1. Interest Rate "Certainty" (The 2.25% Floor)
The biggest hurdle for buyers in recent years wasn't just high rates—it was the fear of rates going even higher.
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The Policy Rate: As of January 28, 2026, the Bank of Canada has held its key interest rate steady at 2.25%.
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The "Wait-and-See" Ends: For years, buyers stayed on the sidelines waiting for the bottom. With the Bank signaling that rates are now in a "neutral" zone (likely to stay here for the foreseeable future), that psychological barrier has broken.
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Impact: 5-year fixed mortgage rates have stabilized between 3.8% and 4.1%. While not the "emergency lows" of the pandemic, this level is considered the "sweet spot" that makes monthly payments predictable and manageable for median-income households.
2. The Price-to-Income "Closing Gap"
Since the peak of the 2022-2024 crisis, two quiet shifts have significantly improved the math for average Canadians:
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Stagnant Home Prices: Nationally, average home prices have remained largely flat or seen modest dips (e.g., Vancouver's average price recently dipped back below the $1 million mark).
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Cumulative Wage Growth: While home prices stayed still, Canadian wages grew. By early 2026, the "Housing Affordability Monitor" shows that the portion of income required to cover a mortgage has fallen for seven consecutive quarters—the longest improvement streak since the 1980s.
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The Result: Buying power has effectively increased by 10–15% for a typical family compared to 2024, purely through the combination of lower rates and higher salaries.
3. The End of the "Blind Bidding" Era
Inventory levels in early 2026 are at a 10-year high in provinces like Ontario and BC. This surplus has fundamentally changed how homes are bought and sold:
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Conditions are Back: In 2021, you had to waive inspections to get a house. In 2026, over 80% of homes in major markets are selling with conditions (inspection, financing, and even the sale of the buyer's current home).
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Price Negotiations: The "Offer Date" strategy has largely failed. Buyers are now successfully negotiating 3% to 5% off the asking price, a feat that was nearly impossible two years ago.
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Selection: Active listings are roughly 20% higher than last year, meaning buyers can actually "shop" rather than settling for the only house available in their budget.
Let's connect to discuss your real estate goals!
Imran Ali
The Ali Group
📧 [email protected]
📞 604-616-5553
