RE/MAX says that its analysis of housing markets that are similar to Canada’s – such as parts of Europe – found that, in some cases, demand for homes was higher than pre-lockdown and increased from a year ago.
“The market has definitely seen a steep decline in the volume of transactions in the last few months, but in much of Canada, transactions have been happening and prices in particular have been resilient. Now that economies are beginning to re-open across the country and in light of some of the recent activity we’ve seen in various cities across Canada, as well as in certain European and US markets, we anticipate that demand could begin to improve much faster than we initially anticipated at the beginning of COVID-19,” said Christopher Alexander, executive vice president and regional director, RE/MAX of Ontario-Atlantic Canada.
Real estate is regional of course, but Alexander added that some parts of Canada are already seeing more positive signs following the decimation of sales during the lockdown.
“Regions such as Toronto, Ottawa, and Vancouver are excellent examples, and are already experiencing an uptick in activity and the number of multiple-offer scenarios, pointing to a post-lockdown housing market outlook that is not nearly as dire as some suggested,” he said.
Nationwide, as restrictions ease, market activity is already on the upswing with the Canadian Real Estate Association’s May 2020 data revealing national home sales up 56.9% from April, with the number of newly listed properties up 69% month-over-month.
LACKIE: Pandemic real estate hit costing city dearly – Toronto Sun
By now it should be a familiar tale: the once-great North American city, booming with industry and immigration, hits a rough patch.
Soon enough the long-overburdened infrastructure starts to crack, then crumble.
Taxes go up. Businesses balk and depart for greener pastures. Less taxes come in.
The people soon follow. Tax revenue drops even more. And now the real estate market is in decline.
The city is less appealing. Even fewer people want to live there. Off they go. Rinse. Repeat. It’s a vicious cycle.
Okay, so that was a bit of an exercise in hyperbole and surely not applicable to a world-class city like Toronto.
Except on a much smaller scale, is it perhaps a cautionary tale?
The second largest financial centre in North America, Toronto is Canada’s business and financial capital and North America’s fastest growing technology market.
We are the functional brain of organizations — where world talent is attracted, recruited, hired, and put to work.
And it’s to all of our benefit.
Home to some of North America’s fastest growing populations, Toronto’s population increase has little to do with birth rates and everything to do with net migration, both from within our borders and beyond.
Why is that interesting?
Because the people coming immediately contribute taxes that keep our potholes filled, transit running, and the lights on in our schools, libraries and rec centres.
And for Toronto — a city required by law to keep a balanced budget — those taxes are critical to funding operations.
Property taxes and Municipal Land Transfer Tax — once referred to as the Toronto’s “budget-balancing golden goose” — comprise a significant percentage of the city’s revenue.
As long as people are selling up as property values rise, that revenue is a certainty.
But what if that were to change?
Today, in the wake of COVID-19, corporations may be rethinking their relationship to their workforce.
Having been forced to pivot their staff to a work-from-home model as much as possible, many of these same companies are now identifying that productivity didn’t take the hit they feared, and may now, instead, opt to shrink some of their operational costs by slashing their office footprints.
If employees can work from home — wherever that home may be — wont this change the nature of hiring, retention, and of office culture?
Will top talent even need to move their life to Toronto?
What about the ecosystem of support services that line the PATH and sustain our downtown office buildings?
The dry cleaners, the 30-minute manicure spots, the expensive juice bars — what about them?
Of all the businesses who have taken a hit through the emergency shut down, it’s hard to imagine they will have an easy time bouncing back, if at all.
The last four months have been a crash course in remote community building.
We rally together on Zoom calls, commiserate about the challenges of child-wrangling without parks or play dates, and collectively rely on one another to mask-up and stop the spread of this virus.
Community now matters more than ever.
But it seems that community can now be forged pretty easily outside of the 416 and 905.
Muskoka and Collingwood, as examples, are seeing record-breaking sales figures in recent days — people have evidently determined that if they can work from anywhere, they might as well do it where their dollars stretch further and they have more room to spread out.
A bi-weekly trip down to head office in the city doesn’t seem bad at all.
We can really only begin to guess at the ripple effects such a shift might initiate.
And not all of them are negative — if people being able to work remotely drives populations back to the smaller communities where Amazon has decimated Main Street, that’s a good thing.
Restaurants and retail will rise to meet the demand — it’s an opportunity for small businesses.
