Spring has arrived in Canada, and the country’s real estate markets are showing mixed trends as we head into April and what’s historically been the industry’s busiest time of the year. 

The past year’s aggressive rate hike campaign by the Bank of Canada has resulted in a sluggish start to 2023 as prospective buyers put their plans on hold. However, many markets are showing signs of life, with the central bank indicating its plan to hold key interest rates. While some areas seem to be finding balance, low inventory is leading to fierce competition in others. 

To better understand the current landscape, Real Estate Magazine connected with industry leaders from across the country to gain insights and get their predictions for the coming months.

Anthony Brown

Halifax, N.S. 

Associate broker, Royal LePage Atlantic

The real estate market in the Greater Halifax Area is a great example of a fundamental microeconomic imbalance in supply and demand; with 69 per cent of the available residential inventory of 2021 but more than double the inventory of 2022, we find ourselves in a strong seller’s market that has a striking resemblance to the insanity that was last spring. 

Local buyer activity, mixed with continued demand from out of province buyers, continues to absorb the lack of available inventory at a strong pace, with a list-to-sale ratio of 106.8 per cent, causing market appreciation to stay between 11 per cent and 12 per cent for the trailing year.

The Spring of 2022 saw the strongest seller’s market the Greater Halifax Area has experienced in the modern-day MLS times, with months of inventory (MOI) creeping below 0.4. 

Currently, we are sitting at 1.28 MOI, still a strong seller’s market but a more manageable market for buyers to navigate. I predict the inventory shortage will show no remorse for the current buyer pool, and demand on the buying side will continue to expand if the Bank of Canada (BoC) holds the overnight rate steady. 

The Greater Halifax Area market is combustible in its current state, and with a few more flat announcements from the central bank, we very well may see a repeat of last spring, to the joy of sellers and the dismay of prospective buyers.  

Matt Richling

Ottawa 

New Pureveyors, Re/Max Hallmark Realty Group Ltd. 

In Ottawa, we are seeing a balance happening in the buyers’ minds while consumer confidence continues to rise. The media has generally stopped the negative focus on rates, allowing many to accept that rates have just returned to normal.

In terms of what we will expect for the remainder of the spring market, we will see that pricing and listing preparation will be even more important as we try to navigate the multiple offers on some property types, neighbourhoods and price points while there may be more of a balanced demand for others.

Extra attention to listing at the correct price, great photos, great video and a great marketing strategy will ensure your listing brings in the results you are looking for. 

With this level of high demand, we will continue to see prices creep up at a modest pace. I believe this will cause increased demand for our lower-priced property groups (sub-$600,000 such as condominium apartments and townhomes, older freehold townhomes, and smaller unrenovated singles) as budgets are tightened, and buyers are forced into a new reality of what they can afford. This will raise prices and tighten the gap between the entry market products and the more standard townhome and single-family freehold. 

Our market is very sellable because the home prices here aren’t anywhere near other major cities in Ontario and across Canada. Ottawa is still very affordable in comparison and offers so much of a city or a suburb lifestyle, depending on where the client wants to live. 

Ottawa’s average price for 2022 was only $657,000 compared to $1.1 million for the Greater Toronto Area, $1.27 million for the Greater Vancouver Area, $868,000 for the Kitchener-Waterloo area, $1.04 million for Durham, and $798,000 for Niagara, etc.

Ara Mamourian

Toronto, Ont. 

Managing partner, The Spring Team

The recovery of Toronto’s urban real estate markets has exceeded expectations, rebounding significantly from the trough observed between October to December 2022. During that period, buyer sentiment reached an all-time low, with properties languishing on the market as potential buyers grappled with an uncertain future.

Despite the anxiety, Toronto homeowners remained calm, maintaining a limited supply of properties. This positioned the market to swiftly shift back to a seller’s advantage upon the arrival of positive news. The turning point came in January when the Bank of Canada raised interest rates by a modest 25 basis points, marking the first time since March 2022. This decision not only boosted buyer optimism but also suggested an impending end to the rate hike cycle.

