The Royal LePage 2024 Winter Recreational Property Report provides an optimistic forecast for the recreational property market in Canada. Here are some key highlights:

1. Market Revival: The report predicts a 7.5% increase in ski chalet prices for 2025, driven by improving borrowing conditions and renewed buyer confidence. This comes after two years of limited activity due to high interest rates.


2. Current Trends: Despite the high interest rate environment, recreational property prices have remained relatively stable. The national median price for a single-family detached home in ski areas is expected to rise to $1,019,960 over the next 12 months.


3. Regional Variations: While some regions like Canmore have seen price increases, other areas in British Columbia experienced price drops. The report notes that Quebec’s recreational markets have shown solid price appreciation despite economic uncertainties.


4. Buyer Behavior: Recreational homebuyers often use equity from their primary residences or pay in cash, but they still watch interest rates closely as an indicator of the economy’s health. The report suggests that additional rate cuts by the Bank of Canada could boost buyer confidence and activity.


5. Longer Selling Times: The report highlights that properties are staying on the market longer, with 75% of Royal LePage’s recreational property specialists noting longer selling times.

Overall, the report is optimistic about the future of the recreational property market, expecting a rebound in activity and prices as borrowing conditions improve.

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The recent mortgage rate drop by the Bank of Canada has sparked significant interest and activity in the Ottawa condo market. As a REALTOR® specializing in condominiums, it’s essential to understand these shifts and what they mean for both buyers and sellers.

Increased Buyer Interest:

Following the rate cut, there’s been a notable uptick in buying interest, particularly among first-time homebuyers and investors. Lower borrowing costs have made mortgages more accessible, encouraging more people to explore condo ownership.

Price Adjustments:

The average selling price of a condo in Ottawa was $414,200 in September 2024, marking a slight decrease of 0.6% compared to the previous month. While prices have decreased by 1.3% year-over-year, the recent rate drop has the potential to stabilize prices and even drive them upwards as demand increases.

Market Dynamics:

The condo market is showing signs of increased activity, but it’s still early days. Some buyers remain cautious, waiting to see if prices will stabilize further. However, the general trend indicates a more dynamic market with potential for growth.

Dwindling Inventory:

One of the challenges in the Ottawa condo market is the dwindling inventory. As more buyers enter the market, the competition for available units intensifies. This could lead to quicker sales and potentially higher prices for well-located and well-maintained condos.

Opportunities for Sellers:

For condo owners looking to sell, now might be an opportune time. The increased buyer interest and lower mortgage rates create a favorable environment for sellers to list their properties and potentially achieve better prices.

Tips for Buyers:

• Act Quickly: With increasing competition, it’s crucial to act quickly when you find a condo that meets your needs.


• Get Pre-Approved: Ensure you’re pre-approved for a mortgage to streamline the buying process and strengthen your position when making offers.


• Work with a REALTOR®: A knowledgeable REALTOR® can help you navigate the competitive market and find the best deals.

Conclusion:

The recent mortgage rate drop has brought renewed energy to the Ottawa condo market. As a REALTOR® focused on this sector, staying informed and prepared can help you seize the opportunities this dynamic market presents.

Canadian Home Sales Edge Up Again Following Third Interest Rate Cut

The Canadian Real Estate Association’s (CREA) October 15, 2024, Monthly Housing Market Report presents an interesting snapshot of a market responding to recent economic shifts, particularly the Bank of Canada’s series of interest rate cuts. With the most recent of these rate reductions in September, Canadian home sales continued to rise, gaining 1.9% month-over-month, marking the third consecutive increase following rate cuts. Although these gains may not be dramatic, they point to a consistent pattern in recent months that could indicate a stable upward trend, albeit slower than some may expect. This trend reflects the potential for an active housing market next year, as many buyers may hold off for anticipated further cuts in early 2025.

Market Dynamics and Regional Highlights

Regionally, the Greater Toronto Area and Hamilton-Burlington, Montreal, Quebec City, and the West Coast (Vancouver and Victoria) were leaders in sales growth. This regional distribution underlines the diversity in Canada’s housing market, where economic resilience, demand, and inventory availability vary. For example, while Ontario cities lead the charge, regions like Quebec City also see momentum, reflecting local factors that draw buyers despite broader economic trends.

Inventory and Supply

New listings saw a significant 4.9% increase month-over-month in September, leading to the availability of 185,427 active listings, a year-over-year jump of 16.8% yet still below Canada’s historic average of 200,000 listings. This increase in inventory could signal a balanced market, especially with a sales-to-new-listings ratio easing to 51.3%, close to the balanced range of 45-65%. Buyers may find more choices than in previous months, as sellers are motivated to list before the traditionally slower winter months.

