Diane Hansen and Chris Cowie’s home in Whitby, Ontario on Oct. 20.Sammy Kogan/The Globe and Mail
For some aspiring homeowners, a cool-down in Canada’s blazing real estate market is just the scenario they were waiting for.
Pundits at the Canadian Real Estate Association – along with Bay Street economists, mortgage brokers and real estate agents – admit that buyers have been clinging to the sidelines far longer than almost anyone expected.
CREA recently downgraded its sales forecast for 2024 and 2025 as the organization predicts that the market countrywide will remain in a holding pattern until next spring.
So far, the Bank of Canada’s interest rate cuts have rallied sellers in far greater numbers than buyers since policy-makers began easing in June.
“We wait for the rate” is how Bank of Montreal senior economist Robert Kavcic sums up the current mood, as borrowers figure more relief is on the way. He points to Ontario as the nation’s soft spot.
That’s partly because of the weight of the Greater Toronto Area, where the active-listings-to-sales ratio in September favoured buyers to the greatest degree since the economic recession of 2009 (with the exception of a short pause at the start of the COVID-19 pandemic lockdown).
That dynamic is bolstering the belief of another camp of aspiring homeowners; they are betting that stubborn sellers will have to cave on prices eventually.
Against that backdrop, some first-time buyers have taken a contrarian view: The Globe and Mail talked to three sets of buyers who decided to strike a deal just as the competition cooled down.
A three-bedroom detached in Whitby, Ont.
Chris Cowie and Diane Hansen figured they might find a nice townhouse when they began their search in earnest in May.
By the time summer wound down, they were moving into a spacious detached house in north Whitby.
The two had been crunching the numbers for a while as they watched prices fall from their peak and bidding wars fade.
Ms. Hansen and Mr. Cowie began the summer working out whether to buy a home as they watched prices fall from their peak and bidding wars fade. Mr. Cowie's uncle, industry veteran John Lusink, advised them that 'time is their friend.'Sammy Kogan/The Globe and Mail
As they thought more seriously about buying, Mr. Cowie consulted his uncle, industry veteran John Lusink.
The president of Right at Home Realty and Property.ca. advised the couple that “time is their friend.”
He doesn’t believe prices will be significantly lower in the coming months, but – in the current economy in the province – he also isn’t forecasting a wild run-up.
Before they looked any farther, Mr. Lusink suggested they talk to their bank, chat with a mortgage broker, and line up a preapproved mortgage.
“Make sure you understand everything banks and lenders are asking for,” was his recommendation as institutions have become increasingly stringent.
The softer market conditions that persisted through the spring and into the summer meant buyers could take their time to look around and submit offers with conditions on financing and home inspection.
“That’s a much safer and more sensible way for first-time buyers to get in the market,” he says.
Mr. Cowie and Ms. Hansen heeded that advice and ended up walking away from one deal after the home failed the inspection.
They were waiting in the kitchen when the inspector came in with the grim news that water from a bathroom was leaking into the basement and may have damaged the foundation.
The couple tried negotiating with the seller, but he played down the problem and refused to make repairs or budge significantly on price for the home built in 1999.
“It was a hard thing to do to walk away from a property,” says Ms. Hansen, “but it could be a money pit.”
As they worked their way through 20 or 30 homes for sale, the couple noticed rival buyers seemed to be dazzled by bright pot lights and gleaming finishes. One house drew 11 offers despite what appeared to be a slapdash renovation.
After their narrow escape from the waterlogged house, the couple became more diligent about making sure a home had good bones.
“As we progressed, we got better at looking around,” says Mr. Cowie. “I was in the basement with my flashlight – checking out the plumbing.”
The next house that caught their eye had been through a few price changes and the couple suspected the sellers had failed to spark a bidding war.
When they submitted an offer close to the latest asking price of $899,000, the sellers countered with a price of $960,000.
“You can’t ask for your dream price when you listed it that low,” was Mr. Cowie’s response.
The two sides wrangled and settled on $920,000 in the end.
The house, built in 2003, passed inspection without any serious red flags.
They feel timing was key in landing a well-maintained home in a good neighbourhood.
With the deal signed, Mr. Cowie and Ms. Hansen were gratified that they had followed the last bit of counsel from their uncle: “buy for the longer term – not for quick money.”
