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Homebuyers will prioritize primary residences with rental options to reduce mortgage costs and increase potential investment returns as uncertainty over interest rates and high property prices will continue to be issues in 2024, a major real estate group predicts.
Re/Max Canada’s Housing Market Outlook Report forecasts the national average home price will increase by 0.5 per cent next year. In 61 percent of areas, average home sales prices are expected to increase between two and 7.5 percent, while 18 percent of markets are expected to decline between two and five percent. Prices remain stable in another 18 percent of the country.
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A Leger survey commissioned by Re/Max shows that 73 percent of respondents are confident that home ownership is the best investment, an opinion that remains unchanged year after year. However, the organization’s agents and brokers expect homebuyers will prefer primary residences that offer some rental potential.
“This strategy, aimed at maximizing investment returns and counteracting rising living costs and mortgage payments, is expected to have a significant impact on the 2024 real estate market,” the report said.
According to Re/Max, the focus is on the property types duplex, triplex and single-family homes with additional apartments. However, more than half of respondents expressed concerns that they might not be able to enter the market at all.
“54 percent fear interest rate increases could impact their ability to engage in the real estate market,” the report said. “This will have the biggest impact on millennial homebuyers, with 73 percent agreeing.”
Christopher Alexander, president of Re/Max Canada, said that while 2023 has been challenging, real estate has historically delivered good returns and financial stability. The market’s sluggish end to the year could also provide brighter prospects for the future, he said.
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“The slower market we experienced across the country this fall could be a leading indicator of an active 2024, as evidenced by the modest price increase and sales outlook for next year, as well as the balance of conditions in several regions across the country reflects. ”
The slower market we’re seeing across the country this fall could be an early indicator of an active 2024
Christopher Alexander, President, Re/Max Canada
Western Canada will face continued challenges from interest rates and low inventory levels in 2024, according to the report.
That will make things difficult for first-time homebuyers in cities like Edmonton, Nanaimo and Saskatoon. Vancouver will likely see a more balanced market.
In Ontario, average price fluctuations will vary by region, with prices expected to decrease by three per cent in the GTA. Forecasts for the rest of the province range from an eight percent price decline in Kitchener-Waterloo to a seven percent price increase in Windsor and Sault Ste. Mary.
Meanwhile, Montreal could become a buyer’s market depending on interest rates, the report said.
In Atlantic Canada, most regions are expecting a slight increase in average residential sales prices, with the largest increase occurring in Moncton. Currently, all markets are sellers’ markets, a trend that is expected to continue through 2024, with the exception of St. John’s, where a balanced market is expected to develop.
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Re/Max said the Leger survey involved 1,516 Canadians and was conducted between September 29 and October 1, 2023. The survey has a margin of error of +/- 2.5 percent, 19 out of 20, comparable to a similar survey. large probability sample.
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