Canadian Housing Market Outlook 2024: Insights Report

As Canada moves into 2024, the housing market is expected to navigate a landscape shaped by economic resilience, regional diversity, and sustained demand across major urban centers. Despite overarching challenges, including elevated construction costs and affordability issues, specific regions display unique trends that offer insights into the future trajectory of Canada’s real estate sector. See the original CMHC Insights here.

National Overview:
The national housing market in 2024 is poised for a year of recalibration amidst economic and interest rate challenges. Economic growth is forecasted to be tepid, with a slight recovery anticipated as interest rates begin their gradual descent. Housing starts are projected to witness a downturn, reflecting the immediate impacts of higher financing costs on new construction activities. This decrease in housing starts, however, contrasts with the demand dynamics, where strong population growth is set to push MLS prices to new heights, underscoring ongoing affordability concerns. The rental segment, in particular, will see demand significantly outstripping supply, leading to rising rents and lower vacancy rates. This juxtaposition of declining construction and rising demand highlights the nuanced challenges and opportunities facing the Canadian housing market in 2024.

Vancouver:
Vancouver’s market is bracing for a nuanced adjustment, with a slight decline in new home construction anticipated due to restricted financing, notably impacting multi-family buildings. However, this downturn is expected to be temporary, with construction activity forecasted to rebound robustly by 2025, driven by persistent housing demand and supportive zoning policy changes. The resale market is set for a resurgence, buoyed by sustained immigration and a stabilizing economic environment, projecting price rebounds and setting new highs by 2026. Despite these positive trends, the rental market remains a concern, with high demand continuing to drive rents up and vacancy rates down, presenting ongoing challenges for renters in Vancouver.

Edmonton:
Edmonton’s housing market stands out for its robustness, fueled by strong economic fundamentals and an influx of both international and interprovincial migrants attracted by the city’s affordability relative to other major Canadian markets. Housing starts are expected to maintain their strength, particularly in the multi-unit segment, driven by favorable economic conditions and population growth. The resale market is anticipated to experience modest growth, albeit constrained by the limited inventory of lower-priced units. The rental segment in Edmonton is forecasted to remain tight, with a growing demand outstripping the available supply, leading to lower vacancy rates and an upward trajectory in rents.

Calgary:
Calgary is anticipated to witness significant growth in housing starts, catalyzed by demographic trends and positive economic indicators. The market’s dynamism is particularly evident in the development of multi-unit homes, responding to low vacancy rates and escalating demand. The resale market is poised for growth, supported by a constrained inventory that continues to favor sellers. On the rental front, market conditions are expected to tighten further, with vacancy rates decreasing amidst strong population growth and a cautious shift from renting to homeownership. Despite these pressures, Calgary’s housing market reflects a balance of challenges and opportunities, underscored by the city’s economic resilience.

Toronto:
Toronto’s housing market forecast highlights a dichotomy between declining housing starts, particularly in the apartment sector, and rising MLS prices. The decrease in construction activity is primarily attributed to escalating costs and financing hurdles, impacting new apartment developments. Conversely, the average MLS price is set to increase, driven by demographic factors and economic improvements. The rental market in Toronto remains under pressure, with a slight increase in vacancy rates unlikely to alleviate the demand-driven upward pressure on rents. This scenario underscores Toronto’s ongoing struggle with affordability and supply constraints, reflecting broader trends in Canada’s largest urban markets.

Ottawa:
Ottawa presents a market on the cusp of growth, driven by its burgeoning technology sector and demographic expansion. An increase in housing starts is on the horizon, particularly in the multi-unit segment, thanks to easing financing costs and supportive policy measures. Moderate price growth is expected, with declining mortgage rates encouraging broader market participation. The rental market is set to experience marginal vacancy rate increases due to heightened construction activity, yet sustained demand will continue to push rents higher. Ottawa’s unique blend of economic vitality and demographic trends positions it for a dynamic housing market evolution in the coming years.

Montréal:
Montréal’s housing market is gearing up for a moderate revival, stimulated by a gradual easing of interest rates and construction costs. Despite an expected slight increase in housing starts, supply challenges persist, with demand continuing to outpace new construction. The resale market is anticipated to see a recovery in activity and price growth, albeit tempered by affordability barriers. The rental sector remains under significant pressure, with demand for rental housing exacerbated by population growth and the constrained transition to homeownership. Montréal’s market dynamics highlight the city’s ongoing navigation through affordability and supply issues, set against a backdrop of demographic growth and economic potential.

The interplay of economic resilience, regional diversity, and demographic trends will be pivotal in shaping the landscape as Canada’s housing market enters 2024. Despite challenges, the potential for recovery and growth remains, driven by strategic policy interventions and market adaptations across the nation’s major urban centers.

 

Tyler Holt is the Editor of Wood Industry / Le monde du bois magazine. He has a master’s degree in literature and publication, and years of experience in the publishing and digital media industry. His main area of study is the effect of digital technologies on industrial and networked production.

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