Those hoping for Metro Vancouver housing prices to soften may have to wait a little longer.
Predictions for the local real estate market going into 2024 include a two per cent increase in average residential prices and a decrease in sales by three per cent, according to a Nov. 28 report from Re/Max Canada.
“It's no secret that the Bank of Canada has really held the cards as far as the market is concerned in Canada, and affordability has remained a challenge throughout the balance of 2023. Going into next year, it looks like we're going to continue to have high rates for a few months,” said Christopher Alexander, president of Re/Max Canada, in an interview.
The average residential sale price in the region was $1,437,253 for the period of Jan. 1, 2022, to Oct. 31, 2022.
That increased 4.2 per cent to $1,497,546 for the same time period in 2023. The report forecasts prices will rise a further two per cent in 2024 to an average of $1,527,497.
Sales in the region decreased 14.5 per cent between the 2022 and 2023 periods from 7,715 units sold to 6,600 units sold. Re/Max Canada predicts that Metro Vancouver sales will decrease by another three per cent.
There were 16,445 properties listed for the 2022 period, decreasing by 6.3 per cent to 15,402 in 2023.
The Bank of Canada has hiked its key rate three times this year. The key rate has remained at five per cent since July and is expected to remain the same come the next rate announcement in the first week of December, according to Central 1 chief economist Bryan Yu.
Yu predicts that the Bank of Canada will cut rates late in the second quarter of 2024, “provided inflation continues to ease and wage growth abates,” he said in an analysis.
Just over half (54 per cent) of Canadians are concerned that further interest rate increases will impact their ability to participate in the real estate market in 2024, according to a Leger survey commissioned alongside the Re/Max report.
Despite these concerns, three-quarters of Canadians believe that home ownership is the best long-term investment, according to the survey results.