Last Updated on July 29, 2024 by CREW Editorial
Royal LePage released its Q2 2024 House Price Survey recently, which presented several key trends in the Canadian real estate market. Notably, the national aggregate home price saw a year-over-year increase of 1.9%, reaching $824,300, and a quarter-over-quarter rise of 1.5%.
Despite a 25 basis points cut in the overnight lending rate by the Bank of Canada in June, buyers did not immediately return to the market as expected. Royal LePage’s survey indicated that a significant number of buyers are waiting for more substantial cuts.
The national aggregate home price remains significantly above pre-pandemic levels, with a 30.8% increase compared to the same period in 2019. The report suggests that the market is returning to normal, with Canadian residential property values increasing by 6% per year over the past five years.
Elevated borrowing costs have also slowed new home construction. Builders face difficulties in financing new projects, impacting supply at a time of growing population demand. Gradual rate reductions could help, benefitting both buyers and builders. This shortage in new construction could mean increased rental demand and the potential for higher rental income.
The Canada Mortgage and Housing Corporation (CMHC) reported a slight increase in national housing starts in May, but construction rates remain below what is needed to meet demand. Higher borrowing costs and labour shortages have made it difficult for developers to launch new projects, contributing to the ongoing housing crisis.
Regional Breakdowns
The price growth is occurring amidst a period of slower market activity in some of the country’s most expensive regions.
Toronto and Vancouver experienced slower-than-usual activity this spring, with inventory levels rising. In contrast, demand continues to outpace supply in the prairie provinces and Quebec. Quebec City, in particular, recorded the highest year-over-year aggregate price increase among major regions, at 10.4% in Q2 2024.
More specifically, for key municipalities in Q2 2024:
- The Greater Toronto Area (GTA) saw a 0.9% year-over-year increase in the aggregate home price, reaching $1,190,600. Sales activity was unseasonably low, with most price appreciation occurring in the first quarter. In Toronto, home prices decreased modestly by 0.5% year-over-year but rose 4.8% quarter-over-quarter.
- In the Greater Montreal Area, the aggregate home price increased 4.8% year-over-year to $599,400.
- Greater Vancouver experienced a 3.9% year-over-year increase in the aggregate home price, reaching $1,251,200. Market activity remains lower than the ten-year average, with inventory levels rising and keeping conditions balanced.
- Ottawa’s housing market saw a 2.1% year-over-year increase in the aggregate home price, reaching $777,400.
- Quebec City recorded the strongest price appreciation among major markets, with a 10.4% year-over-year increase in the aggregate home price, reaching $387,000. Strong demand and affordable home values compared to other regions continue to drive this growth.
- Calgary’s housing market saw a 7.9% year-over-year increase in the aggregate home price, reaching $694,000. Strong sales activity persists, with inventory levels remaining low despite the recent rate cut.
- In Edmonton, the aggregate home price increased 3.7% year-over-year to $450,600. Sales activity remains high, constrained only by low supply levels.
Royal LePage maintains its national year-end forecast, predicting a 9.0% increase in home prices in Q4 2024 compared to the same period last year – this suggested growth would be a positive sign for the real estate market.
The full report and more regional breakdowns are available on the Royal LePage site.
