The Toronto Regional Real Estate Board (TRREB) has issued a statement on the 2024 Federal Budget, emphasizing the need for governments to address Canada's housing affordability crisis. TRREB supports the government's commitment to building more homes and lowering taxes and fees for Canadians. However, they express concern about the impact of tax measures on housing supply and affordability. The Budget includes plans to deliver 3.87 million homes over the next ten years as part of the Canada Housing Plan. TRREB encourages the government to maximize the use of its land assets to spur new construction. They also caution against measures such as higher capital gains tax and taxation of vacant land zoned for residential housing, which could hinder housing affordability goals. TRREB emphasizes that addressing government taxes, fees, and charges on housing is crucial to ending the housing affordability crisis. TRREB is Canada's largest real estate board with over 70,000 residential and commercial professionals [2277ccf5].
Real estate agents across Canada have shared their predictions for the 2024 housing market, shedding light on the potential trajectory of the industry. One key focus is the Bank of Canada's interest rate cuts, with predictions ranging from stable rates in the first half of 2024 to rate cuts in the latter half. The impact of these rate cuts on the economy and the potential for a recession are areas of concern. However, experts anticipate a positive shift in the real estate industry, with a decrease in interest rates expected during the spring and a rebound in the housing market. Overall, the experts predict a wild ride in Canada's housing market in 2024 [12972afb].
These predictions align with previous forecasts that Canada's housing market will experience a soft landing in 2024. Economists have projected a decline in housing prices, with a 7% drop from their peak. The housing market weakness, coupled with higher borrowing costs, is expected to contribute to a slowdown in consumer spending, which is forecasted to be below 1% in the first half of the year. Some economists even anticipate a technical recession, with a contraction in GDP of 0.2% in Q4 2023 and 1% in Q1 2024. To mitigate the impact of these challenges, the Bank of Canada is expected to cut interest rates three times next year, with predictions ranging from a starting date as early as March to June or later. The end-of-2024 interest rate is forecasted to range from 3% to 4.25% [88093f25].
Despite these concerns, the Canadian government remains committed to responsible fiscal management and ensuring the country's competitiveness. They have introduced legislation to address affordable housing and groceries, and further actions will be outlined in the upcoming Fall Economic Statement [668987f0].
Canada has announced a two-year extension to the ban on foreign ownership of Canadian housing, aiming to address concerns about Canadians being priced out of housing markets. The ban, which was set to expire on January 1, 2025, will now be extended to January 1, 2027. The Canadian government has attributed the housing affordability crisis to an increase in migrants and international students, which has fueled demand for homes while construction has slowed. The extension of the ban is part of the government's efforts to make housing more affordable for Canadians [82422d05].
Prominent economist David Rosenberg, who was previously bearish on Canada's housing market, has changed his stance. He believes that the housing market is no longer in the danger zone and that home prices will likely go down but not crash. He also suggests that the Canadian and U.S. economies will soon fall into a recession, leading to central banks lowering borrowing costs. Rosenberg also comments on Canada's immigration policy, stating that it is too ambitious and impacting the housing market. He calls for a rethink of immigration policy to ensure immigrants can pay for themselves. He expresses concerns about the future of Canada, particularly with the balance of power in the House of Commons held by a socialist party. Rosenberg also discusses his future plans and his passion for economics and financial markets [43877d74].
The stability of Canada's housing market in 2024 is a topic of interest and concern. While experts predict a wild ride and a potential rebound in the housing market, there are also concerns about a potential recession and the impact of interest rate cuts. The Canadian government is taking steps to address housing affordability, including extending the ban on foreign ownership. Prominent economist David Rosenberg has changed his stance on the housing market, suggesting that while home prices may go down, a crash is unlikely. Overall, the housing market in 2024 is expected to experience a market correction and a gradual balancing of supply and demand [12972afb] [43877d74] [82422d05] [88093f25] [668987f0] [2277ccf5].