Move-Up Market Report

2023 Move-Up Market Report

National Market Trends

Regional Market Trends

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Winnipeg

Calgary

Vancouver

• Home-buying activity in Greater Vancouver was strong out of the gate in 2023, with just over 14,300 properties sold. • While benchmark prices have fallen short of year-ago levels, values have climbed to some extent over the past six months, rising eight per cent to $1,203,000 between January to June. • Move-up buyers have been particularly active in 2023, given pent-up demand that continued to build while they were sidelined in late 2022. Vancouver’s suburbs have experienced the strongest demand, with detached homes in the $1.2 million to $1.5 million price range most sought-after.

Vancouver

“January marked the trough for residential activity, as sales and prices reached new lows. When the Bank of Canada signalled its intent to hold on further interest rate hikes, the floodgates opened, sending buyers into the market from coast to coast. Inventory challenges re-emerged in most major centres as demand once again outpaced supply. Quality listings were quickly snapped up, many moving in multiple-offer situations, which served to draw more sellers into the market in April. By May, the market was moving full speed ahead until the Bank announced its decision to raise the overnight rate in June and again in July, taking the wind out of the proverbial sails of most markets, with some exceptions, namely Calgary, Regina and Montreal.”

Christopher Alexander

President, RE/MAX Canada

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As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than 140,000 agents in almost 9,000 offices with a presence in more than 110 countries and territories. RE/MAX Canada refers to RE/MAX of Western Canada (1998), LLC, RE/MAX Ontario-Atlantic Canada, Inc., and RE/MAX Promotions, Inc., each of which are affiliates of RE/MAX, LLC. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides. RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. RE/MAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children’s Miracle Network Hospitals® and other charities. To learn more about RE/MAX, to search home listings or find an agent in your community, please visit remax.ca. For the latest news from RE/MAX Canada, please visit blog.remax.ca.

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Existing homeowners are driving housing market gains ahead of interest rate hikes, as home ownership continues to be a top priority for Canadians from coast to coast

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Source: Canadian Real Estate Association, Real Estate Board of Greater Vancouver, Calgary Real Estate Board, Saskatchewan Realtors Association, Winnipeg Regional Real Estate Board, Realtors Association of Hamilton-Burlington, Toronto Regional Real Estate Board, Ottawa Real Estate Board, Quebec Professional Association of Real Estate Brokers, Nova Scotia Association of Realtors. *Benchmark price in Greater Vancouver

as move-up buyers drove strong demand for residential properties across the country throughout the second quarter of the year. Buyers took advantage of the Bank of Canada’s temporary pause in overnight rate hikes in the second quarter of the year, sparking a flurry of activity in the mid- to upper-price ranges in Canada’s biggest housing markets. Tight inventory levels placed upward pressure on values, prompting double-digit price increases in five of the nine markets analyzed, between January and June of 2023. These include Regina, Greater Toronto, Hamilton, Winnipeg and Montreal. Meanwhile, single-digit price upswings were noted in the four remaining markets – Greater Vancouver, Calgary, Ottawa and Halifax – as sellers held on to properties that fell short of peak price levels reported one year ago. Fear of further rate hikes continues to impact the market psyche, with many move-up buyers hoping to get into the market before rates climb again. RE/MAX brokers noted increased urgency in the market as buyers sought to obtain mortgage pre-approvals with guaranteed rate holds in place for a 120-day period, prior to both the BoC’s June and July announcements.

average price* gains in major housing markets (January 2023 VS. June 2023)

despite the pandemic-induced rise and fall of real estate value. This was especially true in central and eastern Canada. With trade-up activity traditionally occurring within four to seven years of the initial home purchase, RE/MAX examined pricing in June 2018 compared to June 2023 and found that almost every market reported a significant upswing in value over the five-year period, ranging from just over three per cent in Regina to more than 80 per cent in Halifax. “While the threat of further interest rate hikes has given some pause to the market, particularly at entry-level price points, robust equity gains over the past five-year period provided the means and confidence to fuel solid buyer intentions in move-up markets across the country,” explains Alexander.

