Zoocasa
Sold Prices
Map
Market Insights
  • Blog Home
  • For Buyers
  • For Sellers
  • Real Estate News
  • Mortgage News in Canada
  • Free Guides (PDF)
  • Real Estate Infographics
Zoocasa
  • Blog Home
  • For Buyers
  • For Sellers
  • Real Estate News
  • Mortgage News in Canada
  • Free Guides (PDF)
  • Real Estate Infographics
Home Affordability

Will Home Prices Bottom Out in 2024? Zoocasa’s Four Housing Market Predictions

Mackenzie Scibetta by Mackenzie Scibetta
December 13, 2023
in Affordability, Ask the Pros, Bank of Canada, Market Insights
Reading Time: 6 mins read
A neighbourhood of homes.
Share
Tweet
Share
0 Shares

Cliquez ici pour la version française.

As the Bank of Canada’s rate hikes caught up to homeowners, the 2023 Canadian housing market was characterized by tightening affordability and buyer uncertainty. National inventory increased closer to normal levels, but that came at the cost of slowing sales. However, now that inflation is coming down, many economists predict the Bank of Canada is done raising rates and that they will come down in mid to late 2024. What will that mean for the 2024 housing market? Zoocasa’s experts weigh in on the top four trends we can expect to see in the coming year.

Prices Will Continue to Decline, Especially for Cottage Country

We’ve already seen many would-be buyers return to the sidelines this fall, with month-over-month sales plunging in October by 3.4% nationally, and unless prices come down, those buyers won’t be enticed to re-enter the market for non-essential purchases. 

As Lauren Haw, Zoocasa’s Broker of Record & Industry Relations Officer, explains, “There’s a current chasm between the bid/ask for many property types. Sellers are still priced quite high relative to what non-urgent and hesitant buyers are willing to spend, meaning sellers in 2024 will have to come down to the buyers’ preferred pricing in order to sell.” 

Non-urgent buyers, such as those moving up or downsizing, are going to delay their purchases, preferring to hold onto their current homes rather than risk higher payments. Though lower sales will help bring prices down in most segments, the demand for the idyllic family home will remain competitive. “There will still be continued pressure for family homes in prime locations which will keep prices buoyant for great detached homes in great school districts,” said Haw. 

  • Read: Navigating the New Norm: Evolving Trends in the Canadian Mortgage Industry

Prices have already started their descent from the summer peak and the national average home price in October 2023 decreased for the fourth month in a row to $731,100.  However, the property types that will benefit the most from price drops will be entry and mid-level cottages and recreational properties. “Non-essential properties that are disposable in nature, especially those that were over-sold and speculated upon during the pandemic, will see the biggest price drops,” predicted Haw. 

The Ongoing Impact of High Interest Rates

“The Bank of Canada’s 10 rate hikes since March 2022 seem to be achieving its goal of bringing inflation down, however, the full impact has yet to be felt,” explains Carrie Lysenko, Zoocasa’s Chief Executive Officer. It takes several months for the effect of each rate hike to trickle down across economic markets, and in some cases, it can take as long as a year or a year and a half.

What this means for the real estate market is that even if rates stay flat, as many predict they will, the impact of previous rate hikes will continue to grow. “Every month that passes, more current homeowners will see their mortgages up for renewal at these higher rates, likely leading to more forced selling,” said Lysenko. 

For example, the average 2020 homebuyer in Toronto had a monthly mortgage payment of $3,737, based on one of the best available rates in September 2020 of 1.64%. Now if that same 2020 Toronto homebuyer is up for renewal, their monthly mortgage payments will increase to $4,499 a month based on the September 2023 rate of 5.24%. 

Pre-Construction Firesales Will Increase

In our 2023 fall market predictions report, we expected a slowdown in the pre-construction industry and this will hold true going into 2024. According to the Canadian Home Builders’ Association, 37% of builders cancelled projects in Q3 of 2023 and 65% said interest rates are causing them to build fewer units. “This lack of builder confidence is reducing housing starts and in the mid to long-term, this will exacerbate the undersupply issue in Canada,” said Lysenko. 

  • Read: TRESA: Ontario's New Real Estate Rules and What It Means for Buyers, Sellers and Agents

“Many of the pre-con investors who closed and financed at the 2018-2021 rates will not qualify to close these properties at today’s rates. Prospective landlords will have to put more equity down and/or be underwater from a cash flow perspective,” said Haw. There’s also the possibility of investors selling as an assignment and never having to close, which will create a firesale market in many buildings. 

