Economic uncertainty is currently gripping Canada and the United States, particularly within the real estate sector. Investors and homebuyers who are making million-dollar or multi-million-dollar transactions require stability and certainty. However, with policy shifts and unpredictable economic events, the real estate market is experiencing significant turbulence. Every time there is a shift in government policy or economic conditions, the market tends to freeze.

If we examine the latest data from Vancouver and Toronto, the two largest real estate markets in Canada, we see a sharp decline in housing activity, particularly on the sales side. Vancouver home sales have declined by 11% year over year. While this might not seem drastic at first glance, zooming out reveals a concerning trend. February 2024 was one of the slowest months for sales in the last 25 years, trailing only behind 2019, 2013, and 2009. Inventory is beginning to build, but primarily in specific sectors—most notably, the condo market.

A Surge in Condo Listings and Investor Sell-Offs

New listings hit record highs in January and February, particularly in the condo market. Many investors are exiting due to years of negative cash flow, high mortgage rates, and softening rental conditions. Vacancies are increasing, and units are taking longer to rent, leading many investors to cut their losses. However, as they attempt to sell, they face an illiquid market due to an inventory surge.

Suburban markets are witnessing significant shifts as well. Since 2015, suburban condo prices in Greater Vancouver, particularly in the Fraser Valley, have doubled. The pandemic fueled demand as remote work became more common, pushing buyers further from city centers. However, as interest rates increased, these local end-user markets—often more sensitive to financial fluctuations—are seeing inventory pile up. Standing inventory in the Fraser Valley’s condo market is now at an all-time high. Historically, when inventory surges to such levels, prices tend to fall.

The Greater Toronto Area (GTA) is experiencing similar issues. Seasonally adjusted home sales declined by 28% on a month-over-month basis, marking the steepest drop since the pandemic and the global financial crisis. The condo segment, particularly among investors, is facing the most challenges. Pre-construction condo sales in 2024 hit a 30-year low. If developers cannot pre-sell units, they simply do not build, leading to a sharp drop in future housing supply.

Government Intervention and Pre-Construction Market Struggles

The British Columbia government recently extended the pre-construction sales period from 12 months to 18 months to allow developers more time to secure financing. This policy shift acknowledges the challenges in the pre-construction market, where projects are struggling to get off the ground. A similar trend is emerging in the GTA, where developers are also struggling to sell pre-construction units, further impacting future housing supply.

Despite the slowing construction market, the federal government is fast-tracking 6,000 undocumented construction workers. This move is ill-timed, as housing starts are already declining rapidly. The demand for construction workers was high during the peak of the market in 2020-2022, but with housing starts now plummeting, the industry will soon face an oversupply of labor. Many construction workers may struggle to find work as current projects wrap up and fewer new developments begin.

Tax Policies and Housing Market Challenges

In an effort to address budget deficits, the British Columbia government has increased the speculation and vacancy tax from 2% to 3% for foreign owners and from 0.5% to 1% for Canadian residents. This tax primarily affects secondary homeowners who use properties as vacation homes. The unintended consequence is that these taxes may discourage investment in housing markets where additional supply is already limited.

Adding to the complexity, the BC government has mandated multiplex housing across the province to increase density. However, utility companies, particularly BC Hydro, are struggling to meet the demand for new developments. Multiplex units require significant electrical infrastructure, including large transformers (PMTs), which take about 12 months for approval. Developers face high holding costs due to these delays, reducing the feasibility of these projects. If natural gas heating were permitted, many of these delays could be avoided, but current policies mandate electric-only heating, further complicating new developments.

The Road Ahead for Real Estate

The Canadian real estate market is at a critical juncture. Uncertainty surrounding economic policies, interest rates, and government intervention is creating an environment where investors and homebuyers are hesitant to act. The data suggests that condo markets, particularly in suburban areas, are at the highest risk of price declines due to rising inventory and decreasing demand. Meanwhile, pre-construction markets are stagnating, which will impact housing supply in the coming years.

Policymakers must carefully consider the timing and implications of their decisions. Fast-tracking construction workers during a market downturn, increasing taxes on secondary homes, and imposing rigid development regulations could exacerbate the current slowdown. Market participants must navigate these challenges with caution, keeping an eye on economic trends and policy changes that could impact their investments.

As the situation continues to evolve, it is essential to monitor housing activity, interest rate trends, and government policies. The coming months will be critical in determining whether the market stabilizes or if further turbulence lies ahead. Investors and homebuyers should prepare for continued uncertainty and make informed decisions based on the latest market data.

Housing Market and Economic Concerns

In recent years, the housing market has become one of the most pressing issues for policymakers, economists, and everyday citizens. With the cost of living rising significantly, particularly in urban centers, homeownership has become an increasingly distant dream for many Canadians. The government has introduced various policies aimed at addressing affordability concerns, but their effectiveness remains a topic of debate. One of the primary tools employed to curb rising home prices has been taxation, specifically targeting foreign investments. While these taxes were designed to limit speculative purchases by non-residents and free up housing for local buyers, their impact has been mixed. Many experts argue that these measures only complicate the market, failing to address the root causes of high housing costs while adding new barriers to investment and development.

A crucial aspect of the housing affordability crisis is the rising cost of living, which has put immense pressure on Canadian households. Factors such as wage stagnation, increasing interest rates, and supply shortages have exacerbated the situation. While the government has made efforts to introduce policies aimed at increasing housing supply, the time required for new developments to reach the market means that short-term relief remains elusive. Additionally, regulatory hurdles and high construction costs have slowed the progress of new housing projects, further constraining supply.

Another point of discussion is the role of foreign buyers in the real estate market. While foreign investment taxes have been implemented to curb speculation, critics argue that these policies have limited impact on housing affordability for local residents. Instead, the main drivers of high home prices appear to be domestic in nature, including population growth, limited housing supply, and high demand in key metropolitan areas. Some experts suggest that alternative solutions, such as increasing housing density, streamlining development approvals, and investing in affordable housing programs, would be more effective than punitive taxation policies.

