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City real estate market a study in contrasts – Lethbridge Herald

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By Lethbridge Herald on January 18, 2021.

Herald photo by Ian Martens
A construction crew works on the roof of a large home being built Monday afternoon in the RiverStone neighbourhood on the city’s westside. @IMartensHerald

Tim Kalinowski
Lethbridge Herald
tkalinowski@lethbridgeherald.com
Almost like a tale of two cities, LethbridgeÕs real estate sectors diverged from one another in remarkable ways in 2020.
On the commercial side of things, as might be expected with the severe economic impacts of COVID-19 and ongoing public health restrictions, last year was a fairly bleak year. New home starts were also sharply down in 2020 with 20 per cent fewer single family residential permits being issued by the City of Lethbridge compared to 2019. However, the resale residential real estate market was on a huge upward swing in 2020 with a nine per cent increase in sales over 2019, and ended the year red hot with 81 per cent more houses sold in December of last year compared to December of 2019.
Lethbridge and District Association of Realtors CEO Cathy Maxwell says the strong resale market was driven by historically low interest rates and a reassessment of housing needs with more people working at home during the pandemic.
ÒI think COVID has caused people to really consider what their home is offering them, and they are making changes,Ó she says. ÒPerhaps some employers are saying you can work from home, and they need to make changes to adapt to that. Perhaps they need more space.”
Compared to January last year, local housing inventories have also tightened up, says Maxwell, with a current supply of three and a half monthsÕ worth compared to about nine monthsÕ worth at this time last year. That lowering of inventory has also switched the market over from a buyerÕs market into a more balanced market which is favouring the sellers a bit more at the moment. The average home price increased by about four per cent in 2020, confirms Maxwell.
While a lot of uncertainty remains with COVID-19 still hanging around and a difficult economy at the moment, Maxwell is hoping that gangbuster December is a sign of things to come in 2021.
ÒOverall we had a good year as far as residential real estate is concerned,Ó she says. ÒWhere that goes in the new year Ñ who knows?”
Building Industry and Land Development Association (BILD) president Perry Neufeld says many developers and builders in the community also seem to be choosing to reset the clock based on the December outlook, and seem to be putting a difficult 2020 firmly in the rearview mirror. Taking advantage of low interest rates, a tight local inventory, and the desire of consumers to readjust their housing to a new stay-at-home pandemic reality, builders took out 19 permits for single family dwellings in December Ñ amazing for a normally slow slow month, says Neufeld.
ÒFrom the numbers standpoint, single family home building permits were slower than 2019,Ó confirms Neufeld. ÒThey were about 20 per cent down from the previous year. However, December, year-over-year, was fairly strong. So it was a fairly strong month moving into 2021.Ó
Neufeld confesses he is unable to fully account for the discrepancy between consumer demand for residential real estate in Lethbridge, which was quite strong in 2020, and fewer housing starts overall in the city. However, he says, when risks are higher in the marketplace, as we saw in 2020, home builders and developers tend to be more cautious about the new inventory they bring online.
ÒIn the land development and building companies there was also caution in how they were investing, and what their spec programs were going to look like,Ó he confirms. ÒWhereas three or four years ago, they would have had quite a few projects on the go when there was a little more certainty in the marketplace. As soon as that uncertainty became something they had to contend with then they had to be a little more creative and cautious in terms of how they presented that product, and brought it online.Ó
That being said, Neufeld sees the strong permit uptake in December and the fact that Lethbridge is one of the only real estate markets in Alberta that saw an increase in values and sales last year as grounds for increasing optimism in 2021.
ÒWe have the ability as an industry to create housing as required,Ó he states. ÒWe have (construction) in the community in all different regions depending on where a person wants to live. Coupled with the fact we have historically low interest rates, I think that bodes well in the cityÕs growth in all areas. I think we are well-positioned to grow the community as fast as it wants to grow.Ó
Unfortunately the commercial real estate outlook for Lethbridge is not as positive for 2021, particularly on the office side of things, says Lethbridge Avison Young associate Vinko Smiljanec.
According to the year-end report produced by Avison Young, overall vacancy rates in Lethbridge for retail in 2020 sat at about 5 per cent, and should remain consistent in 2021. Office spaces had an city-wide vacancy of 6 per cent in 2020, and this is projected to increase in 2021, the report confirms, with downtown commercial real estate vacancies increased most dramatically. It hovered at about 11 per cent in 2019 but increased to 15 per cent as businesses closed, downsized or simply moved to more suburban areas last year.
ÒThe retail and office sectors definitely got hit the hardest with the lockdowns and that,Ó Smiljanec confirms.
ÒOffices are interesting. With everyone working from home, I think the office sector will continue to decrease (in 2021) as companies realize they donÕt need to have their employees in office as much. And those office spaces will continue to decrease as those leases come due.Ó
On the retail side, Smiljanec says he is hopeful that sector has already reached bottom after the raft of closures in 2020, and may well see a rebound at the end of 2021 and at the beginning of 2022 as vaccinations become more widespread and public health restrictions ease.
ÒOn the retail side, I donÕt think we are going to see a whole lot more vacancies come up (this year),Ó he predicts. ÒI think if you have kind of been able to weather the storm this far, I donÕt think you are going to be closing your shop now. Outside of this pandemic, I think we will start to see some recovery later in the year, but it will stay pretty flat until then.Ó
Smiljanec also says there is grounds for potential optimism on the industrial side as vacancy rates actually decreased in 2020 over 2019, falling from 8.25 per cent vacancy in 2019 to 7.15 per cent vacancy last year.
ÒThe best news of the whole mix is probably the industrial side where most of the industrial users and tenants are essential workers,” he says. ÒThey have been able to keep their jobs and stay busy, and actually that side of the sector has actually expanded if anything. There are very few vacancies for small bays. It seems like everyone I speak to in the construction industry, and the industrial, are all busy.
Follow @TimKalHerald on Twitter

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Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

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TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.

The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.

The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.

“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.

“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”

The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.

New listings last month totalled 15,328, up 4.3 per cent from a year earlier.

In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.

The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.

“I thought they’d be up for sure, but not necessarily that much,” said Forbes.

“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”

He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.

“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.

“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”

All property types saw more sales in October compared with a year ago throughout the GTA.

Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.

“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”

This report by The Canadian Press was first published Nov. 6, 2024.

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Homelessness: Tiny home village to open next week in Halifax suburb

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HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.

Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.

Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.

The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.

Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.

They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.

The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.

This report by The Canadian Press was first published Oct. 24, 2024.

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Here are some facts about British Columbia’s housing market

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Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.

Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.

Average residential home price in B.C.: $938,500

Average price in greater Vancouver (2024 year to date): $1,304,438

Average price in greater Victoria (2024 year to date): $979,103

Average price in the Okanagan (2024 year to date): $748,015

Average two-bedroom purpose-built rental in Vancouver: $2,181

Average two-bedroom purpose-built rental in Victoria: $1,839

Average two-bedroom purpose-built rental in Canada: $1,359

Rental vacancy rate in Vancouver: 0.9 per cent

How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent

This report by The Canadian Press was first published Oct. 17, 2024.

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