It Could All Turn On a Dime

Home prices are on a downward trend now, which is typical for the winter months as price growth generally accelerates before the beginning of the spring market. In 2022, the national average home price peaked in March at $855,800 and reached the bottom in December at $705,600. However, Haw predicts we have not yet hit bottom. 

“Once that bottom is hit and prices start to go back up, it will be a rapid ascent to the top as the latent demand for housing in urban cores race to get back in before prices peak again,” explained Haw. Once the curve starts to head back up, investors with notions of stabilized future returns will likely re-enter the market too.

Safe Harbor Statement

The statements contained herein may include statements of future expectations and other forward-looking statements that are based on eXp World Holdings, Inc.’s (“we” and the “Company”) management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. These statements include, but are not limited to, statements about industry trends, including buyer and seller demand; geographical and geopolitical trends; predictions related to fiscal policy;  and the continued growth of our agent and broker base. Such forward-looking statements speak only as of the date hereof, and the Company undertakes no obligation to revise or update them. Such statements are not guarantees of future performance.

Questions about the 2024 market?
Contact us today to speak to a Realtor in your area

Previous Post

Taxed to the Max? A Step-By-Step Guide to Disputing Your Ontario Property’s Assessed Value

Next Post

What $500k Can Buy You Across Canada in December 2023

Mackenzie Scibetta

Mackenzie Scibetta

Mackenzie Scibetta is a seasoned Content Marketing Specialist at Zoocasa, where she brings her expertise to the world of real estate. As a dedicated real estate writer, Mackenzie's primary goal is to equip home buyers and sellers with the most up-to-date market insights, enabling them to navigate their real estate ventures with confidence. Mackenzie's writing is characterized by its depth and breadth, covering a wide range of topics related to the real estate industry. From exploring the intricacies of mortgages to meticulously tracking and analyzing trends in local markets across Canada and the U.S., Mackenzie is known for her comprehensive and data-driven reports. Her commitment to providing valuable information is evident in the consistent quality of her work. Mackenzie's research and insights have earned her recognition from prominent media outlets. Her expertise has been featured in BNN Bloomberg, CTV News, the National Post, The Globe and Mail, and even The New York Times. These accolades underscore her position as a trusted authority in the field of real estate.

Related Posts

Affordability

Best Places to Live in Canada for Young Adults: Top Picks for 2025

July 22, 2025
Two people sitting on beach chairs at the beach
Affordability

Can You Afford to Live Where You Vacation? Here’s What It Costs in America’s Most Popular Spots

July 16, 2025
A woman sitting in the driver's seat of a car
Affordability

Trade Your New Car Budget for a Down Payment in These Affordable U.S. Cities

July 3, 2025

Blog Search

No Result
View All Result

Newsletter Sign-up

Join a community of 130,000+ subscribers. Don't miss important real estate news, market data, and buying and selling tips.

Recent Articles

woman working from home, dog sitting beside her

Got an $85K Windfall? That Still Might Not Get You a Condo in Much of Canada

July 28, 2025
A person sitting on the beach, gazing at the vibrant sunset over the ocean horizon.

6 Beach Towns in Canada That Are More Than Just Summer Getaways

July 27, 2025

Tour 10 of the Craziest Houses for Sale in the U.S. Right Now

July 26, 2025
A woman sitting on a bed, looking relaxed, with a fan blowing gently beside her.

How to Keep Your Bed Cool in the Summer and Sleep Through the Heat

July 25, 2025

Featured Listings

A black house perched on a rocky hill, surrounded by a clear blue sky and distant mountains.

Discover Canada’s Most Unique Homes: 14 Can’t-Miss Properties

July 17, 2025

6 Best Cities for Affordable Luxury Homes in Canada Under $1M

July 10, 2025

5 Canadian Cottage Regions That Make the Perfect U.S. Buyer Getaway 

June 15, 2025

From Skyline Views to Private Escapes: 5 Luxe Calgary Homes for Sale

June 10, 2025
first-time home buyer programs and rebates

Social Media

250 The Esplanade Suite 408 Toronto, ON M5A 4J5

Stay Connected

  • Blog Home
  • For Buyers
  • For Sellers
  • Real Estate News
  • Mortgage News in Canada
  • Free Guides (PDF)
  • Real Estate Infographics
No Result
View All Result

Zoocasa © 2007–2022. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA.