Buying or selling your home right now?
The World Health Organization declared COVID-19 a pandemic in March. Subsequently, the number of home sales in Canada fell sharply as social distancing measures were put in place, open houses got cancelled and fewer new listings became available.
Three months on, the Canadian real estate market is no longer in free fall — sales and listings numbers are rising (though both are down significantly compared to last year), and prices have remained fairly steady — but there continues to be a lot of uncertainty for both buyers and sellers. While bidding wars are still taking place in many markets, the Canada Mortgage and Housing Corporation (CMHC) predicts that prices will fall between nine and 18 per cent this year, and sales and prices might not be back to pre-pandemic levels even by the end of 2022.
If you’re looking to buy or sell residential property this year, you may already know that it’s a quickly moving market with many regional differences — and the process looks quite different now than it did at the start of the year or even a month ago. With that in mind, we reached out to real estate experts in four different provinces* for their market insights and best advice on everything from staging a virtual showing to getting a mortgage approval.
*Note: In Canada, real estate is largely regulated based on provincial or territorial legislation. Some information included in this article may not apply in your province or territory.
It’s (still, kind of) a seller’s market
“There was, right at the beginning, a dramatic drop in properties listed for sale because many sellers were concerned enough to not want to have people in their house,” says Anthony Bastiaanssen, a Realtor in Kelowna, B.C., and chair of the British Columbia Real Estate Association. “People actually took their properties off the market for a period of time or delayed the process of listing it for sale.” But so far this spring, prices have remained relatively steady, despite sales falling significantly. “Prices have not, in any reports that I’ve seen, shown any significant adjustment,” says Bastiaanssen. “Most of the economic forecasts do call for a slight adjustment in pricing down in the short term, but honestly, we still haven’t really seen that.”
According to many reports, attractive properties in in-demand areas are still selling quickly, and, in some cases, attracting multiple offers. “[In Quebec], it’s a very strong real estate market for the seller,” says Anouk Vidal, a real estate broker in Saint-Jérôme, Que., and spokesperson for the Quebec Professional Association of Real Estate Brokers. “We have very low inventory … [and] when a property comes on the market, there’s a lot of demand for it.”
With many regions starting to reopen their economies and loosen restrictions, there’s been an increase in real estate activity over the last few weeks. “The market is actually extremely active right now,” says Vidal. “We were on pause and couldn’t do anything for a couple of months, [so] all the people that need to buy or sell are doing it at this point.” Notably, both Vidal and Bastiaanssen have either observed or heard of an uptick of interest in their provinces for rural and countryside listings, particularly from city-dwellers looking for more space or a recreational property.
Expect virtual showings and tours, and new protocols
Because real estate is largely provincially or territorially regulated, the industry rules and guidelines pertaining to COVID-19 — which are constantly shifting as local regulations change — are slightly different in each region. For example, open houses are currently prohibited in Quebec, says Vidal, as they are in Ontario. But in Alberta, real estate professionals are starting to offer them again for vacant properties.
Still, no matter where you are in Canada, expect to see an increased reliance on technology as videos, 3D renderings and other virtual tours become increasingly important sales and marketing tools. With sellers (and many tenants) hesitant to have people going through their home right now, open houses have gone online, with some real estate professionals doing video walk-throughs with their clients. “There’s been a pretty significant uptick [in] virtual tour-type photography,” says Bastiaanssen, who notes that more serious potential buyers will follow with a visit to the property in person.
When it comes to those fewer, spaced out in-person showings, there are COVID-related guidelines that sellers, buyers and real estate professionals to adhere to. For example, in Quebec, real estate professionals will normally ask buyers (and sellers that are in the properties) to sign a declaration confirming that they’re healthy and haven’t been in contact with someone with COVID-19 ahead of any in-person visits. “[In British Columbia], very specific protocols and precautions, [created] with guidance from WorkSafeBC and the provincial real estate association and real estate council, are being taken to ensure the health and safety of both clients and Realtors themselves,” says Bastiaanssen. That could mean wearing face masks and gloves, using sanitizing wipes and giving buyers directions to avoid handling or touching anything in the home, including light switches and door handles.
With these additional precautions and guidelines in place, both Vidal and Bastiaanssen note that they are seeing mostly “serious” buyers and sellers in the market right now. “It’s a lot more complicated with all the processes that we have to go through,” says Vidal. “We’re working with people that either need [or] really want to move, that are pre-approved at the bank for their mortgage and that, if they find what they want, [are] going to be willing to make an offer.”
