As we look to 2021, I think a lot of people are excited to see 2020 in their rear-view mirror — the year that became a meme in and of itself for being wildly unpredictable and apocalyptic.
The real estate market, however, started out strong, fell off a cliff during the first lockdown in the spring, then rallied back incredibly and finished a record year in many sectors. 2020 will be remembered by realtors fondly, I can assure you of that.
Luxury sales went through the roof as people fortified in anticipation of the next lockdown, and total sales jumped over 70% year over year.
Now well into the fourth quarter, things are slowing as per the seasonal norm as the snow starts to fall. The question on everyone’s mind is, what does 2021 have in store for us?
I was fairly bearish on the post-COVID market six months ago. I expected to see demand fall off once the bottleneck of buyers displaced from the spring lockdown had done their thing.
The market proved me wrong and continued to pick up steam. What hadn’t been predicted was the behavioural shift brought about by COVID-19 that would play right into the Kelowna real estate market’s hands.
Suddenly, workers became untethered from their offices, which caused many to completely rethink where they called home.
People who endured consecutive months in smaller living quarters began questioning their urban existence, and began the search for greener pastures. Buyers sought elbow room, a yard, ample space for home offices, gyms and at-home classrooms.
Many homeowners living in the Lower Mainland made the decision to seek out a less populated area close by that offered relative affordability and the same four season lifestyle they were used to.
Kelowna became a focal point for so many seeking a change.
These behavioural shifts set in motion by a global pandemic will have a lasting impact on the buying decisions and will continue to funnel people into the Okanagan, so I see the demand remaining strong through 2021 and beyond.
This combined with record-low mortgage rates should generate enough sales activity to hold our inventory levels down in seller’s market territory in 2021.
The overall sales volume for the past two months was nearly $1 billion, this is unprecedented for our market when compared to last year at $470 million.
This represents a lot of proceeds that find their way back into the local economy. There are dozens of ancillary businesses that benefit either directly or indirectly from this. Service providers, contractors, local retailers, you name it.
This is good news.
Now, if you’re a buyer, you may not hear this as good news. If you have been on the sidelines for even just three months. you have watched the average single family home in Kelowna jump by nearly $40,000 and over $70,000 if you’ve been on the sidelines since before the pandemic.
Now, it’s not all full steam ahead, the market will face some head winds. As single-family homes had the largest price jump, the entry-level property has been pushed out of reach for many first-time buyers.
This combined with a strict lending environment will keep many would-be homeowners on the sidelines in 2021.
The other challenge we face is a small business economy that is a little battered and bruised after lock downs and social distancing protocols put into effect. The impact on our local job market is still unknown, but this will likely play out in 2021.
This brings us to the potential foreclosure issue that may be brewing — 3.7 million borrowers in Canada are still in government and private-sector mortgage forbearance programs. That’s about seven per cent of all active mortgages, according to Black Knight, a mortgage technology and data firm.
Barring further government support, experts there predict serious delinquencies could be on the horizon.
Having said that, I doubt we will see many foreclosures, however, as people have gained so much equity that they would just sell their property prior to the buyer getting conduct of sale.
In conclusion, my prediction for 2021 is a robust year in Kelowna real estate with some excellent growth opportunities in the higher-end single-family homes, recreational property and agricultural land.
A very strong rental market with low vacancy indicates that positive cash-flow will still exist for investors and homeowners can look forward to another year with single-digit property appreciation.
Condo Owners "Handcuffed" in the Toronto Real Estate Market? – RE/MAX News
Increasing valuations and surging rents had been the hallmarks of the Toronto real estate market, particularly for condominiums, in the years following the 2008-2009 Great Recession. The staggering demand for dense downtown housing, as well as investor speculation and short-term rentals, contributed to one of the hottest housing markets in the world.
Then the COVID-19 public health crisis happened.
Like other major urban centres, the coronavirus pandemic has altered the residential landscape in Toronto, which has become associated with an enormous inventory of tiny and ultra-expensive condominiums. North America’s fourth-largest city is enduring a two-pronged problem. The first is that Airbnb hosts are selling their vacant short-term units, with borders closed to non-essential travel, and short-term rental rules tightened last year. The second is that people are fleeing the hyper-dense city for green pastures in rural communities.
