TORONTO — Canada’s housing market shattered records in July despite the economic uncertainty surrounding the COVID-19 pandemic — and with the usually busy fall real estate season drawing near, experts are divided about whether the boom will continue.
Last month marked the highest monthly sales figure on record, the Canadian Real Estate Association reported, while the national average sales price jumped to a record $571,500.
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Part of the fuel behind rising prices has been driven by a change in the real estate cycle, RBC senior economist Robert Hogue said during an RBC podcast earlier this month.
Traditionally, many homebuyers and sellers wait until spring to make deals as snowfall hampers curb appeal. This year, all of the usual spring homebuying fever was pushed into the usually slow summer months as people emerged from lockdown.
Under normal circumstances, real estate agents expect a busy period in early fall as people try to finish their move before winter.
Rachel Gagnon, an Ottawa-based real estate broker at Ian Charlebois & Associates Real Estate & Mortgages, said the demand for housing has stemmed from “stay at home” orders, which left people wishing for more space and amenities.
“Unless a major, and I mean very major, shift was to happen, which would create an influx of properties on the market, things will continue to move as they have over the last few months,” she said.
“As we move forward through August and September, people work through the new school rules, I think we’ll see a fairly large uptick in activity. Unless a second wave shifts things dramatically, I think we’re going to have a very busy fall market that won’t slow down until the Christmas season.”
But Gagnon also said that she has seen the pressure placed on first-time homebuyers, who are trying to get into the market now while they can afford a mortgage, even if it maxes out their borrowing power.
And COVID-19 related travel restrictions have led to slowing immigration and less demand from property buyers seeking rental properties for tourists or students.
The uncertainty means a fall slowdown is possible, said Bethany King, a team leader at Century 21 Millennium Inc. Brokerage in Brampton, Ont.
While some lenders are offering cash back, lending expectations have also changed, said King. For example, some lenders consider essential workers to have better job security should a second COVID-19 wave come.
Fear about a “second wave” in the fall has parents planning to save money, in case children are sent home and parents need to cut back hours and income to focus on caregiving, she said.
“Those are the things that have investors who are regular people — not millionaires that have tons and tons of properties, and are cashing out — preparing for the worst,” King said.
Kean Birch, an associate professor at York University, said he will be watching for the extension or end of mortgage payment deferrals.
“I find it worrying that housing prices are continuing to rise. The reason being that we don’t know what’s going to happen once the mortgage payment deferral ends, and the consequences actually could be dramatic across the board. And it could be highly inequitable as well,” said Birch, who studies economic geography.
Evan Siddall, chief executive of Canada Mortgage and Housing Corp., wrote a letter earlier this month that said he expects house prices to fall, “even in the face of recent activity, which appears to be the result of very low interest rates and a sharp reduction in new listings.”
“Our projections always anticipated a delayed impact: weakening in late 2020 and 2021 once government income supports unwind,” read the letter.
However, Sherry Cooper, chief economist at Dominion Lending Centres, called CMHC’s forecast is “overly pessimistic.”
“Here we are in the second half of 2020, and the national average sales price has risen 14.3 per cent year-over-year,” she said.
“The good news is that the housing market is contributing to the recovery in economic activity.”
This report by The Canadian Press was first published Aug. 20, 2020.
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.
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.
