ECONOMIC SPOTLIGHT
On the Path to Recovery & Resilience // Q1 2024
Entering 2024, the Canadian housing market reveals promising signs of recovery following a late 2023 downturn. Forecasts indicate a rebound in home sales and gradual improvement in average home prices throughout the year.
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The trends are clear, Canadian home sales are poised to rise from an estimated -8.6% decline in 2023 Q4 to a modest 1.8% increase in 2024 Q1, with an average quarterly growth of 5% thereafter. Meanwhile, average home prices, which experienced a -3.3% drop in 2023 Q4, are projected to see a lesser decline of -2.0% in 2024 Q1, followed by an average quarterly growth of 0.8%.
Preliminary data for December hints at better-than-anticipated momentum in the housing market. Updated forecasts anticipate an increase in home sales in 2024 Q1, driven by revised borrowing rates, a resilient job market, and pent-up demand. Anticipated Bank of Canada rate cuts could boost market sentiment and further drive higher sales and prices.
As we navigate through 2024, the Canadian housing market is showing promising signs of stabilization and growth. Despite improving sales, average home prices may continue to decline initially due to supply-demand imbalances. Over time, economic stability and seller behaviour are expected to support a price recovery. The housing market's trajectory will be significantly influenced by economic policies and conditions, with the Bank of Canada's rate decisions playing a pivotal role.
Stay tuned for updates as we monitor these developments closely.
Source – TD Economics*