Residential sales have been predicted to rise by more than 6% this year as the Canadian real estate market begins to bounce back from a quiet start to the year.
Two interest cuts that have taken the cash rate to 4.5% are expected to entice more sellers into the market to meet the pent-up demand for all types of residential property.
The Canadian Real Estate Association (CREA) forecasts that home sales will be 6.1% higher than in 2023 with 772,395 properties changing hands. It had hoped for a 10.5% spike when it made its last forecast in April, but it had anticipated an earlier rate cut.
By comparison, Canada has been relatively early in cutting rates. The Americans are in a holding pattern, together with the Australians, British and New Zealanders.
The European Central Bank, Switzerland, and Sweden have been among the early rate-cutters, along with Canada.
CREA revised its forecast after seeing a drop of 9.4% of residential transactions in June compared with the corresponding period 12 months ago. However, sales were up 3.7% on the May number.
CREA senior economist Shaun Cathcart said: “It wasn’t a blow-the-doors-off’ month, but Canada’s housing numbers did perk up a bit on a month-over-month basis in June following the first Bank of Canada rate cut.”
Importantly for sellers, CREA expects residential prices to have increased 2.5% to $694,393 by the end of the year. It’s almost half of its forecast just four months ago.
For buyers, good opportunities exist right now.
While market predictions of growth are conservative, the mood of the real estate market can swing incredibly quickly.
Trying to time the market is an error that many buyers and sellers make.
By the time you have decided the market is at its optimum point, you’ll likely find the dynamics have changed when you transact. Part of the challenge is the time required to find a buyer, or a desirable property, and the 4-6 weeks required to complete a transaction.
Our best advice is to talk to local agents about price trends in your area. (And we’ll be happy to help you.)
Additionally, it’s always best to choose the time to buy and sell that fits your personal circumstances.