Here's what will cost Canadians more in 2024, according to experts

The prices of everyday items soared in Canada over the past year, fuelling a cost-of-living crisis.

But are the inflated prices here to stay, or could 2024 bring some reprieve?

• Here's how inflation is impacting Canada

"It's always interesting to see some of the relationships that you might see with the interest rate and what to expect going there," Andrew Barclay, a Statistics Canada analyst, told CTVNews.ca in a phone interview in December.

Experts say this year will be important because it is the first year without the influence of pandemic restrictions and the inflation associated with COVID-19.

Heading into 2024 here are the prices that experts believe we should be watching.

FOOD

Food costs are starting to slow overall, Barclay said, but depending on the category, some items are slowing in price more than others.

"We measure price change, so when I refer to things like price increases slowing down, it doesn't necessarily mean that prices are declining, it just means that they're being compared to a very high level from the past year or so," he said.

In 2023, food has risen in cost but at a slower pace, and that pace has varied. For example, the costs of items like fresh fruits, vegetables, chicken and beef did not slow as much as the prices of pork and wheat products.

"In general, food prices have been decelerating," Barclay said, a trend that Canadians could continue to observe into early 2024.

"We've seen three consecutive months of month-over-month declines in food prices," Barclay said of an indication that this trend may keep up.

A report released in December by more than 30 experts from Dalhousie University, the University of Guelph, the University of Saskatchewan and the University of British Columbia, estimated that the food rate of inflation would increase between 2.5 and 4.5 per cent in 2024, down from five to seven per cent in 2023.

Meat, fish, dairy, fruit and vegetables are following a "trend of deceleration," Barclay said, signalling more good news for shoppers, but there are a few "blips" to note.

Edible oils and bakery items that were influenced by the Russian invasion of Ukraine had a higher inflation rate in 2023 compared to other products, he noted. Still, this is starting to change, he said, so it's possible there will be relief in 2024.

REAL ESTATE

This past year was "interesting" for the real estate market, according to Lauren Haw, Zoocasa's broker of record and industry relations officer.

According to Haw, 2023 was a return to normal, with a pick up in sales after March Break, a slowdown in the summer and a "blip" of sales in the fall.

Canadians should not expect a drop in price for single-family homes near urban centres in 2024, Haw told CTVNews.ca in a phone interview.

"Those single-family homes in great neighbourhoods, in great school districts, we have a critical undersupply compared to the demand for that property type," she said. "I do not foresee a crash in that property type, there is too much demand."

But, Haw said, a possible "softening in prices" that began in 2023 could continue into 2024 for other property types.

Recreational and rural properties, including homes near ski hills and in more remote areas, are starting to decrease in price.

This is due, Haw said, to a return to city life for people who were working remotely over the pandemic and are now back in the office.

Additionally, interest rates were so low during the pandemic that many people were able to qualify for a second mortgage, and decided to buy a vacation property. Years later, their mortgages are up for renewal at significantly higher rates.

"When your principal residence and your cottage property could be potentially coming up for renewal in the coming years, it's a lot of extra mortgage and debt to carry. That secondary property is more disposable in nature, so that's why we're going to see continued listings there," Haw said.

Luxury markets like in Whistler, B.C., are exceptions to the price drop in recreational homes, according to Haw.

Another thing to watch for: Haw said she believes more newly built condos that were previously bought as investor properties could come onto the market in early 2024 because of a lack of return on investment.

"With today's interest rates, the return on being the landlord of a one-bedroom condo is very often — if you only put down the required minimum down payments — you're underwater on your carrying costs," she said.

With landlords facing much higher mortgage rates upon renewal, their tenants are likely to be impacted too.

Haw said renters should expect to pay more in 2024, depending on the season. Spring and summer are peak months for renters, and will come with higher costs, she said.

In 2023, Canadians saw the average rental rate for a new lease increase each month, rising to the highest it's been in 30 years, something that is likely to continue into this year, according to experts.

"For anybody that's in a long-term rental right now, if they're in a rent-protected province and a rent-protected building, it is very hard to justify moving because your rents are going to go up drastically if… you have to go to market," Haw said.

OTHER COSTS MAY DECLINE

With higher costs for everyday items, StatCan analyst Barclay said it is interesting to note Canadians are still spending money on household durables.

The costs of items like passenger vehicles, furniture and appliances are starting to increase in smaller amounts or "outright decline" due to supply chain improvement.

He said the costs of some services, including cellphone plans, as among the things Canadians are starting to pay less for.

Barclay also noted Canadians are still travelling despite cost-of-living struggles, which indicates consumers do have some savings they are willing to spend.

According to the Consumer Price Index report from October, the price of flights dropped 19.4 per cent year-over-year. It is hard to predict whether this trend could continue into 2024.

"During times of recession, or when people are really pinching their every dollar, you tend to not see people travel," Barclay said. "But that hasn't been the case (right now.)"