At any time there are a whole host of market forces that are pulling the Canadian housing market in different directions, and adding characteristics to it that wouldn’t be there otherwise. The ones that started factoring into it in the spring of 2020 and the onset of the COVID-19 pandemic were among the most influential seen in recent memory, and maybe even far beyond it. Much has been made of how certain parts of the country were turned into a seller’s market more than than ever before, and that was because of the way the growth of remote working arrangements made it possible for people to move out of the major city centers. There were many more trends that came to be because of the pandemic, and throughout all of them the need for effective lead magnets for Canadian realtors has remained unchanged.
There are aspects of the market and the working environment for realtors that have changed and seemingly for good, and some of them will be factoring into whether or not realtors are having enough success as they start generating high-quality leads today. It’s one thing to get leads in real estate, but more often the challenge is in converting those leads into clients who eventually come to buy or sell a home through the agent. One of the pandemic-era trends that’s not going to be talked about here is the way that some regions of the country actually saw higher numbers of realtors leave the business, although in some cases it was for them to be retiring earlier.
Either way, this could actually be a favourable development if new clients were hard to come by previously. But for most parts of the country the shift in activity usually still meant that real estate lead generation became even more challenging. It’s for this reason that more and more of those agents decided to get onboard with a paid real estate leads service like the one we have here, and it’s usually money well spent as most agents who use the service and collect their monthly exclusive leads do end up converting a good number of them into clients. They almost always come to see this as money well spend when it comes to building their PREC and making the type of income they foresaw for themselves when they chose real estate as a a career.
We’ll leave the general promotion part of our service there for now, and move right to looking at the many pandemic-era trends that are still affecting Canada’s housing market. We’re now more than 5 years removed from the event, but it’s obviously still factoring into the economy of the country and no one will need to be told that ramifications from it were always going to be felt in the housing market for a long time afterwards. But not just the housing market, as the housing industry has been revised by what happened during that 18-month to 2 year period where COVID was continuing to change everything.
Notable Shifts
COVID-19 had a huge effect on Canada’s real estate markets. Some of those influences stopped being factors quite quickly, but others are still very much with us today.
What we’ll do here is take a look back at some of the major trends and milestones across Canadian housing markets over the past five years, and start with 2020. The first year of the pandemic brought us widespread uncertainty and anxiety in nearly every facet of the Canadian economy and real estate was certainly included in it. What came out of it was economic uncertainty, and the government restrictions and lockdowns really did freeze real estate activity for the first part of that year. Median home prices dropped, and the number of home being sold went down too.
At the same time we started to see how pandemic restrictions forced many Canadians to work from home, and this in some ways also led to buyers and renters reassessing their priorities. There became more of a focus on rural and suburban communities, as buyers placed a higher priority on larger spaces and homes with more amenities or dedicated home offices. This trend lost steam quickly though as the lockdowns eased in the second half of the year. When this happened it mean that pent-up demand erased the declines of the first few months. Home sales and prices went higher for six straight months in a row.
2021 – Year 2
There were plenty of housing market experts foreseeing a a return to some kind of normalcy in Canada’s housing markets for 2021. By the middle of the year Canada’s housing markets had begun to moderate, with sales activity down year-over-year. Sales did pick up, but the supply of properties for sale at the end of 2021 hit an all-time low. This contributed significantly to people putting greater emphasis on the fact that Canada was in a housing crisis.
The lack of supply and price increases also created a FOMO trend for buyers who made purchase decisions under pressure and the belief that if they didn’t buy a home now they might not be able to get approved for a mortgage in the future. The uncertainty caused by COVID wind down led to owners who would not sell during a global pandemic now listing their homes, while at the same time some of the urgency on the demand side was growing stronger in areas where the housing market already had downward pressure on it.
The widespread adoption of work-from-home now had thousands of Canadians leaving densely populated cities to smaller communities, with the aim of enjoying larger living spaces and having easier access to nature. Demand for single-family homes in these smaller communities soared, and on the East Coast of Canada in particular. People were getting extremely high prices for their homes in major urban centres and then taking that buying power into areas of the country where detached homes had never sold for those types of numbers before.
Take Halifax for example. Prices there rose from $329,482 in December 2019 to $489,933 in December 2021—an increase of almost 50% in just two years.
