Navigating the Sluggish Spring Housing Market: A Balanced Perspective
Adrian C. Spitters FCSI?, CFP?, CEA? President, Author, Private Wealth Advisor
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Source Article: Spring should be a boom time for the housing market; it's not
The Canadian housing market is facing uncertainty in 2024. The Teranet-National Bank Composite House Price Index for the 11 largest cities shows prices stabilizing in April. Some cities, like Edmonton, Montreal, and Calgary, saw prices rise slightly month-over-month, but others, like Quebec City, Victoria, Toronto, and Halifax, had declines.
The sluggish resale market means first-time homebuyers are likely waiting to see if the Bank of Canada cuts rates this summer. Toronto's job market has weakened significantly, with the unemployment rate now at 7.9%, up from 5.6% a year ago. This is dampening the housing market there.
However, there is optimism that population growth, limited housing supply, and potential rate cuts could push prices higher later in 2024.
Buyers on the Sidelines
The Canadian Real Estate Association (CREA) reported a dip in Canadian home sales in April 2024 compared to March, even as the number of properties available for sale rose to kick off the spring market. While year-over-year activity showed improvement, this is likely partly due to the timing of this year's long Easter weekend.
"April 2023 was characterized by a surge of buyers re-entering a market with new listings at 20-year lows, whereas this spring thus far has been the opposite, with a healthier number of properties to choose from but less enthusiasm on the demand side," said Shaun Cathcart, CREA's Senior Economist.
Despite the challenges, James Mabey, newly appointed Chair of CREA's 2024-2025 Board of Directors, struck a positive tone, noting that the market is the most balanced it has been nationally since the pre-pandemic era.
"Mortgage rates are still high, and it remains difficult for a lot of people to break into the market, but for those who can, it's the first spring market in some time where they can shop around, take their time, and exercise some bargaining power," he said.
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