Two-thirds of Canadian real estate agents say clients are more risk-averse than ever

Canadian buyers and sellers are holding back from the real estate market at an unprecedented rate, with U.S. political instability and recession fears weighing heavily on consumer confidence, according to a new industry survey.

The Ownright Operators Report, based on responses from more than 1,000 real estate professionals across Canada, found that 67 per cent say their clients are more risk-averse than before 2022. 

Joel Fox, co-founder and chief operating officer of Ownright, the Ontario-based digital real estate law platform, said people transacting in the market today are uneasy. 

“When interest rates decline, you expect the market would pick back up,” Fox said. “It’s very interesting to see this environment where the decline in both average prices and interest rates has been happening and we’re not necessarily seeing the corresponding rebound of the market.”

Fox said geopolitical conditions are making decisions “much more complex” for buyers and sellers, and that in his own business, he’s witnessing “a lot more hesitancy.” Clients on the purchase side are increasingly anxious about whether property values could fall before closing, raising concerns about their ability to get a mortgage or finance the purchase, said Fox. 

Cross-border uncertainty ripples through Canadian transactions

The survey highlights the extent to which U.S. economic and political conditions are shaping Canadian real estate decisions. Nearly one in four professionals said U.S. instability frequently impacts transactions, while 69 per cent say it plays a role at least occasionally.

Broader economic uncertainty, including recession fears, ranked as the leading driver of client hesitation at 40 per cent, outpacing concerns about employment or income stability (17 per cent) and interest rates (15 per cent).

Financing failures and indecision collapsing more deals

The survey found that 34 per cent of real estate professionals identify financing failure as the leading cause of collapsed transactions, up from two years ago.

Client indecision is also taking a toll, cited as the top cause of transaction delays by 38 per cent of respondents, followed by financing and mortgage approvals at 28 per cent.

Fox said the shift toward a buyer’s market is showing up clearly in how offers are being structured, adding that conditions on offers have increased significantly as a result. 

“Those are used by buyers as an off-ramp on a deal if they don’t feel comfortable with it.”

When asked about preferred mortgage advice in today’s climate, 41 per cent of professionals said they recommend fixed-rate mortgages compared to 30 per cent who favour variable rates.

Forty-three per cent of professionals say they are confident the market will rebound within the next 12 months, while 25 per cent are pessimistic.

Administrative burden pushing professionals toward the exit

Beyond market conditions, the report points to growing strain within the day-to-day activities for industry members. 

More than half — 56 per cent — of professionals say compliance and administrative demands are cutting into the time they can spend with clients.

While only 10 per cent reported losing income as a direct result, 30 per cent say they have considered leaving the industry due to regulatory or administrative burdens.

At the same time, professionals are turning to technology to manage the load. Six in 10 say they are using or testing AI-enabled tools. However, 28 per cent believe the real estate transaction system is fundamentally outdated, suggesting that broader structural change has yet to follow the pace of tech adoption.

Fox said much of the AI adoption happening in real estate right now is concentrated on the marketing side, and has not yet reached the compliance and regulatory work that weighs most heavily on professionals. 

“Perhaps it hasn’t gotten to a place where it’s relieved the burden as much as salespeople would hope it would,” he said.

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