But in such a scenario the challenge for Toronto will be how to make up the void — a void already unfathomable following months of economic shutdown.
In terms of financial impact, the estimated burn rate for the city at the height of things was $65 million per week. Months of deferred property taxes for homeowners will be the extra kick.
Shrinking commercial footprints will mean shrinking property tax revenue.
Fewer people riding the TTC downtown to work will mean a substantial hit to fare revenues.
A decrease in demand for housing in the downtown core means an eventual decline in property values. Fewer people transacting real estate purchases means a hit to the land transfer tax revenue.
The golden goose will have stopped laying its eggs.
So, it seems to me that maybe people should stop complaining about companies bringing in talent from beyond our borders and recognize that it may well be what props up our economic recovery.
The alternatives are definitely going to anger you more.
— Lackie is a second-generation Sales Representative with Chestnut Park Real Estate and has been helping her clients navigate the challenging Toronto market since 2011
RE/MAX | Canadian Real Estate: St. John's Housing Market – RE/MAX News
Canadians have faced extraordinary circumstances over the past few months due to the ongoing global pandemic. In efforts to contain the virus, people have been practicing social and physical distancing, which has affected how they work, spend money and the Canadian real estate market. When it comes to the market in St. John’s, many are left wondering how the capital of Newfoundland and Labrador is faring these days.
St. John’s is the main financial, commercial and cultural centre of the province, and the city is home to a variety of suburban neighbourhoods, shopping complexes and industrial areas. Although the fishing industry is still important in St. John’s, the city is known today as the main service centre for the province’s offshore oil and gas industry. St. John’s is a growing metropolitan area with lots to offer, and it’s no wonder one-third of Newfoundland’s population chooses to live here.
Although housing prices are still relatively low in St. John’s compared to other Canadian markets, prices are expected to increase.
Late last year, RE/MAX was anticipating a two-per-cent decline in prices in 2020 for St. John’s Metro. Buyer’s market conditions were expected to prevail in 2020, a continuing trend from 2018-2019.
St. John’s housing market offers exceptional affordability versus many other major cities across Canada, and this is a leading reason why it is an attractive place to settle down for many people. First-time homebuyers were expected to drive the market in 2020, with the Galway subdivision in high demand.
Home Sales in St. John’s
Home sales are down in St. John’s and Newfoundland & Labrador. The Newfoundland And Labrador Association of Realtors reported that residential transactions in St. John’s fell by 61 per cent on a year-over-year basis in May 2020, while home sales in the rest of the province were down 37.4 per cent.
When we look at single detached homes in St John’s, there was a decline of 62.1 per cent from levels in April 2019.
Examining the overall supply of homes on the market, we can see that there was quite a drop comparing this year to last year. There were 4,013 active residential listings at the end of May, which is a decrease of 27 per cent from the same time last year.
Housing Prices in St. John’s
Housing prices in St. John’s remain low, however, there is an expectation that they will experience an increase over the next several years.
Province-wide, the average price of homes sold in May 2020 was $228,519, down 2.3 per cent year-over-year.
However, due to improvements in the labour market and in the unemployment rate in St. John’s, we could see housing prices in St. John’s begin to crawl higher over the next several years.
Effects of Low Housing Prices in St. John’s
There are several effects that low housing prices can have on a housing market such as St. John’s, including the rate of housing construction and the willingness of homeowners to put their properties on the market.
When housing prices are very low, there is a tendency for a slowdown in housing construction. There is the expectation that a reduction in new home construction in St. John’s will affect housing prices, leading to an eventual increase in prices.
Another effect of low housing prices is that when prices are low, homeowners have the tendency to keep their houses off the market. This will mean fewer homes for sale, leading to a decrease in supply and therefore encouraging prices to go up.
With home sales down and prices remaining low, those looking to purchase a property in St. John’s could find this that now is an opportune time.
Buying a new home during the pandemic does come with its challenges; you may be wondering how the quality of services will differ during this time. Luckily, most activities relating to buying or selling a home can be done online. If you are interested in entering the real estate market, always make sure that you work with a qualified Realtor who can best guide you through the market.
RE-OPENING CANADA: Toronto's real estate industry wants to boom again – Toronto Sun
For the Toronto-area real estate industry, the beginning of 2020 was shaping up to be a record-setting year.
And then the pandemic happened.
