In the first half of 2024, seasoned buyers and investors drove detached home purchases in Canada’s priciest markets, including the Greater Toronto Area (GTA), Greater Vancouver Area (GVA), and Fraser Valley, while first-time buyers were sidelined by affordability issues, according to a Re/Max Canada report.

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'The tide is beginning to turn' as investors and move-up buyers drive detached home sales, says Re/Max Back to video

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“While affordability remains the top obstacle for first-time homebuyers, more experienced buyers and investors are taking advantage of softer housing values,” Re/Max president Christopher Alexander said in the Aug. 15 report. He noted that these buyers are making their moves ahead of the Bank of Canada’s end to quantitative tightening, positioning themselves for potential gains when the market fully rebounds.

The Re/Max Hot Pocket Communities Report, which surveyed 83 markets across the GTA, GVA, and Fraser Valley, revealed that detached housing values increased in close to 40 per cent of these markets during the first half of 2024. Additionally, 30 per cent of markets reported a rise in the number of sales. This activity was particularly strong in the GTA’s 416 area code, where more than 34 per cent of neighbourhoods had stable or growing detached homebuying activity, outperforming the 905 region, Greater Vancouver, and Fraser Valley.

Toronto’s downtown and midtown areas remain hot spots for detached housing. Neighbourhoods such as Dufferin Grove, Little Portugal, Trinity-Bellwoods, and Forest Hill South posted significant gains in home buying activity. Alexander emphasized the appeal of these areas, stating, “Vibrant downtown/midtown communities remain a perennial favourite with purchasers in Toronto, with buyers vying for detached properties in coveted blue-chip neighbourhoods.”

In contrast, Greater Vancouver and Fraser Valley’s housing markets are grappling with limited inventory, which has supported price appreciation. Fraser Valley led the way, with 83.3 per cent of its neighbourhoods reporting an increase in average detached home prices. This trend was also evident in Greater Vancouver, where 70.6 per cent of neighbourhoods had a rise in median values. Notable gains were recorded in such areas as Squamish (14.2 per cent increase to $1.57 million), Burnaby (10.8 per cent to $2.16 million), and Port Coquitlam (8.6 per cent to $1.47 million).

Despite the ongoing affordability challenges, some first-time trade-up buyers are finding opportunities in these markets. “Many purchasers in today’s market are first-time trade-up buyers, moving from semi-detached homes, townhomes, or link dwellings to detached housing,” Alexander said. These buyers have benefited from relatively stable entry-level prices, making the transition to single-detached ownership less burdensome than in previous years.

As the market shows signs of recovery, sidelined buyers are expected to gradually re-enter. However, challenges remain. Alexander pointed out that “some first-time buyers are up against considerable challenges likely to temper momentum at the entry level.” Government intervention, such as extending amortization periods for resale home purchasers, could provide some relief, but the high prices in Ontario and British Columbia may limit the impact.

While overall home buying activity has slowed, the market is beginning to stabilize. In the GTA, for example, July sales were up 3.3 per cent compared to the same month in 2023 — somewhat closing the gap after the four per cent decline in year-over-year sales in the first half of 2024.

Alexander noted, “The tide is beginning to turn,” but economic uncertainties, such as the possibility of a U.S. recession, could still impact the market. Buyers are likely to remain cautious as they navigate potential headwinds, keeping a close watch on economic developments on both sides of the border.

• Email: shcampbell@postmedia.com

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