Nearly 48 per cent Canadians aged 25 to 35 currently own their home, and a quarter of these homeowners purchased a property during the coronavirus pandemic, according to a recent demographic survey by Royal LePage.
The pandemic has steered young Canadians along “a path to home ownership,” Phil Soper, president and CEO, Royal LePage, told Global News Thursday.
“As mortgage rates fell to historically low levels and the competition for entry-level housing lessened, young people saw a window of opportunity and went for it,” he said.
Even among non-homeowners, 84 per cent strongly intend to invest in a home in the future, with 68 per cent planning to make the move in the next five years, the survey shows.
Soper noted that measures necessary to prevent the spread of COVID-19 may have driven “many of our younger Canadians to buy” even as the health crisis “dissuaded” many of the older homeowners from selling.
“The living situation for some young people sharing with parents, siblings or roommates became uncomfortably crowded with work-from-home becoming a day-to-day reality. The opportunity, therefore, of owning 500 sq-ft worth of personal space was more than viable to most in the current market scenario,” he said.
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Despite the economic challenges associated to the pandemic, Canadians aged 25 to 35, have shown a healthy personal outlook, according to the survey.
While nearly 92 per cent of those charted agreed that owning a home is a good financial investment, 40 per cent said that their savings have grown since the onset of the pandemic.
According to Soper, “no dining out, no concerts with friends or winter escapes to the sunny south” are liable for this actuality.
“The pandemic has restricted millennials in so many ways. With outdoor spending limited, savings have soared,” said Soper.
“All the unspent money,” he added, “have found its way into real estate investments.”
Furthermore, this young group has had no problem adjusting to the boosted use of virtual tours and electronics contracts set in motion by the ongoing pandemic, Soper noted.
“Younger buyers are extremely comfortable with online research, even when it comes to investing in a home, unlike older investors,” said Soper.
Older people are opting to “wait it out” and delay their “desire for a housing upgrade until the medical crisis is under control.”
A look at the regional markets
Historically low interest rates are making it more attractive for young people to invest in housing across all markets.
Most seem interested in taking advantage of some extra savings and low borrowing costs, to invest in a property that has appreciation potential.
“Most of my 25- to 35-year-old clients have fit into one of three distinct buying scenarios over the last year: the softer condo market and low interest rates allowed renters to become owners; move-up buyers who had purchased a condominium a few years ago were able to turn that equity into a down payment on a larger property in the suburbs; or they’ve left the city altogether for a significantly larger space in more affordable places like Hamilton, Guelph, or even cottage country,” said Tom Storey, real estate agent at Royal LePage Signature Realty in Toronto.
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Ottawa too has seen its housing market appreciate over the last few years, due in part to increased demand from both local and out-of-town buyers, many in the age range of 25 to 35.
In Quebec, demand from buyers aged 25 to 35 has flooded the suburban real estate market over the past year, spurred by low interest rates, the ability to work distantly and the aspiration to invest in long-term quality of life.
Of the young Quebec homeowners, 18 per cent purchased a home since mid-March of last year, while 28 per cent of homeowners located in Montreal have purchased a home since the onset of the pandemic, the highest rate among the cities surveyed.
In British Columbia, 49 per cent of residents aged 25 to 35 own their home with 27 per cent having purchased a home since mid-March of 2020.
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“Younger buyers have a positive association with home ownership. They see the value in it and they’ve done the math. Currently, a monthly mortgage payment can equate to little more than renting,” said Adil Dinani, sales representative at Royal LePage West Real Estate Services in Greater Vancouver.
At 56 per cent, Alberta records Canada’s highest home ownership rate among those aged 25 to 35, of which 24 per cent purchased a home since mid-March of last year.
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While Alberta’s housing market has persistently been stable over recent years, the COVID-19 pandemic seems to have further enthused activity among younger buyers. Thirty-seven per cent of Albertans in this cohort say they’ve seen their savings grow since the beginning of the pandemic.
In the Prairie provinces, 53 per cent of residents aged 25 to 35 have their own home, out of which, 32 per cent purchased a home since March 2020.
