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Coronavirus: What will happen to Canada’s housing market amid the pandemic? – Global News

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As the novel coronavirus pandemic forces parts of the economy to shut down, the snow is melting in areas of Canada in what’s normally a prelude to the busiest weeks of the year in real estate.

But will the health emergency freeze the spring housing market?

So far, it’s hard to tell. Real estate is what economists call a “lagging indicator,” notes Romana King of Zolo.ca, meaning that, usually, it takes a while for economic trends to be reflected in housing market data.

READ MORE: Coronavirus: 500,000 Canadians have filed for EI this week

“The numbers won’t show up for anywhere from a week to three months from now,” King said.

Still, there’s little doubt that COVID-19 has already brought about seismic changes in the industry.

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In February, the housing market in many parts of Canada seemed headed for red-hot season. Home sales were up nearly 27 per cent compared to the same month in 2019 and the national average home price had climbed 15 per cent.

Now, real estate agents are doing client meetings and home tours online or carrying hand sanitizers and gloves when showing properties in person.

READ MORE: Coronavirus — Canada’s big banks to allow mortgage payment deferrals

At Zoocasa.com, new company policies include sanitizing doorknobs, cabinets, countertops and other high-contact areas before and after each visit.

Also, handshakes are out.

“We keep at least six feet away from each other,” reads an online memo. The rule holds for both agents and clients.

READ MORE: Coronavirus — Here’s how to apply for EI and the new COVID-19 emergency benefit

Still, despite the industry’s efforts, the biggest change King has noticed is “the hyper reluctance of buyers to go visit sellers’ home.”

Others, unnerved about the uncertainty over the economy, are pressing the pause button on home-purchasing, King said.

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Others yet are seeing lenders press the pause button for them.

That’s what happened recently to a client of Ron Butler of Butler Mortgage, which offers services in the Greater Toronto Area, Ottawa, Vancouver and Calgary.

READ MORE: Trudeau unveils $82B in aid for families, business amid coronavirus uncertainty

When the lender conducted a routine check on the person’s employment status two weeks before the closing date, it discovered the client, who works in the hotel sector, had been temporarily laid off with no set return date.

The mortgage was cancelled, Butler said.

Butler sounded optimistic about the possibility of finding a solution for his client — possible alternatives included finding a co-signer or signing up with a different lender willing to take on more risk for a high mortgage rate, he said.

Still, buyers who find themselves in that situation face the possibility of losing thousands of dollars in deposit, Butler said. And if the seller has to re-list the property and eventually sells for a lower price, the original buyer may be on the hook for the difference, although they may be able to challenge that through litigation, he added.

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In the current circumstances, some lawyers will take the view that “a contract is a contract — until there’s a plague,” Butler said.






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For now, since the virus hit, Butler has had only one case of a lender pulling out. Nor has he seen prospective buyers getting gold feet as the closing date approaches, he said. But that may change.

The bulk of the layoffs in the hotel and restaurant industries have only come over the past two or three weeks, while home deals, on average, take 48 days to close, said Butler.

“The next three weeks are going to be the great run of insanity.”

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The news this week doesn’t bode well. Air Canada is set to temporarily lay off more than 5,000 employees, according to the union representing the airline’s flight attendants. And on Friday Ottawa said over half a million Canadians have recently filed for employment insurance, a volume Prime Minister Justin Trudeau called “historic.”

READ MORE: Air Canada to lay off over 5K flight attendants as coronavirus halts travel, union says.

Still, the market hasn’t dried out yet, King said.

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Even before COVID-19, virtual tours were becoming more and more popular. Some buyers are comfortable purchasing without seeing properties in person. Others, who have plenty of cash at hand, are undeterred by the economic outlook, she said.

No doubt, low mortgage rates are helping.

Well-qualified buyers can now get a five-year fixed rate for below 2.5 per cent and variable rates below two per cent.






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But mortgage rates have been climbing somewhat, noted Robert McLister, a mortgage broker and founder of rates-comparisons site RateSpy.com. For weeks, a slowing global economy pushed borrowing costs lower. But now that Canada’s economy is staring down the barrel of a recession, banks are facing both higher funding costs from jittery investors who help fund their mortgages and a higher likelihood of loan losses as borrowers struggle to keep up with payments.

READ MORE: Simple steps you can take to prepare for a recession amid coronavirus

“Both funding costs and credit risk (expected losses) have surged. When that happens, banks protect their profitability and increase margins by lifting rates,” McLister said via email.

Some lenders are lifting variable mortgage rates even after the Bank of Canada lowered its trend-setting policy rate by one percentage point in the span of less than two weeks.

Banks can’t lower the interest they pay on deposits as much as mortgage rates, McLister said. This squeezes their margins and creates upward pressure on mortgage rates.

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That should stop when people get back to work and mortgage arrears have topped out, McLister said.

How soon that actually happens will be key in determining whether the housing market is headed for a temporary blip or something more serious, King said.

