Undeterred by affordability challenges, consumer confidence in home ownership as an investment remains steady year-over-year
RE/MAX Canada expects average residential prices to rise by 0.5 per cent in 2024
Three-quarters of Canadians (73 per cent) believe that home ownership is the best long-term investment (unchanged from last year)
While average residential sale price in 61 per cent of regions is expected to increase between two and 7.5 per cent in 2024, 18 per cent of markets analyzed are anticipating a decrease between two to five per cent, while 18 per cent will remain flat in 2024
Housing market conditions are anticipated to be varied in 2024, with 42 per cent expected to balance out, while 29 per cent are expected to favour sellers, 21 per cent to favour buyers, and four per cent to experience mixed conditions.
TORONTO and KELOWNA, BC, Nov. 28, 2023 /CNW/ -- Canadians' outlook on home ownership remains positive, according to a new report from RE/MAX Canada, despite challenging market conditions in 2023, including a persistent housing shortage, and a tricky interest rate environment. According to the RE/MAX 2024 Housing Market Outlook Report, the majority of Canadians (73 per cent) are confident that home ownership is the best investment, a sentiment that remains unchanged year-over-year. Looking ahead, the RE/MAX network of brokers and agents expects the market to be slightly more active in 2024, with national average residential sale prices likely to increase by 0.5 per cent and 61 per cent of regions surveying anticipating unit sales to increase in 2024.
Download the 2024 Housing Market Outlook Report Data Table
"It's been a challenging year for Canadian homebuyers and sellers, who have been feeling the effects of a severe housing shortage and the high cost of living, but much like Canada's housing market, Canadians have stayed resilient. Historically, real estate has given owners excellent returns and strong financial security – and that hasn't changed," says Christopher Alexander, President, RE/MAX Canada. "The slower market we've been experiencing across the country this fall could be an early indicator of an active 2024, as reflected in the modest price increase and sales outlook for next year, and the balancing of conditions in several regions across the country."
Canadian Consumer Insights
According to a Leger survey commissioned by RE/MAX Canada as part of the report, the majority of Canadians (72 per cent) believe that as municipal, provincial and federal governments make plans to increase housing supply, it's important that they consider the diversity of the new housing that's developed.
When it comes to home-buying trends in 2024, the Leger survey reveals that more than four in 10 Canadians believe climate change will impact their decision on where to buy a home next year (41 per cent); while approximately one in five (21 per cent) are exploring alternative home ownership, or opting for inter-provincial/city moves (17 per cent) in search of greater affordability in the neighbourhood they love.
Regional Market Insights
RE/MAX brokers and agents across Canada were asked to provide a year-over-year analysis of their local market between January 1 and October 31, and share their estimated outlook for 2024. Based on their insights, the majority of regions surveyed noted many homebuyers are looking for primary residential properties with rental potential, to get the most out of their investment and offset the rising cost of living and reduce mortgage payments. This is likely to be a leading influential factor heading into 2024, according to RE/MAX brokers and agents across the country.
Western Canada
In Western Canada, average residential prices are anticipated to rise by two per cent in Metro Vancouver, BC, Nanaimo, BC and Saskatoon, SK, and by four per cent in Edmonton, AB next year. Meanwhile, regions such as Victoria, BC, and Regina, SK are anticipating a modest two-per-cent decrease in average residential sale prices in 2024. Although most regions are currently considered to be balanced markets, Saskatoon, SK is an outlier and currently a seller's market. In 2024, Edmonton, AB, and Saskatoon, SK are expected to favour sellers, Victoria, BC is anticipated to shift to a buyer's market and Metro Vancouver, BC and Regina, SK foresee continuing balanced conditions. Meanwhile the market in Nanaimo, BC is anticipated to be a mix of buyer's and balanced in 2024.