June 2018

5-year equity gains in Canada's major housing markets

June 2023

a growing family, the need for more space to accommodate new work-from-home arrangements and schedules, or a better school district, quality-of-life considerations were central to purchasing decisions. This proved true regardless of the move being made – whether downsizing or simplifying in more walkable neighbourhoods closer to the core, trading up or making lateral moves, urban or suburban.

national market trends

What began as a trickle of movement into housing markets late in the first quarter turned into a swell,

Equity gains also factored into Canadians’ decision to move up to larger homes or better neighbourhoods,

Necessity was the primary factor driving demand through the first half of 2023. Whether it was

through the summer months in most major Canadian housing markets. However, once it’s clear that the BoC is nearing the end of quantitative tightening and rates start to unwind, demand for housing will likely ramp up yet again. With uncertainty around financing out of the equation, the focus should remain squarely on supply again. In the move-up market and across the board, that will translate to renewed upward pressure on pricing. “One simply cannot understate the serious repercussions the housing shortage will continue to have on Canadian real estate and affordability,” explains Alexander. “In the short term, while the BoC’s movements may clamp down on housing demand, especially at lower price points, we expect they will have unintended consequences, serving as a temporary dam causing pent-up demand to build and new home construction to contract. When the BoC decides to finally relax quantitative measures and the dam bursts, housing supply will fall even shorter amid record population growth.”

“Inevitably, periods of contraction and short-term restraint ultimately give rise to increased pent-up demand. You can only hold back the impetus for so long. Real estate, after all, is driven largely by lifecycle events and broader factors such as population growth. While some will adjust their timing, most purchasers will eventually move forward, and we’ve seen that pattern emerge time and time again as move-up buyers nationwide re-ignite demand and competition for a limited number of listings.”

Elton Ash

Executive Vice President, RE/MAX Canada

With July’s 0.25 basis point rate hike, the BoC’s key rate now sits at five per cent, and homebuying activity is expected to slow

•Home-buying activity has been exceptionally robust in the first half of the year in Calgary. •Strong demand combined with a shortage of available listings in all housing types and price ranges have created a competitive marketplace, with one in every three homes now sold in a multiple offer situation. •During the pandemic, the province saw a significant upswing in in-migration as affordable housing and job opportunities attracted buyers from other provinces. That trend has continued in 2023 as buyers from other provinces relocate to Calgary in search homes that offer better value for the dollar.

Calgary

•A significant listing deficit has impacted residential sales in Winnipeg this year, particularly at the $350,000 to $500,000 price point where demand is greatest. •Steady upward momentum characterized home-buying activity in Winnipeg’s residential real estate market during the first half of the year, with buyers taking advantage of the Bank of Canada’s temporary pause in overnight rate hikes and lower housing values. •Supply is far more plentiful at the mid-to-upper end of the market, making it easier for move-up buyers to trade up to larger homes or different neighbourhoods in the $750,000 to $1 million price range.

Winnipeg

•Upward momentum in values sparked the leap into home ownership for many buyers, before prices moved beyond their reach. Buyers moving up and laterally have been more strategic, with most waiting for the right listing to come on-stream. •Year-to-date average price has declined 14%, despite an 11% increase in June versus January of this year. •Low inventory is having an impact on would-be move-up sellers, with many concerned that they may not be able to find a suitable home when they sell. Demand for move-up properties is greatest at the coveted $900,000 to $1.1 million price point, where just over 13 per cent of sales are occurring.

•Move-up activity represents the largest cohort in Regina’s housing market, with the greatest activity noted between $200,000 and $350,000. •While economic concerns impacted home-buying activity in Regina early in the year, the market has steadily gained momentum in recent months. Year-to-date residential sales hover at 1,680, down from heady 2022 levels, but ahead of the 10-year average. •Inventory constraints, however, remain front and centre throughout Regina, with available listings down about 15 per cent from last year. Well-priced homes at popular price points are seeing multiple offers as a result.

Regina

Hamilton

Toronto

•Home-buying activity kicked into high gear with the advent of the traditional spring market as the BoC pause on overnight rate hikes brought greater stability to the Greater Toronto Area (GTA) housing market. •The suburbs came alive early as move-up buyers sought to secure detached homes at more affordable price points. “Drive until you qualify” became the new mantra. •Demand was particularly brisk for detached homes in the $1 million to $1.5 million price range, although inventory remained a consistent challenge. In the 416 area-code, potential buyers often found themselves frustrated by both the lack of and the quality of existing housing.

