In the lead up to COVID-19, real estate activity was showing a promising year ahead. But once open homes and showings were replaced with virtual viewings as social distancing measures were ordered, market activity began to shift.
For the most part, both potential home buyers and sellers began to put everything on hold as they waited for the uncertainty caused by the pandemic to pass. As a result, home sales declined across the country and prices began to lose momentum.
According to Point2 Homes, 86% of the agents who responded said they have noticed a significant drop in homebuyers’ interest. Of these respondents, 41% said that most of their clients stopped searching for a home, so they were forced to put everything on hold, while only 2% of agents said that, so far, they’ve only noticed only a minor drop in interest.
As homebuyers’ interest began to drop, 41% of agents said they are “very worried and concerned” about their business, while 34% said they are “extremely anxious” and their entire business is now on hold.
Just 10% of all agents surveyed estimated that this COVID period would translate into business losses of less than 25%; the majority of agents were much less optimistic. In particular, 62% of respondents said they expect at least half of their business to “vanish” after this period. Meanwhile, almost one-third of respondents believed the outbreak would cause a drop of more than 75%.
However, despite the negative impact the pandemic currently has on the market, most agents believe that the current health crisis will only have short-term effects. In fact, 80% of respondents believe things could get back to normal within twelve months, while 51% think it will take just six months for home buying to get back on track.
As the industry continues to navigate this uncertain time, real estate agents reported they are now incorporating new solutions into their work process, to not only help them prepare for the future but so they can continue to help homebuyers who still want or need to find a home.
According to Point2 Homes, 28% of agents said they had been doing more for their clients, such as taking more pictures of properties and spending more time on the phone answering questions about homes that buyers were unable to visit in person.
What’s more, 23% of respondents said they had become more dependent upon technology, including using more virtual tours in their home listings.
Regarding the pandemic’s more permanent changes to the market, Point2 Homes said many agents mentioned there could be a stronger dependency on online tools, such as virtual tours, live streaming, online buying, virtual signatures and buyer pre-assessment. On the other hand, other agents expressed concerns regarding market value, price drops, and the real estate market tipping into buyer territory.
A major real estate transaction in uptown Saint John has many tenants concerned.
Hazen Property Investments has sold 20 of its buildings to Historica Developments.
They include the McArthur on Germain Street and another 12-unit building on the west side to name just a couple.
“My gut feeling was anxiety — stress,” said Jeff Arbeau, who has been renting from Hazen for years.
Hazen is known for good-quality units at reasonable prices.
Historica is known for fixing up older buildings and turning them into luxury units.
We kind of realize there’s probably too many high-end expensive units that most people, we understand, can’t afford.– Keitch Brideau, Historica
Their prices “far exceed” Arbeau’s price range.
Historica rents typically range from $1,200 to $2,000 a month, while Hazen’s are $400 to $700.
“It would have a massive impact ability on my ability to live,” said Arbeau.
Many of his neighbours are also worried.
The information package they received from the new owner asked for debit pre-authorizations for rent payments and promised continued “exceptional” service but didn’t make any assurances about future rental fees.
“They don’t have to worry about it,” said Keith Brideau, president and founder of Historica.
Brideau said his company is not planning to increase rents for any current tenants or to change fees for parking, heat or lights.
That’s because he won’t have to recoup investments for any major upgrades.
“They’ve done an excellent job of taking care of their properties,” said Brideau. “Some of them are real gems.”
As tenants move out, he said, units will get things like fresh paint, refinished floors, and new countertops.
Future tenants, might be charged $50 to $150 a month more than the current rates.
“We definitely aren’t going to be pricing people out of the market,” said Brideau.
Historica is looking to expand into the “middle market,” he said, where rents range from $500 to $1,000 a month.
“We kind of realize there’s probably too many high-end expensive units that most people, we understand, can’t afford.”
Arbeau said another concern of his is about losing the “mom and pop” service he had from Hazen.
“You can contact them with a need, and they’ll get to you right away,” he said. “They know your name. They help you any way they can.”
Brideau said his company is aiming to match or improve the level of service.
“I’ve spent many a Christmas Day in a furnace room trying to get a furnace going with my dad,” said John Hazen, general manager of Hazen Property Investments.
Hazen’s grandfather bought the company’s first building 100 years ago.
Hazen said he had a heavy heart about the sale, but it was a good business opportunity and the right choice for his family.
Hazen had 13 employees. That’s being reduced to about seven.
Some of the people losing their jobs were close to retirement, he said, and all are receiving severance packages based on their years of service.
Hazen still has 270 units, including Regency Towers on the east side, some on Coldbrook Crescent, and one on the west side.
Municipal leaders have been inundated with messages about the Hazen sell-off.
Their buildings are “little micro-communities,” said Coun. Donna Reardon, who represents Ward 3, which includes the uptown and central peninsula.
“Those neighbours will look after each other,” Reardon said. “People who are in them are there for a long time. … If you’re there seven or eight years, you’re one of the newbies in a lot of Hazen’s buildings.
“So, that is upsetting to think that your neighbours may have to move, or you may have to move out.”
Everyone’s “major concern,” she said, “is that rent will go up extraordinarily.”
