With relentless talk around rising interest rates, high inflation and increasing house prices, a little bit of good news is just what Canadian homebuyers need to kick off the new year.
According to RE/MAX® Canada's yearly housing market outlook report, the real estate market across the country is changing — and largely for the better. In 2023, Canadians can expect to see the start of more affordable housing, a return to balance in the real estate market, and dropping house prices in Canada's priciest cities (finally!).
Whether you're thinking of selling your home or getting on the property ladder for the first time, these seven key predictions from RE/MAX's 2023 Canadian Housing Market Outlook Report can help you make better real estate decisions this year.
Canada's housing market will return to balance in 2023
In sharp contrast to 2022, 60% of housing markets in Canada — including the Greater Toronto Area (GTA), the Greater Vancouver Area (GVA), Calgary, Regina and Winnipeg — are expected to balance out in 2023 thanks to a drop in price and easing demand.
What This Means For You: A balanced market happens when supply and demand are about the same. In a balanced market, sellers tend to accept reasonable offers, houses remain on the market for a typical length of time, and there are generally plenty of homes to choose from. In other words, it's good for both sellers and buyers.
House prices across many Canadian regions are expected to drop
Rising interest rates and a looming recession mean the average national house price is expected to decrease by 3.3%, with many notoriously pricey areas anticipated to drop by 10% or more, including the GVA, the GTA and Quebec City.
What This Means For You: According to RE/MAX Canada, if you're a first-time homebuyer, you'll be able to take advantage of a cooling housing market and make offers with more negotiating power — especially in Ontario and Western Canada, where the biggest price declines are expected.
Atlantic Canada's biggest cities are expected to see a price increase
In Eastern Canada, average sale prices are expected to jump in some of the area's biggest cities, including Halifax, Nova Scotia, and St. John's, Newfoundland and Labrador, where the average house price in 2023 is estimated to be $586,076 and $350,805, respectively.
What This Means For You: If you plan on buying a home in these cities, you can expect to see prices to go up around 8% in Halifax and 4% in St. John's. However, despite housing affordability causing increased demand (and sale prices) in these cities, Atlantic Canada still remains one of the most affordable areas in the country to buy a home.
Condos are expected to remain strong in 2023
A return to the office and the end of the pandemic-driven urban exodus means more people are moving back to the city. This bodes well for condos, which are currently the dominant housing type in many of Canada's urban regions, according to the RE/MAX report.
What This Means For You: The condo market in Canada's biggest cities is likely to be busier than usual, especially in places like the GVA, where prices will continue to drop into 2023; and Edmonton, where demand for downtown condos is expected to rise even more.
Most Canadians believe affordable housing will increase in 2023
RE/MAX reports that 54% of Canadians believe that the two-year ban on foreign investors purchasing property will increase the availability of affordable housing for Canadian homebuyers.
What This Means For You: As of January 1, 2023, non-Canadians (anyone not a Canadian citizen, permanent resident or person registered under the Indian Act) will not be able to purchase property in Canada for two years, with some exceptions. The goal of this law is to help regulate the high prices in Canada's housing market.
The trend of moving out of province isn't going anywhere
Thinking of making the move out of province to save on home-buying costs? You're not alone: 15% of Canadians are considering moving to another province in 2023 in search of better housing affordability and livability, with non-homeowners being twice as likely to relocate.
What This Means For You: Balanced markets and buyer's markets — areas where supply equals or exceeds demand — are your best bet for a good deal. According to RE/MAX's 2023 Canadian Housing Market Outlook Report, Nanaimo, Kelowna, Saskatoon and Winnipeg in the west; and Hamilton-Burlington, Brampton, Mississauga and Niagara in the east are all considered buyer's markets in 2023.
The majority of Canadians still say home ownership is the best long-term investment
Most Canadians remain positive about investing in real estate. According to RE/MAX, 73% of Canadians think that homeownership is one of the best long-term investments they can make. Yet, 67% say they're less inclined to buy in the first half of 2023, and 62% are less inclined to sell in that time frame.
What This Means For You: The current economic climate is challenging, and that means it's more important than ever to stay informed on changes to Canada's housing market. If you're planning to buy a home in 2023, reach out to an expert who can answer your questions and guide you through the process of entering the real estate market.
Of course, Canada's housing market can change quickly. Whether you're buying or selling, you can stay up to speed on the latest trends by visiting the 2023 Canadian Housing Market Outlook Report and by reaching out to an experienced RE/MAX agent.
To search home listings or to find an agent, visit the RE/MAX website. To keep up to date with Canada's real estate market, check out the 2023 Canadian Housing Market Outlook Report.
Each RE/MAX office is independently owned and operated. This content is for general informational purposes only and does not constitute financial, investment, legal, tax or accounting advice.