Analyst notes certain investor types are finding opportunity in a softer market
The Canadian detached housing market is witnessing a significant shift as experienced buyers and investors drive increased activity in key regions, particularly in the Greater Toronto Area (GTA), Greater Vancouver Area (GVA), and Fraser Valley. This development comes amid continued challenges for first-time buyers, who remain largely locked out of the country’s most expensive markets due to affordability constraints.
A recent RE/MAX survey of 83 communities across these regions revealed that 30% of the markets reported a rise in detached home sales during the first half of 2024, while nearly 40% saw an increase in home values. This trend, according to RE/MAX, signals a possible watershed moment as seasoned buyers and investors seize opportunities in a market where softer home values, combined with ongoing low inventory, create favourable conditions for property acquisitions.
Toronto leads rebound in sales momentum
The GTA’s detached housing market saw notable momentum, with over 34% of neighbourhoods in Toronto (the 416 area) experiencing either stable or growing sales activity. This figure outpaced other regions, including the 905 area, GVA, and Fraser Valley, reflecting a strong resurgence in buyer interest.
RE/MAX Canada president Christopher Alexander highlighted the dynamics driving this trend, noting that “while affordability remains the top obstacle for first-time homebuyers, more experienced buyers and investors are taking advantage of softer housing values, making their moves ahead of the Bank of Canada’s end to quantitative tightening.” He added that pent-up demand is significant, with an estimated 20,000 to 25,000 potential buyers in the GTA alone, waiting for the right conditions to re-enter the market.
Despite a recent decline in home sales compared to historical averages, the combination of new household formations, lifecycle events, immigration, and population growth continues to stoke underlying demand. Certain Toronto neighbourhoods, including Dufferin Grove, Little Portugal, and Forest Hill South, have shown particularly robust sales activity.
Vancouver and Fraser Valley drive price appreciation
In terms of price growth, the GVA and Fraser Valley lead the pack. Limited inventory levels have driven median price increases in 83.3% of Fraser Valley communities and 70.6% of Greater Vancouver neighbourhoods. Areas such as Squamish and Burnaby have seen significant double-digit price gains, with Squamish recording a 14.2% rise to a median price of $1,570,000.
The market strength extends beyond urban centres, with recreational and lifestyle-driven communities, such as Bowen Island and the Sunshine Coast, reporting healthy increases in detached home sales.
Shift in investor behaviour
Investment behaviour has also evolved, with some condo investors in the GTA’s east end shifting focus to detached homes due to negative cash flows from newly completed units, according to RE/MAX. Meanwhile, empty nesters and retirees in Halton Region are acquiring bungalows for future use, often renting them out in the interim.
The market for blue-chip neighbourhoods remains robust, with areas such as Rosedale and Leaside experiencing increased buying activity. Trade-up buyers, who are moving from semi-detached homes or townhomes to detached properties, are particularly active, taking advantage of relative price stability at the entry level and stepping into the detached market with less financial pressure than in previous years.
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