Why Canadian Homebuyers Should Get off the Sidelines Now

From more choice and less competition, to friendlier financing conditions and prices, here are five reasons experts say Canadian house hunters should buy now.

By Josh Sherman | 4 minute read

Would-be homebuyers remain timid despite falling interest rates, and that could cost them in the long run, experts warn.

There’s an old cliché that the best time to invest in real estate was yesterday — but try telling that to today’s would-be homebuyers.

Declining interest rates have yet to translate to a surge in Canadian home sales.

While the verdict is still out on what impact the Bank of Canada’s third consecutive rate cut will have on the housing market this fall, home-sales activity actually retreated after the central bank’s previous cut, in July.

So it seems some Canadians are waiting for interest rates to fall even more. Others, meanwhile, may be hoping for house prices to collapse.

Whatever’s causing prospective homebuyers to stand on the sidelines, experts say there’s good reason to stop delaying and begin house hunting today. In fact, there are five:

1. Homebuyers can call the shots (with conditions).
 

For years, house hunters in expensive and in-demand markets, such as Toronto and Vancouver, were waiving conditions — including home inspections — on their offers. In doing so, they hoped to have a more competitive bid, but they were sacrificing security. However, today, with much less competition in many local markets, homebuyers can have the piece of mind that comes with these conditional offers. “Now you can come in with a home inspection. Now you can come in with a finance clause. Two years ago, you would’ve lost every single time with those conditions,” says Wahi Partner Realtor Grant Allardyce.

2. Homebuyers can afford to be pickier. 

Beggars can’t be choosers — but Canadian homebuyers can. With sales activity muted, listings are piling up, and that presents buyers with the most choice they’ve had in some time. In fact, the number of new listings for homes available for purchase soared to a 10-month high in July, according to the latest available data from CREA. As many of these new listings go unsold, overall inventory accumulates. In some markets, such as Toronto and Vancouver, the levels of active listings have reached multi-year highs. “Properties are taking longer to sell,” Allardyce explains.

3. Prices likely won’t go a lot lower.   

Don’t hold your breath for the housing market to crash. In its latest quarterly forecast, the Canadian Real Estate Association anticipates the national average price of a home will reach $694,393 this year, an increase of 2.5%. Next year, CREA forecasts the average price will hit $729,319, up an additional 5%.

CREA isn’t the only market-watcher betting on continued price increases. More than one of Canada’s biggest banks has released a forecast predicting higher prices in 2025. Meanwhile, Royal LePage is forecasting the aggregate price of a home to climb 9% in the year’s final quarter compared to the same time in 2023.

“As long as the levels of immigration are kept high and the lack of housing supply remains low, I think we’ll be back into a seller’s market, I would say, not this year, but certainly by mid-spring market next year,” Allardyce tells Wahi.

4. Waiting could cost homebuyers more. 

“There is little sense in trying to wait things out,” Bekim Merdita, executive vice president of Rocket Mortgage Canada, tells Wahi. “While rates may go down more, and we all hope they will, it could also mean that lower rates drive higher home prices.”

Allardyce agrees. He says there’s a “sweet spot” to buy after rate reductions but before homebuyers flock back to the market, driving prices up. 

While variable rates, which respond more immediately to changes to the BoC’s overnight rate, may continue to decline following subsequent cuts, fixed rates are based on the bond market. Representing the lion’s share of all mortgage originations, fixed rates — which are lower than variable rates today — have already priced in a future reduction from the central bank due to the bond market’s predictions.

As of Sept. 6, discounted five-year fixed rates have sunk to 4.49%, the lowest level since October 2020. The savings some homebuyers may be waiting for are already here.

5. Qualifying for a mortgage probably won’t get any easier this year.  

In Allardyce’s experience, it doesn’t get any easier to qualify for a mortgage from a big bank as the year goes on. In fact, he’s found the opposite to be true. “If you’re in Q4 and the banks have already made their budgets and you’re a borderline client on affordability, there’s more of a chance they’re going to deny your application,” Allardyce explains. “If it’s Q1 and they’re trying to build their profits, build their budgets then they might be more inclined to approve your application.”