Real Estate Predictions for 2023
With a new year, it’s always fun to make predictions. Here are some real estate-related predictions for 2023.
Home Prices and Sales
There’s no denying that 2022 was a challenging year for home prices and sales. Interest rates moving up at their fastest pace in 30 years probably had something to do with it.
The predictions are out. Expect 2023 to be a better year, with rates not expected to head much higher, although don’t expect home prices to recover to where they were at the beginning of 2022. Home prices will remain flat or sink further, depending on who you ask.
Real estate brokerages have a more positive view about 2023. CREA predicts that home prices will increase by 0.2%, while Royal LePage and RE/MAX predict that home prices will decline by 1% and 3.3%, respectively. The big banks are less optimistic. TD expects home prices will decrease by 10.7% and RBC by 8.5%.
Regarding actual home sales, CREA expects sales to fall by 2.3% in 2023.
Expect to see the most significant declines in home prices in the first quarter of 2023 compared to the first quarter of 2022. That’s when home prices came off their peak. After that, it should be an average year as things hopefully stabilize.
The big banks are split on what will happen regarding interest rates, a primary driver of real estate.
BMO forecasts another quarter-point increase, starting with the prime rate before the Bank of Canada pushes the pause button on interest rate hikes. CIBC, RBC and Scotia predict that the prime rate will remain at 6.45% by the end of 2023, with a couple of tweaks in between. National Bank and TD expect the prime rate will fall by 0.5%, ending the year at 5.95%.
By the end of 2024, CIBC expects the prime rate to remain at 6.45%, while Scotia expects a quarter-point cut. National Bank and RBC expect the prime rate to drop even more, hitting 5.2% by year-end, while TD expects the lowest prime rate of all, a prime rate of 4.45%.
What will end up happening? Only time will tell.
Most of the big banks expect a cut on the fixed rate size. BMO and TD are expecting the most significant cut to fixed rates. Meanwhile, Scotiabank isn’t predicting any cut at all. When it comes to 2024, most are expecting fixed rates to fall further, although BMO is predicting a slight quarter-point increase.
How the Canadian Mortgage App Can Help
The Canadian Mortgage App stays up to date with all that’s happening in the real estate market.
Changes in home prices and interest rates can affect your home search. Home prices falling further means you can afford a nicer home. Interest rates fallings means you can afford to borrow more. The Canadian Mortgage App has you covered.
What are you waiting for? Download the Canadian Mortgage App today to try it out.