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Feds remove GST on rental builds and more of this week’s top real estate stories

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Here are The Globe and Mail’s top housing and real estate stories this week, with the lowest mortgage rates available in Canada today, commentary from our mortgage expert and one home worth a look.

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Canada needs 3.45 million more homes by 2030 to cut housing costs as population grows, CMHC predicts

A new report from the Canada Mortgage and Housing Corp. says Canada needs 3.45 million more homes to bring housing costs down as the population increases, reports Rachelle Younglai. That’s in addition to the 1.68 million that are expected to be built by 2030 if the pace of construction remains the same. If Canada continues to admit record levels of about half-a-million new permanent residents per year, the CMHC predicts the number of new homes required will raise to 4 million.

Ottawa will remove GST from new rental construction in response to rising cost of living

In an announcement on Thursday, Prime Minister Justin Trudeau said the federal sales tax would be removed from new rental construction effective immediately, reports Marieke Walsh, reviving a promise the Liberals made in the 2015 federal election to address the housing crisis but then dropped in future platforms. Ontario announced it would be removing the provincial sales tax on new rental builds as soon as possible, and Trudeau encouraged other provinces to do the same.

This week’s lowest available mortgage rates

The adage, “Don’t put all your eggs in one basket,” should be Canadianized to, “Don’t put all your eggs in one home,” writes Robert McLister in his weekly column. It’s easy to think homeowners can rely on their home value skyrocketing to get them through their golden years, but a lot can happen before retirement to alter the real estate supply-demand curve.

For a few homeowners, the end of the road is a power of sale

Real estate industry watchers are growing increasingly nervous about the number of power-of-sale properties popping up on multiple listing services, Shane Dingman writes. In a power of sale, if the home is sold for more money than is needed to cover the debt to the lender, the owner will be given the difference. But the owner will be evicted and their home sold without their say-so.

Rising interest rates are pressuring lenders and borrowers, and are a staggering rise in the cost of ownership for those who took out loans to buy homes at peak prices.

Home of the week: Family-friendly home comes with a hand-built backyard office

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Home of the Week, 378 Lumsden Ave., Toronto, Ont.Vision 360 Tours Inc.

378 Lumsden Ave., Toronto

This three-bedroom, two-bathroom property hugs the edge of Taylor Creek Park near Toronto’s Danforth Village, with a backyard cozying up to the tree canopy belonging to Taylor Creek Park. The house has seen some major renovations since the last owners bought it in 2016, including an open-concept kitchen and new hardwood floors. It has a strong connection to nature. Ivy plants surround the home, which is surrounded by mature trees and perennials.

But the star of the house is the backyard office. The owners renovated a small garden shed into a stylish home office, inspired by the designs from their own company, Cabinscape. A small garage door acts as a window and a tiki bar that overlooks the backyard’s multilevel deck. “For me, being in nature is incredibly grounding. I’m able to hear my thoughts in this busy life in the city. Being able to just walk into the forest is so calming and grounding, and I wanted that for my children,” owner Laura Mendes said.

What do you think is the asking price for the property?

a. $2,580,000

b. $1,375,000

c. $1,650,000

d. $2,150,000

c. The asking price is $1,650,000.

 

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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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