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Welcome to our padlet wall, as you can tell by the title we intend to be the main source of information about the housing market. You can expect to learn about the housing market through the websites we have linked, the videos that we post, and the images. A housing market is the supply and demand of houses, and we will be focusing on the market in Canada.

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This website/article informs us on how the housing market was in 2023 and the predictions for the housing market in 2024. It tells us that in 2023 the housing hit an all time low in home sales. They are predicting that 2024 will be the same way and sales will be low if mortgage rates do not decrease or selling prices are not reduced. Another factor that might slow the market down in 2024 is the expected slow down in construction, which will decrease the supply in homes.

I chose this website/article because this keeps us up to date about our topic and lets us know the predictions for the housing market in 2024. I found it useful because it taught us the factors that are affecting the housing market such as construction, mortgage rates, etc. This is different because it is a forecast of what the market will look like.

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The pace of home sales in Ontario in 2023 hit lows not seen the turn of the century, and with little evidence that mortgage rates will drop significantly any time soon, forecasts are predicting the sluggishness to continue into early 2024.

While prices have dropped somewhat from their pandemic-driven highs, the combination of high-interest rates and buyers waiting for prices to tumble further has created a slow sales market throughout much of the province, according to a range of industry information.

The number of home sales in the Greater Toronto Area in 2023 is on track to be lower than in any year since 2001, when the region's population was roughly 25 per cent smaller than it is today.

The latest figures available show the number of homes sold across Ontario last year to be down nearly 13 per cent from the previous year, described by the Canadian Real Estate Association as a substantial decline.

CBC News interviewed three experts on the real estate market to find out what they expect to happen in 2024.

Expect 'continued stagnation' in sales

There's general consensus among those experts that sales volumes will remain sluggish in the first part of 2024, until or unless mortgage rates come down significantly, or sellers start accepting lower bids.

"The general trend we're probably going to see is one of continued stagnation," said Ron Butler, a broker with Butler Mortgage.

He doubts that mortgage rates will drop quickly enough or low enough to jolt reluctant buyers off the sidelines in the early part of 2024.

John Pasalis, president of Realosophy Realty Inc., adds that sellers have yet to bring down their asking prices deeply enough to offset the increased borrowing costs that buyers face.

"It's the combination of these high prices and high interest rates that is keeping a lot of buyers out of the market right now," Pasalis said.

WATCH | What to watch for in 2024 and why there's still uncertainty ahead:

TD economist Rishi Sondhi predicts sales volumes to remain relatively low in the coming year, although better than what the numbers were in 2023.

"We think that the bottom has probably been reached," Sondhi said. "Sales levels were just so darn low in Ontario [in 2023]. It's hard to go lower from there."

Where will prices head?

There's not a lot of consensus on what will happen with prices, in part because of supply and demand factors that are expected to have conflicting effects.

For instance, while decade-high mortgage rates are suppressing demand, rapid population growth is pushing it upward and new construction isn't keeping pace.

Real estate firm Royal LePage is forecasting a six per cent rise in the average home price in the Greater Toronto Area by the end of 2024, and a 4.5 per cent rise in Ottawa.

By contrast, real estate firm ReMax is forecasting an average three per cent drop in prices in the GTA for 2024 and a two per cent increase in Ottawa.

Butler says "buyer sentiment" will have a significant impact on prices in 2024.

"If you feel that these prices are really too high and that they will come down, no matter how motivated you are to buy a home, you will have a tendency to wait and see," he said. "It'll turn around eventually, but right now I think that buyer sentiment is entrenched."

New home construction forecast to slow

Premier Doug Ford's government is now entering the third year of its 10-year timeframe for the promised construction of 1.5 million new homes in Ontario, and has yet to achieve the annual pace needed to achieve that target.

Final figures for 2023 aren't in yet but, as of November, the pace of new construction was slower than the 96,000 housing starts in the previous year.

Forecasts are now predicting the pace will slow even further this year. That's because developers are struggling to finance projects because of high interest rates, inflation has pushed up the price of building materials and a labour crunch continues to hamper the construction industry.

"We're expecting housing starts to fall in 2024," said Sondhi. The evidence is based on a drop in sales in the pre-construction market over the past two years after mortgage rates began to climb.

Sondhi is not forecasting a collapse in new home construction, partly because of expected growth in purpose-built rental housing, fuelled by the provincial and federal governments exempting those projects from HST.

