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The Canadian housing market is on the brink of an intriguing shift, with reports indicating a notable uptick in both home prices and sales. Economists forecast a significant nine percent increase in the aggregate price of homes across Canada in the fourth quarter of 2024 compared to the previous year. Meanwhile, the Canadian Real Estate Association (CREA) reports a modest 0.5 percent increase in home sales activity between February and March 2024, though still hovering around 10 percent below the ten-year average. A surge in new listings in early April hints at a potential surge in buyer activity, fueled by factors like record population growth and speculation about upcoming central bank interest rate cuts.

Toronto is poised to outpace Vancouver in terms of home prices, with expectations of a 10 percent year-over-year increase in the Greater Toronto Area. Montreal follows closely behind with an expected 8.5 percent increase. However, Calgary, previously expected to see significant price gains, is experiencing a more moderate rate of increase at 11 percent year over year. Robert Kavcic of BMO notes that Calgary remains the strongest larger market in Canada, with all listings clearing within a month, while Vancouver and Toronto maintain a balanced market, and Montreal edges into sellers' territory.

The Bank of Canada's decision to maintain its key interest rate at five percent for the sixth consecutive time since July suggests stability, but speculation about a potential rate cut in June looms large. This uncertainty is reflected in market behavior, with an increase in variable-rate mortgages indicating a hesitancy to lock in rates amid anticipation of improved affordability or rate cuts. Whether the central bank decides to cut rates or maintain the status quo will undoubtedly have a significant impact on the trajectory of the real estate market in the coming months, with many stakeholders closely monitoring developments for cues on future trends.

Read the full article on: CBC