Regina

GTA

Ottawa

•Against a backdrop of lower housing values and less competition, buyers took to the streets in Ottawa early in the second quarter, taking advantage of more favourable market conditions, including five-year fixed rates at under five per cent. •Move-up purchasers were at the forefront, driving demand for single-family homes and townhouses priced from $850,000 to $1 million, with more than 7,700 homes changing hands in the first six months of the year. •Suburban Kanata/Stittsville, Barrhaven and Orleans remained top destinations for move-up buyers, with an ample supply of larger homes on good-sized lots available for sale.

Regina

Ottawa

Montreal

•Average price in the Montreal CMA edged up 10 per cent to $583,596 since January. Equity gains have played a substantial role in today’s market, strengthening the position of existing homeowners looking to upgrade. •Demand is greatest for freehold properties, ranging in price from $950,000 to $2 million at present. Turnkey properties are most sought-after, given the high cost of labour and construction materials in today’s inflationary marketplace. •Given solid demand and limited availability of housing stock, momentum in the Montreal is expected to continue into the second half of the year, despite the most recent rate hike.

Regina

Montreal

•Despite inventory challenges and high mortgage rates, more than 2,500 homes changed hands in the first six months of the year in Halifax. •Pent-up demand and greater market stability drew buyers back into the market later in the first quarter and the trend continued throughout the second quarter of the year. •Multiple offers remain common under the $600,000 price point and in certain sought-after areas of the city such as the Halifax Peninsula, Sackville and areas in Dartmouth.

Regina

Halifax

Halifax

Regina

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Halifax

Montreal

Ottawa

Toronto

Hamilton

Winnipeg

Regina

Calgary

Vancouver

Regional Market trends

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and homebuying activity is expected to slow through the summer months in most major Canadian housing markets. However, once it’s clear that the BoC is nearing the end of quantitative tightening and rates start to unwind, demand for housing will likely ramp up yet again. With uncertainty around financing out of the equation, the focus should remain squarely on supply again. In the move-up market and across the board, that will translate to renewed upward pressure on pricing. “One simply cannot understate the serious repercussions the housing shortage will continue to have on Canadian real estate and affordability,” explains Alexander. “In the short term, while the BoC’s movements may clamp down on housing demand, especially at lower price points, we expect they will have unintended consequences, serving as a temporary dam causing pent-up demand to build and new home construction to contract. When the BoC decides to finally relax quantitative measures and the dam bursts, housing supply will fall even shorter amid record population growth.”

With July’s 0.25 basis point rate hike, the BoC’s key rate now sits at five per cent,

Inevitably, periods of contraction and short-term restraint ultimately give rise to increased pent-up demand. You can only hold back the impetus for so long. Real estate, after all, is driven largely by lifecycle events and broader factors such as population growth. While some will adjust their timing, most purchasers will eventually move forward, and we’ve seen that pattern emerge time and time again as move-up buyers nationwide re-ignite demand and competition for a limited number of listings.

Executive Vice President, RE/MAX Canada

Elton Ash

Whether it was a growing family, the need for more space to accommodate new work-from-home arrangements and schedules, or a better school district, quality-of-life considerations were central to purchasing decisions. This proved true regardless of the move being made – whether downsizing or simplifying in more walkable neighbourhoods closer to the core, trading up or making lateral moves, urban or suburban.

Necessity was the primary factor driving demand through the first half of 2023.

June 2023

June 2018

5-year equity gains in major housing markets

better neighbourhoods, despite the pandemic-induced rise and fall of real estate value. This was especially true in central and eastern Canada. With trade-up activity traditionally occurring within four to seven years of the initial home purchase, RE/MAX examined pricing in June 2018 compared to June 2023 and found that almost every market reported a significant upswing in value over the five-year period, ranging from just over three per cent in Regina to more than 80 per cent in Halifax. “While the threat of further interest rate hikes has given some pause to the market, particularly at entry-level price points, robust equity gains over the past five-year period provided the means and confidence to fuel solid buyer intentions in move-up markets across the country,” explains Alexander.

