Residential home sales in London, Ont., declined in November, with the number of transactions down to nearly half of what they were during the peak of the pandemic three years ago, according to a local realtor.
It’s a ‘historic low’ — and a trend that’s expected to continue into the first quarter of 2024, as more home buyers feel cautious amid inflation and high interest rates on mortgages, said Marcus Plowright, owner of RE/MAX Hallmark A Team real estate brokerage in London.
“We had 420 transactions residentially in London in November of this year, and that was a pretty significant reduction to the historical average. We did over 800 transactions in November during the height of the intense real estate market that we were experiencing a few years ago,” he said.
“Looking back five years ago, it’s still significantly less than we were experiencing on an average pre-COVID volume in November, which would’ve been 20 per cent higher than this year.”
Plowright believes pent up demand and a year of continual interest rate hikes have left consumers feeling less confident in the real estate market altogether, he said.
On Wednesday, the Bank of Canada announced it will hold interest rates at a steady five per cent into the new year since raising them to the current rate in July, as Canada’s economy shows signs of cooling down.
“The fad has done it’s job of making everybody think around the verge of a recession. They’re trying to slow down the economy to slow inflation down — and it’s dramatically working,” said Plowright.
Dallas Martin, an agent with the Mortgage Firm in London, said he’s glad the central bank hasn’t raised interest rates because doing so would increase pressures that Canadians are already under, raising concerns that more people will default on their mortgages.
“The potential of people defaulting their mortgages is probably based on their affordability,” he said. “If their monthly mortgage payment is higher due to high interest rates and the cost of living that’s through the roof, then everything adds up. For a lot of people, it’s either the roof over their head or food on the table.”
Housing inventory not keeping up with immigration
Marcus Plowright is the owner at RE/MAX Hallmark A Team real estate brokerage in London. He says transactions in November 2023 are less than half of what they were in November 2020. (Submitted by A Team London Real Estate Brokerage)
Median house prices in London last month were around $565,000, Plowright said, adding housing inventory above that number sits at around 1,500 but the amount of houses below the median is only about 400.
“We have about two months inventory of what we would term affordable — less than $565,000 — and we have seven months inventory of house listed above that,” he said. “The moral of that story is it’s much more challenging to find and buy the lower-end than it is the upper-end.”
Both Plowright and Martin predict if interest rates go down, house prices may increase. Another factor contributing to increased home prices is immigration levels, they both said.
“A lot of people are immigrating here from overseas and they’re going to need places to live too, but we don’t have enough houses. Right now, even rent is super expensive, especially in Ontario and London specifically,” said Martin.
The rental pool of housing has not grown enough to keep up with the pace of immigration to London, and policy makers need to consider when they talk about the housing crisis, said Plowright.
“Affordability won’t improve, simply because interest rate reductions will be offset by house price increases,” he said.
“We don’t desperately need million-dollar houses, we desperately need affordable rental housing.”
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
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.
