3 Positive Things About the Current Real Estate Market in Canada
News about the economy and real estate market can be stressful. Inflation, interest rates, the housing crisis… yikes. If you’re trying to buy or sell a home, all this negative, rapid-fire information can feel overwhelming—and it’s easy to feel like you shouldn’t get into the market at all.
But if your goals include buying or selling a home in the near future, you should know that there are significant plusses to doing it now. Read on for three notable positives about the current real estate market.
1. Listing now means less competition.
A major problem for buyers in the housing market right now is low inventory.
What’s inventory? It’s the number of homes available for sale on the market. It’s usually measured in months of supply, which equals the number of months it would take to sell all available homes at the current rate of sale. According to CREA, the long-term average for this measurement is about five months. At the end of June, “there were 3.1 months of inventory on a national basis... unchanged from the end of May and down more than a full month from the most recent peak at the end of January” (“Canadian Home Sales Showing Signs of Stabilization in June,” 14 July 2023).
For buyers, low inventory can mean high competition, high prices, and a struggle to find a home that suits their needs. But for sellers, low inventory is beneficial. If you decide to list your home now, you’ll have more buyers vying to purchase your property than if you wait. And with more buyer competition, you’re more likely to get full-price offers and sell on your timeline. In a low-inventory market, sellers are in control—so get listing!
2. Buying now has multiple benefits (yes, really!)
Even though low inventory makes house hunting more difficult for buyers, buying a home now still has more benefits than trying to wait out tough conditions.
For one, there’s no telling how long certain market conditions will last, and overall, real estate prices rise in the long term. There’s no market crash on the horizon right now, so waiting for interest rates to go down or prices to significantly drop could leave you facing even higher home values in the future.
Instead, it’s smarter to get into a home now and start building equity.
What’s equity? It’s the difference between the value of your home and the amount you owe on your mortgage. It’s gained as you make payments on your loan at the same time the value of your property rises, and it represents the amount you’ll get back when you eventually sell. The more equity, the better—and investing in your own home now means you will benefit from rising prices in the future instead of struggling with them.
3. Strong home prices are good news for the economy
Plunging home prices are one classic sign of an economic recession—one that, so far, we’re avoiding. Canada has dodged the expected recession this year thanks to the strength of the labour market and consumer spending, and strong home prices are an indicator that the economy is still headed in the right direction. After declines early in the year, home prices are already rebounding in some regions—and most experts are predicting an even bigger boost in 2024.
Though declining home prices would be a welcome break for many buyers, the overall implications of rapidly falling home prices aren’t good for anyone. The recession that usually accompanies dropping home values includes widespread job loss, wage growth shrinkage, and home foreclosures. The fact that home values are strong is a good sign that we’re likely to avoid these problems in the near future.
If affordability is a concern for you as it is for many buyers, reach out to your real estate agent to ask about your options. If you’re a first-time homebuyer, look into the First-Time Home Buyer Incentive offered by the federal government. It’s a contribution to your downpayment fund equal to 5% to 10% of the home’s purchase price, and you can find more information about it on the National Housing Strategy website.
Many provinces and cities also provide grants, tax credits, and incentives for first-time home buyers. Check out the National Bank’s list of provincial incentives, or contact your real estate agent or trusted lender for more information.