TD Bank Housing Outlook For 2024
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Key Takeaways:
- Canada’s rental market is expected to cool – not collapse – moving forward, meaning rents will still likely increase, but not as significantly as they did in 2023
- For people looking to buy in 2024, expect the resale market to heat up during the second half of the year – especially since an interest rate cut is expected in July
- Resale price gains likely won’t be equally spread across Canada; TD Economics predicts that average home price growth in Alberta, Quebec, and parts of the Atlantic will increase more than in Ontario and B.C.
What’s to come in the Homebuying Market?
The homebuying market is currently experiencing stronger-than-expected average home prices and sales, driven by favorable weather, low borrowing costs, and pent-up demand. Price growth was observed in the Prairies, Quebec, and most of the Atlantic, while B.C. and Ontario saw declines. Predictions suggest a 10.5% increase in residential properties listed for resale in 2024. TD Economics forecasts a pickup in sales and prices in the second half of the year, particularly if the Bank of Canada cuts its overnight lending rate. Affordability concerns may limit price gains in Ontario and B.C., while the Prairies are expected to outperform the market due to more affordable housing and a strong local economy. Similarly, Alberta's resale market is anticipated to be robust due to significant population growth. According to CREA forecasts, average Canadian Home Prices are anticipated to increase by almost 5% annually.
So, what could this mean for you?
For renters, the outlook for 2024 remains challenging, with TD Economics estimating rent price growth in the purpose-built market to be similar to the robust 8% increase seen in 2023. Cities like Toronto and Vancouver might see slower rental growth due to high living costs, limiting significant price jumps. Conversely, cities experiencing strong population growth like Edmonton and Calgary may see competitive rental markets and higher prices compared to 2023. However, 2025 could bring relief with slower population growth and lower interest rates. For prospective homebuyers, the market is expected to heat up in the second half of 2024, fueled by potential interest rate cuts. Affordability concerns may temper overall average home price gains, particularly in Ontario and B.C., suggesting limited upward trends without significant price drops.
Source: https://stories.td.com/ca/en/article/renting-vs-buying-canada