Hannah Condie and her fiance bought this bungalow in Scugog, Ont. Their house-buying plans accelerated when their landlord turned the basement of the house they were renting into a short-term rental.Hannah Condie/Supplied
A bungalow in Scugog, Ont.
Hannah Condie and her fiancé were in the midst of wedding preparations when the landlord of the home they were renting in Whitby, Ont. turned the basement into a short-term rental.
“Before we knew it, it was listed as an Airbnb,” she says. “We weren’t even in the market.”
The development accelerated their home-buying plans, says Ms. Condie, who works in downtown Toronto.
The couple preferred a house with a backyard for their dog, but with their budget around the $775,000 mark, most of the places they saw in Whitby were on tiny lots in packed subdivisions.
They decided to look farther afield since they spend part of the week working at home.
Most of Ms. Condie’s family is based in the Scugog area, including her uncle, Shawn Lackie.
Mr. Lackie, a real estate agent with Our Neighbourhood Realty in Oshawa, helped the couple to search for properties in area towns such as Port Perry and Blackstock.
A three-bedroom bungalow on a large lot in Port Perry was listed with an asking price of $699,900 and a date for reviewing offers.
Mr. Lackie says the bidding frenzies of previous years have dissipated but he still figured the 1970s-era house on a quiet street would attract a handful of competing bidders at that price.
As first-time buyers, he advised the couple to make their offer conditional on financing.
Even when buyers have preapproved mortgages lined up, lenders sometimes send borrowers scrambling to provide extra documents at the last minute.
He also recommended that Ms. Condie write a letter to the homeowner, who had spent many years caring for the house and gardens.
The couple submitted an offer of $790,000, which the seller accepted over four competing bids.
The couple packed up their apartment in June, moved into the new house, and were married one week later.
Now they are enjoying spending time with their golden retriever in the back garden.
“I think what tipped us over was the letter,” says Ms. Condie.
An end-unit townhouse in Orillia, Ont.Windle Beringue/Supplied
An end-unit townhouse in Orillia, Ont.
In February of 2020, Grace Beringuel travelled to Ontario from the Philippines to celebrate her sister’s 50th birthday. In March, she was in pandemic lockdown.
“A month after she came, everything closed. She was stranded,” her husband, Windle Beringue.
He was working as a software developer for Telus Digital in the Philippines at the time.
Ms. Beringuel lost her job back home, so she found work in a long-term care residence, where there was a desperate need.
In 2021, the federal government announced a fast track to permanent residence for temporary workers in essential sectors such as hospitals and long-term care.
The couple decided to settle close to family in Orillia, Ont. with their four children.
Mr. Beringuel pitched his boss to see if he could continue working with Vancouver-based Telus Digital, and the company agreed.
“I basically started five days after I landed.”
The couple were renting a townhouse in Orillia when a friend advised them to talk to a mortgage broker about measures aimed at helping first-time buyers to get into the real estate market. Ms. Beringuel had built up some savings working during the pandemic.
“We eventually decided to look around,” says Mr. Beringuel.
The couple spent a couple of months looking for houses in the area.
“A sign suddenly appeared a house away from us.”
The couple were very keen on their neighbourhood close to Lake Couchiching so they asked real estate agent Alexis Victor of Royal LePage Signature Realty to look into the property for them.
The townhouse was an end unit with three bedrooms above grade and a fourth on the lower level. The asking price was $629,900.
“The first time we saw it, we fell in love with it,” Mr. Beringuel says of the house with a beautiful tree on the front lawn.
The couple submitted an offer below asking on the same day the house landed on the market.
The opening bid was rejected by the sellers, so Ms. Victor advised the couple to improve their offer if they were sure they wanted the house.
They raised their offer to $610,000 and the sellers accepted.
The Beringuels were able to buy with a five per cent down payment and they are pleased they were able to negotiate on price while the spring market was quiet.
The couple’s two younger kids are in school and the two young adults work full-time to help with expenses.
“They understand that everyone has to contribute,” he says. “That’s the only way we can sustain it.”
Mr. Beringuel says the community in Orillia has been warm and welcoming. Before the family bought the house, they considered moving to Alberta at one point.
“The younger ones said, they don’t want to move because they already have friends here.”