Meanwhile, figures show that around 30 of Ontario's largest municipalities will fail to qualify for a share of the government's $1.2 billion Building Faster Fund in 2024 because their housing start numbers in 2023 fell short of the mark.

Uncertainty for the condo sector

Condominiums are the segment of Ontario's housing market that looks to be in the roughest shape in 2024, in part because a large proportion are owned by investors.

"As their mortgages come up for renewal, it's going to be harder to afford those condos," said Pasalis.

"Over the next 12 to 18 months, we'll probably see more investors unloading properties just because they can't afford to have so much debt at today's interest rates," he said.

Butler adds he expects to see many investors trying to sell off small condos in urban centres because their plans to turn them into short-term rentals fell through.

As of the end of November, the Toronto Region Real Estate Board had reported 23,128 condo sales in 2023 - a 44 per cent decline from the same period in 2021.

Sales of new condos in the GTA appear to have fallen even more sharply, dropping by 47 per cent in a year, according to a November report from research firm Urbanation.

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What's in store for the housing market in Ontario in 2024 | CBC News

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The pace of home sales in Ontario in 2023 dropped to lows not seen this century, and with little evidence that mortgage rates will drop significantly any time soon, forecasts are predicting the sluggishness to continue into early 2024.

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In this video, Mark Deoro, a principal economist with Dejar Deas, discusses the current state of housing affordability in Canada and the potential changes that could make it more accessible. He suggests that affordability will improve in 2023 as the economy slows down and interest rates decrease, but it won't return to pre-pandemic levels. Deoro also mentions that employment and the construction sector will be important factors to watch in 2024. For those preparing to renew their mortgages, he advises being prepared for higher payments and considering ways to mitigate the increase. Overall, the economist emphasizes the importance of personal financial situation when making decisions about buying, renting, or selling a home. Mark DeRose of DeJar Real Estate discusses the real estate market outlook for the year 2024. Mark expresses optimism about the market, suggesting that 2024 could be an excellent time to buy a home in Canada due to several factors. These factors include historically low-interest rates, a stable economy, and a potential increase in inventory, which could lead to more affordable home prices. Mark also mentions the importance of considering individual financial circumstances and long-term goals when deciding to buy a home.

I chose this video because it informs us on when is a good time to buy and act on the housing market. It tells us what to prepare for when it comes to higher payments and ways to mitigate them. It tells you what position you have to be in if you want to buy, rent, or sell. It informs us that 2024 could be a great time to buy a home due to low interest rates, stable economy, and a potential increase in inventory.

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Is 2024 a good time to buy a home in Canada?

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This website/article provided some insight on how the market has been going so far in 2024. It gives us an idea about how people who expected the housing market to recover this year received the brutal truth in February as housing sales have fallen. Toronto fell 12%, then Vancouver fell 23% from the average it has upheld for the last 10 years.

I chose this article because it gives us a look at the housing market all around Canada. It taught us that this problem is not just in Toronto/Ontario but in a lot of the other territories.

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Drop in sales and surge in new listings suggest too early to sound all clear

Don't count on that housing market recovery just yet.

Hopes for a turnaround after gains in December and January got a dose of reality last week with reports of falling home sales in several major Canadian markets, suggesting it's too early to sound the 'all clear.'

"Anyone expecting smooth sailing ahead for the housing market got a reality check in February," said Robert Hogue, an economist with Royal Bank of Canada in a report Friday.

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Declines in February partly reversed the gains of the previous two months - a reminder, Hogue says, that "very challenging affordability conditions" are still holding buyers back.

Sellers, however, did return. Hogue estimates that new listings rose between 3 and 14 per cent from the month before in Vancouver, the Fraser Valley, Edmonton, Hamilton and Montreal.

"We suspect sellers who took a pass in the fall may have taken an early jump on the upcoming spring market, warmed by news of busier activity in December and January," he said.

The wider inventory though failed to entice buyers.

Sales in Toronto, Canada's biggest market, fell 12 per cent from the month before, reversing half the gains seen in the previous two months.

"This up-and-down pattern could be a sign of things to come, as interest rate uncertainty and poor affordability keep buyers and sellers on their toes for the next while," said Hogue.

Vancouver home sales are now "historically soft" at 23 per cent below the 10-year average.

