Homebuyers’ frenzy growing even before Bank of Canada rates go down

Buyers in Canada are starting to venture back into the housing market, seeking to get ahead of any possible shopping frenzy spurred by expected rate cuts from the Bank of Canada.

An unusual home sales rally in December has stoked speculation that the Canadian housing market may start to heat up even more. With prices still soft as the central bank signals that it’s done raising its benchmark rate, buyers are trying to find the best time to purchase property before more competition floods in and pushes prices back out of reach.

The psyche in the market has already started to shift. Canadians became more optimistic about home prices in November and that trend has steadily risen in the months since, according to a poll conducted for Bloomberg by Nanos Research.

I don’t think we’re the only ones who have saved for a down payment in the last three years


It’s lured in buyers such as Maria Herrera, a 31-year-old manager at a Vancouver animation company. With the goal of snagging a two-bedroom condo, she recently jumped back into the market with her husband and agreed to buy a place in the suburbs in January after spending the past few years weighing a home purchase.

“I don’t think we’re the only ones who have saved for a down payment in the last three years,” Herrera said. “It will go back to people getting excited with the rates getting lower, and people just going a little crazy and going into a buying frenzy.”

House hunters have had to grapple with a market that’s been increasingly tough to crack into as a major shortage of affordable properties collides with record immigration. Home construction has fallen short of the roughly 1.8 million immigrants Canada added the last year and a half.

“We’re seeing multiple offers again and houses selling for over asking price, which is very, very different from a month ago,” said Teia Eagar, a real estate agent in Toronto who says she’s seeing a new sense of urgency among buyers. “They’re trying to time the market. They’re starting to feel like the bottom of the market was hit.”

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