What To Expect From Canada's Housing Market In The Next 3 Years, According To An Expert
Thinking of homeownership? Here's what you need to know.👇
Apartments in Vancouver. Right: A row of houses.
Canada's housing market can be a tough one to crack, and it can be especially hard for first-time homebuyers.
For this reason, we got in touch with a realtor and real estate expert from the Toronto area, Trish MacKenzie, to find out what the market could look like for the rest of 2023 and beyond.
Of course, it's important to remember that nothing is set in stone and that unpredictable things happen all the time — like, does anyone else remember COVID-19 and the colossal effect it had on the Canadian housing market?
However, barring special circumstances, here's what MacKenzie sees happening over the next year or so.
What can we expect for the rest of 2023?
If you've been following Canada's housing market this year, you might have noticed that house prices have been on the decline, making the market a bit more balanced than it was previously.
But there might be an end to that this year.
"More buyers are coming out of the wings and making their move as they see prices that previously had fallen start to rise again," explained MacKenzie.
Issues with inventory (the number of houses on the market) also are coming down the pike, with MacKenzie saying we're at a similar inventory of available houses as we had in two previous buyers' markets in 2016 and 2020. This is something that will push prices up.
"This year, prices are expected to rise over the second half of the year, and we have already seen the increases (though slight) month-over-month in home prices," said MacKenzie.
"We will hear about some markets like Ontario and B.C. having the strongest growth, and it's important to put that statement into context: This growth will be following some of the softest sales months since the early 2000s."
What can we expect in the Canadian housing market beyond 2023?
There are a few things that we could see take place over the next few years.
MacKenzie says the stress on buyers will be ongoing unless we see some shifts in the number of available houses — which she suggests could come as the baby boomer generation ages out of homeownership.
"The reality is there are too many people looking, not enough people selling," she explained.
That being said, MacKenzie predicts that unemployment and rising costs of necessities like groceries and gas will keep prices down.
"The Canadian home price average is expected to stay below pre-pandemic levels into 2024," she said, adding that "after an almost 50% rise in prices over the pandemic, on average Canadian home prices have fallen 21% year-over-year."
So, while things could still hold steady, the housing market is down from where it was in 2019 and early 2020.
What can I do to buy a home in Canada in the coming years?
Of course, this will really vary depending on what you're after, your housing goals, the size of your family, where you want to live and more.
But there are a few ways you can start making inroads to homeownership, according to MacKenzie.
"Those in some of the strongest positions are those who have made homeownership their goal over the past few years," she said, pointing out that people who have been investing or saving with that goal will have good leverage going forward.
And if that's not you, don't sweat it!
"Alternative ownership structures will likely continue to rise — either with multi-family or multi-generational homes," said MacKenzie. "Especially with financial programs like the renovation grant to create a multi-generational space."
But, as they say, the best time to plant a tree was 50 years ago; the second-best time is now.
"Some of my buyers begin their planning with my team a year or two in advance, making sure they are saving as much as possible, building their credit and assessing their affordability every few months," said MacKenzie.
"This has allowed us to find the right place when it pops up, instead of creating an environment that makes buyers desperate and reactive to making a decision on their first home."
So, if you're looking to start buying a home, it doesn't hurt to start planning now.
Meanwhile, there are a number of things that could possibly help you reach your goal, like Canada's new Tax-Free First Home Savings Account.