As a local realtor in the GTA, we understand the concerns and questions many of you have about the current housing market. Despite the Bank of Canada’s recent decision to lower the overnight lending rate to 4.75%—the first drop in four years—homebuyers are still facing significant challenges, especially with climbing home prices. Let’s dive into what this means for you as potential homebuyers or sellers in the GTA, based on recent data from a Zoocasa survey.

Rising Home Prices: The Biggest Concern for Homebuyers

While the interest rate cut was expected to rejuvenate the market, the reality is that home prices have continued to rise. According to the Canadian Real Estate Association, average home prices in major markets like Vancouver, Calgary, Edmonton, Montreal, and Quebec have increased by over 5% year-over-year as of June 2024. Even in the GTA, where prices saw a slight dip of 1.7%, the cost remains a significant barrier for many buyers.

From Zoocasa’s survey of over 1,100 respondents, 58% identified the purchase price as the most crucial factor in determining a home’s affordability. This was followed by monthly mortgage payments at 26.6%, home maintenance costs at 8%, and property taxes at 6%.

Willingness to Move for Affordable Housing

Interestingly, many prospective buyers are not willing to relocate to find a more affordable home. Zoocasa’s survey revealed that 34.5% would move within the same city, while 31.1% would consider moving within the same province. Only 9.5% are open to moving to a different province, and a small 7.4% would move to a different country. Baby Boomers are particularly less inclined to move, with 25.9% stating they wouldn’t move to find a more affordable home, compared to 16% of Gen X and 6.5% of Millennials.

Interest Rates: A Secondary Concern

Despite the anticipation that lower interest rates would bring buyers back into the market, this has not been the case. While 31.6% of Zoocasa’s survey respondents are waiting for significant rate cuts, 15.5% said they are not waiting for further rate cuts, and 15.4% stated that interest rates do not influence their decision. Notably, Baby Boomers are the least affected by interest rates, with 21.8% saying they do not impact their decision, compared to 12.2% of Gen X and 8% of Millennials.

When it comes to the importance of current mortgage rates, 31% of respondents considered them very important, 26.2% important, and 20.1% were neutral.

Primary Concerns in the Current Market

High home prices continue to be the top concern across generations. From Zoocasa’s survey, 42.3% of respondents cited rising home prices as their primary worry, followed by interest rates (25.6%), economic uncertainty (14.9%), inventory shortage (7.2%), and competition from other buyers (6.3%).

Millennials are the most impacted by rising prices, with 48.9% marking it as their primary concern. This is higher compared to 40.5% of Baby Boomers and 36.5% of Gen X.

Confidence in Navigating the Market

Despite the uncertainties, many buyers still see homeownership as a good investment. However, confidence levels vary by age group. Baby Boomers reported higher confidence in navigating the homebuying process, while Millennials showed the lowest confidence levels.

Working with Real Estate Agents

A significant majority of homebuyers have had positive experiences working with real estate agents. Zoocasa’s survey showed that 84.3% of respondents who worked with an agent in the past were either satisfied or very satisfied with their experience. This satisfaction likely contributes to the 71.5% of respondents who would consider working with an agent again in the future.

Conclusion

The current housing market presents both challenges and opportunities. As your trusted real estate professionals in the GTA, we’re here to help you navigate these complexities. Whether you’re buying your first home or selling to move into a new one, our team is dedicated to providing you with the insights and support you need to make informed decisions.

If you’re thinking about entering the market soon, don’t hesitate to reach out. Let’s work together to achieve your real estate goals.