Toronto house prices to top Vancouver, says the forecast Achi-News

Toronto will overtake Vancouver as Canada’s most expensive housing market by the end of the year, predicts a new forecast from Royal LePage.

After stronger than expected sales and price gains in the first quarter of this year, the real estate company has increased its forecast for house prices in markets across the country.

According to the Royal LePage House Price Survey, which draws data from 63 of Canada’s largest housing markets, the aggregate price of a home nationally rose 4.3 per cent year over year in the first quarter of 2024 to $812,100.

“Clearly, more and more buyers are motivated by the need to get ahead of rising house prices, rather than adopting the strategy of waiting for mortgage rates to fall.”

Royal LePage said within the first three months of the year Canada’s housing market has seen solid price appreciation and sales activity, a trend he expects to accelerate only when the Bank of Canada makes its first interest rate cut later this year.

Their latest forecast predicts that the aggregate national home price will rise by 9 percent in the fourth quarter of 2024, year on year.

But some regions will do better than others.

Prices in the Greater Toronto Area are expected to rise 10 per cent in the fourth quarter, the biggest appreciation of all major markets in the country, after climbing 5.2 per cent in the first quarter to $1,177,700.

“At the end of 2023, we anticipate moderate price gains in the first half of this year and stronger appreciation in the third quarter, following one or more expected rate cuts. What we’ve seen so far is a boost in sales volumes and prices even more than anticipated,” said Karen Yolevski, chief operating officer of Royal LePage Real Estate Services Ltd, of the Toronto market.

Montreal is expected to be another high flyer, with prices projected to rise 8.5 percent in the fourth quarter, the second highest appreciation in Canada.

Activity in the Greater Vancouver Area, however, has been quieter, with prices rising 3.4 percent in the first quarter to $1,238,200, Royal LePage said.

“Heading into spring, the Vancouver market has been steadily gaining momentum, although not at the feverish pace that other markets across Canada have seen recently,” said Randy Ryalls, general manager of Royal LePage Sterling Realty.

“The gradual increase in activity we have experienced in the first few months of the year is expected to continue throughout the coming months, probably leading to a moderate increase in house prices,” he said.

Royal LePage predicts Vancouver home prices will rise 5.5 percent in the fourth quarter.

“While Vancouver remains the most expensive market in the nation today, Royal LePage predicts that the aggregate home price in the GTA will surpass Greater Vancouver in the second half of 2024,” the report said.

The Alberta city, which bucked a downward price trend last year, saw its aggregate home prices rise 9.7 percent to $676,400 in the first quarter, the largest appreciation in the country.

“While activity levels remain strong and prices continue to rise in Alberta, our research shows that buyer demand, relative to available inventory, is strongest in both largest urban center in the country,” said Soper. “We now expect Toronto and Montreal to record the highest home price appreciation this year.”

Calgary home prices are expected to increase by 8 per cent in the fourth quarter.

Nearly 90 percent of regions tracked by Royal LePage posted higher prices at the start of the year, but housing markets still haven’t fully recovered from the post-pandemic correction, the report said.

The aggregate price of a home in Canada is still 5.2 percent below the peak reached in the first quarter of 2022. That said, prices remain well above pre-pandemic levels.

Good news when it comes to renting, sort of. The staggering annual climb in Canadian rental prices slowed in March, with the average rent falling 0.6 percent from the previous month, Urbanation’s monthly report said.

The decline was partly due to seasonal forces but also due to renters moving out of the very expensive cities like Vancouver and Toronto, Rentals.ca said.

Average rents were $2,181 in March, up 8.8 percent from a year ago — a cooler pace than the 10.5 percent growth recorded in February.

Average rents in Canada are up 21 percent from March 2020, the month the global COVID-19 pandemic began.

• The spring meetings of the IMF and the World Bank begin in Washington, DC where finance ministers, central bankers and policy makers meet to discuss the global economy.
• Gildan Activewear Inc. chief executive Vince Tyra will deliver an investor update today, marking his first 90 days on the job. The presentation comes as activist investor Browning West seeks to replace the majority of directors on the company’s board in a bid to reinstate founder Glenn Chamandy as chief executive of the clothing company.
• Today’s Data: Canadian housing starts for March, manufacturing sales, US retail sales, NAHB housing market index
• Earnings: EQB Inc., M&T Bank Corp, Charles Schwab Corp, Goldman Sachs Group Inc

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McLister on Mortgages

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