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Looking to buy a house this year? Here’s what real estate experts are expecting


While home prices have dropped nine months in a row, many Canadians are still struggling to jump into the housing market amid high interest rates and low supply.


But real estate experts are flagging that there could soon be a number of material changes in the Canadian housing market just around the corner.


“I think the first and perhaps most important trend that we will see this year will be the transition from a rising interest rate environment, to a no news state as it relates to rates,” said Phil Soper, chief executive officer of Bridgemarq Real Estate Services and Royal LePage, in a phone interview on Tuesday.


“So I'd say the move to a stable rate environment, even though it's at a higher level than it has been during the pandemic, will be the first step in reviving consumer confidence,” Soper said.


In December, the Bank of Canada hiked its key policy rate for the seventh time in a row, to 4.25 per cent.


FORECASTING A DROP IN PRICES


John Pasalis, president and broker at Realosophy Realty Inc., said he thinks housing prices will continue to fall amid this high-rate environment.


“I think the main trend this year is probably going to be continued downward pressure on housing prices. I think that's the most likely event and I don't think the market has really absorbed higher rates yet,” Pasalis said in a phone interview on Tuesday.


“We haven't seen much distress from sellers yet, but it's still early. As we move into the new year, sales are going to remain slow and we're likely going to start to see a little bit more distress from sellers.”


The Canadian Real Estate Association reported home sales fell for the ninth straight time in November.


The actual national average home price was at $632,802, which was down 12 per cent from the same month a year ago.


But Jason Mercer, chief market analyst at the Toronto Regional Real Estate Board, said he thinks there could be some good news on the horizon for homebuyers.


“We're starting to see a flat lining in terms of prices and I think that trend is going to carry forward through the first half of 2023, give or take,” Mercer said in a phone interview on Tuesday.


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