“We talk about interest rates and we talk about supply and demand levels,” King said. “But the primary indicator when we talk about real estate is job security.”

© 2020 Global News, a division of Corus Entertainment Inc.

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Looking for the next mystery bestseller? This crime bookstore can solve the case

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WINNIPEG – Some 250 coloured tacks pepper a large-scale world map among bookshelves at Whodunit Mystery Bookstore.

Estonia, Finland, Japan and even Fenwick, Ont., have pins representing places outside Winnipeg where someone has ordered a page-turner from the independent bookstore that specializes in mystery and crime fiction novels.

For 30 years, the store has been offering fans of Agatha Christie’s Hercule Poirot or Arthur Conan Doyle’s Sherlock Holmes a place to get lost in whodunits both old and new.

Jack and Wendy Bumsted bought the shop in the Crescentwood neighbourhood in 2007 from another pair of mystery lovers.

The married couple had been longtime customers of the store. Wendy Bumsted grew up reading Perry Mason novels while her husband was a historian with vast knowledge of the crime fiction genre.

At the time, Jack Bumsted was retiring from teaching at the University of Manitoba when he was looking for his next venture.

“The bookstore came up and we bought it, I think, within a week,” Wendy Bumsted said in an interview.

“It never didn’t seem like a good idea.”

In the years since the Bumsteds took ownership, the family has witnessed the decline in mail-order books, the introduction of online retailers, a relocation to a new space next to the original, a pandemic and the death of beloved co-owner Jack Bumsted in 2020.

But with all the changes that come with owning a small business, customers continue to trust their next mystery fix will come from one of the shelves at Whodunit.

Many still request to be called about books from specific authors, or want to be notified if a new book follows their favourite format. Some arrive at the shop like clockwork each week hoping to get suggestions from Wendy Bumsted or her son on the next big hit.

“She has really excellent instincts on what we should be getting and what we should be promoting,” Micheal Bumsted said of his mother.

Wendy Bumsted suggested the store stock “Thursday Murder Club,” the debut novel from British television host Richard Osman, before it became a bestseller. They ordered more copies than other bookstores in Canada knowing it had the potential to be a hit, said Michael Bumsted.

The store houses more than 18,000 new and used novels. That’s not including the boxes of books that sit in Wendy Bumsted’s tiny office, or the packages that take up space on some of the only available seating there, waiting to be added to the inventory.

Just as the genre has evolved, so has the Bumsteds’ willingness to welcome other subjects on their shelves — despite some pushback from loyal customers and initially the Bumsted patriarch.

For years, Jack Bumsted refused to sell anything outside the crime fiction genre, including his own published books. Instead, he would send potential buyers to another store, but would offer to sign the books if they came back with them.

Wendy Bumsted said that eventually changed in his later years.

Now, about 15 per cent of the store’s stock is of other genres, such as romance or children’s books.

The COVID-19 pandemic forced them to look at expanding their selection, as some customers turned to buying books through the store’s website, which is set up to allow purchasers to get anything from the publishers the Bumsteds have contracts with.

In 2019, the store sold fewer than 100 books online. That number jumped to more than 3,000 in 2020, as retailers had to deal with pandemic lockdowns.

After years of running a successful mail-order business, the store was able to quickly adapt when it had to temporarily shut its doors, said Michael Bumsted.

“We were not a store…that had to figure out how to get books to people when they weren’t here.”

He added being a community bookstore with a niche has helped the family stay in business when other retailers have struggled. Part of that has included building lasting relationships.

“Some people have put it in their wills that their books will come to us,” said Wendy Bumsted.

Some of those collections have included tips on traveling through Asia in the early 2000s or the history of Australian cricket.

Micheal Bumsted said they’ve had to learn to be patient with selling some of these more obscure titles, but eventually the time comes for them to find a new home.

“One of the great things about physical books is that they can be there for you when you are ready for them.”

This report by The Canadian Press was first published on Sept. 15, 2024.



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Labour Minister praises Air Canada, pilots union for avoiding disruptive strike

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MONTREAL – Canada’s labour minister is praising both Air Canada and the union representing about 5,200 of its pilots for averting a work stoppage that would have disrupted travel for hundreds of thousands of passengers.

Steven MacKinnon’s comments came in a statement shared to social media shortly after Canada’s largest air carrier announced it had reached a tentative labour deal with the Air Line Pilots Association.

MacKinnon thanked both sides and federal mediators, saying the airline and its pilots approached negotiations with “seriousness and a resolve to get a deal.”

The tentative agreement averts a strike or lockout that could have begun as early as Wednesday for Air Canada and Air Canada Rouge, with flight cancellations expected before then.

The airline now says flights will continue as normal while union members vote on the tentative four-year contract.

Air Canada had called on the federal government to intervene in the dispute, but Prime Minister Justin Trudeau said Friday that would only happen if it became clear no negotiated agreement was possible.

This report from The Canadian Press was first published Sept. 15, 2024.

