Here's where home prices will rise the most in Canada in 2024

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Housing prices across Canada are expected to keep climbing as we head into 2024. In fact, they’re set to increase significantly.

According to a report released Thursday by Royal LePage, Canadians can expect to see a 5.5% increase in prices towards the end of next year — compared with prices in 2023.

The national average for a typical home will be $843,684 in 2024.

Regionally, though, the numbers are all over the board.

Calgary climbs as Vancouver remains priciest

The Greater Vancouver Area is expected to lead the country in average home prices, with costs for a typical property estimated to be $1,281,732.

Calgary, however, will see the highest year-over-year spike with a forecasted increase of 8% year-over-year — 2.5% higher than the national forecasted average.

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“Canada’s real estate market has been on a roller coaster ride for the last four years. A global pandemic briefly brought market activity to a grinding halt in early 2020, followed by a rapid, widespread spike in demand and price appreciation as Canadians sought safety and greater living space in their homes among a world of uncertainty,” Phil Soper, president and CEO of Royal LePage said in a statement.

“Markets take time to adjust. We see a move toward typical home sale transaction levels in 2024, and as the year progresses, appreciating house prices.”

Home prices are expected to rise next year in all major markets across the country.

National 2024 Quarterly Forecast (Royal LePage)

The Greater Vancouver Area is expected to see a much lower increase than the majority of other Canadian cities, with a predicted growth of 3% year-over-year.

Similarly, in the Greater Toronto Area, the cost of a home is expected to soar above the national average to $1,198,012, which is 6% higher than it is currently.

On the other side of the scale, Edmonton still ranks as one of the country’s most affordable markets for a home, with prices for a typical home expected to come to $443,248 by the end of next year.

Despite the relative affordability, that number is still a 4% increase from the end of 2023.

The quarterly breakdown of the national average of home prices according to Royal LePage. (Royal LePage)

The steady increase in prices can be attributed to a number of things, according to Royal LePage.

Sales activity in most of Canada’s major real estate markets has been on the decline while inventory levels have gradually increased.

Also, transactions are down as much as 20% to 30% in some regions, and home prices have only declined modestly during this time due to a drop in demand as potential buyers continue to hold out for lower interest rates.

2024 will be “tipping point” for Canada’s economy

“Looking ahead, we see 2024 as an important tipping point for the national economy as the
majority of Canadians acknowledge that the ultra-low interest rate era is dead and gone,” Soper said.

“We believe that the ‘great adjustment’ to tolerable, mid-single-digit borrowing costs will have a firm grip on our collective consciousness after only modest rate cuts by the Bank of Canada.”

Royal LePage’s forecast is based on a prediction that the Bank of Canada has concluded its interest rate hike campaign and that the key lending rate will hold steady at 5% through the first half of 2024.

According to them, the central bank is expected to start making modest cuts in late summer or fall of next year, and several major financial institutions have already begun offering discounts on fixed-rate mortgages.

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