After the real estate market in parts of Ontario has developed surprisingly slowly in recent months, experts are now trying to calm panicked sellers and developers: The market is about to return to heat – and with it – if their forecasts are correct – even higher prices for buyers.
Following the release of Royal LePage's forecast earlier this week, which predicted a 10 per cent increase in average home prices for the Toronto region specifically by the end of this year, the Canadian Real Estate Association has just released its own forecast for each province and the country as a whole, extending out to 2025.
Based on trends so far this year, looming interest rate cuts and other factors, the trade group expects the cost of an average home to rise in every province next year – by just 2 percent in Prince Edward Island and 7.9 percent in Alberta.
While this prairie province will see the largest increase in housing costs, both proportionally and in amount, Ontario and BC were not far behind (of course, they are the provinces with the highest purchase prices in the country).
CREA experts predict that the average home price in Ontario will increase by 0.7 percent in 2024 and another 3.9 percent in 2025.
CREA forecasts the average price of a home or condo in Ontario will rise 0.7 per cent to $876,965 by the end of 2024 – still an increase in a lifeless market that should drive prices down – before climbing 3.9 per cent to $911,150 in 2025.
The association also says that activity will return with a vengeance: in 2025, 7.3 percent more homes will find new owners in the province (expected total 178,461), after this number has already increased by 2.2 percent by the end of 2024 (expected total 166,303).
This puts Ontario far ahead of all other provinces in terms of real estate sales volume, although a larger increase in sales figures is expected in Nova Scotia and BC (11 and 10.3 percent respectively).
The trading group expects sales activity to pick up again, with transactions increasing by 2.2 percent in 2024 and 7.3 percent in 2025.
“Since the last CREA forecast in April, expectations for interest rate cuts this year have been scaled back. Supply has also increased more than expected, as many sellers came to the market with properties for sale in the spring, but buyers were left out,” the report said.
It goes on to say that “lower interest rates are expected to gradually bring buyers back into the market in the future,” although not as strongly as the association had thought in light of this spring.