"We don't expect this softness to ease quickly. Affording the purchase of a home is extremely difficult in Vancouver and will continue to be a major constraint for buyers," said Hogue.

Meanwhile, sellers flooded into this market, with new listings jumping 31 per cent after an even bigger increase in January.

Calgary, "the busiest and hottest" market in the country, also slowed in February. RBC estimates that home sales fell 8 per cent month over month, reversing gains in the previous two months.

Still this market is hard to keep down. Home sales are still 60 per cent above pre-pandemic levels, and demand remains strong, thanks to the surge in population.

Calgary home prices over the past year are up the most of the markets RBC tracks, gaining over 10 per cent in February - a trend they expect will continue.

Despite falling sales, other major markets also saw slight gains in prices. The MLS Home Price Index in Toronto and Vancouver rose for the first time in months.

But don't look for big gains on this front, Hogue cautions. RBC expects prices to stay mainly flat for the near future, and declines are possible if large numbers of sellers, some possibly distressed, continue to enter the market.

"We think a vigorous, sustained recovery won't take shape until interest rates fall more meaningfully - something we peg for the second half of 2024," said Hogue.

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Canada's job numbers for February blasted past expectations Friday, more than doubling forecasts. But before you get too excited, the country's unemployment rate also ticked up because population growth once again rose faster than job growth.

To keep up with the rising population, the economy would have needed to add 65,000 jobs, not 41,000, said Desjardins principal economist Marc Desormeaux.

Economists say the blockbuster headline hides a weakening labour market, with gains limited to self-employment and the public sector and wage growth cooling.

"Today's report is certainly impressive at first blush, particularly the towering rise in full-time jobs," BMO chief economist Douglas Porter said in note. "However, it's staggeringly clear that the results are flattered by ongoing massive population gains, and the labour market is thus actually gradually cooling."

Statistics Canada will fill in more details on how the economy fared in January this week. The agency is set to release its survey of manufacturing for the month on Thursday followed by wholesale trade numbers on Friday.

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1. Mortgage delinquency rates in Ontario and B.C. soar

2. Sidelined homebuyers just waiting for interest rate cuts

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Posthaste: Canada's housing market 'recovery' gets a reality check

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Hopes for a housing market turnaround got a dose of reality last week with reports of falling home sales in major Canadian markets. Read on

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This article/website gives details about what experts think about the housing market. We dived into what economists, the banks and the real estate industry thinks of the housing market. It also tells us if it is a good time to buy a house, and how there might be pressure on first time buyers as prices might be going up as the year goes on. It also gives us insight on when you are ready to buy a house with 7 signs that you are prepared to buy a home.

I chose this article because it includes the opinions of many experts in the real estate field. It also helped us as we are young adults that will want to purchase homes in the next few years and it gave us some signs and scenarios that will be helpful to know when even thinking about buying a house.

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What Do Economists Say About Housing?

"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 2025," Robert Hogue, Assistant Chief Economist at RBC, says. "That's especially the case for first-time buyers who may be more financially constrained."

If interest rates begin to drop mid-year as many expect , "There will be a lot of pent-up demand to satisfy in the market once confidence returns, which could heat things up in a hurry," according to Hogue. But don't expect housing prices to fall much, since "poor affordability conditions will restrain the recovery."

While this pent-up demand could push prices up, mortgage renewal payment shocks (since mortgages renew at significantly higher rates) could prompt more homeowners to put their homes on the market, which would keep supply and demand in balance.

Hogue expects home resales in Canada to rebound 9.2% year-over-year, compared to declines of 25.1% in 2022 and 11.1% in 2021.

Robert Kavcic, BMO Senior Economist, foresees that a "return to the rollicking price gains of recent years, and previous highs for some locations, is unlikely at this point." That's good news for buyers in places like Ontario, where he expects downward pressure on prices to continue through the spring. But prices will still be relatively high, and "still-challenging affordability will likely temper the subsequent rebound."

In line with most analysts, Kavcic says that the Bank of Canada is likely done with interest-rate hikes and will begin to reduce them soon": "We believe the Bank will be in a position to cut rates around mid-year, with 100 bps [or 1%] of easing through 2024." Those cuts will lead to lower rates on mortgages.

In a February report, Marc Desormeaux, Principal Economist with Desjardins, also forecasts softer home prices and sales this spring, despite a surge in home sales in December 2023.

