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Economic Viewpoint

Desjardins Housing Outlook: Rate Cuts Will Boost Sales and Prices, but Probably Won’t Help Canada’s Homebuilding Ambitions

June 3, 2024
Marc Desormeaux, Principal Economist • Kari Norman, Economist • Hélène Bégin, Principal Economist

We still expect that the Bank of Canada (BoC) will begin reducing interest rates soon and that further monetary easing will support a broad-based rebound in home sales and housing prices later in the year.

That said, slowing economic growth in the coming quarters, still-elevated borrowing costs and still very stretched affordability will limit the scope of price and sales gains.

Alberta housing markets continue to face the best prospects in 2024 and 2025. By contrast, rate-sensitive Ontario and BC markets should experience more softness in the near term, but also see stronger rebounds as rate cuts increasingly work their way through the economy.

We don’t think lower rates will translate into a construction boom. Monetary easing will take time to stimulate projects currently on hold, and Canadian housing construction faces myriad structural challenges. These will likely limit our homebuilding and affordable housing ambitions for the next few years.

NOTE TO READERS: The letters k, M and B are used in texts, graphs and tables to refer to thousands, millions and billions respectively. IMPORTANT: This document is based on public information and may under no circumstances be used or construed as a commitment by Desjardins Group. While the information provided has been determined on the basis of data obtained from sources that are deemed to be reliable, Desjardins Group in no way warrants that the information is accurate or complete. The document is provided solely for information purposes and does not constitute an offer or solicitation for purchase or sale. Desjardins Group takes no responsibility for the consequences of any decision whatsoever made on the basis of the data contained herein and does not hereby undertake to provide any advice, notably in the area of investment services. Data on prices and margins is provided for information purposes and may be modified at any time based on such factors as market conditions. The past performances and projections expressed herein are no guarantee of future performance. Unless otherwise indicated, the opinions and forecasts contained herein are those of the document’s authors and do not represent the opinions of any other person or the official position of Desjardins Group.