Housing market to see ‘gradual liftoff’ in second half of 2024: RBC – BNN Bloomberg

1 minute, 48 seconds Read

Canada’s housing market is expected to see a gradual uptick in activity towards the end of this year while ongoing affordability concerns will hamper the market’s recovery, a new report says. 

RBC Economics published an outlook report on Monday which projected that the Canadian housing market will see a “tale of two halves” in 2024, as interest rates are expected to be lowered at the year’s midway mark.


Buy/sell, rent/lease residential &
commercials real estate properties.

“Interest rates will continue to dictate the outcome of Canada’s housing market in 2024 with the first and second halves showing different pictures,” Robert Hogue, RBC’s assistant chief economist, said in the report.

“We expect slow activity and softer prices to persist in the early part of the year as the Bank of Canada maintains its policy rate… but, a pivot toward rate cuts mid-year will get the wheels turning faster over the second half or perhaps even sooner.”

The report said that months of high rates have created pent-up demand for homeownership, and as consumers start to regain confidence alongside potential rate cuts, it could “heat things up in a hurry” this summer.

RBC forecasts that the Bank of Canada will drop its key interest rate from five per cent to 4.75 per cent at its June 5 meeting, followed by another drop of 25 basis-points to 4.5 per cent in July.

‘Poor affordability conditions’

Alongside expectations of rate cuts and a rise in activity, the report said “poor affordability conditions” will persist, slowing the recovery and making a “gradual liftoff” more likely. 

“The larger window of opportunity for buyers is likely to open only after interest rates have dropped materially—something we foresee in the latter stages of 2024 or into 2025,” the report said.

“That’s especially the case for first-time buyers who may be more financially constrained.”

Sales prospects are expected to continue improving as the year goes on, which will attract more sellers into the market, the report noted. Additionally, mortgage renewal payment shocks could prompt more owners to sell. 

This should help keep supply and demand conditions in balance, Hogue said, adding that “inventories have been rebuilding over the past couple of years” after reaching historical lows during the pandemic.

This post was originally published on 3rd party site mentioned on the title of this site

Similar Posts

X
0
    0
    Your Interest
    Your Interest List is emptyReturn to Buying
    ×