Royal LePage’s Q4 2023 Home Price Update and Market Forecast

 In Real Estate Market News

National home prices close out 2023 above prior year, despite continued slowdown in market activity.

Royal LePage expects sidelined buyers to re-engage this quarter ahead of expected rate cuts by the Bank of Canada.

Fourth quarter highlights: 

  • National aggregate home price increased 4.3% year over year in Q4 2023; decreased 1.7% quarter over quarter
  • Aggregate home price in greater regions of Toronto, Montreal and Vancouver posted gains of 5.1%, 4.1% and 2.7% year over year, respectively, in final quarter of 2023
  • Among report’s major regions, Calgary recorded highest year over year price appreciation (10.7%); only major region to post quarterly price gains in Q4 2023 (1.5% over Q3)
  • 81% of regional markets posted a quarter-over-quarter decline
  • Approximately 2.2 million mortgages in Canada will be renewing over the next two years, most at a much higher interest rate
  • National aggregate home price expected to rise 5.5% year over year in Q4 of 2024

According to the Royal LePage House Price Survey released today, the aggregate[1] price of a home in Canada increased 4.3 per cent year over year to $789,500 in the fourth quarter of 2023. On a quarter-over-quarter basis, however, the national aggregate home price decreased slightly by 1.7 per cent, highlighting that elevated borrowing costs continue to affect market activity, as Canadians adapt to the higher interest rate environment.

“I believe the narrative suggesting that the housing market will rebound only when the Bank of Canada lowers rates misses the mark,” said Phil Soper, president and CEO of Royal LePage. “The recovery will begin when consumers have confidence the home they buy today will not be worth less tomorrow. We see that tipping point occurring in the first quarter, before the highly anticipated easing of the Bank of Canada’s key lending rate.”

The Royal LePage National House Price Composite is compiled from proprietary property data nationally and regionally in 63 of the nation’s largest real estate markets. When broken out by housing type, the national median price of a single-family detached home increased 4.4 per cent year over year to $816,100, while the median price of a condominium increased 4.0 per cent year over year to $583,900. On a quarter-over-quarter basis, the median price of a single-family detached home decreased 2.1 per cent, while the median price of a condominium declined modestly by 0.6 per cent. Price data, which includes both resale and new build, is provided by Royal LePage’s sister company RPS Real Property Solutions, a leading Canadian real estate valuation company.

“Canadian consumers are moving through a period of transition and as a result, so are the dynamics of our national housing market,” added Soper. “Buyer sentiment can have as great an impact on market trends as inventory or interest rates. Early market recovery will be sparked by signs of home price stability, and we are very close to that now.”

Royal LePage House Price Survey Chart: royal_lepage_national_house_price_composite_in_the_fourth_quarter_of_2023

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