2022 – High Inflation and Rising Interest Rates
Home sales fell in Canada for much of 2022. By September of 2022 Canadian home sales were 11% below the 10-year pre-pandemic national average. The continuing reality of limited inventory worked out to housing prices rising across much of the country. This is where runaway inflation really started to factor into all of this too, and the Bank of Canada’s interest rate hikes meant that rising interest rates coupled with the inflation crisis also raised new questions about Canada’s old problem of housing supply and affordability. This was especially true for first-time home buyers in higher-priced markets like Toronto and Vancouver. The two areas of the country where finding effective lead magnets for Canadian realtors is always that much more of a challenge.
Another part of what we saw in 2022 was the federal and provincial governments introducing policies aimed at curbing speculation, cooling foreign demand for Canadian housing, and improving affordability. Many realtors and housing market experts will tell you these were birdbrained ideas put forth by a Liberal government that just wanted to make it look like they cared. All the while understanding that way too much of Canada’s GDP, and the Federal government being perfectly okay with that.
2023 – Cooling and Adjustment
The initial shock of the pandemic had subsided by 2023, but many of the effects of COVID-19 were still being felt in the housing market. Interest rate hikes slowed down the market, and multiple offer scenarios weren’t seen nearly as often. Would-be sellers who were eager to capitalize on earlier high prices contributed to a larger inventory and a more balanced market. At the same time, hybrid work models maintained demand in both cities and suburbs, with prices showing only slight fluctuations.
There was also a resurgence in both housing demand and activity across the country as the economy picked up. Interest rate continued to go up, but many locations in Canada weren’t too affected by that and the markets started to see pre-pandemic levels of activity for realtors who needed to start generating high-quality leads today. Early in the year, home sales surged and prices were once again on the rise but as 2023 drew to a close housing markets showed signs of cooling. Sales and prices fell quarter over quarter.
The belief here was that sellers and buyers who were holding onto unrealistic pricing expectations were becoming more flexible so as to get deals done before the end of the year.
2024 – Return to Balance / Focus on Affordability
Home sales and prices remained relatively flat for the first part of 2024. From there, however, six consecutive cuts by the Bank of Canada over the last half of that year pushed home sales and prices up all through the rest of the year. 2024 saw a resurgence in sales, driven by lower interest rates and renewed market confidence. Spurred by this the housing industry returned its attention to the issues that were establishing Canada’s housing markets long before the pandemic started. Most notable was the federal government’s Canada Housing Plan to tackle the national crises in housing affordability and supply.
Across Canada, buyers were still putting a premium on homes with extra space, home offices, and other amenities that continued to reflect the workplace changes that had greater numbers of people selling expensive homes in urban areas and then buying big homes in more rural ares of Canada for much lower prices in comparison. The last quarter of 2024 was active, as home sales were up more than 25% year-over-year to close out the year. Total home sales for 2024 reached 482,796, and the average price of a home sold in 2024 was $689,822.
2025 – Looking Ahead to the Future of Canadian Real Estate
What we’re seeing now is that the trade war with the United States has cast a shadow over some of the optimism regarding Canada’s housing market. Both sales and prices have been relatively stagnant so far this year. We need to consider as well that interest rates are at the lowest levels they’ve been in years, and that almost certainly is contributing to the number of new listings jumping up to 14.8% for this past January but then fall off a cliff in February onwards because of fear and uncertainty. The number of newly listed properties fell back 12.7% month-over-month and for the most part this has been due to the imposed tariffs. Activity will likely vary by region, and the expectation is that Ontario and British Columbia will see the biggest rebounds in sales. High demand in Alberta and Saskatchewan will also be driving significant price increases for quality homes in those Provinces.
Overall, growing demand from buyers due to lower interest rates is predicted to result in a 4 to 5% increase in the national average home price. This should take that number up to $722,221, plus an 8.6% increase in national home sales to 532,704 residential properties being sold across the country. There is much you can learn about effective lead magnets for Canadian realtors here, and if you’d like to start trying automated lead generation for realtors then you an sign up for Real Estate Leads and see for yourself how it fast tracks you being in touch with people who are ready to work with a realtor as they buy or sell a home. It’s possible to start generating high-quality leads today.