Purchase agreements may include COVID-19 related clauses
In addition to typical purchase agreement clauses, such as home inspection or property inspection conditions, some individuals who are worried about losing their job or getting sick have been asking for COVID-related clauses to be worked into contracts. According to Jeffrey Kahane, a real estate lawyer at Kahane Law Office in Calgary, real estate brokerages have differing policies when it comes to these COVID-related clauses,; but ultimately, the contract terms should come down to what’s important for you as a buyer or seller. “Sometimes, it has nothing to do with getting out of the deal,” says Kahane. It could be about requiring that “the seller hire a reputable company to come in and do a deep clean on the property before possession.” For buyers doing virtual tours of properties, Kahane notes that it’s important to “put in a condition on the offer that you actually get to go in and view the property” in person.
Additionally, because of COVID-19, some provinces are currently allowing virtual signings of legal documents such as agreements of purchase and sale. “In Alberta, they have allowed virtual signings until August at least, where we can have people swear affidavits and sign declarations by video, and take ID by video,” says Kahane. “It works fine, but we’re finding that very few of our clients inside of Calgary are opting for that; they’d rather just come into the office.”
For buyers, mortgage rates are exceptionally low
One thing going in favour of buyers? Low mortgage rates. “Rates are exceptionally low relative to what we’ve seen over the past 12 to 24 months,” says Paul von Martels, vice president of prime and reverse mortgage credit at Equitable Bank. He notes that the five-year, fixed-rate mortgage remains the most popular product by far, and the mortgage-approval process isn’t taking any longer than it did pre-COVID. “We’re offering electronic signatures for all of our mortgage documentation, right from start to finish, if a client chooses to take that option,” says von Martels. “We’ve done a lot of things to enable a more remote home buying, selling and refinancing.” For example, some of Equitable Bank’s home-appraisal partners are doing virtual appraisals, “taking pictures through windows and working with clients to acquire other interior pictures.”
One thing that all buyers should keep in mind is that CMHC’s stricter mortgage insurance rules will be coming into effect on July 1, requiring buyers who want to access CMHC’s mortgage default insurance to have higher credit scores, no borrowed down payments and lower debt ratios. “All else being equal, in many cases, the changes will reduce buying power for borrowers,” says von Martels, but adds that the two other companies in Canada that offer mortgage default insurance, Genworth and Canada Guaranty, “have publicly come out and said that they will not be making the same changes that CMHC will be implementing.”
For prospective home buyers whose income might have been temporarily impacted by the pandemic, von Martels’ advice is to explore options with a mortgage broker who has experience working with a wide range of mortgages, as they might be able to guide you toward alternative products and lenders who offer more flexibility.
It might also make sense to temporarily pause your real estate search if you have a low risk tolerance or are experiencing any economic uncertainty. It’s hard even for experts to forecast what the Canadian real estate market will look like in six months, or in 2021 with confidence. “I think that it’s important for clients or borrowers to stay honest with themselves and not to rush into things because they see market activity picking up or maybe because they think that they can get a deal on something,” says von Martels.
Sellers, presenting well is still key
Homeowners with extra time on their hands should be working on landscaping and improving the outside appearance of their home right now ahead of listing their home for sale, advises Vidal. Aside from the outer areas of a home always drawing buyers’ eyes in the summer, Vidal thinks that people will place value on comfortable outdoor spaces especially now, after being stuck inside.
Truc Nguyen is a Toronto-based writer, editor and stylist. Follow her at @trucnguyen.
Source: – CBC.ca
BCFSA rules on real estate agent’s $50K loan to client
A real estate agent who lent a client $50,000 so she could afford to make a deposit on a property in Richmond, B.C., committed professional misconduct by doing so, according to a provincial regulator.
The B.C. Financial Services Authority, which investigates real-estate-related complaints from members of the public, has concluded that Wei “Vicky” Wang’s loan constituted a conflict of interest, and that Wang had committed misconduct by failing to avoid the conflict and by failing to advise her client of it.
The BCFSA’s chief hearing officer Andrew Pendray issued his decision on the matter earlier this month. It was published online Wednesday.
