Buyers gain the upper hand in the real estate market

Oct. 30, 2009-Canadian homebuyers are gaining the upper hand in today's real estate market and it may be a better time to purchase that first home now, more-so than ever before.

"In the old days, [interested homeowners] were lined up around the block to see any old dump before the other guy bought it," says Realtor, Mike Donia. "Now, the power shift is all in the buyers' hands."

Because there are more options for buyers in today's market, they are now being wooed by vendors in a way that is drastically different from the past decade of increasing home prices and bidding wars.

For example, in the Atlantic Provinces, first-time homebuyer activity in the housing market has remained steady due to strong employment levels and quality inventory, according to this year's Royal LePage First-Time Homebuyers' Report.

The importance of affordable housing is significant. In Quebec, for example, 56 per cent of first-time homebuyers hope to purchase a property in the $150,000 to $300,000 range. Luckily, in today's buyers' market, the current average housing prices for the first quarter of 2009 fit in with buyers' demands. In Montreal, the average condominium sells for $206,528 and a detached bungalow can be bought for $232,375.

A sign of a brighter housing market and a sign of new times is the return of conditional offers and house inspections, according to Phil Soper, president and CEO of Royal LePage.

"In the past, people were wary about putting in a request for a housing inspection or making conditional offers, things that were disregarded during a seller's market," says Soper. "But that's certainly not true anymore."

Furthermore, the consensus seems to be that the housing market is going to get worse before it gets better, meaning housing prices will likely continue to fall, creating even better opportunities in this buyer's market.

"The crash of the stock market on top of reduced exports to the United States points to a long and deep economic recession for the GTA [and regions across Canada]," says housing economist, Will Dunning. "This implies that our housing downturn will be long-lasting."

Thanks to falling home prices, record low mortgage rates and a strong supply of new homes, buying intentions in Canada are up significantly from last year. Forty-eight per cent of the 2,026 adults surveyed say it makes sense to buy now, rather than wait another year, according to a poll by Ipsos Reid for RBC.