Moreover, there are concerns about the unintended consequences of government intervention. For example, rent controls, while designed to protect tenants, may discourage new rental housing developments, exacerbating supply shortages. Similarly, high property taxes and restrictive zoning laws can disincentivize investment in the housing market, leading to sluggish growth and limited options for buyers and renters alike. It remains to be seen whether the government's current approach will yield the intended outcomes or merely create additional challenges for the housing market.

Inflation and Economic Predictions

Beyond housing, inflation remains a major concern for the Canadian economy. Recent Consumer Price Index (CPI) data indicate that inflation is running slightly higher than expected, raising questions about the effectiveness of the Bank of Canada's monetary policy. Key components of inflation, such as energy prices and the cost of shelter, continue to drive overall price increases. While some rental markets have shown signs of stabilization, the broader inflationary environment remains uncertain.

Energy prices, in particular, have been a significant contributor to inflationary pressures. As global oil prices fluctuate and supply chain disruptions persist, Canadian consumers have felt the impact through higher fuel and utility costs. These rising expenses have not only strained household budgets but have also increased costs for businesses, potentially leading to further price hikes across various sectors.

The housing component of inflation is another major factor. Although some rental markets have seen declines in prices, homeownership costs remain elevated due to high mortgage rates and ongoing supply shortages. The Bank of Canada has been closely monitoring these trends, adjusting interest rates in an attempt to manage inflation without stalling economic growth. However, the effectiveness of these measures is uncertain, and there are concerns that aggressive rate hikes could push the economy toward a recession.

Economic forecasts remain mixed, with some analysts predicting that inflation will persist in the short term before gradually easing, while others warn of a potential resurgence in price pressures. The global economic environment adds another layer of complexity, as geopolitical tensions, supply chain disruptions, and changing trade dynamics continue to influence domestic economic conditions.

A critical question is how the Bank of Canada will navigate these challenges. The central bank faces a delicate balancing act: raising interest rates too aggressively could dampen economic growth and trigger a recession, while failing to act decisively could allow inflation to become entrenched. The coming months will be crucial in determining whether policymakers can steer the economy toward stability without causing significant disruptions.

Conclusion and Final Thoughts

As discussions about housing affordability and economic stability continue, it is essential for Canadians to stay informed about the factors shaping the market. Government policies, inflation trends, and monetary decisions all play a role in determining the economic landscape. While policymakers strive to address these challenges, the effectiveness of their strategies remains a subject of debate.

For prospective homebuyers and investors, understanding these dynamics is crucial. The housing market is influenced by a complex interplay of supply and demand, interest rates, government interventions, and broader economic conditions. Those looking to enter the market must carefully assess their financial situation and remain aware of policy changes that could impact affordability and investment opportunities.

In the broader economic context, inflation remains a key concern, with potential ramifications for interest rates, consumer spending, and overall economic growth. The ability of the Bank of Canada to manage inflation effectively will have significant consequences for businesses and households alike. As economic conditions evolve, staying informed and adaptable will be essential for navigating the challenges and opportunities ahead.

Ultimately, these discussions highlight the need for a balanced approach to policymaking—one that considers both short-term relief and long-term sustainability. By fostering a well-informed public and encouraging constructive dialogue, Canadians can contribute to the ongoing conversation about economic and housing policies, ensuring that future decisions are guided by both data and real-world experiences. Engaging with these discussions, sharing insights, and staying proactive in financial planning will be key to navigating the evolving economic landscape.

As Ontarians prepare to cast their votes in the 2025 provincial election, housing affordability and availability remain top concerns. The Ontario Real Estate Association (OREA) has released its Election Report Card, evaluating the housing platforms of the four major political parties. This report assesses each party’s commitments against OREA’s recommended strategies to address the ongoing housing crisis in the province.

OREA’s Housing Vision: A Home for Everyone

OREA’s A Home for Everyone plan focuses on three fundamental priorities aimed at tackling Ontario’s housing supply and affordability crisis:

1. Increasing Housing Supply

• Ending exclusionary zoning to permit up to four units per lot across the province.

• Increasing density near transit corridors through zoning modernization and converting commercial spaces into residential units.

• Encouraging modular housing as an efficient and scalable solution to boost housing supply rapidly.

2. Lowering the Cost of Homeownership

Reducing or capping municipal development charges to make housing more affordable.

• Allowing easier severance and sale of multiplex properties by creating a framework for conversion into condominiums.

• Introducing incentives for first-time buyers and new pathways for innovative homeownership models.

3. Improving Consumer Protections

• Strengthening the Landlord and Tenant Board (LTB) by reducing backlogs and restoring in-person hearings.

• Eliminating the auctioneer exemption to establish a single standard for real estate transaction oversight.

• Enhancing professional education for Realtors to ensure better consumer service and protection.

OREA’s Election Report Card: Evaluating Party Platforms

OREA gathered information from the four major parties through a survey and analyzed their housing platforms based on their responses and published policies. The New Democratic Party (NDP) and Ontario Liberals provided completed surveys, while the Progressive Conservative Party (PC) submitted a written response. Here’s how each party aligns with OREA’s vision:

Progressive Conservative Party of Ontario (PC)

The PC party’s housing platform includes initiatives to encourage modular housing through the development of housing innovation guides. These guides aim to help consumers navigate the complexities of building processes and financing options. According to OREA, this proposal supports their recommendation to promote and scale innovative housing solutions to address supply shortages.

Ontario New Democratic Party (NDP)

The NDP proposes a significant increase in affordable housing supply, legalization of fourplexes, and greater density around transit hubs. Their platform also supports:

• Eliminating the auctioneer exemption to enhance real estate transaction oversight.

• Restoring in-person hearings at the LTB to improve tenant and landlord dispute resolutions.

