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Canadian Real Estate Sales See Worst April Since 1984, Montreal and Toronto Lead Lower – Better Dwelling

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Canadian real estate sales have dropped to the lowest level in a generation. Canadian Real Estate Association (CREA) data shows sales fell in April. Slower growth was expected going into this month, however not this slow. The volume for the month was the lowest since 1984 – when the population was a third smaller.

Canadian Real Estate Sales

Canadian real estate sales slipped to a generational low. There were 16,612 seasonally adjusted sales across CREA in April, down 56.8% from the previous month. Unadjusted sales came in at 20,630 for April, down 57.6% from a year before. Most of the slowdown was obviously due to the pandemic, however not all of it.

Canadian Real Estate Sales

The unadjusted sales for all home types, as reported through the Canadian MLS.

Source: CREA, Better Dwelling.

Slower growth was expected before the pandemic, due to the comparison period. The months in the first quarter of this year were being compared to negative growth last year. Comparing it to negative numbers last year, makes the acceleration seem more impressive than it is. Due to the pandemic, the numbers are obviously worse than they would have been under normal circumstances.

Canadian Real Estate Sales Change

The annual percent chage of unadjusted sales for all home types, as reported through the Canadian MLS.

Source: CREA, Better Dwelling.

National sales volumes have been sliding for a few years, but this is like nothing seen in a long time. April sales peaked in 2016, and have had trouble challenging that high. Last month was the worst April since 1984. This is easily explainable by the pandemic, but the lack of sales volume still has broader macro market consequences – regardless of the reason.

March Canadian Real Estate Sales

The number of sales reported through the Canadian MLS in the month of March.

Source: CREA, Better Dwelling.

Vancouver Real Estate Was One of The Least Impacted

All markets have seen an impact, but some markets saw declines of less than half. Winnipeg saw the smallest drop with 739 sales in April, down 36.2% from last year. Vancouver follows with 1,119 sales, down 39.5% from last year. Halifax came in third with 354 sales, down 47.2% from last year. Winnipeg and Vancouver have both slipped for two consecutive years.

Canadian Real Estate Sales By Market

Canadian real estate sales breakdown for selected markets.

Source: CREA, Better Dwelling.

The largest drops were in Eastern Canada, with Montreal and Toronto taking big hits. Montreal reported 1,890 sales in April, down 67.1% from last year. Toronto followed with 2,975 sales, down 67.1% from last year. The Niagara region came in third with 213 sales, down 64.6% from last year. Both Niagara and Toronto are in the same economic region, and both slipped for a second April in a row.

Canadian Real Estate Sales Change By Market

The percent change in Canadian real estate sales for selected markets.

Source: CREA, Better Dwelling.

The insights in this month’s numbers aren’t as clear as most analysts claim. Sales are predictably down, due to pandemic measures – that’s obvious. Sales will rise as the pandemic measures are lifted, that’s also obvious. What isn’t clear, is whether the volume can be made up without driving prices lower. The Bank of Canada is forecasting mortgages in arrears will triple over the next few months. They don’t see the arrears rate peak until next year – and this a conservative, anti-fear mongering forecast. If that happens, some buying volume may be delayed as people wait for the air to clear in the market.

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CHL Leaders: QMJHL grad Vermette enters exciting new career in real estate – Canadian Hockey League

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Gabriel Vermette spent four years in the QMJHL lacing up the skates while also learning many life skills he continues to use today.

“Balancing school, life, playing hockey at the same time, it’s a lot, and it teaches you a lot in life,” recollected Vermette in speaking with Junior Hockey Magazine as part of its CHL Leaders segment. “The big thing is to manage the stress with all of the things that you have (to do). You just have to go with one thing at a time.”

Following four full seasons in the QMJHL from 2009-13 that spanned 246 career contests with the Chicoutimi Sagueneens and Drummondville Voltigeurs – highlighted by a playoff elimination of the Memorial Cup host Shawinigan Cataractes in 2012 – Vermette elected to pursue an education, majoring in psychology at the University of Ottawa where he also suited up for another two seasons with the varsity Gee-Gees.

In all, it was an opportunity that became a reality given Vermette’s ability to access the CHL’s invaluable post-secondary scholarship program.

“At the end of my junior I shifted my plan and began thinking about what I would do in real life if it’s not hockey, so (the scholarship) is vital,” Vermette said. “It took away a lot of stress of having to pay a lot.”

Today, Vermette puts his skills to use in enjoying a new career as a real estate broker with RE/MAX Vision Gatineau in his home province of Quebec.

“It has been one year,” Vermette concluded. “I am really happy with what I am doing. I think I have had quite a lot of success so I am really proud.”

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Gloomy B.C. real estate forecasts not as bad as some predict: agent – CityNews Vancouver

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VANCOUVER (NEWS 1130) — The forecast for buying and selling real estate in B.C. isn’t what it could have been, but it’s not as bad as the double-digit price drops some analysts have predicted, according to a Richmond presale condo and townhouse agent.

Vince Taylor admits he’s biased, but said the facts are not — supply is low in B.C. and interest rates are historically low, so prices will be relatively stable.