In Atlantic Canada, meanwhile, 48 per cent of residents in the surveyed age group own their home. Of this, 42 per cent have purchased a home since mid-March of last year, the highest of all regions surveyed.
“Within one month of the start of the pandemic, buyers in this age group came out in droves,” said Will Campbell, sales representative at Royal LePage Atlantic in Halifax.
“This market is challenging due to a lack of supply. However, young buyers are determined to make a purchase, even if they have to be flexible on location.”
What does this mean for the spring market
Going by the present trends, Soper is anticipating a healthy housing price growth in 2021 across the Canadian market.
There is a “clear imbalance” as of now, owing to the rising demands for buying a home among younger Canadians and the reluctance of the older population towards selling, Soper noted.
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The ongoing housing supply shortage is likely to continue well into spring or at least until “more vaccination is underway, and older people are comfortable getting back into the market,” he said.
This will put a “very significant upward pressure on prices,” he added.
“We can expect a 10-20 per cent increase in the price of detached homes overall,” Soper said, adding, “There could also be rising demands for recreational housing, investment in cottage country properties as we move further into summer months.”
© 2021 Global News, a division of Corus Entertainment Inc.
Canadian home prices, sales to moderate but remain high
By Julie Gordon
OTTAWA (Reuters) -Canada’s home sales and price growth will moderate over the coming years from the unsustainable levels of 2020, but remain elevated, with housing starts expected to stabilize by the end of 2023, the national housing agency said on Thursday.
While the pace of price growth is expected to ease as mortgage rates increase and buyers face already high prices, home prices could climb 14.4% on average in 2021, the Canada Mortgage and Housing Corporation (CMHC) forecast in its spring market outlook.
Its report does not forecast any annual price declines in the 2021-2023 period.
“Economic conditions are expected to return to pre-pandemic levels by the end of 2023 … This includes the pace of home sales and prices, which we expect to see moderate from 2020 highs over the same period,” Bob Dugan, chief economist at the CMHC, said in a statement.
Dugan warned that significant risks that could impact the forecast include the path of the COVID-19 pandemic, a faster-than-expected increase in mortgage rates, and a reversal of the urban exodus that has driven up prices outside large cities.
The CMHC said last May that it expected housing starts, sales and prices to plunge amid the pandemic, with prices not expected to recover to pre-pandemic levels until 2022.
But home sales and prices soared to record levels, with the average selling price up 31.6% in March 2021 from a year ago. Housing starts also hit a record high in March.
Rental demand is also expected to recover through 2023 as immigration and inter-provincial migration resume, and as students return to campus, the agency said.
(Reporting by Julie Gordon in OttawaEditing by Paul Simao)
'Unprecedented' demand driving real estate sales and prices in Canmore – CBC.ca
It was just minutes after a new listing for a $1.15-million home in Canmore, Alta., went online when real estate agent Jill Law’s phone started buzzing.
Three days and 31 showings later, she had received 11 offers for the property, including one from a family who wrote a personal letter to the seller and included a family photo.
It appears to be the winning “bid” in a soaring real estate market that is seeing more multiple offers and properties selling above the asking price.
Real estate professionals, market watchers and long-time residents say there’s a combination of factors at play, including the pandemic and low interest rates. But the sales surge and rising prices are raising concerns in the community — which still considers itself a place where families can raise their children rather than an exclusive playground for the privileged.
The average house price in Canmore is closing in on $1.1 million, according to the Alberta Real Estate Association’s benchmark price.
“Sales are up, the inventory is down,” said Dan Sparks, one of Canmore’s busiest real estate agents, who has been selling homes in the Bow Valley for 20 years.
But there are fewer homes to sell. There are approximately 100 homes on the market right now. When you factor in the number of sales, it works out to a one-month supply, down sharply from the usual five- to six-month supply at this time of year.
What does all of that mean? To put it mildly, it’s a sellers’ market.
“We’ve had exceptional sales throughout the Canmore area, but the listings and the supply haven’t kept pace,” said Ann-Marie Lurie, the chief economist with the Alberta Real Estate Association.