• Establishing a framework for innovative co-ownership models, making it easier for multiple buyers to invest in housing together.

Ontario Liberal Party

The Ontario Liberal Party prioritizes affordability by proposing to end development charges on new homes under 3,000 square feet and eliminate the provincial land transfer tax for:

• First-time homebuyers

• Seniors looking to downsize

• Non-profit homebuilders

OREA notes that these proposals align with their recommendation to lower the cost of homeownership, making home purchases more attainable for more Ontarians.

Green Party of Ontario

The Green Party has committed to building two million new homes over the next decade by legalizing fourplexes across Ontario. This policy is in line with OREA’s stance on ending exclusionary zoning by allowing up to four units per lot as-of-right across the province.

Housing and the 2025 Election: What’s at Stake?

As Ontario’s housing market continues to face supply shortages, rising prices, and affordability challenges, OREA’s evaluation underscores the urgency for political action. OREA President Rick Kedzior emphasized in a press release that housing is a key issue for voters, stating:

“Whether they are voting PC, NDP, Liberal, or Green, Ontarians want leaders who are willing to help people achieve the dream of homeownership, obtain more affordable housing, and break down barriers that prevent them from finding a great place to call home.”

With the election set for February 27, 2025, Ontarians will soon have the opportunity to decide which party’s vision best aligns with their housing needs. The policies put forward by each party will play a crucial role in shaping the province’s real estate market for years to come.

Introduction

Selling your home is a major financial decision, and maximizing your profit while minimizing costs is crucial. One way to cut expenses is by hiring a low commission real estate agent. These agents charge lower fees than traditional ones, but does that mean sacrificing quality service?

This blog explores the advantages and drawbacks of working with low commission agents, compares them to traditional agents, and helps determine if they’re the right choice for your home sale.

What’s the Average Real Estate Commission?

Traditional real estate commissions typically range from 4% to 6% of the home's sale price, split between the listing and buyer’s agents. However, commission structures are evolving, with some sellers negotiating fees as low as 1% to 3%. Low commission agents may offer rates from 1% to 1.5% to attract cost-conscious sellers.

What Is a Low Commission Real Estate Agent?

A low commission agent charges a reduced fee for listing services, often between 1% and 1.5%. While the savings can be substantial, lower costs may come with trade-offs in marketing, negotiation, and service quality.

Are Low Commission Real Estate Agents Reputable?

These agents must meet the same licensing and training standards as traditional agents. Many are experienced professionals, though their level of service can vary. Some excel in high-volume transactions, while others may lack the time for personalized client support.

Risks of Using a Low Commission Real Estate Agent

1. Limited Service and Support

Low commission agents often handle multiple clients at once, leading to reduced personal attention, slower responses, and minimal hands-on guidance.

2. Lower Sale Price Potential

A full-service agent markets aggressively, prices strategically, and negotiates effectively. A low commission agent may offer limited marketing, resulting in a lower final sale price.

3. Dual Agency Conflicts

Some low commission agents act as dual agents, representing both the buyer and seller, which can lead to conflicts of interest.

4. Reduced Marketing Exposure

Traditional agents invest in professional photos, virtual tours, and targeted advertising. A discount agent may cut corners, limiting buyer interest and possibly affecting your final sale price.

5. Fewer Showings Due to Buyer Agent Commission Cuts

Agents may be less inclined to show homes that offer reduced buyer’s agent commissions, reducing potential offers.

6. Higher Risk of Sale Falling Through

With multiple clients to manage, low commission agents may be less responsive in critical deal negotiations, inspections, or repair requests.

Alternative Home Sale Options

1. For Sale By Owner (FSBO)

Selling your home yourself eliminates agent fees but requires significant effort. FSBO homes often sell for less and take longer to close.

2. Cash Buyers and iBuyer Services

Companies that buy homes for cash offer quick sales, but often below market value. This option suits those prioritizing speed over profit.

3. Traditional Full-Service Real Estate Agent

Full-service agents provide expert pricing strategies, broad market exposure, and strong negotiation skills, typically leading to a higher final sale price.

What Can You Expect from a Traditional Real Estate Agent?

A full-service agent provides:

• Professional marketing (high-quality photos, virtual tours, and staging)

• Competitive pricing strategies

• A broad buyer network and targeted advertising

• Skilled negotiation for higher profits

• End-to-end transaction management

How to Check If a Low Commission Agent Is Reputable

• Research Reviews and Testimonials: Look for online feedback from past clients.

• Verify Licensing and Credentials: Check your state’s real estate board.

• Ask About Services and Marketing: Ensure their offerings align with your expectations.

• Review Their Track Record: Ask about past sales and average time on market.

Conclusion: Should You Use a Low Commission Real Estate Agent?

A low commission agent may be a smart choice if you’re selling in a hot market, have a highly desirable home, and are comfortable with a hands-off approach. However, if maximizing your home’s sale price and receiving full-service support is a priority, a traditional agent is often the better investment.

Before deciding, weigh the savings against the potential risks. If service quality, negotiation expertise, and strong marketing matter to you, a full-service agent may offer the best return on investment.

Recent developments in international trade policies, particularly the imposition of tariffs by the U.S. on imports from Canada, Mexico, and China, are poised to influence the Canadian real estate market. Here's an overview of the potential impacts:

Increased Construction Costs

The U.S. has announced a 25% tariff on imports from Canada and Mexico, and a 10% tariff on imports from China. These tariffs are expected to raise the cost of building materials, such as lumber and steel, which are significant components in construction. The National Association of Home Builders has expressed concerns that these increased costs could lead to higher home prices for consumers.

Potential for Higher Home Prices

As construction costs rise due to tariffs, builders may pass these expenses onto buyers, resulting in increased home prices. This could further strain housing affordability, which is already a concern in many Canadian markets. The combination of higher material costs and existing market conditions may make it more challenging for prospective homeowners to enter the market.

