Fear not, prepared homebuyer

Summer is almost over, by temperature and calendar, and the Bank of Canada again reduced interest rates in its latest announcement on Sept. 4.

It’s a natural period of transition, as we edge out of the warmer – and typically, in the context of real estate, slower months.

Most experts expected the BoC to introduce its third straight rate reduction on Sept. 4, helping to inspire more homebuying activity for those who are prepared, and giving those sitting on the sidelines the little nudge they might need.

More healthy territory

All of this is good news as we look ahead to the final few months of 2024 and into 2025.

“The fall market is usually a good early indicator for activity as we look ahead to early 2025, and we’re headed toward more healthy territory,” Christopher Alexander, president of ReMax Canada, says in the realty firm’s 2024 Fall Housing Market Outlook (see page 11). “With interest rates starting to ease, buyers are beginning to come off the sidelines.”

Atypically, perhaps, for this year compared to previous years, is that this period is also characterized by larger systemic challenges beyond market dynamics. Housing supply and affordability remain serious long-term challenges – so much so that the Building Industry and Land Development Association (BILD) is calling for urgent government action.

“The (July 2024 new home sales) numbers present a clear picture and signal the need for an urgent response from government,” says Justin Sherwood, senior vice-president of communications and stakeholder relations at BILD. “Changes in interest rates will not solve what is an ongoing structural problem, particularly evident in the GTA.”

Consumer confidence

Alexander concurs, for the resale market. “Ultimately, for the long-term health of Canada’s housing market, we need a national housing strategy developed in collaboration between all levels of government, that’s more strategic and visionary in how we can use existing lands and real estate to boost supply.

“Despite some consumer confidence starting to return to the market this season, the reality is Canadians are still grappling with some serious housing affordability challenges rooted in lack of supply,” he says. “Yes, borrowing is becoming less expensive, but this won’t make housing affordable in the long run. Markets ebb and flow, and as buyers re-enter the market and absorb inventory, we’ll see more upward pressure on price.”

Complex issues, indeed. But opportunities for new-home buyers remain, as other content in this issue explores.

For those prepared and ready to make their move, this window of opportunity may not be open indefinitely. Activity is picking up, and so too, likely in some markets, will purchase prices.