TD raised its housing sales and price forecasts. Here’s how it sees the real estate market unfolding over the next yearhas reduced its overnight lending rate by 75 basis points this year with further rate cuts expected. With inflation falling to the Bank of Canada’s 2-per-cent target in August as well as the U.S. Federal Reserve’s recent rate cut of 50 basis points, this opens the door to the Bank of Canada matching this rate cut should economic conditions deteriorate.
Our forecast has home sales picking up in the fourth quarter of this year. By the fourth quarter, we think there should be enough stimulus in the system by way of lower rates to start generating some increases in sales. We’re not talking about high sales levels, we’re just talking about increases off a low base. Our forecast doesn’t anticipate sales levels returning to where they were before the pandemic struck before 2025.
We can foresee relatively strong price growth taking place in other parts of the Prairies, for example, Saskatchewan, and that’s just a function of good affordability. There’s upside there because housing is frankly just affordable. We published a forecast for condo sales earlier this month. In that forecast, we had condo sales picking up to their prepandemic level in the second half of 2025, so that will help balance the market. And that’s probably when you see some positive price growth take place. Positive price growth is consistent with balanced market conditions.On average, you’ve seen condo prices go up about 1.6 per cent in a given quarter, if you annualized that, that’s around 6 per cent growth on average.