CANADIAN HOUSING MARKET OUTLOOK REPORT ARCHIVES

“Green Shoots” Sprouting This Fall, Amid Prospects of Lower Interest Rates Ahead 

RE/MAX Canada anticipates a steady fall market for majority of regions across the country 

  • Residential sale price expected to increase between one and six per cent this fall in 76 per cent of RE/MAX broker regions surveyed  
  • While average residential sale prices are likely to increase in the majority markets analyzed, there are a couple of outliers where prices are anticipated to be flat or decline, including Toronto, Hamilton, Burlington, Kitchener-Waterloo, Charlottetown, North Bay and London 
  • 25 per cent of Canadians expressed that saving for a home purchase is one of their top three priorities when it comes to financial savings, despite high cost of living and affordability challenges 

TORONTO, ON, Sept. 3, 2024 – With the long-anticipated decline in interest rates finally starting to materialize, early indicators from RE/MAX brokers and agents across Canada suggest steady housing market activity this fall. Average sale prices across all housing types are expected to increase between one and six per cent in the majority of regions by year’s end, according to RE/MAX’s 2024 Fall Housing Market Outlook.  

Ahead of the next Bank of Canada (BoC) interest rate announcement on September 4, two in 10 Canadians (16 per cent) said they will feel more comfortable engaging in the real estate market once they see there is more than a 100-basis-point cut to the BoC’s lending rate between now and the end of the year, according to a Leger survey commissioned by RE/MAX as part of the report. 

“The fall market is usually a good early indicator for activity as we look ahead to early 2025, and we’re headed toward more healthy territory. With interest rates starting to ease, buyers are beginning to come off the sidelines,” says Christopher Alexander, President, RE/MAX Canada. “That’s not to say the fall market will be in full swing according to historic standards. Consumers will drive that trend, so we’ll need to see a bigger move by the Bank of Canada for that to happen.”  

Consumer Sentiments Going into the Fall Market 

Ahead of further anticipated interest rate cuts by the Bank of Canada, it seems that even the mere prospect of lower rates has boosted confidence among first-time homebuyers, with one-quarter of Canadians (25 per cent) actively saving for a home purchase and confident they will be able to buy soon (with the majority being younger Millennials and Gen Zs aged 18-24, at 35 per cent).  

On the flipside, dropping interest rates now may prove too little, too late for some current homeowners, with 14 per cent saying they need to renew their mortgage soon, and with the current higher interest rate, they may need to sell their home.  

When it comes to financial savings, the Leger survey revealed that while a home purchase is listed among the top three priorities for 25 per cent of Canadians, it has taken a back seat to day-to-day expenses such as utilities and food (58 per cent), and travel (45 per cent). 

In the search for affordability, one-quarter of Canadians say that they are considering moving to another country (28 per cent) and 25 per cent say they are reconsidering whether to have children or start a family due to housing affordability challenges. 

“Despite some consumer confidence starting to return to the market this season, the reality is Canadians are still grappling with some serious housing affordability challenges rooted in lack of supply. Yes, borrowing is becoming less expensive, but this won’t make housing affordable in the long run,” says Alexander. “Markets ebb and flow, and as buyers re-enter the market and absorb inventory, we’ll see more upward pressure on price. 

“Ultimately, for the long-term health of Canada’s housing market, we need a national housing strategy developed in collaboration between all levels of government, that’s more strategic and visionary in how we can use existing lands and real estate to boost supply. In the meantime, buyers would be wise to work with an experienced real estate agent to help navigate those cyclical market ups and downs that often accompany this push and pull of supply and demand.” 

Regional Market Insights 

As part of the 2024 Fall Housing Market Outlook Report, RE/MAX brokers and agents in Canada were asked to share an analysis of their local market between January and July 2023 and 2024 and share their estimated outlook for fall 2024. The majority of regions (76 per cent) anticipate an increase in sale price between one to six per cent, including Greater Vancouver Area, BC; Calgary, AB; Edmonton, AB; Saskatoon, SK; Winnipeg, MB; Halifax, NS; St. John’s Metro, NL; Truro/Colchester, NS; Fredericton, NB; Timmins, ON; Sudbury, ON; Brampton, ON; Mississauga, ON; Niagara, ON; Ottawa, ON; Durham, ON; Barrie, ON; Muskoka, ON; Peterborough, ON; York Region, ON; Kingston, ON; Windsor, ON, and Thunder Bay, ON. Exceptions to the upward trend include Toronto, ON; Hamilton, ON; Burlington, ON; and Kitchener-Waterloo, ON, where a moderate decline between two and three per cent is expected, and Charlottetown, PEI; North Bay, ON, and London, ON, where prices will likely remain flat. 

When it comes to listings, a majority of regions surveyed (82 per cent) saw the number of listings increase between 2.3 and 34.7 per cent between January and July (2023 – 2024). The number of sale transactions also increased between 3.1 and 7.4 per cent in Atlantic Canada, 3.4 to 30.9 per cent in Western Canada, and between 0.6 and 14.8 per cent in Ontario, except for some larger Ontario markets like Toronto, Brampton, Durham Region, Mississauga, Peterborough and York Region, where sales trended downward.     

According to RE/MAX brokers’ insights, 33 per cent of housing markets are expected to be seller’s markets, but this may shift as competition increases and market conditions evolve. 

To view the regional data table, click here. 

Western Canada and Prairies  

The Prairies continue to skew towards a seller’s market (Edmonton, AB; Calgary, AB; Saskatoon, SK) which is consistent with 2023, except for Winnipeg, MB, which is a balanced market. On the other hand, in Western Canada, inclusive of the Greater Vancouver Area, BC, and Kelowna, BC, a mix of balanced and buyer’s markets are anticipated. Heading into the fall, prices are forecasted to increase by two to six per cent in regions like the Greater Vancouver Area, BC, and Kelowna, BC; Calgary, AB; Edmonton, AB; Saskatoon, SK; and Winnipeg, MB. Sale transactions are anticipated to increase by five to 15 per cent in the Greater Vancouver Area, BC; Edmonton, AB; and Winnipeg, MB; and a decrease of one per cent in Saskatoon, SK, due to inventory shortages, while Calgary, AB anticipates sales will remain flat. RE/MAX broker feedback in Regina, SK indicates that many factors will dictate how the market pans out for the remainder of the year, including government election cycles, The Bank of Canada interest rate announcements and inventory levels. Historically, Regina, SK sees the markets cool from mid-September through the end of the year. 

All markets in Western Canada and The Prairies – apart from the Greater Vancouver Area, BC – continue to experience supply challenges, with increased activity in the market, as consumers benefit from recent interest rate cuts. Lower mortgage rates have bolstered consumer confidence in the market but paired with low supply, RE/MAX brokers and agents in the region are reporting aggressive offers in conjunction with sellers raising asking prices for residential homes. 

Ontario 

Despite The Bank of Canada’s interest rate cuts, low housing supply continues to impact multiple markets across Ontario, keeping prices high. However, some buyers are gaining more confidence as mortgage rates decrease and are slowly re-entering the market heading into fall, keeping prices relatively stable in comparison to the year prior. Housing supply is expected to become a larger issue once further interest rate cuts motivate buyers on the sidelines to re-enter the market and spark more competition. 

Although some homebuyer confidence is starting to return, buyers in Toronto remain hesitant as affordability continues to be a challenge, especially for first-time homebuyers.  

Across Ontario, 12 regions are expecting average residential prices to remain flat or increase modestly heading into the fall. Increasing markets include Timmins, Sudbury, Brampton, Mississauga, Thunder Bay, and Barrie (each rising five per cent), Peterborough, York Region and Kingston (rising three per cent), Niagara (up two per cent), Durham Region and Ottawa (up one per cent), and London (rising a nominal 0.5 per cent). The outliers to this upward trend are Toronto, Kitchener-Waterloo, Hamilton, and Burlington, which are expecting a price decrease.  

In Ontario, seven markets are expected to experience balanced conditions this fall, while four are anticipated to be seller’s markets, and five are buyer’s markets. Four markets are expecting a mix, with three buyers/balanced conditions, and one sellers/balanced market. 

Atlantic Canada  

Echoing similarities to other regions across Canada, Atlantic Canada is also reporting low inventory supply and increased competition when it comes to buyer activity. Buyers are competing aggressively on affordable housing and new listings, causing prices to spike. This is likely a result of current supply challenges and an increase in out-of-town buyers from Western and Central Canada.  

Unlike in 2023, average residential prices in Atlantic Canada are expected to increase for the remainder of year, by five per cent in Truro and Colchester, NS, one per cent in Halifax, NS, 1.5 per cent in St. John’s Metro, NL, and two per cent in Fredericton, NB, while Charlottetown, PEI is anticipated to remain flat. All markets in Atlantic Canada with the exception of Charlottetown – which is a buyer’s market – are considered to be seller’s markets.   

Quebec  

Like other regions across the country, Montreal’s housing shortage coupled with interest rates have resulted in a seller’s market, with buyers making multiple offers on properties to remain competitive or opting to wait on the sidelines. Pricing and marketing are crucial for sellers looking to attract hesitant buyers.  

Additional survey findings:  

  • Majority of Canadians (77 per cent) believe steps taken by municipal, provincial, and federal governments to improve housing inventory and affordability are not enough to solve our affordability crisis and more needs to be done 
  • 60 per cent of Canadians believe building more diverse types of housing are the key to solving Canada’s housing supply challenges 
  • For 16 per cent of Canadians, rising cost-of-living and affordability challenges have not deterred them at all, and they plan to purchase another home beyond their primary residence soon (or have recently) 
  • 40 per cent of Canadians feel Canada is one of the best countries in the world to purchase/invest in real estate (notably this number is higher at 52 per cent, for new Canadians that have been in Canada for less than 5 years) 
  • One-third of Canadians (32 per cent) said they are relying on their home as their only financial plan for retirement. 

Undeterred by affordability challenges, consumer confidence in home ownership as an investment remains steady year-over-year

RE/MAX Canada expects average residential prices to rise by 0.5 per cent in 2024

  • Three-quarters of Canadians (73 per cent) believe that home ownership is the best long-term investment (unchanged from last year)
  • While average residential sale price in 61 per cent of regions is expected to increase between two and 7.5 per cent in 2024, 18 per cent of markets analyzed are anticipating a decrease between two to five per cent, while 18 per cent will remain flat in 2024
  • Housing market conditions are anticipated to be varied in 2024, with 42 per cent expected to balance out, while 29 per cent are expected to favour sellers, 21 per cent to favour buyers, and four per cent to experience mixed conditions.

Toronto, ON and Kelowna, BC, Tuesday, November 28, 2023 — Canadians’ outlook on home ownership remains positive, according to a new report from RE/MAX Canada, despite challenging market conditions in 2023, including a persistent housing shortage, and a tricky interest rate environment. According to the RE/MAX 2024 Housing Market Outlook Report, the majority of Canadians (73 per cent) are confident that home ownership is the best investment, a sentiment that remains unchanged year-over-year. Looking ahead, the RE/MAX network of brokers and agents expects the market to be slightly more active in 2024, with national average residential sale prices likely to increase by 0.5 per cent and 61 per cent of regions surveying anticipating unit sales to increase in 2024.

Download the 2024 Housing Market Outlook Report Data Table:
http://download.remax.ca/PR/2024REMAXHousingMarketOutlook_data.pdf

“It’s been a challenging year for Canadian homebuyers and sellers, who have been feeling the effects of a severe housing shortage and the high cost of living, but much like Canada’s housing market, Canadians have stayed resilient. Historically, real estate has given owners excellent returns and strong financial security – and that hasn’t changed,” says Christopher Alexander, President, RE/MAX Canada. “The slower market we’ve been experiencing across the country this fall could be an early indicator of an active 2024, as reflected in the modest price increase and sales outlook for next year, and the balancing of conditions in several regions across the country.”

Canadian Consumer Insights

According to a Leger survey commissioned by RE/MAX Canada as part of the report, the majority of Canadians (72 per cent) believe that as municipal, provincial and federal governments make plans to increase housing supply, it’s important that they consider the diversity of the new housing that’s developed.

When it comes to home-buying trends in 2024, the Leger survey reveals that more than four in 10  Canadians believe climate change will impact their decision on where to buy a home next year (41 per cent); while approximately one in five (21 per cent) are exploring alternative home ownership, or opting for inter-provincial/city moves (17 per cent) in search of greater affordability in the neighbourhood they love.

Regional Market Insights

RE/MAX brokers and agents across Canada were asked to provide a year-over-year analysis of their local market between January 1 and October 31, and share their estimated outlook for 2024. Based on their insights, the majority of regions surveyed noted many homebuyers are looking for primary residential properties with rental potential, to get the most out of their investment and offset the rising cost of living and reduce mortgage payments. This is likely to be a leading influential factor heading into 2024, according to RE/MAX brokers and agents across the country.

Western Canada

In Western Canada, average residential prices are anticipated to rise by two per cent in Metro Vancouver, BC, Nanaimo, BC and Saskatoon, SK, and by four per cent in Edmonton, AB next year. Meanwhile, regions such as Victoria, BC, and Regina, SK are anticipating a modest two-per-cent decrease in average residential sale prices in 2024. Although most regions are currently considered to be balanced markets, Saskatoon, SK is an outlier and currently a seller’s market. In 2024, Edmonton, AB, and Saskatoon, SK are expected to favour sellers, Victoria, BC is anticipated to shift to a buyer’s market and Metro Vancouver, BC and Regina, SK foresee continuing balanced conditions. Meanwhile the market in Nanaimo, BC is anticipated to be a mix of buyer’s and balanced in 2024.

