Home prices are unlikely to increase as much as originally forecasted for the year.
The aggregate price of a home in Canada is expected to rise 7% in the final quarter of 2023, compared to the same period last year, a slight decrease from the previous projection of 8.5%.
Royal LePage has downgraded its outlook amid a sluggish third quarter, which saw the national aggregate home price increase 3.6% year-over-year but fall 0.8% on a quarterly basis.
This indicates that while Canadians have adjusted to the higher cost of borrowing, elevated interest rates continue to impact market activity.
In Toronto, aggregate home prices increased 4.5% year-over-year to $1,147,000. However, prices experienced a modest decline of 2.8% from the second quarter.
Today’s stable market stands in sharp contrast to the steep declines experienced in the third quarter of 2022. But when compared to the spike in property values reached during the pandemic-fuelled real estate boom, the national aggregate price of a home remains 6.3% below the peak reached in the first quarter of last year.
Looking to 2024, once interest rates begin to ease, even by a small amount, buyers are anticipated to return to the market in large numbers and the relentless upward march on home prices will begin again.