However, Desormeaux also expects a broad-based rebound in home prices mid-year that will continue into 2025, in line with expected interest rate cuts by the Bank of Canada towards the middle of 2024. He forecasts that the strongest rebounds will be seen in the higher-priced markets of Toronto and Vancouver, which are more sensitive to interest rate movements. However, price gains will be "mild" by historical standards, especially in comparison to the real estate boom during the pandemic when interest rates were still low and prices rose more than 20% across the country.

What Does The Bank of Canada Say About Housing?

The Bank of Canada's view of the housing market is important because its monetary policy affects the interest rate on your mortgage. When inflation is rising, the Bank raises rates to cool consumer spending; as inflation falls towards its 2% target, the Bank is more inclined to cut rates. When the overnight lending rate goes up, that in turn affects the prime rate, which at 7.2% is currently 2.2 percentage points higher than the overnight rate. The prime rate is what lenders use to set the interest on variable-rate mortgages, among other products. (Fixed-rate mortgages are affected by the yield on 5-year bonds.) So as the prime rate goes up, the cost of borrowing goes up. However, mortgage interest rates (as well as rental costs) are part of the shelter component of the Consumer Price Index or CPI, the most common measure of inflation. So when mortgage rates are high, this creates inflationary pressure.

In its most recent rate decision, the Bank of Canada held its target for the overnight rate at 5%, noting that inflation is coming down, but some components of the CPI are still too high to cut rates just yet. One of the most notable components is housing: "Inflation in shelter services remains high-close to 7%-because of rising mortgage rate costs, higher rents and other housing costs," noted Bank Governor Tiff Macklem.

Macklem reportedly said that he expects that the housing market will "rebound" this year in tandem with expectations for interest rate cuts later in 2024, adding, however, that there is "considerable uncertainty" with housing prices. He said that the Bank expects a "modest increase" in housing prices, but this depends on buyer demand.

However, in a recent speech, Macklem also said that housing affordability is a problem-one that the Bank can do nothing to solve.

"Housing affordability is a significant problem in Canada-but not one that can be fixed by raising or lowering interest rates. Housing supply has fallen short of housing demand for many years," noted Macklem. "There are many reasons why-zoning restrictions, delays and uncertainties in the approval process, and shortage of skilled workers. None of these are things monetary policy can address."

What Does the Real Estate Industry Say About Housing?

In January, the Canadian Real Estate Association (CREA) updated its forecast for home sales and average home prices. CREA notes that "interest rates have been the major factor affecting markets over the last few years and this is expected to continue in 2024 and 2025."

The main points of the forecast are:

The national home price is expected to rise 2.3% in 2024 to $694,173.

National home sales and average home prices are expected to continue increasing in 2025, by 7.3% (sales) and 4% (price) respectively.

The biggest sales gains are expected to be in provinces where housing demand is strong, such as Alberta, and provinces that are rebounding from lower sales volumes, including B.C., Ontario and Nova Scotia.

Alberta, Quebec, New Brunswick, Nova Scotia and Newfoundland are forecast to see price gains above this national increase.

B.C. and Ontario are forecast to see prices remain flat.

For context, home sales in 2023 declined 11.1% from 2022, which was "technically the lowest annual level for national sales activity since 2008," according to CREA's January statistics.

However, looking at CREA February sales and transactional data in its March 18 release, it suggests that housing market activity is on the cusp of heating up.

"After two years of mostly quiet resale housing activity there's a feeling that things are about to pick up," said Larry Cerqua, Chair of CREA. "At this point, it's hard to know whether buyers are going to wait for a signal from the Bank of Canada or whether they're just waiting for the spring listings to hit the market.

The national average home price was $685,809 in February 2024, up 3.5% from February 2023.

CREA's Residential Market Sales Activity Forecast

CREA's Residential Market Average Price Forecast

What Does This All Mean?

On the whole, analysts expect interest rate cuts to begin mid-2024, however the timing of this is dependent on the Bank of Canada being satisfied that inflation is under control. Interest rates affect demand for housing as high interest rates can be a barrier for buyers getting into the market, but may also affect supply as homeowners with existing mortgages decide to sell due to interest rate shocks at renewal. This may make for a buyer's market.

According to CMHC Senior Specialist of Housing Research Tania Bourassa Ochoa, up to 2.2 million mortgage borrowers will be up for renewal in 2024 and 2025, which represents 45% of all outstanding Canadian mortgages. "Most of these borrowers contracted their fixed-rate mortgages at record-low interest rates and, most likely, at or near the peak of housing prices around 2020 to 2021," she noted.

