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How Canada's real estate market has been forced to move online | Urbanized – Daily Hive



Almost every industry in Canada has been impacted by the global pandemic, and the real estate sector is no exception.

According to statistics released by the Canadian Real Estate Association (CREA), national home sales decreased by 14.3% on a month-to-month basis in March 2020.

Perhaps not surprising, then, is how the pandemic has changed the buying and selling experience.

The Real Estate Council of Ontario (RECO) says this varies brokerage by brokerage. But both parties — buyers and sellers — can anticipate an increased reliance on technology and digital media tools throughout the process.

This could include video conferencing calls, viewing homes via virtual tours or video walk-throughs, using digital documents for contracts, and electronic signatures for finalizing agreements.

“Though buyers can expect to see a property in person before buying, they should expect to do more ‘browsing’ virtually,” RECO tells Daily Hive. “This may be a trend that stays beyond the pandemic.”

Market outlook in Vancouver


Vancouver realtor Shawn Brown of The West Haven Group says the demand and supply for properties are similarly balanced to what it was before the crisis. He had several deals collapse in March, but after that, he was hit with new business. 

“I’ve had my busiest month so far in April,” he says. Brown notes that this is not the case for a lot of agents; that realtors need to ensure their marketing is effective and that the price is compelling for people to take the risk and buy now.

“Realtors are particularly careful right now with how they are conducting their business because they have been deemed an essential service and they don’t want any reason to be constrained further,” he says.

Brown says several of his buyers were getting left behind at the start of the year because of how competitive the market was, but they have now been able to buy again.

Toronto real estate transactions

Jesse Farb, a broker with The Real Estate Office in Toronto, was overseas right before things broke out in North America.

“When I got back, we reacted by looking at the advice of The Real Estate Council of Ontario, and then figuring out the policies and procedures that we need to put in place for the health and safety of our team, our clients, and then the general public at large,” he says. 

Farb explains that things changed quickly early on with moving to 3D virtual walkthrough tours on all his team’s listings, making sure the legal professionals they work with are operating in a safe manner using digital signings for closings, and also using wire transfers.

He stresses that every transaction is different, but some buyers are trying to enter the market now because they think they will get a better deal; in some cases, they have been right. However, a lot of sellers have been holding firm on pre-COVID pricing.

Farb thinks that when the economy starts to reopen, there will be a small boom during the warmer months as the spring market relaunches, but this could be short-lived due to the economic fallout resulting from the crisis.

Digitizing the process


Matisse Yiu, a digital marketing specialist for the Vancouver rental platform, says buyers are relying heavily on digital tools to “shop” and narrow down their options before requesting a viewing.

“Sellers, in turn, do not want to hold open houses and want to limit visits by prospective buyers to only those who are very serious,” Yiu tells Daily Hive.

She explains that this also applies to landlords and property managers who are now doing tenant screenings before in-person viewings are even held — something she is seeing users rely on more.

“The need for proof of income has also become an important piece of documentation during this time when evictions are currently suspended,” says Yiu. This is an element that’s included in’s rating system for renter reliability and credibility.

As the demand and interest for short term rentals have decreased drastically in Vancouver, Yiu says it will be interesting to see how this affects monthly rental asking rates and vacancy rates, as the availability of Airbnb listings and rental prices seem to be linked.

“Currently, we have already seen a shift of short term rentals returning to the long term rental market, therefore boosting the supply of housing.”

Transitioning to technology

Michael Ninian, the founder and CEO of illusity, a virtual commerce platform for global real estate development presales, says he is seeing a much higher interest in 360 web apps solutions, consumer direct platforms, and VR.

“In general, we are seeing a higher demand for 3D marketing material such as renderings, fly-through videos for use with websites, and social media outreach campaigns,” he explains.

Ninian says developers were caught out with the forced closures of sales centres and disruptions of the traditional sales cycle. “We are now seeing developers coming on board with the idea of bringing the entire sales centre experience directly to a potential buyer using technology like AR/VR/XR, AI, and ML, among others.”

He anticipates that more real estate developers will move to direct virtual commerce platforms when the crisis is over. “Consumers of today want access to information on their terms and similar to the retail and automotive industries, consumers demand informative and convenient sales platforms to purchase products.”


