Between the dust settling from the Covid-19 buying frenzy and spiking interest rates cooling off real estate markets across the country, the past couple of years have been a bit of a wild ride. Many Canadian cities are experiencing a correction trend and a Desjardins economic report shared that it believes at a national level we can expect around a 23% decline in the average home price from early 2022 through December 2023. However, not all Canadian cities are expected to see this decline. Keep reading for our 2023 housing market update for some of Canada’s biggest cities.

Ottawa 2023 Housing Market Update

Home prices in Ottawa spiked the first half of 2022 and saw some sky-high months. Thanks to interest rates going through the roof the market cooled off. These interest rates altered the dynamics of the market and by December 2022 there was a 30% drop in sales compared to December 2021 (Members of the Ottawa Real Estate Board). Due to inflation, rising costs of material and fuel, and a labour shortage, Ottawa saw the slowdown, and in some cases total shutdown, of numerous new residential builds, specifically condominium projects. Despite project delays, cancellations, and a decline in purchases, condo prices continue to rise. As we enter into 2023, we are still experiencing high interest rates that are going to impact the market as it drastically shifts what buyers can afford and what is available to them. Despite all this, there is great speculation that home prices in Ottawa will continue to rise in 2023, particularly as first-time homebuyers drive up the demand. Compared to other metropolitan areas like Toronto and Vancouver, Ottawa is still considered to be a fairly affordable major city to live in. Even compared to other popular Ontario cities, such as Hamilton, Brampton and Mississauga, Ottawa offers more affordable options with the average single family home still less than a million dollars. For this reason, many people are still quite interested in the Ottawa market.

Toronto 2023 Housing Market Update

The Toronto Housing Market Report shared that wrapping up 2022, Toronto was experiencing a decline on all fronts. The average home sold price decreased 9%, with detached homes, semi-detached homes and freehold townhomes all declining in their year-over-year prices. Condo prices were able to hold steady with their average price remaining the same. Sky-high interest rates and lower demand made for a bit of a bumpy end to close out 2022. Heading into 2023 we can expect home prices to continue to moderately decline as interest rates remain high. With interest rates remaining as high as they are, monthly mortgage payments will remain lofty and will likely push some from purchasing. The current high interest rates are continuing to make the city less affordable for many, particularly for those trying to get into the market. Economists predict that in the first half of 2023 Toronto will continue to see the trend of prices declining. But there is optimism for the second half of 2023, and things may start to turn around. 2023 may see some sideline buyers step out from the woodworks. With lower prices, less bidding wars and competition, and conditions back on the table, there may be less hesitation to enter the Toronto market.  

Calgary 2023 Housing Market Update

Calgary will continue to see modest growth for 2023, with the average detached home price breaking past the $700,000 mark. The city will continue to see an increased interest in condominiums as an affordable housing option. Unlike many provinces, Calgary did not experience the same drastic market swings during the pandemic. Because the Calgary market didn’t experience any extreme shifts, and it is not needing any major correction, home prices are expected to see steady growth this year. Calgary has become quite a popular major city, and the migration of Canadians flocking to Calgary will keep the market quite active. There is more competition heating up in the Calgary market, and bidding wars are more commonplace here than in other Canadian cities at the moment. CREB (Calgary Real Estate Board) record shows that housing inventory reached a new low this past November. According to a market report (Mortgage Sandbox), the pipeline of units under construction is above historical trends, and demand is significantly outpacing supply – making for a vulnerable market. Inventory levels should increase come spring as new homes hit the market and new builds are scheduled for completion. Some professionals suggest that due to continued increase in popularity, and based off the current supply, Calgary may face a longer-term housing shortage. As a major city with a smaller price-tag, the housing market here is heating up and we’re sure it will be quite the year for Calgary.

Vancouver 2023 Housing Market Update

Despite a forecasted 2% drop of single-family detached homes, Vancouver, not surprisingly, still remains the most expensive city to purchase a home in Canada in 2023. The Greater Vancouver Area is experiencing a decrease in sale prices for detached homes and an increase in benchmark price for condominiums. Coming in hot, we can expect a 1% price increase for condominiums with the average condo sitting at $747,299. Single detached homes in Vancouver are still quite expensive, and thanks to high interest rates bringing hefty monthly mortgage payments, it is not all that shocking to see people purchasing condos as a more affordable housing option in the city. Due to a supply shortage lingering from the end of 2022, buyers are still hesitant to put their home up on the market with the fear that they may not find another home for themselves to move into. This supply shortage has kept prices from declining even further. As of January 1^st, B.C. instated a mandatory 3-day cool off period for buyers. Meaning buyers will have 3 business days to walk away from the purchase after signing. Many real estate professionals share that this policy is not as effective in the current cooler market and are waiting to see how this policy plays out when the market heats up again.