As interest rates go down, buyers who have been waiting for more favourable rates may get back into the housing market. This, in turn, can push housing prices up, which is expected mid-year. Sales volumes and prices are expected to increase in the entire country, but there are regional variances.

According to the CREA's January stats, "Price declines of late have been predominantly located in Ontario markets, particularly the Greater Golden Horseshoe, and to a lesser extent British Columbia. Elsewhere in Canada prices are mostly holding firm or in some cases (Alberta, New Brunswick, and Newfoundland and Labrador) continuing to climb.."

Keep in mind there are substantial differences in market conditions between regions. A house in an urban centre such as Toronto, for example, will be more expensive than a house in a smaller town or village. There may be greater demand in an urban centre, resulting in a bidding war (that is favourable to the seller), while rural homes may sit longer on the market, resulting in sellers being more amenable to price negotiations.

Is 2024 a Good Time To Buy a House?

The cost of borrowing is currently high, but housing prices have come down from record highs during the pandemic. What's more, it's expected that prices stay relatively soft for the first half of 2024, which may prompt buyers to get into the market. However, affordability remains a major issue across Canada, especially in Ontario and B.C., where RBC's Hogue notes that "crushing home ownership costs have significantly depressed home resales." So is now a good time to buy a house?

It depends.

Trends suggest that housing prices are going to go up over the long term, so first-time buyers can especially feel the pressure to get into the market before it's "too late." Let's take a look at two scenarios to see how interest rates and purchase prices affect your monthly budget. Both scenarios assume the minimum down payment.

Scenario A: Higher interest rate, lower house price. If you purchase a $500,000 home with a 5-year fixed-term mortgage at 5%, your monthly mortgage payments will be $2,873. At the end of the five-year term, you will have paid $56,773 in principal and $115,615 in interest.

Scenario B: Lower interest rate, higher house price. If that same home goes up in value to $525,000 (5% increase) but you secure a 5-year fixed-term mortgage at 4.75%, your monthly mortgage payment will be $2,934. At the end of the five-year term, you will have paid $61,242 in principal and $114,804 in interest.

In this instance, you'll pay slightly more each month in mortgage payments, but over the five-year term of the mortgage, you'll pay more in principal and less in interest. Using this example, it looks like it's "better" to wait until rates go down to buy a home.

However, assuming that same $500,000 house, if the price goes up to $550,000, your monthly mortgage payment at 4.75% is now $3,067, and at the end of the five-year term, you will have paid $64,022 in principal and $120,017 in interest. You've still made a bigger dent in your principal, but the overall cost of the interest is higher. What's more, you might not be able to afford this higher monthly payment.

Putting these scenarios aside, it's impossible to time the housing market, just like it's impossible to time the stock market, and these forecasts are not set in stone.

Any time you're considering buying a house, it's critical to ensure that you have your financial house in order before you even begin your search.

7 Signs That You're Ready To Buy a House in 2024

You have a stable income and employment history. This is important to a lender as it demonstrates your ability to pay your mortgage. Banks typically want at least two years of employment history and sufficient income relative to the size of the loan that you're requesting. ( Private mortgage lenders will have different standards for approval.) A stable income and employment is also important for your own peace of mind; buying a house is a huge investment that has many ancillary expenses, such as maintenance and repairs, and you want your house to be a sanctuary, not a source of financial stress.

You've paid down your debt. Having a low debt-to-income ratio is also important to lenders; if you're carrying too much debt or using too much of your income to service existing debts, you may be seen as a higher risk. You may be offered a higher interest rate than a prospective borrower with low debt levels, or you may be told you don't qualify. Keeping your debt levels low is also important to protect you from high interest rates. While it appears the Bank of Canada is done raising rates, anyone who carried a credit card balance between 2020 and 2023 would have seen their interest rates (and corresponding charges) rise substantially.

You have great or excellent credit. Your credit score is one of the most important factors when it comes to qualifying for a mortgage and getting a good interest rate. In general, you'll need a 680 score to qualify with a traditional lender, such as a bank. The higher your credit score, the better your rate. If your credit score is less than 600, it's worthwhile to spend time improving your credit before buying a house.