According to the Toronto Regional Real Estate Board’s new Real Estate Market Economic Recovery Initiatives document, which will be released next week, real estate sales in the Greater Toronto Area (GTA) dropped 67.1% in April this year compared to the same time last year and was down by 53.7% this May compared to May 2019, but prices have remained relatively stable because the number of listings has dropped in unison with the number of buyers.
The average selling price for a Toronto detached home in April this year was $1,249,730 — a 7.9% drop since April 2019.
Also, month-over-month sales figures suggest improving conditions, with May 2020 sales up 55.2% over April 2020 sales and June sales following a similar trajectory, said TRREB. (The guide will be updated with June numbers next week.)
“While COVID-19 has temporarily impacted home sales and listings in the GTA, home buying intentions have remained quite stable, suggesting that many people will be looking to satisfy pent-up demand for ownership housing once the recovery starts to take home,” according to the document.
“The supply of listings, which was a concern before the pandemic shut-downs began, will continue to be an issue as the economy and housing market recovers.”
The real estate board expects consumer confidence will improve as people gradually go back to work. A growing number of people will look to take advantage of current very low borrowing costs to buy a home, it said.
But this is all based on uncertain factors such as continued success in containing the spread of COVID-19 and generally improving economic conditions and unemployment. But if, for instance, a second wave came along, “a more aggressive approach to government stimulus may be needed.”
TRREB is recommending that policy-makers need to address the lack of a diverse housing supply in the GTA to ensure affordability and “it should once again be top-of-mind once the recovery takes hold.”
For the city, this could mean a deferral of the municipal land transfer tax or property taxes and streamlining zoning approvals.
At the provincial level, also consider a land transfer tax deferral and adjust first-time buyer rebate to reflect current average prices and adjustments of tax rate brackets so that higher rates are not imposed on below average-priced properties.
The board also suggests the province expedite hearings to help optimize the supply of rental housing.
The federal government could consider adjusting the mortgage stress test to allow for greater flexibility and allow 30-year amortizations for insured mortgages.
The feds could also consider various options for flexibility for the RRSP Home Buyers’ Plan, including increasing withdrawal limits, expanding first-time home buyer eligibility and allowing cross-generation use, such as parents using RRSP funds to help their kids with a home purchase.
Meanwhile, Ontario Real Estate Association president Sean Morrison says open houses still remain prohibited at this time and the association is recommending realtors stay with stage one protocols for re-opening, which is physical distancing, wearing personal protective equipment during all showings, limiting numbers at showings and sanitizing between showings and have COVID-19 questionnaires ready to make sure no one in contact has travelled outside the province.
“There were a lot of digital tools we used sporadically that we became dependent on,” said Morrison.
“Things like video conferencing with clients, sign documents by an electronic means and email offers back and forth. That became the norm over the past three months. The key piece for us will be the re-opening of sales offices.”
Commercial real estate landlords will face some drastic changes during recovery
Saad Rafi, the head of Toronto’s Recovery and Rebuild strategy said despite the vast majority still working from home — and that may not change any time soon — a number of commercial landlords are looking to rent more space.
That’s because for those who cannot do their job remotely and need to go into the office, those companies will require more space to allow their employees to physically-distance.
That’s just one change the commercial real estate will see as we enter Phase Two and beyond.
“A 6 x 6 cubicle isn’t going to to do it in an era of sensitivity to contagion,” explains Benjamin Shinewald, the president and CEO of the Building Owners and Managers Association (BOMA) of Canada, which has also released a guide to re-opening to its members.
“The vast majority of tenants are fixed in the space they have. There’s always tenants adding and shedding space. Very sadly, there will be some tenants that will be disappearing because of the recession. But I don’t see a huge change in the horizon (in the next three to six months.)”
Even though the remote workers will balance out the in-office workers who require more space, Shinewald said fewer people returning to work will mean changes to the way buildings operate and changes to their environment — everything from the number of times toilets flush to shopkeepers who have malls attached to office towers, who will have less foot traffic.
“But there are those who say efficiency of retail will increase, because people will not be browsing and loitering in stores the way they used to,” he said.
“They buy what they want and go out.”
Workers in these office towers may also expect changes with elevator usage. Gone are the days when you would cram as many into the confined space. Shinewald said he wouldn’t doubt it if there are quadrants blocked off with a maximum of up to four. Perhaps people will be facing the corners to prevent spread if someone coughs or sneezes.
“The challenges around re-entry are real,” he said.
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