Canadian Housing Market Outlook 2024

National Market Report Summary

• The average selling price of a home in Canada decreased by 3.3% year-over-year to $713,200 in September 2024.
• The average selling price of a single-family home in Canada decreased by 2.8% year-over-year to $789,900 in September 2024.
• The average selling price of a townhouse/multiplex in Canada decreased by 4.7% year-over-year to $652,700 in September 2024.
• The average selling price of a condo in Canada decreased by 4.0% year-over-year to $516,000 in September 2024.
• The average rent in Canada increased by 3.9% year-over-year to $2,159 for September 2024.?

Single-family Home Prices

Townhouse and Multiplex Prices

Condo Prices

Canada Housing Market Summary

Data from the Canadian Real Estate Association (CREA) indicates that the benchmark price of resale residential homes sold across Canada in September 2024 was $713,200, and it decreased by 3.3% compared to a year ago.

CREA also reported a sales-to-new-listings ratio (SNLR) of 54%, indicating a balanced market nationally for September 2024.

According to the Canadian Real Estate Association (CREA) , in September 2024, the Canadian housing market saw a surge in new listings across all major markets except Montreal. This influx of supply has helped build inventory levels, which currently hover around four months’ worth. However, buying activity remains subdued in most regions, mainly due to high interest rates, which price out many potential buyers in expensive markets like Vancouver and Toronto.

Key Trends

• Price Stabilization: The National Composite MLS Home Price Index (HPI) mainly remained flat, with prices down just 3.3% from a year earlier. Home prices in many regions, particularly Vancouver and Toronto, are experiencing downward pressure due to eased supply-demand dynamics. However, other cities, like Calgary and Edmonton, still see robust activity and price growth despite the recent moderation.

• Interest Rate Influence: Although the Bank of Canada (BoC) has implemented rate cuts (75 basis points), they have not yet translated into a significant increase in buying activity across the board. Buyers are cautious, and affordability challenges persist, especially in higher-priced areas.
• Gradual Rebound Expected: Home sales rose by 1.9% month-over-month, marking the highest levels since July 2023. While high interest rates are still a hurdle, further cuts from the BoC are anticipated. This should moderately improve affordability and stimulate buyer activity by 2025. Introducing an insured 30-year amortization in December 2024 will reduce monthly mortgage payments, making homeownership slightly more attainable.
• Supply Growth:? A 4.9% rise in new listings gave buyers more choices, especially in major markets like Toronto, Montreal, and Vancouver. Sellers have become more active, significantly increasing new listings, particularly in Ontario. This increase is helping rebuild inventory levels, which had dwindled during the pandemic. However, absorption challenges in Toronto’s condo market may pose issues for some sellers.
• Home Sales and Listings

In September 2024, home sales across Canada’s Multiple Listing Service (MLS) climbed by nearly 2% compared to the previous month. Major urban areas, including the Greater Toronto Area, Montreal, Vancouver, and Quebec City, were leading the charge. Despite this rise in sales, the increase was slower than the surge in new listings, which jumped by nearly 5%. This meant more homes were available, providing buyers with a broader selection.

For the first time in months, many sellers put their homes on the market during September, creating a surge in supply. As a result, 185,427 homes were listed for sale across the country by the end of the month, a 16.8% increase year-over-year. Despite this, the current number of listings remains below the historical average of 200,000, signalling that the market remains competitive.

Sales-to-New Listings Ratio (SNLR) and Inventory

The national sales-to-new listings ratio (SNLR) dropped slightly from 55% in August to 54% in September 2024. A balanced market is generally indicated by a ratio between 40% and 60%, so the current ratio suggests that Canada’s housing market remains relatively balanced, with neither buyers nor sellers dominating.

At the end of September, Canada had 4.1 months of housing inventory, a slight decrease from 4.2 months in August. This remains below the long-term average of 5.1 months, suggesting that while there is more supply than before, the market still has pressure to meet demand.

Home Prices

The National Composite MLS Home Price Index (HPI) increased by 0.1% from August to September, showing slight fluctuation since the beginning of the year. However, compared to September 2023, home prices were down 3.3%. The year-over-year price declines are decreasing, indicating that the housing market may stabilize after a volatile period in late 2023.

The actual, non-seasonally adjusted national average home price stood at $669,630 in September 2024, a 2.1% increase from the same month in 2023. This suggests that despite fluctuating demand and supply factors, home prices in Canada remain relatively stable and show improvements.

Regional Highlights

• Vancouver and Toronto: These markets continue to see modest price declines due to softening demand and higher inventories.
• Calgary and Edmonton: Despite a slight moderation, these cities still see some of the most robust resale activity and price growth.
• Montreal: Early signs of a rebound in buying activity are emerging, contrasting with other major markets.