“I am expecting a drop-off for sure. I don’t expect the market to rebound in 2020 like it was going to in March, but I see no structural, no macro or micro economic reason for the kinds of drops that have been reported,” he said.

“Tell me how that makes any sense that prices are going to go down when you have the lowest interest rate in 40 years, limited supply, and not that many people actually lost their jobs.”

He adds the COVID-19 cloud is dark, but there is a silver lining, and nothing structurally has changed about the real estate market.

While Canada is seeing the worst GDP numbers in a decade, Taylor said the easing of health and safety restrictions will bring more buyers and lower prices to the market.

The Canada Mortgage and Housing Corp. expects home prices and sales to decline substantially this year and still won’t have recovered by the end of 2022.

The federal housing agency’s special housing market outlook predicts home prices to decline between nine and 18 per cent, and as much as 25 per cent in oil-producing regions, before starting to recover by mid-2021. The report also suggests average home prices in B.C. could drop close to $100,000 this year.

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Will real estate prices plunge? That may depend on the sellers – Financial Post

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The economic uncertainty surrounding COVID-19 has contributed to contradictory estimates of future housing prices and sales. Leading the bears is the Canada Mortgage Housing Corporation (CMHC), projecting average housing prices to fall by nine to 18 per cent.

Others, including economists at the Canadian Real Estate Association (CREA), are not convinced prices will fall as steeply as the CMHC projects. Many homebuyers and sellers have been left perplexed by these conflicting forecasts — much can go wrong if they rely on the wrong estimates in their buy and sell decisions.

Regardless of the sophistication of algorithms, forecasts are necessarily a byproduct of the assumptions forecasters make and the data they use. Assumptions, inherently, are neither right nor wrong. They are informed guesses about future outcomes. When reviewing a forecast based on modelling, always remember the advice from the famed statistician, George Box: “All models are wrong, but some are useful.”

The CMHC forecasts were generated using “a specific set of assumptions for the market conditions and underlying economic fundamentals,” CMHC noted in the report’s appendix.

But how precise are they? CMHC estimates that average Canadian housing prices in 2020 will be anywhere between $493,200 and $518,400, representing a nine to 18 per cent decline from pre- COVID-19 levels. The number of sales transacting through the Multiple Listing Service is expected to be between 416,000 and 450,500.

The above forecasts are for the average price in Canada. Local market forecasts could be much different. CMHC reported provincial estimates for prices, sales and housing starts, with all provinces seeing the same trend of falling metrics through 2020 and a rebound starting later in 2021.

The lowest average price forecast for British Columbia at $609,515 is still more than double that for Alberta at $288,522. Both numbers are for the second quarter of 2022. The lower bound forecast for Ontario at $531,715 is slated for the second quarter of 2021, which suggests that CMHC expects housing markets to recover sooner in Ontario.

CMHC’s report does not disclose the methods or data used to generate forecasts. The report mentions that CMHC forecasts deploy the “full range of quantitative and qualitative tools currently available.”

The report claims that the forecast’s “range provides a relatively precise guidance to readers on the outlook while recognizing the small random components of the relationship between the housing market and its drivers.” However, the wide range of forecast for prices and sales is indicative of the “high degree of forecast uncertainty” partly due to the “unprecedented nature of the COVID-19 pandemic.” To us, therefore, the claim for precision may be a stretch.

Homebuyers and sellers need to be able to understand what forecasts mean for their decision-making processes. Economists prepare estimates with care. However, when predictions differ from the real outcomes, economists readily revise their projections. Homebuyers and sellers, once they have transacted, cannot “revise” their transactions. Hence the stakes are higher for the ones active in the market.

Another way of thinking about future housing prices is to think about the willingness of sellers to accept lower bids for their listings. If one is of the view that sellers will be, on average, willing to accept bids 18 per cent or more below than what they could have received before March 2020, a significant decrease in housing prices could be inevitable. However, this seems to be an unlikely scenario.

If prices start to decline significantly, sellers can slow or even freeze the market by not listing their properties, withdrawing them from consideration, or refusing a lower bid. Sellers’ unwillingness to sell dwellings at lower-than-expected prices can protect against a freefall in housing prices. Also, when less inventory is available for purchase, buyers may have to compete, which could put upward pressure on prices.

Lastly, the average decline in the average price does not imply that an individual dwelling will experience an average drop in valuation. Why? Because the average price forecasts ignore the differences in sizes and quality of housing or the fact that when economic conditions worsen, higher priced homes stop transacting, and lower-valued homes dominate the sales. The shift in the structural composition of housing gives a false impression that housing prices are falling. Thus, CREA’s estimates of constant quality homes are not as severe as CMHC’s.

Homebuyers and sellers should have a look at the market forecasts. But they should base their decisions on their circumstances and local housing market conditions. Remember, forecasts are useful, but not necessarily accurate.

Murtaza Haider is a professor of Real Estate Management at Ryerson University. Stephen Moranis is a real estate industry veteran. They can be reached atwww.hmbulletin.com.

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