Canada’s housing market will return to ‘balance’ in 2023

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After the “frenzy” of 2021 and a “big peak and valley” in 2022, the president of Re/Max Canada tells Global News that next year could see “balance” return to the national housing market.

But Christopher Alexander says how high the Bank of Canada drives interest rates, and when it pauses or returns to more normal steps in its policy rate, will determine when homebuyers and sellers alike feel comfortable getting back into the market.

“That’s the big wild card,” he says.

Prices to rise outside most expensive markets:

Re/Max’s 2023 housing market outlook released on Tuesday projects home prices in Canada will drop an average of 3.3 per cent from the average sale seen in 2022.

Despite relative stability in prices on a national scale, on a regional basis, Ontario and western parts of Canada are set to see further drops, according to the brokerage’s forecast.

Some cities in Ontario are especially vulnerable, Re/Max projects, with steeper price drops expected for the Greater Toronto Area (11.8 per cent lower), Barrie (15 per cent lower) and Durham (10 per cent lower).

Parts of British Columbia are also expected to see declines, such as Greater Vancouver (five per cent lower), Kelowna (down 10 per cent) and Nanaimo (also down 10 per cent).

But parts of Atlantic Canada and Alberta are set for growth in 2023, Re/Max expects.

Calgary is set to see prices rise seven per cent, for example, while average sale prices in Halifax could jump up eight per cent next year, its forecast said.