Amid ongoing economic pressures and rising interest rates, affordability and the cost of living continue to be top liveability considerations for potential homebuyers in Western Canada. This has led to an increase in demand from first-time homebuyers for primary properties that also have the capacity to provide them with rental income, in places such as Victoria, BC; Vancouver, BC; Edmonton, AB; Nanaimo, BC; and Saskatoon, SK. The only outlier to this trend is Regina, SK, as the relative affordability of the region provides homebuyers with greater financial flexibility, as compared to other provinces.

Looking ahead to 2024, interest rates and low inventory are likely to continue placing pressure on the market, particularly among first-time homebuyers in regions such as Edmonton, AB, Nanaimo, BC and Saskatoon, SK. However, these same conditions may allow Metro Vancouver, BC to remain balanced. Although Regina, SK provides many aspiring homeowners with a pocket of affordability, demand and supply are not expected to skew market conditions significantly.

Ontario

Much like Western Canada, shifts to average residential prices are a mixed bag in Ontario. Specifically, prices are anticipated to increase by two per cent in Thunder Bay, ON and Ottawa, ON; three per cent London; 3.5 per cent in Hamilton, Niagara and York Region; four per cent in Sudbury and Burlington; 4.5 per cent in Kingston; five per cent in Muskoka and Haliburton; seven per cent in Oakville and Simcoe County; and 7.5 per cent in Windsor and Sault Ste. Marie. Meanwhile, prices are anticipated to remain unchanged in Mississauga, Brampton, North Bay, and Kenora in 2024. Looking ahead to 2024, Peterborough and the Kawartha’s and the Greater Toronto Area (GTA) are both anticipating a slight decline of three per cent in average residential prices, while Durham Region and Grand Bend are anticipating a decline of five per cent. Kitchener-Waterloo is anticipating a decrease of eight per cent in average residential sale prices.

Despite various markets in Ontario favouring sellers or experiencing balanced conditions in 2023, the majority of regions are currently buyers’ markets including, Kitchener- Waterloo, Hamilton, Burlington, Niagara, Mississauga, Durham Region, Brampton, Grand Bend, North Bay, Muskoka, Haliburton and Kingston. Although Hamilton and Burlington experienced varying conditions throughout the year, both have shifted toward buyer’s markets in Q4 of 2023. Looking ahead to next year, Mississauga, Hamilton, Burlington, Brampton, Simcoe County, Muskoka and Haliburton are likely to balance out from their current buyer’s or seller’s conditions. The GTA market is anticipated to gain balance in 2024 but is also expected to favour buyers at certain points of the year.  Considering the interest rate environment and the cost of living this year, housing market conditions in 2023 have fluctuated. As interest rates have recently paused, many markets are stabilizing with several regions in Ontario (54 per cent), expected to remain unchanged in 2024 from their current market conditions.

Despite cost of living becoming a more prominent consideration for homebuyers and sellers, additional emerging liveability trends in Ontario include the desire for greater access to public transportation and green space, as well as proximity to preferred schools. In tandem with Western Canada and Atlantic Canada, both cost of living and interest rates are the most prominent factors impacting Ontario markets. These factors are leading many Canadians to become resourceful and focus their home-buying search on properties that can accommodate additional tenants, as a means to offset mortgage costs and ongoing affordability challenges.

Quebec

Market conditions are aligned in the Quebec province, with both Quebec City and Montreal favouring sellers. In Quebec City average residential sale price is anticipated to remain unchanged in 2024, but the market is expected to shift into greater balance next year. Meanwhile, Montreal is expected to move toward a buyer’s market in 2024, but that is dependent on interest rates. Although many sellers are taking a wait-and-see approach to the market, pressure from rising rates could encourage more homeowners to list their properties for sale. Average residential sale prices in Quebec City are anticipated to remain unchanged.

Much like the rest of Canada, the cost of living is a top consideration for Canadians in the Quebec region. Additionally, the return to in-person work post-pandemic has prompted rising in properties with proximity to workplaces and public transport. In 2024, rising interest rates could limit the purchasing power of potential homebuyers, weighing on the Quebec market.

Atlantic Canada

In Atlantic Canada, the majority of regions are anticipating a modest increase in average residential sale prices, including, Fredericton, NB (+3.6 per cent); Saint John, NB (+3.5 per cent); Moncton, NB (five per cent); and St. John’s & surrounding area, NL (three per cent). The only exception is Halifax, NS, where average residential sale price in unlikely to waiver. Currently, all markets are considered to be seller’s markets, a condition that is expected to hold firm in 2024, with the exception of the St. John’s, NL area, where the market is expected to regain balance in the coming year.

Looking ahead to 2024, low inventory will continue to impact local housing market conditions in Atlantic regions. Despite this being the most dominant factor impacting the market, rising interest rates also hold the potential to rattle buyer confidence. When it comes to liveability, cost of living is one of the most prevalent trends in the Moncton, St. John’s, Fredericton, Saint John and Halifax markets. Current economic conditions and ongoing affordability challenges have led first-time homebuyers in particular to expand their home-buying search to include semi-detached homes or properties with rental income potential.

Leger Survey Results

While the market is anticipated to cool in the first half of 2024, Canadians’ perceptions of real estate as a good investment haven’t shifted since 2022. According to a Leger survey commissioned by RE/MAX as part of the report, Canadians perceive homeownership as the best investment they could make (73 per cent), a number that has stayed consistent since last year’s report. Yet, more than half (54 per cent) are concerned that interest rate increases will impact their ability to engage in the real estate market. This will impact millennial homebuyers most acutely, with 73 per cent agreeing with this statement.

Additional insights from the Leger survey:

  • Over half (54 per cent) of Canadians are concerned that further interest rate increases will impact their ability to engage in the real estate market in 2024
  • Six in 10 Canadians (59 per cent) feel confident that working with a professional real estate agent will bring value to the process
  • Almost half (47 per cent) of Canadians believe Canada is one of the best countries in the world to purchase/own real estate

About the 2024 Canadian Housing Market Outlook Report: 

RE/MAX’s 2024 Canadian Housing Market Outlook Report includes data and insights from RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments. The overall outlook is based on the average of all regions surveyed, weighted by the number of transactions in each region.  

About Leger 
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,516 Canadians was completed between September 29 and October 1, 2023, using Leger’s online panel. Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size (1,516) would yield a margin of error of +/- 2.2 per cent, 19 times out of 20. 

RE/MAX Canada anticipates a softening fall housing market for majority of regions across the country, impacted equally by lack of inventory and the interest rate climate 

RE/MAX Canada network expects residential sale prices to remain flat this fall

  • While average residential sale prices are softening, there are a few outliers where prices are anticipated to increase, including larger markets such as Greater Toronto Area, (2.5 per cent), Calgary (4.5 per cent), and Sudbury (five per cent)
  • Leger survey data shows that 33 per cent of Canadians who are interested in buying and/or selling a home in the next 12 months will wait and see how interest rate changes play out before buying
  • Lack of affordable housing inventory is leading more than half of Gen Zs (55 per cent), and nearly half of Millennials (49 per cent) to change their housing plans

TORONTO and KELOWNA, BC, Sept. 5, 2023 – While Canada grapples with the highest interest rates it’s seen in decades, RE/MAX Canada brokers and agents across the country are reporting that both the interest rate climate and lack of inventory are likely to result in a softer market this fall. According to the 2023 Fall Housing Market Outlook Report, the RE/MAX network expects the national average residential sale price across all home types to remain flat, with no change anticipated between now and the end of the year.

“If the fall market is an early indicator for 2024 activity, we may see a very active first quarter as buyers and sellers take advantage of easing prices into the earlier part of next year,” says Christopher Alexander, President, RE/MAX Canada.

The housing inventory shortage is having the greatest impact on Millennial and Gen Z homebuyers. According to a Leger survey commissioned by RE/MAX Canada as part of the report, lack of affordable housing inventory is leading more than half of Gen Zs (55 per cent), and nearly half of Millennials (49 per cent) to change their housing plans.

In addition to the lack of inventory, the interest rate environment is still on the minds of Canadians, especially ahead of the Bank of Canada’s (BoC) next announcement on September 6. According to the Leger survey, 33 per cent of Canadians who are interested in buying and/or selling a home in the next 12 months will wait and see how interest rate changes play out before buying. On the other hand, over half of Canadians (51 per cent) say further interest rate increases this year will not change their financial situation or impact their plans to buy or sell a home. Overall, younger Canadians are more likely to rely on BoC interest rate announcements to determine the best time to buy or sell (47 per cent of Gen Zs and 52 per cent of Millennials).

“While we wait for governments to implement a tangible national housing strategy to boost Canada’s supply of both affordable and diverse housing, the market is starting to ease in some regions. This is bringing some much-needed relief from the sky-high prices we’ve experienced over the past couple of years,” continues Alexander.

Adds Elton Ash, Executive Vice President of RE/MAX Canada, “The Canadian housing market has historically given homeowners great returns and solid financial security. We believe in the long-term health of Canada’s housing market, but in order to protect it, we need to acknowledge and address the housing supply shortage in every city, town, and neighbourhood across the country.”

As part of the 2023 Fall Housing Market Outlook Report, 74.1 per cent of RE/MAX broker regions surveyed saw the number of listings decrease between 1.2 up to 40 per cent between January – July year-over-year (2022 and 2023). The number of sales transactions in all regions surveyed as part of the report experience declines year-over-year from a decrease of 4.1 per cent to upwards of 39.6 per cent.

Regional Market Insights

RE/MAX brokers and agents in Canada were asked to provide an analysis of their local market between January and July 2022 and 2023 and share their estimated outlook for fall 2023. Based on their insights, 44 per cent of housing markets in Canada are expected to be sellers’ markets in 2023, while the rest are anticipated to be a mix of balanced, buyers, and sellers/balanced and buyers/balanced (mix depending on location in the specific region).

Western Canada and the Prairies

Contrary to other regions across the country, in Western Canada and the Prairies, the majority of markets are anticipating average residential sale prices to increase this fall by 0.7 per cent – 4.5 per cent in regions such as Calgary, AB, Edmonton, AB, Winnipeg, MB, Red Deer, AB. On the flip side, regions such as Greater Vancouver Area (GVA), BC, Kelowna, BC, are expecting sales to soften by two – three per cent.

The mix of outlooks is also reflective of the estimated market type heading into the fall, with the majority of regions reporting a mix of sellers/balanced depending on the price point, property type, location in the specific region.

Ontario

Ontario is a diverse mix of average residential sale price estimates heading into the fall, with seven regions reporting a decrease expected including Hamilton, ON, Ottawa, ON, Windsor, ON (two per cent), North Bay, ON (three per cent), Kitchener-Waterloo, ON (four per cent), Durham Region, ON, Peterborough, ON (five per cent), while Thunder Bay, ON, and Peel Region, ON are likely to remain relatively flat (zero per cent) this fall.

Regions that are anticipating an increase in average residential sale price estimates this fall include; Burlington, ON (one per cent), Lakelands West, ON, Oakville, ON (two per cent), York Region, ON (2.2 per cent), Greater Toronto Area (GTA), ON (2.5 per cent), Sudbury, ON (five per cent).

In Ontario, 53 per cent of markets are likely to be sellers markets this fall, while 40 per cent are anticipated to be balanced, and seven per cent buyers.

Across Ontario, the simultaneous impact of inventory shortages and rising interest rates has influenced markets throughout 2023 and will continue to do-so heading into the fall. Lack of inventory is the most pressing factor influencing activity this fall in regions such as Sudbury, ON, Peel Region, ON, and Ottawa, ON, while other markets reported both being major contributors to market activity this fall.

While rising interest rates throughout 2023 has created some consumer reluctancy to enter the market in some regions, by comparison, buyers in regions like Hamilton and Burlington were actually aided by rising interest rates this year.

In regions, like the GTA, it’s important to note that while inventory will continue to be a challenge in the long-term, in the short-term as we look ahead to the fall, interest rates are likely to be the most pressing factor influencing the market. Regions such as Hamilton-Burlington are also likely to be most heavily impacted by interest rates heading into the fall.

Quebec

The island of Montreal experienced a decrease in prices by 5.8 per cent between January – June 2022 and 2023, as well as an 18.2 per cent decrease in number of sales. Conversely, number of listings increased by 63.7 per cent in the same period. Unlike other regions, the area has properties available, however, mostly renovated, and well-priced homes are moving. The region is also seeing a new trend of assuming sellers’ mortgages, transferring mortgage, or paying in cash, primarily among high-end buyers. RE/MAX brokers reported an increase in these practices as a way for buyers to combat rising intertest rates and mortgage payments.

Atlantic Canada

Keeping with the trend across the country, all markets in Atlantic Canada surveyed reported low inventory in tandem with rising interest rates which have adversely affected the market, especially for buyers with lower price points (Halifax, NS, Charlottetown area, PEI), or first-time homebuyers (St. John’s, NF).

In Atlantic Canada, average residential prices are expected to decline between one and two per cent in Halifax, NS and Charlottetown Area, PEI for the remainder of 2023 and increase by three per cent in Moncton, NB. Average residential prices are expected to remain flat in St. John’s, NF for the back-half of 2023. Most markets in Atlantic Canada are considered sellers’ markets (St. John’s, NL, Halifax, N.S and Moncton, NB) apart from the Charlottetown area, PEI, which is considered balanced.

