2022 will go down as one of the most interesting and changeable real estate markets anyone can remember in recent history. With a looming recession on the horizon and the market possibly flipping to a buyer's market in 2023, what should we expect by the end of 2022 and into 2023.
According to Desjardins, the market is projected to fall 24% from the February 2022 peak to the end of 2023. They believe we are now in a balanced market, possibly heading into a buyer's market, as prices by the end of 2023 are still predicted to be higher than at the beginning of the pandemic. The Toronto market has seen increases in house prices even though interest rates have been increasing, but by 2023, we could start to see the city house prices in Toronto and the inflated Vancouver market also start to fall.
Historical Average Home Prices in OntarioNote: Data sourced from the Canadian Real Estate Association (CREA)
What To Watch Moving Into 2023
- Interest Rate Rises
According to the Ontario Housing Market Report, interest rate rises will potentially continue into 2023.
- Immigration Boom
Immigration is a big one. With Canada's immigration churning over again, expectations of record immigration could aid in stopping a housing crash. Newcomers are ready and willing to buy their first home, and demand for rental homes is high. All of this will be positive for the housing market.
- Government Policy Changes
-Multi-Generational home renovations.
-An increase in first-time home buyers tax credit.
-Tax-free savings account for first time home buyers.
-And other relevant proposals.
- Unemployment Rates
Many economists agree that the recession of 2023 will be short-lived, and the market will begin to stabilize in 2024.
So many factors are ringing into the current economy, so it's not a clear call how the next couple of years will unfold or even how the predicted recession will impact the housing market.
Keeping an eye on changes and getting good advice from your financial adviser and mortgage broker is the smart way to navigate the next months and years.
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