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Economic Viewpoint

Canadian Residential Real Estate Outlook: The Housing Market Rout May Not Be as Bad as We Once Feared

February 9, 2023
Randall Bartlett, Senior Director of Canadian Economics, Hélène Bégin, Principal Economist, and Marc Desormeaux, Principal Economist

The Canadian housing market has corrected sharply from its pandemic highs. But looking ahead, we expect it to find a bottom by the end of the year. This is likely to be the result of falling interest rates, a tight labour market, elevated household savings and heightened immigration. We are expecting national home sales to reach a low in the second half of 2023 before lifting off again. The increase in sales should outpace listings, spurring a return to a seller’s market in some provinces before the end of 2024 and, hence, higher prices. This will act as a brake on improved affordability at the national level next year.