The Canadian housing market has kicked off 2023 with a healthy start, as buyer activity has picked up earlier than anticipated. After a long period of correction and downturn, we are now seeing an increase in home prices compared to the final quarter of the previous year.
Royal LePage, a leader in Canadian real estate, has forecasted a 4.5% increase in the aggregate price of a home in Canada by the fourth quarter of 2023. This revised forecast is a result of a quicker-than-expected boost in activity in Canada's major housing markets during the first quarter of the year. The national aggregate home price is expected to continue rising modestly but steadily over the next nine months.
Phil Soper, President and CEO of Royal LePage, expressed cautious optimism regarding the market's recovery. While the company does not expect huge price gains this year, Soper believes that a sense of normalcy is returning to the market.
The aggregate price of a home in Canada decreased 9.2% year-over-year to $778,300 in Q1 2023. However, on a quarter-over-quarter basis, the aggregate price of a home in Canada rose 2.8%. This increase can be attributed to buyers returning to the market following the Bank of Canada's decision to pause interest rate hikes for the first time in a year.
Soper also highlighted the unusual behavior of Canada's housing market since the start of the COVID-19 pandemic. After a temporary halt in early 2020 due to lockdowns, the work-from-home revolution led to a two-year frenzy of record sales volumes and aggressive price growth. The market has now turned a corner, and the housing economy is growing again, providing relief for many buyers who have been waiting for prices to bottom out.
As we head into the spring and summer months, it's essential to keep an eye on market trends and stay informed. With a cautiously optimistic outlook and a more stable market on the horizon, 2023 may be an excellent year for both buyers and sellers in the Canadian housing market.