Real Estate

Canadian Housing Market Outlook 2024

Canadian Housing Market Outlook 2024

Table of contents


    National Market Report Summary

    • The average selling price of a home in Canada increased by 0.4% year-over-year to $707,800 in January 2024.
    • The average selling price of a single-family home in Canada increased by 0.8% year-over-year to $776,300 in January 2024.
    • The average selling price of a townhouse/multiplex in Canada increased by 0.9% year-over-year to $655,400 in January 2024.
    • The average selling price of a condo in Canada increased by 1.1% year-over-year to $526,500 in January 2024.
    • The average rent in Canada increased by 10% year-over-year to $2,146 for January 2024

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    Composite Home Prices

    The average selling price of a home in Canada was $707,800 for the month of January 2024, that’s increased by 6.3% compared to the previous month. On a year-over-year basis, Canadian home prices have increased 0.4% over the last 12 months.

    Single-family Home Prices

    The average selling price of a single-family home in Canada was $776,300 for the month of January 2024, that’s decreased by 0.4% compared to the previous month. On a year-over-year basis, single-family home prices in Canada have increased by 0.8% over the last 12 months.

    Townhouse and Multiplex Prices

    The average selling price of a townhouse in Canada was $655,400 for the month of January 2024, that’s decreased by 0.7% compared to the previous month. On a year-over-year basis, the price of a townhouse in Canada has increased by 0.9% over the last 12 months.

    Condo Prices

    The average selling price of a condo in Canada was $526,500 for the month of January 2024, that’s decreased by 0.2% compared to the previous month. On a year-over-year basis, the price of a condo in Canada has increased 1.1% over the last 12 months.

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    Canada Housing Market Summary

    Data from the Canadian Real Estate Association (CREA) indicates that the benchmark price of resale residential homes sold across Canada in January 2024 was $707,800, and it increased by 0.4% compared to a year ago.

    CREA also reported a sales-to-new-listings ratio (SNLR) of 59%, indicating a balanced market nationally for January 2024.

    After a slow second half in 2023, home sales in Canada are showing signs of recovery. Between December 2023 and January 2024, sales increased by 3.7%, following a 7.9% rise the previous month. However, sales are still about 9% below the 10-year average. The market conditions have become more competitive due to an increase in demand. The MLS® Home Price Index (HPI) decreased by 1.2% monthly but increased by 0.4% compared to the previous year.

    The national average sale price rose 7.6% year-over-year to $659,395 in January 2024. The Greater Toronto Area (GTA), Hamilton-Burlington, Montreal, Greater Vancouver, Fraser Valley, Calgary, and Ontario’s Greater Golden Horseshoe and cottage country saw the most gains. The sales-to-new listings ratio (SNLR) was 58.8% in January 2024, indicating a balanced market. At the end of January 2024, 3.7 months of inventory were available nationally. While prices mainly declined in Ontario markets, they remained steady or increased in other regions.

    Month-over-Month Market Expectations for Canada

    Transactions –  Number of Sales

    The number of sales in Canada was 40,011 during January 2024, that’s increased by 3.7% compared to the previous month. On a year-over-year basis, sales in Canada have increased by 20.9% over the last 12 months.

    New Listings

    The number of new listings in Canada was 67,755 during January 2024, that’s increased by 1.5% compared to the previous month. On a year-over-year basis, new listings in Canada have increased by 7.9% over the last 12 months.

    Real Estate Market

    The sales to new listings ratio (SNLR) in Canada was 59% during January 2024, indicating a balanced market. On a monthly basis, that’s increased by 2.2% compared to the previous month. Canada’s yearly sales to new listings ratio has increased by 9.6% over the last 12 months.

    The sales to new listings ratio (SNLR) is the number of home sales compared to new listings. An SNLR under 40% suggests a buyer’s market where buyers have the upper hand and more negotiating power. An SNLR between 40% and 60% is a balanced market, while an SNLR of over 60% is considered a seller’s market. 

