Year-in-review and what lies ahead for Canadian real estate in 2024

The Canadian Real Estate Association (CREA) released its housing market statistics for the final month of 2023 last week, closing out a year that can be defined as, if anything, “unpredictable.”
According to CREA’s December report, 2023 ended with a jump in sales and a year-over-year decline in listings and prices.
 
Governments need to take action
 
Some may view this glimmer of hope as the precursor of increased market activity ahead, but the reality is that Canadians are still navigating a housing crisis, rooted in severe inventory and affordability challenges across the country, which will continue to persist this year.
With high demand (which is expected to continue to grow as immigration rises), and low inventory, there’s a dire need for governments at all levels to collaboratively enact new measures and policies that make the market more affordable and accessible for all.
After all, according to Leger research recently commissioned by Re/Max Canada, most Canadians (73 per cent) perceive home ownership as the best investment they could make. Governments should support these aspirations.
 
2024 trends
 
Reflecting on the past year and looking ahead to what’s on the horizon for 2024, here are some of the trends that are likely to play the biggest roles in the Canadian real estate market.
 
The stats: A deeper dive on home sales & outlook for 2024
 
In line with Re/Max’s housing price outlook for 2024, the market is likely to be active in the first quarter and into the spring — a trend that is already starting to materialize. Interest rates, higher demand and low inventory will continue to heavily influence the market this year.
 
The interest rate effect
 
Over the past year, Canadians faced some of the highest interest rates seen in decades. This, coupled with the lack of housing inventory, resulted in a softening market in the latter half of 2023.
As we look ahead, with another possible pause or even a slight decline in interest rates on the horizon, interest rates will likely be a prominent influence on market activity — especially considering that many Canadians have taken a “wait and see” approach when it comes to their housing ambitions. 
 
Nationwide insights
 
Re/Max brokers and agents in key regions from coast to coast provided their market insights. Here’s how these influencing factors are expected to play out regionally in 2024: 
In Western Canada, major and growing cities such as Vancouver, Nanaimo, Saskatoon and Edmonton are anticipating a rise in residential prices between 2 and 4 per cent. In contrast, Victoria and Regina are anticipating a slight decrease of 2 per cent. 
Ontario’s more populous markets are seeing increases from 2 to 7.5 per cent, while smaller markets that boomed during the pandemic could experience a decline of up to 5 per cent and a steady state in markets across the GTA and up north.
In Montreal, prices will likely remain steady, although interest rates could encourage more homeowners to list their properties. 
Atlantic Canada, once a haven for Canadians seeking affordability, is anticipating modest increases across the board of around 3 per cent in the region’s largest and growing markets.
 
Acknowledging and addressing Canada’s housing shortage: A must
 
The Canadian housing market has historically given homeowners great returns and solid financial security. We believe in the long-term health of Canada’s housing market but, to protect it, we need to acknowledge and address the housing supply shortage in every city, town and neighbourhood across the country.
In 2024, I hope we can take steps toward achieving this goal. I encourage visionary thinking and solutions that may include reforming municipal zoning laws to allow for a greater diversity of housing, expanding capacity for laneway developments and using available land to drive housing supply in a manner that doesn’t compromise climate adaptation and mitigation efforts. For that to happen, some tough decisions need to be made.
 
Over 65% of Canadians agree
 
Research conducted by Re/Max Canada in 2023 showed that Canadians strongly believe that addressing the affordability and housing supply crisis should be among the top priorities for governments across the country (66 per cent). Additionally, 41 per cent feel that removing zoning and development red tape is a key measure toward improving supply — something they hope will continue.
 
So, let’s keep our eyes on the prize this year.