About Leger
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,517 Canadians aged 18+ was completed between July 21 and 23, 2022, using Leger’s online panel. Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.5 per cent, 19 times out of 20.

Sixty per cent of Canadian housing markets anticipated to be balanced in 2023

RE/MAX Canada expects average residential prices to decrease by 3.3 per cent in 2023

  • The biggest price declines across the country are expected in Ontario and Western Canada, where some markets may see average residential sale prices decrease by 10 to 15 per cent
  • Price growth outlooks are anticipated in Atlantic Canada markets, with average residential sale prices expected to increase by eight per cent in Halifax and four per cent in St. John’s in 2023
  • 60 per cent of regions in Canada are expected to be balanced markets in 2023, according to RE/MAX brokers and agents
  • 73 per cent of Canadians still say that home ownership is the best long-term investment they can make

Toronto, ON and Kelowna, BC, November 29, 2022 – Amid rising interest rates, and a looming recession, RE/MAX Canada is anticipating a modest decline of 3.3 per cent in average residential sales prices across the country in 2023. The estimates are based on surveys of RE/MAX brokers and agents from coast to coast, as reflected in RE/MAX’s 2023 Canadian Housing Market Outlook Report.

In sharp contrast to 2022, most regions analyzed in the report will experience more balanced conditions in 2023 – a trend that’s already starting to materialize in many regions as a result of current economic conditions.

According to a Leger survey commissioned by RE/MAX as part of the report, Canadians view home ownership as the best long-term investment they can make (73 per cent). Yet, the majority (67 per cent), are feeling less optimistic in the short-term with 67 per cent less inclined to buy in the first half of 2023, and 62 per cent less inclined to sell in that time frame.

“It’s good see the majority of markets moving toward more balanced conditions, which is typically defined by 45 to 90 days on market. This is a much-needed adjustment from the unsustainable price increases and demand we saw early in 2022,” says Christopher Alexander, President, RE/MAX Canada. “Many Canadians have understandably expressed hesitancy about engaging in the real estate market early in 2023, in the wake of rising interest rates and broader economic uncertainties. However, despite this, a greater number of Canadians consider real estate to be a solid long-term investment compared to this time last year. As we head into the new year, it’s important that governments work collaboratively to support housing affordability and address the supply challenges that Canadians continue to face, in order to make home ownership feasible for those who want it.”

“We’re confident that as economic conditions improve and the market continues to even out into Q3/Q4 2023, a more-regular pace of activity will resume. It’s especially critical during challenging economic times, that staying informed and working with an experienced real estate professional can help Canadians clarify some of the unknowns, help them find a home within their means, and ultimately make the best decision possible,” says Elton Ash, Executive Vice President, RE/MAX Canada.

Regional Canadian Housing Market Insights

RE/MAX brokers and agents in Canada were asked to provide an analysis of their local market in 2022 and share their estimated outlook for 2023. Based on their insights, 60 per cent of housing markets in Canada are expected to be balanced markets in 2023, impacted by modest price declines and less activity.

With the exception of Halifax, NS, Ottawa, ON and the region of Montreal, QC, balanced market conditions are expected in Canada’s major city centres, including the Greater Toronto Area (GTA), ON, Mississauga, ON, Greater Vancouver Area (GVA), BC, Calgary, AB, Regina, SK and Winnipeg, MB, in what is being called a healthy development. Move-up and move-over buyers are driving activity in these regions with the exception of Ottawa, ON and Calgary, AB, where first-time buyers are expected to lead. Following a two-year frenzy fuelled by the pandemic, average residential sale prices are anticipated to decrease in Canada’s priciest markets – the GVA and GTA.

Greater Toronto Area (GTA), Ontario

The Greater Toronto Area (GTA) is currently a balanced market – a condition that is anticipated to continue into 2023. Move-up and move-over buyers have been driving demand in the region, in a trend that is expected to carry on in the next year. Meanwhile, single-detached homes remain the dominant housing type, followed by condo apartments. The average residential sale price has increased by 11 per cent from $1,086,155 in 2021 (January-December) to $1,203,916 (January-October) in 2022.

“We’re seeing three main trends that will continue into next year,” says Cameron Forbes, RE/MAX Realtron Realty broker. “Continued interest rate increases and associated price adjustments, rising unemployment due to an economic slowdown, and new opportunities to engage in the market for buyers and sellers because of improved affordability. For buyers, this includes having fewer competitors, reduced prices and an increase in choices in the market. Meanwhile, sellers will have a trade-up advantage, reduced competition of listings, a stronger ability to re-locate to the suburbs, and have all of the advantages that buyers do, too.” The most desirable neighbourhoods in the city are currently based on location and affordability, with access to transit being the largest factor.

Rising interest rates are expected to be a dominant theme in 2023, resulting in a slower market for both buyers and sellers in the GTA. These conditions are impacting first-time buyers in particular, with many choosing to pause their home-buying efforts, due to a lack of affordability. Meanwhile, new construction projects are being delayed as a result of the widening gap between market prices and construction costs, including the impact that higher interest rates have had on financing these projects. The luxury market in Toronto has slowed down and will likely continue to cool in 2023 due to economic pressures. The average residential sale price in the GTA may decrease by up to11.8 per cent in 2023.

“It’s important to also consider some key context for the GTA. The pandemic years between Spring 2020 and early 2022 were outliers in terms of pricing and demand and factoring out those years in assessing what lies ahead for the region is important as we slowly tilt back to a post-pandemic recovery. This moderating market is an opportunity for homebuyers to take the time to consider their needs, assess opportunities patiently and ultimately make a wise purchasing decision and investment in the long run” adds Alexander.

Greater Vancouver Area (GVA), British Columbia

Balanced market conditions in the GVA are anticipated to continue into at least the second quarter of 2023. Move-up and move-over buyers have led consumer demand in the region, with first-time buyers following close behind – a trend that’s likely to persist into the beginning of next year.

“A big priority for homebuyers will be weighing value against opportunity in the market, with upsizing being top of mind. On the flip-side first-time homebuyers will be able to take advantage of a cooling market and make offers with conditions,” said Tim Hill, RE/MAX All Points Realty agent. “Interestingly, it will be first-time home buyers that will facilitate move-up and move-over buyers to sell their first properties and upsize.  I believe this will be a major factor and growing trend in the GVA real estate in 2023.”

Single-detached homes remain the dominant housing type in the area, with the “upsizing” trend expected to become increasingly popular among families in 2023. Desirable neighbourhoods in the city are currently based on location, with access to rapid transit playing a large part in purchasing decisions. A continued drop in condo pricing is expected into 2023, while the luxury market is anticipated to have a slow start to the year before balancing out in the latter half of 2023. The average residential sale price in the GVA is anticipated to decrease by five per cent in 2023.

Calgary, Alberta

Much like Vancouver, Calgary’s marked is balanced, but is expected to shift into seller’s territory in early 2023. First-time buyers are driving demand in the region, with move-up and move-over buyers trailing close behind – a trend that is expected to continue into 2023.

“First-time buyers dealing with higher interest rates have lowered their expectations and downsized their purchases, going from single-detached homes to duplexes or apartments,” said Richard Fleming, from RE/MAX Real Estate Mountain View. “We’re seeing first-time buyers that still want to get into real estate, they’re just adjusting what that looks like.”

The average residential sale price increased by 13 per cent from $585,025 in 2021 (January-December) to $658,277 in 2022 (January-October). Condos are currently the dominant housing type in the region, with single-detached homes expected to drive the majority of sales in 2023, as buyers seek additional living space. Inventory is anticipated to remain low in the first quarter of the year, before steadily increasing through the third quarter and finally sloping down again in the final quarter of 2023.

Home sales are steadily increasing and are expected to remain on the rise in 2023. The luxury market has decreased its pace but is likely to pick back up next year. The average residential sale price in Calgary is anticipated to increase by seven per cent in 2023.

Edmonton, Alberta

Similar to the majority of regions across the country, Edmonton is currently experiencing a balanced market, with demand expected to increase in the spring. Move-up and move-over buyers are driving demand in the region and are expected to continue doing so into 2023. The average residential sale price increased by three per cent from $387,614 in 2021 (January-December) to $401,025 in 2022 (January-October). Single-detached homes remain the dominant housing type.

“We’re seeing three main trends this year,” said John Carter of RE/MAX River City. “Migration from other provinces, increased demand for luxury residential real estate, and balanced market conditions.” New construction developments continue to be pressured by ongoing supply chain challenges and inflationary cost issues. Additionally, limitations on skilled labour are contributing to hurdles experienced by many builders.

However, Edmonton is expected to weather the recession well, as average incomes in the region are some of the highest in the country, according to Carter. Despite rising interest rates, the majority of buyers have not capped their mortgage capacity. Demand for downtown condos is expected to continue rising in 2023, with demand in the luxury segment becoming more robust in the year ahead. The average residential sale price in Edmonton is anticipated to increase by three per cent in 2023.

Regina, Saskatchewan

Regina is considered a balanced market and is anticipated to remain one in 2023. Move-up and move-over buyers have driven demand in the region and are expected to continue doing so into 2023. The average residential sale price in the region decreased by one per cent from $324,650 in 2021 (January-December) to $320,970 in 2022 (January-October). Single-detached homes remain the dominant housing type in the region.

“The market will remain balanced and steady through 2023 and we do not anticipate a major change in the average residential sale price or number of sales in 2023 as a result,” said Jeremy Cosette of RE/MAX Crown Real Estate. “We’ll see a lot of similarity to 2022 across the board and although housing supply will likely fluctuate throughout the year, overall, it’ll level out and remain unchanged in 2023.”

Rising interest rates will likely be a dominant theme in 2023, resulting in a slower market for both buyers and sellers. The average residential sale price in Regina is anticipated to remain the same in 2023.

Winnipeg, Manitoba

Winnipeg is currently sitting in a balanced market, but is expected to shift to a buyer’s market early in the year before returning to balance in late 2023. Move-up and move-over buyers continue to drive demand in the region, with single-detached homes remaining the dominant housing type in the region – trends that are both expected to intensify in 2023. The average residential sale price increased by 10 per cent from $386,491 in 2021 (January-December) to $423,680 in 2022 (January-October).

“In 2023 we will continue to see an interest in multifamily sales as well commercial, land assembly and land banking,” said RE/MAX Executives Realty broker Akash Bedi. “On the residential side, I think we will see a bit of a slowdown with residential rental unit sales.”

Rising interest rates are expected to continue placing pressure on affordability and pre-approval amounts in Winnipeg next year. Unlike the majority of regions, Winnipeg is experiencing an increase in joint family and multi-generational family ownership – which can be attributed to ongoing affordability challenges. The condo market is in line with the changes experienced in the overall market. The average residential sale price in Winnipeg is expected to decrease by 8.5 per cent in 2023.

Ottawa, Ontario

Ottawa is currently defined as a seller’s market and it is anticipated to remain one into the third quarter of 2023, where subsequently it is anticipated to become balanced. First-time homebuyers are driving demand in the region due to its relative affordability a trend that is expected to carry on next year. The average residential sale price increased by nine per cent from $601,039 in 2021 (January-December) to $656,761 in 2022 (January-October). Townhomes are currently the most in-demand housing-type due to the accessible entry-point they provide buyers.

“We’re seeing three main housing trends heading into 2023,” said Laura Keller of RE/MAX Affiliates Realty Ltd. “More multigenerational living, less upward movement as housing prices change and many first-time buyers who will look to engage and enter the market.” First-time buyers in Ottawa are particular about the finishes, style and location of their homes, with many not wanting to spend money on small renovations. As single-family dwellings have become unaffordable to rent, multi-residential properties and tiny or coach home conversions are expected to increase. Rising interest rates are anticipated to continue cooling the market in the next year. Supply remains an issue in Ottawa, with many new construction developments being halted due to increased development fees and material and labour shortages. The average residential sale price in Ottawa is anticipated to increase by four per cent in 2023.

Montreal Region, Quebec

The Montreal Region is currently a seller’s market, but certain types of properties and areas will be going towards a balanced market. These conditions are anticipated to continue into 2023. Currently, move-up and move-over buyers are driving demand in the region – a trend expected to carry over next year. The average residential sale price increased by 13 per cent year-over-year in Montreal from $490,000 in 2021 (January-December) to $556,000 in 2022 (January-October).

Single-detached homes are the most in-demand housing type in the Montreal Region. “We’ll see three main trends this year,” said Patricia Hamelin of RE/MAX du Cartier. “Slower movement in the market, an increase in the amount of move-up buyers and the market continuing to balance out in 2023.”

Now in the post-pandemic, housing demand is beginning to balance back to pre-pandemic levels. Rising interest rates are anticipated to continue impacting the housing market in 2023 – specifically by reducing its pace. Supply chain, labour shortages and rising costs of materials and labour have caused new construction developments to become delayed. The luxury market is expected to continue to cool in 2023, thus creating more advantageous opportunities for potential buyers. The average residential sale price in the Montreal Region is anticipated to decrease by five per cent in 2023.

