TD expects a decline in new listings in Canada’s real estate market in Q1

The latest report by Rishi Sondhi, an economist with TD Economics, says the national real estate market will face a drop in new listings during the first quarter of this year. Then a rebound is expected later in 2023, followed by slower growth next year.

According to the report, restrained home sales and decreasing housing prices will lead to a listings decline in Q1.

Sondhi expects listings to grow by 7% during the period from the second and fourth quarters before slowing to a 2% pace next year.

Although he admits we’ll face certain near-term weaknesses, he also expects growing demand to keep markets balanced and support positive growth in housing prices, especially in the second half of 2023.

Nevertheless, in his opinion, there is still a certain risk that supply goes up faster than expected, as homeowners are dealing with record high debt servicing costs.

According to the Canadian Real Estate Association (CREA), home sales will grow by 10.2% next year, as markets keep returning to normal. Meanwhile, the national average home price is expected to rise by 3.5% from 2023 to 2024 to about $685,056, which is lower than in 2022 but on the same level as in 2021.