Equity gains also factored into Canadians’ decision to move up to larger homes or

January marked the trough for residential activity, as sales and prices reached new lows. When the Bank of Canada signalled its intent to hold on further interest rate hikes, the floodgates opened, sending buyers into the market from coast to coast. Inventory challenges re-emerged in most major centres as demand once again outpaced supply. Quality listings were quickly snapped up, many moving in multiple-offer situations, which served to draw more sellers into the market in April. By May, the market was moving full speed ahead until the Bank announced its decision to raise the overnight rate in June and again in July, taking the wind out of the proverbial sails of most markets, with some exceptions, namely Calgary, Regina and Montreal.”

President, RE/MAX Canada

Christopher Alexander

(January 2023 VS. June 2023)

average price* gains in major housing markets

What began as a trickle of movement into housing markets late in the first quarter turned into a swell,

National Market Trends

2023 Move-Up Market Report

Existing homeowners are driving housing market gains ahead of interest rate hikes, as home ownership continues to be a top priority for Canadians from coast to coast

Let's Get Started!

Halifax

•Average price edged up 10 per cent to $583,596 since January. Equity gains have played a substantial role in today’s market, strengthening the position of existing homeowners looking to upgrade. •Demand is greatest for freehold properties, ranging in price from $950,000 to $2 million at present. Turnkey properties are most sought-after, given the high cost of labour and construction materials in today’s inflationary marketplace. •Given solid demand and limited inventory, momentum in the Montreal is expected to continue into the second half of the year, despite the most recent rate hike.

Montreal

•Lower housing values and less competition brought buyers out early in the second quarter, taking advantage of more favourable market conditions, including five-year fixed rates at under five per cent. •Move-up buyers were at the forefront, driving demand for single-family homes and townhomes prices $850,000-$1 million, with more than 7,700 homes changing hands in the first six months of the year. •Suburban Kanata/Stittsville, Barrhaven, and Orleans remained top destinations for move-up buyers, with an ample supply of larger homes on good-sized lots available for sale.

Ottawa

•Home-buying activity kicked into high gear with the advent of the traditional spring market as the BoC pause on overnight rate hikes brought greater stability to the GTA. •The suburbs came alive early as move-up buyers sought to secure detached homes at more affordable price points. “Drive until you qualify” became the new mantra. •Demand was particularly brisk for detached homes in the $1 million to $1.5 million price range, although inventory remained a consistent challenge. In the 416 area-code, potential buyers often found themselves frustrated by both the lack of and the quality of existing housing.

Greater Toronto Area

•Equity gains sparked the leap into home ownership for many buyers, before prices moved beyond their reach. Those moving up and laterally have been more strategic this year, with most waiting for the right listing to come on-stream. •Year-to-date average price declined 14 per cent, despite an 11-per-cent increase in values in June versus January of this year. •Low inventory is impacting would-be move-up sellers, with many concerned they won't find a suitable home when they sell. Demand for move-up properties is greatest between $900,000-$1.1 million, where just over 13 per cent of sales are occurring.

Hamilton

•A significant listing deficit has impacted residential sales in Winnipeg this year, particularly at the $350,000 to $500,000 price point where demand is greatest. •Steady upward momentum characterized home-buying activity in during the first half of the year, with buyers taking advantage of the Bank of Canada’s temporary pause in overnight rate hikes and lower housing values. •Supply is far more plentiful at the mid-to-upper end of the market, making it easier for move-up buyers to trade up to larger homes or different neighbourhoods in the $750,000 to $1 million price range.

Winnipeg

•Move-up activity represents the largest cohort in Regina’s housing market, with the greatest activity noted between $200,000 and $350,000. •While economic concerns impacted home-buying activity in Regina early in the year, the market has steadily gained momentum in recent months. Year-to-date residential sales hover at 1,680, down from heady 2022 levels, but ahead of the 10-year average. •Inventory constraints remain front and centre throughout Regina, with available listings down about 15 per cent from last year. Well-priced homes at popular price points are seeing multiple offers as a result.

Regina

Calgary

Vancouver

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Regional Market Trends

National Market Trends