Amid ongoing economic pressures and rising interest rates, affordability and the cost of living continue to be top liveability considerations for potential homebuyers in Western Canada. This has led to an increase in demand from first-time homebuyers for primary properties that also have the capacity to provide them with rental income, in places such as Victoria, BC; Vancouver, BC; Edmonton, AB; Nanaimo, BC; and Saskatoon, SK. The only outlier to this trend is Regina, SK, as the relative affordability of the region provides homebuyers with greater financial flexibility, as compared to other provinces.
Looking ahead to 2024, interest rates and low inventory are likely to continue placing pressure on the market, particularly among first-time homebuyers in regions such as Edmonton, AB, Nanaimo, BC and Saskatoon, SK. However, these same conditions may allow Metro Vancouver, BC to remain balanced. Although Regina, SK provides many aspiring homeowners with a pocket of affordability, demand and supply are not expected to skew market conditions significantly.
Ontario
Much like Western Canada, shifts to average residential prices are a mixed bag in Ontario. Specifically, prices are anticipated to increase by two per cent in Thunder Bay, ON and Ottawa, ON; three per cent London; 3.5 per cent in Hamilton, Niagara and York Region; four per cent in Sudbury and Burlington; 4.5 per cent in Kingston; five per cent in Muskoka and Haliburton; seven per cent in Oakville and Simcoe County; and 7.5 per cent in Windsor and Sault Ste. Marie. Meanwhile, prices are anticipated to remain unchanged in Mississauga, Brampton, North Bay, and Kenora in 2024. Looking ahead to 2024, Peterborough and the Kawartha's and the Greater Toronto Area (GTA) are both anticipating a slight decline of three per cent in average residential prices, while Durham Region and Grand Bend are anticipating a decline of five per cent. Kitchener-Waterloo is anticipating a decrease of eight per cent in average residential sale prices.
Despite various markets in Ontario favouring sellers or experiencing balanced conditions in 2023, the majority of regions are currently buyers' markets including, Kitchener- Waterloo, Hamilton, Burlington, Niagara, Mississauga, Durham Region, Brampton, Grand Bend, North Bay, Muskoka, Haliburton and Kingston. Although Hamilton and Burlington experienced varying conditions throughout the year, both have shifted toward buyer's markets in Q4 of 2023. Looking ahead to next year, Mississauga, Hamilton, Burlington, Brampton, Simcoe County, Muskoka and Haliburton are likely to balance out from their current buyer's or seller's conditions. The GTA market is anticipated to gain balance in 2024 but is also expected to favour buyers at certain points of the year. Considering the interest rate environment and the cost of living this year, housing market conditions in 2023 have fluctuated. As interest rates have recently paused, many markets are stabilizing with several regions in Ontario (54 per cent), expected to remain unchanged in 2024 from their current market conditions.
Despite cost of living becoming a more prominent consideration for homebuyers and sellers, additional emerging liveability trends in Ontario include the desire for greater access to public transportation and green space, as well as proximity to preferred schools. In tandem with Western Canada and Atlantic Canada, both cost of living and interest rates are the most prominent factors impacting Ontario markets. These factors are leading many Canadians to become resourceful and focus their home-buying search on properties that can accommodate additional tenants, as a means to offset mortgage costs and ongoing affordability challenges.
Quebec
Market conditions are aligned in the Quebec province, with both Quebec City and Montreal favouring sellers. In Quebec City average residential sale price is anticipated to remain unchanged in 2024, but the market is expected to shift into greater balance next year. Meanwhile, Montreal is expected to move toward a buyer's market in 2024, but that is dependent on interest rates. Although many sellers are taking a wait-and-see approach to the market, pressure from rising rates could encourage more homeowners to list their properties for sale. Average residential sale prices in Quebec City are anticipated to remain unchanged.
Much like the rest of Canada, the cost of living is a top consideration for Canadians in the Quebec region. Additionally, the return to in-person work post-pandemic has prompted rising in properties with proximity to workplaces and public transport. In 2024, rising interest rates could limit the purchasing power of potential homebuyers, weighing on the Quebec market.