The announcement in March that rate increases would cease reinvigorated buyer interest in Toronto’s urban properties. As competition intensified, sellers began receiving their desired prices for their homes.

Looking ahead, fixed interest rates may experience downward pressure as investors seek refuge from riskier assets, such as regional banks and technology companies, and turn to secure government-backed bonds. This shift could lead to fixed-rate cuts for the first time in years. Additionally, there is speculation about potential variable rate cuts in the near future.

This wave of positive developments comes as a refreshing change for Toronto buyers after a year of predominantly negative news. As a result, the property market is expected to remain active at least until the end of spring.

Historically, the summer months have witnessed a slowdown in real estate activity, and this trend is anticipated to continue in the coming months. Buyer exhaustion and the allure of summer festivities contribute to this seasonal lull.

Barring any unexpected rate announcements in April, heightened buyer activity should persist, and sellers can anticipate multiple offers on their properties. Employing the under-listing strategy may prove advantageous for sellers, despite the stress it may cause inexperienced agents and some buyers, as it can help maximize returns on property sales.

Jennifer Queen

Winnipeg, Man. 

The Jennifer Queen Team

Winnipeg is a market not often reported on – and truthfully, I like to think it is because we are one of Canada’s best-kept secrets! That might be because the slow-and-steady market is not overly exciting or newsworthy.   

With steady property value increases for 47 of the last 50 years, Winnipeg has a proven track record of stability and affordability in housing. 

The only exception is the condominium market, which experienced a slow period due to new legislation in 2015. However, 2022 and 2023 have seen a resurgence in condominium sales, which is promising for sellers.

Winnipeg’s affordability has attracted buyers from other provinces with much higher average sales prices, such as Ontario and British Columbia, and combined with positive net migration, Winnipeg’s growth rate is five per cent above both the provincial and national averages, according to the 2021 Census. 

Unfortunately for buyers, this population growth, combined with a market with a proven track record for stability and affordable housing, means we will likely continue to see a market slanted more toward the seller.  

With the exception of the temporary pause we saw in the Fall of 2022, primarily due to nervousness over interest rates, confidence remains relatively high within the market. Bidding wars are back (nearly 50 per cent of sales last week were in multiples), sellers are getting agreeable terms and conditions, and homes are selling quickly. I anticipate limited inventory through much of 2023, which will keep the market here a seller’s market.   

Taylor Hack

Edmonton, Alta. 

Team leader, Hack&Co, Re/Max River City

Edmonton’s real estate market is distinct and has behaved differently than other major Canadian markets during and after the pandemic. It did not experience the same inflationary pressures, which led to more stable and reasonable buying conditions. This starkly contrasts the multiple offer situations and condition-free purchases seen in other cities.

From 2015 to 2020, net migration to Alberta was either flat or negative, which resulted in an oversupply of properties and depreciation in Edmonton’s market. The condo market, in particular, was heavily impacted by limited employment opportunities for less established individuals.

In recent years, Calgary has outpaced Edmonton in attracting new residents, leading to a roughly $100,000 price difference between mid-priced houses in both cities. However, Edmonton’s past weaknesses have now become its strengths. 

With record-breaking net migration since 2021, the city’s real estate market holds immense potential for growth as buyers are attracted to its affordability and investors seek opportunities for growth.

As vacancy rates decrease and rent prices rise, even long-time renters are becoming buyers in the market. Edmonton is nearing a balanced market and may soon transition into a seller’s market. 

My prediction for 2023 is that Edmonton will become the most dynamic market in the country, with years of mediocrity fueling an unprecedented boom. 

The city could experience its best year ever in the real estate sector in 2023. One crucial factor to consider is the number of homeowners who found themselves trapped in negative equity situations during the market downturn. As the market recovers, many of these individuals will be motivated to sell and move, further amplifying the impact of increased migration to Edmonton.

Keith Roy

Vancouver, B.C.

