This Week’s Top Stories: More Firms Forecast Canadian Real Estate Prices Will Fall, Banks Drop More Office Space, and Mortgage Defaults Rise – Better Dwelling
Another big global credit agency sees Canadian real estate prices falling next year. Fitch Ratings, see prices dropping up to 5% at the national level in 2021. The decline would effectively wipe out most of this year’s gains, but would obviously vary across the country’s markets. The firm also forecasts delinquencies can double the current level, which is bad – but not as bad as the BoC’s forecast of tripling.
Canada’s real estate markets are frenzied, but yet another fundamental indicator was showing it shouldn’t be. Canada’s population reached 38,008,005 in Q3, up just 2,767 people in the quarter. Ontario actually saw a decline of 895 people, while BC saw the population drop by 1,861 people. Surprised a decline in fundamentals would have no impact on buyer psychology? Don’t be. Prices didn’t rise on fundamentals, so a deterioration of fundamentals wouldn’t necessarily trigger a decline. Especially if buyers aren’t aware of that fact.
The Canadian household debt to income ratio has retraced more than half of the historic drop made in Q2. The household debt to income ratio jumped to 170.7% in Q3, up 4.85% from the previous quarter. New data also shows the massive decline in Q2 was revised up 4 points from previously mentioned. Revisions are normal, but this does remind us pandemic data is highly volatile. Improvements or deterioration may be worse or better than previously expected. The full extent of its impact won’t be known until households are well into the clear.
CMHC, Canada’s national housing agency and state-owned mortgage insurer, is seeing delinquencies rise. The agency notes banks, credit unions, mortgage finance companies (MFC), and mortgage investment entities (MIEs) have all seen the arrears rate rise in Q2 2020. The broad increase came despite mortgage lenders rolling out more than generous payment deferral programs. Rising rates across types of lenders indicates this isn’t just a problem related to a single segment of borrower.
Two of Canada’s largest banks are reducing office space, as more companies adopt work from home policies. TD decided to vacate 1.2 million square feet of office space, about 11% of the bank’s non-retail space. CIBC is consolidating 23 Greater Toronto operations into their CIBC Square tower, currently under construction. They also note they’ve been planning to reduce square footage before the pandemic. Both banks appear to be pleasantly surprised with how well work from home is going during the pandemic. The reduction in office space is likely to improve profits, but also drastically rewrite how Canada’s largest companies influence real estate demand.
Canadian real estate prices are rising at the fastest pace since 2017, and it’s being led by the suburbs. CREA’s aggregate benchmark price reached $646,700 in November, up 11.33% from last year. The price of a typical detached home reached $709,700, up $8,300 from the previous month. The price of a condo apartment though, reached $471,100 – down $6,800 in the same month. Price growth across the country is being exclusively driven by detached homes, largely located in the suburbs. Meanwhile condo apartments, mostly located in urban areas, are seeing their premium disappear.
Canada’s non-bank lenders saw arrears rise, despite offering payment deferrals to borrowers. The lenders reported 4,392 mortgages more than 90 days in arrears in Q2, up 20.13% from the previous quarter. The balance of those mortgages reached $1.08 billion, up 31.81% over the same period. With the value rising faster than the number of mortgages in arrears, this implies more expensive homes are falling into arrears.
The City of Toronto finally voted in favor of a vacancy tax, but the industry wants a few exceptions. Among the requests for exemptions are US citizens, commuters, or owners unable to rent due to market conditions. Considering these are the scenarios a vacancy tax is meant to address, it would be surprising to see Toronto adopt them. Considering Toronto is adopting a vacancy tax 5 years after cities around the world did, seeing them not accomplish the intended goal seems on point.
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.
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.
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.
