Real Estate News

RBC Forecasts Two Act Drama for Canadian Real Estate Slow Start and Potential Rebound in 2024

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The Canadian real estate market is anticipated to face challenges in the initial half of 2024, according to RBC Economics. The predominant factor influencing this slowdown is the high-interest rates maintained by the Bank of Canada. RBC expects a sluggish market with softening prices in the first half of the year due to the policy rate being kept high. However, a pivotal shift towards rate cuts is predicted by mid-year, potentially boosting sales in the latter half, although not enough to prevent overall price declines.

RBC aligns with the broader consensus among economists in Canada, foreseeing lower interest rates by mid-year. The bank anticipates several pro-market factors, including rapid population growth, robust wage growth, and pent-up demand, contributing to a potential turnaround in market activity during the second half of the year. Despite forecasting a 9.2% increase in existing home sales compared to the previous year, RBC emphasizes that this improved market scenario does not imply a boom, as higher sales are expected to coincide with lower prices.

The improved market conditions may be dampened by increased inventory and stretched affordability, leading to a downward pressure on prices. RBC points out that higher sales volumes typically support prices but notes the potential influence of a sudden influx of investors looking to sell amid reduced profitability in long-term rentals due to lower financing costs. Additionally, mortgage renewal payment shocks and the overall poor affordability conditions are expected to restrain the recovery, even with pent-up demand in the market.

Read the full article on: BETTER DWELLING


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Amandeep Singh
Amandeep Singh
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