Skyrocketing costs for real estate during the pandemic are hitting Canadians hard, turning finding a home into an ordeal.
The excitement of shopping for their first home this past year quickly turned into a daunting task for Kathryn Quirk and her partner Tom.
“[We] started booking appointments for viewings, going to two or three a day, and very quickly realized that half a million dollars does not get you what you imagined in your head,” Quirk told CTV News.
The couple, who live in Waterloo, Ont., kept encountering what’s become a common occurrence: finding homes listed within their price range that would then go on to sell for $100,000 or $200,000 over asking.
“Knowing that it’s either move out to a small town or move out of province or continue to rent — it sucks, it’s really disheartening,” Quirk said.
The national average home price was over $720,000 in November, up nearly 20 per cent from the same time last year, according to the Canadian Real Estate Association.
“The housing market is scorching hot,” Elan Weintraub, co-founder of Mortgage Outlet, told CTV News. “I’m actually running out of adjectives to use. It went from hot to scorching to burning.”
Home prices that defy gravity have become a feature of the COVID-19 era.
“COVID is causing a lot of people to pull up stakes and move around who in a non-COVID world would have been in their forever home for the next 30-40 years,” Shaun Cathcart, senior economist with the Canadian Real Estate Association, explained.
At the same time, buyers are contending with a rush of people trying to take advantage of low mortgage rates.
“We talk about the bank of mom and dad, a lot of parents are pulling money out of their property to help their kids buy real estate,” Weintraub said.
That’s one of the factors driving up the price of homes in Vancouver and Toronto. One two-storey, semi-detached home which was recently listed was sold after just a day on the market for $1.71 million — which was $210,000 over asking.
Nicola St. John, with Bosley Real Estate in Ontario, told CTV News that there’s “nothing on the market.”
“Lowest inventory in the city since 2013.”
More than 630,000 homes have sold on the MLS system so far this year, well ahead of the 550,000 houses in 2020.
Experts say tight supply will continue and push prices even higher next year. While the growth in price isn’t expected to be as extreme in 2022, according to a CREA forecast released Wednesday, it will still be an issue.
And some are choosing to bow out for the moment.
The ongoing difficulty of finding a home has made Quirk and her partner decide to put off buying for now.
“With how crazy the housing market is, we’ve just decided to put it on hold,” she said.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
