ECONOMIC SPOTLIGHT // Q1 2024
In the first quarter of this year, Canada’s real estate market exceeded expectations with a significant rise in home sales and average prices, driven by favorable weather, lower borrowing costs, and pent-up buyer demand. Particularly, British Columbia and Ontario saw robust sales activity, whereas Alberta, Quebec, and parts of the Atlantic experienced notable price increases. Despite this, prices in B.C. and Ontario began to stabilize, suggesting a shift towards market equilibrium.
As spring approaches—a peak season for real estate—we anticipate a modest uptick in both sales and prices. However, the pace may be tempered by uncertainty over potential interest rate cuts by the Bank of Canada, alongside early purchases made due to the unusually warm weather, which could slow momentum. Regional variances continue to define the market's landscape.
Future Outlook and Implications
The Bank of Canada is maintaining a steady interest rate of 5.0%, adopting a wait-and-see approach amid improving economic conditions and decelerating inflation. Should inflation continue to ease and borrowing costs decrease, the second half of the year might witness increased home sales and rising prices.
Real estate remains a multifaceted market, influenced by local trends and broader economic signals. Changes in immigration policy could particularly impact major markets like Ontario and B.C. Monitoring these indicators will be crucial in predicting future market directions.
Stay tuned for updates as we monitor these developments closely.
Source – TD Economics*