Real eState

LACKIE: Real estate market’s winding path humbling

Published

1 year ago

June 18, 2023

Some economists are predicting that we’re looking at rates ticking down no sooner than next spring. Now no one is even considering a reduction in 2023. Photo by iStock /GETTY IMAGES

Here we go again.

It’s been less than two weeks since the Bank of Canada’s 0.25% interest rate bump and depending on whom you feel like asking, we are either looking at much ado about nothing — after all, is a quarter of a basis point really such a biggie when we’ve ridden the interest rate tides this far? — or the beginning of the real undoing with economic calamity coming straight for us.

The opinions, as ever, are hot and forceful and while much of what I am hearing sounds not unreasonable even if completely contradictory, I can’t help but wonder how it is that some of us have learned nothing from the last 16 months, let alone the last three years.

For every Twitter thread or Instagram Reel composed by a self-appointed soothsayer who is, in their own mind at least, an expert on economics or real estate or consumer behaviour is a human being still resisting the biggest life lesson forced upon me since the early days of the pandemic: Few among us have a single clue what comes next, at best we are working with educated guesses so perhaps we could all stay humble.

The market was supposed to crash approximately five times since the first lockdown. The various rallies that we have seen in the months and years since were, according to some, myself included in some cases, never supposed to happen. Consumers were supposed to be scared, hiding at home, drowning in indebtedness and insecurity. They were purportedly re-evaluating all of the things, moving out of town, starting small businesses, giving up small businesses. It’s over, it’s really over this time. Except not.

To the real estate bulls, Toronto real estate is a force to be reckoned with, propped up by chronic insufficiency thanks to municipalities choking development all while financialized real estate and record immigration keeps demand strong. Toronto is a beast; can’t stop, won’t stop.

To the real estate bears, the end is nigh. The market is on its ninth life having spent far too long on shaky ground with an economy propped up by government tinkering. The time of reckoning may have been delayed but it’s coming and it will bring pain.

What we actually know at this point:

Fixed rates are up. Five-year offerings are now hovering around 6% when just weeks ago some banks were offering five-year fixed with a 4 out front. Those blue skies that seem to have fuelled the spring market got awfully dark awfully quickly.

Showings and offer registrations reacted almost immediately to June rate hike and dropped off precipitously. There were a number of failed offer nights last week, even on great houses that had strong interest. Buyers are clearly nervous.

Sentiment reigns supreme. Structural aspects endure. The two sides of the coin.

“Higher for longer” is the new refrain. Rates as high as they are and sitting there will bring pain, particularly for the overleveraged. There are many who have been hanging on for dear life, waiting for the rates to come down, who are now wondering how they will make it.

Some economists are predicting that we’re looking at rates ticking down no sooner than next spring. Now no one is even considering a reduction in 2023.

Extended amortizations have absorbed a huge amount of the turbulence and have given the appearance of market strength and resilience, but renewals and unemployment will be the curveballs.

My feeling, based on the conversations I am having with clients and colleagues, is that even if prices dip again the move-up buyers who tend to drive the market will be ok, they will just be impatiently wondering where the inventory went. They will come back.

Downsizers sitting on a ton of equity will be equally buffered.

The first-time home buyers will have to sit tight or expand into a bigger, more expensive rental that will eat away at more of their savings for down payment but if and when prices ever soften, they may find their moment.

It is the overleveraged and the speculators who will be in the toughest spot in the near term. Needing to sell but needing the market to get more favourable to find an off ramp to cash out and walk away with some actual cash.

The one thing I would bet the proverbial house on is that we are heading into what will prove to be a very quiet summer. What sits on the other side is anyone’s guess.

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Real eState

Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

Published

3 days ago

November 6, 2024

Anne Joseph

TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.

The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.

The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.

“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.

“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”

The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.

New listings last month totalled 15,328, up 4.3 per cent from a year earlier.

In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.

The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.

“I thought they’d be up for sure, but not necessarily that much,” said Forbes.

“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”

He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.

“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.

“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”

All property types saw more sales in October compared with a year ago throughout the GTA.

Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.

“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”

This report by The Canadian Press was first published Nov. 6, 2024.

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Real eState

Homelessness: Tiny home village to open next week in Halifax suburb

Published

2 weeks ago

October 24, 2024

Anne Joseph

HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.

Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.

Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.

The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.

Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.

They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.

The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.

This report by The Canadian Press was first published Oct. 24, 2024.

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Here are some facts about British Columbia’s housing market

Published

3 weeks ago

October 17, 2024

Anne Joseph

Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.

Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.

Average residential home price in B.C.: $938,500

Average price in greater Vancouver (2024 year to date): $1,304,438

Average price in greater Victoria (2024 year to date): $979,103

Average price in the Okanagan (2024 year to date): $748,015

Average two-bedroom purpose-built rental in Vancouver: $2,181

Average two-bedroom purpose-built rental in Victoria: $1,839

Average two-bedroom purpose-built rental in Canada: $1,359

Rental vacancy rate in Vancouver: 0.9 per cent

How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent

This report by The Canadian Press was first published Oct. 17, 2024.

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