Halifax, NS

Halifax is currently a seller’s market and it is anticipated to remain one in 2023. Move-up and move-over buyers are driving demand in the region and are expected to continue to do so next year. The city saw an 19 per cent increase in year-over-year residential sale prices from $457,741 in 2021 (January-December) to $542,663 in 2022 (January-October). Single-detached homes remain the most in-demand housing type among buyers. Interest rates rising and inter-provincial migration reducing post-pandemic, contributed to the number of sales in the region decreasing by 25 per cent year-over-year, from 6,588 in 2021 (January-December) to 4,912 in 2022 (January-October).

“Halifax is expected to see strong investor activity in 2023 as prices and returns are still attractive, especially compared to other major cities across the country. Amidst inflation, a looming recession and continued adjustments to interest rates, the year is expected to start slow, but pick up its pace in the second half of 2023,” says Ryan Hartlen, broker of RE/MAX Nova.

Supply is anticipated to remain tight in 2023 for Halifax, as buyer demand remains high and the city prepares to welcome a wave of new Canadians. Renting rooms and sharing expenses are ways first-time homebuyers are entering the market in Halifax. The luxury market has experienced additional activity and a recent rise in prices, but overall, this segment is expected to cool in 2023.

The average residential sale price in Halifax is anticipated to increase by eight per cent in 2023.

Additional findings from the 2023 Canadian Housing Market Outlook Report

  • Western Canada
    • In Nanaimo, BC, the Greater Vancouver Area, BC, Kelowna, BC and Winnipeg, MB average residential sale prices are expected to decline by five to 10 per cent in 2023.
    • Victoria, BC, Calgary, AB, Edmonton, AB, and Saskatoon, SK are all expected to see average residential sale prices increase between two to seven per cent in 2023.
    • The average residential sale price is not expected to fluctuate in Regina, SK in 2023.
    • 67 per cent of regions in Western Canada are considered balanced markets, including Victoria, BC, GVA, BC, Calgary, AB, Edmonton, AB, Regina, SK and Winnipeg, MB.
    • Nanaimo, BC and Kelowna, BC are both considered to be buyer’s markets, while Saskatoon, SK is categorized as a seller’s market for single-detached properties and a buyer’s market for condominiums.
  • Ontario
    • In London, Kitchener-Waterloo, Barrie, the GTA, Durham, and Lakelands West (Georgian Bay area) average residential sale prices are expected to decline by two to 15 per cent in 2023.
    • Sudbury, Hamilton-Burlington, Oakville, Brampton, Ottawa, Mississauga, Muskoka, Niagara, Windsor, York Region, Haliburton, Peterborough and The Kawarthas, and Kingston are all expected to see average residential sale prices increase between two to eight per cent in 2023.
    • 40 per cent of regions in Ontario Canada are considered balanced markets, including London, Kitchener-Waterloo, Oakville, Barrie, Toronto, Windsor, Lakelands West and Kingston.
    • Hamilton-Burlington, Brampton, Mississauga and Niagara are all considered buyer’s markets, while Sudbury, Muskoka, Durham York Region, Haliburton, Ottawa and Peterborough and the Kawarthas favour sellers.
  • Quebec
    • In Quebec City, average residential sale prices are expected to decline by 10 per cent respectively.
    • The region of Montreal is a seller’s market, while Quebec City is a balanced market.
  • Atlantic Canada
    • In Moncton, NB, Saint John, NB and Fredericton, NB, average residential sale prices are expected to decline between 3.5 and five per cent in 2023.
    • Halifax, NS and St. John’s, NL are both expected to see average residential sale price increases in 2023, rising eight and four per cent respectively, while sale prices are anticipated to remain unchanged in Charlottetown, PEI.
    • With the exception of St. John’s, NL (a balanced market), all regions in Atlantic Canada are considered to favour sellers.

Additional key insights from the Leger survey:

  • Although rising interest rates have cooled/stabilized the real estate market, 45 per cent of Canadians are concerned that further increases will impact their ability to engage in the real estate market in 2023
  • 54 per cent of Canadians believe that the two-year ban on foreign investors purchasing property which will come into effect on Jan. 1, will increase the availability of affordable housing for local homebuyers
  • 15 per cent of Canadians are considering moving to another province in 2023 to find better housing affordability and liveability
  • 54 per cent of Canadians feel confident that their financial situation will remain steady in 2023

 

About the 2023 Canadian Housing Market Outlook Report:

RE/MAX’s 2023 Canadian Housing Market Outlook Report includes data and insights from RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments. The overall outlook is based on the average of all regions surveyed, weighted by the number of transactions in each region.

About Leger
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,544 Canadians was completed between November 4-6, 2022, using Leger’s online panel. Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.5 per cent, 19 times out of 20.

About the RE/MAX Network
As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than 140,000 agents in almost 9,000 offices with a presence in more than 110 countries and territories. RE/MAX Canada refers to RE/MAX of Western Canada (1998), LLC and RE/MAX Ontario-Atlantic Canada, Inc., and RE/MAX Promotions, Inc., each of which are affiliates of RE/MAX, LLC. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides.

RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. RE/MAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children’s Miracle Network Hospitals® and other charities. To learn more about RE/MAX, to search home listings or find an agent in your community, please visit remax.ca. For the latest news from RE/MAX Canada, please visit blog.remax.ca.

Forward looking statements
This report includes “forward-looking statements” within the meaning of the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “believe,” “intend,” “expect,” “estimate,” “plan,” “outlook,” “project,” and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. These forward-looking statements include statements regarding housing market conditions and the Company’s results of operations, performance and growth. Forward-looking statements should not be read as guarantees of future performance or results. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include (1) the global COVID-19 pandemic, which has impacted the Company and continues to pose significant and widespread risks to the Company’s business, the Company’s ability to successfully close the anticipated reacquisition and to integrate the reacquired regions into its business, (3) changes in the real estate market or interest rates and availability of financing, (4) changes in business and economic activity in general, (5) the Company’s ability to attract and retain quality franchisees, (6) the Company’s franchisees’ ability to recruit and retain real estate agents and mortgage loan originators, (7) changes in laws and regulations, (8) the Company’s ability to enhance, market, and protect the RE/MAX and Motto Mortgage brands, (9) the Company’s ability to implement its technology initiatives, and (10) fluctuations in foreign currency exchange rates, and those risks and uncertainties described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company’s website at www.remax.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.

RE/MAX Canada Network expects Canadian housing market prices to decrease 2.2 per cent this fall

  • RE/MAX brokers and agents anticipate prices in the Canadian housing market to ease by 2.2 per cent this fall, due to high inflation, rising interest rates and economic uncertainty
  • Rising interest rates have prompted 44 per cent of Canadians to temporarily shelf their home-buying aspirations, while 34 per cent say they won’t hold on purchasing a home for the foreseeable future
  • Recession worries have impelled 41 per cent of Canadians to wait to purchase/sell their home in fall 2022

Toronto, ON and Kelowna, BC, September 28, 2022 – RE/MAX brokers and agents are anticipating the national average residential sale price in the Canadian housing market to decline 2.2 per cent in the final months of the year (September-December), according to RE/MAX’s 2022 Fall Canadian Housing Market Outlook Report. This market moderation comes on the heels of rising interest rates, record-high inflation and broader global and economic uncertainties that have impacted consumer confidence and market activity. Bucking the downward trend, seven out of 30 Canadian housing markets analyzed are likely to experience modest price appreciation between 1.5 and seven per cent. Meanwhile, RE/MAX brokers and agents expect a decline in sales this fall, in 18 out of 30 markets surveyed.

In a survey of RE/MAX brokers and agents, 25 out of 30 said rising interest rates have affected activity in their local residential market this year, with some indicating that this has been the biggest factor impacting homebuyer and seller confidence – a trend that is likely to continue for the remainder of 2022. These insights are supported by a new Leger survey commissioned by RE/MAX Canada, which reveals that 44 per cent of Canadians agree that rising interest rates are compelling them to hold on buying a property this fall, while 34 per cent say they won’t hold.

“While we are still facing significant housing supply shortages across the Canadian housing market, many regions are experiencing softer sales activity given recent interest rate hikes. This provides some reprieve from the unprecedented demand and unsustainable price increases we’ve seen across Canada through 2021 and in early 2022,” says Christopher Alexander, President at RE/MAX Canada. “However, the current lull in the market is only temporary. Until housing supply increases, these ‘boom’ and ‘bust’ cycles will likely be a recurring event.”

“Despite the fact that nearly half of Canadians are waiting to buy or sell a home, we’re confident that as economic conditions improve by mid-2023, activity will resume,” says Elton Ash, Executive Vice President, RE/MAX Canada. “Timing the market for short-term investment is extremely difficult and rarely successful. But as a long-term investment, the Canadian housing market continues to yield solid returns. If someone needs to buy or sell, regardless of those cyclical peaks and valleys, being informed and working with an experienced real estate professional can help consumers clarify some of those unknowns and make the best decision possible.”

Regional Canadian Housing Market Trends

RE/MAX brokers and agents in Canada were asked to provide an analysis of their local market this fall and share their estimated outlook for the remaining months of 2022 (September-December).

Western Canada and the Prairies

In regions such as Vancouver, BC, Victoria, BC, Kelowna, BC, and Edmonton, AB, RE/MAX brokers reported rising interest rates as a factor impacting local market activity, resulting in softening consumer confidence, fewer multiple offers from buyers, and a shift toward more balanced conditions between buyers and sellers. In all regions analyzed in Western Canada and the Prairies, with the exception of Calgary, AB and Edmonton, AB, the average residential sale price is expected to decline between zero and 6.5 per cent.

In Calgary, AB, interest rate hikes and recession worries have not had a notable effect on the market, due to the region’s relative affordability. As such, a modest three-per-cent price increase is expected through the remainder of the year. In Edmonton, AB, rising interest rates have had the greatest impact on homes priced from $500,000 to $1,000,000, while those priced at $400,000 or less are still relatively affordable and a good entry point into the market, despite the current economic climate. Edmonton is likely to experience a modest price increase of 1.5 per cent for the remainder of the year. In both Vancouver, BC and Edmonton, AB, demand for luxury properties has remained stable, with interest rate hikes having a minimal impact on this segment of the market. This is expected to continue into the fall months. Low inventory remains a pressing concern in Kelowna, BC, Victoria, BC, Vancouver, BC and Calgary, AB, and is expected to place upward pressure on home prices in 2023 and beyond. In contrast, recent commercial and industrial developments have eased inventory concerns in Winnipeg, MB for the time being.

Ontario

Much like other provinces across the country, Ontario has not been immune to the impacts of rising interest rates. Many markets including Oakville, Windsor, Barrie, Durham, Kingston and Kitchener-Waterloo, anticipate – and in some cases already experiencing – a reduction in the number of units sold over the coming months. Apart from Oakville and Muskoka, average residential sale prices in Ontario are likely to remain steady or decrease between two to 10 per cent in the fall months.

Similar to Western Canada, the luxury market has remained resilient and in-demand among buyers in Oakville, despite rising interest rates and a looming recession – a contributing factor to the modest two-per-cent average residential sale price increase expected in Oakville this fall. Muskoka continues to attract homebuyers to the area, while simultaneously, many sellers are eager to sell before year-end. Given a steady stream of demand, Muskoka is expected to experience a modest five-per-cent increase in average residential sale price this fall. In Peterborough, interest rate hikes and the subsequent effects on the stress test have eroded affordability in the area, which is the main factor contributing to the seven-per-cent decrease in average residential sale price expected in the coming months. The return of conditional offers has been a prevalent trend across the province, including in Kingston, Kitchener-Waterloo, Muskoka and Peterborough. Echoing many regions across Canada, Durham, London, Sudbury, Ottawa, the Lakelands and the Greater Toronto housing market are expected to regain balance in 2023, albeit with low inventory continuing to place upward pressure on prices. As one of the more affordable markets in Ontario, Thunder Bay is unlikely to experience any significant fluctuations in average residential sale prices this fall.

Atlantic Canada*

Similar to Western Canada and Ontario, economic factors such as rising interest rates and a possible recession have contributed to decelerated home-buying activity in the region. Charlottetown, PEI experienced immediate impacts as interest rates rose, with the number of sale transactions reduced by almost half on a month-over-month basis, particularly among properties in the $500,000 to $1,000,000 price range. Despite these circumstances, Atlantic Canada continues to attract out-of-province buyers due to its affordability, relative to the rest of Canada. The majority of Atlantic Canada housing markets analyzed are expected to experience modest price increases through the end of 2022, including Halifax, NS (+1.5%), Moncton, NB (+6%) and St. John’s, NL (+7%). The outlier is Charlottetown, PEI, where average residential sale price is expected to decline by two per cent in the fall months.

Housing affordability continues to attract buyers in Moncton, who have been able to leverage the recent decrease in demand to negotiate with sellers and include conditions on purchases. Meanwhile in St. John’s, NL, economic pressure from rising interest rates has resulted in extended rent periods by would-be buyers, despite this region anticipating an increase of seven per cent in average residential sale prices. The trend has been further exacerbated by low housing inventory. However, recent “green” government announcements and initiatives are anticipated to boost the local economy and in tandem, the housing market. In spite of concerns over supply falling short of demand, Charlottetown, PEI is expected to regain more balance in 2023. However, inflation coupled with the increased cost of living will likely result in a moderate two-per-cent decline in average residential sale prices through the end of 2022.

