The GTA real estate market showed signs of life in August with the average benchmark price rising for the first time in months but a new report from RBC is warning that the correction “isn’t over yet.”
In a note to clients on Thursday, RBC Assistant Chief Economist Robert Hogue warned that anticipated interest rate hikes in the coming months will “disqualify more buyers from obtaining a mortgage and shrink the size of a mortgage others can qualify for.”
That, he said, will only exacerbate a housing correction which has been underway since March and isn’t likely to end until the spring.
“We think the market will adjust to higher interest rates by early 2023. Any recovery will likely take a few months to tighten demand-supply conditions, placing the bottom for prices around spring time (overall for Canada),” he said. “We expect benchmark prices will be down approximately 14 per cent from the recent peak nationwide. On a provincial basis, we project Ontario and British Columbia to record the largest peak-to-trough declines at -16 per cent and place Alberta and Saskatchewan at the other end of the scale at negative four per cent.”
The GTA saw five straight months of declines in its home price index earlier this year but in August prices rose two per cent month-over-month, prompting some to speculate that the market was beginning to stabilize.
Hogue, however, said that he expects that buyers will remain “on the defensive in the coming months” as the Bank of Canada takes its policy rate “deeper into restrictive territory.”
The Bank of Canada has already increased its benchmark rate from 0.25 per cent to 3.25 per cent so far in 2022 in a bid to tamp down inflation and Hogue pointed out in his note that RBC expects the rate to reach four per cent by December.
“For many potential buyers, home purchasing prospects remain grim,” he said. “The partial reversal of earlier massive price increases is small comfort at a time when sharply higher interest rates cut deeply into affordability.”
The average selling price for all GTA home types combined in August was $1,079,500, which still represents a 0.9 per cent year-over-year increase.
“Over the past six months, the composite MLS home price index plummeted 19 per cent in Cambridge, 16 per cent in Kitchener-Waterloo and London, 15 per cent in Brantford and 13 per cent in Guelph,” he said.
RBC has previously described the ongoing housing correction as ‘historic’ and has suggested that it is likely to “rank as the steepest correction of the past five national downturns.”
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.
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.
VANCOUVER – Voters along the south coast of British Columbia who have not cast their ballots yet will have to contend with heavy rain and high winds from an incoming atmospheric river weather system on election day.
Environment Canada says the weather system will bring prolonged heavy rain to Metro Vancouver, the Sunshine Coast, Fraser Valley, Howe Sound, Whistler and Vancouver Island starting Friday.
The agency says strong winds with gusts up to 80 kilometres an hour will also develop on Saturday — the day thousands are expected to go to the polls across B.C. — in parts of Vancouver Island and Metro Vancouver.
Wednesday was the last day for advance voting, which started on Oct. 10.
More than 180,000 voters cast their votes Wednesday — the most ever on an advance voting day in B.C., beating the record set just days earlier on Oct. 10 of more than 170,000 votes.
Environment Canada says voters in the area of the atmospheric river can expect around 70 millimetres of precipitation generally and up to 100 millimetres along the coastal mountains, while parts of Vancouver Island could see as much as 200 millimetres of rainfall for the weekend.
An atmospheric river system in November 2021 created severe flooding and landslides that at one point severed most rail links between Vancouver’s port and the rest of Canada while inundating communities in the Fraser Valley and B.C. Interior.
This report by The Canadian Press was first published Oct. 17, 2024.
