Many questioned whether the market would improve in the spring after a year when qualifying for a mortgage became significantly more difficult.
This year’s spring market may improve, given the Bank of Canada’s indications that rates are at their highest point.
Mortgage payments should go down.
The survey shows typical monthly mortgage payments will decrease with falling home prices. As a result, the demand for ownership homes should rise after June 2023, helped by reduced fixed mortgage rates, a reasonably resilient labour economy, and record immigration. Buyer competition is also anticipated to grow as purchasing aspirations rise, which will put “renewed upward pressure” on property prices in the Greater Toronto Area, according to TRREB.
Housing market forecasts
Although January’s sales data for the Canadian home market may have been rather depressing, a well-known real estate professional claims that there are increasingly hopeful indicators.
Christopher Alexander, president of RE/MAX Canada, told Canadian Mortgage Professional that, though January saw the lowest number of home sales in Canada for that month since 2009, he anticipated a sharp rise in the market around the spring as buyers start to come off the sidelines and gain confidence from a more stable lending environment than before.
Currently, new listings are the biggest problem in the Canadian market.
In January, 3.3% more homes were added to the market than the previous month, but nationwide, the number of new listings is still at an all-time low. According to CREA, new inventory hit its lowest point for January of last year since 2000.
According to CREA, the market had 4.3 months of inventory available across Canada at the end of January, over a month less than its long-term average and close to its pre-pandemic level.
Alexander has already issued stern warnings about the supply crisis endangering Canada’s housing market; nevertheless, he added that given the sharp decline in home prices over the past year in many locations, the current low inventory levels are unlikely to turn very soon.