Canadian real estate surprised everyone in 2020. While the markets closed the year with red-hot, record-breaking activity, the year brought much uncertainty, financial upheaval, renewed forecasts of a bursting housing bubble, and other news that will likely continue to impact market activity in 2021. With the first week of the new year behind us, here’s a look back at 2020’s top Canadian housing market headlines. You can see the wave of panic and confusion, followed by a quick rebound in consumer confidence and market activity.
In its housing market outlook for 2020, RE/MAX called for a leveling out of the highs and lows that characterized Canadian real estate in 2019 – especially in Toronto and Vancouver. Given the market conditions at the end of 2019, a healthy national average price increase of 3.7% was expected for residential real estate.
Unforeseen circumstances threw that forecast out the window, as we all know, but not in the way many had anticipated. More on that headline later…
In its January 22 interest rate announcement, the Bank of Canada waved a red flag about rising household debt and the housing market, hinting at a future rate cut (which would materialize more than once just a few short months later). Would a lower cost of borrowing alleviate people’s debt levels, or just encourage them to carry the same debt, or take on even more, at a lower cost? And more importantly, would a lower lending rate improve Canada’s housing affordability? Not likely, according to Christopher Alexander, Chief Strategy Officer and Executive Vice President at RE/MAX of Ontario-Atlantic Canada, who told BNN Bloomberg that housing prices would only continue their upward trajectory without a national housing strategy geared to increasing supply.
“There’s no real incentive for developers to build more affordable housing or more rental units, especially with rent control rules right now,” Alexander told BNN’s Greg Bonnell. “We’ve got some significant issues that we’ll need to tackle so people have a place to live, and they don’t have to compete like crazy to get into a home.”
Canadians watched as COVID-19 spread like wildfire overseas, and it would be long before it would be declared a global pandemic by the World Health Organization. By January 25, it had already hitched a ride to Toronto with someone returning from Wuhan, China (source) and things quickly spiralled from there. By March, lockdowns, quarantines, travel bans and non-essential business closures began to take effect.
From a real estate perspective, what would these sudden changes mean for people who had already sold their home but hadn’t yet purchased a new one? What about those who absolutely needed to move for other reasons, such as affordability or security for their family? Real estate was quickly deemed an essential service across Canada’s provinces, allowing offices to continue operating, albeit under strict safety measures.
By spring, “social distancing” officially became a thing and Canada’s traditionally busy housing market slowed to a crawl. These directives from Canada’s chief public health officer Dr. Theresa Tam involved minimizing all close contact with community members by maintaining a distance of six ft., avoiding crowds and mass gatherings. Confusion ensured about how to proceed with transactions under the new and ever-changing public health guidelines. In addition, widespread concerns around household finances and the greater economy, and worries about a housing market crash, prompted many homebuyers and sellers to move to the sidelines.
But the real estate industry quickly pivoted by incorporating new marketing methods, such as virtual showings, live virtual open houses, and e-documents. Many agents had already been using these technologies to some degree, which allowed a smoother transition for consumers who still needed to engage in the market. It wouldn’t be long before housing market activity came roaring back, with some interesting trends emerging.
Financial relief for Canadians
Business closures, temporary layoffs and permanent job losses meant many Canadians needed help to make ends meet. Governments and organizations stepped in with various programs to offer much-needed relief, such as the Canada Emergency Response Benefit (CERB), the Canada Emergency Wage Subsidy (CEWS), rent subsidies, mortgage deferrals, property tax deferrals, off-peak Hydro billing and relaxed Internet usage rules, and others.
Then-Governor of the Bank of Canada Stephen Poloz hinted at the possibility of lowering the key interest rate at the beginning of the year. In March, the Bank did just that – thrice – in an effort to stimulate the suddenly slow economy. The Bank’s rate currently sits at a record-low 0.25%, and is expected to hold steady for the foreseeable future.
The Canadian Real Estate Association reported that sales and listings were way down in March and April, but the decline was short-lived and market activity was back on the upswing in May. Also in May, Canada Mortgage and Housing Corporation forecasted that average house prices could fall by up to 18 per cent over the next 12 months – a projection that was called “panic inducing,” and challenged by RE/MAX based on market activity reported by brokers from coast to coast.
