Will house prices drop in Canada in 2023? It is difficult to predict with certainty what will happen to house prices in Canada in 2023. Factors such as economic conditions, interest rates, and government policies can all have an impact on the housing market. Additionally, the COVID-19 pandemic has added uncertainty to the market.
According to a report by Desjardins, the sharp decline in housing prices in 2023 is expected to restore the balance in the Canadian housing market. The housing market was at an all-time high in February 2022, expected to fall by 25% in 2023.
Desjardins anticipated a significant correction in the Canadian housing market, an adjustment from the past predictions, which states a 15% drop in the average home price during the same time period.
According to top TD Economics, the Canadian housing market won’t rebound until 2024. According to their current forecast, the Canadian average home prices will recall around half of the gains during the pandemic. However, the development of the supply picture is a critical risk of the forecast.
Some homeowners are forced to advertise their properties due to rising interest rates which cause larger monthly payments. If the number of listings by new homeowners is significant, it could downwardly pressure the housing prices by more than what they expected.
Since February, the sales have already plummeted to 40%. And the prices are expected to continue dropping in the early months of 2023.
In October 2022, the existing home sales in Canada increased by 1.3% m/m in October, which was still 17% below their pre-pandemic levels.
Sales were up in eight provinces, with the steepest increases in PEI (+26.3% m/m), B.C. (+5.8%), Manitoba (2.4%), and Alberta (2.2%).
At the same time, the sales dropped in Quebec (-2.4%) and Newfoundland and Labrador (-1.5%).
Canadian Housing Market Statistics: According to the report by Canadian Real Estate Association (CREA), home sales increased slightly in October 2022, while the sales between August and September 2022, lodged on Canadian MLS® Systems, dropped by 3.9%.
Key Points from the Canadian Housing Report
- National home sales were raised by 1.3% month-over-month in October.
- The actual monthly activity was 36% less than in October 2021.
- The number of newly listed housing properties rimed up 2.2% month-over-month.
- The MLS® Home Price Index (HPI) decreased by 1.2% month-over-month and 0.8% year-over-year.
- The national average sale price is a 9.9% year-over-year decrease in October.
The sales in the whole country increased for the first time in October since interest rates began to ascend last winter. In 2023, the market is expected to return to normal, with sellers and buyers returning.
But the market will be significantly different than the previous year. For more accurate information, contact your local REALTOR®.
Will house prices drop in Canada in 2023?
Canadian Housing Market in 2023: In the next 18 months, the sales and prices of houses will certainly fall more than in the previous months. The prices of houses have fallen swiftly along with the housing market.
Without shrinking the hardships some Canadians are facing, this market shift is helping bring back rationality to the Canadian real estate market.
With the decrease in prices, many markets are redressing, and affordability is also improving. With the help of the housing market, the Bank of Canada is battling inflation.
It is expected that with the slowdown to weaken the inflationary pressures, it will be sufficient for the Bank to reverse some rate rises next year.
This will help increase affordability when Canada’s housing market stabilises next year. The inflation was hard on Canadians in 2022.
According to a report released on 29 November 2022 by RE/MAX, the average housing prices in Canada are expected to go down to 3.3%.
For homebuyers in the near future, this news is very hopeful. Due to this, some markets will also feel hopeful.
The most significant price drop will be in the regions of Ontario and Western Canada. Many cities are expected to become affordable in 2023 for homebuyers.
The places that will see a fall in housing prices in Ontario are Barrie (-15%), Durham (-10%), Thunder Bay (-5%) and GTA (-11.8%).
Along with Ontario, the Vancouver region is also expecting a decrease of 5% and B.C. cities Nanaimo and Kelowna expect a decrease of 10%. Similarly, Fredericton is facing 3.5% while New Brunswick cities Moncton, 5% and Saint John is facing 3.5% of the fall.
While some major cities like Halifax and St. John’s in the Atlantic region are actually expecting increases in the housing prices in 2023.
It is believed that 60% of Canadian regions will be “balanced markets” in 2023. This is believed because the balancing demand and supply of houses are just right.
But then again, these are just some predictions. These will give a general idea of where the actual housing market is and where it can lead in future.
So if you want to buy a house in Canada in the near future, it is always better to know if you can afford the house.
Summary:
- Canada Housing Market Uncertainty
- Desjardins Predicts 25% Decline
- Rising Interest Rates Impacting Sales
- Regional Variations in Price Changes
- Market Shift Brings Rationality
- Affordability Expected to Improve
- Predicted Price Drops by Region
Check out our Web Story at https://celpip.biz/web-stories/will-house-prices-drop-in-canada-in-2023/
