The Canadian Real Estate Association expects the average price of a home to end the year 4.8 per cent lower than 2022, but says prices will rise by roughly the same amount in 2024.
The association’s prediction revealed Friday amounts to an average price of $670,389 this year and $702,214 next year, when prices are expected to increase by 4.7 per cent.
The board also foresees home sales falling 1.1 per cent to 492,674 this year and then rising 13.9 per cent to 561,090 in 2024.
The forecast accounts for little change in month-over-month sales seen since summer 2022 and the modest monthly gains recorded in February and March, as buyers edged closer to make purchases.
“As the spring market heats up and it looks as though some buyers are coming off the sidelines, it’s important to remember that the intense market conditions of recent years have not gone anywhere, they’ve just been on pause,” said Jill Oudil, CREA’s chair, in a press release.
The market Canadians are re-entering has seen months of falling sales, lower listings and dampened buyer sentiment as eight successive interest rate hikes weighed on the cost of borrowing.
But in recent months, the rate has been held twice in a row, prompting some to eye purchases once more, while prices are still low.
These trends left March home sales down 34.4 per cent to 41,636 from the year before.
On a seasonally-adjusted basis, sales reached 33,833, about one per cent higher than they had been in February.
March marks the second consecutive month of higher sales, Rishi Sondhi of TD Economics pointed out.
Sondhi attributed much of the boost to interest rates stabilizing, which helped “buyer psychology” and a solid job market.
“Our forecast assumes further sales gains are in the cards this year, although an important downside risk stems from looming regulatory changes that will make it harder to qualify for mortgage,” he said, in a note to investors.
As month-over-month sales ticked up new listings remain at 20-year lows, said CREA.
On a seasonally-adjusted basis, new listings totalled 53,298 in March, down 5.8 per cent from February. Actual new listings hit 68,597, a 27.4 per cent drop from a year ago.
With supply at historic lows, Oudil said homes are not only selling but selling faster, but it has not been enough to entice some sellers to list their properties.
“Sellers will likely need to see more evidence of a sustained pickup in activity and prices before listings turn meaningfully higher,” Sondhi said.
People don’t sell during a down market for several reasons, said Robert Kavcic, a senior economist with BMO Capital Markets.
Some don’t have to sell because the job market is strong and there are fewer mortgage delinquencies because the Office of the Superintendent of Financial Institutions has stress-tested most buyers and investors have a strong rental market to fall back on.
“Potential sellers don’t want to sell into a down market, and expectations are building that the worst of the correction is over,” he added, in a note to investors.
“The Bank of Canada’s guidance has helped establish this improved market psychology.”
As that shift in thinking took shape, CREA found the average home price was $686,371 in March, down 13.7 per cent from the year prior.
Excluding the Greater Toronto and Greater Vancouver Areas, which tend to be the country’s hottest markets, from the calculation cuts more than $136,000 from the national average price.
On a seasonally-adjusted basis, the average home price ticked up two per cent from February to $648,088.
CREA also said the average price was up almost $75,000 from its January 2023 level.
This report by The Canadian Press was first published April 14, 2023.
MONTREAL – Travel company Transat AT Inc. reported a loss in its latest quarter compared with a profit a year earlier as its revenue edged lower.
The parent company of Air Transat says it lost $39.9 million or $1.03 per diluted share in its quarter ended July 31.
The result compared with a profit of $57.3 million or $1.49 per diluted share a year earlier.
Revenue in what was the company’s third quarter totalled $736.2 million, down from $746.3 million in the same quarter last year.
On an adjusted basis, Transat says it lost $1.10 per share in its latest quarter compared with an adjusted profit of $1.10 per share a year earlier.
Transat chief executive Annick Guérard says demand for leisure travel remains healthy, as evidenced by higher traffic, but consumers are increasingly price conscious given the current economic uncertainty.
This report by The Canadian Press was first published Sept. 12, 2024.
Dollarama Inc.’s food aisles may have expanded far beyond sweet treats or piles of gum by the checkout counter in recent years, but its chief executive maintains his company is “not in the grocery business,” even if it’s keeping an eye on the sector.
“It’s just one small part of our store,” Neil Rossy told analysts on a Wednesday call, where he was questioned about the company’s food merchandise and rivals playing in the same space.