For RECO, the authority states that while these are difficult times for many, real estate remains, and will continue to be, an essential service, both now and when the market shifts back into full swing.

“If we are looking for a silver lining, [the crisis] has sparked a tremendous amount of innovation and unprecedented digital adoption by both those in the industry and consumers, much of which may weave into some brokerages’ offerings permanently.”

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What's unique to this hardened real estate insurance market – Canadian Underwriter



At the same time insurers have a reduced appetite to take on real estate risks, real estate developers during a pandemic-induced economic recession have an aversion to investing a lot of money into risk-reduction measures. These twin dynamics are a recipe for a long and arduous hard market in real estate insurance lines, according to a real estate insurance expert.

“What we’re facing right now is a circumstance where there is less and less appetite to take on the broader and wider risk,” said Jeff Charles, managing director for Gallagher. “That’s the whole supply-and-demand issue that the market is facing. And then there is the multi-year accumulation of attritional losses compounded by cat losses. And it’s a zero per cent interest rate environment. The insurance companies are on their heels with where they can be profitable, and that is driving the focus on their underwriting.”

Carriers are looking for more information about risks associated with where developers are building, primarily in areas with a high flood risk, Charles observed. Absent the right amount of information, it’s easier for companies to say they’re going to pass on an application. “’It doesn’t suit our profile and we don’t have enough information,’” said Charles, reciting what brokers are hearing insurance companies say. “That’s becoming more common and, arguably, appropriate.”

Broker conversations with clients are now shifting, Charles said. Clients will be asked if they’re willing to fork over the money and take on the increased costs to transfer the risks to insurance. Or they have the option to do something different, like take that money and invest in actions to mitigate risks and be pro-active.

There’s no straightforward path for clients to take in this environment, Charles told Canadian Underwriter. He finds the market “fascinating,” since one developer will see things differently from another.

When asked if the aversion to investing in risk mitigation would mean a day of reckoning was coming, Charles said it’s already here.

“The reckoning is starting,” he said. “But what’s particularly unique about this [hardening market in real estate] is that as long as we continue to operate in this low interest rate environment, and insurers are restricted in how they generate their income — they’re playing with one arm tied behind their back with the investment returns — that’s going to leave a continued focus on underwriting profitability and potential reliance on generating the majority of their returns to shareholders from their underwriting profitability.”

Related: COVID-19 compounds ongoing real estate insurance challenges

In other words, insurers have to make better decisions about the risks to which they are deploying capacity, and how much premium they’re going to charge. “We’ve started to see price move and we’re starting to see limitations on terms and conditions,” Charles said.

This is not just a Canada-only problem, he pointed out. The same issues are playing out around the world. Compared to other countries, Canadian flood risk may be small potatoes for global insurers who operate in Canada.

“What’s missing from this conversation is the reinsurance conversation,” Charles said. “What kind of price increases is the insurance company seeing. And what’s the driving impact to the end-user of that cost of reinsurance? That’s where you see…the tolerance to take on additional water issues is being tightened fastest.”

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Canadian real estate shares drop on Ontario move to freeze rents – BNN



Shares of Canadian apartment companies dropped after the country’s largest province said it plans to freeze residential rents in 2021.

New rules announced Thursday apply to the vast majority of rental units in Ontario. Without the change, owners of rent-controlled apartments, condos and houses would have been able to boost rents by 1.5 per cent next year. The legislation also extends a ban on evictions of small businesses.

Real estate investment trusts with rental properties in Ontario had been trading higher before the announcement. Ottawa-based Minto Apartment REIT fell to C$17.96 as of 2:37 p.m. Toronto time, down 3.2 per cent from its intraday high, while InterRent REIT sagged 1.8 per cent from its earlier high.

Canadian Apartment Properties REIT, the country’s second-largest real estate trust by market value, initially fell more than 1 per cent on the announcement before recovering. The REITs didn’t immediately provide comment on the rule change.

“The last thing I want any family to worry about right now is whether or not they can afford to stay in their home,” Ontario Premier Doug Ford said at a news conference in Toronto.