Looking Ahead

As interest rates are expected to be cut further, the Canadian housing market will likely see more activity and rising prices in 2025. However, affordability challenges will persist, especially in high-demand areas like Vancouver and Toronto. Buyers should remain vigilant and informed, as navigating the market during these evolving conditions will require careful planning. Consulting with mortgage experts can help you secure the best rates and make informed decisions.

While some buyers may hold off hoping for better affordability, others may find this a prime time to take advantage of increased listings and stable prices before potential price rebounds next year. As the market cools slightly through the fall and winter months, spring 2025 is anticipated to bring renewed momentum. Whether buying or selling, staying proactive and seeking expert advice will position you to capitalize on the shifting market trends.

Transactions –? Number of Sales

New Listings

Real Estate Market

The sales to new listings ratio (SNLR) measures the number of home sales compared to new listings. An SNLR under 40% suggests a buyer’s market in which buyers have the upper hand and more negotiating power. An SNLR between 40% and 60% is a balanced market, while an SNLR of over 60% is considered a seller’s market.?

Annual Changes Composite Home Prices by Province

Annual Changes to the National Composite Home Prices

Canadian Rental Market

The National Rental Report revealed essential trends in the Canadian rental market. In September 2024, the national average asking rent for all residential property types rose 2.1% year-over-year, reaching $2,193. This is the smallest annual increase since October 2021, marking a slowdown in rent growth compared to the rapid increases seen in the previous 2 years.

Municipal Trends

Vancouver remains the most expensive city, with a one-bedroom unit averaging $2,649 and a two-bedroom unit at $3,488. However, Vancouver also experienced significant rent declines, with a year-over-year decrease of 11% for both 1-bedroom and 2-bedroom units.

Toronto also saw a decline in rental costs, with 1-bedroom units averaging $2,402 (down 8.1%) and 2-bedroom units at $3,133 (down 8.2%).

Burnaby and Mississauga followed Vancouver and Toronto with high rent prices, but both experienced slight rent declines over the past year.

Victoria and Barrie showed rent growth in certain areas, with Barrie seeing a 6.3% increase in 1-bedroom rents.

Edmonton saw one of the fastest increases, with rents up 10.1% year-over-year, bringing the average rent for a 1-bedroom unit to $1,408.

Condominium and Apartment Trends

The report highlights that condominium rents fell by 1.7% year-over-year, with the most significant declines seen in Vancouver (-13.6%) and Toronto (-7.7%). Meanwhile, purpose-built apartments saw a 5.4% annual increase, with the average rent reaching $2,138. Studio units experienced the fastest rent growth, rising 11.1% to an average of $1,645.

Affordable Markets

While Ontario and British Columbia dominate Canada’s most expensive rental markets, smaller cities in provinces like Saskatchewan and Manitoba offer more affordable options. For example, Saskatoon saw a 22.8% rent increase, but the average remains relatively low at $1,428 for a 1-bedroom unit. Regina experienced a 15.3% increase, with rents at $1,329.

Shared Accommodations

Shared accommodation rentals grew popular, especially in cities with higher living costs, like Vancouver and Toronto. Across the four provinces measured, shared accommodation rents increased 6.9% to an average of $1,009. Edmonton saw the fastest growth, with shared rents rising 8.8% to $790.

As rent prices across Canada continue to fluctuate, many cities see either rent stabilization or decline, particularly in high-demand urban centres like Vancouver and Toronto. However, rising costs in smaller cities and provinces reflect growing pressure on the rental market. With rent increasing in some regions, mainly for shared accommodations and affordable cities, prospective tenants and homeowners must consider their options carefully.

Canada Market Rents Summary

The average rent in Canada was $2,159 for the month of September 2024, which increased by 3.9% on a year-over-year basis.

The average rent for a bachelor apartment in Canada was $1,656 for the month of September 2024, which increased by 9.6% on a year-over-year basis.

The average rent for a 1-bedroom apartment in Canada was $1,954 for the month of September 2024, which increased by 2.6% on a year-over-year basis.

The average rent for a 2-bedroom apartment in Canada was $2,347 for the month of September 2024, which increased by 3.5% on a year-over-year basis.

The average rent for a 3-bedroom apartment in Canada was $1,954 for the month of September 2024, which increased by 3.5% on a year-over-year basis.

How Does Renting Compare with Homeownership in Today’s Housing Market?

Each $100,000 in mortgage balance costs an average of $536 per month on nesto’s lowest fixed 5-year rate at 4.19% and $602 per month on nesto’s lowest adjustable 5-year rate at 5.30%. For each $100,000 in mortgage balance, a 0.25% change in Canada’s policy rate impacts the monthly payment by $14. Rates used for calculation are those offered on insured purchases with less than a 20% downpayment on a 25-year amortization. Canada’s policy rate is 4.25%, and nesto’s prime rate is 6.45%.

Rental Price Changes by Province

?? Vous pouvez trouver la version fran?aise de cet article ici: https://www.nesto.ca/fr/immobilier/perspectives-du-marche-immobilier-canadien/

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