In the past six months, things have been pretty slow. Why? Well, interest rates were high, and this made buying or selling houses a bit tricky for many. But guess what? There's a change coming!
Canadians are getting the hang of these higher rates, and there's buzz about the Bank of Canada possibly cutting them down. What does this mean? We might see a lot more people buying and selling homes this spring. It's like everyone's been on pause, and now they're ready to hit play.
Phil Soper, the big boss at Royal LePage, has some thoughts. He believes the market will start picking up when people are sure that the home they buy won't lose value. And guess what? He thinks this shift in confidence might happen even before the Bank of Canada decides to lower the rates.
Here's some number talk: According to the Royal LePage House Price Survey, the overall price of homes in Canada went up by 4.3% last year. But, hold on, there's a twist. By the end of the year, prices dipped a little by 1.7%. That's because these high borrowing costs made people think twice.
Royal LePage also made a prediction for 2024. They think the overall price of homes in Canada will go up again by about 5.5% compared to last year.
In December, the Bank of Canada kept its key lending rate at 5.0%. But here's the interesting part: they might not increase it anymore and could even cut it down later this year. That's a big deal because it could make borrowing money for houses easier and cheaper.
Phil Soper mentioned something else important. The Bank of Canada has a tricky job ahead. They need to lower the rates without making everyone rush to spend more money, which could push prices up again (that's inflation). In November, the Consumer Price Index (CPI), which measures inflation, showed prices went up by 3.1% compared to last year. But if you don't count mortgage interest costs, inflation is actually closer to the Bank's target rate.
Soper thinks that even a small cut in rates could kickstart the housing market. People who've been waiting to sell their homes might jump in, and buyers who've been on the sidelines could start house hunting. It's like everyone's just waiting for a sign to get moving.
And there's more: In places like Toronto, Montreal, and Vancouver, home prices still went up last year. But in most areas, prices dropped a bit towards the end of the year. Plus, many Canadians will be renewing their mortgages soon, and they might face higher rates.
So, what's the takeaway? The housing market in Canada has had its ups and downs, but things are looking up. With possible rate cuts and a growing sense of confidence, we might see a lot more action in buying and selling homes. Keep an eye out, because this spring could be pretty exciting for the housing market!