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It's not just Toronto and Vancouver — Canada's housing bubble has gone national – CBC.ca

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When people picture red-hot real estate markets, they most likely think of soaring prices for the condos dotting Vancouver’s skyline. They might also conjure up the bidding wars for massive mega-mansions in and around Toronto. 

But they’re likely not thinking about properties Barb Armstrong’s quiet bungalow in picturesque Perth Ont., about an hour southwest of Ottawa.

Even so, Armstrong’s four bedroom, three-bath home was swept up into a bidding war worthy of any big city this month. It sold for $150,000 over her asking price of $529,900 —and the offer didn’t come with any conditions.

“It was quite a shock to see that that amount of money was coming our way for sure,” she said. “It was over our expectation and we were really blown away.”

Armstrong and her husband were lukewarm on selling at first, but a realtor friend explained how hot the local real estate market had become, with families from Ottawa and even as far away as Toronto drawn to Perth by its comparative affordability and bucolic lifestyle.

“We thought, ‘Well, jeepers, maybe we should go for it now,” Armstrong said. The couple listed their home in mid March. Thirty-five viewings later, they had 11 offers on the table. She says she feels like they won the lottery.

WATCH | Barb Armstrong describes the frenzy of offer night:

Barb Armstrong describes what it was like to sell her home in Perth, Ontario, recently, a frenzied process that ended up with here selling her home for $150,000 more than she was anticipating getting. 0:52

Half a country away, on Vancouver Island, Lars Reese-Hansen isn’t surprised to hear about buyers taking their best shot at getting into the market, however they can. He sold his 60s-era single family home in the Comox Valley last fall, and planned to buy elsewhere in B.C. this spring. 

He’s looking to downsize into something newer with less maintenance as he heads into retirement but he can’t find anything that fits the bill, even though he’s casting a wide net and is willing to compromise.

“Most of the places that I requested to view are sold before I actually get a foot out the door,” he said.

Reese-Hansen recently lined up four newly listed homes to see that he thought had potential. Just as he hopped in the car to drive down the highway to see them, his realtor called to say they were already gone.

Record high prices

Canada’s housing market is indeed flush with cash at the moment, with the national average selling price hitting an all-time high of $678,091 in February. That’s up more than 25 per cent from the same month last year, pre-pandemic.

Against all odds, the pandemic seems to have prompted a flurry of buying by Canadians spending more time at home than ever before.

While there’s a perception that high prices are mostly a problem in big cities like Toronto and Vancouver, sales are booming just about everywhere, with bully offers becoming the norm.

Paul Martin, president of the Rideau St Lawrence Real Estate Board that covers Perth, Ont., where the Armstrongs live, says “the market just took off,” last year.

“We’ve seen our property prices jump close to 50 per cent in the area,” he said.

About a third of the new buyers are from Toronto, he says, despite the region being about three hours from the city. About half are from Ottawa, which is closer but still up to an hour away.

Realtor Paul Martin, who has been selling homes in the corridor between Toronto and Ottawa for more than 30 years, says he’s never seen anything like what’s happening right now. (Brian Morris/CBC)

One of the area’s major draws is extra space as more people ponder permanently working from home.

Underpinning the frenzy are record low interest rates, which are lower than they’ve ever been, built on the back of Canada’s central bank slashing its lending rate to practically zero to stimulate the economy out of COVID-19.

Pandemic exacerbated pre-existing problems

Economist Mike Moffatt, senior director at the Smart Prosperity Institute, an Ottawa-based think-tank, says low mortgage rates are key to what’s happening, but they’re not the only factor.

If it were just cheap lending, markets should be heating up fairly evenly across the country. But they’re not. Some smaller towns an hour or more outside the orbit of large urban centres are faring better in real estate than some big cities.

Though he lives in Ottawa, Moffatt hails from southwestern Ontario and he says affordability issues were a problem there even before the pandemic because of supply and demand issues. The area’s population was increasing largely from new immigrants and foreign students, and now pandemic-era low rates have poured gasoline on those fires.

“Cottage country places in southwestern Ontario — Woodstock, Ingersoll, Tillsonburg — those are the places seeing the big price increases,” he said.