Ford’s government also imposed new limits on social gatherings in Toronto, Ottawa and Peel, where COVID-19 cases have been rising. Outdoor gatherings are now restricted to 25 people, down from 100, and indoor gatherings are limited to 10, down from 50. The rules are primarily meant to crack down on parties and don’t apply to restaurants, movie theaters and other businesses operating with less strict capacity limits.

Ontario reported 293 new cases of Covid-19 in the past day, 21% higher than the average of the previous seven days.

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Canadian Real Estate: More Buyer Opportunity in the Calgary Real Estate Market – RE/MAX News



The province of Alberta has faced a myriad of challenges in the aftermath of the coronavirus pandemic. In addition to a global economic downturn amid the COVID-19 public health crisis, the price of crude oil crashed to levels never seen before. It was a double whammy for the western province that affected every industry throughout the region, including the Calgary real estate market.

Are conditions beginning to normalise? The energy sector has rallied, with crude prices advancing to their best levels since March. The broader economy has rebounded as the gross domestic product (GDP) surged 6.5 per cent in June, up from the 4.8 per cent increase in May. Much of the housing market has returned to pre-pandemic levels.

Is Calgary improving, too? The real estate market is beginning to see some improvements. According to the Calgary Real Estate Board (CREB), sales of single-family and townhomes recorded year-over-year gains in August. Last month, 992 single-family homes were sold, up from 945 at the same time a year ago. Townhome transactions totaled 216 in August, up from 194 in August 2019. Overall, August 2020 sales were about on par with August 2019 sales: 1,573 to 1,580.

The residential benchmark price was $420,800, down one per cent from last year.

But while Calgary faced a somewhat different situation than other municipalities, the city is seeing a resurgence, says CREB® chief economist Ann-Marie Lurie.

“Recent national reports have shown a bounce back to new record levels over the past several months. Calgary has seen improvements over the lows recorded during the lockdowns but is far from record levels,” said Lurie in a news release. “The situation in Calgary has been slightly different as the job losses were not isolated to sectors that are typically associated with rental demand. We have started to see improvements in the job market compared to previous months as some jobs start to return.”

Does this represent a buying opportunity in the Calgary real estate market?

Canadian Real Estate: More Buyer Opportunity in the Calgary Real Estate Market

According to the latest Statistics Canada data, Calgary’s unemployment rate was the highest in the country for the second consecutive month in August. But the good news is that nearly 27,000 jobs were added last month, and the jobless rate slipped one percentage point to 11.8 per cent. The recent figures suggest that the city is on a slow but steady recovery.

What’s more, there has been increasing consternation surrounding the sight of empty commercial space and dark tower floors in Calgary and throughout the rest of the province. Although some real estate agents anticipate this to be the case for the next little while, they are not convinced that this will be the new norm.

That said, until the employment situation returns to pre-pandemic levels and the lights are turned back on within commercial premises, this could trigger a buying opportunity in the housing market since prices still sit one per cent below what they were a year ago.

CREB notes that new listings are have started to ease over the last month, which has diminished existing supply. At the same time, says the CREB chief economist, “the pace of year-over-year decline has eased as inventory levels have trended up relative to levels recorded a few months ago.” Put simply, the housing supply is picking up, and this could put downward pressure on prices if demand cannot keep up.

But the window of opportunity might be brief because Calgary is starting to see tighter market conditions in individual pockets of the real estate market. This is especially true when you consider low interest rates will inevitably draw buyers from the sidelines.

Earlier this year, the Bank of Canada (BoC) slashed the benchmark interest rate by 150 basis points to around 0.25 per cent. Plus, the central bank reduced the benchmark five-year mortgage for the third time this year to 4.79 per cent. So, whether you are a real estate investor or a homebuyer, now would be the best opportunity to take advantage of the modest downturn in Calgary real estate.

The Role of Calgary’s Diversification in its Recovery

Calgary has become diversified in recent years, relying on more than just energy to sustain the local economy. Financial services, manufacturing, aerospace, retail, and film and television are just some of the industries that have become integral to Canada’s fourth-largest city. This diversification strategy allowed the city to flourish before the pandemic, elevating the Calgary real estate market. The pandemic affected every sector, so it was no surprise that the rest of the municipal economy suffered. Now that the recovery is underway, the housing market is looking positive.

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