Canadian home sales fall in March, price growth slows: CREA | Canada News Media
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Canadian home sales fall in March, price growth slows: CREA

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Homes on Sherman Brock Circle in Newmarket, Ont.Fred Lum/the Globe and Mail

Canadian home sales dropped in March and prices fell in some of the country’s hottest markets, as borrowing became more expensive after the Bank of Canada raised interest rates.

The number of resales decreased 5.4 per cent from February to March on a seasonally adjusted basis, with the sharpest drops in Calgary and the Toronto region, according to the Canadian Real Estate Association, or CREA.

“March definitely saw a slowdown compared to February in terms of both activity and price growth,” Jill Oudil, chair of CREA, said in a press release. Though Ms. Oudil cautioned that it was too early to say whether the country’s real estate rally was starting to end. “One month does not make a trend, so we’ll have to wait and see if this is the beginning of the long-awaited cooling off of this market,” she said.

The home price index, which tracks the price of a typical home and adjusts for pricing volatility, fell from February to March by low single-digit percentages in regions across southern Ontario such as Brantford, Cambridge, Kitchener-Waterloo and Hamilton-Burlington.

In other parts of the country where home prices have jumped by more than 50 per cent in two years, the home price index was up by a single percentage point, if at all. Overall, that contributed to the country’s slowest home price growth in six months.

Nationally, the home price index was up 1 per cent to $874,100 from February to March on a seasonally adjusted basis, according to CREA. That was down from the record 3.5-per-cent increase from January to February.

Compared with March of last year, however, the home price index is up 27.1 per cent. Over the same period, the number of home resales is down 16 per cent, while new listings have fallen 10 per cent.

Realtors say homes are taking longer to sell and that previous marketing tactics are no longer working. That includes underpricing properties and setting a date for offers in hopes of triggering a bidding war. Now realtors say that homes are not fetching as many bidders, and home sellers are not getting the prices they were expecting.

“A lot of these sellers have not come to terms with reality yet,” said Odeen Eccleston, president of real estate brokerage and developer Wiltshire Group in Toronto. “It looks like they’re not going to be getting the same numbers that their neighbours and counterparts obtained,” she said.

In the first two months of this year, houses in the Toronto suburbs were drawing dozens of bids with some selling for hundreds of thousands of dollars more than the asking price. Today, properties are not generating the same level of interest.

In York region, one of the suburbs where the typical home price has risen 70 per cent in two years , Ms. Eccleston said she has observed similar properties selling for $200,000 less than in February.

“It’s the same subdivision, same builder, same five-bedroom model and similar levels of upgrades,” said Ms. Eccleston, who has sold homes in the Toronto region for 15 years.

Activity is expected to wane further this year after the central bank raised its benchmark interest rate twice in two months. The bank has indicated it intends to continue to raise interest rates, which will continue to push up borrowing expenses for would-be buyers.

The cost of a fixed-rate mortgage, where the interest rate does not change over the term of the loan contract, has doubled in about a year, according to mortgage brokers, with the popular five-year fixed mortgage now above 4 per cent. Economists predict that the rise in interest rates will temper demand and lead to dip in prices.

“With the Bank of Canada set to hike rates aggressively, home sales are likely to trend even lower,” Rishi Sondhi, an economist with Toronto-Dominion Bank, said in a note, adding that this will “weigh on price growth.” Mr. Sondhi expects the average home price to fall incrementally in the latter half of the year.

Phil Soper, chief executive officer of Royal LePage, said there are signs that the real estate market is starting to calm down after nearly two years of frenetic bidding wars. Mr. Soper said multiple offer situations are dropping and the gap between the asking price and selling price is narrowing. “It’s getting easier to price properties,” he said.

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Telus prioritizing ‘most important customers,’ avoiding ‘unprofitable’ offers: CFO

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Telus Corp. says it is avoiding offering “unprofitable” discounts as fierce competition in the Canadian telecommunications sector shows no sign of slowing down.

The company said Friday it had fewer net new customers during its third quarter compared with the same time last year, as it copes with increasingly “aggressive marketing and promotional pricing” that is prompting more customers to switch providers.

Telus said it added 347,000 net new customers, down around 14.5 per cent compared with last year. The figure includes 130,000 mobile phone subscribers and 34,000 internet customers, down 30,000 and 3,000, respectively, year-over-year.

The company reported its mobile phone churn rate — a metric measuring subscribers who cancelled their services — was 1.09 per cent in the third quarter, up from 1.03 per cent in the third quarter of 2023. That included a postpaid mobile phone churn rate of 0.90 per cent in its latest quarter.

Telus said its focus is on customer retention through its “industry-leading service and network quality, along with successful promotions and bundled offerings.”

“The customers we have are the most important customers we can get,” said chief financial officer Doug French in an interview.

“We’ve, again, just continued to focus on what matters most to our customers, from a product and customer service perspective, while not loading unprofitable customers.”

Meanwhile, Telus reported its net income attributable to common shares more than doubled during its third quarter.

The telecommunications company said it earned $280 million, up 105.9 per cent from the same three-month period in 2023. Earnings per diluted share for the quarter ended Sept. 30 was 19 cents compared with nine cents a year earlier.

It reported adjusted net income was $413 million, up 10.7 per cent year-over-year from $373 million in the same quarter last year. Operating revenue and other income for the quarter was $5.1 billion, up 1.8 per cent from the previous year.

Mobile phone average revenue per user was $58.85 in the third quarter, a decrease of $2.09 or 3.4 per cent from a year ago. Telus said the drop was attributable to customers signing up for base rate plans with lower prices, along with a decline in overage and roaming revenues.

