A new report from a real estate company reveals that buyer demand for homes remains strong in Canada despite borrowing rate hikes, indicating a potential stabilization of the market after the pandemic boom. The report highlights an ongoing housing shortage in the country as a significant issue, urging governments to promote more development, particularly in affordable housing.

According to the report, the aggregate price of a home in Canada remained nearly unchanged compared to the previous year in the second quarter of 2023, dropping just 0.7% to $809,200. This slight decrease suggests that the market may be close to recovering from the market correction experienced in 2022. The report predicts that prices will remain relatively flat for the next six months and then increase by approximately 8.5% in the final quarter of 2023 compared to the same period in 2022.

Despite the increase in borrowing rates, buyer demand remains strong, especially among those who have secured a rate hold. Homeowners who bought homes during the pandemic-induced real estate boom and experienced a drop in value during the market correction are now in a position where they could potentially resell their homes without significant losses. However, the report emphasizes that the housing shortage and high prices, particularly in cities like Toronto and Vancouver, continue to be challenging for prospective homebuyers. It calls for increased government support in the development of affordable housing options.

The report indicates that the Canadian housing market is returning to normal seasonal trends, although concerns about interest rates persist. The lack of housing options and rising rental costs further contribute to affordability challenges, particularly for young individuals trying to enter the housing market. The report underscores the importance of government intervention to address these issues and ensure access to affordable housing for Canadians.

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