There aren’t any rent control mechanisms available to the city, but Reardon said she expects the market will control itself to some degree.
“He can skyrocket the rents, I suppose,” said Reardon, “but what will the market bear in Saint John?”
Reardon said she’d be interested in exploring best practices across the country on rent controls, but she is reluctant to do anything that would stifle development and growth.
Information Morning – Saint John22:06Historica developer pledges no rent hikes
Hazen Apartments was in the rental business in Saint John for 100 years. This week they sold all 20 of their buildings to Historica Developments. We hear from a former Hazen tenant, developer Keith Brideau, who bought the properties and an expert on affordable housing. 22:06
Some are worried that Historica may own too big a share of the local housing market and that this will give it monopoly-like power over prices and availability of apartments.
Historica now owns nearly 40 buildings containing a total of about 400 units.
Brideau estimated that represents five per cent or less of the rental market.
Julia Woodhall Melnik’s big concern is potential gentrification — the displacement of people who live uptown because it’s affordable.
“Where are they displaced into?” asked the assistant professor and director of the laboratory for housing and mental health at UNB Saint John.
The north end is one possibility, said Woodhall Melnik, but deficiencies in the public transit system would make it difficult for vulnerable populations to get to uptown services.
Saint John promotes itself as having relatively low housing prices when it comes to buying, she noted, but limited rental stock means rents are less affordable.
Woodhall-Melnik is hoping developers and landlords will take advantage of government funding available for rent subsidies and affordable housing developments.
Information Morning – Saint John15:33We continue the conversation on affordable housing
We continue our discussion of affordable housing in Saint John. Hazen Property Investments talks about the decision to sell 20 of their buildings. And Ward 3 city councillor Donna Reardon tell us what her constituents are saying and what the city can and can’t do to keep rents reasonable for people. 15:33
Brideau agreed affordable housing is a big issue and said he “would like to be part of that solution.”
He said Historica might announce something on that front within the next year.
Brideau said more construction is happening now in Saint John than he’s seen in the last 20 years. He noted one non-profit building is going up now on Wellington Row.
Reardon said affordable housing is “on everybody’s radar.”
She noted there are still many vacant lots in peninsula neighbourhoods.
A new survey shows the aggregate price of a home in the GTA increased by 11% year-over-year to $922,421 in the third quarter of 2020.
This Royal LePage House Price Survey says the median price of an average two-story home increased 12.2% year-over-year to $1,082,502 in the third quarter of this year.
The price of a bungalow jumped 10.6% year-over-year to $887,156.
During the same period, condominiums in the GTA saw prices rise 6.8% year-over-year to $599,826.
Strong home price gains were seen in Toronto where the price of a home rose 11.1% year-over-year to $975,980.
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The median price of a standard two-story home rose 15.5% year-over-year to $1,483,510. And the price of a bungalow increased 11.3% year-over-year to $974,295.
The average price of a condominium increased 4.9% year-over-year to $644,903 during the same time frame.
“Demand from the delayed spring market has continued through the third quarter,” said Debra Harris, vice president for Royal LePage Real Estate Services Limited. “The seasonal slowdown is expected in the coming months, but given the recent strength of September, we will likely see a more brisk fourth-quarter market than the previous year.”
An oncologist and a real estate mogul will be this year’s recipients of honourary degrees from Cape Breton University.
Dr. Ronald MacCormick, oncologist, and Louis J. Maroun, real estate, will be presented with their honourary degrees during the university’s fall convocation set for Nov. 7.
“Both Dr. MacCormick and Louis J. Maroun have represented our island in their respective careers and they have impacted thousands of Cape Bretoners; one in life-saving cancer care and one in international business and philanthropy,” said David Dingwall, university president and vice-chancellor.
MacCormick is the chief medical oncologist at the Cape Breton Cancer Centre.
He completed his medical training at Dalhousie University and his specialty training at the Princess Margaret Hospital in Toronto. His highly-reputable medical practice and his role in developing the state-of-the-art regional cancer center has impacted patients from across Cape Breton Island and parts of mainland Nova Scotia.
“Although I was not born in Cape Breton, both my parents are from here and I have spent the vast majority of my career here and raised a family here. My connections to Cape Breton Island and the people I care for are deep and I am a proud promoter of Cape Breton,” said MacCormick.
Maroun was born and raised in Sydney and holds a bachelor of arts degree from the University of New Brunswick and is a Fellow of the Royal Institution of Chartered Surveyors.
Considered one of the most prolific executives in national and international real estate transactions, Maroun first began his career in real estate in 1982 after seven years with the Nova Scotia provincial government.
He has built a highly-notable career and has been dedicated to his philanthropic work with such charitable organizations as the Cape Breton Regional Hospital Foundation, the Canadian MS Society, Casting for Recovery Canada and Cape Breton University’s Shannon School of Business.
“I credit my Cape Breton roots with giving me the drive, ingenuity and determination to succeed in my business career. It also taught me the value of caring for each other during adverse times, which led to my desire to give back to my community,” said Maroun.
Cape Breton University has been awarding honorary degrees since 1989.
The fall convocation will be celebrated through a virtual platform and to view the ceremony, visit www.CBUConovcation2020.ca.
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