Impact on Mortgage Rates

Tariffs can contribute to inflationary pressures, leading to potential increases in interest rates as central banks respond to rising inflation. Higher interest rates can result in elevated mortgage rates, affecting the cost of borrowing for homebuyers and potentially cooling housing demand.

Supply Chain Disruptions

The imposition of tariffs may lead to supply chain disruptions, causing shortages of certain building materials. This could delay construction projects and further increase costs, impacting the availability and pricing of new homes in the market.

Economic Uncertainty

The evolving trade policies contribute to economic uncertainty, which can affect consumer confidence and investment decisions in the real estate sector. Potential retaliatory measures from Canada and other affected countries could further complicate the economic landscape, influencing the real estate market dynamics.

In summary, the recent tariffs imposed by the U.S. are likely to have a multifaceted impact on the Canadian real estate market, primarily through increased construction costs, potential rises in home prices, and broader economic uncertainties. Stakeholders in the real estate sector should monitor these developments closely to navigate the changing market conditions effectively.

The Bank of Canada (BoC) reduced its key policy interest rate by 23 basis points to 3%. The BoC plays a crucial role in shaping the economic landscape through its interest rate decisions. These announcements influence borrowing costs, mortgage rates, and overall market conditions, making them essential for both buyers and sellers to monitor closely. Below, we outline the key interest rate announcement dates for 2025 and explore how they may impact real estate and financial markets.

Key Interest Rate Announcement Dates for 2025

The Bank of Canada is scheduled to release interest rate decisions on the following dates:

• January 29, 2025

• March 12, 2025

• April 16, 2025

• June 4, 2025

• July 30, 2025

• September 17, 2025

• October 29, 2025

• December 10, 2025

These dates are critical for individuals and businesses involved in real estate, as they often dictate mortgage rates, lending conditions, and overall affordability.

How Interest Rate Announcements Affect Buyers

For homebuyers, interest rate decisions impact mortgage affordability in several ways:

• Higher Interest Rates: If the BoC raises rates, mortgage costs increase, leading to higher monthly payments and potentially reducing purchasing power.

• Lower Interest Rates: A rate cut can make homeownership more affordable by lowering borrowing costs, encouraging more buyers to enter the market.

• Market Uncertainty: Buyers often delay purchasing decisions in anticipation of interest rate changes, affecting housing demand.

How Interest Rate Announcements Affect Sellers

Sellers must also keep an eye on BoC rate changes, as they can influence demand and property values:

• Rising Rates: Higher borrowing costs can reduce buyer demand, leading to longer listing times and possible price reductions.

• Declining Rates: Lower mortgage rates can attract more buyers, potentially increasing competition and home values.

• Timing Sales: Sellers may choose to list properties before anticipated rate hikes to take advantage of stronger demand.

What to Expect in 2025

Given ongoing economic uncertainty, inflation concerns, and market fluctuations, the Bank of Canada’s decisions will be closely watched. Homebuyers and sellers should stay informed and work with financial and real estate professionals to navigate potential changes effectively.

Final Thoughts

The Bank of Canada’s interest rate announcements are key indicators for anyone involved in the housing market. By staying updated on these important dates and understanding how rate changes impact the market, buyers and sellers can make informed decisions to maximize opportunities and mitigate risks.

Stay tuned for updates after each announcement to assess how market conditions evolve throughout 2025.

The State of Toronto’s Pre-Construction Condo Market in 2025: Key Trends and Risks

As we move further into 2025, the Canadian real estate market is facing a year of complexity and volatility. With significant shifts in housing starts, trade tariffs, and overall economic conditions, understanding market segmentation is more crucial than ever. The Toronto pre-construction condo market, in particular, is at the epicenter of these changes, setting the tone for broader national trends.

The Importance of Market Segmentation

Traditionally, discussions around real estate trends have lumped all market segments together, but 2025 demands a more nuanced approach. Not all properties will perform equally, and broad generalizations no longer hold. The days of a universal upward trajectory, where all properties appreciated regardless of type and location, are over.

Factors such as price points, investor involvement, and product type (end-user vs. investor-targeted properties) will dictate market performance. For example, luxury condos that peaked in 2021–2022 are now facing substantial losses, whereas entry-level single-family homes remain in steady demand. The key takeaway: real estate decisions must be made with precision and attention to market specifics.

Toronto’s Pre-Construction Market: The Eye of the Storm

If there is one segment of the Canadian real estate market facing the most significant challenges, it is the Toronto pre-construction condo sector. Data from 2024 showed that new construction home sales in the Greater Toronto Area (GTA) hit a 28-year low. This was not a temporary seasonal dip—2024 recorded the fewest pre-construction sales in nearly three decades.

The primary reason? The overwhelming reliance on investors. Historically, 60–70% of Toronto’s pre-construction condos were sold to investors rather than end-users. This strategy worked when interest rates were low and property values were climbing. However, with rising mortgage rates, stagnant price growth, and falling rental yields, the numbers no longer add up for investors. As a result, demand has evaporated, leaving developers struggling to sell at previously inflated values.

The Role of Trade Tariffs and Economic Uncertainty

Adding to the instability, looming trade tariffs from the United States pose a significant economic threat. The potential implementation of tariffs ranging from 5% to 25% on Canadian goods could have profound consequences for the national economy. Foreign Affairs Minister Melanie Joly has warned about potential job losses and cost-of-living increases if a full-scale trade war were to unfold.

A National Bank report projects that a 25% tariff on Canadian exports could shrink GDP by 6%, triggering one of the most severe recessions in recent history. Such an economic downturn would directly impact real estate by reducing consumer confidence, weakening purchasing power, and forcing policymakers to reconsider monetary policies.

How Interest Rates and Bond Yields Factor In

Predicting interest rate movements remains highly speculative, given the current economic landscape. Over the past few weeks, bond yields have fluctuated wildly, moving up or down by 10–12 basis points per day—an unusual level of volatility for sovereign debt markets. This uncertainty complicates mortgage rate predictions and makes it difficult to forecast real estate trends with confidence.