    Canada’s Housing Market Breakdown & Change By Province

    Provincial and territorial composite benchmark prices in order of decrease/increase compared to last year.

    Historical Changes To National Benchmark Prices In Canada By Property Type

    Last 10 Years of Monthly Changes to Canada’s Composite Home Price

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    Housing Market Glossary and Definitions

    MLS® Home Price Index (HPI)

    The MLS® Home Price Index (HPI) is a real estate price index compiled by the Canadian Real Estate Association (CREA) that tracks the price of homes in your neighbourhood. It’s a quick way for Canadians to compare home prices in different parts of Canada and between different periods without having to factor in the unique characteristics of a particular property.

    While market prices can vary from one month to the next based on seasonal factors, the Home Price Index (HPI) provides a more consistent view and tracks price trends over an extended period. The Home Price Index (HPI) is updated annually in May to reflect changes in real estate markets.

    MLS® HPI is the most comprehensive and precise way to track a neighbourhood’s home price level and trends. MLS HPI uses over 15 years of data from the MLS® System and advanced statistical models to create a “typical” home based on the characteristics of homes purchased and sold. This benchmark home is tracked across all Canadian neighbourhoods and various types of homes.

    Strata insurance

    Strata insurance is insurance that a strata or condominium uses to cover damages to common areas, assets and liabilities to the strata. It can also include fixtures built or installed as part of the original construction of each unit, even though these may not be common structures. Strata insurance can cover the following:

    • Buildings and structures on the strata’s property, including common areas such as the garage, roof, lobby, pool, etc.,
    • Liabilities for any property damage or bodily harm due to an injury suffered on a strata property,
    • Which also includes fixtures in the standard unit or part of the original make of each unit.

    Strata insurance generally does not cover personal belongings and appliances in a condo unit. Damage caused by individual unit owners (e.g., water damage due to a unit owner’s negligence) is typically covered under personal condo insurance.

    Property Types

    Detached homes, also known as single-family homes, are residential properties that stand alone and are not connected to other buildings. It’s a legal single residential unit on its own parcel of land and a separate title.

    Semi-detached homes are characterized by their unique architectural design, where two houses are built side by side and share a common wall. Although sharing a building, semi-detached homes have their own parcel of land and separate legal titles.

    Townhouses are residential dwellings typically characterized by narrow, tall structures, often sharing walls with neighbouring units. Although they may share yards or common elements with their neighbours, townhouses will have separate legal titles from any adjoining building. Townhouses can be purchased as freehold or leasehold within a condo or strata and may come with their own land parcel. Townhouses can be part of a low-rise or high-rise building.

    Condo apartments, also known as condominiums, are residential properties that combine elements of apartments and individual homes. It is a unit within a larger building or complex owned by an individual who also shares ownership of common areas and amenities with other residents. Condo apartment owners have legal ownership of their units and can modify them within the guidelines set by the condominium association. Unlike a townhouse, condos do not offer exclusive use of outdoor space unless they come with a balcony or terrace. Condos can be part of a low-rise or high-rise building.

    Plexes or multiplexes are unique residential buildings constructed into 2 to 6 units within a single structure. Traditionally, they have been designed as low-rise residential buildings where any unit is accessible via an external entrance with higher floors connected by staircases. Each unit will have a separate registration and title but may share common elements and co-ownership fees with the other multiplex owners. Plexes are common in Québec and older parts of Toronto.  

    Property Ownership Classes

    A freehold is a type of property ownership where an individual or entity has complete and indefinite ownership rights over a property and its parcel of land. Common freehold property types include detached houses, semi-detached houses, farms, and townhouses not part of condominium corporations.

    A condominium or condo is a distinct type of property class that combines apartment living and individual homeownership elements. In a condominium, individual units are owned by the residents, while the common areas and amenities are shared among all the unit owners. This type of ownership gives you rights to your specific unit and some rights and responsibilities to the common areas, such as the hallways, elevators, garage, pool and rooftop patios.
    A leasehold is a legal arrangement where a person or entity holds the right to use and occupy a property for a specific period, typically through a lease agreement. In some cases, the leaseholder may own the building or unit and rent the land from the landowner (landlord).


