Real eState

Mixed signals: Why it’s hard to tell if Canada’s real estate market is hot or not right now

Published

1 year ago

August 31, 2023

Housing sales in Canada have cooled, but prices in some areas have held their ground, even in the face of five-year fixed mortgage rates that are pushing six per cent. Photo by ASHLEY FRASER/POSTMEDIA

Canadian residential real estate markets have been giving off mixed signals in recent months. After a strong start to spring, the Bank of Canada’s resumption of interest rate hikes in June sent buyers back to the sidelines. But while sales have cooled, prices in some areas have held their ground, even in the face of five-year fixed mortgage rates that are pushing six per cent. So is the market hot or not? The Financial Post’s Shantaé Campbell asked realtors in Vancouver and Toronto to assess their respective markets by looking at some of the indicators of bull markets gone by, from bidding wars to inventory levels.

Bidding wars

When Canadian real estate markets were soaring in recent years, bidding wars were an everyday occurrence, with some properties attracting dozens of offers and selling well over asking. Realtors in Canada’s biggest markets say that while those days are long gone, there are still pockets where bidding wars have taken place this summer.

“This year, it’s only happening with the quality inventory and the highly sought-after product,” said Adil Dinani, a realtor with Royal LePage West in Vancouver, who has noticed a decline even since last summer in the overall prevalence of bidding wars.

By contrast, Cailey Heaps of Heaps Estrin Real Estate team, said she has seen a resurgence this summer.

“Last summer the market was pretty flat. After June 1 … it was very quiet in the latter half of 2022,” Heaps said. “The 2023 Summer market has been more robust.”

Heaps gave the example of a semi-detached property on Glendale Avenue in Toronto’s High Park-Swansea neighbourhood that sold in six days in June, fetching 13 per cent above the asking price following a bidding war. Most recently, she said another bidding war led to a downtown home going for 33 per cent above asking.

Inspections

In a competitive market, buyers will often choose to forego home inspections in their rush to secure a property. While exact figures are unavailable, a sharp decline in the membership at the Ontario Association of Certified Home Inspectors showed just how out of fashion they became. Though joining is voluntary, membership plummeted from 827 in 2017 to just 80 by 2022, suggesting a significant shift in industry practice.

Heaps said that inspections are still common in the Greater Toronto ARea, but that it is sellers who are now the ones preemptively springing for the cost.

“There has been a lot of dialogue around inspections,” Heaps said. “It’s not that buyers are completely foregoing it. Sellers are just opting to have their own. Because of this, inspection clauses are just not that common anymore.”

Dinani said that while buyers have more leeway to insist on an inspection nowadays, there are ways to avoid having such a demand hold up a deal.

He gave the example of a client who was competing with five other bidders for a home in Vancouver Heights. Assessing that the home would have commanded a higher price in a more robust market, Dinani advised his clients to conduct their own inspection before placing their bid, a strategic move to make their offer more attractive.

While it involved paying the cost upfront — something homebuyers might balk at — the risk can be worth it if you aren’t paying top dollar for the home.

Offer dates

The use of offer dates — when a home is strategically priced to attract numerous bidders on a fixed date following a showing — was a hallmark of Canada’s hot real estate markets.

In a report focusing on the Hamilton, Ont. census metropolitan area from January 2012 to June 2022, the Canada Mortgage and Housing Corporation (CMHC) found that the practice was specifically tied to tight markets, with under 1.5 months of inventory and average prices exhibiting double-digit growth.

With inventories tighter than ever — at the end of the second quarter of 2023, the Canadian Real Estate Association (CREA) found that Toronto had 0.7 months of inventory, down from the 2.4 months recorded at the end of the second quarter of 2022 — one might assume that offer dates are making a comeback.

But Heaps said that while inventory is tight, the market dynamic has shifted because of rising interest rates.

Nevertheless, she said her brokerage has found situations in which offer dates make sense.

“We’re aware of the impact of interest rates, and we’re strategically pricing to still create interest and bidding wars.”

Dinani advises sellers to exercise caution and manage their expectations regarding offer dates.

“The likelihood of receiving multiple offers in today’s market is not as high as before, perhaps one in 10 homes,” Dinani said.

Inventory

There were 3.2 months of inventory on a national basis at the end of July 2023, up slightly from 3.1 months in May and June. While July marked the first month-over-month increase since January, inventory is still a full month below where it was at the beginning of 2023, and almost two months below the long-term average of about five months.

The Real Estate Board of Greater Vancouver reported that July’s housing inventory was 14.4 per cent lower than the 10-year seasonal average of 12,039.

While tight inventory in the past has been a bullish sign, driving prices higher, Dinani said there are forces at play — including high interest rates and demand from immigration — keeping the market balanced.

For some house-hunters, the lack of supply has been frustrating.

“We’ve got a few clients looking for specific homes and they’re just wondering when they will get listed and so we’re getting creative,” he said. “We’re approaching sellers who have previously tried to sell their homes to see if they’re still interested in selling. I think you have to be creative in this market.”

Days on the market

Length of time on the market is frequently used as a barometer of a hot housing market. Currently, the length of time between listing and sale is getting longer, though it differs markedly by city and by the type of residence.

In Toronto, for example, homes that were typically sold within nine days in July 2020 are now taking 19 days to sell due to current market conditions. Meanwhile, in Vancouver, properties that took an average of 33 days to sell in July 2020 are moving in 23 days this year.

Heaps believes the luxury market has skewed the numbers in Toronto.

“If you look at the ultra-luxury segment of the market, like the $10 million dollar plus, and of those listings that were live since Jan. 1 of 2023, only four per cent of them have transacted,” she said. “But if you were to look at the average days on market in the sub $2 million and a half range, I think you’d see it was very strong.”

• Email: shcampbell@postmedia.com

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Real eState

Two Quebec real estate brokers suspended for using fake bids to drive up prices

Published

4 days ago

September 11, 2024

Anne Joseph

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.

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Real eState

Montreal home sales, prices rise in August: real estate board

Published

1 week ago

September 6, 2024

Anne Joseph

MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.

The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.

The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.

The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.

QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.

Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.

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

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Real eState

Canada’s Best Cities for Renters in 2024: A Comprehensive Analysis

Published

2 months ago

July 24, 2024

Harry Miller

In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.

Here are the top 10 cities that emerged as the best for renters in 2024:

St. John’s, NL

St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.

Sherbrooke, QC

Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.

Québec City, QC

Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.

Trois-Rivières, QC

Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.

Saguenay, QC

Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.

Granby, QC

Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.

Fredericton, NB

Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.

Saint John, NB

Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.

Saint-Hyacinthe, QC

Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.

Lévis, QC

Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.

This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.

Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.

Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.

For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.

While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.