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As plant-based milk becomes more popular, brands look for new ways to compete

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When it comes to plant-based alternatives, Canadians have never had so many options — and nowhere is that choice more abundantly clear than in the milk section of the dairy aisle.

To meet growing demand, companies are investing in new products and technology to keep up with consumer tastes and differentiate themselves from all the other players on the shelf.

“The product mix has just expanded so fast,” said Liza Amlani, co-founder of the Retail Strategy Group.

She said younger generations in particular are driving growth in the plant-based market as they are consuming less dairy and meat.

Commercial sales of dairy milk have been weakening for years, according to research firm Mintel, likely in part because of the rise of plant-based alternatives — even though many Canadians still drink dairy.

The No. 1 reason people opt for plant-based milk is because they see it as healthier than dairy, said Joel Gregoire, Mintel’s associate director for food and drink.

“Plant-based milk, the one thing about it — it’s not new. It’s been around for quite some time. It’s pretty established,” said Gregoire.

Because of that, it serves as an “entry point” for many consumers interested in plant-based alternatives to animal products, he said.

Plant-based milk consumption is expected to continue growing in the coming years, according to Mintel research, with more options available than ever and more consumers opting for a diet that includes both dairy and non-dairy milk.

A 2023 report by Ernst & Young for Protein Industries Canada projected that the plant-based dairy market will reach US$51.3 billion in 2035, at a compound annual growth rate of 9.5 per cent.

Because of this growth opportunity, even well-established dairy or plant-based companies are stepping up their game.

It’s been more than three decades since Saint-Hyacinthe, Que.-based Natura first launched a line of soy beverages. Over the years, the company has rolled out new products to meet rising demand, and earlier this year launched a line of oat beverages that it says are the only ones with a stamp of approval from Celiac Canada.

Competition is tough, said owner and founder Nick Feldman — especially from large American brands, which have the money to ensure their products hit shelves across the country.

Natura has kept growing, though, with a focus on using organic ingredients and localized production from raw materials.

“We’re maybe not appealing to the mass market, but we’re appealing to the natural consumer, to the organic consumer,” Feldman said.

Amlani said brands are increasingly advertising the simplicity of their ingredient lists. She’s also noticing more companies offering different kinds of products, such as coffee creamers.

Companies are also looking to stand out through eye-catching packaging and marketing, added Amlani, and by competing on price.

Besides all the companies competing for shelf space, there are many different kinds of plant-based milk consumers can choose from, such as almond, soy, oat, rice, hazelnut, macadamia, pea, coconut and hemp.

However, one alternative in particular has enjoyed a recent, rapid ascendance in popularity.

“I would say oat is the big up-and-coming product,” said Feldman.

Mintel’s report found the share of Canadians who say they buy oat milk has quadrupled between 2019 and 2023 (though almond is still the most popular).

“There seems to be a very nice marriage of coffee and oat milk,” said Feldman. “The flavour combination is excellent, better than any other non-dairy alternative.”

The beverage’s surge in popularity in cafés is a big part of why it’s ascending so quickly, said Gregoire — its texture and ability to froth makes it a good alternative for lattes and cappuccinos.

It’s also a good example of companies making a strong “use case” for yet another new entrant in a competitive market, he said.

Amid the long-standing brands and new entrants, there’s another — perhaps unexpected — group of players that has been increasingly investing in plant-based milk alternatives: dairy companies.

For example, Danone has owned the Silk and So Delicious brands since an acquisition in 2014, and long-standing U.S. dairy company HP Hood LLC launched Planet Oat in 2018.

Lactalis Canada also recently converted its facility in Sudbury, Ont., to manufacture its new plant-based Enjoy! brand, with beverages made from oats, almonds and hazelnuts.

“As an organization, we obviously follow consumer trends, and have seen the amount of interest in plant-based products, particularly fluid beverages,” said Mark Taylor, president and CEO of Lactalis Canada, whose parent company Lactalis is the largest dairy products company in the world.

The facility was a milk processing plant for six decades, until Lactalis Canada began renovating it in 2022. It now manufactures not only the new brand, but also the company’s existing Sensational Soy brand, and is the company’s first dedicated plant-based facility.

“We’re predominantly a dairy company, and we’ll always predominantly be a dairy company, but we see these products as complementary,” said Taylor.

It makes sense that major dairy companies want to get in on plant-based milk, said Gregoire. The dairy business is large — a “cash cow,” if you will — but not really growing, while plant-based products are seeing a boom.

“If I’m looking for avenues of growth, I don’t want to be left behind,” he said.

Gregoire said there’s a potential for consumers to get confused with so many options, which is why it’s so important for brands to find a way to differentiate themselves, whether it’s with taste, health, or how well the drink froths for a latte.

Competition in a more crowded market is challenging, but Taylor believes it results in better products for consumers.

“It keeps you sharp, and it forces you to be really good at what you’re doing. It drives innovation,” he said.

This report by The Canadian Press was first published Sept. 15, 2024.



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