(Getty Images)
The annually published Housing Market Outlook (HMO) predicts emerging trends in the national and metropolitan new-home and resale housing markets. The forecasts are based on information made available May 1, 2024.
On a national level according to HMO, there is weak economic growth in 2024 however, HMO is projecting a regain in 2025-2026 as interest rates decrease. “We expect inflation to fall to the mid two per cent range by mid-2024 and then stabilize in the low two per cent range in 2025–2026. This decline will let the Bank of Canada gradually lower its policy rate from mid-2024,” states HMO.
A decline in apartments is also anticipated following the record high levels in 2023, according to HMO. “Some condominium projects may also face delays in 2024. Lower pre-construction sale levels will make securing financing harder. Additionally, despite labour shortages and rising construction costs, developers are handling a record number of units already in development.”
Prairie provinces thrive
According to HMO, the Prairies are anticipated to see an economic growth and expected to perform well due to affordable home prices. Which attracts homebuyers and job seekers – leading to increased home construction for the provinces. Calgary, Alta., has seen positive economic and labour growth alongside stable oil and gas prices, states HMO.
“Developers are projected to initiate further construction on multi-unit homes due to low vacancy rates and increasing demand for these types of dwellings,” reports HBO.
Ontario and British Colombia face challenges
Both Ontario and B.C. are anticipated to push the decline in national housing for 2024, according to HBO. The high prices for homes will make specific resident types unaffordable. Developers, may struggle apartment construction because of supply challenges, specifically financing costs. In Toronto, Ont., a predominate decline the apartment sector has been noted.
“There is a projected slight increase in the vacancy rate for purpose-built rental apartments during the 2024–2026 period. This rise can be attributed to decreased demand from international students, moderate shifts from renting to homeownership and an increase in supply,” states HMO.
In Vancouver, B.C., there has been a decline in home construction, which HMO attributes to the “restricted financing affecting multi-family building.” However, HMO is anticipating a “robust recovery and ongoing near-record growth are anticipated in the following years.”
Quebec expects growth
According to HMO, Quebec is expected to grow more robustly compared to those in other regions. Quebec experienced a decline in home construction in 2023, before other provinces. In Gatineau, Que., HMO anticipates the housing will increase slightly in 2024. “This increase in residential construction will be concentrated in the rental segment, as demand for houses and condominiums is low.”
Montreal, Que., will see a decline in interest rates and housing starts, however rental demand surged, surpassing growth in supply, resulting in record-high rent increases states HMO.
Atlantic provinces remains steady
The pressure for new home construction due to strong migration in 2022-2023 is expected to ease. According to HMO, the housing in certain provinces will remain historically robust but will realign more closely with weaker population growth over the forecast period.
In Halifax, N.S., HMO anticipates home prices, sales and starts to increase over the 2024–2026, which is supported by population growth and the likely easing of interest rates. Halifax is also experiencing record high rental apartment construction, HMO expects this momentum to continue.
The full HMO report is available to read online.