The dial is starting to move as more Canadians enter the real estate market. Sales activity was 1.9% higher for September compared with August, which is the last month of the traditionally popular selling season.
It’s the third successive month that an increase in transactions has been recorded by the Canadian Real Estate Association (CREA).
Sales activity is at its highest point since mid-2023, signalling that the recent interest rate reductions by the Bank of Canada (BoC) are starting to turn the tide.
A CREA spokesman says that while the market is still lagging behind historical averages, the association expects volume to pick up.
It takes a full 1% cut in interest rates to change market sentiment. The BoC last month delivered another 0.5% trim, taking down the base rate by 1.25% in a matter of a few weeks. Our policy rate is now 3.75%.
Statistics Canada says inflation is now just 1.6%, one of the lowest figures among western economies. But while this provides potential for further rate cuts, the BoC has said it is concerned more cuts could spark another property price breakout.
CREA says the speed of the rate cuts, and the potential for further reductions, could see buyers and sellers watching the financial markets over the winter period and set Canada up for a boom spring market.
It forecasts sales will finish 5.2% higher than last year at 468,909 transactions. Next year, we will be close to 500,00 transactions with Ontario (+9.9%), British Columbia (+8.5%) and Saskatchewan (+6%) leading the way.
Values will rise, too. We should see them 0.9% higher this year versus 2023. The average price will likely finish at $683,200.
Next year, it could climb a further 4.4% to $713,375.
Savvy upgraders, investors and first homebuyers will be focusing on trying to transact before a full market rebound. Here’s why:
Less Competition: Before the spike in market activity, you’ll find less competition from other buyers or sellers. This gives you more negotiating power.
Beat The Crush: For sellers, if you go to market in spring, you’ll be one of hundreds of properties. Buyers will play you off against other sellers. If you’re buying next spring, you’ll be wary of paying too much but mindful someone might beat you to the deal.
More Choice: Early in the cycle, there’s usually a wider selection of properties available. As the boom intensifies, desirable properties get snapped up quickly.
Rising Values: Getting in early allows you to potentially buy at a lower price and sell at a higher price if you can delay that transaction even by a few weeks.