“And that’s what’s causing some of the price gains that we’re seeing in that market.”
And some of those price gains have been astronomical.
Kelly MacMillan with ReMax Alpine Realty says she just sold a hotel condominium unit for $50,000 above the asking price.
The two-bedroom, two-bathroom condo — which has the potential to generate nightly hotel revenue — was listed for $600,000. The sellers purchased the property four years ago for $350,000.
“There was an opportunity to cash out of the marketplace,” said MacMillan.
“They’re very happy,” she said of her clients.
Pandemic pushes demand
Sparks calls it COVID fatigue. Although he has been taking calls from people in Toronto and Montreal — and even a family in Germany — a good portion of buyers are people from Calgary and Edmonton who have been stuck at home for over a year and are looking for a change of scenery, he says.
“They’ve been working from home for a while, and they can continue to do so. And if they can do that, then they’ll do it where they want to be,” he said.
“Canmore, especially recreational markets, where people are discovering that they don’t have to be where they work. They have that work-from-home flexibility.”
As the inventory dwindles, so do the opportuniites to find a traditional, single family, detached home. Sparks says last week there were just two homes listed for under $1 million — and only five were on the market for under $1.5 million.
Sparks spent several years on the board of directors of Canmore Community Housing, a town-owned corporation tasked with creating affordable housing options for people and families.
A 10-unit townhouse project is under construction and is expected to open in early 2022.
Already there are 150 people on the waiting list to either buy or rent a property.
“It’s basically just fingers in the dam,” said Sparks.
“Housing affordability in Canmore is always going to be a problem. We’re just going to constantly be working on that problem.”
The average condominium price in Canmore is now $500,000.
New development, more affordable housing?
Canmore town council recently approved a series of amendments to the latest development plan for the Three Sisters Mountain Village (TSMV) on the east side of the community.
One of the changes is a proposed requirement that the developer include 20 per cent affordable or subsidized housing — double the amount proposed by TSMV. A spokesperson for the developer says the company is still assessing the impact of the amendments and is withholding comment until the plan goes back to council on May 11.
The mayor says that while it will take years for those units to become available, council had to act now.
John Borrowman says young families have been leaving the community for years because they can’t afford to stay.
“We’ve been bleeding the next generation like that for years,” he said.
“If we don’t do something to ensure affordable housing is a big part of our future, the town will become … it will only be a place for the very wealthy.”
New housing options, slow uptake
The town recently said it would consider secondary suites to be built or legalized in existing neighbourhoods. Financial incentives are being offered to homeowners to add what it calls “accessory dwelling units.”
So far, only three homeowners have applied for the $20,000 grants.
Dale Hildebrand is a local real estate agent and builder. He recently sold two duplexes that were listed for $1.2 million and $1.4 million. One of them includes a separate, one-bedroom suite.
Hildebrand’s next project is in the early stages, but he’s hoping to redevelop several residential lots near downtown into 16 to 18 townhouses. Several will be purpose-built for employers to purchase for their employees.
“They can … rent them out to their employees at a subsidized rate,” said Hildebrand.
But as demand remains strong and prices climb, the market may be too hot for employers to consider employee housing.
It’s a problem for the community, which has had trouble attracting employees.
“It’s harder for young people to find affordable accommodation,” said Michel Dufresne, the director of the Job Resource Centre for Banff and Canmore.
“It also makes it harder for small businesses to provide that housing for their employees. It’s become a bigger play when you have to buy a house for a million dollars to house five people,” he said.
“It’s very costly.”
Bryan Labby is an enterprise reporter with CBC Calgary. If you have a good story idea or tip, you can reach him at firstname.lastname@example.org or on Twitter at @CBCBryan.
Prices for Cottage Properties in Canadian Real Estate Market Soar – RE/MAX News
From luxury properties to townhomes, the Canadian real estate market has witnessed monumental growth over the last year. Across the country, sales activity and home valuations have been climbing at levels never seen before, buoyed by strong demand, low inventory and historically low interest rates. These are the dominant trends, whether you’re house-hunting in the Okanagan Valley, British Columbia or Halifax, Nova Scotia.