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    Canadian Rental Market

    The 2023 Rental Market Report by the Canada Mortgage and Housing Corporation (CMHC), published in January 2024, provides an overview of the Canadian rental market. The report highlights several key trends:

    1. Record-Low Vacancy Rates: Canada experienced record-low vacancy rates of 1.5% in 2023. Low vacancy rates nationally have led to highly competitive rental conditions across major markets.
    2. Record-High Rent Growth: The average rent growth reached a record high of 8.0%. This growth rate outpaced wage growth, making it less affordable for renters, especially those with lower incomes.
    3. City-Specific Trends: Major cities like Toronto, Montréal, Calgary, and Edmonton witnessed significant declines in vacancy rates. Meanwhile, Vancouver and Ottawa maintained stability.
    4. Rental Condominium Markets: In 2023, rental condominium markets accounted for 20% of all rented units in 17 surveyed cities. More condos rented in Canada’s CMAs have decreased the average vacancy rate from 1.6% to 0.9%, indicating a tighter market.

    These trends and rising rents contribute to growing concerns about affordability. The report provides comprehensive insights into these and other aspects of the rental landscape in Canada.

    The Rentals.ca National Rent Report for January 2024 provides a detailed analysis of the Canadian rental market. Here are the main points:

    1. Record-High Rents: The average asking rents for all residential property types in Canada reached a record high of $2,178 in December 2023, marking an 8.6% increase from December 2022. Over the past two years, asking rents in Canada have increased by 22% or an average of $390 monthly.
    2. Rental Market Outlook for 2024: The rental market in Canada is expected to remain undersupplied but should become somewhat more balanced this year. Rent growth is expected to reach its 5-year average of approximately 5%. Rental demand is expected to remain strong but may moderate compared to 2023 due to a slowing economy, a reduced number of non-permanent residents, and an improvement in homebuying activity as interest rates decline.
    3. Traditional Apartment Rents See Fastest Growth: Traditional purpose-built rental apartments had the lowest average rents in Canada at $2,076 but posted the fastest growth over the past year with a 12.8% increase. These higher growth rates compared to an average rent of $2,340 for condo rentals and $2,354 for home rentals, which experienced relatively slower annual growth of 6.9% and 5.9%, respectively.
    4. 1-Bedroom Apartment Rents Grew 13%: Apartment rents for purpose-built and condominium rentals increased 10.7% in 2023, matching the 10.7% growth in 2022 and ending the year at an average of $2,116. Rents increased fastest for one-bedroom apartments over the past year (+12.7%), reaching an average of $1,932.
    5. Alberta Apartment Rents Grew 16%: Alberta was the province with the fastest-growing rents for purpose-built and condominium apartments in 2023, recording a 15.6% annual increase in December to reach an average of $1,691.

    These trends indicate a dynamic and evolving rental market in Canada, with significant regional variations and a strong overall demand for rental properties.

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    Canada Market Rents Summary

    The average rent in Canada was $2,146 for the month of January 2024, which increased by 10% on a year-over-year basis.

    The average rent for a bachelor apartment in Canada was $1,604 for the month of January 2024, which increased by 11.2% on a year-over-year basis.

    The average rent for a 1-bedroom apartment in Canada was $1,923 for the month of January 2024, which increased by 12% on a year-over-year basis.

    The average rent for a 2-bedroom apartment in Canada was $2,280 for the month of January 2024, which increased by 10.5% on a year-over-year basis.

    The average rent for a 3-bedroom apartment in Canada was $1,923 for the month of January 2024, which increased by 10.5% on a year-over-year basis.

    How Does Renting Compare with Homeownership in Today’s Housing Market?