You've saved enough for a down payment. In Canada, the minimum down payment you need to make depends on the purchase price of the home.

If you put less than 20% down, you'll also need mortgage default insurance, which adds to the overall cost of your loan (though insured mortgages typically have lower interest rates). With a larger down payment, you'll pay less in monthly mortgage payments and you'll pay less overall interest over the lifetime of your mortgage. With the national home price averaging $657,145 in December 2023, your minimum down payment would be $40,743, or 6.2%, which may be daunting for new home buyers.

You understand your mortgage options. There are significant differences between fixed-rate and variable-rate mortgages, as well your mortgage term, that can affect how much you pay each month and how much you pay over the course of your mortgage. If you're concerned about the volatility of a variable-rate mortgage, but you also think that interest rates are going to come down in the next few years, a 3-year fixed rate mortgage might be worth considering. It's important to weigh your options carefully.

Consider how the popularity of variable-rate mortgages surged during the pandemic (reaching a record high of 56% of new mortgages in January 2022) as borrowers flocked to rock-bottom rates that were low as 0.85% for a 5-year variable. But those same borrowers saw their monthly payments jump substantially when variable rates hit 5.95% two years later. While no one could have foreseen the Bank of Canada raising interest rates 10 times, many borrowers were caught off guard.

You plan on putting down roots for a while. When you secure a mortgage, the most common amortization schedule in Canada is 25 years, which means it'll take that long to pay off your mortgage in full. When you make a payment each month, you're paying both principal and interest and for the first 10 years of that 25, you are paying more interest than principal. Around the 10-year mark, you start putting more money towards the principal with each payment, so it can make good financial sense to stay put for a while . Buying a house also comes with significant closing costs, which can add up if you move frequently.

You're preapproved for a mortgage. ​​A mortgage preapproval verifies how much a lender is willing to lend you considering factors such as your income, down payment, debt level, assets and credit score. A preapproval will also signal if there are any potential problems with your mortgage application, so you have time to remedy those issues before you put an offer on a house. Your lender will typically hold your rate offer for 60, 90 or 120 days.

The Bottom Line

Buying a house is a huge financial decision. The sooner you buy a house, the sooner you can start building equity, but owning a house comes with a lot of financial responsibilities that can drain your savings if you're not careful.

If you want to hold out for lower mortgage rates and you're looking in a market that is less sensitive to price fluctuations, waiting until mid-2024 to buy a house may pay off. However, to make the best decision for your finances and your peace of mind, it's important to consider working with a real estate professional who understands both the homebuying process and the market.

Frequently Asked Questions (FAQs)

What is the best season to buy a house in Canada?

What month is the cheapest to buy a house in Canada?

Is renting better than buying a house in Canada?

How do I know it's a buyer's or seller's market in Canada?

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Best Time To Buy A House In Canada In 2024

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If you're thinking about buying a house this year, whether you're a first-time or repeat home buyer, here are some factors to consider when making one of the biggest buying decisions in your lifetime.

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In this video, it discusses the current housing market slowdown in Canada and the anticipated impact of expected interest rate cuts. The market is experiencing a decrease in price growth, and most analysts predict the first interest rate cut from the Bank of Canada in the spring or summer, which may stimulate more activity. The popularity of fixed-mortgage rates is expected to increase, with many people purchasing homes with 4-5% 5-year fixed mortgage rates by the end of 2024. However, those renewing at much higher rates will face significant sticker shock, leading to belt-tightening and reduced spending. Economists believe housing affordability issues will arise due to the global economy's reduced spending and the possibility of a short, shallow recession. An Ipsos poll reveals record frustration over home ownership, with over 70% of renters having given up on ever owning a home, leading to potential political backlash.

I chose this video because it explains what the Canadian housing market is like in 2024 and what to expect. There is a decrease in price growth and the first interest rate cut will be in the spring or summer. Fixed mortgage rates are expected to increase by the end of 2024. Housing affordability will rise due to the global economy reduced spending and shallow recession.

