Canadian Real Estate in 2024

This past year was "interesting" for the real estate market, according to Lauren Haw, Zoocasa's broker of record and industry relations officer.

This past year was "interesting" for the real estate market, according to Lauren Haw, Zoocasa's broker of record and industry relations officer.

According to Haw, 2023 was a return to normal, with a pick up in sales after March Break, a slowdown in the summer and a "blip" of sales in the fall.

Canadians should not expect a drop in price for single-family homes near urban centres in 2024, Haw told in a phone interview.

"Those single-family homes in great neighbourhoods, in great school districts, we have a critical undersupply compared to the demand for that property type," she said. "I do not foresee a crash in that property type, there is too much demand."

But, Haw said, a possible "softening in prices" that began in 2023 could continue into 2024 for other property types. Recreational and rural properties, including homes near ski hills and in more remote areas are starting to decrease in price. This is due, Haw said, to a return to city life for people who were working remotely over the pandemic and are now back in the office.

Additionally, interest rates were so low during the pandemic that many people were able to qualify for a second mortgage, and decided to buy a vacation property. Years later, their mortgages are up for renewal at significantly higher rates.

"When your principal residence and your cottage property could be potentially coming up for renewal in the coming years, it's a lot of extra mortgage and debt to carry. That secondary property is more disposable in nature, so that's why we're going to see continued listings there," Haw said.

Luxury markets like in Whistler, B.C., are exceptions to the price drop in recreational homes, according to Haw.

Another thing to watch for: Haw said she believes more newly built condos that were previously bought as investor properties could come onto the market in early 2024 because of a lack of return on investment.

"With today's interest rates, the return on being the landlord of a one-bedroom condo is very often — if you only put down the required minimum down payments — you're underwater on your carrying costs," she said.

With landlords facing much higher mortgage rates upon renewal, their tenants are likely to be impacted too.

Haw said renters should expect to pay more in 2024, depending on the season. Spring and summer are peak months for renters, and will come with higher costs, she said.

In 2023, Canadians saw the average rental rate for a new lease increase each month rising to the highest it's been in 30 years, something that is likely to continue into this year, according to experts.

"For anybody that's in a long-term rental right now, if they're in a rent-protected province and a rent-protected building, it is very hard to justify moving because your rents are going to go up drastically if… you have to go to market," Haw said.