Posthaste: Are we on the verge of a home

Thousands of Canadians may soon enter the housing market as the country’s real estate looks to be on the verge of getting out of correction territory, according to the Royal Bank of Canada.

RBC Economics estimates more than 400,000 potential households have been suppressed since 2019, many of whom have been renting for longer than they’d have hoped and so they may finally be ready to make the plunge.

“Timing shouldn’t be underestimated because many would-be buyers have been working hard toward making a purchase with savings near a 25-year-high rate, and 25- to 34-year-olds employed at an above-average historical rate,” the report said.

“We see this influx of financially ready house hunters easily outweighing the lull in homebuyer demand from newcomers to Canada.”

Despite the escalating trade war, prospective homebuyers are increasingly optimistic about the economy and thus more likely to come off the sidelines in the near future, RBC said.

The labour market is expected to have a worker shortage next year as well, which will help job prospects.

This positive mindset comes as Canada’s real estate market appears to be stabilizing. The non-seasonally adjusted national average home price was $674,819 in July, up 0.2 per cent from a year ago, according to the Canadian Real Estate Association.

Total sales climbed 0.6 per cent in the month to 205,388, which is 1.5 per cent more sales than the long-term average for July.

“No matter where you are in Canada, more moderate housing market conditions can be expected to continue to bring buyers off the sidelines going forward,” CREA chair Garry Bhaura said in a statement last month.

RBC expects sales to keep picking up across the country in 2027, with Ontario and British Columbia — Canada’s most slumping markets — to be particular bright spots.

The bank predicts transactions will climb by 8.2 per cent in Ontario and 7.8 per cent in B.C.

“It will take longer for the condo market segment to turn around, however,” the report said. “Abundant inventory in the Toronto and Vancouver areas and investor apathy are bound to keep condo prices downward possibly into 2027.”

Overall, RBC expects the average home price to climb by 0.8 per cent next year.

But the bank also said it won’t all be smooth sailing when it comes to the housing market’s recovery because Canada’s trade war with the U.S., immigration cuts and affordability issues are still presenting headwinds for buyers.

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