Last week’s inflation numbers triggered a lot of speculation about the Bank of Canada’s next interest rate move, bolstering the argument for a 50-point cut instead of the usual 25-point change. They also over shadowed the latest sales and pricing numbers from the Canadian Real Estate Association.
The strong potential for an interest rate shake-up has CREA adjusting its forecast. The realtors had expected sales would start to rise as the Bank of Canada began cutting its benchmark, policy rate. That did not happen. The logic is, buyers expect interest rates to drop further and waiting another six months to get in to the market will ease the mortgage burden in a meaningful way.
CREA now expects to see a relatively quiet market until the second half of 2025. It is calling for total sales of 469,000 properties in 2024; a 5.2% increase over 2023. It is forecasting a 6.6% increase, to nearly 500,000 sales, in 2025.
The national average price for this year is expected to rise just 0.9%, to $683,000 then climb 4.4%, to $713,000, in 2025.
The monthly numbers for September show a 1.9% increase in sales over August with a 6.9% increase over a year earlier. The national average price came in 2.1% higher than September 2023 at nearly $670,000.
The number of new listings rose almost 5.0% compared to August and is up nearly 17% over September 2023.