Royal LePage has released its Q3 Home Price Update and Market Forecast.

In this video interview, Phil Soper, President and CEO of Royal LePage, discusses the state of house prices in Canada, demand in the market, inventory levels and what to expect in the future.

PRESS RELEASE
TORONTO, Oct. 10, 2024 /CNW/ – According to the Royal LePage House Price Survey released today, the aggregate1 price of a home in Canada increased 1.6 per cent year over year to $815,500 in the third quarter of 2024. On a quarter-over-quarter basis, however, the national aggregate home price decreased 1.1 per cent, following sluggish activity in most – though not all – markets through the summer months. Coast to coast, sales volumes began to pick up in September, and more than one third (38%) of regional markets covered in the report recorded positive aggregate price gains in the third quarter over the previous quarter.

“Despite three cuts to the Bank of Canada’s overnight lending rate, buyer demand nationally remains weak, particularly among two key groups: first-time homebuyers and small investors,” said Phil Soper, president and chief executive officer, Royal LePage. “First-time buyers, who are more sensitive to interest rates, are adopting a wait-and-see attitude. With home prices essentially flat and interest rates steadily declining, they perceive no penalty in postponing their purchase.

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1 Aggregate prices are calculated using a weighted average of the median values of all housing types collected. Data is provided by RPS Real Property Solutions and includes both resale and new build.

“Similarly, small investors who typically buy condominiums to rent out and supply much of Canada’s rental housing, are also hesitant. Elevated rates have made the financials unworkable, with carrying costs surpassing rental income. While historically some landlords accept negative cash flow temporarily when properties are appreciating in value, the current flat prices do not justify many investments,” said Soper. “We believe that both groups will re-enter the market in significant numbers as property values begin to rise again. With further rate cuts from the Bank of Canada likely this year, we anticipate prices will appreciate more quickly, eliminating the advantages of waiting for first-time buyers and making calculations more favourable for investors.

“Total listings on royallepage.ca, Canada’s most visited real estate company website, reached a historical high in September, up 19 per cent year over year,” continued Soper. “Clearly, existing homeowners are ready to move. And, all buyers have more choice and less competition than is typical in our growing nation. The market recovery is underway and will continue to gain strength into 2025.”

The Royal LePage National House Price Composite is compiled from proprietary property data nationally and regionally in 64 of the nation’s largest real estate markets. When broken out by housing type, the national median price of a single-family detached home increased 2.0 per cent year over year to $850,400, while the median price of a condominium increased 0.5 per cent year over year to $590,200. On a quarter-over-quarter basis, the median price of a single-family detached home decreased modestly by 1.2 per cent, while the median price of a condominium decreased 1.1 per cent. Price data, which includes both resale and new build, is provided by RPS Real Property Solutions, a leading Canadian real estate valuation company.

“With rates dropping, we see positive signs for sidelined buyers. As confidence grows and buyers anticipate rising prices, we expect a significant increase in activity. Given the building demand – both organic and from immigration – the 2025 spring