Ottawa home prices expected to rise 4.5% in 2024 as pent-up demand grows: Royal LePage

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Royal LePage is forecasting the aggregate price of an Ottawa home will rise 4.5 per cent year-over-year by the fourth quarter of 2024, slightly below the national average.

The real estate company says the aggregate price in Ottawa will rise to $771,942 by the end of next year, up from an estimated $738,700 this year.

The median price of a single-family detached property is expected to rise four per cent to $884,000 over that period, while the median price of condominium is forecast to increase five per cent to $407,190.

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Jason Ralph, broker of record at Royal LePage Team Realty in Ottawa, says even a modest drop in interest rates next year could spark a “flurry of buying activity” in the late summer and early fall of 2024 as borrowing to buy a home becomes less expensive.

“These days, only those homeowners who must move for personal reasons are listing their homes,” Ralph said in a news release. 

“In many cases, those with the luxury of time are staying on the sidelines, waiting for interest rates to come down. This is creating pent-up buyer demand, especially in the always desirable single-family detached segment.” 

The latest forecast comes amid a continued slide in housing transactions that has driven down Ottawa home prices as would-be buyers take a wait-and-see approach to interest rates. 

Royal LePage is the second major real estate firm to predict a small gain in home prices next year for Ottawa.

Last month, Re/Max said it expects average prices in the city will rise two per cent in 2024.

In its report released Thursday, Royal LePage is projecting the aggregate price of a home in Canada will rise by 5.5 per cent to $843,684 by the fourth quarter of 2024 as buyers adjust to higher borrowing costs.

Its calculations show the median price of a single-family detached property will increase by six per cent to $879,164 and condominiums will rise five per cent to $616,140 by the end of next year.

The company is basing its forecasts on its prediction that the Bank of Canada will hold its benchmark interest rate steady at five per cent through the first half of 2024 before making modest cuts in late summer or fall.

“Looking ahead, we see 2024 as an important tipping point for the national economy as the majority of Canadians acknowledge that the ultra-low interest rate era is dead and gone,” Royal LePage president and CEO Phil Soper said in a statement.

“Acceptance that a mortgage rate of four to five per cent is the new normal should untether pent-up demand as first-time buyers, flush with savings collected during the extended down market in housing, regain the confidence to go home shopping. And, with the return of first-timer demand, we expect families who have put off upgrading their homes to begin to list their properties in much greater numbers.”

Royal LePage expects homes in Vancouver to remain the most expensive in 2024, with prices forecasted to rise three per cent to an average of $1.28 million. 

The company foresees the biggest price increases in Calgary at eight per cent, while Regina will remain the most affordable of the places it studied as aggregate home prices are expected to rise three per cent to $381,306 by the end of 2024.

Meanwhile, the Canadian Real Estate Association said home sales fell in November as the average price of a home sold inched higher compared with a year ago.

The association says November home sales fell 0.9 per cent compared with the same month last year.

On a seasonally adjusted basis, November home sales were also down 0.9 per cent compared with October this year.

The number of newly listed homes fell 1.8 per cent on a month-over-month basis in November.

CREA says with new listings down more than sales in November, the national sales-to-new listings ratio rose for the first time since April to come in at 49.8 per cent compared with 49.4 per cent in October.

The actual national average price of a home sold in November was $646,134, up two per cent from November 2022.

– With additional reporting from the Canadian Press

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