Team leader, Keith Roy and Associates 

As we finished the first quarter of 2023, there were many things to be optimistic about in Vancouver. The cherry blossoms are out, and tulips are blooming; a new mayor and council are making changes for the better at city hall, and the freeze that was gripping the real estate market for the last eight months seems to have thawed.

Following the rate hikes of 2022 and 2023, the number of sales in the Greater Vancouver real estate market dropped precipitously from March 2022 (4,359 sales) and fell below 2,000 sales per month since July 2022. 

March 2023 was the first time we crossed over the 2000 sales threshold in nine months (about 2,600+). While most outlets are reporting price drops year-over-year, only active buyers seem to realize that prices are edging back up, and multiple offers are becoming very common again. On the supply side, the number of homes for sale has not increased dramatically.

The result of low supply and increasing demand is that prices are holding firm and even increasing in specific product types.

Q2 2023 will bring increased sales to the region, backed by stable interest rates and pent-up demand from the last few months of uncertainty and low volume. 

The counterbalance to these positive forces is that inventory will likely remain low for the balance of 2023. Most people who wanted to move for whatever reason did so in 2021 and 2022. Investors are unlikely to sell at the bottom of a market cycle, and many homeowners are happy to stay in their current homes with the locked-in low-interest rates for a few more years and don’t need to upgrade their homes. 

The bulk of the demand is coming from new buyers entering the market, strong immigration numbers and downsizing homeowners who are still pocketing equity. 

Anecdotally another factor affecting the Vancouver real estate market is a recent change to the strata property act, which prohibits rental restrictions on properties. This has turned every building and townhome complex into an investment opportunity. With high rents, low vacancy rates and a long history of equity appreciation, Vancouver is an attractive place for real estate investments.

Notably, the foreign buyer ban, which was subsequently revised in the federal budget, has seemingly had no impact on the real estate market and is rarely even part of the conversation when talking with buyers or sellers. 

Tony Joe

Victoria, B.C.

Broker/owner, Re/Max Island Properties

Every week, someone has the dream to locate from elsewhere in Canada to Greater Victoria— relocations continue to fuel the market. Combined with an already low amount of good inventory, bidding wars have returned, with prices stabilizing or inching upward.

During the pandemic, Canadians moved from metropolitan Toronto and Vancouver to Vancouver Island’s clean air and blue skies. That demand continues as we enter the spring market in 2023.  

Like elsewhere in the country, Victoria is behind in the creation of housing stock to meet the needs of consumers relocating here. This is further articulated by the fact that there is no physical expansion space: Victoria is surrounded by water on three sides and a mountain on the fourth— Victoria is becoming a taller city, with condo towers now defining the cityscape. 

There’s no question that interest rates affected our market like others. But as the third most expensive market in Canada (after Vancouver/Lower Mainland and Toronto), first-time buyers don’t define the market. That’s not to say there are no first-timers, but rather most of the buyers already have equity either from the sale of property or from an intergenerational transfer of funds from family.

Victoria isn’t an industry or manufacturing town. What drives the economy is Government, Military, Technology, Lifestyle/Retirement and Universities. Many carefully choose Victoria as their final posting in preparation for retirement.

I mentioned “good” inventory above. Although inventory remains historically low, there are still opportunities, including properties that have been on the market unsold for months. 

However, sharply priced and well-prepared properties – the good ones- are moving quickly with multiple offers, highlighting that buyers are still ready to pounce when the right property arises. 

It should be noted that subject conditions are common in winning bids today, and while the occasional property is selling for $100,000 over list price, the numbers aren’t nearly as stratospheric as during the peak of the market. What isn’t common in this market (yet) is intentional underpricing for bidding wars.

The local market perked up with the last announcement that the Bank of Canada would not increase rates. As a result, the spring market is upon us, with listings selling days after coming to market and buyers returning after a break from 2022’s hectic pace.

We’ll see sales strengthening with inventory level remaining low: in many ways, it’s feeling similar to the “recovery year” of 2019. But as mentioned above, the recovery here in Victoria may be stronger than many are expecting.

We’d love to hear more about what’s happening in your market. Please let us know in the comments below! 

REM Editorial Team