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Canadian residential real estate markets have experienced a mix of trends in recent months, leaving experts questioning whether the market is hot or cooling down. The Bank of Canada's decision to resume interest rate hikes in June caused many buyers to take a step back, resulting in a cooling of sales. However, some areas have seen stable or even increasing prices, despite rising mortgage rates. Bidding wars, once common in hot markets, have become less frequent, with quality properties and highly sought-after products being the exceptions. In contrast, certain areas like Toronto have experienced a resurgence in bidding wars in the 2023 summer market.

Another shift has been observed in the use of home inspections. While they were previously a common practice for buyers, sellers are now more frequently taking the initiative to conduct inspections themselves, reducing the prevalence of inspection clauses in offers. Tight inventories persist, with Toronto having only 0.7 months of inventory by the end of the second quarter of 2023, down from 2.4 months in the same period in 2022. However, the market dynamics have shifted due to rising interest rates, impacting the prevalence of offer dates when homes are priced to attract multiple bidders on a fixed date following a showing.

Despite inventory constraints and a longer time on the market for some properties, experts suggest that forces such as high interest rates and immigration demand are maintaining a balanced market. Realtors are getting creative in their approaches to find homes for clients, including approaching sellers who had previously attempted to sell their homes. Overall, the Canadian residential real estate market is showing signs of cooling, with some exceptions in specific areas and property types.

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