Shoots

Green shoots?

Talk to some urban realtors, and they” probably tell you they see ‘em. In the past ten days showings have been booked at a rate not witnessed since last summer. And rentals are hopping again. Despite the cold, snow, slush, rainstorms and the darkness of January, the green tips are visible.

Could this be a market revival, just when the doomsters were expecting collapse?

Opinions abound, but there are some facts worth considering.

Back to work, dude…

Major employers have been recalling people to the office. Yes, clamour out of those jammies and back into your pants. Get a haircut. Do your nails. Commute from Bunnypatch and be happy about it. Or, you could rent a nice condo near the office and reduce the travelling stress.

Apparently, that’s a thing, realtors say. And leases have been flying around as a result – especially after the January 5th RTO mandate came down from  government, the banks and other evil, heartless employers who give you money and then have the gall to expect you to show up to collect it.

This may be the bottom of the curve

Prices have dropped in a meaningful way. Almost everywhere. (Except Quebec. They’re weird.) The decline from the 2022 peak is running around 25% in most major centres for detached homes as days-on-market stats expand and listings pulled, reducing inventory.

It looks like seller resistance has kicked in, as the number of relistings falls off. Big price reductions are still possible where people really, really, really need to get out – and tose earn headlines. But the relentless grind down in asking prices in most places has ground down. Or nearly so. Spring is not far off. Realtor hope is eternal.

Stability matters

We have oodles of it right now, even in a screwed-up world where the US president has started snorfling other countries. Our prime minister is a stable guy (unlike the last one). The China deal is stable. The push to diversity our trade globally is stable. Making peace with unbridled cowgirl Danielle is stable. Being rid of Chrystia Freeland and that environut Guilbeault is stable. And interest rates are stable.

The Bank of Canada rate is expected to sit exactly where it is now for the next twelve months or so. Mortgages are anticipated to stick right around the 4% mark. Despite what happens in the ridiculous USA with the Fed under assault, our central bank is… yes, stable. Praise be.

Demand never dies

Canadians want to live in real estate they own, Often that makes zero financial sense, but they’re addicted. Smitten. Can’t help it. Now that a huge segment of our population heralds from other equally house-horny places (like South East Asia), it’s unlikely the appetite for mortgage debt will fall.

Says CIBC’s housing economist Benny Tal: “Unfortunately, I don’t see prices [of houses] going down in any significant way. The supply story is different; the inventory story is different. The demand is still there, and with interest rates stabilizing, the demand will continue to be there.”

And what happens if a drought comes?

The real estate brutalists discount the idea of a serious supply shortage in the future, but the builders don’t. The cracks start to appear in earnest in 2027, several of them warn. The construction business is in the process of being dismantled as sales vanish, projects are cancelled and the pipeline empties. From concept to completion it takes at least five years for a development to materialize – with the cranes now in place representing buyer commitments made right after the pandemic.

Last year was the worst on record for GTA builders, for example. The industry in Vancouver has been pleading for government support, and an end to the foreign-buyer ban. Over 100,000 trades are expected to be idled this year in Ontario as the hammering, tiling, roofing and digging stops. When buyers see the market reversing, turning price declines into even marginal gains,  everything will change.

Of course, all this could be moot. If consumer sentiment circles the drain in Canada, real estate will continue to melt away. There’s a lot to be uncertain about, after all. But ask yourself why people have been so willing to pump money into the stock market here – with spectacular results – as well as real assets like precious metals (up 70% last year) – and yet have abandoned housing. After all, property is far more useful than an ETF. It can be leveraged, turned into an income asset, used as collateral or lived in.

And good luck trying to use an equity fund to lure your girlfriend into living with you.

Case closed.

About the picture: “Been reading since 2008. It’s been a fun ride. Agreed & questioned some stuff, but overall enlightened!” writes Richard, in Vineland ON. “Have a lot to say, but as Grandma used to say, “It’s all been said before” She was 98! Me, I would just get out of bed and go to work! No kids, not by choice. I’m now 68 and pretty sure I’m financial literate. Amassed some $’s. Anyway, I’m pretty much reading you these days just to see the dogs — I’ve had seven! Salley (“Border Collie”, smarter than me) is now ten.”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/01/18/shoots/