About the 2022 RE/MAX Canada Fall Outlook Report

The 2022 RE/MAX Canada Fall Outlook Report includes data and insights from RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments. Average sale price is reflective of all property types in a region and varies depending on the region. When referring to “fall” this includes the months of September 2022-December 2022. *Insights/figures in Atlantic Canada were gathered prior to Hurricane Fiona. Regional summaries with additional broker insights can be found at the RE/MAX Canada blog.

About Leger
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,522 Canadians was completed between September 16 and 18, 2022, using Leger’s online panel. Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.5 per cent, 19 times out of 20.

About the RE/MAX Network
As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than 140,000 agents in almost 9,000 offices with a presence in more than 110 countries and territories. RE/MAX Canada refers to RE/MAX of Western Canada (1998), LLC and RE/MAX Ontario-Atlantic Canada, Inc., and RE/MAX Promotions, Inc., each of which are affiliates of RE/MAX, LLC. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides.

RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. RE/MAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children’s Miracle Network Hospitals® and other charities. To learn more about RE/MAX, to search home listings or find an agent in your community, please visit remax.ca. For the latest news from RE/MAX Canada, please visit blog.remax.ca.

Forward looking statements
This report includes “forward-looking statements” within the meaning of the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “believe,” “intend,” “expect,” “estimate,” “plan,” “outlook,” “project,” and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. These forward-looking statements include statements regarding housing market conditions and the Company’s results of operations, performance and growth. Forward-looking statements should not be read as guarantees of future performance or results. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include (1) the global COVID-19 pandemic, which has impacted the Company and continues to pose significant and widespread risks to the Company’s business, the Company’s ability to successfully close the anticipated reacquisition and to integrate the reacquired regions into its business, (3) changes in the real estate market or interest rates and availability of financing, (4) changes in business and economic activity in general, (5) the Company’s ability to attract and retain quality franchisees, (6) the Company’s franchisees’ ability to recruit and retain real estate agents and mortgage loan originators, (7) changes in laws and regulations, (8) the Company’s ability to enhance, market, and protect the RE/MAX and Motto Mortgage brands, (9) the Company’s ability to implement its technology initiatives, and (10) fluctuations in foreign currency exchange rates, and those risks and uncertainties described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company’s website at www.remax.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.

Confidence continues in Canadian housing market, with the inter-provincial relocation trend likely to remain strong in 2022

  • Migration between provinces expected to continue in 2022, potentially impacting local Canadian real estate conditions, according to 53 per cent of RE/MAX brokers (20 out of 38)
  • 49 per cent of Canadians believe the housing market will remain steady in 2022 and view real estate as one of the best investment options over the next year
  • Some of the highest outlooks are anticipated for Atlantic Canada, with Moncton and Halifax projecting average residential sales prices to increase by 20 per cent and 16 per cent respectively in 2022
  • 97 per cent of regions (37 out of 38) surveyed are likely to remain seller’s markets in 2022

Toronto, ON and Kelowna, BC, December 1, 2021 – RE/MAX is anticipating steady price growth across the Canadian real estate market in 2022, with inter-provincial migration continuing to be a key driver of housing activity in many regions, based on surveys of RE/MAX brokers and agents, as reflected in the 2022 Canadian Housing Market Outlook Report. The ongoing housing supply shortage is likely to continue, putting upward pressure on prices. As a result of these factors, RE/MAX Canada estimates a 9.2-per-cent increase in average residential sales prices across the country*.

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“Based on feedback from our brokers and agents, the inter-provincial relocation trend that we began to see in the summer of 2020 still remains very strong and is expected to continue into 2022,” says Christopher Alexander, President, RE/MAX Canada. “Less-dense cities and neighbourhoods offer buyers the prospect of greater affordability, along with liveability factors such as more space. In order for these regions to retain these appealing qualities and their relative market balance, housing supply needs to be added. Without more homes and in the face of rising demand, there’s potential for conditions in these regions to shift further.”

Despite the global pandemic, many Canadians still feel confident in the real estate market. According to a Leger survey conducted on behalf of RE/MAX Canada, 49 per cent of respondents believe Canadian real estate will remain one of their best investment options in 2022 (59 per cent of homeowners vs. 34 per cent non-homeowners which included renters, those not looking buy, and those currently looking to purchase). Additionally, 49 per cent of respondents are confident the Canadian real estate market will remain steady next year.

“Canadians recognize the value and investment potential in their homes. However, market challenges such as rising prices and limited supply have impacted local markets from coast-to-coast, causing angst this past year among those looking to get into the market and those hoping to move up in it,” says Elton Ash, Executive Vice President, RE/MAX Canada. “Despite this, it’s encouraging to see that many are feeling confident in the housing market in 2022 and view Canadian real estate as a solid investment.”

2022 Regional Canadian Real Estate Insights

RE/MAX brokers and agents in Canada were asked to provide an analysis of their local market in 2021 and share their estimated outlook for 2022. Based on their insights, 97 per cent of Canadian real estate markets are expected to favour sellers, impacted by limited housing supply and high demand.

WESTERN CANADA

The Calgary and Edmonton markets shifted from balanced conditions in 2020 to seller’s markets in 2021, which brokers and agents in the region expect to continue into 2022. This is attributed to heightened demand prompted by the inter-provincial migration trend that took place throughout 2021, which saw many homebuyers from Ontario and British Columbia driving demand high, while supply remained low.

In addition to an increase in out-of-province buyers flocking to Edmonton, the region has also welcomed investors who found themselves priced out of other markets. RBC’s provincial outlook for Alberta puts this province ahead of all others in terms of economic growth in 2022, which should bode well for homebuyers and investors alike 2022.

Regions such as Victoria, Nanaimo, Regina and Kelowna also experienced an influx of buyers in search of larger properties and greater affordability, which is likely to continue pushing demand and prices up in 2022. This trend has notably increased demand for single-family detached homes and in some regions, condos as well, which may continue in 2022.

Despite some buyers choosing to move away from urban centres such as Vancouver/Greater Vancouver in favour of suburban areas within British Columbia, or leaving the province entirely, Vancouver/Greater Vancouver has remained a quality place to live. The region continues to draw interest from Canadian and international buyers, a trend that is likely to grow next year, in tandem with rising immigration. Vancouver/Greater Vancouver is expected to remain a seller’s market in 2022, providing inventory stays tight and current demand continues, according to a RE/MAX broker in Greater Vancouver Area.

Winnipeg is anticipated to continue to be a seller’s market in 2022. Young couples enjoying the freedom to work from home have been driving much of the demand in the region, especially for one- and two-story detached homes. The appeal of Winnipeg has had less to do with affordability, and more with lifestyle shifts such as hybrid working environments.

ONTARIO

According to the RE/MAX broker network in Ontario, market activity across the province is anticipated to remain steady in 2022, with continued average price growth, although at widely varying degrees. RE/MAX brokers anticipate average sale price increases in smaller markets such as North Bay (four per cent); Sudbury (five per cent); Thunder Bay (10 per cent); Collingwood/Georgian Bay (10 per cent); and Muskoka (20 per cent), where the move-over trend has remained strong. Meanwhile, in larger markets within the province, there’s a possibility that more immigration could weigh on supply levels and prices, including Ottawa (five per cent); Durham (seven per cent); Brampton (eight per cent); Toronto (10 per cent); Mississauga (14 per cent).

When it comes to price appreciation year-over-year, there are a few regions that stood out in 2021 for their exponential increases across all property types, including Brampton, which rose from $869,107 in 2020 to $1,085,417 in 2021 (25 per cent); Durham from $706,818 in 2020 to $914,48 in 2021 (29 per cent); and London from $487,500 in 2020 to $633,700 in 2021 (30 per cent). In comparison, Toronto experienced a modest seven-per-cent increase year-over-year ($986,085 in 2020 to $1,054,922 in 2021).

ATLANTIC CANADA

All of Atlantic Canada’s regions analyzed are currently seller’s markets, with potential for average sale prices to increase between five to 20 per cent in 2022, according to RE/MAX brokers and agents. Larger urban centres including Moncton, Fredericton, Saint John, Halifax, Charlottetown and St. John’s have all experienced an influx of out-of-province buyers, especially from Ontario, moving to the region in search of greater affordability and liveability.

Due to this spike in demand, much of the region has experienced increasing competition, especially among single-family detached homes and condos in some cities. There’s a possibility that this may further be amplified as immigration continues to grow in the region.

According to RE/MAX brokers and agents in the region, new construction is anticipated to remain strong into 2022, although construction activity may be dampened by ongoing supply shortages and delays in permits related to the pandemic backlog.

Seller’s market conditions are expected to prevail across the region in 2022, with the exception of Charlottetown and Southern Nova Scotia, which may return more to a balanced state as activity gradually begins to decrease.

These factors have led to some of the highest price outlooks in the country, with Halifax and Moncton projecting estimated average residential sales price to increase by 16, and 20 per cent respectively.

Additional findings from the 2022 Canadian Housing Market Outlook Report

  • Two-in-five Canadians trust their agent to advise them during the current real estate landscape (43 per cent)
  • 23 per cent of Canadians now have a greater desire to build their own home or buy pre-construction
  • 26 per cent of Canadians have the desire to purchase a home while mortgage rates remain low
  • 62 per cent of Canadians currently own a home. This is higher among those ages 35+ (70 per cent) compared with Millennials, ages 18-34 (42 per cent)
  • The majority of Canadians (72 per cent) said rising home prices did not impact their purchasing decisions in 2021.

About the 2022 Housing Market Outlook Report

The 2022 RE/MAX Housing Market Outlook Report includes data and insights from RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments. Regional summaries with additional broker insights can be found at REMAX.ca. The overall outlook is based on the average of all regions surveyed, weighted by the number of transaction in each region.

*2020 average residential sale price numbers were full-year, 2021 were from January 2021 – October 31, 2022.

About Leger
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,554 Canadians was completed between October 29-31, 2021 using Leger’s online panel. Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.5 per cent, 19 times out of 20.

About the RE/MAX Network
As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than 140,000 agents in over 8,600 offices across more than 110 countries and territories. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides. RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. RE/MAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children’s Miracle Network Hospitals® and other charities. To learn more about RE/MAX, to search home listings or find an agent in your community, please visit remax.ca. For the latest news from RE/MAX Canada, please visit blog.remax.ca.

Forward looking statements
This report includes “forward-looking statements” within the meaning of the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “believe,” “intend,” “expect,” “estimate,” “plan,” “outlook,” “project,” and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. These forward-looking statements include statements regarding housing market conditions and the Company’s results of operations, performance and growth. Forward-looking statements should not be read as guarantees of future performance or results. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include (1) the global COVID-19 pandemic, which has impacted the Company and continues to pose significant and widespread risks to the Company’s business, the Company’s ability to successfully close the anticipated reacquisition and to integrate the reacquired regions into its business, (3) changes in the real estate market or interest rates and availability of financing, (4) changes in business and economic activity in general, (5) the Company’s ability to attract and retain quality franchisees, (6) the Company’s franchisees’ ability to recruit and retain real estate agents and mortgage loan originators, (7) changes in laws and regulations, (8) the Company’s ability to enhance, market, and protect the RE/MAX and Motto Mortgage brands, (9) the Company’s ability to implement its technology initiatives, and (10) fluctuations in foreign currency exchange rates, and those risks and uncertainties described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company’s website at www.remax.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.

Canadian housing market expected to remain strong this fall, despite Delta variant, say RE/MAX brokers and realtors

Young families driving demand for single-detached homes in cities across the country

  • Canadian housing market prices are anticipated to increase by 5% in the remaining months of 2021, according to RE/MAX brokers and agents.
  • 27/30 major Canadian housing markets analyzed are seller’s markets, driven by lack of supply and high demand.

Toronto, ON and Kelowna, BC, October 5, 2021 – Early indicators from RE/MAX brokers and agents across the Canadian housing market suggest steady activity for the remainder of 2021. According to the RE/MAX Canada 2021 Fall Housing Market Outlook Report, RE/MAX brokers and agents expect the average residential sale price for all home types could increase by five per cent from now until the end of the year.

Single-detached homes experienced the biggest price gains when comparing 2021* to 2020 data, rising between 6.8 and 27.3 per cent across 27 markets surveyed in the report. RE/MAX brokers and agents expect this trend to continue into the fall, driven by strong demand by young families.

“As our brokers and agents predict, the fall market activity is expected to remain steady, which is promising, despite the ongoing challenges presented by the Delta variant,” says Christopher Alexander, Senior Vice President, RE/MAX Canada. “This is particularly relevant given the Canadian housing markets is often a good indicator of economic activity in the country, and with the Bank of Canada forecasting economic growth of 4.5 per cent in 2022, a strong fall housing market is a good sign that things may be starting to return to a more natural rhythm.”

DOWNLOAD THE DATA TABLE

Regional Canadian Housing Market Overview

WESTERN CANADA

High housing prices, driven up by low supply and high demand, have created challenging conditions for many homebuyers across Canada, especially in cities such as Toronto and Vancouver. However, affordable options still exist for homebuyers who are considering alternative markets, thanks to their continued ability to work remotely. RE/MAX brokers have reported this trend in Edmonton and Calgary, where buyers are leveraging increased purchasing power thanks to local housing affordability coupled with lower interest rates. RE/MAX brokers and agents anticipate this trend to continue through the remainder of 2021.

