How busy will Canada's mortgage and housing markets be in 2024?

Top lending executives have their say on coming trends

How busy will Canada's mortgage and housing markets be in 2024?

Canada’s mortgage and housing markets have seen plenty of turbulence throughout this year amid climbing interest rates and cooler sales activity – but while challenges will persist in 2024, there’s room for optimism looking ahead.

That was the message from a panel at this week’s Mortgage Professionals Canada (MPC) national conference in Toronto, convening top executives from leading lenders to hear their thoughts on how the market is likely to play out next year.

While a dramatic turnaround isn’t in the cards for Canada’s still-tepid housing market, opportunity will still present itself in 2024, according to participants in the panel – moderated by Canada Guaranty senior vice president of sales and marketing Mary Putnam (pictured top).

Marina Bournas (pictured below), RFA Mortgage Corporation’s president and chief executive officer, highlighted the cyclical nature of the mortgage market, and said her company was looking to the future with a positive outlook.

“I think we’re in an industry where it comes in ebbs and flows, and we’ve been through multiple changes: there have been regulatory changes, market changes,” she said. “So I’m an optimist.

“With that being said, I do think 2024 will probably look very similar to 2023, and hopefully there’s some optimism with rates for the latter part of the year.”

Top of mind for RFA at present, according to Bournas, is gearing up for busier times ahead by strengthening existing relationships and adding new talent.

“We’re trying to ensure we’re working on the foundation, working on continuing to build that trust with our brokers,” she said, “working to hire and train and just be ready when it starts up again – because it absolutely will.”

Certainty on interest rates required before market shifts again

Yousry Bissada (pictured below), CEO of Home Trust Company, told the audience that while demand was still definitely present in the housing market, buyers and sellers alike required clarity on when interest rates are likely to fall before stepping back into the fray.

“The fear of this uncertainty and volatility that’s going on, we believe, still left a lot of people on the sidelines,” he said. “And that may last a while yet. People just need a little certainty… People need to know that the Bank of Canada will one day say, ‘We’re done, and we’re on the way down.’

“And when that happens, I think people get certainty, and they’re willing to put money in and they’re willing to risk what a renewal will look like a few years down the road.”

The end result? “I think it’s going to be very similar to this year,” Bissada added, “especially with the backup as people just remain on the sidelines and wait to see, wait for that announcement of ‘We’re done.’”

A subdued market for now – but green shoots emerging

Jason Ellis (pictured below), First National Financial’s president and CEO, said that while the market would likely remain subdued in 2024, there appeared to be little prospect of a sizeable downturn, particularly with demand always persisting among Canadian homebuyers.

“I think we’re going to be fine. I think origination volumes will moderate,” he said. “I don’t think we’re going to go off the housing cliff – I still think there’s a great deal of resiliency. And we’ve got that backdrop of [the] supply problem, which means there’s always going to be buyers of houses.”

BMO head of home financing and personal lending Hassan Pirnia (pictured below) reinforced the notion of a market that goes through cycles – and said that while further moderation of prices and activity could be ahead, the housing sector was nevertheless poised to rebound mildly after that.

“Despite what we’ve experienced in recent years… we’re in a cyclical business,” he said. “There are peaks and valleys, and we are still in the valley. So our prediction is it’s going to be a moderate housing slump, and it will recalibrate in mid- to late 2024, when the interest rates will start coming down.”

Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.