The Canadian real estate landscape has shifted gears, marking a departure from the rapid expansion seen across the housing sector in recent years. The once-feverish pace has simmered down, ushering in a phase of steadier conditions and a re-establishment of equilibrium in housing markets nationwide. However, within this transitional period, GTA (Greater Toronto Area) housing statistics have revealed intriguing dynamics.
As outlined in the 2024 RE/MAX Canadian Housing Market Outlook, the national average residential price is anticipated to see a marginal increase of 0.5%. Notably, a significant 61% of markets under review are projected to witness a year-over-year surge in unit sales. This signals a considerable shift from the challenging market landscape experienced earlier in 2022.
So, what’s behind this adjustment? Firstly, the Bank of Canada’s move to increase interest rates has resulted in higher mortgage rates, influencing buyer behaviour. Secondly, overarching uncertainty in both the housing market and the broader economic landscape has played a role. Additionally, many households have depleted their savings accrued during the pandemic era, thereby reducing their purchasing power due to inflation.
The Canadian real estate market is transitioning into a balanced state due to these nationwide developments. The RE/MAX outlook forecasts that 41% of regions will regain balance, with 28% of markets favouring sellers, 21% leaning toward buyers, and 4% experiencing mixed conditions.
Christopher Alexander, President of RE/MAX Canada, remarked, “It’s been a challenging year for Canadian homebuyers and sellers… but much like Canada’s housing market, Canadians have stayed resilient.”
While the talk of market equilibrium and stabilizing prices bodes well for potential homebuyers, what does it mean for sellers eyeing listings this year?
Why Current Conditions in the Canadian Real Estate Market Could Benefit Sellers
Understanding the difference between a balanced and a buyer’s market is pivotal:
- A balanced market aligns residential supply with demand, while a buyer’s market occurs when there’s an excess of homes compared to buyers.
- In a balanced market, buyers may wield more negotiation power, homes might take longer to sell, and initial price expectations may need adjustment.
Amid the expected easing of prices in 2024 and conditions favouring buyers, there are silver linings for sellers:
Firstly, the +0.5% national average projection might not reflect local realities. For instance, in the Edmonton market, home prices are anticipated to surge by 4% this year, while the Windsor housing market might see a 7% rise.
Additionally, as a seller transitioning to a new residence, entering a more balanced market avoids the stress of selling in a frenzied seller’s market.
However, a balanced market doesn’t mean selling at a significant discount. Sellers might consider several strategies to attract buyers:
- Collaborate with a real estate agent.
- Ensure the property is in top condition and inspected before listing.
- Enhance curb appeal by tidying up front and backyards.
- Declutter the house and potentially offer incentives like new appliances.
It’s crucial to note that despite the current market shift, housing demand persists. Anticipated interest rate decreases by the Bank of Canada in the coming year and rising immigration levels are likely to revive home buying, reinstating competition within the Canadian real estate market.
The Barnett Real Estate Team is here to help you navigate these unique market conditions and maximize your profit.