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Canada housing market 2024: What to expect with interest rate cuts in the forecast

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The video discusses the development of a neighborhood and the negative impact of investor speculation on housing density and parking. It proposes that a crash in the housing market is needed to address the issue. The high percentage of homes sold to investors and speculators reflects the speculative nature of the housing market and the lack of focus on creating affordable housing for residents. This video emphasizes the need for a crash in the housing market to discourage speculative investment and drive a change in investor sentiment towards sustainable and affordable housing. The negotiation between the developer and the city regarding density zoning reveals the influence of developers in shaping urban planning decisions, potentially at the expense of residents’ needs. The lack of parking spaces between homes on 27-foot lots highlights the practical issues and inconvenience faced by residents, indicating a lack of consideration for livability in the development process. The video raises questions about the sustainability and long-term impact of building homes primarily for investors and speculators, rather than focusing on creating stable and affordable housing options for residents.

I chose this video because it opens the eyes of people that are not aware of the housing market and why we need a housing market crash. Homes that are sold to investors are what makes housing so unaffordable for residents. Residents also face a lot of inconveniences due to the lack of parking spaces between homes. This video is very useful and shows how hard it is for residents to live alongside paying a lot of money every month on rent.

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Jon Flynn Broker of Record, Flynn Real Estate Inc.

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Ground ZERO 🏠 DETACHED HOMES on Smaller Lots Than MOBILE HOMES. 2024 Canadian Housing Market

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The video discusses the potential trouble brewing in the Canadian real estate market and the lack of awareness among homeowners. It highlights the possibility of a housing market crash in 2025-2026, increased mortgage rates, and the potential impact on homeowners. This video also emphasizes the importance of being prepared and making informed decisions. The video highlights the potential trouble in the Canadian real estate market, indicating that there are concerns and issues on the horizon. The discussion of increased mortgage rates and higher payments highlights the potential financial strain on homeowners and the importance of understanding the impact on their finances. The video also mentions the limited ability to sell and make a profit due to affordability issues, indicating the potential challenges for homeowners in the current market. The possibility of negative equity is mentioned, indicating the potential risk for homeowners who may have to sell at a loss. The importance of staying power and being prepared for high interest rates is emphasized, suggesting the need for long-term planning and financial stability in the real estate market.

I chose this video because it informs people of the trouble brewing in the market and the possible upcoming market crash. It also tells you how you have to be prepared and make smart financial decisions. It talks about how mortgage rates will increase and how homeowners will potentially have to sell at a loss. You need to be financially prepared and stable for the upcoming high interest rates.

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Trouble Brewing in the Canadian Housing Market

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This website/article talks about the rising home prices, the large interest rates on mortgages, and the rising rental costs. It responds to the people that are fighting for the banks to cut the interest rates to make homes more affordable. The banks are stating that it is not a problem of interest rates but it is a problem with the supply of homes in Canada. The banks believe that when more homes are built and the supply increases, the housing market will grow and the affordability of houses will increase. This will lead to more people being able to buy houses with less competition, which leads to cheaper selling prices.

We chose this article because it gives another perspective on why the housing market is the way it is, hitting all time lows as of recent. We learned that this might be a supply and demand problem rather just a monetary policy problem, as the competition in the housing market will decrease if supply goes up.

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Canada's real estate market is notoriously unhinged. Home prices are up more than 35 per cent in just four years. Mortgage interest costs are up 30.9 per cent year over year. And rental prices are continually hitting record highs.

As inflation comes under control, there is a growing chorus calling on the Bank of Canada to cut interest rates, easing at least some of those affordability issues.

But Bank of Canada governor Tiff Macklem says a lower interest rate isn't the silver bullet people are hoping for.

"Housing affordability is a significant problem in Canada but not one that can be fixed by raising or lowering interest rates," Macklem said during a speech in Montreal on Tuesday.

Macklem said the real issue is that housing supply has fallen short of housing demand for years.

"There are many reasons why: zoning restrictions, delays and uncertainties in the approval processes and shortages of skilled workers. None of these are things monetary policy can address," he said in his address to the Montreal Council on Foreign Relations.

Macklem admits the emergency low interest rates during the COVID-19 pandemic helped fuel the run-up in home prices during that time. And the central bank's own research shows that "shelter inflation" continues to drive inflation.

Falling housing starts blamed on high interest

Randall Bartlett, senior director of Canadian economics at Desjardins, said prices for both rented and owned accommodation are projected to continue growing above their pre‑COVID pace beyond the end of 2024.

"One of the key takeaways from the Bank of Canada's January 2024 Monetary Policy Report is that shelter inflation is likely to be the single most important driver of year-over-year price growth in the first half of 2024," he wrote in a research note.

The issue of affordability is not a new one in Canada. But it has accelerated in recent years.

