The anticipated real estate recovery is beginning to take shape in good news for both sellers and buyers, and the Bank of Canada (BoC)) has recently injected additional optimism with its first interest rate cut in six months.
We’re seeing a largely two-speed recovery in which markets with affordability challenges and strong inventory of homes for sale – mostly, Toronto and Vancouver – are taking a little longer to gain momentum.
The latest market data shows value growth in the Prairies, Quebec and most of Atlantic Canada, while buyers in Ontario and British Columbia are either struggling or remain reluctant to meet sellers’ price expectations.
In its latest report, the Royal Bank of Canada (RBC) says it expects this two-speed recovery to continue into 2026 when the normal dynamics of buyer demand should return.
The MLS Home Price Index, which is a market indicator for home prices, found that a strong supply of homes for sale was pushing down prices in Toronto, Vancouver, Calgary, Edmonton, Fraser Valley and Hamilton.
However, the number of deals being struck is on the rise in three of those cities – Vancouver, Edmonton and Calgary – plus Montreal.
Here are five potential approaches for buyers in the current climate:
Buy the dip – When a market is just starting to recover, inventory levels are often still reasonable but competition is low. As a buyer, you’ve had time on your side. However, now you need to start to move quickly.
Proven strategy – Identify homes that have been on the market more than six weeks. Sellers may be feeling the pressure. The number of mortgage defaults is still low, so low-balling your bid may not work. Think about long-term value when making an offer rather than trying to squeeze the seller on price.
Avoid bidding wars – By entering the market now, you will minimise the likelihood of being caught up in a bidding war, and this should increase the power of your negotiating position.
Prioritise location – The best value-buying will be achieved by focusing on location. Homes in good school districts with proximity to transport and employment hubs will always deliver the best long-term capital gains.
Cash questions – Always validate your financial position before beginning your search for a property. A pre-approved mortgage is a great start, but you need to ensure you have the cash reserves to pay for closing costs, legal and other fees.