Canadian Real Estate Market Expected to Come "Unstuck" in 2024

A Conversation with Steve Saretsky and John Pasalis on the Year Ahead

Financial Post’s Larysa Harapyn sat down with Vancouver realtor Steve Saretsky and John Pasalis of Realosophy Realty to discuss the Canadian real estate market’s prospects for 2024.

Table of Contents

The Market is Due for a Correction

The Canadian real estate market has been on a tear, with prices rising steadily over the past few years. However, some experts believe that the market is due for a correction. Steve Saretsky, a Vancouver realtor, notes that the market has been "unstuck" for quite some time now and is ripe for a downturn.

Steve Saretsky: "The Canadian real estate market has been on an incredible run over the past few years. But I think we’re at a point where the market is due for a correction. We’ve seen prices rise steadily, and it’s getting to the point where people are starting to feel like they can’t afford to buy anymore."

Interest Rate Cuts and Their Impact

One of the key factors that could impact the Canadian real estate market in 2024 is interest rate cuts. John Pasalis, CEO of Realosophy Realty, believes that a cut in interest rates will have a positive effect on the market.

John Pasalis: "A cut in interest rates will definitely help to stimulate the market. It will make it easier for people to qualify for mortgages and will also lead to an increase in sales. However, it’s worth noting that rate cuts can also lead to increased volatility in the housing market."

The Impact of Rate Cuts on Volatility

While a cut in interest rates may be beneficial for the real estate market, it could also lead to increased volatility. Steve Saretsky notes that this volatility could be due to the fact that people are becoming more optimistic about the market.

Steve Saretsky: "When interest rates come down, people tend to get a bit too optimistic about the market. They start thinking that they can afford to buy and sell more easily, which leads to an increase in sales. However, this optimism can also lead to overbuying and overspeculation, which can cause prices to rise even faster."

The Rise of Bundled Pricing

Another factor that could impact the Canadian real estate market is bundled pricing. This refers to mortgage rates that come with strings attached, such as higher fees or penalties for early redemption. John Pasalis believes that this trend is becoming increasingly popular and could have a significant impact on the market.

John Pasalis: "Bundled pricing is becoming more common in the mortgage industry. It’s a way for lenders to offer attractive rates while also generating revenue from other sources. However, it can be confusing for consumers who don’t understand what they’re getting into."

The Impact of Trump’s Economic Policies on Canada

The Canadian real estate market may also be impacted by US President Donald Trump’s economic policies. Steve Saretsky notes that Trump’s "economic force" could have a significant impact on the Canadian economy and, by extension, the housing market.

Steve Saretsky: "Trump’s economic policies are having a significant impact on Canada. His trade tariffs and border closures are leading to increased uncertainty in the market. This uncertainty can cause people to hold back from buying or selling properties, which can have a negative impact on prices."

Conclusion

The Canadian real estate market is expected to undergo significant changes in 2024. With interest rate cuts, bundled pricing, and Trump’s economic policies all playing a role, it’s clear that the market will be impacted in various ways. While some experts believe that the market is due for a correction, others think that a cut in interest rates will have a positive effect.

Key Takeaways:

The Canadian real estate market is expected to undergo significant changes in 2024.
Interest rate cuts could have both positive and negative effects on the market.
Bundled pricing is becoming increasingly popular in the mortgage industry.
Trump’s economic policies are having a significant impact on Canada, including the housing market.

Recommendations for Homebuyers and Sellers

For those looking to buy or sell properties in 2024, it’s essential to be aware of these trends. Here are some recommendations:

For Homebuyers:

Be cautious when dealing with bundled pricing.
Research mortgage rates thoroughly before making a decision.
Consider waiting until interest rates come down.

For Home Sellers:

Be prepared for increased competition in the market.
Consider reducing prices to attract more buyers.
Be aware of the impact of Trump’s economic policies on the Canadian economy.

Conclusion

The Canadian real estate market is expected to undergo significant changes in 2024. With interest rate cuts, bundled pricing, and Trump’s economic policies all playing a role, it’s essential for homebuyers and sellers to be aware of these trends. By being informed and prepared, you can navigate the market with confidence and make smart decisions about your investments.

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