In these tumultuous times, and as a new year is set to begin, people are wondering what to expect with the real estate market in the near future. And while no one has a crystal ball, experts are making predictions about what we could see for real estate in 2023. Here’s what they’re saying.
Canadian home prices could continue to drop…
Canada’s housing market reached an all-time high in February 2022, largely due to historically low-interest rates and demand from pandemic living. Now that the Bank of Canada has increased rates steadily—with additional rate hikes likely still to come—we’ve seen an adjustment in the number of homes for sale, and the average sales growth has slowed.
Experts are now predicting steeper price declines in early 2023 than they did originally. TD Economics predicts the average national home prices will drop by 11%, while Desjardins predicts an average 23% decrease in the average home price from the height in February 2022 to December 2023.
…but that doesn’t mean they’ll be more affordable
However, while home prices may drop, that doesn’t mean they’ll be more affordable—buyers will have to factor in higher mortgage rates. Housing supply could also diminish as people decide to hold off on selling, which could keep prices competitive, especially in Toronto.
The market should rebound in 2024
While experts are predicting a downturn in real estate in 2023, they’re already looking ahead to an upswing in 2024. TD Economics predicts a rebound of 19% in 2024, and Desjardins claims that at the end of 2023, home prices will settle above their pre-pandemic levels nationally and provincially.
Rent prices will continue to increase
In response to the volatile real estate market for buying and selling, rentals are in demand in Toronto. This is driving up the cost—in October, average rental prices grew 27% year over year—and this will likely continue into early 2023.
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