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Home prices will return to pandemic peak by end of 2024

In a new report released on Thursday, Royal LePage's 2024 market survey predicts a significant rebound in home prices across Canada, signaling a potential return to pre-pandemic peaks by the end of the coming year. The report attributes this optimistic outlook to expected Bank of Canada rate cuts, set to stimulate the housing market following a historic cycle of rate hikes.

According to the forecast, the first half of 2024 is expected to witness incremental gains in home prices, with more substantial increases in the latter half of the year. Royal LePage CEO Phil Soper emphasized the importance of 2024 as a pivotal year for the national economy, noting that Canadians are increasingly acknowledging the end of the ultra-low interest rate era.

"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," Soper stated in a press release accompanying the research.

Predicted Trajectory of Home Prices

Royal LePage's forecast outlines a trajectory for home prices in 2024. The report predicts a 3.3% year-over-year increase in aggregate home prices in the first quarter, followed by a 0.2% rise in the second quarter. As the year progresses, the anticipation is for more robust growth, with a 3.3% increase in the third quarter and a notable 5.5% bump in the fourth quarter.

By the end of 2024, the median home price is projected to reach $843,684, effectively reclaiming the heights observed during the COVID-19 pandemic in the first quarter of 2022. Single-family homes are anticipated to see a 6% increase to $879,164 in the fourth quarter, while condominium prices are expected to rise by 5% to $616,140 during the same period.

Calgary Leading the Way

Calgary emerges as a standout in the report, with home prices in the city expected to outpace all major markets in 2024. Royal LePage predicts an eight percent growth in aggregate home prices, reaching $711,612. This trend follows a notable uptick in Calgary's home prices during the second half of 2023, in stark contrast to other cities experiencing declines.

Corinne Lyall, a broker and owner at Royal LePage Benchmark, attributes Calgary's resilience to a sustained shortage of supply. Despite a slowdown in activity, home prices in Calgary have remained robust, hinting at the city's potential for significant gains in the upcoming year.

As Canadians prepare for the "great adjustment" to slightly higher borrowing costs, the housing market seems poised for a resurgence, with 2024 shaping up to be a crucial year for the nation's real estate landscape.



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