As we bid farewell to 2023 and welcome 2024, let’s reflect on Canada’s economic journey and explore the upcoming trends shaping the landscape.
Inflation started at 5.9% and gradually decreased to 3.1% by November. Housing market dynamics slowed, but property values remained stable amid the Bank of Canada’s rate adjustments.
Canadians accepted the end of historically low-interest rates. This delayed new buyers’ entry into the housing market and existing owners from changing their homes.
Canada’s economy demonstrated resilience with robust job growth and increased investments, but a slowdown in business and consumer activities emerged towards the year’s end.
Tangible effects of rate hikes and an anticipated drop in inflation below 3% are influencing movement in fixed mortgage rates, benefiting first-time home buyers and allowing existing homeowners to look at new property options.
Potential rate cuts by the Bank of Canada may provide relief for Adjustable and Variable Rate holders. There is talk of rates dropping as much as 1% this year, but we’re not holding our breath. If rate cuts are insufficient, there is the opportunity to lock in a variable rate to a fixed.
Governments continue to address housing affordability and supply shortages through new construction developments. Any increase in supply is expected to be quickly devoured by the demand from a new generation of buyers and immigration, meaning prices will likely increase over the coming years.
What it means for Consumers:
Approximately $251 billion in mortgages are set for renewal in 2024, presenting an opportunity for consumers as lenders compete for business. Seeking professional advice is key.
High-interest debt holders can consider refinancing for debt consolidation, taking advantage of declining rates to manage debt effectively.
As the era of interest rate hikes potentially ends, there’s growing anticipation for increased buyer interest. Opting for variable or short-term fixed rates now positions buyers before heightened demand.
In the face of uncertainties, proactive decision-making is crucial for navigating the mortgage landscape in 2024. Seeking professional guidance ensures alignment with evolving market conditions, empowering you to make informed decisions in the year ahead.