As we bid farewell to 2024, it's time to reflect on how the real estate market performed over the past year. From price fluctuations to shifts in sales volume, here’s an in-depth look at what happened in 2024 and how it compared to previous years.
Quick 2024 Summary:
Average Sale Price: The average home price in 2024 was $587,268, marking a +1.91% increase from 2023’s average of $576,259. This modest rise indicates continued stability in home values despite market headwinds.
Sales Volume: Total sales for the year reached 2,613, a slight decline of -1.47% compared to 2023’s 2,652 sales. This continues a multi-year trend of declining sales volumes, reflecting a more cautious market.
Monthly Trends: Peaks and Valleys
January to March: The year began with a strong January, with average sale prices at $574,876, a remarkable +14.7% YoY increase from $501,263 in January 2023. However, February and March saw prices dip slightly below 2023 levels.
Spring Market (April to June): Spring proved to be the star of 2024. April’s average price soared to $681,863, an impressive +12.4% YoY gain, the highest monthly increase of the year. June also saw strong performance, with prices at $648,355, reflecting renewed buyer confidence during this period.
Summer Market (July to September): Prices softened during the summer months, with August experiencing the sharpest drop to $519,457, down from $572,774 in 2023.
Fall and Early Winter: The market rebounded in the latter months of the year. December’s average price climbed to $644,163, a significant increase from $574,404 in December 2023.
Key Economic Factors in 2024
Bank of Canada Key Interest Rate Cuts: Throughout 2024, the Bank of Canada steadily reduced its key interest rate, providing much-needed relief to borrowers and spurring activity in the housing market. This downward trend in rates is widely expected to continue into 2025, further encouraging buyer confidence and affordability.
CMHC Lending Policy Changes: A significant policy shift by CMHC allowed home buyers to secure insured mortgages for properties valued up to $1.5 million, up from the previous cap of $1 million. This change expanded opportunities for buyers in higher-priced markets and contributed to the stability of home values across Canada.
30 Year Mortgages: First time home buyers, and any buyers purchasing some new construction homes, are now able to extend their mortgages up to 30 years. This means they can now get into a home they previously couldn’t afford or get into the same home with more affordable monthly payments.
Projected Annual Value Increase: By the end of 2024, we anticipate an overall increase in home values of 4-6%, with the bulk of these gains recognized during the strong spring market. This growth reflects the combined impact of improved affordability and increased buyer activity driven by economic adjustments.
Key Trends and Insights
Price Stability Amid Fluctuations: The average sale price saw modest annual growth, but monthly data revealed significant fluctuations, with spring and winter markets driving overall gains.
Declining Sales Volume: The gradual drop in sales since 2021 points to potential challenges, including higher interest rates earlier in the year, tighter lending criteria, or market saturation. Buyers may also be adjusting to affordability concerns.
Seasonal Patterns: Spring remains the most dynamic season, with buyers and sellers taking advantage of increased activity. Conversely, late summer continues to be a quieter period for the market.
What Does This Mean for 2025?
As we move into 2025, these trends offer valuable insights:
For Buyers: With rates continuing to drop and increased lending flexibility, timing will be key. Spring and late winter could present competitive opportunities, while summer may offer deals.
For Sellers: Strategic timing will be crucial. Listing in spring or late fall could maximize your returns, as these periods consistently show price resilience.
For Investors: With a projected 4-6% annual value increase and expanding lending options, 2025 could be a prime year for strategic investments, especially during quieter summer months.
We expect 2025 to be a continued year of growth. However we constantly heard throughout 2024 that the market was slow, which if compared to 2021 / 2022 it can certainly feel that way, but with 38 years of experience on our team we can tell you that this market is still healthy and fast when properties are priced correctly and marketed at a top level. Lending rates continue to drop, and many are expecting a nearly 1% drop in the BoC key lending rate in the first quarter of 2025 which means homes will become more affordable, this combined with new home buyers able to extend their mortgage to 30 years increasing their purchasing power further we expect prices to climb and sales to grow.