    Each $100,000 in mortgage balance costs an average of $566.89 per month on nesto’s lowest fixed 5-year rate at and $638.20 per month on nesto’s lowest adjustable 5-year rate at . For each $100,000 in mortgage balance, a 0.25% change in Canada’s policy rate impacts the monthly payment by $15. Rates used for calculation are those offered on insured purchases with less than a 20% downpayment on a 25-year amortization. Canada’s policy rate is , and nesto’s prime rate is .

    Rental Prices Compared to Other Canadian Cities

    Rental Prices Compared to Other Provinces and Nationally

    Average Rents by Housing Type

    Rental Growth by Housing Type

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    Frequently Asked Questions

    Will 2024 be a good time to buy a house?

    Despite the uncertainty in the housing market, 2024 could be an excellent time to buy a house. Interest rates and housing prices are likely to reduce while wages rise – a combination that means more buying power.

    Is Canada in a housing bubble, and will it burst?

    Canadian real estate prices have risen spectacularly since 2000, and with the current pandemic and inflationary pressures, there is speculation that Canada may be bottoming out of a housing bubble. However, experts are mixed on whether or not this bubble will burst; some think prices may take a dip but stay relatively stable, while others expect prices to fall further.

    Should I wait to get a mortgage in 2024?

    Whether or not you wait to get a mortgage in 2024 depends mainly on your financial circumstances. Consider the current market conditions and forecasts and factor them into your financial and long-term plans. It’s also important to remember that waiting may mean missing out on specific opportunities – especially once mortgage rates start reducing. 

    How nesto works

    At nesto, all of our commission-free mortgage experts hold concurrent professional designations from one or more provinces. Our clients will receive the best advice and care when they speak with specialists that exceed the industry status quo. 

    Unlike the industry norm, our agents are not commissioned but salaried employees. This means you’ll get free, unbiased advice on the most suitable mortgage solution for your unique needs. Our advisors are measured on the satisfaction and quality of advice they provide to their clients. 

    nesto is working hard to change how the mortgage industry functions. We start with honest and transparent advice, followed by our best rates upfront. We can offer you these low rates using the fintech industry’s best-in-class and safest technology to provide a 100% digital online experience and process to reduce overhead costs.

    By working remotely across Canada, all our mortgage experts and staff spend less time commuting to work and more time with their friends and family. This makes for more dedicated employees and contributes to our success with happy and satisfied clients.

    nesto is on a mission to offer a positive, empowering and transparent property financing experience, simplified from start to finish.

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    EXPLANATIONS

    Rates

    Values

    Rents

    Criteria

    Experts

    Titles

    Interest Rates

    Qualified using nesto’s fixed 5-year insured and uninsured rates as advertised on our website. For today, Thursday, February 29, 2024, our example calculations are qualified on our lowest rates, which may or may not apply to your unique financing situation or long-term goals. Insured fixed-rate mortgages will be qualified at , which is exactly 2% in addition to our fixed insured rate currently at . Uninsured fixed-rate mortgages will be qualified at , which is exactly 2% in addition to our fixed uninsured rate currently at . Insured variable rate mortgages will be qualified at , which is exactly 2% in addition to our variable insured rate currently at . Uninsured variable rate mortgages will be qualified at , which is exactly 2% in addition to our variable uninsured rate currently at .

    We appreciate your patience and understanding and encourage you to email us at website@nesto.ca with information that needs correction alongside your sources.

    Property Values

    Home values collected from CREA or QPAREB are those presented as the composite benchmark or average prices for each city/province/region unless specified. They may be interchangeably called average home prices, though an average price may not be available for many regions outside Quebec.

    Rents

    Our monthly or year-over-year rental averages are sourced from Urbanation’s monthly Rentals.ca National Rental Report.