In it, Pendray wrote that the evidence before him supported the conclusion that the $50,000 Wang provided was a loan, and thus a conflict, despite Wang’s arguments to the contrary.
Pendray’s decision came after hearings on the BCFSA’s fifth amended notice to Wang about the complaints against her from her former client.
All of the iterations of the notice centred on the client’s purchase of two homes – one in Richmond and one in Vancouver. Both addresses are redacted throughout the decision, as are the names of the client, her husband and other witnesses.
The loan related to the Richmond purchase, for which a contract of purchase and sale was executed on June 9, 2016, with a completion date scheduled for Oct. 4 of that year, according to the decision.
The agreed purchase price was $1,688,000, with a deposit of $90,000 – slightly more than five per cent of the total price.
Pendray’s decision indicates that Wang’s brokerage provided the BCFSA with two “receipt of funds records” relating to the deposit, one for $40,000 from the client’s account and one for $50,000 from Wang’s account.
The record for the $50,000 transaction included the note “loaning to the buyer temporarily,” according to the decision, and both Wang and the client acknowledged that Wang provided $50,000 toward the purchase of the Richmond property.
The real estate agent argued that the $50,000 she provided to her client should not be considered a loan because it wasn’t provided with the expectation of repayment with interest.
“When asked what she would call the $50,000 towards the (Richmond property) deposit, if it were not described as a loan, Ms. Wang indicated that she did not know, though she subsequently suggested that one could consider it to be a gift,” Pendray wrote in his decision.
“Ms. Wang stated that she and the client were friends, and that she had not thought much of providing the $50,000 at the time.”
Despite Wang’s suggestion that the money could be considered a gift, Pendray noted that she made efforts to secure repayment of it.
The money was wired back to Wang on June 29, 2016, after she and her client had exchanged WeChat messages about how and when she would be paid back, according to the decision.
In her defence, the decision indicates, Wang declined to say she had been repaid, insisting that the money had been “returned” in the same way one would return a car after borrowing it.
She also argued that the entire hearing had been unfair to her, submitting three times that it ought to be adjourned because the BCFSA had revised its allegations against her five times.
Pendray rejected all of these arguments, writing that Wang has “long known the nature of the allegations against her” and that there was “no unfairness in proceeding with the hearing.”
He concluded that both Wang and her client understood the $50,000 to be a loan, not a gift, and that Wang expected to be repaid.
“Even if I was to accept Ms. Wang’s submission that in order for the $50,000 to be considered a loan, it is necessary that the loan have been provided in exchange for future repayment plus something more, the facts of this case lead me to the conclusion that there was, in this case, something more,” Pendray wrote.
The chief hearing officer noted that Wang received a commission of $22,538.78 for her role in the transaction. She could not have received that amount, he concluded, if the client had backed out of the purchase for lack of funds.
“In order to receive that commission, the purchase of that property had to complete,” Pendray wrote. “In order for the purchase to ever have had the chance to reach completion, the deposit on the property, as required by the contract of purchase and sale, would have had to have been paid.”
Having concluded that Wang provided the client with a loan, Pendray determined that doing so was a conflict of interest under the provincial Real Estate Services Act, and that Wang had committed misconduct.
He ordered Wang and the BCFSA to make submissions on what sanctions Wang should face for her behaviour, with specific penalties to be determined at a later date.
Luxe $9m South Yarra sanctuary for sale with six-car basement garage
A winning collaboration by some of the best in the business has produced this luxurious modern sanctuary in a prized lifestyle location.
High-end builder Agushi teamed with celebrated Workroom architects and Nathan Burkett Landscape Architects on the private inner-city residence.
The four-bedroom, five-bathroom house at 12 Rockley Rd, South Yarra has hit the market with a $9m-$9.5m asking price.
Largely crafted from concrete – which even features on the sculptural curved staircase that links the home’s three levels – and marble, it delivers sophisticated interiors with carefully framed garden views.
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When at home, a mirrored lift, infinity pool with in-floor cleaning and a six-car basement garage provide the ultimate in convenience.
But it is the state-of-the-art automation that paves the way for a lock-up-and-leave lifestyle.
The technology has been a game-changer for vendor and interior designer Georgie Coombe-Tennant and her husband, Mark.
It has transformed the way they live, doing away with the need for front door keys and allowing them to turn on the oven remotely, let the postie in the gate while sitting on a ski lift or turn on the sprinkler from Europe.
