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The Canadian housing market exhibited minimal change in March 2024, with both home sales and prices maintaining a mostly flat trajectory. Although there was a slight uptick of 0.5 per cent in sales activity compared to the previous month, it remained below the 10-year average. Similarly, the national composite MLS Home Price Index (HPI) experienced a marginal decrease of 0.3 per cent month-over-month. Analysts attribute this stagnant performance to factors such as high interest rates and the anticipation of rate cuts, which may be influencing current market sentiment.

The stagnant market behavior suggests that Canadian consumers are facing financial constraints, contributing to record levels of unaffordability in the housing sector. Achieving pre-COVID affordability levels would require significant adjustments, such as a 33 per cent decrease in prices, a 55 per cent increase in incomes, or a 350 basis points reduction in interest rates. It is anticipated that a combination of these factors will eventually drive a recovery in the real estate market. The increase in new properties for sale may alleviate some demand pressures, potentially leading to a buyer's market scenario and facilitating price adjustments.

The Canadian Real Estate Association (CREA) forecasts a return to the 10-year average sales volume growth trajectory by 2025. Interest rates are expected to remain a pivotal factor influencing housing markets, with the possibility of rate cuts in the latter half of 2024. CREA anticipates significant increases in residential property transactions in 2024, with Alberta, Nova Scotia, Ontario, and Quebec projected to experience the most substantial growth. Additionally, home prices are forecasted to rise across various provinces, with notable increases expected in Alberta, British Columbia, Nova Scotia, and Quebec. These forecasts indicate a cautious optimism for a gradual recovery in the Canadian housing market in the coming years.

Read the full article on: REAL ESTATE MAGAZINE