After a period of uncertainty, Canada’s housing market is showing signs of life. The steady decline in interest rates has reignited interest among homebuyers, leading to a modest increase in sales transactions for the second consecutive month. While the market is still below pre-pandemic levels, experts predict continued growth as the Bank of Canada implements further rate cuts. The next Bank of Canada interest rate announcement is scheduled for October 23rd, with a predicted rate drop of another 0.50% (fingers crossed).

A Surge in Home Resales

The number of homes resold in Canada has seen a significant uptick since July. Sellers, anticipating increased demand in the fall, have listed more properties than in any three-month period in over two years. This surge in supply has helped to rebuild inventories across the country, bringing them back to pre-pandemic levels. However, the increase in supply has been more pronounced in Ontario, particularly in Toronto, due to a rise in new condo completions.

A Rebalanced Market

The growing inventory has led to a more balanced market, giving buyers more bargaining power. As a result, property values have stabilized, with the national composite MLS Home Price Index remaining relatively unchanged since spring. While there have been slight fluctuations in certain regions, the overall trend has been towards price stability.

Regional Variations

While the national market is showing signs of recovery, there are regional variations. In Vancouver, for example, the sales-to-new listings ratio has decreased, indicating a buyer’s market. Prices in this region have also seen a slight decline. On the other hand, markets in the Prairies, Quebec, and parts of Atlantic Canada continue to experience modest price increases due to low inventories and strong demand.

Outlook for the Future

As interest rates continue to fall, experts predict that more homebuyers will enter the market. However, affordability challenges and deteriorating labor market conditions may limit the extent of this growth. While demand is expected to increase, constrained buyer budgets and growing inventories are likely to keep price gains in check.

Overall, the Canadian housing market is slowly but steadily recovering. While there are challenges ahead, the combination of declining interest rates and increased inventory is creating a more balanced market. As the economy continues to evolve, it will be interesting to see how the housing market responds.

 

While you can time buying and selling to meet seasonal behaviours, you cant necessarily time mortgage refinancing, as this follows a timeline based on your original term and maturity date. With rates on the decline, increased resale activity and modest price growth –  all homeowners will benefit, even if they simply need to refinance or pull out equity from their home.

Where we truly excel as a tenured mortgage brokerage is by helping empower borrowers with the information and resources they need to make informed decisions about their home financing. We believe in educating first and discussing products 2nd.  Call us today for a free consultation for your upcoming mortgage maturity or home purchase plans.