“We will keep an eye on all retailers — like all retailers keep an eye on us — to make sure that we’re competitive and we understand what’s out there.”
Over the last decade and as consumers have more recently sought deals, Dollarama’s food merchandise has expanded to include bread and pantry staples like cereal, rice and pasta sold at prices on par or below supermarkets.
However, the competition in the discount segment of the market Dollarama operates in intensified recently when the country’s biggest grocery chain began piloting a new ultra-discount store.
The No Name stores being tested by Loblaw Cos. Ltd. in Windsor, St. Catharines and Brockville, Ont., are billed as 20 per cent cheaper than discount retail competitors including No Frills. The grocery giant is able to offer such cost savings by relying on a smaller store footprint, fewer chilled products and a hearty range of No Name merchandise.
Though Rossy brushed off notions that his company is a supermarket challenger, grocers aren’t off his radar.
“All retailers in Canada are realistic about the fact that everyone is everyone’s competition on any given item or category,” he said.
Rossy declined to reveal how much of the chain’s sales would overlap with Loblaw or the food category, arguing the vast variety of items Dollarama sells is its strength rather than its grocery products alone.
“What makes Dollarama Dollarama is a very wide assortment of different departments that somewhat represent the old five-and-dime local convenience store,” he said.
The breadth of Dollarama’s offerings helped carry the company to a second-quarter profit of $285.9 million, up from $245.8 million in the same quarter last year as its sales rose 7.4 per cent.
The retailer said Wednesday the profit amounted to $1.02 per diluted share for the 13-week period ended July 28, up from 86 cents per diluted share a year earlier.
The period the quarter covers includes the start of summer, when Rossy said the weather was “terrible.”
“The weather got slightly better towards the end of the summer and our sales certainly increased, but not enough to make up for the season’s horrible start,” he said.
Sales totalled $1.56 billion for the quarter, up from $1.46 billion in the same quarter last year.
Comparable store sales, a key metric for retailers, increased 4.7 per cent, while the average transaction was down2.2 per cent and traffic was up seven per cent, RBC analyst Irene Nattel pointed out.
She told investors in a note that the numbers reflect “solid demand as cautious consumers focus on core consumables and everyday essentials.”
Analysts have attributed such behaviour to interest rates that have been slow to drop and high prices of key consumer goods, which are weighing on household budgets.
To cope, many Canadians have spent more time seeking deals, trading down to more affordable brands and forgoing small luxuries they would treat themselves to in better economic times.
“When people feel squeezed, they tend to shy away from discretionary, focus on the basics,” Rossy said. “When people are feeling good about their wallet, they tend to be more lax about the basics and more willing to spend on discretionary.”
The current economic situation has drawn in not just the average Canadian looking to save a buck or two, but also wealthier consumers.
“When the entire economy is feeling slightly squeezed, we get more consumers who might not have to or want to shop at a Dollarama generally or who enjoy shopping at a Dollarama but have the luxury of not having to worry about the price in some other store that they happen to be standing in that has those goods,” Rossy said.
“Well, when times are tougher, they’ll consider the extra five minutes to go to the store next door.”
This report by The Canadian Press was first published Sept. 11, 2024.
TORONTO – The U.S. Consumer Financial Protection Bureau has ordered TD Bank Group to pay US$28 million for repeatedly sharing inaccurate, negative information about its customers to consumer reporting companies.
The agency says TD has to pay US$7.76 million in total to tens of thousands of victims of its illegal actions, along with a US$20 million civil penalty.
It says TD shared information that contained systemic errors about credit card and bank deposit accounts to consumer reporting companies, which can include credit reports as well as screening reports for tenants and employees and other background checks.
CFPB director Rohit Chopra says in a statement that TD threatened the consumer reports of customers with fraudulent information then “barely lifted a finger to fix it,” and that regulators will need to “focus major attention” on TD Bank to change its course.
TD says in a statement it self-identified these issues and proactively worked to improve its practices, and that it is committed to delivering on its responsibilities to its customers.
The bank also faces scrutiny in the U.S. over its anti-money laundering program where it expects to pay more than US$3 billion in monetary penalties to resolve.
This report by The Canadian Press was first published Sept. 11, 2024.