Atlantic Canada
In Atlantic Canada, the majority of regions are anticipating a modest increase in average residential sale prices, including, Fredericton, NB (+3.6 per cent); Saint John, NB (+3.5 per cent); Moncton, NB (five per cent); and St. John's & surrounding area, NL (three per cent). The only exception is Halifax, NS, where average residential sale price in unlikely to waiver. Currently, all markets are considered to be seller's markets, a condition that is expected to hold firm in 2024, with the exception of the St. John's, NL area, where the market is expected to regain balance in the coming year.
Looking ahead to 2024, low inventory will continue to impact local housing market conditions in Atlantic regions. Despite this being the most dominant factor impacting the market, rising interest rates also hold the potential to rattle buyer confidence. When it comes to liveability, cost of living is one of the most prevalent trends in the Moncton, St. John's, Fredericton, Saint John and Halifax markets. Current economic conditions and ongoing affordability challenges have led first-time homebuyers in particular to expand their homebuying search to include semi-detached homes or properties with rental income potential.
Leger Survey Results
While the market is anticipated to cool in the first half of 2024, Canadians' perceptions of real estate as a good investment haven't shifted since 2022. According to a Leger survey commissioned by RE/MAX as part of the report, Canadians perceive homeownership as the best investment they could make (73 per cent), a number that has stayed consistent since last year's report. Yet, more than half (54 per cent) are concerned that interest rate increases will impact their ability to engage in the real estate market. This will impact millennial homebuyers most acutely, with 73 per cent agreeing with this statement.
Additional insights from the Leger survey:
Over half (54 per cent) of Canadians are concerned that further interest rate increases will impact their ability to engage in the real estate market in 2024
Six in 10 Canadians (59 per cent) feel confident that working with a professional real estate agent will bring value to the process
Almost half (47 per cent) of Canadians believe Canada is one of the best countries in the world to purchase/own real estate
About the 2024 Canadian Housing Market Outlook Report:
RE/MAX's 2024 Canadian Housing Market Outlook Report includes data and insights from RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments. The overall outlook is based on the average of all regions surveyed, weighted by the number of transactions in each region.
About Leger
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,516 Canadians was completed between September 29 and October 1, 2023, using Leger's online panel. Leger's online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size (1,516) would yield a margin of error of +/- 2.2 per cent, 19 times out of 20.
About the RE/MAX Network
As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than 140,000 agents in almost 9,000 offices with a presence in more than 110 countries and territories. RE/MAX Canada refers to RE/MAX of Western Canada (1998), LLC and RE/MAX Ontario-Atlantic Canada, Inc., and RE/MAX Promotions, Inc., each of which are affiliates of RE/MAX, LLC. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides.
RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. RE/MAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children's Miracle Network Hospitals® and other charities. To learn more about RE/MAX, to search home listings or find an agent in your community, please visit remax.ca. For the latest news from RE/MAX Canada, please visit blog.remax.ca.
Forward looking statements
This report includes "forward-looking statements" within the meaning of the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "believe," "intend," "expect," "estimate," "plan," "outlook," "project," and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. These forward-looking statements include statements regarding housing market conditions and the Company's results of operations, performance and growth. Forward-looking statements should not be read as guarantees of future performance or results. Forward-looking statements are based on information available at the time those statements are made and/or management's good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include (1) the global COVID-19 pandemic, which has impacted the Company and continues to pose significant and widespread risks to the Company's business, the Company's ability to successfully close the anticipated reacquisition and to integrate the reacquired regions into its business, (3) changes in the real estate market or interest rates and availability of financing, (4) changes in business and economic activity in general, (5) the Company's ability to attract and retain quality franchisees, (6) the Company's franchisees' ability to recruit and retain real estate agents and mortgage loan originators, (7) changes in laws and regulations, (8) the Company's ability to enhance, market, and protect the RE/MAX and Motto Mortgage brands, (9) the Company's ability to implement its technology initiatives, and (10) fluctuations in foreign currency exchange rates, and those risks and uncertainties described in the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission ("SEC") and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company's website at www.remax.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.
SOURCE RE/MAX Canada
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