2024 Predictions
Top 3 Real Estate Predictions for 2024
As we venture into 2024, the Canadian real estate market presents a landscape of evolving trends and opportunities. Let's delve into the top three projections shaping this sector.
Multi-Unit Dwellings on the Rise
The upcoming year anticipates a significant increase in multi-unit dwellings, including duplexes, townhouses, and basement suites. This shift is fueled partly by initiatives like the Saskatchewan government's Secondary Suite Incentive (SSI), designed to encourage the development of such units. This program offers financial support covering 35% of the cost of constructing a new secondary suite in a homeowner's primary residence. The maximum grant available per eligible suite is $35,000. This trend diversifies housing options and adds value to properties with the potential for basement suite conversions, offering homeowners a lucrative opportunity to enhance their property's worth.
Interest Rate Decreases
A notable shift in the financial landscape is the predicted decrease in interest rates. Central banks across Canada project a reduction ranging from 0.5% to 1%, a move that could reinvigorate the housing market. TD Bank Economist Rishi Sondhi said in an interview, "We think the Bank of Canada will remain on hold through the end of this year [2023] and the first quarter of next year before initiating a series of rate cuts starting in the second quarter of next year [2024]. They want to have core inflation moving convincingly towards their 2% target without breaking the back of the economy." This expected decrease is poised to make mortgages more affordable, potentially stimulating buyer activity, especially in the latter half of the year. The impact of these rate cuts would be a welcome relief for homebuyers and investors alike, who have been grappling with higher recent rates.
Purpose-Built Rental Properties
Gaining Momentum & Possible New Construction Incentives: Another significant trend is the rise in purpose-built rental properties. It's hard not to notice the increase of purpose-built rental complexes currently under construction in Saskatoon. Hundreds, if not thousands, of apartment units are under construction downtown and on the far east side of Saskatoon alone! In the fourth quarter of 2023, the federal government introduced a GST rental rebate to incentivize the construction of rental properties in the country. This initiative attempts to address the housing shortage by encouraging the construction of rental properties designed to meet the growing demand. This move benefits those seeking rental options and presents an opportunity for investors looking to delve into the rental market. 36% of the 5% GST towards the purchase price of a new rental property may seem like little, but expect to see the provincial and smaller municipality governments follow suit and incentivize new construction projects.
The Canadian real estate market in 2024 seems poised for a dynamic shift, with these trends indicating a more diversified and accessible housing landscape. Expect the anticipated decrease in interest rates and the increase in multi-unit and rental properties to create new opportunities for buyers, investors, and renters, contributing to a more vibrant and inclusive real estate market.
