As the year comes to a close, I will talk about what we saw in the past few months on the Fraser Valley and Canadian markets. I will also touch on some factors I expect will lead to a strong 2024 market.
Interest Rate Projections for 2024
Markets continue to expect significant rate cuts in 2024, with a full 1.25% of cuts now expected by the end of the year.
We’re seeing mortgage rates finally start to come down. Deep discounted 5-year fixed rates have fallen more than 50bps from the October highs, with some insured offerings down closer to 100bps.
If rates do fall in 2024, which seems quite likely, we can expect sales and sale prices to increase. Affordability will rise which will increase buyer demand. Hopefully, we see the number of new listings increase to avoid a shortage of supply.
Here is the schedule for upcoming rate announcements in 2024:
I predict that the BOC will hold rates until the June 5th announcement. The reason is that the spring market is usually quite busy and if they decrease rates before the busy season, it may cause a larger catalyst than we need.
Population Growth Surges in Canada
Annual population growth is now 1.25 million people. With the majority of people choosing to live in Alberta.
At the same time that the population is booming, new supply is falling. Particularly in the single-family home sector, which makes sense as fewer people can afford single-family homes at today’s high prices and rates. With fewer homes being built and the Canadian population continuing to rise, this could suggest that prices hold strong over the next while.
Local Market Snapshot
Sale prices are up year-over-year across all asset classes with the detached market increasing the most. The townhome market is the hottest, sitting at 25% sales-to-active listing ratio which indicates a Seller’s market. Condos are the second hottest, sitting in a balanced market at 20% and the detached market in the Valley is officially in a Buyer’s market.
Single Family Detached: At $1,489,100, the Benchmark price for an FVREB single-family detached
home decreased 0.94% compared to October 2023 and increased 6.22% compared
to November 2022.
- Townhomes: At $837,200, the Benchmark price for an FVREB townhome decreased 0.95%
compared to October 2023 and increased 5.08% compared to November 2022.
- Apartments: At $545,300, the Benchmark price for an FVREB apartment/condo decreased 0.02 per
cent compared to October 2023 and increased 5.60% compared to November 2022.
Going into 2024, I believe the market will pick up after a not so eventful 2023.