Prices: Steady but Uneven

Price stability is a central theme in CREA’s report, with the MLS® Home Price Index (HPI) ticking up just 0.1% from August to September, though it remains 3.3% below levels from the previous year. The report notes a minor year-over-year gain in the national average sale price, up 2.1%. Nationally, housing prices have shown a flat trajectory through 2024 despite minor month-to-month adjustments, indicating that sellers are likely holding steady in their price expectations in response to demand from rate-driven buyers. This relatively flat pricing may appeal to prospective buyers aiming to enter the market before any dramatic economic shifts.

Outlook and Considerations for Buyers and Sellers

The fall and winter months could bring interesting dynamics to the market, especially with possible further rate cuts on the horizon. CREA notes that these reductions could positively impact the 2025 market, as buyers who may delay their purchase now could drive demand early next year. As James Mabey, CREA’s Chair, emphasizes, fall is an ideal time for buyers to engage with a REALTOR® and strategize, given the diverse economic signals at play and the increase in inventory.

This CREA report provides a positive outlook for the Canadian real estate market, with favorable conditions for both buyers and sellers. The increased supply and manageable prices create an environment for potential long-term growth.

The latest Royal LePage House Price Survey paints an evolving picture of Canada’s housing market as it navigates through the tail-end of 2024. While the market experienced a slower summer, recent indicators show that growth may be on the horizon, particularly heading into 2025. Here’s a deeper dive into the key insights from the survey and what buyers, sellers, and investors can expect in the coming months.

A Modest Increase in Prices

According to the **Q3 2024 Royal LePage House Price Survey**, the national aggregate home price saw a modest increase of 1.6% year-over-year, bringing the average price to **$815,500**. However, when compared to the second quarter of 2024, there was a 1.1% decrease. This minor fluctuation reflects the “sluggish” market activity that defined much of the summer.

Though the numbers might not seem remarkable, they indicate that prices are holding relatively steady despite broader economic challenges, such as elevated interest rates and inflationary pressures. **Phil Soper**, President and CEO of Royal LePage, commented on the pace of recovery, suggesting that while price growth was slower than expected, it’s likely that we will see greater movement as interest rates continue to ease.

Regional Variations: Some Markets Show More Resilience

One of the standout themes in the Royal LePage survey is the uneven nature of the recovery across different regions. In some cities, the housing market has bounced back quicker than others. For example, **Calgary** has been a leader in price growth, showing a 10.7% year-over-year increase in the fourth quarter of 2023. On the other hand, major markets like **Vancouver** and **Toronto** have lagged slightly, with only modest year-over-year gains of 2.7% and 5.1%, respectively.

Interestingly, **Montreal** is also showing strong signs of recovery. The city is forecast to experience a 5% increase in home prices by the end of 2024, making it one of the more robust markets outside of the Prairies.

Factors Driving the Market: Interest Rates and Supply Shortages

Two major factors are shaping the current dynamics of Canada’s real estate market: **interest rates** and the ongoing **housing supply shortage**. Over the past year, high interest rates—peaking at 4.25%—have pushed many potential buyers to the sidelines. First-time buyers and small investors have been particularly sensitive to these higher borrowing costs, waiting for the right moment to enter the market.

However, recent changes to mortgage rules, such as the easing of stress tests and potential reductions in interest rates, are expected to bring more buyers back. For instance, **new mortgage regulations** announced by the Office of the Superintendent of Financial Institutions (OSFI) will make it easier for first-time buyers to secure longer-term mortgages and increase the cap on insured mortgages from $1 million to $1.5 million. These changes are predicted to boost market activity as early as the first quarter of 2025.

At the same time, Canada continues to struggle with a critical **lack of housing supply**. This shortage, exacerbated by population growth and immigration, remains a significant barrier to price stability. While government efforts to incentivize new housing developments are underway, these efforts have yet to materialize into sufficient new builds to meet demand.

Forecast for 2025: Price Growth Expected

Looking ahead, Royal LePage remains optimistic about the future of the housing market. The forecast for Q4 2024 suggests a **5.5% increase** in home prices year-over-year, with more robust growth anticipated in early 2025. Several factors support this optimism:

1. Interest Rate Cuts: As interest rates are expected to decline further in 2025, buyers who have been hesitant due to high borrowing costs may feel more confident about entering the market.


2. Pent-Up Demand: Many potential buyers, particularly those in high-demand urban areas, have been waiting for the right conditions to purchase. As economic conditions improve, this demand could unleash more buying activity, pushing prices higher.


3. Increased Investor Activity: Small investors, especially those who purchase condominiums, are likely to re-enter the market as borrowing conditions improve and the rental market remains strong.

Final Thoughts

While the Canadian housing market has been sluggish in recent months, the fundamentals suggest that better times are ahead. Easing interest rates, pent-up demand, and ongoing supply challenges are expected to drive price growth in the coming year. For both buyers and sellers, it will be crucial to monitor how the market evolves, especially as we enter the first quarter of 2025.

This slow yet steady recovery may offer opportunities for first-time buyers who have been waiting for better conditions, while investors and move-up buyers could benefit from more favorable financing options. The Canadian housing market may not yet be out of the woods, but it’s certainly on the path to recovery.

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