If trade tariffs are implemented and job losses materialize, the Bank of Canada may be forced to cut interest rates aggressively to counteract the economic slowdown. This would provide relief to variable-rate mortgage holders but could also introduce inflationary pressures. In short, real estate markets remain at the mercy of larger economic forces beyond local supply and demand.

Segmentation Will Define 2025 Market Performance

Beyond macroeconomic factors, real estate segmentation will be the key theme for 2025. Not all properties will experience the same trajectory:

• Underperforming Segments: Investor-heavy properties, such as small one-bedroom condos, rental properties segmented into multiple units, and pre-construction condos, are expected to struggle due to weak investor demand and challenging rental economics.

• Resilient Segments: Entry-level single-family homes, duplexes, and ground-oriented housing catering to end-users will likely see steadier performance, driven by genuine housing demand from local families.

Final Thoughts: A Year of Volatility and Strategic Decision-Making

Given the multiple uncertainties—from trade wars to fluctuating interest rates—the best real estate strategy for 2025 is to focus on affordability, stability, and long-term value. Buyers should make decisions based on personal financial stability rather than market speculation. Sellers, especially those in the pre-construction space, need to brace for continued headwinds.

While we may not know the full extent of trade tariffs or interest rate movements, what is clear is that 2025 will be defined by segmentation. Broad market trends will no longer be sufficient for making informed real estate decisions. Instead, understanding specific market dynamics, investor behavior, and macroeconomic influences will be crucial in navigating the year ahead.

The housing market experienced a turbulent year in 2024, with a significant dip in interest rates coming late in the year, according to the Cornerstone Realtors Association. While the rate drop provided some relief to potential homebuyers, it was not enough to offset slower sales in the earlier months of the year. As a result, total home sales for 2024 reached 10,210 units—a slight improvement over 2023 but still 26% below long-term averages.

Challenges in the Spring Market

The spring season, traditionally a busy period for real estate, saw sluggish activity that weighed heavily on annual sales figures. Rising interest rates during the first half of the year deterred many prospective buyers, leaving the market stagnant. This initial slump overshadowed the modest recovery that occurred later in the year when rates began to ease.

“As interest rates have begun to trend downward, some homebuyers are taking advantage of the opportunity to enter the market while there is still a good selection of homes available,” noted Nicolas von Bredow, spokesperson for the Cornerstone Realtors Association in the Hamilton-Burlington area. “Although the pace of return has been gradual, the improving rates have sparked renewed interest, and many potential purchasers are starting to feel more confident in making their move.”

Renewed Interest in Homebuying

The decline in interest rates brought a wave of renewed optimism among homebuyers. Many who had been hesitant to purchase earlier in the year began exploring opportunities as borrowing costs became more favorable. This shift in sentiment helped inject some momentum into the market during the latter months of 2024. Buyers looking to capitalize on lower rates found a better selection of homes available, as inventory levels increased throughout the year.

Inventory Gains Across the Market

One of the defining trends of 2024 was the improvement in housing supply. Over 3,000 units were available for most of the year, marking a noticeable uptick in inventory compared to previous years. This increase was evident across all property types and price ranges, including more affordable options.

The growth in inventory offered buyers greater choice, which, in turn, helped stabilize the market. For sellers, however, the increased competition meant adjusting expectations. Properties that once sold quickly during the pandemic-fueled housing boom required more time and strategic pricing to attract buyers.

Impact on Home Prices

Improved supply and changing market dynamics led to a slight decline in home prices. On an annual basis, the average benchmark price fell by nearly 1% in 2024. However, this decrease was relatively modest when viewed in the context of the price surges during the pandemic years.

Despite the recent dip, home prices remained robust compared to pre-pandemic levels. The 2024 average benchmark price was still consistent with 2021 figures and 9% higher than the 2020 annual benchmark price of $651,425. This resilience highlights the underlying strength of the housing market, even in the face of fluctuating interest rates and economic uncertainty.

Long-Term Trends and Market Stability

While 2024 did not mark a full recovery for the housing market, it demonstrated a gradual stabilization following several years of volatility. The easing of interest rates played a crucial role in restoring buyer confidence, though the effects were not immediate. The slower pace of recovery underscores the challenges that the market continues to face as it adjusts to a post-pandemic environment.

For many buyers and sellers, the key takeaway from 2024 was the importance of adaptability. Buyers who entered the market later in the year benefited from improved selection and more favorable borrowing conditions. Sellers, on the other hand, had to navigate a more competitive landscape, emphasizing the need for realistic pricing and strategic marketing.

Looking Ahead

As the market moves into 2025, several questions remain. Will interest rates continue to decline, further boosting buyer activity? How will inventory levels evolve, and what impact will they have on prices? These factors will be critical in shaping the housing market’s trajectory in the coming year.

Despite the uncertainties, the lessons of 2024 provide valuable insights. The combination of improved supply, declining interest rates, and resilient home prices suggests a market that is gradually finding its footing. For buyers, sellers, and industry professionals, the road ahead holds both challenges and opportunities, making it an exciting time to watch the real estate market’s evolution.

Starting in 2025, the City of Hamilton will introduce a Vacant Unit Tax (VUT) aimed at reducing the number of unoccupied residential properties. Similar to programs in cities like Vancouver, Toronto, and Ottawa, this initiative seeks to address housing shortages and fund essential housing programs.

What is the Vacant Unit Tax?

The VUT requires all residential property owners in Hamilton to submit an annual occupancy declaration, beginning in January 2025. This declaration determines whether a property has been vacant for more than 183 days during the previous calendar year.

Properties identified as vacant without qualifying for an exemption will be subject to a tax equal to 1% of the property’s assessed value. For instance, a home valued at $500,000 would incur a $5,000 tax if it remained unoccupied for most of the year.