It said customers are increasingly adopting unlimited data and Canada-U.S. plans which provide higher and more stable ARPU on a monthly basis.

“In a tough operating environment and relative to peers, we view Q3 results that were in line to slightly better than forecast as the best of the bunch,” said RBC analyst Drew McReynolds in a note.

Scotiabank analyst Maher Yaghi added that “the telecom industry in Canada remains very challenging for all players, however, Telus has been able to face these pressures” and still deliver growth.

The Big 3 telecom providers — which also include Rogers Communications Inc. and BCE Inc. — have frequently stressed that the market has grown more competitive in recent years, especially after the closing of Quebecor Inc.’s purchase of Freedom Mobile in April 2023.

Hailed as a fourth national carrier, Quebecor has invested in enhancements to Freedom’s network while offering more affordable plans as part of a set of commitments it was mandated by Ottawa to agree to.

The cost of telephone services in September was down eight per cent compared with a year earlier, according to Statistics Canada’s most recent inflation report last month.

“I think competition has been and continues to be, I’d say, quite intense in Canada, and we’ve obviously had to just manage our business the way we see fit,” said French.

Asked how long that environment could last, he said that’s out of Telus’ hands.

“What I can control, though, is how we go to market and how we lead with our products,” he said.

“I think the conditions within the market will have to adjust accordingly over time. We’ve continued to focus on digitization, continued to bring our cost structure down to compete, irrespective of the price and the current market conditions.”

Still, Canada’s telecom regulator continues to warn providers about customers facing more charges on their cellphone and internet bills.

On Tuesday, CRTC vice-president of consumer, analytics and strategy Scott Hutton called on providers to ensure they clearly inform their customers of charges such as early cancellation fees.

That followed statements from the regulator in recent weeks cautioning against rising international roaming fees and “surprise” price increases being found on their bills.

Hutton said the CRTC plans to launch public consultations in the coming weeks that will focus “on ensuring that information is clear and consistent, making it easier to compare offers and switch services or providers.”

“The CRTC is concerned with recent trends, which suggest that Canadians may not be benefiting from the full protections of our codes,” he said.

“We will continue to monitor developments and will take further action if our codes are not being followed.”

French said any initiative to boost transparency is a step in the right direction.

“I can’t say we are perfect across the board, but what I can say is we are absolutely taking it under consideration and trying to be the best at communicating with our customers,” he said.

“I think everyone looking in the mirror would say there’s room for improvement.”

This report by The Canadian Press was first published Nov. 8, 2024.

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TC Energy cuts cost estimate for Southeast Gateway pipeline project in Mexico

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CALGARY – TC Energy Corp. has lowered the estimated cost of its Southeast Gateway pipeline project in Mexico.

It says it now expects the project to cost between US$3.9 billion and US$4.1 billion compared with its original estimate of US$4.5 billion.

The change came as the company reported a third-quarter profit attributable to common shareholders of C$1.46 billion or $1.40 per share compared with a loss of C$197 million or 19 cents per share in the same quarter last year.

Revenue for the quarter ended Sept. 30 totalled C$4.08 billion, up from C$3.94 billion in the third quarter of 2023.

TC Energy says its comparable earnings for its latest quarter amounted to C$1.03 per share compared with C$1.00 per share a year earlier.

The average analyst estimate had been for a profit of 95 cents per share, according to LSEG Data & Analytics.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:TRP)

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BCE reports Q3 loss on asset impairment charge, cuts revenue guidance

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BCE Inc. reported a loss in its latest quarter as it recorded $2.11 billion in asset impairment charges, mainly related to Bell Media’s TV and radio properties.

The company says its net loss attributable to common shareholders amounted to $1.24 billion or $1.36 per share for the quarter ended Sept. 30 compared with a profit of $640 million or 70 cents per share a year earlier.

On an adjusted basis, BCE says it earned 75 cents per share in its latest quarter compared with an adjusted profit of 81 cents per share in the same quarter last year.

“Bell’s results for the third quarter demonstrate that we are disciplined in our pursuit of profitable growth in an intensely competitive environment,” BCE chief executive Mirko Bibic said in a statement.

“Our focus this quarter, and throughout 2024, has been to attract higher-margin subscribers and reduce costs to help offset short-term revenue impacts from sustained competitive pricing pressures, slow economic growth and a media advertising market that is in transition.”

Operating revenue for the quarter totalled $5.97 billion, down from $6.08 billion in its third quarter of 2023.

BCE also said it now expects its revenue for 2024 to fall about 1.5 per cent compared with earlier guidance for an increase of zero to four per cent.

The company says the change comes as it faces lower-than-anticipated wireless product revenue and sustained pressure on wireless prices.

BCE added 33,111 net postpaid mobile phone subscribers, down 76.8 per cent from the same period last year, which was the company’s second-best performance on the metric since 2010.

It says the drop was driven by higher customer churn — a measure of subscribers who cancelled their service — amid greater competitive activity and promotional offer intensity. BCE’s monthly churn rate for the category was 1.28 per cent, up from 1.1 per cent during its previous third quarter.

The company also saw 11.6 per cent fewer gross subscriber activations “due to more targeted promotional offers and mobile device discounting compared to last year.”

Bell’s wireless mobile phone average revenue per user was $58.26, down 3.4 per cent from $60.28 in the third quarter of the prior year.

This report by The Canadian Press was first published Nov. 7, 2024.

Companies in this story: (TSX:BCE)

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