2023 Housing Market Forecast

Here's a look at what's going on with Canadian housing markets.

Will high rates squash home prices? What places in Canada can offer better affordability? It is a buyer's market? Read on for some answers.

Nov 16, 2023

Updated from October 19, 2023


Bubbles or no bubbles, it may be your time to wade in.

In 2023, national average home prices in Canada are among the highest in all the G7 countries. There's been talk of housing bubbles here for years. Yet, nothing has burst (yet), and homeowners take tremendous pride in owning a home, riding local price waves up or down.

To help you time your home buying or selling decisions, here's a snapshot of our nation's current housing market trends and a look forward to what experts say is coming to a market near you.

Cooling is ahead (and not just the weather).

Higher interest rates and economic volatility are ventilating housing markets — with demand, sales, and home-price heat continuing to cool in October 2023.

As we head into Canada's fall and winter seasons, the summer rate hikes and a 'higher for longer' rate and inflation mantra are taking the steam out of the spring market revival, with higher bond yields translating to higher borrowing costs for everyone — including mortgage holders and companies building new housing.

The watch is on to see how prices fare as 2023 winds out while the housing market waits for a rate-pattern change.

Door-to-Door: Housing Forecast for 2023

It's a big picture containing a lot of smaller pictures. From the declining sales and increasing listings in Vancouver and Toronto to the hot Alberta market (mainly led by Calgary), it's a tale of higher-priced markets cooling and home buyers venturing out to find better affordability where the jobs are.

Sales are declining everywhere this fall, with buyers and sellers heading into hibernation to (hopefully) re-emerge next year. Markets are reclaiming a level of balance to give buyers more choices, easing pressure in bidding for homes and retaining essential purchase conditions.

What about home prices? This national activity downturn is projected to stabilize or bring down prices (or slow increases) for the rest of 2023 and early 2024.

Royal LePage still sees the aggregate price of a Canadian home coming about 7% higher at year's end compared to 2022 — but CREA's October year-over-year number logs a 1.8% increase — stay tuned for the final word on the national 2023 price picture.

More forecast tidbits:

  • October national home sales fell 5.6% from last month.
  • Canada’s housing market has now given back about three-quarters of the sales gains from the spring when interest rate hikes were paused from February to May.
  • By the end of 2023, the national average home sale price is expected to come in around 6% lower than the peak of March 2022.
  • The pandemic house-buying flurry pushed prices up by about 45%.
  • Overly tight demand-supply conditions that dominated the housing scene for months during and after the pandemic have officially unfurled to offer buyers more choices.
  • Prices in Vancouver and Toronto have seen decreases again in October, but are still considered to log an increase at year-end compared to 2022, with immigration likely placing a floor under the market into next spring.
  • 'No more GST' to build rental buildings has already spurred construction activity, which may (eventually) help alleviate housing pressure demand.
  • Some areas may see continued market heat as buyers look for better home affordability and are willing to move.

How much home can you afford?

Use our great calculator below for an idea, then give us a shout for your numbers.

Waiting for 2024?

In a recent survey by Dye & Durham, 24% of respondents are holding off buying a home until home prices drop, and another 23% are waiting on interest-rate drops.

If the central bank shifts into a 'definitive pause' state by the end of 2023 (i.e. no more rate hikes), experts are looking to a 2024 spring and summer housing market recovery. Pent-up demand may bring back roaring price increases in some areas.

Will the recent record immigration numbers help keep prices from falling too far?

Since last year, there's been a whopping 46% increase in Canadian newbies waving the red maple leaf. The pure mass of potential new home buyers may help bolster market stability during any downturn.

National Average Home Price Index

$741,400 in September 2023

An increase of about 1% year over year and a decrease of around 13% from peak prices in March 2022.

(as per MLS® HPI Aggregate Composite Benchmark, not seasonally adjusted)

What's up now? How the (housing) turn tables.

Calgary's housing market seems to have swapped places with Toronto as Canada's most popular place for home buying.

Calgary's prices aren't yet as sky-high as TO's, but the mad influx of people looking for jobs and affordable housing pushed up its September 2023 sales by 29% from last month for a record high, and prices up by 9% over last year. Inventory fell by 24%, with bidding wars now the main course.

