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Royal LePage is predicting modest, steady national aggregate home price growth over the next nine months due to strong buyer demand and low housing supply.
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The Royal LePage House Price Survey reveals that Canada’s aggregate home price experienced a 9.2% year-over-year decline to $778,300 in Q1 2023, but increased by 2.8% quarter-over-quarter. This change came as buyers resumed their search for homes after the Bank of Canada paused interest rate hikes.
The COVID-19 pandemic caused significant fluctuations in Canada’s housing market, with the work-from-home trend leading to a two-year period of unprecedented sales volumes and price growth. The real estate market faced a downturn as the Bank of Canada increased interest rates, but is now showing signs of recovery.
The survey, based on proprietary property data from 62 major Canadian real estate markets, indicates that the national median price for a single-family detached home dropped 10.7% year-over-year to $808,700, while condominium prices fell 6.7% year-over-year to $571,700. However, quarter-over-quarter, median prices for these housing types increased by 3.4% and 1.8%, respectively.
Royal LePage says despite higher interest rates, buyers are returning to the market, though they now face a significant shortage of available homes for sale. Home sales and new listings in major urban centers have been increasing monthly, though still lower than last year’s figures.
Royal LePage forecasts a 4.5% increase in the aggregate home price in Q4 2023 compared to the same quarter in 2022, revising their previous prediction due to a faster-than-anticipated recovery in housing markets. As the market rebounds, cautious optimism prevails, with a return to some normalcy expected, but without huge price gains.
Greater Toronto Area
In Q1 2023, the Greater Toronto Area (GTA) experienced an 11.8% year-over-year decrease in aggregate home prices to $1,119,900, while the quarterly increase was 4.8%. Housing type-wise, single-family detached homes and condominiums saw a median price drop of 11.9% and 7.4% year-over-year, respectively.
Despite a drop in sales compared to record highs in Q1 2022, sales and new listings have been rising monthly, indicating robust market activity. Affordability challenges still affect first-time homebuyers, increasing rental market prices.
Royal LePage forecasts a 7.5% increase in GTA’s aggregate home prices in Q4 2023 compared to last year.
Greater Montreal Area
In Q1 2023, the Greater Montreal Area (GMA) saw a 3.5% year-over-year decrease in aggregate home prices to $551,400, with a 1.3% quarterly increase.
Single-family detached homes experienced a 3.1% year-over-year median price decrease, while condominiums saw a 0.8% increase. Month-to-month sales and new listings rose, indicating market recovery.
Royal LePage forecasts a 3.0% increase in GMA’s aggregate home prices in Q4 2023 compared to the same period last year, reflecting improved consumer confidence and economic indicators that favor market recovery.
Greater Vancouver
Greater Vancouver’s aggregate home prices decreased 10.6% year-over-year to $1,224,200 in Q1 2023, but increased 1.3% on a quarterly basis. Single-family detached homes’ median prices fell 11.2%, while condominiums’ median prices dropped 9.9%. Despite low inventory levels, buyer activity and positive consumer sentiment have returned to the market.
Month-to-month sales and new listings increased, with Royal LePage forecasting a 2.5% aggregate home price increase in Q4 2023 compared to the previous year, reflecting current market conditions and rising demand outpacing supply.
Ottawa
In Q1 2023, Ottawa’s aggregate home prices decreased 10.3% YoY to $725,700, but increased 0.8% on a quarterly basis. Median prices for single-family detached homes and condominiums fell 12.2% and 11.2%, respectively. The market experienced low supply, pressuring prices and leading to multiple offers on well-priced properties.
As long as interest rates remain stable or only slightly increase, the market should perform at typical levels. Royal LePage forecasts a 2.0% aggregate home price increase in Q4 2023 compared to the same quarter last year. However, ongoing strike talks involving civil servants could impact market activity.
Calgary
Calgary’s aggregate home price increased 0.7% YoY to $616,500 in Q1 2023, with a 2.9% quarterly increase. Single-family detached homes and condominiums saw median price increases of 0.9% and 4.5%, respectively. The market has returned to pre-pandemic seasonal patterns, with sales activity increasing as the spring market approached. However, inventory shortages and low supply are contributing to rising prices.
While new construction has slowed, supply is expected to improve but not meet growing demand. Royal LePage forecasts a 2.5% aggregate home price increase in Q4 2023 compared to the same quarter last year.
Edmonton
Edmonton’s aggregate home price decreased 5.0% YoY to $429,500 in Q1 2023 but increased 0.6% on a quarterly basis.
The median price for single-family detached homes and condominiums fell 5.8% and 3.3% YoY, respectively. The city is transitioning into a seller’s market due to tightening inventory levels. Activity is currently stalled, but a typical spring market is expected in 2023. Despite more inventory than a year ago, supply remains below pre-pandemic levels, leading to modest price increases.
Royal LePage forecasts a 1.5% increase in Edmonton’s aggregate home price in Q4 2023 compared to the same quarter last year.
Halifax
In Halifax, the aggregate home price decreased 6.8% YoY to $474,700 in Q1 2023 but increased 1.2% on a quarterly basis.
The median price for single-family detached homes and condominiums fell 6.5% and 2.3% YoY, respectively. Demand has rebounded, and prices are rising, shifting conditions towards a seller’s market.
Inventory levels have improved but remain low for the spring market. A lift in inventory levels is expected during the typical spring market. Royal LePage forecasts a 1.0% increase in Halifax’s aggregate home price in Q4 2023 compared to the same quarter last year, revising the previous forecast upward.
Winnipeg
In Winnipeg, the aggregate home price decreased 4.6% YoY to $369,900 in Q1 2023 but increased 2.5% quarterly. The median price for single-family detached homes fell 4.4% YoY, while condominium prices remained almost flat, decreasing 0.2%.
Early 2023 saw gradual price increases, and consumer confidence returned as inflation slowed and interest rates stabilized. However, supply still lags behind growing demand and remains below pre-pandemic levels.
The entry-level market is particularly competitive, and the spring season is expected to be busy. Royal LePage forecasts a 2.5% increase in Winnipeg’s aggregate home price in Q4 2023 compared to the same quarter last year.
Regina
In Q1 2023, Regina’s aggregate home price increased 0.4% YoY to $362,800 and 0.9% quarterly. Single-family detached home median prices decreased 0.4%, while condominium prices rose 9.3%.
The market performed closer to stable pre-pandemic levels, with low inventory but an expected boost in activity during spring. Apartment and condo sales have seen a resurgence, and properly priced listings attract multiple offers.
Inventory issues persist, with many potential sellers hesitant to list. Construction is expected to pick up in summer. Royal LePage forecasts a 0.5% increase in Regina’s aggregate home price in Q4 2023 compared to the same quarter last year.