When comparing activity year-over-year (YoY) average sale prices across single-detached homes, condos and townhomes, British Columbia’s Nanaimo, Victoria and Vancouver experienced significant price growth, at 23 per cent, 19.1 per cent and 16.4 per cent, respectively. Nanaimo also saw one of the largest price surges in its condo and townhome segments when compared to other Western Canada regions, with average condo prices currently sitting at $343,713 (a 17.6-per-cent increase YoY), and townhomes at $492,536 (a 21.9-per-cent increase YoY). In Calgary and Regina, the fall outlooks are relatively status quo, with prices expected to remain flat in Calgary and up one per cent in Regina. Meanwhile, Edmonton, Saskatoon, Vancouver, Victoria, Winnipeg and Nanaimo are expected to see price gains ranging between four and nine per cent through the remainder of the year, according to RE/MAX brokers and agents.

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ONTARIO

Unsurprisingly, Ontario has seen some of the highest average residential price increases across single-detached homes in the country, with the majority of regions (13 out of 16), experiencing increases between 20 and 35.5 per cent YoY. The outlier markets that experienced price increases below 20 per cent include Toronto (+14.6 per cent), Thunder Bay (+17.1 per cent) and Mississauga (+19.7 per cent).

The condo and townhome segment in all of these regions has also performed well, with smaller and more suburban markets such as Kitchener, North Bay, London, Peterborough, and Southern Georgian Bay seeing a higher surge YoY. The estimated price outlook for the remainder of the year ranges from a two-per-cent price decrease in North Bay, to increases across the other regions ranging between two and 15 per cent.

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ATLANTIC CANADA

Housing market activity in Atlantic Canada remained persistent YoY, with Halifax and Moncton seeing significant price increases across all property types. Single-detached homes in Halifax rose 24.3 per cent YoY, from $402,484 to $500,147. Meanwhile, Moncton detached prices gained 21.2 per cent YoY, from $233,676 to $282,886. The condo and townhome segments in Halifax, Saint John and Moncton all saw prices surge between 12.5 per cent and 48.9 per cent YoY.

Housing prices in St. John’s, NFLD were more tempered, with single-detached homes rising 8.4 per cent YoY (from $343,070 in 2020 to $371,970 in 2021) and townhomes experiencing a 2.8-per-cent increase, from $247,432 in 2020 to $254,462 in 2021. Condominiums were the only property segment to see a decline in average price, down 1.9 per cent YoY, from $261,425 in 2020 to $256,415 in 2021. However, sales in the region have been brisk across all property types, with detached-home sales up 60.4 per cent YoY, condominium sales up 75.7 per cent, and townhome sales up 94.1 per cent.

Moncton in particular is expected to continue strong, with one of the highest price outlooks for the remainder of 2021, between 12 and 15 per cent. Saint John is expected to see more-tempered price growth, ranging between one- to three-per-cent across all property types, while Halifax could see a six-per-cent increase in average sale price for the remainder of the year. In St. John’s, detached home prices are expected to rise one per cent through the remainder of 2021, while condo and townhome prices should hold steady.

“Housing activity throughout the pandemic has remained strong, so it comes as no surprise that the outlook for the remainder of the year continues on an upward trajectory, which is great for homeowners and their equity, but challenging for first-time buyers who have been priced out of the market,” says Elton Ash, Executive Vice President, RE/MAX Canada. “We must continue to educate Canadians from a practical, real world, point of view. What is affecting the Canadian housing market right now? Low Interest rates, economic stimulus, higher home-buying budgets, a higher savings rate, homeowners too scared to sell, and not enough new construction. These factors have created current market conditions.”

Adds Alexander, “The Canadian housing market has historically given homeowners great long-term returns and solid financial security, but there’s no doubt that the rapid price growth we’ve experienced recently is cause for concern. However, it’s not cause for panic. The data shows single-detached home price acceleration may be starting to level off in some urban centres, but prices continue to rise in many smaller cities and communities that were once havens for affordability. Real estate has been a boon to the Canadian economy, during the pandemic and before it. We believe in the long-term health of Canada’s housing market, but in order to protect it, we need to acknowledge and address the housing supply shortage. Our current government needs to stop applying band-aids and cure the problem at its root.”

About the 2021 RE/MAX Fall Housing Market Report

The 2021 RE/MAX Fall Housing Market Outlook Report includes data and insights from RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments. Regional summaries with additional broker insights can be found at REMAX.ca. The fall outlook is based on predictions of RE/MAX brokers and agents. The overall outlook is based on the average of all regions surveyed, weighted by the number of transactions in each region.

*2020 average residential sale price numbers were full-year, 2021 were from January 2021-August 31, 2021.

Canada Housing Market Forecast

Average Price of Houses in Canada Expected to Go Up

RE/MAX Canada expects average residential prices to rise 4% to 6% in 2021

  • 35% of RE/MAX brokers indicate that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021
  • 45% of RE/MAX brokers indicate that move-up buyers will likely be a primary driver of the housing market demand in 2021
  • Half of Canadians (53%) are confident that Canada’s housing markets will remain steady in 2021
  • 52% of Canadians believe real estate will remain one of the best investment options in 2021

Canadians on the move: Not an exodus, but the re-location trend across Canadian housing market is real.

RE/MAX Canada is anticipating healthy housing price growth in 2021, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing housing supply shortage is likely to continue, presenting challenges for home buyers and putting upward pressure on prices. Due to these factors, the 2021 RE/MAX Housing Market Outlook Report estimates a four to six per cent increase in the average residential sales price nation-wide.

CLICK TO DOWNLOAD THE DATA TABLE

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“We’ve seen a lot of anecdotal evidence since the summer that households are considering significant lifestyle changes by relocating to less-dense cities and neighbourhoods,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “This has sparked unprecedented sales this year in suburban and rural parts of Canada and we expect this trend to continue in 2021.”

Despite the disruption of the virus, consumers are feeling optimistic, according to a Leger survey conducted on behalf of RE/MAX Canada, with 52 per cent of Canadians eyeing real estate as one of the best investment options in 2021, and expressing confidence that the Canadian housing market will remain steady next year.

The Impacts of COVID-19 on the Canadian Housing Market

While many economists predicted employment disruptions would negatively impact the Canadian housing market, the pandemic directly influenced only six per cent of Canadians to sell their home, according to the survey. Furthermore, 40 per cent of Canadians realized that their home needed renovations during the pandemic, and 29 per cent discovered that they need more space.

When it comes to where Canadians would prefer to live – urban, suburban or rural – they are evenly split, with roughly three in 10 preferring to live in each area. In fact, many suburban markets across the country have been heavily impacted by out-of-town buyers, a segment that is expected to drive market activity in 2021. This was a trend that was evident in many regions across the country, including North Bay, Kingston, Moncton and Greater Vancouver, among others.

Unsurprisingly, younger Canadians (under age 35) are significantly more likely to have realized that they need more space and are motivated to move out of their current neighbourhood.

“Despite the tragic impacts of the pandemic, our optimism in the strength of Canada’s housing market has always remained,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “While we’ve seen a significant shift in buyer preferences this year, we believe factors such as the supply issue, pent-up demand and historically lower interest rates will continue to fuel activity in 2021.”

A deeper dive: 2021 Canadian housing market insights

RE/MAX brokers and agents were asked to provide an analysis on their local market activity in 2020, as well as an outlook for 2021. Heading into the new year, 84 per cent of RE/MAX brokers and agents surveyed are anticipating sellers’ markets.

WESTERN CANADA

Vancouver and Greater Vancouver are good examples of the steady activity that’s anticipated to continue in 2021. According to the RE/MAX broker network in western Canada, sellers’ markets are likely in both regions next year, driven in large part by low inventory levels, low interest rates and high demand, as was the case in 2020. In Greater Vancouver, suburban neighbourhoods such as Pitt Meadows, Ladner and Maple Ridge are expected to be top neighbourhoods next year due to affordability and easy access to more outdoor space. Both regions are expected to see average residential prices increase by four and five per cent respectively in 2021.

Markets in Calgary and Edmonton, on the other hand, are currently balanced, which is anticipated to continue into 2021. The luxury market in Edmonton continues to be strong, with seemingly no impact felt by the pandemic. Both regions are predicting to see average residential prices increase by two and three per cent next year.

Get more insights and download the infographics:
Victoria, BC
Nanaimo, BC
Vancouver, BC
North Vancouver, BC
West Vancouver, BC
Tri-City (Greater Vancouver), BC 
Fraser Valley, BC
Kelowna, BC
Edmonton, AB
Calgary, AB
Saskatoon, SK
Regina, SK
Winnipeg, MB

ONTARIO

According to the RE/MAX broker network in Ontario, market activity across the province is estimated to remain very steady in 2021, with the potential for average sale price increases of between seven and 12 per cent in regions like London (10 per cent), Kitchener-Waterloo (seven per cent), Hamilton-Burlington (seven per cent), Niagara (12 per cent), and Kingston (10 per cent), Cornwall (10 per cent) and Thunder Bay (10 per cent). This is being attributed to high demand and low supply, coupled with shifting home-buying trends toward local liveability factors such as more space, larger yards and closer proximity to amenities like parks.

Move-up and move-over buyers are also impacting luxury segments in the province. Cities such as Ottawa and Hamilton-Burlington have seen a massive spike in demand for luxury homes since the start of the pandemic. This is expected to continue in 2021.

The urban-to-suburban buyer interest in Ontario has impacted Toronto’s downtown core, specifically for condos, which is currently a buyer’s market. Supply levels throughout Toronto are continuing to drop and are not expected to improve in 2021, which will impact average home prices. Immigrants are also expected to drive some market activity next year, which alludes to those coming to Toronto for education purposes, along with the expected influx of immigration from outside the country. Similar to Ottawa and Regina, Toronto’s luxury market remains unimpacted by COVID-19 and is driven by move-up buyers.

Wondsor Housing Market Outlook 2021
London housing market outlook 2021
Kitchener Waterloo housing market outlook 2021
Hamilton Burlington housing market outlook 2021
Oakville housing market outlook 2021
Mississauga housing market outlook 2021
Toronto housing market outlook 2021
Brampton housing market outlook 2021
Barrie housing market outlook 2021
Collingwood housing market outlook 2021
Muskoka housing market outlook 2021
Sudbury housing market outlook 2021
North Bay housing market outlook 2021
Thunder Bay housing market outlook 2021
kingston housing market outlook 2021
Ottawa housing market outlook 2021
Cornwall housing market outlook 2021

Get more insights and download the infographics:
Windsor, Ont.
London, Ont.
Niagara Region, Ont.
Kitchener-Waterloo, Ont.
Hamilton-Burlington, Ont.
Oakville, Ont.
Mississauga, Ont.
Toronto, Ont.
York Region, Ont.
Durham Region, Ont.
Brampton, Ont.
Barrie, Ont.
Collingwood, Ont.
Muskoka, Ont.
Sudbury, Ont.
North Bay, Ont.
Thunder Bay, Ont.
Kingston, Ont.
Ottawa, Ont.
Cornwall, Ont.

ATLANTIC CANADA

Much like the rest of the country, the majority of Atlantic Canada is a sellers’ market, which is anticipated to continue next year. In Moncton, Halifax and Saint John, housing activity has been driven primarily by out-of-province buyers and move-up buyers who have either expedited retirement plans or are working from home and no longer need to be in an office.

Overall, similar to other areas across the country, increased space has become a prominent buyer demand in the wake of the pandemic, with detached homes serving as the most popular home type in cities like Moncton, Saint John and Charlottetown. This is expected to persist in 2021 according to RE/MAX Canada brokers in the region.

Get more insights and download the infographics:
Fredericton, NB
Saint John, NB
Moncton, NB
Halifax, NS
Charlottetown, PEI
St. John’s, Newfoundland

Additional findings from the 2021 RE/MAX Canadian Housing Market Outlook Report:

  • More than one-third (36 per cent) would prefer to work with realtors who use technology/virtual services to enhance the buying/selling process
  • 15 per cent of Canadians have spent more time researching/monitoring the real estate market during the first and second wave of the pandemic

About the 2021 RE/MAX Canada Housing Market Outlook Report
The 2021 RE/MAX Canada Housing Market Outlook Report includes data and insights supplied by RE/MAX brokerages and local real estate boards. RE/MAX brokers and agents are surveyed on market activity and local developments. Regional summaries with additional broker insights can be found at blog.remax.ca.

About Leger
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,534 Canadians was completed between November 6 and 8, 2020 using Leger’s online panel. Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.51 per cent, 19 times out of 20.

Canadian housing market expected to remain active for the remainder of 2020 due to pent-up demand and low inventory levels, say RE/MAX brokers and agents

Canadians showing more interest in suburban and rural homes for sale, as work and life dynamics shift 

  • Canadian housing prices anticipated to increase by 4.6% in the third and fourth quarter according to RE/MAX brokers and agents. This is compared to the earlier prediction by RE/MAX brokers and agents of +3.7% at the start of the year.
  • 32% of Canadians no longer want to live in urban centres, opting for rural or suburban communities instead.
  • Canadians are almost equally split in their confidence in Canadian housing market, with 39% as confident as they were before the pandemic, and 37% slightly less confident.

Leading indicators from RE/MAX brokers and agents across the Canadian housing market point to a strong market for the remainder of 2020. According to the RE/MAX Fall Market Outlook Report, RE/MAX brokers suggest that the average residential sale price in Canada could increase by 4.6 per cent during the remainder of the year. This is compared to the 3.7 per cent increase that was predicted in late 2019.

