Buyers who paused their search are returning, fuelled by optimism
A new report shows optimism in the Canadian real estate market, with 36% of prospective buyers ready to re-enter the market if the Bank of Canada signals further interest rate stability.
Over a quarter of buyers nationwide who paused their home search due to rising interest rates plan to resume this spring, according to a report by Royal LePage. For many, the central bank holding interest rates steady was enough to reignite their search.
“The study reveals that a significant portion of people — who wanted to upgrade their housing situation and had the capacity to do so but didn’t have the confidence — were waiting for a signal to return to the market,” said Royal LePage CEO Phil Soper.
Despite rates potentially being near their peak, the survey found 70% of buyers are still seeking five-year, fixed-rate mortgages, a trend Soper called "counterintuitive."
“You would think people would be inclined to take the short-term (fixed) or variable rate mortgage,” he said.
Edmonton realtor Beverley Hasinoff, with Liv Real Estate, confirmed this renewed activity.
"I have already seen a significant increase in the number of buyers resuming their searches," Hasinoff told the Edmonton Journal. She observed many properties selling quickly, with some even receiving multiple offers.
“I have already seen a significant increase in the number of buyers resuming their searches, some with multiple offers,” she added.
Tight supply is a factor. Rising borrowing costs have discouraged some sellers from listing, adding to the inventory shortage.
Read next: Luxury housing market makes a comeback
Hasinoff advised sellers who sat out last year or are now considering selling to "get their home ready for the market." However, she warned that buyers are price-sensitive, urging sellers to price accordingly.
Recent data from the Realtors Association of Edmonton revealed rising demand with a 10% week-over-week sales increase, while new listings dropped and prices dipped slightly. The average home price saw a moderate decline to $363,000, far lower than the Canadian average of $675,000.
“It’s just that people were freaked out over the last year by rapidly rising rates,” Soper said.
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
