Canadian real estate market is cooling – is this an opportunity for buyers?
Recent reports from the Canadian Real Estate Association (CREA) show that home sales dropped from January 2019 to February 2019, with the sales-to-new-listings ratio (SNLR)-- a figure that can be used to determine overall demand—declining to 46.2 percent in February 2019, down 14.91 percent from January of this year. Even with this cooling, any SNLR figure between 40 percent and 60 percent is considered a balanced market—so it’s not time to overreact.
The national markets that saw the biggest slowdown in sales were in the Greater Vancouver and Greater Toronto areas, while the markets in Ottawa, Quebec City, and Montreal saw some modest increases. So while the market is cooling in some areas, there’s still activity in other markets, which means that there’s still a lot of opportunity right now for those who are willing to be patient.
Experts believe that there are a couple primary reasons for the cooldown. First, the foreign buyers’ taxes that were implemented in BC and ON as a way to calm down markets in those areas may be contributing to the change. The mortgage stress test have also signifcantly impacted the behavior of buyers.
However, there are reasons for optimism. With the advent of the government’s First-Time Home Buyers Initiative, new buyers could enter the market and realize their dreams of owning a home. Making the market more accessible to new buyers could spur more activity in the markets and see a return to a more robust level of activity.
One of the upsides to a cooling market is that buyers generally have more of an opportunity to get the homes they want, with fewer bidding wars. Buyers have more power, especially when asking the right questions and working with an experienced realtor who knows the market. While the market is slowing down slightly, it might be the ideal time for certain buyers to make a move.
Interest Rates still remain cheap!
Overall, the cooling market is not a cause for pessimism. As Better Dwelling recently noted in an article about the CREA reports, the real estate markets are not making significant moves in any direction, and it seems as if larger, more macro-level considerations will determine where the market goes in the future.