The pandemic has prompted many Canadians to reassess their living situations. According to a survey conducted by Leger on behalf of RE/MAX Canada, 32 per cent of Canadians no longer want to live in large urban centres, and instead would opt for rural or suburban communities. This trend is stronger among Canadians under the age of 55 than those in the 55+ age group.

Not only are Canadians more motivated to leave cities, but changes in work and life dynamics have also shifted their needs and wants for their homes. According to the survey, 44 per cent of Canadians would like a home with more space for personal amenities, such as a pool, balcony or a large yard.

“While COVID-19 lockdowns slowed the Canadian housing market at the start of a typically busy spring market, activity bounced back by early summer in many regions, including Vancouver and Toronto,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Despite the tragic impacts of the pandemic, our optimism in the strength of Canada’s housing market has always remained, and current market activity further exemplifies this. Many homebuyers are now exploring different neighbourhoods that better suit their new lifestyles, and real estate agents are getting busier and working more with buyers from different major cities.  According to our brokers and agents across the RE/MAX network, Canada’s fall market is expected to see spring market-like activity.”

Looking ahead at the Canadian housing market

RE/MAX brokers across Canada were asked to provide an analysis on market activity during COVID-19 lockdowns, assessing how their regions have bounced back with easing restrictions. They also provided a prediction of market activity for the remainder of 2020. Unsurprisingly, most provinces experienced a slowdown in March and April, with significant drops in activity up to 70 per cent year-over-year. Prices, however, have remained stable across the country. Heading into fall, 50 per cent of RE/MAX brokers and agents surveyed anticipate a modest increase in average residential sale prices.

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Western Canada Housing Market

While COVID-19 lockdowns in March and April slowed down the housing market in Western Canada, transactions in Kelowna, Saskatoon and Vancouver resumed by May, with sales in both May and June surpassing year-over-year levels. Many buyers put their plans on hold at the peak of COVID-19 lockdowns, but they returned to the market quickly to make up for lost time. Edmonton’s housing market quickly bounced back to pre-COVID levels in June, while Saskatoon experienced its busiest June in years; this momentum is anticipated to continue into the fall market, with  RE/MAX brokers and agents estimating a three-per-cent increase in average residential sale prices for the remainder of the year. Overall, brokers and agents in Western Canada say the potential buyers they are talking to are not too concerned with a potential second wave of COVID-19 impacting their real estate journey, and RE/MAX brokers are estimating steady activity to round out 2020.

Regional housing market insights:
Victoria, BC
Nanaimo, BC
Vancouver, BC
Whistler, BC
Kelowna, BC
Edmonton, AB
Calgary, AB
Saskatoon, SK
Regina, SK
Winnipeg, MB

Ontario Housing Market

With Ontario being one of the hardest-hit provinces in Canada, markets like Niagara, Mississauga and Kitchener-Waterloo experienced significant drops in activity, but bounced back aggressively in June as economies began reopening. Toronto continues to be a sellers’ market with low listing inventory and high demand. An uptick in new listings is anticipated for the fall market, now that buyers and sellers are more comfortable engaging in the housing market, with all of Ontario now in phase three of re-opening. RE/MAX brokers estimate a five-per-cent increase in average residential sale price in Toronto for the remainder of the year. According to the RE/MAX broker network in Ontario, market activity in the province is estimated to remain steady in the fall, with the potential for modest price increases of up to six per cent in regions like Hamilton, Brampton and London.

Regional housing market insights:
London, Ont.
Niagara Region, Ont.
Kitchener-Waterloo, Ont.
Hamilton-Burlington, Ont.
Mississauga, Ont.
Toronto, Ont.
Brampton, Ont.
Sudbury, Ont.
Thunder Bay, Ont.
Durham Region, Ont.
Ottawa, Ont.

Atlantic Canada Housing Market

Regions with low case counts of COVID-19, such as Halifax, Charlottetown and Saint John experienced slower activity in March, but the decline was less pronounced than that of some Ontario and Western Canada markets. Halifax continues to experience a shortage in listing inventory since before COVID-19, and the shortage has caused an uptick in average residential sale price. RE/MAX brokers anticipate a 10-per-cent increase in average residential sale price in Halifax for the remainder of the year. Activity in Atlantic Canada was back to pre-COVID-19 levels by May 2020, and like many sellers’ markets in Canada, multiple offer scenarios continue to happen in these regions.

Regional housing market insights:
Saint John, NB
Halifax, NS
Charlottetown, PEI
St. John’s, Newfoundland

Canadian Housing Market Heat Map Fall 2020

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Pent-up demand causing sellers’ market-like conditions in recreational markets

When it comes to recreational property markets in Canada, the regions surveyed for the report experienced a slight decrease in sales activity in March, similar to most major cities in Canada; however, similar to other markets, this picked up quickly by May. Muskoka, Peterborough and the Kawarthas, and Whistler are all experiencing sellers’ market conditions, with pent-up demand and low inventory driving a modest increase in pricing. According to RE/MAX brokers, average prices in these recreational markets are estimated to remain stable for the remainder of 2020.

In lockstep with the Leger survey revealing increased consumer interest in relocating to rural areas, as well as 48 per cent of Canadians wanting to living closer to green space, RE/MAX brokers and agents have reported that many buyers in Toronto and Vancouver, who are now working remotely, have expressed interest in regions like Muskoka and Peterborough and the Kawarthas, and Whistler, in search of more space and access to nature.

Canada’s luxury real estate continues to thrive

While the classification of “luxury homes” is specific to each region and differs across the country by minimum pricing, Canada’s overall luxury market has remained strong throughout the pandemic, with market conditions unchanged from the beginning of the year in most regions.

When it comes to the hottest Canadian housing markets of Toronto and Vancouver, the luxury segment here is considered balanced, with Vancouver pushing into a sellers’ market. Vancouver is beginning to see more interest from move-up buyers instead of the foreign buyers who drove demand in Vancouver’s luxury market prior to COVID-19. This was likely due to travel restrictions brought on by the pandemic. In Toronto, activity was slower than usual this spring as buyers did not have any urgency to transact during the pandemic. Both luxury markets are could likely remain balanced for the remainder of the year, according to RE/MAX luxury specialists.

The luxury segment in secondary markets such as Hamilton are seeing a slight uptick in activity, with high-end buyers also seeking more square footage and larger properties outside of city centres. Hamilton has experienced an increase in buyer interest from residents from Brampton and Mississauga looking to relocate to the region.

“The classically hot spring market that was pushed to the summer months due to the COVID-19 pandemic created a surprisingly strong market across Canada and across all market segments,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “Looking ahead, government financial aid programs may be coming to an end in September, which could potentially impact future activity; however, the pent-up demand and low inventory dynamic may keep prices steady and bolster activity for the remainder of 2020. Overall, we are very confident in the long-term durability of the market.”

Survey respondents split on their confidence in the Canadian housing market

The survey found that Canadians are almost equally split in their confidence in Canada’s real estate market, with 39 per cent as confident as they were prior to the pandemic, and 37 per cent slightly less confident. When it comes to the prospect of a second wave of COVID-19, 56 per cent of Canadians who are feeling confident in Canada’s real estate market are still likely to buy or sell.

In re-contacting the respondents who lost confidence about their local housing market from the RE/MAX Global Outlook Report survey that was conducted in May 2020, asking if their confidence level in their market has changed since the start of the pandemic, 40 per cent are now as confident as they were before the pandemic. This is compared to their responses in May, which found that 58 per cent were less confident in their housing market, alluding to growing optimism in the market as COVID-19 lockdown restrictions continue to ease across the country.

Additional highlights from the 2020 Fall Canadian Market Outlook Report Survey:

  • 48 per cent of Canadians would like to live closer to green spaces
  • 48 per cent of Canadians say its more important than ever to live in a community close to hospitals and clinics
  • 33 per cent of Canadians would like more square footage in their home and have realized they need more space
  • 44 per cent of Canadians want a home with more outdoor space and personal amenities (i.e. balcony, pool etc.)

About the 2020 RE/MAX Fall Market Outlook Report

The 2020 RE/MAX Fall Market Outlook Report includes data and insights from RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments. Regional summaries with additional broker insights can be found at REMAX.ca.

Average home price expected to rise by 3.7% next year

• Increased consumer confidence could be a key factor affecting the housing market in 2020
• 51% of Canadians are considering a home purchase in the next five years, up from 36% at the same time last year
• Only two in 10 Canadians say that the mortgage stress test negatively affected their ability to purchase a home in 2019

RE/MAX is calling for a leveling out of the highs and lows that characterized the Canadian housing market in 2019, particularly in Vancouver and Toronto, as we move into 2020. Healthy price increases are expected next year, with the RE/MAX 2020 Housing Market Outlook Report estimating a 3.7 per-cent increase in the average residential sale price.

Most individual markets surveyed across Canada experienced moderate price increases year-over-year from 2018 to 2019. However, some regions in Ontario continue to experience higher-than-normal gains, including London (+10.7 per cent), Windsor (+11 per cent), Ottawa (+11.7 per cent) and Niagara (+12.9 per cent).

As more Canadians have adjusted to the mortgage stress test and older Millennials move into their peak earning years, it is anticipated that they will drive the market in 2020, particularly single Millennials and young couples. A recent Leger survey conducted by RE/MAX found that more than half (51 per cent) of Canadians are considering buying a property in the next five years, especially those under the age of 45.

CLICK HERE TO DOWNLOAD THE FULL REPORT

Canadian housing market outlook BC infographicBRITISH COLUMBIA

Reduced foreign buyer activity has opened up more opportunity for local buyers in Greater Vancouver’s condo market. While average residential sale prices for all properties increased by two per cent, from $1,030,829 in 2017 to $1,049,362 in 2018, the number of sales dropped by 30 per cent. The low absorption rate is expected to bring down average residential sale prices in 2019 by three per cent

Similarly, the number of sales year-over-year has dropped by 33 per cent in Kelowna. Rising interest rates, government policy changes and the mortgage stress test were all factors that contributed to the decline, which is expected to continue into 2019. Average residential sale prices increased by six per cent year-over-year from $674,930 in 2017 to $718,915 in 2018, with prices expected to decrease by three per cent in 2019.

“The drop in sales in key markets across British Columbia can be partially attributed to Canadians’ increasing difficulty in getting an affordable mortgage in the region,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “The situation created by the introduction of the mortgage stress test this year, as well as continually increasing interest rates, means more Canadians will be priced out of the market.

Canadian housing market outlook Prairies infographicTHE PRAIRIES

Alberta continues to experience slowing economic conditions, which have contributed to a decrease in average residential sale prices in Calgary, from $478,088 in 2018 to $460,532 in 2019. Condos are the easiest way for first time homebuyers to get into the market, with starter units going for as low as $150,000. While the city’s unemployment rate continues to remain high compared to the rest of Canada, the population is increasing, with more people moving to the city from other parts of the province.

On the other hand, Winnipeg has shown a small increase in average residential sale price, both for freehold and condominium properties, by 1.5 and 0.8 per cent, respectively. The number of properties sold also increased by five per cent, from 8,139 in 2018 to 8,539 in 2019. Immigration to the city, in combination with reasonable prices and ample supply of inventory, is expected to drive sales going into 2020. Regina also saw the number of properties sold increase by more than five per cent year-over-year, despite being one of the few markets where the effects of the mortgage stress test are still being felt.

Canadian housing market outlook Ontario infographicONTARIO

Toronto is set to experience a strong housing market in 2020. Lower unemployment rates, economic growth and improved overall affordability in the Greater Toronto Area are expected to drive the market forward. The estimated average sale price increase for 2020 is six per cent, two points higher than the growth experienced between 2018 ($736,256) and 2019 ($766,236). The city saw 76,413 properties sold in 2019, up 12 per cent from 2018 (68,064). While Toronto is experiencing its “busiest” construction season ever, housing supply still falls short of the demands of the city’s rapidly growing population.

Cities such as Ottawa and Windsor are seller’s markets, showing substantial increases in average residential sale price at 11.7 and 11 per cent, respectively. This strong growth is expected to continue into 2020, with Ottawa’s new LRT system impacting surrounding development and Windsor’s continued affordability attracting young professionals to the area. Buyers are also not burdened by the mortgage stress test, as they were in 2018.

The Niagara region is also showing strong growth, with average residential sale price increasing almost 13 per cent, from $378,517 in 2018 to $427,487.50 in 2019. Value-conscious consumers from the Greater Toronto Area are buying in droves, with many choosing to live in the region while commuting to Toronto.

“Southern Ontario is witnessing some incredibly strong price appreciation, with many regions still seeing double-digit gains,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “Thanks to the region’s resilient economy, staggering population growth and relentless development, the 2020 market looks very optimistic.”

Canadian housing market outlook Atlantic Region infographicATLANTIC CANADA

In Atlantic Canada, Halifax and Saint John have experienced solid price appreciation of six and five per cent, respectively. Affordability continues to attract many buyers in the region, most of whom are buying single family homes. At the same time, the region’s multi family and condo market is being driven by retirees. Conversely, the real estate market in St. John’s is expected to recover in 2020, with increased consumer confidence expected to bring about stabilization. However, the city’s aging population and high rate of outbound migration is expected to have an impact on housing market activity at some point.

Key Findings from the 2020 RE/MAX Housing Market Outlook Omnibus Survey

Fifty-one per cent of Canadians are considering buying a property in the next five years. This is up from 36 per cent at the same time last year. The increase is attributed to consumers’ adjustment to the mortgage stress test and increased purchasing power. Only two in 10 survey respondents said the mortgage stress test has negatively  impacted their ability to purchase a home.

