Summer is traditionally a slower time for Canadian real estate, home prices and home sales
Demand will continue to stay high, and supply will stay low
Don’t expect prices to fall, especially in Toronto and Vancouver
Ruth Saldanha: Canadian real estate has been volatile for some time now, with prices falling back in 2020 at the start of the COVID-19 pandemic and then oscillating ever since. In this four-part series, we will cover the four main aspects of real estate – residential, commercial, industrial, and REITs – and help you understand where the market is now and where it likely be over the medium term. Today, let’s talk about residential real estate.
With rising home prices and rising interest rates, home ownership has become a tough proposition for many, especially in the urban parts of Canada. Is this likely to continue? The market is already slowing, and is that likely to continue? Brenda Lum, Managing Director of Credit Ratings at DBRS Morningstar, is here today to talk about this. Brenda, thank you so much for being here today.
Brenda Lum: Thank you for the invitation. Really excited.
Why Has the Canadian Housing Market Somewhat Cooled Right Now?
Saldanha: So, let’s start by talking about the residential real estate market right now. It started to cool a little bit. What’s going on and why are prices where they are?
Lum: Well, usually, the summertime is a little bit of a slower period. People are on vacation, school is out, so looking for houses are a little bit in the background. Generally, though, in the urban markets, we’re still going to see high prices. Interest rates have risen, which normally should cause prices to fall or at least stay steady. But within certain urban markets, there’s a different dynamic. There’s both demand issue and a supply issue. Firstly, on the demand side, there’s the choice for urban geography for immigrants to come in, and Canada is a very strong proponent of having immigrants come into this country. So, that’s increasing demand. Supply though, on the other hand, is restricted because there’s just not a lot of geography. So, as you can see, for example in Vancouver, in Toronto, the urban markets are growing upward towards the sky as opposed to maybe the 50s and 60s and 70s when they were growing outward. So, with a natural increase in demand and a limitation on supplies, particularly for single family homes, that the price will continue to rise.
What is Likely to Happen to Demand? And Supply?
Saldanha: I want to dig in a little bit on this, because like you said, people have been like, there’s not enough supply right now. So far, real estate has been a solid investment for Canadians. Do you expect this to continue going ahead? Will it continue to be one of the most solid investments that we have?
Lum: I think so but selectively. I think if you’re in the right geography. where there will be natural demand and limited supply, it’s a great investment. I think if you’re going into markets where you have an ability to increase supply readily and the demand is not necessarily there, so it may not be the first choice, then probably not so much, unless you’re looking at it as a home as opposed to investment.
Which Canadian House Markets Would Make a Good Investment?
Saldanha: So, Brenda, I want to talk about that a little bit more. You said that there’s some markets that would do well and some that are not so good. Can you give us a sense of which is which right now?
Lum: Sure. I would say that the urban markets will do well. And the primary reason is because you will have people who naturally be inclined to move into the urban markets. I think when you’re looking at secondary and tertiary markets, the demand will be somewhat less. And as a result, I don’t think you’ll have that same appreciation of price. So, if you’re looking at investment, probably urban is much more amenable than looking at some type of rural properties.
Some Risks in Canadian Real Estate
Saldanha: What are some of the risks that you’re considering in residential real estate right now?
Lum: Some of the risks that we’ve continue to look at would be interest rate rising risk. We feel that there is potential for further increases. So, that will impede the servicing of debt. Right now, the servicing costs are very high in terms of the cost for ownership vis-à-vis the amount of household income. So, if rates are rising and you have to renew your mortgage, then that will just increase further. Hopefully, with potentially salary inflation that you can have some offset, but I don’t think at this time that it will be a full offset.
Will Home Prices Rise in Canada?
Saldanha: And the last thing that everyone wants to know is, are prices going to rise from here. So, I guess, the question is, what’s going to happen with prices from here on.
Lum: I think in the urban markets, yeah, I still think that they’re going to rise. There’s going to be – demand is going to outstrip supply. We’re fortunate that there is some type of development in purposeful rentals. So, that may provide some relief on the rental side, but I doubt it on the acquisition side. I think you’ll still have solid prices. People want to live in certain geographies. There is a demand for single family homes, and hence why those prices have risen more than the price of condominiums.
Saldanha: Great. Thank you so much for joining us with your perspectives, Brenda.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