Failing to submit the occupancy declaration by the March 31, 2025 deadline will result in the property being classified as vacant, and the tax will automatically apply. Additionally, late submissions will incur a $250 late fee, along with penalties of 1.25% on the first day of default and 1.25% monthly interest on unpaid taxes.

Exemptions to the Vacant Unit Tax

Certain circumstances allow for exemptions to the VUT, including:

1. Deceased Owners: Properties owned by someone who passed away are exempt for the year of death and the following year.

2. Major Renovations: If a property is uninhabitable for more than 183 days in a year due to approved renovations, it qualifies for an exemption.

3. Property Sales: Homes sold during the year to unrelated buyers are exempt.

4. Institutionalization: Properties owned by individuals residing in long-term care facilities or other institutions for extended periods are exempt.

5. Court Orders: Properties under court orders prohibiting occupancy are exempt.

6. Non-Profit Housing: Units owned and operated by designated non-profit housing organizations are not subject to the tax.

Ensuring Compliance: Annual Audits

To ensure accuracy and compliance, the City of Hamilton will conduct annual audits. These audits will target:

• Properties claiming exemptions.

• Those with changes in occupancy status.

• Properties flagged through complaints or selected for random checks.

If a property is deemed vacant after an audit, the tax will apply retroactively.

How the Tax Will Be Collected

The Vacant Unit Tax will be added to the Final Property Tax Bill, issued in June each year. For 2025, the tax will reflect the occupancy status of properties in 2024.

Property owners will need to pay in two installments:

• First installment deadline: June 30, 2025.

• Second installment deadline: September 30, 2025.

Revenue generated from the VUT will support housing initiatives such as building affordable housing units, assisting non-profit housing organizations, funding rent subsidies, and providing homelessness outreach programs.

Key Dates to Remember

• December 2024: Property owners receive declaration instructions.

• March 31, 2025: Deadline to submit occupancy declarations.

• April 2025: Late declarations accepted with fees.

• June 2025: Vacant Unit Tax charges added to property tax bills.

By implementing this tax, Hamilton joins other cities in tackling housing shortages and supporting a more sustainable housing market. Property owners are encouraged to familiarize themselves with the requirements and exemptions to ensure compliance and avoid unnecessary charges.

Canada’s central bank has cut interest rates for the fifth consecutive time as the country’s economy continues to grow at a slower pace than anticipated. The Bank of Canada announced a 50-basis-point reduction, citing subdued economic performance and rising unemployment as key factors influencing the decision.

Canada’s economy expanded by just 1 per cent in the third quarter of 2024, and early indications suggest that growth in the fourth quarter will be even weaker. “Monetary policy no longer needs to be clearly in restrictive territory,” said Bank of Canada Governor Tiff Macklem in a statement. He emphasized that the lower interest rates have already begun to stimulate consumer spending and housing activity.

Economic Pressures and Rising Unemployment

One of the central bank’s primary concerns is the labor market. Canada’s unemployment rate rose to 6.8 per cent in November, as the number of people seeking work outpaced the creation of new jobs. “It has been especially hard for young people and newcomers to Canada to find work,” Macklem noted.

Economists are forecasting further increases in unemployment. A recent analysis by BMO’s chief economist, Douglas Porter, predicts that the jobless rate will likely average 7 per cent in the first quarter of 2025 before gradually declining.

Adding to these challenges, a recent shift in federal immigration policy has moderated population growth. While this change may relieve some pressures on housing and services, private sector economists warn it could contribute to higher unemployment rates in the near term.

External Risks and Trade Uncertainty

Global factors are also shaping Canada’s economic outlook. The central bank highlighted potential risks stemming from the incoming U.S. administration, including the threat of 25 per cent tariffs on Canadian exports. “No one knows how this will play out in the months ahead – whether tariffs will be imposed, whether exemptions get agreed, or whether retaliatory measures will be put in place,” Macklem said.

Inflation and Government Policy

Despite these challenges, the Bank of Canada expects inflation to remain near its 2 per cent target over the next two years. Shelter price inflation and goods price inflation have eased, though the bank warned that “elevated wage increases combined with weak productivity could push inflation up.”

Recent federal government measures are also influencing inflation dynamics. A two-month GST holiday on a broad range of consumer goods is expected to temporarily lower inflation to around 1.5 per cent in January. However, this effect will dissipate once the GST break ends in mid-February. Additionally, proposed one-time payments of $250 for working Canadians earning less than $150,000 annually, and changes to mortgage rules, are expected to impact demand and inflation trends.

Looking Ahead

The central bank is taking a cautious approach to future rate decisions, forecasting a more “gradual approach” to monetary policy adjustments. It is also monitoring potential new federal spending on border security measures. This spending could be announced in the Fall Economic Statement, which Finance Minister Chrystia Freeland is set to present on December 16.

The Bank of Canada’s next scheduled announcement on the overnight rate target is January 29, 2025.

As temperatures drop and winter draws near, preparing your house for the colder months is crucial. Proper winterization not only keeps your home warm and cozy but also helps reduce energy costs and prevents potential damage from harsh weather conditions. This guide covers all the essential steps to ensure your house is ready to withstand winter's challenges.

1. Seal Leaks and Improve Insulation

Drafts can significantly increase heating costs and reduce comfort during winter. Identifying and sealing leaks, as well as boosting insulation, are vital steps in winterizing your home.

• Inspect for Drafts: Check windows, doors, electrical outlets, and baseboards for cold air leaks. Light a candle or incense stick and move it around these areas; if the flame or smoke wavers, there's a draft.

• Use Weatherstripping and Caulk: Apply weatherstripping to doors and windows and use caulk to seal cracks in walls or around window frames.

• Upgrade Insulation: Add insulation in attics, walls, and basements. A well-insulated attic prevents heat from escaping, saving energy and reducing heating costs.

