One economist is forecasting a quiet fall for Canadian real estate.

A new report from RBC’s Robert Hogue says that "the fall season may look a lot like August with buyers staying on the defensive in many parts of Canada despite more choice becoming available to them.” He also cautions that the next bout of broad market recovery will hinge on interest rates coming down in 2024.

Hogue’s forecast is certainly well-founded. In the wake of this summer's duo of interest rate hikes, it's been a sluggish summer almost across the board for Canadian real estate, with demand-supply conditions easing most significantly in the Toronto and Vancouver areas.

The latest data from the Toronto Regional Real Estate Board, for instance, revealed that home resales were down in August — but not for a lack of purchasing options.

“Rather, it increasingly reflects sagging buyers’ sentiment in the face of high interest rates, extremely poor affordability, and a softening economy,” says Hogue.

He also points out that Toronto's sales-to-new listings ratio is “the closest it's been to buyers’ market territory since January,” which took a clear toll on prices last month, pushing them downwards for the first time since February. Hogue says that buying activity and prices are likely to remain "mostly stagnant" in the near term.

The forecast seems to be similar for Vancouver area real estate. Hogue notes that the “more cautious mood” that characterized the market this summer will certainly bleed into the fall. Amid the theme of trigger-shy home buyers, prices are anticipated to see a “flat trajectory” in the months ahead.

Calgary, it seems, has the makings of an outlier. The westerly market was one of the few to see upticks in resales and prices last month.

“Inventories remain exceptionally low at this stage amid supercharged demand and explosive population growth. This makes for a highly competitive environment for buyers,” writes Hogue. “We see little that will cool down the market materially in the short term.”

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