With a shortage of new listings and only a trickle of new home construction reaching the market, a report by the Windsor-Essex County Association of Realtors released Monday is forecasting a competitive housing market this fall with prices expected to rise more quickly in the first part of 2024.
The local real estate market is now on par in terms of average sales price ($554,277 in July) and slightly ahead in the number of sales (438) compared to 2022.
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“We believe the last four months of the year are going to be really solid,” said Windsor-Essex County Association of Realtors president Mark Lalovich. “We hit a soft spot in the summer, which is a seasonal thing.
“I think there’s a lot of interest out there and we’re going to be getting new traffic with the battery plant and the supplier plants.”
Lalovich said the biggest challenge in the market right now is demand is outstripping supply. Listings are still over 20 per cent below the number of homes on the market last summer.
There were 1,049 new homes listed in July, just under 300 fewer than a year ago.
New home construction has also slowed significantly with rising interest rates. In June, there were only eight homes completed in Windsor, well short of the province’s target number for 108 homes.
“I think we’ll starting to see the impact of all these investments in the fall, not just on the housing side, but on the rental side as well,” Lalovich said. “The rental market has been a bit soft as well, but those are starting to fill up.
“We will really start to see the impact gearing up next spring. The market is going to get increasingly competitive as we move into next year.”
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The Windsor census metropolitan area, which also includes Lakeshore, Tecumseh, LaSalle and Amherstburg, is already seeing accelerated population growth.
Statistics Canada’s July Labour Force Survey reported 1,000 people more people moved to the area last month. That brings the population growth in the Windsor CMA to 5,200 in the first seven months of 2023, with 4,100 people coming in just the last five months.
With the newly built home market not expected to provide much new inventory until at least next year, Lalovich said the resale market will have to be the source of increasing supply in the short term.
“The reason for fewer houses being on the market is the Boomers are not moving,” Lalovich said. “They were supposed to be downsizing, but that’s not happening.”
Lalovich said some people are waiting to see if the market recovers further closer to the peak levels of 2022. Others can’t find an affordable place to downsize to and some are put off by higher interest rates on mortgages.
Some still need the space as their children remain at home longer.
“If we can’t get new builds back on track turning out product next year, we could be facing a big surge of demand in the resale market again,” Lalovich said. “It could go back to the levels of the epidemic.
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“An economist in Ottawa warned us in the spring, if we didn’t get more listings in the Windsor area by fall, we faced a spike in prices this fall.”
However, Lalovich is optimistic listings will increase if the Bank of Canada doesn’t raise interest rates at its next meeting on Sept. 6.
“I think sellers are sitting in the weeds seeing what the Bank of Canada is going to do with interest rates,” Lalovich said.
“People want to see that the Bank of Canada is not becoming radical and pushing interest rates higher. I don’t think they have a lot of leverage on the market unless they’re willing to create problems.
“They have inflation more under control, so I don’t think they’ll want to do that.”
Dwaddell@postmedia.com
Twitter.com/winstarwaddell
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.
The Canadian Press. All rights reserved.
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.
The Canadian Press. All rights reserved.
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.
The Canadian Press. All rights reserved.
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