Anxiety over the economy and geopolitics are sidelining Canadians on the housing market, a survey of real estate agents by Ownright has found, with two-thirds reporting clients are more risk-averse than they were before 2022.

The Toronto-based digital real estate law firm polled 1,015 real estate professionals across Canada (excluding Quebec) to understand what was impacting market sentiment and their day-to-day business.

The survey, provided to RENX Homes before public release, had four-in-10 agents reporting broad economic uncertainty as the macro factor that is most heavily influencing buyers’ hesitation.

Next was employment and income stability concerns at 17 per cent, interest rates at 15 per cent, and a mix of worries over the economy and global politics for the remainder.

“The confidence in the housing market has been shaken a little bit,” Joel Fox, the co-founder and chief operating officer of Ownright, said in an interview with RENX Homes.

Even with the average home price falling in most of the country and interest rates settling down from decade-high peaks, the buyers’ market conditions are being perceived as a risk, he said.

Economic, political changes keeping housing market on its toes

“What we’ve seen over the past few years, and it’s persisted for longer than expected, is the calculation in people’s mind is getting a bit more complicated in how they think about entering the housing market,” Fox said.

Economic turbulence was found to be a driving factor behind the hesitation. The Canadian economy has been buffeted by a trade war with the U.S., a dismal job market and skyrocketing energy prices, to name a few examples.

Forty-one per cent of those surveyed said their clients are “somewhat” more risk-averse than they were before 2022; 26 per cent said “significantly” more.

Fox also pointed to a stream of worrisome news that has emanated from the U.S., including threats to annex Canada and conflicting messages about the war in Iran. Ownright asked how often agents’ clients cite political or economic instability in the U.S. as a reason to delay buying or selling homes. Under half (46 per cent) reported “occasionally.” Approximately a quarter said “frequently.”

The see-sawing from stability to volatility is affecting the housing market, Fox said. When interest rates fell, the general expectation was for housing to bounce back. But that has yet to pan out, he continued, because of the ever-changing conditions.

The twists and turns in the world are driving people toward “as much certainty as they can possibly get,” Fox said. The survey found 41 per cent of respondents would recommend a fixed rate mortgage to a homebuyer, compared to 30 per cent who would suggest a variable rate mortgage.

60% of agents using or trying AI tools

Another game changer that has hit real estate is artificial intelligence (AI). The technology is increasingly being used by agents to spend less time on certain tasks such as marketing or administrative work.

Agents, Fox said, are trying to boost their productivity with AI automation so they can focus on closing sales, the most profitable part of their job.

Ownright found 23 per cent are actively using AI-enabled tools, and 37 per cent are testing or exploring its use.

Approximately a quarter said they are not using AI tools but considering it, and 12 per cent reported no interest.

The survey found eight per cent of respondents are “very confident” Canada’s real estate market will rebound in the next 12 months, and 35 per cent are “somewhat confident.” On the negative side, five per cent reported being “very pessimistic” and 20 per cent said they were “somewhat pessimistic.” Over a third said they were neutral.

Fox expects the real estate sector’s defensive attitude to continue, given the market does not have “much further to drop.” He does not anticipate a market rebound to occur until there is more steadiness.

“When there is as much instability driven from south of the border as there is right now,” Fox said, “it’s going to make it really difficult for Canada to move on its interest rate stance.”