• Install Door Sweeps: Attach sweeps to the bottom of exterior doors to block cold air from entering.

2. Prepare Your Heating System

Your heating system is the backbone of your home during winter, so it’s essential to ensure it’s in top condition.

• Schedule a Furnace Tune-Up: Have a professional inspect and service your furnace to ensure it operates efficiently and safely.

• Replace Filters: Dirty filters restrict airflow, making your heating system work harder. Replace them monthly during the heating season.

• Test Your Thermostat: Check that your thermostat is functioning correctly. Consider upgrading to a programmable or smart thermostat to optimize energy use.

• Clean Ductwork and Vents: Remove dust and debris from ducts and vents to improve airflow and indoor air quality.

• Inspect Alternative Heating Sources: If you use space heaters, fireplaces, or wood stoves, ensure they are clean and in good working order.

3. Protect Your Plumbing

Frozen pipes are a common winter problem that can cause significant water damage. Taking preventive measures will save you from costly repairs.

• Insulate Pipes: Wrap exposed pipes in unheated areas, such as basements, attics, and crawl spaces, with foam pipe insulation.

• Seal Gaps: Close gaps around pipes that allow cold air to reach them.

• Let Faucets Drip: During extreme cold, allow faucets to drip slightly to prevent pipes from freezing.

• Disconnect Outdoor Hoses: Remove and store garden hoses, and shut off and drain outdoor faucets to prevent freezing.

• Install a Water Heater Blanket: Insulating your water heater reduces energy consumption and ensures a steady supply of hot water.

4. Check Windows and Doors

Windows and doors are common sources of heat loss. Addressing these areas can make a noticeable difference in energy efficiency.

• Install Storm Windows and Doors: Adding storm windows and doors creates an extra barrier against cold air.

• Use Thermal Curtains: Heavy or insulated curtains help retain heat inside the home.

• Apply Window Film: Clear, plastic window film is a cost-effective way to reduce heat loss through windows.

• Replace Old Windows: If your budget allows, consider replacing single-pane windows with energy-efficient double- or triple-pane options.

5. Maintain Your Roof and Gutters

A sturdy roof and clear gutters are essential for handling snow and ice during winter.

• Inspect Your Roof: Look for damaged, loose, or missing shingles and have them repaired. A solid roof prevents water leaks and heat loss.

• Clean Gutters: Remove leaves and debris from gutters and downspouts to prevent ice dams, which can cause water damage.

• Install Gutter Guards: These keep debris out of gutters, reducing maintenance and preventing blockages.

• Trim Overhanging Branches: Ice and snow can weigh down branches, causing them to break and damage your roof.

6. Prepare for Snow and Ice

Snow and ice can create safety hazards and damage your home. Take proactive steps to minimize risks.

• Stock Up on Supplies: Keep a shovel, snow blower, and ice melt handy. Choose pet-safe ice melt to protect your furry friends.

• Mark Driveways and Walkways: Use stakes or markers to identify paths and driveways, making it easier to clear snow without damaging landscaping.

• Install Heat Cables: In areas prone to heavy snow, consider installing heat cables on your roof to prevent ice dams.

• Service Your Snow Removal Equipment: Check that your snow blower or plow is in good working condition before the first snowfall.

7. Prepare Your Yard and Exterior

Your home's exterior and yard need attention to withstand winter conditions.

• Protect Outdoor Furniture: Cover or store patio furniture to prevent weather damage.

• Shut Down Sprinkler Systems: Drain and winterize irrigation systems to prevent frozen pipes.

• Mulch Flower Beds: Add mulch to flower beds to protect plants and retain soil moisture.

• Inspect Your Foundation: Seal any cracks in your foundation to prevent cold air and pests from entering.

8. Test Safety Equipment

Winter often brings an increased risk of fires and carbon monoxide poisoning due to higher heating system usage.

• Check Smoke and Carbon Monoxide Detectors: Test detectors and replace batteries if necessary. Install additional detectors if needed.

• Inspect Fire Extinguishers: Ensure your fire extinguishers are fully charged and accessible.

• Clean Your Chimney: If you use a fireplace, have the chimney professionally cleaned to remove creosote buildup, which can cause chimney fires.

• Practice Fire Safety: Avoid overloading electrical outlets and keep flammable items away from heat sources.

9. Boost Energy Efficiency

Energy efficiency saves money and reduces your environmental impact.

• Use Ceiling Fans: Set ceiling fans to run clockwise at a low speed to circulate warm air.

• Install a Draft Stopper: Place draft stoppers at the base of doors to block cold air.

• Unplug Idle Electronics: Even when turned off, electronics can draw power. Unplug them or use a power strip.

• Lower Water Heater Temperature: Set your water heater to 120°F to save energy without compromising comfort.

10. Prepare an Emergency Kit

Winter storms can cause power outages and other emergencies. Being prepared ensures your family’s safety and comfort.

• Stock Essential Supplies: Include flashlights, batteries, blankets, non-perishable food, bottled water, and a first-aid kit in your emergency stash.

• Invest in a Generator: A portable generator can provide backup power during outages. Ensure it is properly installed and vented.

• Keep Sand or Kitty Litter: These materials can provide traction on icy surfaces.

11. Conduct a Pre-Winter Checklist

Before winter sets in, run through a checklist to ensure nothing is overlooked.

• Test your heating system and thermostat.

• Inspect and clean gutters.

• Stock up on snow removal tools and supplies.

• Check your home’s insulation and seal any gaps.

• Confirm that safety equipment is functional.

Conclusion

Winterizing your home is an investment in comfort, safety, and energy efficiency. By following these steps, you can protect your house from the challenges of winter weather while enjoying a warm, cozy, and cost-efficient season. Start early, address potential problems proactively, and embrace the peace of mind that comes with a well-prepared home.

