Real Estate Market Update

On the housing front, the Canadian housing markets saw “tightening conditions” and showed “surprising strength” as 2023 drew to a close. The markets across the country could be in for a “seasonally strong spring,” which would fall in line with the expected timing of the first interest rate cut as soon as April 2024.

Canadian Real Estate Association Senior Economist Shaun Cathcart said in December that this spring is poised to be “more active” than previously expected.

It helps that borrowing costs are coming down.

Some lenders like Equitable Bank, THINK Financial, and MCAP dropped their 5-year fixed rates below 5%. Fixed mortgage rates are expected to come down more in 2024. Variable-rate mortgages are expected to follow in mid-year.

The Bank of Canada is expected to bring the policy rate 5% down to 3.5% by the end of 2024. This is slightly lower than market expectations of 3.75%.

Interest rate cuts

Because some consumers are reducing their spending inflation is trending in the right direction. Some economists expect it to go below the 3% level in 2024, getting closer to the Bank of Canada's 2% target. The next reading is January 24.

(Source: TRREB and CREA, December 2023)