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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.

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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.

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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.

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“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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Canada’s response to Trump deportation plan a key focus of revived cabinet committee

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OTTAWA, W.Va. – U.S. president-elect Donald Trump’s promise launch a mass deportation of millions of undocumented immigrants has the Canadian government looking at its own border.

Deputy Prime Minister Chrystia Freeland said Friday the issue is one of two “points of focus” for a recently revived cabinet committee on Canada-U.S. relations.

Freeland said she has also been speaking to premiers about the issue this week.

“I do want Canadians to know it is one of our two central points of focus. Ministers are working hard on it, and we absolutely believe that it’s an issue that Canadians are concerned about, Canadians are right to be concerned about it,” Freeland said, after the committee met for the first time since Trump left office in 2021.

She did not provide any details of the plan ministers are working on.

Public Safety Minister Dominic Leblanc, whose portfolio includes responsibility for the Canada Border Services Agency, co-chairs the committee. Freeland said that highlights the importance of border security to Canada-U.S. relations.

There was a significant increase in the number of irregular border crossings between 2016 and 2023, which the RCMP attributed in part to the policies of the first Trump administration.

The national police service said it has been working through multiple scenarios in case there is a change in irregular migration after Trump takes office once again, and any response to a “sudden increase in irregular migration” will be co-ordinated with border security and immigration officials.

However, Syed Hussan with the Migrant Rights Network said he does not anticipate a massive influx of people coming into Canada, chalking the current discussion up to anti-migrant panic.

“I’m not saying there won’t be some exceptions, that people will continue to cross. But here’s the thing, if you look at the people crossing currently into the U.S. from the Mexico border, these are mostly people who are recrossing post-deportation. The reason for that is, is that people have families and communities and jobs. So it seems very unlikely that people are going to move here,” he said.

Since the Safe Third Country Agreement was modified last year, far fewer people are making refugee claims in Canada through irregular border crossings.

The agreement between Canada and the U.S. acknowledges that both countries are safe places for refugees, and stipulates that asylum seekers must make a refugee claim in the country where they first arrive.

The number of people claiming asylum in Canada after coming through an irregular border crossing from the U.S. peaked at 14,000 between January and March 2023.

At that time, the rule was changed to only allow for refugee claims at regular ports of entry, with some specific exemptions.

This closed a loophole that had seen tens of thousands of people enter Canada at Roxham Road in Quebec between 2017 and 2023.

In the first six months of 2024, fewer than 700 people made refugee claims at irregular crossings.

There are 34,000 people waiting to have their refugee claims processed in Canada, according to government data.

In the first 10 months of this year, U.S. border officials recorded nearly 200,000 encounters with people making irregular crossings from Canada. Around 27,000 encounters took place at the border during the first 10 months of 2021.

Hussan said the change to the Safe Third Country Agreement made it less likely people will risk potentially dangerous crossings into Canada.

“Trying to make a life in Canada, it’s actually really difficult. It’s more difficult to be an undocumented person in Canada than the U.S. There’s actually more services in the U.S. currently, more access to jobs,” Hussan said.

Toronto-based immigration lawyer Robert Blanshay said he is receiving “tons and tons” of emails from Americans looking at possibly relocating to Canada since Trump won the election early Wednesday.

He estimates that about half are coming from members of the LGBTQ+ community.

“I spoke to a guy yesterday, he and his partner from Kansas City. And he said to me, ‘You know, things weren’t so hunky-dory here in Kansas City being gay to begin with. The entire political climate is just too scary for us,'” Blanshay said.

Blanshay said he advised the man he would likely not be eligible for express entry into Canada because he is at retirement age.

He also said many Americans contacted him to inquire about moving north of the border after Trump’s first electoral victory, but like last time, he does not anticipate many will actually follow through.

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



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Surrey recount confirms B.C. New Democrats win election majority

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VANCOUVER – The British Columbia New Democrats have a majority government of 47 seats after a recount in the riding of Surrey-Guildford gave the party’s candidate 22 more votes than the provincial Conservatives.

Confirmation of victory for Premier David Eby’s party comes nearly three weeks after election night when no majority could be declared.

Garry Begg of the NDP had officially gone into the recount yesterday with a 27-vote lead, although British Columbia’s chief electoral officer had said on Tuesday there were 28 unreported votes and these had reduced the margin to 21.

There are ongoing recounts in Kelowna Centre and Prince George-Mackenzie, but these races are led by John Rustad’s B.C. Conservatives and the outcomes will not change the majority status for the New Democrats.

The Election Act says the deadline to appeal results after a judicial recount must be filed with the court within two days after they are declared, but Andrew Watson with Elections BC says that due to Remembrance Day on Monday, that period ends at 4 p.m. Tuesday.

Eby has said his new cabinet will be announced on Nov. 18, with the 44 members of the Opposition caucus and two members from the B.C. Greens to be sworn in Nov. 12 and the New Democrat members of the legislature to be sworn in the next day.

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

The Canadian Press. All rights reserved.



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Port of Montreal employer submits ‘final’ offer to dockworkers, threatens lockout

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MONTREAL – The employers association at the Port of Montreal has issued the dockworkers’ union a “final, comprehensive offer,” threatening to lock out workers at 9 p.m. Sunday if a deal isn’t reached.

The Maritime Employers Association says its new offer includes a three per cent salary increase per year for four years and a 3.5 per cent increase for the two subsequent years. It says the offer would bring the total average compensation package of a longshore worker at the Port of Montreal to more than $200,000 per year at the end of the contract.

“The MEA agrees to this significant compensation increase in view of the availability required from its employees,” it wrote Thursday evening in a news release.

The association added that it is asking longshore workers to provide at least one hour’s notice when they will be absent from a shift — instead of one minute — to help reduce management issues “which have a major effect on daily operations.”

Syndicat des débardeurs du port de Montréal, which represents nearly 1,200 longshore workers, launched a partial unlimited strike on Oct. 31, which has paralyzed two terminals that represent 40 per cent of the port’s total container handling capacity.

A complete strike on overtime, affecting the whole port, began on Oct. 10.

The union has said it will accept the same increases that were granted to its counterparts in Halifax or Vancouver — 20 per cent over four years. It is also concerned with scheduling and work-life balance. Workers have been without a collective agreement since Dec. 31, 2023.

Only essential services and activities unrelated to longshoring will continue at the port after 9 p.m. Sunday in the event of a lockout, the employer said.

The ongoing dispute has had major impacts at Canada’s second-biggest port, which moves some $400 million in goods every day.

On Thursday, Montreal port authority CEO Julie Gascon reiterated her call for federal intervention to end the dispute, which has left all container handling capacity at international terminals at “a standstill.”

“I believe that the best agreements are negotiated at the table,” she said in a news release. “But let’s face it, there are no negotiations, and the government must act by offering both sides a path to true industrial peace.”

Federal Labour Minister Steven MacKinnon issued a statement Thursday, prior to the lockout notice, in which he criticized the slow pace of talks at the ports in Montreal and British Columbia, where more than 700 unionized port workers have been locked out since Nov. 4.

“Both sets of talks are progressing at an insufficient pace, indicating a concerning absence of urgency from the parties involved,” he wrote on the X social media platform.

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

The Canadian Press. All rights reserved.

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