Days after the Bank of Canada’s interest rate hike, the Canadian Real Estate Association (CREA) decided to downgrade its forecasts for resale in the residential real estate market.
Uncertainty has reigned since interest rates hit 5% on Wednesday after a pause in rate hikes in June. A situation which, according to CREA, risks slowing down Canadians in their desire to buy a home.
“Some buyers are likely to pull back like in 2022, waiting for additional signals from the Bank of Canada and knowing the data on which it is basing its policy,” the association estimated.
If the ACI downgrades its forecasts, it doesn’t necessarily mean that prices will follow the same trend, she warned. Rather, we must conclude that prices will stabilize or grow more slowly in the coming months.
According to estimates by ACI, residential property sales are expected to increase by 11.2% in 2024 to 516,072 properties.
Between 2023 and 2024, the median price of a home is expected to increase by 3% to nearly $723,250. “Therefore, the general assumption is that prices will stabilize until interest rates start falling,” the organization said.