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There are a lot of factors that go in to determining whether Canada is in a buyer’s market. While interest rates have gone up, there are some things that contribute to it being a good time to buy. Many Canadians know that home ownership is a great long-term investment. However, they also acknowledge the higher interest rates may have a negative effect on their ability to buy or sell a home.
It’s speculated that the economic and market conditions will improve in the second half of 2023. Experts think this will change the landscape of the housing market and what kind of market it is. Despite challenging times economically, buyers are able to benefit from the economic conditions. Home ownership is still considered a solid investment and it’s believed that all markets are headed towards balanced conditions as opposed to highs and lows. The price increases that were being seen with homes at the beginning of 2022 are now gone. The demand is much less, putting the real estate industry into a buying market.
Spring is the busiest time for buying and selling homes to senior economists suggest that this will be the time to really see what is happening in Canada. This is also the time that the central bank hits a peak of the tightening cycle. There’s going to be a lot of listings this spring, likely with big price tags. However, when the Bank of Canada is at the top of the tightening cycle, this will cut rates. Right now, it’s a buyer’s market in many areas of the Greater Toronto areas. The ratio between sales and new listings are sliding as the housing market corrects itself.
An RBC economist, Robert Hogue recently stated in a report that while demand-supply conditions are looking balanced throughout Canada, it’s not balanced in expensive real estate markets in Ontario and British Columbia. Areas like Toronto, Victoria, London, and Vancouver have a ratio of sales to listings at around 0.40. This is below the threshold where it would usually cause a buyer’s market situation. Buyers will succeed in reversing the big money prices happening in Ontario and BC ,eliminating the unrealistic price gains that have existed for the past few years.
A buyers market would have to mean a fall in real estate prices. Real estate experts have warned that housing prices would drop up to 12 percent in the GTA in 2023. This is due to the massive highs in real estate that happened in Ontario and BC. Here are some examples from the MLS Home Price Index that happened at the beginning of 2023.
As the Bank of Canada hiked up interest rates, it caused the average home price with any type of property in the GTA to fall by around 19 percent. The slowing pace of price declines in the last few months is a sign that the market downturn has more or less run its course. The high interest rates can cause problems for those looking to get in on a home.
The central bank has made it clear that it’s closely studying inflation as well as employment data as time moves on. They may be close to ending the rate hikes with this in mind. It’s believed that interest rates will be high for the rest of the year at least. This may potentially hold back buyers even if houses are greatly reduced.
With all the information gathered, it’s believed that we are in a buyer’s market. It’s important to get pre-approved for a mortgage so you know what home will fit into your budget. Work with a real estate agent you trust who can find you the best mortgage broker and get you the best price on your home. There’s going to be plenty of real estate available to you so buyers can look at the full range of property types.
Yes, housing prices have already fallen by 15% since the big peak in 2022. There’s a forecast that there will be a further decrease of prices by 12% over 2023. So yes, the prices are definitely falling even more than they were predicted to.
Yes, there is a forecast that Canadians will see a 25% Decline in home prices in 2023. A recent report by Desjardins states that the Canadian housing market will see a sharp correction in 2023 from the prices that were seen in 2022. Home prices are predicted to drop by 20% in Quebec but even more in Ontario, at 25%
There doesn’t seem to be indications that the housing market will crash at this point. Experts don’t believe that this is going to happen as Canadians are still buying homes. This is balancing out the market.
