The housing recession won’t last long, if Royal LePage is to be believed. The agency predicts that minor interest rate reductions will fuel a 5.5% increase in property prices in 2024.
This increase is expected in the fourth quarter of 2024, when prices are compared with those of the corresponding quarter in 2023.
In Canada, the median price of a single-family detached property and a condominium apartment is expected to increase by 6% and 5%, respectively, to $879,164 and $616,140.
It is during the second part of the year that property prices are expected to see the largest increases, once the Bank of Canada begins to slightly ease its key rate.
According to these forecasts, by the end of next year, real estate prices will have returned to their pandemic peak, reached in the first quarter of 2022, Royal LePage maintains.
In the Greater Montreal area, the price of a property in the fourth quarter of 2024 is expected to increase by 5% compared to the fourth quarter of 2023, to reach $610,260. At the same time, the median price of a single-family detached home is expected to increase by 4.5%, to reach $684,998, while that of a condominium is expected to grow by 6%, to reach $471,912.
Priced at $471,912, a young couple with $50,000 as a down payment would need to take out a loan of $434,991 including the mortgage insurance needed due to the high loan-to-value ratio. At a fixed rate of 5% for 5 years, they will have to pay $2,530 per month for their condo. With gross income of $100,000, the household will spend 30% of it on its condo; 35% if you add insurance, taxes and heating.
Over the past 18 months, sales have declined in the country’s main cities, the agency explains in the press release revealing its forecasts, while the level of properties for sale has gradually increased. Transactions are down 20-30% in some areas. Property prices have fallen modestly due to rising interest rates.
There is no consensus on Royal LePage’s forecasts. At the end of November, its competitor RE/MAX predicted stable prices in Quebec in 2024 and a shift in market power towards buyers in Montreal.