“We had always had old traditional homes and renovated them, and we just felt like it was time for something modern,” Mrs Coombe-Tennant said.
“We saw Bear (Agushi’s) work and my expression for his work is that everything is so resolved.
“He has not left a single detail out of it. If you think of something you would need in a home it’s there.”
She has delighted in decorating the home, which she said offers loads of space despite having a townhouse feel.
“I found the home is so easy decorate and furnish because you have got this beautiful blank canvas and you can put any amount of colour or neutrality into in,” she said.
As well as three living areas and four bedrooms, the two-year-old home has the luxury of two home offices with desks crafted of the same grey Damastas marble that features in the lavish kitchen and bathrooms.
The main open-plan living zone screams entertainer thanks to a series of full height sliding doors linking it to a covered outdoor dining space with a built-in barbecue, a conversation pit and north-facing sun deck.
A second ground floor lounge room provides another breakout space, perfect for curling up beside the fire.
Despite its proximity to Chapel St and Toorak Village, Mrs Coombe-Tennant said the home felt secluded.
“I guess with South Yarra people are always worried about noise and things like that but it’s very, very quiet, it’s really secretive. No one knows it’s here,” she said.
“Once we are in that front door you don’t hear a single sound, but you have got everything on your doorstep.”
RT Edgar Toorak director Sarah Case added that it was rare to find homes of this calibre created specifically for a lock-up-and-leave lifestyle.
“This home has every luxury we’ve come to expect from Agushi, who’s renowned solid concrete construction, superior quality, generous spaces and meticulous attention to detail, while providing for a modern way of living with a lift to all levels, stunning pool and six-car garage,” Ms Case said.
“From the magnificent marble kitchen to the beautiful bedrooms and the poolside outdoor spaces, every aspect has been thoughtfully designed to meet the needs of even the most discerning buyer.”
Mr Agushi said he prided himself on building homes with “over specced” insulation, glazing, solar panels and smart home integration.
Expressions of interest close on June 15 at 5pm.
According the latest Proptrack Home Price Index, national home prices continued to stabilise in April after rising for the fourth consecutive month, rising 0.14 per cent.
LACKIE: Busy Spring in Toronto Real Estate
This has been a busy, bustling spring for the Toronto real estate market.
There are people who will say it’s all an illusion. A perfectly coordinated dance between snake oil selling realtors and their greedy clients, all unified in pumping a market currently back on its heels as means of personal enrichment.
How does that saying go — never let the truth get in the way of a good story?
They will say it makes no sense that the market should have any signs of life at all given the rollercoaster of the last 18 months (slash, the three years since COVID, if we’re being honest) and that with rates high and staying there, and prices still high and mostly staying there, we are looking at the furthest thing from a healthy marketplace.
And perhaps it’s all relative — things feel particularly energized because in comparison to last fall, we are actually seeing some action out there.
Houses in dodgy pockets fetching upwards of 20 offers, buyers seemingly undeterred by the needles on the street just steps away from the front door.
Cute houses in great pockets drawing multiple offers and landing peak-of-2022 prices.
Sellers who may have wondered if the time-was-now realizing they didn’t want to miss their moment.
There are many utterly baffled that the market has held. That prices have held. That the pain of 2022 didn’t reset the playing field.
They are adamant that any attempt to explain it by pointing to how grossly insufficient our inventory levels are is really just distortion and manipulation. The idea somehow being that people can be scammed into engaging and thus what we are really looking at is a mirage.
They think our problems will be solved if buyers simply stay home. Refuse to show up to houses that are underlisted. Refuse to engage in multiple offers. Refuse to pay a dollar more than list price. Refuse to pay realtor fees. Refuse to participate.
Legislate agents into listing at market value. Legally obligate sellers to accept any offer that meets the price they chose to list at. Cap realtor fees. The list goes on.
Absent from all of this is the reality very much apparent on the ground: for all of the noise and anger, Toronto has not enough houses and more than enough willing participants who are capable of driving a marketplace.
By this time next week, we will have stats to support that the spring market is very much here and with it I expect we will note a sharp increase in transactions and a notable bump to average sale prices.
Is it a seasonal blip that will fizzle out as temperatures rise? Entirely possible. But even just a return to some seasonal rhythms in our marketplace would be a welcome return to normalcy.
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