Despite a challenging housing market outlook RE/MAX Canada’s Kottick says Canadians still want to buy, and are willing to compromise to do so
Tariffs, economic uncertainty and affordability challenges may be hurting the national housing market – but Canadians are still clinging to the dream of homeownership despite those hurdles, according to RE/MAX Canada’s president.
The real estate giant’s latest housing market outlook, released last week, showed 65% of hopeful buyers surveyed are prepared to compromise in their efforts to own a home, including through relocation and cutting back on discretionary spending.
And Don Kottick, who’s helmed the organization as president since last year, told Canadian Mortgage Professional that the poll suggests homeownership appetite is still strong even with a sluggish market and challenging economic environment.
“Homeownership is still near and dear to the hearts of pretty much most Canadians,” he said. “Regardless of market conditions, regardless of headwinds, homeownership is still tied to who we are as Canadians.”
Widespread return to the city unlikely, says Kottick
Home affordability has improved modestly across many markets this year, although rising interest rates are eroding some of those gains. Some executives say the only solution to unlock a healthier market is for prices to drop even further.
But Kottick sees potential buyers who are on the verge of being able to afford a home taking pragmatic steps to get a purchase over the line.
“People are willing to sit a little longer in traffic to get that home that really appeals to their wants and their needs,” he said. “If they can get that bigger home [for less], they get better quality of life.”
The COVID-19 pandemic and the onset of a remote-working revolution pushed scores of buyers out of cramped apartments in big cities and toward more rural, spacious housing.
A hot topic of debate in the real estate sector since then is whether a ramping-up of return-to-office efforts could see buyers turn their attention back to cities and away from suburban and rural areas, but Kottick isn’t convinced.
“It’s not happening like, flip a switch and everybody’s back. It’s something that’s kind of a work in progress,” he said. “There’s a lot of discussion on it, a lot of talk on it – and probably a lot of resistance to it.”
Regional picture varies, but much will depend on BoC for 2027
About 32% of housing markets analyzed by RE/MAX’s latest report now sit in buyer’s market territory, a jump from 15.2% last year, as softer conditions emerge in many parts of the country.
Home sales were down in 81% of markets analyzed, the survey said. But while the outlook for the national market is cloudy, it’s often highlighted that the regional picture can vary widely from one province or city to the next – and prices actually increased in 56% of markets.
Some regional markets are still showing notable strength, Kottick said, with Northern Ontario cities including Sudbury, Thunder Bay, Kenora and Sault Ste. Marie seeing sellers’ market conditions holding.
Saskatoon and St. John’s, Newfoundland, meanwhile, are also bucking the broader national trend. “We still have these pockets that are really resilient, really strong,” Kottick said. “The recovery is definitely slower in some of the major markets where there’s been more price appreciation over time.”
Still, it goes without saying that the continuing trade war with the US and inflation fears as a result of the US-Iran war are keeping a lid on homebuying demand.
Rising oil prices have sent inflation expectations soaring in recent weeks, with chances of at least one Bank of Canada rate hike in the coming months also reportedly growing.
The central bank is scheduled to make its next decision at the end of this month, although at least one top economist has questioned the need for rate hikes – especially with the economy continuing to weaken.
Kottick said the trajectory into next year will depend on those factors, and whether there’s good news ahead on the economic front.
“If we can get the macro headwinds resolved, we very well could see the market really pick up in 2027,” he said.
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