Recent months have seen a mixed picture at best for Canada’s regional housing markets, with home prices sliding across many cities and sales remaining sluggish despite a mild uptick in some regions.
Still, that slight jump in activity begs the question of which buyer types are finding opportunity in the current housing market even as others wait out for even lower prices and rates down the line.
Kalson Jang (pictured top), a Toronto-based mortgage agent with Premiere Mortgage, told Canadian Mortgage Professional that while some buyer cohorts – notably, investors – were still sitting on the sidelines, others including first-time homebuyers and upsizers were suddenly enjoying a better outlook and more choice.
“Maybe they started off as a couple in a condo and now they have one child on the way, or maybe even a baby who is becoming a toddler,” he said. “Maybe they have another baby on the way, and now have a family of four.
“They definitely have to move out of the condo so it gives them a nice opportunity, even though the condo market’s down. They’re still able to buy a house.”
Buyers grapple with changing housing outlook
Plunging prices and lack of demand in Toronto’s condo market mean few sellers are likely to make a profit on those property types if they sell.
But buyers who are in a position to purchase a larger property because of price drops across the market are also sometimes comforted by the fact that they’re paying less for their new home, Jang said, than they might have earlier in the year.
First-time buyers, meanwhile, have benefited from lower prices in the condo market – and lower interest rates after the recent September cut by the Bank of Canada – to make their move.
Much has been made of the so-called “dog crate” condos sitting unsold in the city, with those properties largely built for rental purposes before demand nosedived. Few buyers are willing to take a gamble on those properties.
But other, larger condo types are attractive to buyers in the city, Jang said, particularly those who are purchasing for the first time.
“Even if they’re making pretty good money, they weren’t able to actually buy anything of decent value when condo prices were so high before,” he said. “Now they’re able to buy condos, let’s just say for $500,000. Before, that didn’t get you much. But now, that gets you something quite nice.”
Toronto market far from a big rebound
That’s not to say things are looking up if you’re a seller in Toronto’s housing market. Condo prices are expected to continue slipping in the months ahead, particularly with a flood of new inventory still scheduled to hit the market.
And some analysts believe borrowing conditions still need to improve before more buyers will be coaxed back into the market.
“Two more 25-basis-point interest rate cuts by the Bank of Canada would see monthly mortgage payments move more in line with homebuyers’ average incomes,” Toronto Regional Real Estate Board (TRREB) chief information officer Jason Mercer said in remarks accompanying the board’s latest release.
The good news is that those reductions appear to be on the way, although it’s not clear whether they’ll arrive in the central bank’s last two decisions of 2025.
For now, Jang said buyers who need to move – for work, family, or other reasons – are finding a market that’s much better suited to their goals than before.
“Buyers need to remember to take a longer-term approach. You’re not buying a house like it’s a stock – you’re buying a home to live in and a home to build your life,” he said.
“So if you keep that long-term perspective, you’re going to gain in the long term anyway. You just need to make sure you buy something that fits your family’s needs.”
CMP
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