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Coronavirus is already taking its toll on Canada's real estate market – Yahoo Canada Finance

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The real estate frenzy in Canada’s biggest markets is headed for a chill as anxiety rises over the economic fallout of the coronavirus.” data-reactid=”23″>The real estate frenzy in Canada’s biggest markets is headed for a chill as anxiety rises over the economic fallout of the coronavirus.

A call for social distancing means far fewer people will be opening up their homes to potential buyers. 

RE/MAX wants its realtors in Ontario, the Atlantic provinces and Western Canada to cancel open houses until COVID-19 is under control.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“While almost all real estate brokerage firms have embraced digital tech and realtors are able to utilize signature platforms and other tools to conduct business, once showings, open houses and other in-person business is restricted, there will definitely be a drop off in transactions,” John Lusink, president and broker of record at Right at Home Realty, told Yahoo Finance Canada.” data-reactid=”26″>“While almost all real estate brokerage firms have embraced digital tech and realtors are able to utilize signature platforms and other tools to conduct business, once showings, open houses and other in-person business is restricted, there will definitely be a drop off in transactions,” John Lusink, president and broker of record at Right at Home Realty, told Yahoo Finance Canada.

“We expect to see a drop in sales but this will take a month or two to filter through into the actual results.”

Buyers will also likely put their plans on hold.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“Obviously there has been an immediate pause in market activity as everyone tries to figure out what happens next,” Steve Saretsky, realtor and author of real estate blog Vancity Condo, told Yahoo Finance Canada.” data-reactid=”29″>“Obviously there has been an immediate pause in market activity as everyone tries to figure out what happens next,” Steve Saretsky, realtor and author of real estate blog Vancity Condo, told Yahoo Finance Canada.

“We are seeing buyers move to the sidelines and sellers put some of their listing plans on hold.” 

But that doesn’t mean the end result will be more affordable homes.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“The way I see it the housing market is basically frozen… no buyers and no sellers,” Benjamin Tal, deputy chief economist at CIBC Capital Markets, told Yahoo Finance Canada.” data-reactid=”32″>“The way I see it the housing market is basically frozen… no buyers and no sellers,” Benjamin Tal, deputy chief economist at CIBC Capital Markets, told Yahoo Finance Canada.

“That in a way will limit or even eliminate any notable downward risk to prices. Simply the  number of sales will go down dramatically.”

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Measures to shore up the market” data-reactid=”34″>Measures to shore up the market

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The Bank of Canada announced two interest rate cuts in March, which led the country’s 6 biggest banks to lower their prime rates that determine variable mortgage rates.” data-reactid=”35″>The Bank of Canada announced two interest rate cuts in March, which led the country’s 6 biggest banks to lower their prime rates that determine variable mortgage rates.

Lower interest rates can serve as rocket fuel for home prices, but that won’t likely be the case this time.

“Low interest rates are not helping here much since we have reached a point in which reduced confidence  takes over improved affordability,” said Tal.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The Bank of Canada also announced new measures to ensure liquidity during the COVID-19 pandemic.” data-reactid=”38″>The Bank of Canada also announced new measures to ensure liquidity during the COVID-19 pandemic.

Canada’s 6 biggest banks saw their lending margins increased and say they will cut clients some slack, including allowing the deferral of mortgage payments.

“Effective immediately, Bank of Montreal, CIBC, National Bank of Canada, RBC Royal Bank, Scotiabank and TD Bank have made a commitment to work with personal and small business banking customers on a case-by-case basis to provide flexible solutions to help them manage through challenges such as pay disruption due to COVID-19; childcare disruption due to school closures; or those facing illness from COVID-19,” the banks said in a statement.

“This support will include up to a six-month payment deferral for mortgages, and the opportunity for relief on other credit products.”

Saretsky says he expects borrowers to take the banks up on their offers.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Effects across sectors” data-reactid=”43″>Effects across sectors

Jivan Sanghera, president at Circle Mortgage Group, says he’s getting ready to close his office and work from home.

“I have a feeling it’s just a couple more days work and we won’t have much to do,” Sanghera said.

“I can’t see why people would even consider listing their homes for sale currently with the risk that strangers bring.”

Housing starts data will tell us how badly the homes that were supposed to be under construction will be hit. Tal says the effects are already being felt.

“The main damage will be in the new construction. We are already hearing about cancellations of pre sales as developers are unable to get the financing due to weak demand that will continue, so expect notable slowing in housing starts.”

A slowdown in that part of the market means that, along with realtors and mortgage brokers, construction workers will take it on the chin too. But there is some light at the end of the tunnel.

“We have to remember that this crisis has an end game, a vaccine. So knowing that is shaping the reaction curve of governments,’ said Tal.

“You just try to ride the wave until we reach that point which will take a while.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter&nbsp;@jessysbains.” data-reactid=”52″>Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Download the Yahoo Finance app, available for&nbsp;Apple&nbsp;and&nbsp;Android.” data-reactid=”53″>Download the Yahoo Finance app, available for Apple and Android.

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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.

The Canadian Press. All rights reserved.

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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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