This begs the question: can condo owners sell their units in a market plagued by dwindling demand and surging inventory? Many savvy investors who got in on the ground floor in the last decade will likely turn a profit when they secure a buyer. However, somebody who acquired a one- or two-bedroom suite in the last couple of years may find it harder to make money off the property and use the proceeds to upgrade to a detached or semi-detached house.
Ultimately, some Toronto condo owners may be feeling trapped by a large inventory of condos, most of which had been erected in the last few years. Or, as Dale-Paul Jordan, who listed his Toronto condo, told Reuters: “One of the things we’re handcuffed to is selling our condo to help with the down payment.” But does the data reflect the notion that condo owners in the Toronto real estate market are handcuffed? Let’s explore!
Condo Owners in the Toronto Real Estate Market
Sales activity and prices slowed down in the fall, while condo stocks intensified across the city.
According to the Toronto Regional Real Estate Board (TRREB), average Toronto condo prices tumbled 4.7 per cent year-over-year in December to $625,828, a contrast to the 8.1-per-cent growth in the average detached home price ($1,475,758).
Could this be the new norm, at least temporarily?
Recent TRREB data highlights that condo inventories more than doubled in the Greater Toronto Area. This has been a remarkable turn of events, because the broader real estate sector is booming in Toronto and the surrounding areas.
TRREB’s Chief Market Analyst Jason Mercer noted in the report, “there was a dichotomy between the single-family market segments and the condominium apartment segment. The supply of single-family homes remained constrained resulting in strong competition between buyers and double-digit price increases. In contrast, growth in condo listings far-outstripped growth in sales. Increased choice for condo buyers ultimately led to more bargaining power and a year-over-year dip in average condo selling prices during the last few months of the year.”
For now, it seems as though Toronto condo owners looking to leave the city have two options: stay put or sell the unit at a deep discount. But perhaps 2021 will offer more options for “handcuffed” homebuyers.
A Rebound in the Condo Market in 2021?
It is widely expected that many of the public policy health guidelines will remain intact in the first half of 2021. This includes immigration controls and a crackdown on short-term rentals (Airbnb). But the second half of the year could see heated market activity, with more Canadians immunized with the coronavirus vaccine and consumers holding about $200 billion in savings.
Although there has been some speculation that the Bank of Canada (BoC) could be the first central bank to tighten monetary policy, the institution has yet to send any signals that it would raise interest rates anytime soon. In other words, the BoC’s benchmark lending rate of 0.25 per cent and the five-year mortgage rate of below five per cent are unlikely to change in 2021 and possibly in 2022. Put simply, borrowing has never been cheaper, which is allowing new homebuyers to delve into the real estate market.
Another lingering question impacting the direction of Toronto real estate: if life returns to some semblance of normalcy following widespread vaccinations of Canadians, will corporations maintain their work-from-home policies? Google recently announced that the company would have employees return to the office in September and only experiment with flexible telecommuting a few days per week. This matters because many professionals have been enjoying newfound freedom over the last several months and some have migrated to regions further from their place of employment, soaking up the luxury of no daily commute coupled with quieter rural living.
But this could potentially change toward the end of 2021, with businesses returning to their commercial workspaces. Will this translate to a wave of homebuyers (and condo seekers) returning the big cities? Should this wave start to trickle back to the city sooner rather than later, this along with the other strong demand trends forecasted for the coming year, should provide some relief for handcuffed condo owners in Canada’s largest real estate market.
Quebec's Real Estate Market Performed Well in 2020 With Historic Sales Records – GlobeNewswire
L’ÎLE-DES-SOEURS, Quebec, Jan. 15, 2021 (GLOBE NEWSWIRE) — The Quebec Professional Association of Real Estate Brokers (QPAREB) has just released its residential real estate market statistics for the province of Quebec, based on the real estate brokers’ Centris provincial database.
In total, 112,476 residential sales transactions were concluded in 2020 in the province of Quebec. This represents a 17 per cent increase compared to 2019. It was also the highest number of sales ever registered since the real estate brokers’ Centris system began compiling market data in the year 2000.
“The fourth quarter brought an extraordinary year to a close, one marked by an unprecedented health crisis. Exceptional government financial assistance programs, rock-bottom interest rates, a renewed interest in acquiring a property adapted to the new reality of teleworking, as well as new needs have helped accelerate the increase in transactions beyond large urban areas,” said Charles Brant, director of market analysis at the QPAREB. “This has further reduced the already limited number of properties for sale on the market, pushing property prices to levels never before seen across the province,” he added.
