Canadians hope patience will work as home prices fall

Andrew Hamilton and his wife said goodbye to their house in Toronto’s Junction neighborhood approximately a year and a half ago when the costs of homes were rising, but finding a new home proved tricky. With no available houses meeting their requirements or price range, the couple chose to temporarily use the equity they obtained from selling their home on a rental property in Etobicoke. But still, they have one eye on the market and hope the current cool-down will intensify enough for them to find another house. Hamilton said that he thinks patience will work.

His sentiments are standard throughout the sector, especially with prospective purchasers, who have lamented the rapid pace of Canada’s real estate market in recent years.

But several people feel that 2023 might be the year their luck changes. The costs have steadily reduced since last spring, bidding wars are rare, and economists expect an end to the Bank of Canada’s quick succession of increases in interest rates that have added hundreds, if not thousands, of dollars to the mortgage payments which are done every month.

Despina Zanganas, a realtor from Toronto with PSR Brokerage, said that it just takes time. She expects purchasers who delayed buying will feel more comfortable this year as the varied housing market sinks in. She said that they’re getting accustomed to it.

She added that people mentioned that they need not go into bidding wars and put in unconditional offers. Now they have the opportunity to put in conditional offers, so that provides a bit more confidence to many people.

But at least one significant variation could be on the horizon.

Economists have foreseen that 2023 will be the year Canada sets foot in another recession, even though it is unclear how severe the downturn will be.

Douglas Porter notices a 25 to 30% chance that Canada’s economy gets a soft landing when inflation and increase in interest rates gently ends, thereby helping stop a recession. Conversely, there is a 50% chance of a slight downturn and a 20 to 25% opportunity of “something very severe.”

Last month, the Canadian Real Estate Association said that the real national average house cost was $632,802 in November, which is a 12% decrease from the same month in the previous year.

- Published By Team Timeswire

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