In the last few years, home buyers have had the upper hand in the Canadian housing market, but this is expected to change this year. What is a balanced market? Let's explore recent history, and what this recent change means for you. At the height of the market during the pandemic, many Canadian cities experienced skyrocketing home prices.
Canada's housing industry has long been a hotbed of activity for Canadian buyers and sellers. But now that the Bank of Canada is on an inflation-busting crusade of raising interest rates, the country's housing market is beginning to cool down. Many regions are expected to (or have already) moved toward balanced market conditions, but what does that mean?
Every real estate market has its own unique characteristics and trends that may or may not benefit homebuyers or sellers. A balanced market consists of supply meeting demand - the number of homes for sale is equal to the amount of people trying to purchase properties. There are three types of real estate markets in Canada - Buyers' Market, Sellers's Market and Consumers' Market.
How can you determine if a market has returned to balance? There are a few metrics and developments that participants should consider monitoring:
- Stable residential property prices.
Homes are sold at or near the asking price.
The number of sales matches the five- or ten-year averages (or between 45 and 90 days).
Transactions occur within a reasonable time span that is neither too long nor too fast.
For nearly a year now, the national housing sector has been inching toward balanced conditions.
Economic trends: inflation, unemployment, and the GDP growth rates
( RE/MAX Canada, 2023)
Here are some of the regional markets that are anticipated to become balanced this year:
Greater Toronto Area (GTA), Ontario
The RE/MAX outlook suggests the national average price is projected to tumble 3.3 per cent, while sales are forecast to rise in more than one-third (34 per cent) of housing markets analyzed. Nearly half of Canadians are worried that rate hikes will affect their ability to buy or sell a home in 2023.