2023 Housing Market Trends and Forecast
Recent statistics released on May 15th by the Canadian Real Estate Association (CREA), a trade association that compiles and analyzes numerous factors affecting the real estate market in Canada, reveal national home sales jumped by double digits on a month-over-month basis in April 2023.
Canadian MLS® Systems posted data supporting this upward trend, demonstrating consistent gains over consecutive months. The data revealed an 11.3% increase in sales from March to April 2023, foreshadowed by smaller consecutive gains recorded in February and March (see below), hinting at a positive trajectory for the market.
Larry Cerqua, the 2023-2024 Chair of the CREA, acknowledged the ongoing issue of demand surpassing supply.
In an update by CREA, he stated, “Over the last few months, there have been signs that housing markets were going to heat back up this year, so it wasn’t a surprise to see things take off after the Easter weekend, which often serves as the opener to the spring market.”
He continued, “The issue going forward is not new: demand is once again returning at a scale that is outpacing supply.”
To navigate this rapidly changing market, Cerqua recommends that Canadians seeking information and guidance regarding buying or selling a property should contact local realtors.
CREA says the average home price in Canada reached $716,000 in April 2023, up $103,500 from January 2023. Prices are rising in most provinces except in Alberta and Saskatchewan, where prices have decreased.
The national average home price is 4 per cent lower compared to last year, but it is an improvement from last month’s 14 per cent year-over-year decline. This drop was due to an increase in Canadian interest rates over the past year, which caused a decrease in demand for home sales. According to CREA Statistics, the average price of resale residential homes sold across the province in April 2023 was $911,078, a decrease of almost 8 per cent from April 2022.
Omar Hashem, Broker of Record at Lotful Realty, a boutique brokerage specializing in residential sales and investments in Ottawa, says, “This is an amazing time for buyers.” Hashem adds that interest rates are higher than what recent buyers remember.
Experts at Canada Mortgage and Housing Corporation (CMHC) predict a turning point in the middle of the year as sales and prices in the housing market will stabilize and eventually begin to grow.
“We expect new housing starts to decline from where they were in the last couple of years. This is a concern because we need more supply in the housing market to create affordability,” says CMHC Chief Economist Bob Dugan. Dugan anticipates a continuation of rising prices into the coming year.
Overall, there is upward pressure on housing prices due to the limited availability of homes for sale and an increase in demand.
The average home prices in Ottawa have steadily increased over the past four months. CREA reveals THE average home sale price was $677,678 in April 2023, an increase of 6.5% month-over-month compared to March 2023’s average sale price of $636,610.
Hashem says he expects an average increase of 4-5% in 2023 and an increase of around 7% in 2024.
“Date the Rate, Marry the house,” Hashem explains that a rate can be refinanced or renegotiated, but not the house or price once you bought it.
Hashem says this is a great time for first time investors to jump in and for those who already have properties to take advantage of the chance to increase their asset base while diversifying.
