July 12, 2024

KJ Home

The Best Home for Creating Lasting Memories

Toronto house prices to top Vancouver, says forecast

7 min read

Toronto, Montreal to see biggest gains, beating Vancouver and Calgary, predicts Royal LePage

Article content

Toronto will steal Vancouver’s title as Canada’s most expensive housing market by the end of the year, predicts a new forecast by Royal LePage.

After stronger-than-expected sales and price gains in the first quarter of this year, the real estate company has bumped up its forecast for home prices in markets across the country.

According to the Royal LePage House Price Survey, which draws data from 63 of Canada’s largest housing markets, the aggregate price of a home nationally rose 4.3 per cent year over year in the first quarter of 2024 to $812,100.

Advertisement 2

Article content

“Consistent with our previous forecast, the market did reach a critical tipping point in the first quarter of 2024, when home prices bottomed out and began to appreciate again,” said Phil Soper, president and chief executive of Royal LePage.

“Clearly, more and more buyers are motivated by the need to get ahead of rising home prices, rather than adopting the strategy of waiting for mortgage rates to fall.”

Royal LePage said within the first three months of the year the Canadian housing market saw solid price appreciation and sales activity, a trend it only expects to accelerate when the Bank of Canada makes its first interest rate cut later this year.

Their updated forecast predicts that the aggregate national home price will rise by 9 per cent in the fourth quarter of 2024, year over year.

But some regions will fare better than others.

Prices in the Greater Toronto Area are expected to rise 10 per cent in the fourth quarter, the greater appreciation of all major markets in the country, after climbing 5.2 per cent in the first quarter to $1,177,700.

“At the end of 2023, we forecast modest price gains in the first half of this year and stronger appreciation in the third quarter, following one or more expected rate cuts. What we’ve seen so far is a boost in sales volumes and prices even greater than predicted,” Karen Yolevski, chief operating officer of Royal LePage Real Estate Services Ltd, said of the Toronto market.

Article content

Advertisement 3

Article content

“Since the start of the year, average days on market have been steadily decreasing and we’re starting to see an uptick in new listings, which are desperately needed.”

Montreal is expected to be another high flyer, with prices forecast to rise 8.5 per cent in the fourth quarter, the second highest appreciation in Canada.

Activity in the Greater Vancouver Area, however, has been more muted, with prices rising 3.4 per cent in the first quarter to $1,238,200, says Royal LePage.

“Heading into spring, the Vancouver market has been steadily gaining momentum, though not at the feverish pace that other markets across Canada have seen as of late,” said Randy Ryalls, general manager of Royal LePage Sterling Realty.

“The gentle upswing in activity we’ve experienced in the first few months of the year is expected to continue throughout the months ahead, likely resulting in a moderate increase to home prices,” he said.

Royal LePage forecasts that Vancouver home prices will rise 5.5 per cent in the fourth quarter.

“While Vancouver remains the nation’s most expensive market today, Royal LePage predicts that the aggregate price of a home in the GTA will surpass Greater Vancouver in the second half of 2024,” said the report.

Advertisement 4

Article content

The gains of Toronto and Montreal are expected to even outpace Calgary, which Royal LePage had previously expected to record the biggest gains this year.

The Alberta city, which bucked the trend of declining prices last year, saw its aggregate home price rise 9.7 per cent to $676,400 in the first quarter, the biggest appreciation in the country.

“While activity levels remain strong and prices continue to rise in Alberta, our research indicates that buyer demand, relative to available inventory, is strongest in the two largest urban centres in the country,” said Soper. “We now expect Toronto and Montreal to log the highest home price appreciation this year.”

Calgary home prices are expected to increase 8 per cent in the fourth quarter.

Almost 90 per cent of regions tracked by Royal LePage posted higher prices at the beginning of the year, but housing markets have still not fully recovered from the post-pandemic correction, the report says.

The aggregate price of a home in Canada is still 5.2 per cent below the peak reached in the first quarter of 2022. That said, prices remain far above pre-pandemic levels.

Advertisement 5

Article content

In the first quarter of this year, home prices were almost 30 per cent above what they were in 2019, says the report.

 Sign up here to get Posthaste delivered straight to your inbox.

Financial Post

Good news on the rental front, sort of. The dizzyingly annual ascent of rent prices in Canada slowed in March, with the average rent decreasing 0.6 per cent from the month before, says Urbanation’s monthly report.

The decline was partly down to seasonal forces but also because renters are shifting out of the really expensive cities like Vancouver and Toronto, said Rentals.ca.

Rents averaged $2,181 in March, up 8.8 per cent from a year ago — a cooler pace than the 10.5 per cent growth recorded in February.

Average rents in Canada are up 21 per cent from March 2020, the month the global COVID-19 pandemic began.

  • The IMF and World Bank spring meetings kick off in Washington, D.C. where finance ministers, central bankers and policymakers meet to discuss the global economy.
  • Gildan Activewear Inc. chief executive Vince Tyra will present an investor update today, marking his first 90 days in the job. The presentation comes as activist investor Browning West seeks to replace a majority of directors on the company’s board in a move to reinstate founder Glenn Chamandy as chief executive of the clothing company.
  • Today’s Data: Canada housing starts for March, manufacturing sales, U.S. retail sales, NAHB housing market index
  • Earnings: EQB Inc., M&T Bank Corp, Charles Schwab Corp, Goldman Sachs Group Inc

Advertisement 6

Article content

Financial Post

A successful professional was well on her way to an early retirement at age 52 or 53, but now she’s wondering if her original plan will still be possible since she just lost her high-paying job. We asked financial planner Ed Rempel and retirement planner Eliott Einarson to help her out. Find out more at FP Investing. 

Recommended from Editorial

Are you worried about having enough for retirement? Do you need to adjust your portfolio? Are you wondering how to make ends meet? Drop us a line at [email protected] with your contact info and the general gist of your problem and we’ll try to find some experts to help you out while writing a Family Finance story about it (we’ll keep your name out of it, of course). If you have a simpler question, the crack team at FP Answers led by Julie Cazzin or one of our columnists can give it a shot.

Advertisement 7

Article content

McLister on Mortgages

Want to learn more about mortgages? Mortgage strategist Robert McLister’s Financial Post column can help navigate the complex sector, from the latest trends to financing opportunities you won’t want to miss. Read them here 

Today’s Posthaste was written by Pamela Heaven with additional reporting from Financial Post staff, The Canadian Press and Bloomberg.

Have a story idea, pitch, embargoed report, or a suggestion for this newsletter? Email us at [email protected].

Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.

Article content


Leave a Reply

Your email address will not be published. Required fields are marked *

Copyright © All rights reserved. | Newsphere by AF themes.