Canada's housing market is showing signs of a shift as sellers re-enter the market in major cities, but a full recovery hinges on significant interest rate reductions, according to a report by RBC Economics.
Sellers Test the Spring Waters
- Increase in Listings: Major cities like Toronto (5.9% increase), Vancouver (15% increase), and Montreal saw a significant rise in new listings in April compared to March.
- Potential Reasons: Some sellers who held off in the fall market due to lower demand are re-entering, while others facing high interest rates might be motivated to sell.
Buyers Remain Wary
- Affordability Squeeze: High interest rates continue to impact affordability, leading to a decline in home resales despite the rise in listings.
- RBC Prediction: The report predicts buyer activity will remain low until several interest rate cuts are implemented.
Regional Market Updates
- Toronto: Home resales dipped in April despite more listings, easing pressure on buyers but causing prices to stagnate.
- Montreal: After strong gains earlier in the year, the Montreal market saw a slowdown in activity in April. Tight inventory and high interest rates are likely contributing factors.
- Vancouver: A surge in listings led to a slight increase in sales, but prices remained flat, potentially due to the influx of supply.
- Calgary: This market remains a seller's advantage with tight supply limiting buyer options. However, demand is strong, resulting in the highest annual price growth (9.9%) among major markets.
Interest Rate Cuts Key to Recovery
- RBC Forecast: The report predicts a full market recovery is unlikely until interest rates fall considerably. RBC expects these cuts to happen in the second half of 2024.
Looking for Local Expertise?
While the national market shows signs of adjustment, local factors can significantly impact your experience. Contact a Coldwell Banker Horizon Realty expert to discuss the specifics of your area and your real estate needs.
Source: RBC