    Mortgage Qualifying Criteria

    Insured qualifying criteria are limited to a 39% gross debt service (GDS) ratio and up to 25 years of amortization. For insured mortgage transaction calculations, we have used a 20% downpayment, unless otherwise indicated, in our examples and excluded any mortgage default insurance (CMHC) premium. Uninsured qualifying criteria are limited to a 35% gross debt service (GDS) ratio and up to 30 years of amortization. We have used a 20% downpayment for uninsured mortgage transaction calculations in our examples. Unless otherwise indicated, a $100 monthly heating cost is attributed to the total monthly stress-tested payment. Municipal tax rates are the most recently shown on the applicable municipality’s website (1% used as default when unavailable or for a region with an unspecified mill rate). Mortgage default insurance is not permitted on purchases that have valuations of $1 million or more, amortizations exceeding 25 years, or on refinance transactions.

    nesto Mortgage Experts

    Titles such as mortgage broker, mortgage agent, submortgage broker, mortgage salesperson, or principal broker are provincially regulated licensing terms with educational requirements specific to each province. Albeit, commonly, they may all be referred to as mortgage brokers. In Ontario, where mortgage agent is used as a designation, mortgage brokers or principal brokers have additional responsibility for compliance and training mortgage agents.

    Licensed mortgage professionals often use the industry norm of “mortgage broker,” “broker,” or “advisor” to refer to themselves. However, disclosure requirements for licensed mortgage professionals’ titles vary across each province in Canada. These disclosures require mortgage brokers to adhere to specific rules when using titles to represent their qualifications and expertise. The provinces have regulations and guidelines that govern the use of titles by mortgage brokers. These regulations aim to ensure transparency and protect consumers in the mortgage industry.

    Regulatory Titles

    In Ontario (FSRA), Mortgage Brokers and Agents both serve as the middle person between borrowers and lenders, helping clients find the most suitable mortgage options for their financing situation. A Mortgage Agent works under the supervision of a Mortgage Broker and assists in the mortgage application process. A Mortgage Broker may also be responsible for compliance requirements for their brokerage or a team.

    The provinces of Quebec (AMF) and Newfoundland (Digital & Government Service NL) both exclusively utilize the designation of Mortgage Broker as a licensing designation.

    British Columbia (BCFSA) has two distinct roles within the mortgage industry: the Submortgage Broker and the Mortgage Broker. These positions have specific responsibilities and functions that contribute to the overall process of securing mortgages for clients. The Submortgage Broker works under the supervision of a licensed Mortgage Broker and assists in various tasks, such as gathering client information, completing paperwork, and liaising with lenders. The Mortgage Broker oversees the entire mortgage application process, including assessing client needs, finding suitable mortgage options, negotiating terms, and ensuring compliance with regulations.

    In Alberta (RECA) and New Brunswick (FCNB), the distinction between a Mortgage Associate and a Mortgage Broker lies in their roles and responsibilities within the mortgage industry. A Mortgage Associate typically works under the supervision of a Mortgage Broker and assists in the mortgage application process gathering necessary documentation, and providing support to clients. A Mortgage Broker is licensed to independently negotiate and arrange mortgage loans on behalf of clients, offering a more comprehensive range of mortgage options and expertise in the field.

    In Saskatchewan (FCAA) and Nova Scotia (Government of Nova Scotia, Business Licensing), there are distinct roles for both Associate Mortgage Brokers and Mortgage Brokers. The critical difference lies in their level of experience and licensing requirements. Associate Mortgage Brokers work under the supervision of a licensed Mortgage Broker and are in the early stages of their career. They may assist with gathering client information and preparing mortgage applications. Mortgage Brokers have obtained the necessary qualifications and licences to operate independently and provide mortgage services directly to clients. They have the authority to negotiate mortgage terms, advise clients, and facilitate the mortgage process from start to finish.

    In Manitoba (MSC), a Salesperson is primarily responsible for promoting and selling products or services, while an Authorised Official holds the authority to make legally binding decisions on behalf of the organization. These roles have different levels of authority and expertise, with the Salesperson focusing on sales and the Authorised Official having broader decision-making powers and acting as the liaison between the brokerage and the regulator. 

    For a complete list of licensing terms in Canada, please see the Mortgage Broker Regulators’ Council of Canada (MBRCC) published list.


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