Bank of Canada Rate Cuts Signal ‘Turning Point’ for Housing Market.

After a cautious year marked by changing expectations driven by increased borrowing costs, economists anticipate a potential rebound for the Canadian housing market in 2024.

The likelihood of this largely hinges on predictions suggesting that the Bank of Canada may initiate reductions in its key interest rate, currently at five percent, as early as the second quarter of the present year.

“We’re obviously watching for a turning point in the market,” said Toronto-Dominion Bank economist Rishi Sondhi.”

“We’ve had some, I would say, weaker sales and price activity over the past few months … We’re getting some indications that the market, at least from a demand perspective, is starting to turn around.”

In its most recent update on national home sales and pricing data, the Canadian Real Estate Association noted a trend of subdued market conditions since the conclusion of last summer, with both sellers and potential buyers adopting a more cautious approach.

Although declines in prices have primarily affected Ontario in recent times, there has also been a late-year softening of home prices in the Fraser Valley, Winnipeg, and Halifax. In contrast, in other provinces such as Alberta, Saskatchewan, New Brunswick, Prince Edward Island, and Newfoundland and Labrador, prices have generally remained stable or continued to rise.