Canadian real estate has been a staple in headlines and above-the-fold features for years, but 2024 has been an especially turbulent year, the product of a perfect storm of factors including affordability, inventory, immigration, economy, interest rates, government policy, sidelined homebuyers clamouring to get back into play, and home sellers waiting for just the right time to list. Here’s how it all played out in the last year, at ground level.

10. High housing values, interest rates and taxes contribute to post-pandemic exodus from Canada’s most expensive provinces.

Tax rate increases, in tandem with record-high housing values and mortgage rates, have sparked a post-pandemic exodus from the country’s most expensive markets, contributing to a significant uptick in interprovincial migration numbers in Alberta and Atlantic Canada in 2023. While some homebuyers were content to move outside of core markets within their province, close to 60,000 Canadians found their answer to the current housing crisis in Alberta and, to a lesser extent, Nova Scotia, New Brunswick and Prince Edward Island.

Source: Taxes and Canadian Real Estate

9. Nearly half of Canadians considering alternative paths to home ownership.

Canadians from coast to coast have been grappling with affordability challenges, but at the same time, their desire to achieve home ownership remains strong. This is prompting many to seriously consider alternative ways to get their foot in the door, where it might not be feasible under the traditional ownership model of a single person or couple purchasing with a downpayment between five to 20 per cent.

Source: Alternative Home Ownership Report

8. Cottage owners choosing to retain and maintain their recreational properties, despite higher interest rates and affordability concerns.

A flood of listings didn’t hit Canada’s cottage market last spring, and the expert consensus was that it was unlikely to transpire in 2024, despite the rumour mill. Even the change to the capital gains tax that took effect on June 25 didn’t spark a wide-spread influx of new listings and sales by cottage owners trying to get in under the wire, given the narrow window of the start of the traditional spring selling season and the looming tax deadline.

Source: 2024 Cottage Trends Report

7. Multi-family construction continues unabated across Canada, with purpose-built rentals the primary focus in every major urban market.

Strong population growth and housing supply issues prompted a significant shift in the Canadian commercial real estate market as builders and developers adopted an “all-hands-on deck” approach to solving Canada’s housing shortage. RE/MAX examined 12 markets across the country and found the push for intensification in the first quarter of 2024 gained momentum as builders and developers turned their attention to purpose-built rental construction—some at the expense of new residential condominiums, and to a lesser extent, commercial builds. All 12 markets surveyed identified multi-family real estate as a top-performing asset class.

Source: 2024 Commercial Real Estate Report

6. Experienced buyers and investors take advantage of softer detached housing values, drive sales in Toronto and Vancouver.

With first-time buyers locked out of the country’s most expensive housing markets, the move-up/down segment or more experienced homebuyers, as well as investors, were fuelling detached home-buying activity in the first six months of 2024 in one-third of markets analyzed across the Greater Toronto Area, Greater Vancouver Area and Fraser Valley. The Toronto’s 416 area code led the rebound, with just over 34 per cent of neighbourhoods experiencing stability or growth in detached home-buying activity.

Source: 2024 Hot Pocket Communities Report

5. “Green shoots” sprout this fall, amid prospects of lower interest rates ahead.

With the long-anticipated decline in interest rates finally starting to materialize, early indicators across Canada suggested steady housing market activity in the fall, with average sale prices expected to rise in the ballpark of one and six per cent by year’s end. The fall market is usually a good early indicator for activity in the year ahead, and “more healthy territory” was visible on the horizon, with interest rates starting to ease and buyers trickling in off the sidelines

Source: 2024 Fall Housing Market Outlook

4. Scarcity in Toronto and Vancouver expected to impact future values, as single-detached homes become housing’s new unicorn.

Billions spent in infill and renovation during the pandemic years have raised the overall value of residential housing stock and continues to support higher pricing on single-family homes, despite downward market pressure in the country’s most expensive markets — Toronto and Vancouver. RE/MAX examined the evolution of housing stock and trends impacting values in Canada’s two largest real estate markets in recent years. RE/MAX found on-going renewal and revitalization efforts have had a substantial impact on housing supply and affordability, particularly in urban core areas.

Source: Changing Landscapes Report

3. Double-digit increases in condo inventory reported in most major cities as sellers return to market ahead of more interest rate cuts.

RE/MAX examined condominium activity between January – August 2024 in seven major markets across the country including Greater Vancouver, Fraser Valley, City of Calgary, Edmonton, Greater Toronto, Ottawa and Halifax, and found that listings have soared in anticipation of increased demand in Q4 of 2024 and early 2025. Growth in inventory levels was highest in the Fraser Valley (+58.7%), followed by Greater Toronto (+52.8%), City of Calgary (+52.4%), Ottawa (+44.5%), Edmonton (+17.7%), Halifax Regional Municipality (+8.1%) and Vancouver (+7.3%).

Source: 2024 Canadian Condominium Report

2. Mortgage Stress Test gets an update, bringing some relief to buyers. Finally.

“There’s no doubt that the Mortgage Stress Test was good policy at the time [when it was created], credited with preventing a swath of foreclosures when rates eventually started climbing in 2022 and 2023,” wrote Christopher Alexander in an op-ed in The Globe And Mail. “But in today’s higher interest rate environment, it’s become counterintuitive policy, serving only as an additional barrier for first-time homebuyers.” Alexander, alongside many in the mortgage industry, had long been advocating for changes to the outdated policy, and the OFSI finally responded. Effective November 21, 2024, homeowners would no longer be stress-tested when switch their uninsured (conventional) mortgage to another lender at renewal.

1. “Jumbo” interest rate cuts prompt rebound in home sales, prices start to edge back up.

A fifth consecutive interest rate cut – and a second “jumbo” cut in a row – coupled with the above-mentioned changes to the mortgage stress test, could prove to be the much-needed reprieve needed by those who have been struggling to gain a foothold in the housing market. The current environment is more encouraging than it has been in the past few years, especially for first-time homebuyers. However, a boost in sales, coupled with limited inventory, almost always leads to rising prices, which is the expectation across virtually all Canadian housing markets in 2025.

SOURCE: https://blog.remax.ca/top-10-canadian-real-estate-trends-of-2024/