Real Estate Market Predictions For 2024
November 1, 2023
Many people enjoy reading predictions about the future, whether they’re related to weather, personal matters, business, relationships, or real estate. Some predictions are based on stars, while others rely on past events and current statistics. Whether you believe in them or not, they can be entertaining.
No one can predict the future, even economists who base their forecasts on statistics and facts. There are many factors and events that can affect the economy, some of which cannot be predicted.
Years ago, the GTA and Toronto real estate market was often referred to as living in a housing bubble, with prices consistently rising by double-digit percentages each year. Even when everyone believed prices couldn’t rise further, they did. I remember sharing predictions with other realtors, and most of the time, we were right—prices increased again, particularly during the spring market. I tended to be more optimistic and often encouraged investing in real estate loudly on social media.
Today, on November 1, 2023, the interest rates are high at a 7.2% prime rate. The Bank of Canada hasn’t raised rates since July 12, 2023, and there is still one more announcement due on December 6, 2023. My first prediction is that the overnight and prime rates will remain unchanged.
The Bank of Canada’s primary goal is to reduce inflation. They have refrained from raising the interest rate for two consecutive times. According to Retail Insider, “Rising interest rates and inflation have affected every Canadian to the point where economic confidence is at an all-time low in six-plus years of tracking, and high housing prices exacerbate the situation.” Considering this and changing consumer behaviors, people are likely to spend less on non-essential items, leading to stabilized prices and flattened inflation in 2024. This forms my second prediction.
I anticipate that interest rates will not increase in 2024 (#3), while housing prices will rise again, especially in spring 2024 (#4). Why? Despite the confusing and unpredictable fall market, there is very low inventory. Quality properties, as well as those priced well or under market value, are attracting multiple offers and selling for slightly over the market value. The demand exists. People are waiting, but not everyone can wait forever. Hence, as soon as more inventory hits the market in spring, buyers are likely to jump back into the market, as usual.
Summarizing my 2024 predictions:
#1 The interest rate will remain the same on Dec 6, 2023.
#2 Inflation will stabilize in 2024.
#3 Interest rates will not increase in 2024.
#4 Real estate prices will rise in the spring of 2024.
Some media outlets are stating that Canadian house prices will fall by 10% in 2024 as the economy slips into a recession. It’s not surprising that the media often has a negative outlook. Let’s see what others are saying:
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