Century 21 Real Estate CEO Mike Miedler discusses rapid growth in the real estate market amid the coronavirus pandemic.
It’s no secret that 2020 has seen a booming real estate market despite the economic woes the coronavirus pandemic has caused. But can that keep going in 2021?
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Lawrence Yun, chief economist at the National Association of Realtors, thinks so.
Lawrence Yun, chief economist at the National Association of Realtors, believes 2020’s growth will continue in 2021. (Bing Guan/Bloomberg via Getty Images)
First, Yun is expecting the Federal Reserve will continue low interest rates as officials have said they want to do so for several years.
“So at least through 2021, one can anticipate a low interest rate,” he said.
Record-low rates played a major role in 2020’s booming real estate market, which saw months of consecutive growth and double-digit year-over-year price gains despite high unemployment and economic uncertainty amid the coronavirus pandemic.
Further, he said, COVID-19 vaccines will boost job creation and, in turn, benefit the housing sector.
Record-low interest rates played a major role in 2020’s booming real estate market. (Xinhua/Wang Ying via Getty Images)
The growth in people working from their homes during the pandemic may also continue to buoy home-buying, he noted, especially in communities traditionally seen as vacation destinations.
Yun isn’t sure all those workers will be returning to their offices.
“Many people are assuming they could work from home more frequently than before and hence want to have a larger-sized home,” Yun said. “Instead of going downtown every single day, why not live further out where things are more peaceful and they can get a larger-sized home at a more reasonable price?”
The market saw months of consecutive growth and double-digit year-over-year price gains despite high unemployment and economic uncertainty amid the pandemic in 2020. (iStock)
And even homeowners who stayed put through the pandemic may feel the itch for a change of scenery after seeing how their circumstances have shifted, according to Yun. That could turn into a lasting trend.
“These are homeowners who were perfectly content with their home before the pandemic, but now because they witnessed the pandemic, work-from-home flexibility, they’re itching for some larger-sized home or maybe different areas, quiet areas,” Yun said. “People who would not consider buying or selling a home several years ago are now beginning to be tempted to consider that, and that will filter in continuously through 2021.”
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.
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.
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.