But one of the most riveting developments in the Canadian real estate market since the beginning of the coronavirus pandemic has been the substantial price increases for cottage properties. While cottage country markets across the country have typically witnessed high demand during the summer months, evolving consumer trends are pointing to sustained interest throughout the year in rural communities.
Since more people are working from home, professionals are setting their sights on lakefront cottages, chalets in the mountains or cabins in the woods, away from the hustle and bustle of major urban centres. But as homeowners cash in on their big-city properties, they are using their high equity to outbid buyers (including local residents and their fellow out-of-town buyers) and driving up cottage prices in the process. Many forecasts suggest that this impressive growth will continue through 2021 and potentially heading into 2022.
Has the Canadian real estate market been permanently altered as more households shy away from hyper-dense metropolitan areas to embrace the charm of quiet small-town life? The answer might be reflected in the numbers across multiple recreational housing markets from coast to coast.
Prices for Cottage Properties in Canadian Real Estate Market Soar
If you are currently trying rent a cottage in rural Ontario, you may be out of luck as the vast majority are fully booked for the rest of 2021. Similarly, if you’re keen to buy a cottage in Atlantic Canada, be prepared to put up a fight thanks to swelling levels of demand as a result of out-of-province buyers and cheap borrowing costs.
Here are some of the figures of what homebuyers can expect to face as they seek shelter in Canada’s recreational property markets:
Kawartha Lakes, Ontario (March 2021 / year-over-year)
- Residential non-waterfront sales: +87.7%
- Residential waterfront sales: +223.1%
- Median price for residential non-waterfront properties: +44.7% to $606,000
- Median price for residential waterfront properties: +64.5% to $872,000
Georgian Bay, Ontario (March 2021 / yoy)
- Residential sales: +106.1%
- Benchmark price for single-family homes: +43.6% to $617,900
Sunshine Coast, British Columbia (December 2020 / yoy)
- Residential sales: +82%
- Median price of residential properties: +7.8% to $830,000
Prince Albert, Saskatchewan (March 2021 / yoy)
- Residential sales: +79.2%
- MLS® Home Price Index (HPI): +12.1% to $183,100
Prince Edward Island (March 2021 / yoy)
- Residential sales: +81.7%
- Average price of homes sold: +21.9% to $330,121
Lethbridge, Alberta (March 2021 / yoy)
- Single-detached home sales: +59.6%
- Median sale price for single-detached homes: +14% to $335,000
What to Expect for Cottage Real Estate Moving Forward?
Whether you desire to go fishing on a lake or sip coffee on the patio of your waterfront property, be prepared to open your wallet wide. Cottage country prices are still expected to increase, especially now that the busy spring and summer home-buying season has arrived. This historically active period is anticipated to be busier than ever before. At the very least, prices are expected to continue rising.
Like Toronto or Vancouver, cottage areas are experiencing low inventory. A dramatic supply imbalance is leading to bidding wars for active and new listings. While this was unheard-of just a few short years ago, it has become the norm in many recreational communities across Canada. Work-from-home arrangements, the demand for less-densified areas and larger living spaces paired with ultra low interest rates are the key drivers of this unprecedented growth within destinations that would be difficult to spot on a map.
As the Financial Post wrote in February, “Cottage country is the new battleground for housing bidding wars.” Although cottage country housing will still appeal to city slickers following the COVID-19 pandemic, the market could eventually normalize, write Murtaza Haider, a Ryerson University professor, and Stephen Moranis a real estate industry veteran.
“Once more housing is made available by prospective sellers, who have been patiently watching the markets from the sidelines, cottage country markets are likely to return to calmer conditions to match the serene and tranquil environments that distinguish them,” they said.
Until then, cottage country is no longer just the focus of retirees searching for the quiet life in their golden years, or families seeking fun in the summer sun. Young professional couples who only need a reliable Internet connection to work are expected to become a key driver of the cottage country housing market for the foreseeable future, whether in the Sunshine Coast or Atlantic Canada.
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