Meanwhile, Toronto's sales declined by about 12% (the average price still rose by 2.4% y/y because it's Toronto), and inventory surged by 44% from this point last year to push its market into the buyer's range for the first time in quite a while.

The summer rate-hike punch from the Bank of Canada, combined with Toronto's already higher prices, are likely the unwelcome pair that have pushed Canadians to the other side of the country in search of housing that doesn't cost an arm and leg for a modest-sized home.

Housing underdog? Where the best home value lives in Canada.

We're not saying you should (or could) move there, but you can dream about how much home you'd get for the prices — based on September 2023 numbers. These areas are considered to have affordable prices yet high demand and strong potential for growth.

  • Moncton, NB – Average home price $340,700
  • Saskatoon, SK – Average home price $381,900
  • Hamilton, ON – Average home price $854,300 (more affordable considering the much higher average prices of nearby GTA at $1,100,500!)

Buyer's or seller's market?

BALANCED – National SNLR (sales to new listing ratio) eased to 49.5% in October 2023 (from September's 51.4%)

Newly listed homes in Canada fell by 2.3% in October, the first decline since March, but sales have also fallen to bring a further tilt to a buyer's market in both large and smaller housing markets — including much of BC, Ontario, the Atlantic provinces, and the Vast Horizons (aka the Prairie provinces

  • October's SNLR hit a 10-year low.
  • The highest national SNLR so far was 67.9%, reached in April 2023.
  • The long-term average for this national measure (according to CREA) is 55.1%

Why is the market balance improving? Meteoric policy rate hikes over an 18-month period (starting March 2, 2022), including two more increases this past summer, have finally worked their way to mortgage and home-buying decisions.

More sellers have emerged worried about the higher-interest-rate effects on future home prices (or needing to find a lower-priced home solution to ease monthly budgets), and buyers need to buy in the normal course, with the market somewhat buoyed from those coming off the sidelines trying to find a deal.

What is a buyer's market?

According to CREA (Canadian Real Estate Association), a strong buyer's market is when the sales-to-new-listings ratio (SNLR) is 40% or below.

At that ratio percentage, there are typically more properties for sale than buyers, offering more choice and bargaining power — especially in placing purchase offers with conditions that protect a buyer's rights and finances.

What is a balanced housing market?

When the SNLR falls between 40% and 60%, market conditions are considered 'balanced' in buyer demand, available listings, and sales levels that keep prices relatively stable, thus allowing reasonable purchase and sale terms.

The middle ground of housing competition — balanced markets can lean more towards the buyer's or seller's spectrum. And despite any prevailing national or local trends, a particular house, street or area can defy it (you know who you are).

What is a seller's market?

An SNLR of 60% or higher is a market that strongly favours the seller.

A seller's market means there are more buyers than sellers, and the properties sell quickly and at higher prices, giving the seller more power to set their price and terms of sale.

When the demand for housing exceeds supply, buyers often resort to a gamut of strategies to snap up a house before others, such as engaging in bidding wars or feeling pressured to place no-condition offers.

More housing gossip

  • In September 2023, Greater Toronto saw the most inventory on the books (sales listings) since 2010.
  • "The removal of the federal GST could catalyze 120,000 new secured rental homes within the Greater Toronto Area alone over the next 10 years." – Federal Housing Minister Sean Fraser
  • Only 34% of Canadian homeowners surveyed plan to postpone planned renovations due to rising rates.
  • A class action suit against TRREB, CREA, and Toronto Real Estate Brokerages is moving ahead, alleging inflated commissions paid by home sellers.
  • Despite a near-desperate need for more housing, supply in larger centres has grown by only 1% so far in 2023 compared to last year.
  • A higher federal mortgage stress test is impacting home affordability for first-time buyers (though insured borrowers just caught a re-qualifying break).
  • Luxury homes in Toronto may see a sales boost ahead of an additional tax on properties over $3M coming into effect on January 1, 2024.
  • BC is increasing short-term rental license fees tenfold to $1,000 in an effort to target dwellings that are 'airbnb-ed' instead of being rented long-term or sold as a primary residence.

Love to see some stats?

Here are a few multi-numbered sources to keep you busy and in the know:

Need a mortgage with that house? That's where we come in.

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