October 28, 2022 SEP Dev

When is the Best Time to Buy a House in Ontario?

Traditionally speaking, the housing market does follow certain ebbs and flows (or ‘seasonality’). Just like other types of investments, even the real estate market shares opportunistic times to buy/sell throughout the calendar year based on competition created by supply and demand. And, of course, the ‘best time’ often refers to the ‘cheapest’ or the periods with the lowest competition.

 

So, when is the best time to buy Real Estate in Ontario?

Decades of data suggest that the best seasons to buy real estate in Ontario tend to be the Fall and the deep Winter.

 

Fall – High Inventory + Lower Prices

When the kids go back to school, parents kick it into high gear. The Fall presents an expansive inventory. When inventory is high, there tends to be lower competition. Lower competition is better suited for buyers because (as we have all learned) bidding wars can make homes quite unaffordable.

Winter (late December – late January) – Low Inventory + Lower Competing Buyers

Many home sellers and buyers don’t want to brave the cold, so during these times, inventory could be far lower. But those that do list their homes, are likely motivated and eager to sell. Also, they could be trying to dodge the Spring market where inventory grows, thus making competition harder for the seller. This might be a great buying opportunity with room for negotiations in both the price and closing date.

 

Can Spring/Summer ever be the best time to buy a house in Ontario?

It’s not impossible that Spring/Summer can also present opportunities to buy a house in Ontario, at a great price. It’s circumstantial and depends on other factors (ex. Motivation to sell, interest rate, competition, economic factors, etc.). Historically, Spring and Summer have more competing buyers since it’s a great time for most families to move, but also have more buying options in general.

 

Do interest rates have any impact on the best time to buy a house in Ontario?

Yes, most certainly.

Lower Interest Rates = higher purchasing power. As affordability rises for everyone, so do home prices as competition grows strong and causes high competition (and in some cases, unhealthy competition – evident throughout 2020/2021)

Higher Interest Rates = lower purchasing power. As affordability drops, so do home prices (evident throughout most of 2022). Even though home prices drop, it might not be an equal match to the drop in affordability… so this can still be an opportunistic time to buy.

 

Disclosure: The time of writing is Q4 of 2022 – An anomaly of years to say the least. With continuous pressure from the Bank of Canada to curb inflation, we can’t claim that traditional trends for buying a house in Ontario hold in this current market – not until events play out for another 2-3 quarters. We can then reflect on the data of those quarters (once available) to determine any trends.

 

Call us for advice on rates, strategies, and trends in the mortgage market at any given time. (905) 455-5005.

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