What Latest Job Numbers Could Mean for Interest Rates, and Home Sales Picking Up in Canada

This week’s top real estate stories.

By  Jared Lindzon | 2 minute read

Feb 16

Wahi's Week in Real Estate

Every Friday, Wahi brings you the most important real estate stories from the past week.

Toronto Housing Market Correction Nears its End

Toronto home prices may be the lowest they’ll ever be, which for most buyers is still way too high. After six straight months of price declines, the housing market in Canada’s most populous city is about to turn a corner, according to a report by RBC. Though a full-fledged recovery won’t be realized until later in the year, prices are expected to start rising soon, ending the backslide that began two years ago. The bank also predicts home prices will fall 1% nationwide in 2024, including a 2.2% uptick in Alberta and a 2% drop in Ontario.

“In its latest report, CREA announced home sales jumped 3.7% in January as compared to December, and 22% ahead of January 2023.”

Unexpectedly Upbeat Jobs Report is Bad News for Interest Rates 

Last week, Statistics Canada reported the country’s first decline in unemployment since December of 2022, which is great for people who want jobs, less so for those who want houses. That’s because the strong economic indicator suggests the economy may be too resilient to cut interest rates without driving up inflation. Just a few weeks ago financial analysts were predicting the first rate cut would come in April; now predictions have been pushed back to June, and if we get any more good news about the economy, it could mean more bad news for borrowers.

Canada’s Housing Market Registers a Pulse

Canada’s housing market is ready to come off life support as the Canadian Real Estate Association (CREA) confirms “signs of life.” In its latest report, the organization announced home sales jumped 3.7% in January as compared to December, and 22% ahead of January 2023. They attribute the sudden burst of activity to pent-up demand — especially in the country’s biggest cities, as well as Ontario’s cottage country— coupled with slightly more favourable borrowing conditions. But don’t disconnect the ventilators and breathing tubes just yet; CREA warns the market is still in a weak state, with relatively low prices and minimal competition.     

The Housing Shortage Is Worse Than We Thought   

The dark hole Canada has dug its housing market into may be much deeper than originally anticipated. That’s because the impossibly high number of homes Canada needs to build to ease its affordability crisis — and which the country is nowhere close to hitting — might be a significant underestimate. According to a report published by CIBC last week, Canada needs to build 5 million new homes by 2030 to restore affordability — well beyond the 3.5 million target set by CREA. The number hardly matters though, given that the pace of new home construction is slowing, not accelerating.   

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Toronto’s Housing Market to Return to Its Unhinged Ways  

The Toronto Regional Real Estate Board has high hopes that 2024 will bring the city’s real estate market back to its former glory. In its annual forecast the organization predicts total sales topping 77,000 this year, representing a 17% jump from the 66,000 transactions logged in 2023. The increase in activity is also expected to bring an increase in prices, with TRREB anticipating a 3.5% jump, bringing the average sale price to $1.17 million. That would place 2024 in second for having the most expensive housing market the city has ever seen, just below 2022’s peak of almost $1.19 million.   

Jared Lindzon

Wahi Writer

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