(Toronto) With two children under the age of six living in a two-bedroom, one-bathroom unit, Jacquelin Forsey and her husband have long known that it is only a matter of time before their family becomes too great for their beloved gite.
Long hours in this small space while Ms. Forsey was pregnant and time away from home during the COVID-19 pandemic, as well as a visit to neighbors who were selling their “beautiful” “perfectly sized” place, recently convinced the couple to start looking for a new place to settle.
“If there was a way to expand this place, we would never leave,” said Ms. Forsey, a doctoral student, of the home her family owns in Toronto’s Leslieville neighborhood.
” We like it. We love the neighborhood, we love our home, but we just can’t all be in this little house forever. »
The couple have spent the past few months scouring home-for-sale listings and made at least one offer, to no avail, but Ms Forsey has her fingers crossed that their luck turns this spring as economists and brokers predict the activity will return to the Canadian housing market.
The market has been sluggish since last year. Would-be buyers began to postpone plans to buy homes as the Bank of Canada aggressively raised interest rates eight times in a row.
The rapid succession of increases eroded purchasing power as borrowing costs soared and drove prices down, discouraging sellers from putting their properties up for sale.
While data from the Canadian Real Estate Association shows average prices have fallen 19% from their peak of $816,578 in February 2022, to $662,437 last month, and BMO Capital Markets Chief Economist predicts they will bottom out when they show a 20% to 25% pullback, real estate agents are seeing many potential buyers start making moves again.
“We had a flood of buyers in January, February and we’re still getting more and more, and we’ve started to see a lot of offers coming back and some fierce offers,” observed Michelle Gilbert, a Toronto-based Sage Real broker. Estate.
“We started getting calls from buyers who were just like, ‘I think I’m just going to adjust to what I want, but I don’t want to miss my chance.’ »
These customers are a mix of people who need to move for work or because their families are growing, or first-time home buyers eager to catch up with falling prices.
Many first time buyers find it harder to qualify for a mortgage, but still want to make a purchase. So they compensate by adjusting their expectations, Ms. Gilbert observed.
“Maybe they can’t get the square footage they thought they could get because they failed to qualify, but they still really want to get a good deal,” she said. .
In Vancouver, agent Tirajeh Mazaheri of Coldwell Banker Prestige Realty has also seen an upsurge in buyers.
A few weeks after the Bank of Canada signaled that further interest rate hikes were unlikely, it noted that properties had started to sell quickly again, after receiving several offers.
She spotted a $699,000 listed condo that got 11 offers and a $2.8 million listed home got five last month.
Others aren’t hitting the market yet, but are preparing to do so soon.
“Anyone who hasn’t gotten pre-approved yet is doing it now because people want to jump at the chance to buy something because they’re worried the prices will start going way too high again,” Ms. Mazaheri.
Despite this enthusiasm, she does not see the market returning to the blistering pace of 2021, largely due to the lack of available properties.
February new listings totaled 51,366, down 26% from the same month a year earlier, the Canadian Real Estate Association (CREA) recently revealed. On a seasonally adjusted basis, they numbered 57,535, down nearly 8% from January.
If a sharp decline in new listings continues alongside tighter supply and demand conditions, price moderation will materialize over the coming months, said RBC Economics Deputy Chief Economist Robert Hogue, in a recent report.
If these conditions hold, he expects prices to bottom out sometime in the summer or soon thereafter.
Sellers will be closely watching the direction in which prices move.
“A lot of sellers are starting to want to sign up, but most of them, I notice, are a bit cautious,” Mazaheri pointed out.
“They’re also noticing the changing market and they want to get the best price for their property, so maybe they’re thinking about waiting until spring or summer.” »
For Ms Forsey, there is no rush to buy a house, but she admits the pause in interest rates gives her family some confidence in their decision to look for a new place.
While her engineer husband has created spreadsheets to assess what they can afford, their amortization and the effects of potential interest rates, she said they’ve come to terms with the fact “we can’t time the market and we just have to do our best, make decisions that we’re comfortable with, and hope it works out. »
“We can stay here until the right opportunity arises, and we don’t have to rush or make any rash decisions,” she said.
“And if that doesn’t work for us for a long time, that’s okay because what we have is pretty awesome. »