RBC Economics has something called the "aggregate affordability measure." By the end of last year, that index was "at or near worst-ever affordability levels in many markets," with particular concerns in hot spots like Vancouver and Toronto.

"Close to 60 per cent of all households could afford to own at least a regular condo apartment in 2019 based on their income. That share has plummeted to 45 per cent in 2023," assistant chief economist Robert Hogue wrote in a paper released in December.

"An even tinier 26 per cent could now afford a (relatively more expensive) single-family home."

The Canadian Home Builders' Association says housing starts (a measure of how many new buildings have begun construction) have fallen for two consecutive years. And its CEO says high interest rates are at least part of the reason.

"Interest rates are directly lowering the feasibility of building much-needed new housing supply - we saw this in 2023 and it will continue in 2024," Kevin Lee said.

The Canada Mortgage and Housing Corporation (CMHC) surveyed developers constructing purpose-built rentals last fall. Three main concerns were raised: significantly higher construction costs, development fees and higher lending rates.

"More restrictive financial conditions have limited the flow of private investments into new purpose-built rental housing, resulting in a decrease of planned projects and further fuelling the affordability crisis," the CMHC report said.

A balancing act

Macklem said everyone - from prospective homeowners to developers to policy-makers - wants the same thing.

"It's very clear. The solution to housing affordability is to get supply up," he said.

But while supply and demand are out of whack, Macklem said the Bank of Canada can only do so much. And, he said, central banks really have only one tool to use.

WATCH | Canada's housing market expected to remain soft for now:

"The impact of raising the policy rate is actually to bring the housing market into better balance, not by reducing supply but by reducing demand and bringing it more in line with supply," he said.

Balance is something that has been lacking from the Canadian housing market for many years.

The good news is that most economists believe the Bank of Canada is going to start cutting interest rates this summer. That should provide some relief to developers worried about financing their next project and to homeowners struggling with significantly higher mortgage payments.

But some believe the mere anticipation of changes to the central bank's key overnight lending rate may lead to a flood of pent-up activity in housing sales.

"Data from late 2023 and early 2024 suggests the housing market could very well be revving up again as lower bond yields and mortgage rates and more favourable prices [mean] more buyers jumping off the sidelines to front-run expected future rate cuts," wrote Bryan Yu, chief economist with Central 1 Credit Union in Vancouver.

If that's the case, affordability will only get worse as construction slowed, even while the pool of potential buyers swelled - with Canada experiencing record levels of immigration last year.
WATCH | Bank of Canada governor Tiff Macklem speaks in Montreal:

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ANALYSIS | Bank of Canada governor says interest rate relief won't deliver new housing supply | CBC News

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As inflation comes under control, there is a growing chorus calling on the central bank to cut interest rates, easing at least some affordability issues. But Bank of Canada governor Tiff Macklem says a lower interest rate isn't the silver bullet people are hoping for.

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This image/graphic expresses the continuous rise in house prices that is currently going on in Ontario at the moment. We see the average home price is above the average of the past years which is currently decreasing the amount of home sales in the housing market.

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This image/graphic expresses the increase in people selling their homes in Ontario and Canada in general. More people see the housing prices going up and think that they should cash out and sell their home for a price way higher than they bought it at, so more people are selling their houses at the moment.

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What did you learn about your topic that surprised you the most?

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What did you learn about your topic that surprised you the most?

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The thing that surprised us the most about the housing market, is the fact that the sales of homes have been down. Not only that sales are down in Ontario but also in many other provinces. It is surprising that this is a nation wide issue that seems to affect all Canadians. And it does not look like it is getting better in the near future.

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Provide a real-life example of how this topic is relevant or interesting for you.

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Provide a real-life example of how this topic is relevant or interesting for you.

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This topic is relevant and interesting to us as we are young adults in the 19-21 age range, so looking for a house is an objective for the near future. So learning about the housing market especially in Ontario is important, because knowing the trends, rates, forecasting, and expert analysis is very helpful when entering the housing market as a first time buyer.

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If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on?

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If you could pass on your knowledge to a family member or friend, what do you think is the most important thing to pass on?

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If we could pass on any of our newly learned knowledge of the housing market, it would be to understand and keep up with market trends. Staying updated on things such as interest rates, supply and demand, economy factors, and government policies that affect the housing market. This will help making decisions and predictions within the housing market.