CREA Revises Canada’s 2023 and 2024 Home Sales Forecast
1.5 min read
The Canadian Real Estate Association (CREA) has revised its 2023 and 2024 forecasts for the Canadian real estate market. In April 2023, national home sales saw a significant surge as buyers responded to favourable interest rates and low property values. However, the Bank of Canada's unexpected rate hikes in June and July reintroduced uncertainty, leading to a slowdown in sales activity. The decline in new listings and the prospect of prolonged high-interest rates prompted CREA to downgrade its home sales and price forecasts in 2023 and 2024. While prices may stabilize, significant growth is expected once interest rates decline.
According to CREA's revised projections, approximately 464,239 properties are expected to be traded in 2023, a 6.8% decline from the previous year. The scarcity of supply and higher borrowing costs due to rate hikes are the primary factors influencing the downward adjustment. The national average home price is forecasted to decrease by a marginal 0.2% to $702,409 in 2023, although the trajectory for prices in the future is anticipated to be less steep.
Looking ahead to 2024, CREA predicts a rebound in national home sales, with a projected 11.2% increase to 516,072 units. As housing markets return to their typical trends and monetary policies shift towards a more neutral stance, the forecast aligns the activity with the 10-year average, remaining below the levels seen in previous years.
References
Quarterly forecasts. CREA. (2023, July 14). https://www.crea.ca/housing-market-stats/canadian-housing-market-stats/quarterly-forecasts/
Younglai, R. (2023, July 14). Crea downgrades home sales forecast for 2023 after spring sales rebound eased in June. The Globe and Mail. https://www.theglobeandmail.com/business/article-crea-downgrades-home-sales-forecast-for-2023-after-spring-sales/
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