Housing in Canada can fluctuate wildly price wise. From rock bottom to a housing boom, it is always ever changing and never stagnant. This keeps real estate agents, buyers, and sellers constantly on their toes and this market must be followed religiously to get the best price on any house for sale. Sellers must always be aware also of the best times to sell. While still a relatively more moderate market than in other countries, Canadian houses for sale have risen in price, whereas the houses for sale in some other countries have dropped. Once a haven for rather affordable housing, the increased strength of the Canadian dollar has resulted in less purchasing power by those outside Canada.
Houses for sale in Canada are generally higher in price in the big cities
The higher housing prices appear on the west coast of Canada, generally in the Vancouver and British Columbia territories and provinces. The colder the climate, the less one will pay for a house in Canada, as Manitoba and Prince Edward Island, some of the chilliest territories exhibit the lowest prices in housing. Being too remote from major markets also has an impact on prices and parts of Nova Scotia can be extremely rural and accessibility to goods and services keep the houses for sale at a reasonable price. As of April 2020, the average price of a Canadian house for sale was $488,000.00 CAD, which brings the average market about on track with average prices in the USA, in fact a bit higher now in 2021.
The reliance on real estate in Canada as a market is significant
Real estate sales in Canada make up about 12% of the GDP (Gross Domestic Product). There are many reasons why it is difficult to find an affordable home for sale now in Canada. First off, supply and demand are no longer equal. An influx of new residents over a decade ago scooped up many of the prime properties. In addition, low APR (Annual Percentage Rates) then and now exist in Canada, still enticing individuals into the Canadian territories.
So how can an individual find a house for sale in Canada now?
The best method is to go through a real estate listing agency such as Zillow or Realtor.ca. Both are affiliated with the MLS (Multiple Listing Service) in Canada and have access to listings all over the Canadian landscape. Individuals can search via location, amenities, price, or all the above. MLS realtors are all licensed and have access to data that is not publicly available in Canada such as property taxes, or the house history which can be important to those seeking specific information on a home before they commit to purchase.
The MLS is extremely important as generally there are approximately 275,000 listings per day on average of houses for sale in Canada. It can streamline the search process for many looking to buy a home in Canada. Sellers can also do well to list their home with an MLS realtor as the exposure to prospective buyers is high, and the MLS services all can assist buyers in obtaining mortgages or prequalification. Sellers benefit when a buyer is already pre-qualified, as the buyer has been vetted through the MLS service.
Why is the real estate market booming despite the rising prices and low inventory?
It is a demographic shift apparently. While less non-residents were buying into houses in Canada, the millennials who found themselves working from home many times in 2020 and 2021, were primed to move out of the cities and into less expensive housing in the outer lying territories and provinces. The APR also did not rise and although houses for sale were now more expensive, the steadily low APR rates still generate a lot of interest from the younger generations, who may have been fighting their bills in the larger cities. A general increase in first time home buyers occurred in August 2020.
This has all led to what is called “bidding wars” where many buyers would put in an offer on a house for sale, only to find out that they were outbid by others also interested in the same property. To effectively purchase a home now in Canada, individuals must put an offer in early, and even if a bidding war does not occur, they should have enough capital as a down payment to counter other offers, or they will indeed lose the house of their choice.
Many Canadians that are seeking a house for sale also lose out now as the jobs they have can be cutting payroll or cutting their work hours, leaving them with a drop in income. Most mortgage and loan brokers will not look favourably on this scenario. It can be best for some individuals to wait until their income stabilizes again, as being turned down by mortgage and loan companies, or continually losing during bidding wars can be disheartening.
House seekers in Canada can be seeking a house for sale to avoid rent
As mentioned before though, if an income decrease has occurred it is better to perhaps avoid seeking a house for sale. If paying rent in a particular location is a problem, it might be wiser to seek a cheaper rental property and wait on buying a house. The markets will even itself out, as it always does, and a hasty decision with little cash flow to back it can have serious consequences.
Although houses for sale are few and far between that will probably change in the next decade or so and young home buyers might very well be better off waiting until their finances and the market both stabilize. Buying a house is a serious commitment and much thought must be given to the process. When in doubt, consult a realtor who will guide anyone interested in any house for sale in a positive direction. Haste many times makes waste when purchasing a home.