Selling a home is often considered a spring or summer activity, with many believing the warmer months bring the highest offers and quickest sales. However, winter is often an overlooked but potentially ideal time to list your property. With fewer homes on the market, motivated buyers, and a host of unique benefits, winter may just be the best time to sell. In this blog post, we’ll explore why you should consider selling your home in winter and the distinct advantages that come with it.

1. Less Competition on the Market

One of the most significant advantages of selling your home during winter is the reduction in competition. While the spring and summer months bring a flood of homes onto the market, winter often sees fewer listings. This means that your property is more likely to stand out to potential buyers.

When you list your home during the colder months, you aren't competing against the dozens, if not hundreds, of properties that are typically available in spring or summer. Fewer homes on the market means your property has a better chance of catching the eye of serious buyers, resulting in quicker offers and a potential for a higher sale price.

2. Motivated Buyers

Winter buyers tend to be more serious and motivated than those shopping in other seasons. The people actively looking to buy a home in winter typically need to move quickly due to work, family, or lifestyle reasons. Whether they are relocating for a job or looking to settle in before the new year, winter buyers are often highly motivated to make a decision quickly.

This means less time wasted on casual lookers and more time spent with buyers who are prepared to act fast. With fewer listings to sift through, these buyers are more likely to be serious about making an offer if they find a home they like. In many cases, they may even be more flexible on price to make a sale happen quickly.

3. End-of-Year Tax Benefits

Another advantage to selling your home in winter is the tax benefits that come with a year-end transaction. Buyers who close by the end of December can take advantage of certain tax deductions, such as property tax deductions and mortgage interest deductions, which may make them more eager to close quickly.

For sellers, moving before the end of the year can also be beneficial. Depending on the specific circumstances, selling your home before December 31st might help you optimize your tax situation, potentially lowering your taxable income for the year. Additionally, if you’re able to buy a new property before the new year, you might be able to deduct interest payments on your new mortgage in the same tax year.

4. Serious Buyers, Fewer Lookers

While it’s true that fewer people may be out looking for homes during winter, those who are looking tend to be more serious. Cold weather, holidays, and shorter days mean that only motivated buyers will take the time to tour homes. While the spring and summer markets might see curious buyers coming through homes just to get an idea of what’s available, winter buyers are typically more focused and committed.

This can work to your advantage, as you’ll have fewer showings, but the showings that do occur will likely be with people who are more inclined to make an offer. Plus, many buyers are more likely to move quickly during the holidays, as they aim to settle into a home before the new year.

5. Homes Show Better in the Winter

While it might seem counterintuitive to sell your home during the cold, dark months of the year, winter can actually highlight your home’s best features. Holiday décor can add warmth and charm, and winter weather can create a cozy, inviting atmosphere. A roaring fireplace, a hot drink in hand, and a well-decorated home can give buyers the feeling of warmth and comfort that they may not get during the hotter months.

Additionally, winter weather can highlight how well your home performs in the colder months. Buyers will get a sense of how well your home retains heat, whether there are any drafts, and if the heating system is efficient. If your home is well-maintained and performs well in the winter, it could be an attractive feature for buyers.

6. Faster Closings

Due to fewer people on the market, winter buyers and sellers often experience a quicker, smoother transaction. Lenders, inspectors, and title companies are often less busy during the winter months, which can lead to faster closings. If you're looking for a quick sale, winter may be the ideal time to get your home under contract.

Moreover, many people are eager to close on a deal before the holidays, which can lead to quicker negotiations and fewer delays. Buyers are also more likely to be flexible in terms of closing dates, as they want to finalize the sale before the end of the year.

7. Sellers Have More Leverage

During the winter, there’s generally a smaller pool of buyers, but those buyers are often more serious and prepared to make offers quickly. This can put you in a stronger negotiating position, especially if you're working with a motivated buyer. The likelihood of multiple offers or bidding wars may be lower in winter, but you’ll also encounter fewer low-ball offers and tire-kickers.

Additionally, because winter is a slower time for real estate agents and service providers, you'll often have more attention from your agent, who can help you fine-tune your marketing strategy, schedule showings more easily, and provide personalized support.

8. More Room for Negotiation on Price

While it's true that homes may sell for less in the winter compared to the peak spring and summer months, you may still get a fair price or even above asking if your home is well-presented and strategically priced. Sellers in winter may be more open to negotiating, and since fewer homes are available, buyers may be more inclined to make reasonable offers that align with current market conditions.

If you’ve priced your home competitively for the winter market, you might find yourself receiving offers close to or even above asking price, especially if you’ve made the effort to stage and present your home well. The winter market can also provide more opportunities for creative negotiation, such as offering closing cost assistance or adjusting timelines to suit both parties.

9. Real Estate Agents Are More Focused

With fewer homes on the market and fewer transactions occurring, real estate agents typically have more time to focus on your listing in the winter months. Their undivided attention can help ensure that your home is marketed correctly, that your listing receives maximum exposure, and that the sales process runs smoothly.

Additionally, agents are often more eager to work with sellers during the winter because the market is slower. This means you’re more likely to have an experienced, motivated agent on your side, guiding you through the sales process with greater attention and care.

10. Leverage the New Year Motivation

Many people begin the new year with a sense of renewed purpose and a desire for a fresh start. This motivation can make buyers eager to find and close on a home quickly. If your home is listed in December or January, you can capitalize on that “new year, new home” mentality and attract buyers who want to kick off the year in a new space.

Conclusion

While it’s true that winter may not seem like the most popular time to sell a home, it offers several distinct advantages that can lead to a faster and more profitable sale. The combination of less competition, motivated buyers, tax benefits, and the opportunity to showcase your home in a cozy, inviting light makes winter a viable and even favorable time to list your property. If you’re considering selling, don’t overlook the benefits that winter can provide—you may find that it’s the perfect time to make a successful sale.

Whether you're looking to sell quickly or simply want to stand out in a quieter market, winter can provide the perfect opportunity to get the best deal for your home.