Liveability continues to be important to Canadians, with more than half wanting to live closer to green spaces and shopping/dining locations. Specific figures:

• 62% of Canadians would like to live near shopping/dining locations
• 59% would like to live closer to green spaces
• 30% would like to live closer to work
• 36% would like to live closer to public transit

Learn about RE/MAX real estate franchise opportunities in Ontario-Atlantic Region and Western Canada.

CANADIAN HOME PRICES EXPECTED TO INCREASE BY 1.7 PER CENT IN 2019

Modest price increases are expected in 2019, as the RE/MAX 2019 Housing Market Outlook estimates the average sales price to increase by 1.7 per cent. Housing markets across the country have stabilized in 2018, after the unprecedented increases in average sales price that many markets experienced in 2017. However, there continue to be some outliers in 2018 average sales price gains, particularly in areas outside of the main city centres, such as Chilliwack (+ 13%), Windsor (+13%), London (+17%) and Charlottetown (+11%).

It is anticipated that the market will continue to stabilize, as Canadians will start to feel the pinch of higher interest rates as they move forward with their home-buying plans in 2019. A recent survey revealed almost one-third (31 per cent) of Canadians said higher interest rates have not affected their ability to get an affordable mortgage thus far. However, this is expected to change in 2019. A separate survey of RE/MAX brokers and agents found 83 per cent predict rising interest rates will make it more difficult for Canadians to purchase a home next year.

British Columbia
Reduced foreign buyer activity has opened up more opportunity for local buyers in Greater Vancouver’s condo market. While average residential sale prices for all properties increased by two per cent, from $1,030,829 in 2017 to $1,049,362 in 2018, the number of sales dropped by 30 per cent. The low absorption rate is expected to bring down average residential sale prices in 2019 by three per cent

Similarly, the number of sales year-over-year has dropped by 33 per cent in Kelowna. Rising interest rates, government policy changes and the mortgage stress test were all factors that contributed to the decline, which is expected to continue into 2019. Average residential sale prices increased by six per cent year-over-year from $674,930 in 2017 to $718,915 in 2018, with prices expected to decrease by three per cent in 2019.

“The drop in sales in key markets across British Columbia can be partially attributed to Canadians’ increasing difficulty in getting an affordable mortgage in the region,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “The situation created by the introduction of the mortgage stress test this year, as well as continually increasing interest rates, means more Canadians will be priced out of the market.

Prairies
Slowing economic conditions in Alberta have contributed to a decrease in average residential sale prices in Edmonton, from $393,003 in 2017 to $379,539 in 2018. While economic recovery is expected to take some time, the luxury market is thriving, with prospective investors in cannabis and migrant speculators driving this new segment. Meanwhile in Calgary, the market is expected to stay relatively flat in 2019 due to its reliance on the oil and gas industry, and further real estate hindrances like the mortgage stress test.

Conversely, Winnipeg has shown a moderate increase of average residential sale price, rising from $315,720 in 2017 to $323,001 in 2018. Looking ahead to 2019, prices are expected to continue on this upward trajectory, with an expected increase of four per cent. Although the senior population is downsizing, immigration to Winnipeg from urban centres such as Toronto and Vancouver (15,000 people move to Manitoba every year) is expected to drive sales going into 2019. In Saskatchewan, both Regina and Saskatoon have experienced a buyers’ market which is set to prevail into 2019.

Ontario
In Toronto, rising interest rates and the mortgage stress test were the two major factors affecting market activity this past year, with average sale prices dropping by four per cent from $822,572 in 2017 to $789,181 in 2018, and unit sales down by 16 per cent. Lack of affordability in the single-detached segment will make it difficult for buyers wanting to enter the freehold market. The resale condo market, on the other hand, now represents almost 37 per cent of total residential sales, with its relative affordability fueling the rise of vertical growth. Average residential sale price is expected to increase by two per cent in 2019.

Communities such as Ottawa and London are sellers’ markets, showing increased growth in average residential sale price. This trend is expected to continue into 2019, however rising interest rates and the stress test continue to make it difficult for prospective buyers in other Ontario communities, including Barrie, Oakville and Durham regions.

Due to the stress test and increasing interest rates, we are seeing more buyers in traditionally affordable regions in Ontario unable to enter the market,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “This is particularly true for first-time buyers and single Millennials, as evident in cities like Brampton, Kingston and Durham.

Atlantic Canada
In Atlantic Canada, Halifax, Saint John and St. John’s have all experienced stable price appreciation in 2018. Detached homes continue to be the most in-demand property type, while the region’s aging population and retirees are driving the condominium market. The economic slowdown and drop in oil prices in St. John’s have resulted in a buyer’s market, but activity is expected to pick back up in the latter half of 2019.

The RE/MAX 2019 average residential sale price expectation for Canada is an increase of 1.7 per cent.

Key Findings from the RE/MAX 2019 Canadian Housing Market Outlook Omnibus Survey

Thirty-six per cent of Canadians are considering buying a property in the next five years. This is down from 48 per cent at the same time last year. The decrease is attributed to actual and perceived impacts of the mortgage stress test and rising interest rates on housing affordability. Thirty-one per cent of survey respondents said higher interest rates have not affected their ability to get an affordable mortgage so far, but the risk of future rate hikes, as indicated by RE/MAX brokers and agents, might affect these buyers in 2019.

Liveability continues to be important to Canadians, with more than half wanting to live closer to green spaces, work and better access to public amenities. Despite the apparent popularity of recreational cannabis since legalization in October 2018, 65 per cent of respondents said they do not want to live near a retail cannabis store. Specific figures:

  • 52 per cent of Canadians would like to live closer to green spaces
  • 47 per cent would like better access to public amenities
  • 35 per cent would like to live closer to work
  • 37 per cent would like to live closer to public transit
  • 35 per cent would like to move to a different neighbourhood
  • 59 per cent strongly disagree with living near a retail cannabis store

THIS PAST YEAR SAW THE SINGLE-FAMILY DETACHED HOME AND CONDO MARKETS DIVERGE ON DISTINCTLY DIFFERENT PATHS IN CANADA’S TWO HIGHEST-PRICED REAL ESTATE MARKETS, GREATER VANCOUVER AND THE GREATER TORONTO AREA, AS REVEALED IN THE 2018 HOUSING MARKET OUTLOOK.

The trend is expected to continue into 2018 as a mix of relative affordability for condo units and price appreciation for detached homes in recent years, combined with government policy changes in both markets, has helped push an influx of buyers toward condo ownership.

In Greater Vancouver, demand for condos continues to outpace supply, resulting in the average price of a condo rising an estimated 16 per cent year-over-year, from $553,604 in 2016 to $643,778 in 2017. The GTA’s condo market also saw price appreciation of 22 per cent in 2017, as the average sale price for a condo rose to an estimated $523,437, up from $429,241 in 2016. As condo prices rose, sales for single-family detached homes declined 25 per cent in Greater Vancouver and 22 per cent in the GTA year-over-year between January and the end of October 2017.

The RE/MAX 2018 average residential sale price expectation for Canada is an increase of 2.5 per cent as the desire for home ownership remains strong, particularly among Canadian millennials.

According to a survey conducted by Leger on behalf of RE/MAX, the appetite for home ownership remains strong with roughly half of Canadians (48 per cent) considering the purchase of a home in the next five years. Of those who are considering purchasing a home, the top three reasons for doing so are to upgrade on their current home, to purchase a starter home as a means of entering the housing market and to upsize from their current home to accommodate a change in family make-up. The survey also found that access to outdoor spaces was a key factor for many Canadians when considering purchasing a home, with 87 per cent agreeing that access to green space was important to them and 82 per cent agreeing that having a backyard was important.

In order to find a balance between the home features they’re looking for and affordability, many buyers are continuing to look at real estate markets outside of the country’s largest urban centres. These move-over buyers leaving the GTA and Greater Vancouver have contributed to increased demand and considerable year-over-year average price increases in Kelowna (nine per cent), London-St. Thomas (18 per cent), Hamilton-Burlington (15 per cent), Barrie (19 per cent), Durham region (19 per cent), Niagara (23 per cent), Kingston (eight per cent), and Ottawa (10 per cent).

Much of the activity in regional markets across Ontario was fuelled by price appreciation in Toronto during the first four months of the year prior to the introduction of the provincial government’s Fair Housing Plan. The 16-point plan introduced a 15 per cent non-resident speculation tax, which slowed demand from overseas buyers in the upper-end of the market. The policy changes as a whole curtailed activity significantly for single-family detached homes throughout the GTA in the short-term.

The new OSFI mortgage qualification rules that come into effect on January 1, 2018 also impacted housing market activity toward the end of this year and are expected to slow activity in real estate markets across Canada in the first part of 2018. This fall, a number of regions including Fraser Valley, Edmonton, Regina, Winnipeg, Mississauga and Oakville experienced increased demand from buyers looking to purchase homes before the new stress test regulations take effect.

It is expected that the new mortgage stress test will slow activity across Canada during first few months of 2018 and at the end of November, the Bank of Canada predicted that the new regulations could disqualify up to 10 per cent of prospective home buyers who have down payments of 20 per cent or more. The regions expected to feel the greatest impact of decreased buyer purchasing power are Victoria, Greater Vancouver, Kelowna, North Bay, London-St.Thomas, Barrie, Hamilton-Burlington, the GTA, Durham region, Kingston, Ottawa, Halifax and St. John’s.

As oil prices continue to stabilize, both Calgary and Edmonton have experienced modest average residential sale price increases in 2017. In Calgary, the average residential sale price rose by approximately two per cent, to $487,931 up from $478,100 in 2016. Buyers and sellers remain relatively tentative, but the city’s ongoing evolution into a major tech and distribution hub, as seen with Amazon’s recent announcement that Calgary will house one of the company’s key distribution centres, is expected to increase confidence in the real estate market moving forward. In Edmonton, sales rose by an estimated five per cent year-over-year, from $357,916 to $375,788 in 2017, with a variety of new infrastructure projects, including construction on the Valley Line expansion of the LRT system, expected to contribute to increased activity in the coming years.

IGH DEMAND AND LOW SUPPLY CONTINUED TO CHARACTERIZE VANCOUVER’S AND TORONTO’S HOUSING MARKETS THROUGHOUT 2016 AS COMPETITION FROM BUYERS FOR LIMITED INVENTORY OF SINGLE-FAMILY HOMES PUSHED PRICES HIGHER.

The average residential sale price increased 13 per cent in Greater Vancouver to approximately $1,020,300 and rose 17 per cent in the Greater Toronto Area (GTA) to an estimated $725,857. Although demand remains high in both urban centres, limited inventory in the freehold market, the new 15 per cent foreign-buyer tax in Vancouver and the recent tightening of mortgage rules by the federal government are expected to soften market activity in the short term. In 2017, RE/MAX estimates average residential sale price will increase by two and eight per cent in Greater Vancouver and the GTA respectively.

Regional markets in close proximity to Canada’s highest-price cities continued to experience steady interest from local move-up buyers and buyers from these cities (“move-over” buyers) who are looking to find a balance between affordability and square footage. This year there were considerable year-over-year average price increases in Barrie (16 per cent), Hamilton-Burlington (20 per cent), the Fraser Valley (20 per cent) and Kelowna (14 per cent).

Regulation changes at both the provincial and federal level towards the end of 2016 are already starting to impact activity in certain markets. The 15 per cent foreign-buyer tax is expected to slow this trend somewhat, as price appreciation declines in Vancouver have resulted in some potential sellers staying in the Lower Mainland. The ripple effect of the foreign-buyer tax can also be felt in the upper end of the GTA and Montreal markets as some foreign investors are expected to look for properties in these regions rather than Vancouver. Measures taken by the federal government to tighten mortgage insurance criteria for new home buyers is expected to temper local rst-time buyer activity across the country in the short term, but is not expected to have a long-term impact in most regions.

Home ownership remains a priority for Canadians, with 53 per cent of respondents in a recent RE/MAX survey conducted by Leger expressing intent to purchase a home and 47 per cent expressing intent to do so in the next five to 10 years. Nearly one in three (30 per cent) Canadians plan to use the purchase of a home as an investment strategy to help fund their retirement, and 42 per cent of millennial respondents view it as a retirement funding strategy. A proportion of Canadians would also consider unconventional home financing options to realize their dream of ownership such as: purchasing a home with a family member (33 per cent); renting a room on a vacation rental site like Airbnb (15 per cent); renting out a room in their home (22 per cent); or even purchasing a home with a roommate (9 per cent).

The housing markets in Calgary and Edmonton remained relatively stable, with moderate declines in the number of sales and average residential sale price as a result of the prolonged recovery of the oil sector over the past two years. The average residential sale price in Edmonton decreased slightly, by two per cent year-over-year in 2016, while Calgary’s average residential sale price decreased by four per cent. Buyer activity is expected to pick up slightly in the second half of 2017 if employment opportunities in the oil sector continue to gradually come back to the province.

High inventory continues to be a factor in many regions including Regina, Montreal, Saint John and St. John’s, offering a good selection of product to first-time and move-up buyers in these cities. Local infrastructure projects and initiatives, such as preparations for Montreal’s 375th anniversary celebrations in 2017, are anticipated to provide a boost to these economies and their real estate markets next year.

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