Are we in a buyers’ market?

Interest rates have gone up REALLY fast, leaving many homeowners struggling to keep up and pushing potential buyers out of the market – an unfair situation, to say the least. Over the last six months, the demand for homes has decreased, prices have come down, and there’s a lot less competition out there for the few properties that are on the market. 

Do those signs point to a buyers’ market? I’ll be bold and say…yes. 

Read more: What’s the difference between a buyers’ market and a sellers’ market  

We're not in a sellers' market anymore.

The rate hikes have certainly done away with that. But is it a traditional buyers’ market? Typically, you’d see a ton of supply and fewer interested buyers, resulting in lower prices. But while prices are certainly down for the most part, and there aren’t as many buyers out there, there's one key trend that doesn’t fit: right now, there just aren’t that many listings out there.

Because values have dropped and there’s so much uncertainty floating around, sellers aren’t putting their homes on the market unless they have to. These are sellers who are motivated and open to negotiating. As a result, buyers are scoring the kinds of deals we haven’t seen in years.

The biggest downside to buying right now is obvious: even if you pick up a property at a hefty discount, the higher interest rate will inflate your monthly costs. But these interest rates are temporary. If you save on a property now, remember: you’ll only be paying higher rates for a limited time. And once they go back down, you’ll have a smaller loan – and greater savings over the course of your mortgage. Make sure you talk to a reputable mortgage broker about your options. Be wary about jumping into a 3-5 year fixed rate with your bank – they’re pushing borrowers into these products because they make a ton of money from them. 

So is this a good time to buy?

If you can afford the payments and are able to find something you like, then 150% YES. You could keep waiting for the bottom of the market (the folks who do this likely won’t ever buy). Prices could drop even more – nobody has a crystal ball. But it’s also possible that we’re already at the bottom. That’s something we will only know in hindsight, but there are a couple of things to consider: 

1. The Bank of Canada has made comments that the hikes may be coming to an end. I think once they offer up more clarity on what their plans are, buyer confidence will return and we’ll start reverting back to a more “normal” market. 

2. Let’s not forget that at the end of the day, we still face a housing supply issue in Toronto. With record immigration, demand will increase again. And more buyer competition means more price increases. 

Buyers with money to spend are in the driver's seat right now.

For the most part, you can go in with low offers and conditions. Your agent should do the due diligence needed to advise you on what to expect and how much room there is for negotiation. 

Want to talk about current opportunities in the market? I can help you find them – get in touch!