Here are some of the highlights of 2020.
- By property category, single-family homes stood out with a significant 18 per cent increase in sales across the province. Sales of plexes and condominiums also registered strong increases of 17 per cent and 13 per cent, respectively.
- Among the province’s metropolitan areas, Quebec City (+28 per cent), Sherbrooke (+22 per cent) and Gatineau (+15 per cent) registered the largest increases in sales.
- Overall, sales in regions outside of the metropolitan areas experienced an even more dramatic increase in sales (+31 per cent), all property categories combined.
- More specifically, several small urban resort areas registered phenomenal sales increases in 2020, including the agglomerations of Charlevoix (+94 per cent), Sainte-Agathe-des-Monts (+64 per cent), Mont-Tremblant (+59 per cent) and Sainte-Adèle (+57 per cent).
- There was an average of 39,848 active listings on the Centris system in Quebec in 2020, a 29 per cent drop compared to 2019. This was the fifth consecutive annual decrease in active listings.
- The median price of single-family homes in Quebec stood at $295,000 in 2020, up 13 per cent compared to 2019.
- The median price of condominiums also registered a notable increase, rising by 11 per cent to reach $272,000.
- The median price of plexes (2 to 5 dwellings) remained relatively stable compared to 2019, inching up by 1 per cent to reach $425,000.
Market conditions and selling times
- Market conditions tightened in the vast majority of areas of the province. Many agglomerations located outside of the metropolitan areas experienced the most rapid tightening of market conditions in favour of sellers.
- Selling times across the province shortened compared to 2019: for all property categories combined, it took an average of 86 days for a property to sell (-11 days).
In the context of the current pandemic, the QPAREB reminds you that working with a real estate broker means more security and less stress, as all members are subject to the Real Estate Brokerage Act as well as strict rules and a code of conduct. Learn more about the health measures that are in effect.
About the Quebec Professional Association of Real Estate Brokers
The Quebec Professional Association of Real Estate Brokers (QPAREB) is a non-profit association that brings together more than 13,000 real estate brokers and agencies. It is responsible for promoting and defending their interests while taking into account the issues facing the profession and the various professional and regional realities of its members. The QPAREB is also an important player in many real estate dossiers, including the implementation of measures that promote homeownership. The Association reports on Quebec’s residential real estate market statistics, provides training, tools and services relating to real estate, and facilitates the collection, dissemination and exchange of information. The QPAREB is headquartered in Quebec City and has its administrative offices in Montreal. It has two subsidiaries: Centris Inc. and the Collège de l’immobilier du Québec. Follow its activities at qpareb.ca or via its social media pages: Facebook, LinkedIn, Twitter and Instagram.
Société Centris provides real estate industry stakeholders with access to real estate data and a wide range of technology tools. Centris tools are used by close to 14,000 real estate brokers, as well as other industry professionals. Centris also operates Centris.ca, the most visited real estate website in Quebec.
Click on the links below to consult the regional press releases:
Quebec City CMA
RMR de Gatineau
RMR de Sherbrooke
RMR de Saguenay
RMR de Trois-Rivières
Agglomération de Granby
Agglomération de Joliette
Agglomérations des Laurentides
Agglomération de Saint-Hyacinthe
Agglomération de Drummondville et de Victoriaville
Agglomération de Val-d’Or et de Rouyn-Noranda
For more information:
Communications and Marketing
1-888- 762-2440 or
514-762-2440, ext. 238
Home sales hit record in 2020, Canadian Real Estate Association reports – CTV News
The Canadian Real Estate Association says home sales in December hit an all-time record for the month to end what was also a record year.
It says December sales were up 47.2 per cent compared with December 2019, the largest year-over-year gain in monthly sales in 11 years.
Sales for the month were also up 7.2 per cent compared with November.
For 2020 as a whole, CREA says some 551,392 homes were sold, up 12.6 per cent from 2019, and a new annual record.
The actual national average home price was a record $607,280 in December, up 17.1 per cent from the final month of 2019.
CREA says excluding Greater Vancouver and the Greater Toronto Area, two of the most active and expensive markets, lowers the national average price by almost $130,000.
This report by The Canadian Press was first published Jan. 15, 2021.
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