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The Canadian real estate market is more active in 2024... but prices are expected to remain high

The Canadian real estate market is more active in 2024... but prices are expected to remain high

By Omayma othmani

Published: January 8, 2024

The Canadian real estate market may recover this year after a disastrous period characterized by a spike in interest rates. However, there is a ray of hope for buyers on the horizon, as many experts believe that the key interest rate will decrease this spring, even if purchase prices remain high.

The first decrease is scheduled for April 2024, according to Jamie Djien, Chief Economist at Desjardins.

He said that in already expensive markets, the risks of improvement are very small for many households, explaining that the resale market could see a gradual improvement he described as very modest.

Caution, caution...

Note that the Bank of Canada maintained the benchmark interest rate at 5% in December for the third consecutive time to reduce inflation, with the key interest rate possibly rising from 5 to 3.5% by the end of the year, according to Desjardins Group forecasts.

Faced with this renewed optimism, Canadian Central Bank Governor Tiff Macklem called for caution. In his speech delivered on December 15 at the Canadian Toronto Club, he said it is still too early to consider a potential cut in the key interest rate.

He also added that when the Board is convinced of price stability restoration, they will consider lowering the key interest rate.

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