Did the coronavirus pandemic permanently change the Canadian real estate market? Undoubtedly, many aspects of the Canadian economy have been altered, triggering a cascade of challenges and opportunities!

Of course, this can weigh on consumer sentiment. But how much is it altering how Canadians purchase residential properties, whether single-family detached homes or condominium suites?

Now that it has been a year since Canada’s housing sector began its correction after the central bank launched its rate-hiking campaign, industry observers are observing the fallout. Homebuyers are navigating difficult terrain with rampant inflation and economic uncertainty dominating today’s environment.

Indeed, despite the decline in the average national home price over the last 12 months – approximately $660,000, according to the Canadian Real Estate Association (CREA) – housing affordability is still a crucial issue for buyers and sellers. According to market analysts and real estate agents, this is resulting in a new trend in the Canadian real estate market: trade-offs.

So, what are prospective homebuyers giving up to make the most significant purchasing decision in their lifetime?

Buyers Are Comprising on the Must-Haves

Is it too late to purchase the “perfect” home?

During Canadians’ property hunt, many families are learning to prioritize what matters to them while giving up certain features, according to a new study conducted for RE/MAX.

For example, more than two-thirds (68 percent) of Canadians say they might have to consider rethinking their focus on a specific location when buying a home. Seventy-two percent of Canadians also note that changes in the broader economy have revised their homebuying plans.

Because 66 percent of Canadians think the housing market is moving faster than they could make an offer, half of Canadian homebuyers are buying residential properties “to alleviate fears around the unknown,” the report stated.

“I don’t know how sustainable it is for prices to be the way they are now, but it was a pretty quick decision to buy the two-bedroom. A part of it was we didn’t want to be priced out of the area, because I do think that it will continue to get expensive, and the longer that we had waited, I don’t think a two-bedroom would have been affordable for us,” a repeat homebuyer in British Columbia.

Another repeat homebuyer in Alberta conceded that the residential property she purchased would have been her third choice.

“The area that we ended up buying in, if you had asked me a year or two ago would have been a third-choice area. So we did trade off a bit on location. It’s about a 30-minute walk into the city for us, and to my office […] the areas we were looking in prior to were about a 15-minute walk and much closer,” she said.

Others are conceding their desired home category, with many first-time buyers opting for a higher-density housing type instead of a conventional single-family unit.

As a result of these adjustments, Canadians have expanded their definition of what makes “a good fit,” realizing that they require the assistance of real estate agents to balance “must-haves” with “nice-to-haves.”

Of course, this balance might depend on your personal circumstances. Families with children might desire a location closer to a school. Professional couples may want to live in a home close to work or public transportation. Retirees may yearn for a simple one-story home in a community with nearby amenities.

This is why it is always critical for buyers and sellers (who will most likely turn to buyers again) to work with real estate agents!

Meanwhile, Canadians continue to focus on supporting a work-life balance. While the line between home and work is getting blurred as more people work from their homes, prospective homeowners envision their residential properties as safe spaces.

In addition, the size is becoming crucial, too: 64 percent of respondents say storage space is a critical factor when buying a home.

“People are bringing more intentionality and purpose to how they are utilizing space. The office needs to feel different from the kitchen or the bedroom. They’re looking for spaces that can shift their mindset,” said Chelsea Hamre, a RE/MAX real estate agent, in the report.

At the same time, a growing number of Canadians view their homes as both a place of rest and productivity. Twenty-one percent describe their homes as a place where they spend their “time learning and developing,” which is nearly double from 2020.

In the end, the Canadian real estate market has been transformed three years after the start of the COVID-19 public health crisis. Is an extra room necessary room? Yes, storage space is of the utmost importance! But, no, having a school three minutes from your house may no longer be feasible within your budget.

Ultimately, exploring and purchasing a home in this environment might be a balancing act between needs and wants, must-haves and nice-to-haves!