The market experienced a steep decline in the volume of transactions, but in much of Canada, transactions had been happening in many Canadian markets, and prices were resilient. With economies beginning to re-open across the country and in light of recent activity seen in various cities across Canada, as well as in certain European and U.S. markets, RE/MAX anticipated a bounce-back in demand that was much faster than was initially anticipated at the beginning of COVID-19. Regions such as Toronto, Ottawa and Vancouver has already experienced an uptick in activity and the number of multiple-offer scenarios, pointing to a post-lockdown housing market outlook that was much brighter than some suggested. Indeed, it quickly became clear that many Canadian housing markets were weathering the storm.
Immigration and the demand for Canadian real estate
Immigration plays a significant role in the demand for Canadian real estate. COVID-19 put a damper on that, too, but the slow-down was expected to be temporary. Before the pandemic closed borders, Canada was welcoming roughly 300,000 new Canadians every year, which carried a substantial demand for homes. Would the strength of Canada’s housing market be undermined without immigration?
Technically it could, but this is expected to be short-lived with the federal government’s recent announcement to welcome 1.2 million people to Canada between 2021 and 2023. Furthermore, “as the United States continues to get stricter on its immigration rules, Canada is going to become even more appealing. While 2020’s [immigration] numbers are way down, we expect that once travel resumes and people can move freely, that number will tick back up again,” Christopher Alexander, Chief Strategy Officer and Executive Vice President at RE/MAX of Ontario-Atlantic Canada, who told BNN Bloomberg.
Canadian real estate focus shifts to larger, suburban homes
In the wake of COVID-19, the real estate industry saw a number of notable shifts in home-buying activity. The RE/MAX Fall Market Outlook reported that urban condos took a back seat to suburban, rural and recreational properties, in the face of shifting work/life dynamics. This meant no more brutal work commutes to consider when shopping for a new home. Room for a home office, a good Internet connection and access to green space became top-of-mind for many homebuyers, who were cashing in on their urban home equity to buy more home for less money in the ‘burbs. Indeed, a RE/MAX survey conducted by Leger found that 32% of Canadians no longer wanted to live in urban centres, opting for rural or suburban communities instead.
Who would have predicted at the start of 2020 that big city dwellers would be fleeing these metropolises to live in rural areas? With more Canadian businesses embracing work-from-home policies, many people began to take advantage of the opportunity to relocate to cottage country. As such, the appeal of small “cottage country” towns spiked among homebuyers.
On the flip-side of growing demand for non-urban properties, came a decline in downtown condo sales. The combination of closed borders, tighter short-term rental rules, and the trend of homebuyers leaving downtown caused condo demand to plummet. Even hotter-than-hot condo markets such as Vancouver and Toronto got very quiet among buyers, renters and investors alike.
The Toronto real estate market saw its rental vacancy rate triple to 2.4% compared to just 0.8% one year prior, according to Urbanation. In downtown Toronto, it’s higher. The Toronto resale condo market moved in lockstep, with listings up 113% in the third quarter of 2020, according to the Toronto Regional Real Estate Board. Demand and rental prices have plummeted due to ongoing border closures, the pause on immigration and travel restrictions, the decreased need for student housing, stricter rules for short-term rentals, and shifting consumer behaviour since the pandemic took hold in mid-March.
Leading up to that fateful day in November when Biden took the vote, REMAX.ca and Google noted increases in US-based queries about Canadian real estate. Was this directly related to the US politics, and should the Great White North be anticipating an influx of homebuyers from the south? It’s difficult to say conclusively. While there was no clear sudden “spike” in related searches in October, there could still be something behind the longer-term trend line. And, of course, we’ll see what happens post-election and once the Canada-U.S. border opens up again.
As various regions across Canada entered into second wave of Covid-19 and lockdown measures, property prices continued to rise, with further price growth between 4% and 6% expected in 2021. Additional highlights from the RE/MAX 2021 Housing Market Outlook Report are:
35% of RE/MAX brokers indicate that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021
45% of RE/MAX brokers indicate that move-up buyers will likely be a primary driver of the housing market demand in 2021
Half of Canadians (53%) are confident that Canada’s housing markets will remain steady in 2021
52% of Canadians believe real estate will remain one of the best investment options in 2021
The year began with concerns about housing supply in Canada, and while many markets are still falling well short of demand, we wanted to close the loop somewhat with this list of Canadian cities that reported the most housing starts. Here are some noteworthy housing starts data from the monthly CMHC report (year-to-date 2020):
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.
