As we move
into a new month, the Ontario real estate market is shifting in unexpected
ways. While September showed only a slight 0.12% increase in overall
transactions, a number of cities saw significant declines. For example,
Pickering's transactions dropped by 28%, North Bay saw an 18% dip, and
Kitchener faced a 17% decrease. However, a major trend emerged—new listings
surged by an impressive 38.29%, led by Toronto's incredible 94% jump.
What's
surprising is that despite lower transaction volumes, prices are on the rise
across many cities. Waterloo, for instance, saw prices climb by 23%, with
Toronto close behind at a 14% increase. This combination of fewer sales but
rising prices suggests some big changes are on the horizon.
According to
Garry Bhaura, Broker of Record at RE/MAX President Realty, Brokerage, “What's
interesting is that listings and prices usually follow the same path, but right
now they're diverging. This could be a sign that Ontario is preparing for a
wave of buyer interest.”
So, what's
driving these shifts in the Ontario housing market? Let's break down the key
factors.
1.
Falling Interest Rates: Creating Opportunity for Homebuyers
Interest
rates have been on a downward trend. At the beginning of 2024, Canada’s policy
rate was 5.00%, but it has since dropped to 4.25%, with the possibility of
falling below 4% by the end of the year or early 2025. This decline is closely
linked to reduced inflation, which has fallen from 2.8% at the start of the
year to a current low of 2%, the lowest level since March 2021. This trend has
influenced the Bank of Canada’s decisions on rate cuts.
Lower
interest rates reduce borrowing costs, making mortgages more affordable for
potential homebuyers. This can lead to increased demand as buyers seize the
chance to secure lower rates. If you've been on the fence about purchasing a
home in Ontario, now might be the ideal time to take the plunge.
2. Rate
Wars Among Canadian Banks: How to Lock in Low Mortgage Rates
Canada is
currently witnessing a “rate war” among major banks, initiated when CIBC
dropped its insured 5-year mortgage rate to 3.99%. This sparked a wave of
competitive rate reductions across the banking industry. TD Bank, for example,
is now offering fixed 5-year mortgage rates as low as 4.74%.
With policy
rates potentially declining further, mortgage rates may also continue to drop.
For homebuyers, this presents an incredible opportunity to lock in these
competitive mortgage rates before they start rising again. The best mortgage
rates won’t last forever, so it’s essential to act quickly if you want to
secure an affordable loan.
3.
Upcoming Mortgage Reforms: What Homebuyers Need to Know
Big changes
are coming to the Canadian mortgage market. On September 16, 2024, the
Department of Finance announced reforms set to take effect on December 15,
2024. The insured mortgage cap will be raised from $1 million to $1.5 million,
and 30-year amortization options will become available for first-time
homebuyers and new-build property purchases.
These
reforms aim to make homeownership more accessible, particularly in high-cost
markets like Toronto and the GTA. By increasing the mortgage cap and extending
amortization periods, more Canadians will qualify for larger loans with lower
down payments. This is likely to boost demand, making it crucial for
prospective buyers to get ahead of the crowd.
Why
Winter 2024 Could Be a Hot Market for Buyers
As winter
approaches, the Ontario real estate market is set to face unique conditions.
This time of year typically sees fewer listings, while prices can peak due to
low inventory. With anticipated rate reductions and mortgage reforms taking
effect, there is a real possibility of a buyer surge that could drive
competition.
Sukh Bhaura Career/Business Development
Director at RE/MAX President Realty, advises, “Now is the time for homebuyers
to make a move, as waiting could mean missing out. The current market
conditions are creating the ideal opportunity to find the perfect home.”
The
Bottom Line: Act Now or Miss Out
Ontario’s
real estate market is undergoing significant changes that could benefit buyers.
With falling interest rates, competitive mortgage rate wars, and upcoming
reforms, the stage is set for increased buyer activity. Don’t miss out on this
rare window of opportunity—now is the time to secure your dream home.
Stay updated
on the latest market trends, and be ready to make your move. As winter
approaches, savvy buyers will need to act fast to take advantage of these ideal
conditions.
