As the traditional spring selling season nears, realtors in the London, Ont., region say it won’t be an expected borrowing rate hike on Wednesday that threatens to cool a hot spring housing market, but a lack of inventory.
With such a lack of inventory, there’s just not enough to go around.– Randy Pawlowski, LSTAR president
This year opened with the second best January on record in terms of home sales, according to the London St. Thomas Association of Realtors (LSTAR). It reported 529 homes sold in a month traditionally seen as a sluggish.
That same month, there were 669 new listings, of which 383 of them were snapped up, leaving only 286 homes for sale in the entire region, or, as LSTAR president Randy Pawlowski sees it, less than two weeks worth of inventory.
“The new listings will hit the market and they’re gone within a week.”
‘The hope is we see more inventory come to market’
“Honestly, this is the first time in my 25 years in this business where folks are calling and looking for housing and I’m having to say to them we’re sold out or it’s just hard to find.”
The 2021 census suggests the population of London, Ont., grew by 10 per cent, making it the fastest growing community in Ontario and the fourth fastest in Canada. Realtors don’t expect that growth to slow down anytime soon. (Colin Butler/CBC)
Pawlowski, who runs a boutique brokerage with Sutton Group in Middlesex Centre, said the lack of inventory is putting a strain on the 2200 local realtors who are having a tough time finding a home for their clients.
“Everybody thinks realtors are on their way to the bank every day, but with such a lack of inventory, there’s just not enough to go around.”
“The hope is we see more inventory come to market.”
First-time buyers, migrants from the GTA magnify shortage
A recent report from Royal LePage says the median price of a home in London, Ont., rose by 30 per cent from $546,600 in 2020 to $710,700 in 2021. Realtors say they expect to see strong growth, despite a coming hike to the key lending rate. (Colin Butler/CBC News)
“We have a shortage of homes and too much demand,” said Peter D. Meyer, the owner and broker of record with Royal LePage-Triland realty in London, who’s been buying and selling homes in the region for 33 years.
“We have a lot of people who are moving to London and buying but not adding any new inventory to the marketplace.”
He said they include people moving from the GTA and overseas, as well as Millennials, who Meyer said are looking to put down roots and, because of their sheer numbers, have an outsize influence on the city’s housing market.
“That whole population is in prime buying mode,” he said.
Rate hike could strain overextended homeowners
It’s because of those factors, Meyer believes, there will be no sign of any slowdowns when the Bank of Canada announces what’s widely expected to be a hike in the country’s key lending rate on Wednesday.
“We have a shortage of homes and too much demand,” he said. “At the end of the day, people need a place to live.”
Meyer said if the hike in the prime rate affects anything, it will likely be investors, who might pull back and wait for the things to settle down.
Pawlowski, meanwhile, thinks the predicted hike could force some homeowners who bought at too high a price to eventually sell, but not until the end of 2022.
“Any of those rate increases will put a strain on their monthly payments and so, will the interest rate increases mean some of those folks are unable to afford the properties they’re in? I suspect so.”
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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.
