Homebuyers are watching the economy closely, and for good reason. Buying a home is one of the biggest purchases most people ever make. And some recession talk in the media, driven by high interest rates and cost of living concerns, has made a lot of would-be buyers second guess their plans.
A recent survey from BMO showed that over two-thirds of prospective Canadian homeowners (67%) are waiting for interest rates to drop before purchasing a home, and many are taking a “wait and see” approach due to concerns about the economic outlook.
But here’s the good news: the Canadian economic narrative is often more nuanced than the headlines suggest.
Most Canadians Await a Market Shift, But Forecasters Predict a Soft Landing
While Canadian households are feeling the pressure of high debt loads, many economic experts predict Canada may avoid a severe recession in the near future, instead facing a period of slow, modest growth.
For example, many economists anticipate that the Canadian economy will grow modestly in 2025, supported by expected lower interest rates and a gradual return to consumer spending. However, the path isn’t smooth—household debt remains high, and inflation risks could persist.
If expert economists aren’t forecasting a dramatic downturn, should you put your plans on hold? We are constantly navigating economic uncertainty and the best way to handle that is by leaning on facts, not fear. You can do that by making sure you have the information you need to make an informed decision.
Tips for Buying a Home During Periods of Economic Uncertainty
Here’s the best advice anyone can give right now. While it’s important to keep an eye on the Bank of Canada and inflation, that shouldn’t necessarily overshadow your real-life needs. Economic shifts come and go, but the reasons people buy homes rarely change.
As real estate experts often point out:
“Well-prepared buyers who have been waiting on the sidelines are likely motivated by personal and lifestyle needs like growing families, new jobs, or retirement. And these considerations can outweigh short-term economic uncertainties…”
Timing your move around real life (not the news cycle) is what matters most.
But here’s the key for Canadian buyers.
If you’re going to buy a home right now, job stability and mortgage affordability really matter, especially with the high cost of living. You need to feel confident in your income and know you can comfortably manage your mortgage payments, even if your situation or the economy shift.
If your job is secure and you’ve built a cushion of savings, experts say you don’t necessarily need to delay. Just keep these strategic tips in mind:
- Set a Budget and Stick to the Stress Test: Don’t overextend. The Canadian mortgage stress test is designed to ensure you can afford payments even if interest rates rise. Make sure your personal budget is comfortable beyond the stress test, factoring in likely rising costs like property taxes and maintenance.
- Negotiate: In many Canadian markets, built-up inventory has shifted conditions in favour of the buyer. Other buyers may pull back because of their own fears. Use this to your advantage to negotiate on price, closing conditions, or repair allowances.
- Be Strategic about Rates and Renewals: Talk to lenders about what rate you can qualify for today (fixed vs. variable) and, crucially, your strategy for when your mortgage term is up for renewal. Canadians are particularly sensitive to rate changes, so have a plan for a higher renewal rate.
- Consider Selling Before You Buy: If you already own a home, selling first can reduce the financial pressure and help solidify your budget for your next home, reducing the risk of carrying two mortgages.
But nothing replaces the value of having a trusted team around you, especially right now. As Canadian financial advisors recommend:
“Buying a home during a period of uncertainty can sometimes be a good idea, but only for people who are lucky enough to remain financially stable… Be sure to enlist the help of an experienced local real estate agent. Not only do agents know their markets well, they will also work to get you the best deal in any given situation.”
Bottom Line
While many Canadians are understandably cautious, the general consensus among Canadian economists points toward navigating slow growth rather than a deep recession.
So, you don’t necessarily have to put your moving plans on hold. If your finances are solid, your job is stable, and you have a real need to move, you can still make it happen.
What’s holding you back from making your next move? Let’s talk it over.
Learn more about the Real Estate Market with Allan Abrigo and find out what properties are on the market today in Ontario.
