‘Experienced buyers’ fuelling detached home sales

With first-time buyers locked out of the country’s most expensive housing markets, the move-up/down segments, as well as investors, fuelled detached home sales in the first six months of the year, RE/MAX Canada finds.

“While affordability remains the top obstacle for first-time homebuyers, more experienced buyers and investors are taking advantage of softer housing values, making their moves ahead of the Bank of Canada’s end to quantitative tightening,” says RE/MAX President Christopher Alexander.

“The first interest rate cut in June did little to incentivize buyers, but early indications show the second may have struck a nerve.”

The RE/MAX Hot Pocket Communities Report surveyed 83 markets in the Greater Toronto Area (GTA), Greater Vancouver Area and Fraser Valley, B.C. and found that nearly 40 per cent of markets reported an increase in detached housing values in the first half of 2024, while 30 per cent reported an upswing in the number of sales.

In the GTA, 40 per cent of communities in the 905 reported an increase in average price, with the highest gains reported in Scugog in Durham Region (9.3 per cent to $1.090 million) and Stouffville in York Region (six per cent to $1.642 million). Upward trending, albeit more moderate, was also reported in detached house values in York Region: Aurora (2.6 per cent to $1.7 million), Newmarket (1.7 per cent to $1.4 million) and Richmond Hill (0.8 per cent to $2 million).

York, Durham and Dufferin – three of the fastest-growing regions in the GTA’s 905 – are home to the top four most affordable neighbourhoods with detached housing options under $1 million. Those neighbourhoods include Georgina, where the average house price is $930,000.

While affordability continues to be a “monumental challenge” for first-time buyers in York, existing homeowners with equity are cautiously entering the market, according to Cam Forbes of RE/MAX Realtron Realty.

Opportunities exist throughout the region, with the most affordable communities – including Newmarket and Stouffville – experiencing some upward pressure on prices. Overall inventory levels for detached housing product have improved, with a good selection of detached properties available for sale. Values have moderated, down 1.1 per cent in the first six months of 2024, compared to year-ago levels, RE/MAX reports.

Detached housing sales in the first half are off last year’s pace by nearly 10 per cent, but some areas have fared comparatively well – including East Gwillimbury, Georgina, Vaughan and Stouffville – all of which report activity nearly on par with the first half of 2023 levels.

While there may be a nominal upswing in the demand for detached homes in the fall, a change in market fundamentals by next spring 25 should spark an increase in homebuying activity, particularly if overnight rates fall below four per cent, RE/MAX predicts.

Photo of Christopher Alexander courtesy of RE/MAX.