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Hoping to buy a home? Canadian prices forecast to rise by end of 2023

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Home prices in Canada are set to rise this year, according to a new report.

In its latest forecast released Thursday, Royal LePage adjusted its price forecast for 2023 given stronger-than-expected demand and limited supply.

The brokerage now predicts that national home prices will rise 4.5 per cent year-over-year by the end of 2023 instead of dropping one per cent in 2023, as it had predicted in December.

Royal LePage CEO Phil Soper told Global News that high employment and low supply contributed to the change in the forecast.

The report says in Toronto, the aggregate home price is expected to rise 7.5 per cent to $1,148,638 in the fourth quarter of 2023 compared to the same quarter last year. In Vancouver, prices are expected to rise 2.5 per cent to $1,239,123, and in Montreal, three per cent to $560,629.

Nationally, the average price is forecast to rise to $791,170 from $757,100.

As the Bank of Canada announced Wednesday that interest rates will hold steady at 4.5 per cent, first-time buyers are now entering the market since rates seem to have achieved some stability, Soper said. But homeowners have been slow to put their properties for sale, causing an imbalance between supply and demand, which drives prices up.

“At this stage, people are just going ‘hip, hip, hooray’ that (interest rates) have reached a stable point and — critically — home prices aren’t going to be falling further,” Soper said.

A rise in home prices can cause higher demand, Soper explained, as buyers get FOMO (fear of missing out) and try to enter the market while the opportunity is there.

Sales and new listings have steadily been increasing month-to-month, according to the Royal LePage report.

Home prices in Toronto reached $1,108,606 in March compared with $1,096,519 the month before, according to Toronto Regional Real Estate Board data recently released. The numbers indicate prospective homebuyers are regaining the confidence to wade into the market despite borrowing costs climbing and are looking to take advantage of lower prices while they last.

Soper said the real estate market has returned to “sanity” from a year ago when buyers took advantage of low-interest rates and wanted a change of scenery amid COVID-19 restrictions. The high demand caused bidding wars and prices reaching above asking. Royal LePage’s report says that home prices have fallen 9.2 per cent year-over-year to $778,300 on average in Canada for the first quarter of 2023.

“It’s a much saner market for both real estate professionals and for consumers,” Soper said. “The market has entered a period of relative stability now.”

The central bank said in its Monetary Policy Report Wednesday it expects that housing activity to stabilize around the middle of the year.

“Growth in residential investment is anticipated to resume in the second half of 2023,” it read. “Strong demand from immigration should support housing activity over the projection horizon.”

Soper said the market is now trending toward being advantageous for sellers after going through a 12-month correctional period that ended around mid-March. He warns, though, that if supply remains low, prices could get out of hand in 2024, and encouraged more supply to be created.

 

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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.

The Canadian Press. All rights reserved.

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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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