The Canadian housing market is set for several significant changes over the next five years. Experts predict a slower rise in home prices, an increase in housing supply, and fluctuating mortgage rates.
Home prices are expected to continue increasing, but at a slower pace compared to recent years. The rapid price growth seen during the pandemic will likely moderate, with annual increases predicted to be around 1-2%. By 2028, home prices could see a total appreciation of about 13-14% compared to 2023 levels.
An increase in the number of homes for sale is also anticipated. The shortage of available homes has driven prices up, but new constructions and more properties entering the market should help ease this pressure. This increase in supply will be a welcome relief for buyers facing limited options.
Mortgage rates, influenced by the Bank of Canada's efforts to control inflation, are expected to rise initially. However, they may gradually decrease towards the end of this period, making home loans more affordable and potentially boosting demand.
Despite these changes, the market is predicted to remain competitive. Factors such as strong job growth, population increases, and limited land availability will continue to drive demand for housing. While the market will cool compared to the pandemic years, it will still favor sellers, particularly in urban areas with high demand.
Overall, the Canadian housing market will experience a period of adjustment. While buyers might find some relief from soaring prices and limited supply, the market will remain robust, driven by underlying economic and demographic trends.
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