The numbers back that up. According to data from the Canadian Real Estate Association, prices in Owen Sound are up by 29 per cent in the year up to February 2021. They’re up 39 per cent in Tillsonburg, by 36 per cent in Woodstock, and by 26 per cent in Guelph. All those markets have fared better than the Greater Toronto Area, where CREA’s House Price Index has risen by about 14 per cent in the same time frame.

“It’s fuelled by that the coupling of white-collar professionals who have a lot of money right now and globally low interest rates.” 

WATCH | Mike Moffatt explains why a hot housing market is bad for the economy:

Economist Mike Moffatt says high house prices are great for existing owners, but could be bad news for Canada’s economy overall if new buyers are priced out. 0:26

Buyers in small towns are finding themselves priced out of their own markets because local salaries can’t compete with the buying power of out-of-towners.

“We’re going to have a lot of both political and economic problems if we price an entire generation of young families from ever owning a home,” Moffatt said.

Back in B.C., the frenzy is so great that some people are resorting to buying without ever setting foot in their new homes. That’s what happened to Ean Jackson and his wife Sibylle Tinsel. They recently sold their home in Vancouver and were looking to downsize somewhere farther afield.

The couple settled on the tiny community of Powell River, B.C., about 100 kilometres up the coast. They have friends in the area so it was always a long-term plan, but their home sale sped up their timeline.

There were few houses available when they started looking, and what was there was hard to see given pandemic restrictions. “We couldn’t get up there in time to even see the place,” Jackson said in an interview.

So they did what millions of Canadians did while shopping for consumer goods this year — they shopped online and hoped for the best.

Vancouverites Ean Jackson and Sibylle Tinsel recently sold their home and hoped to downsize to a smaller town, but were surprised by the lack of inventory and prices in a hot market. (Mike Zimmer/CBC)

Their realtor was able to give them a walkthrough of the interior and exterior via video, and they liked what they saw enough to put down an offer.

Though they are excited for this new chapter, it “all feels very awkward,” Jackson said.

“It feels really strange. And we look at each other at dinner time just about every night and say, ‘Did we do the right thing? … Did we get ripped off? Or is this going to work out?”

Ultimately Jackson says he knows the answer to that last question is yes because they love what the area has to offer, but he does feel for new young families trying to buy in at current levels.

“You save up for three or four years, you get the price that you think, and then the house just got twice as expensive,” he said.

“I can’t see this lasting, though. It’s got to end sometime.”

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Canada’s manufacturers ask for federal help as Montreal dockworkers stage partial-strike

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MONTREAL (Reuters) – Canada‘s manufacturers on Monday asked the federal government to curb a brewing labor dispute after dockworkers at the country’s second largest port said they will work less this week.

Unionized dockworkers, who are in talks for a new contract since 2018, will hold a partial strike starting Tuesday, by refusing all overtime outside of their normal day shifts, along with weekend work, they said in a statement on Monday.

The Canadian Union of Public Employees (CUPE) Quebec’s 1,125 longshore workers at the Port of Montreal rejected a March offer from the Maritime Employers Association.

The uncertainty caused by the labour dispute has led to an 11% drop in March container volume at the Montreal port on an annual basis, even as other eastern ports in North America made gains, the Maritime Employers Association said.

The move will cause delays in a 24-hour industry, the association said.

“Some manufacturers have had to redirect their containers to the Port of Halifax, incurring millions in additional costs every week,” said Dennis Darby, chief executive of the Canadian Manufacturers and Exporters (CME).

While the government strongly believes a negotiated agreement is the best option for all parties, “we are actively examining all options as the situation evolves,” a spokesman for Federal Labor Minister Filomena Tassi said.

Last summer’s stoppage of work cost wholesalers C$600 million ($478 million) in sales over a two-month period, Statistics Canada estimates.

($1 = 1.2563 Canadian dollars)

 

(Reporting By Allison Lampert in Montreal. Additional reporting by Julie Gordon in Ottawa; Editing by Marguerita Choy)

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Canada scraps export permits for drone technology to Turkey, complains to Ankara

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OTTAWA (Reuters) –Canada on Monday scrapped export permits for drone technology to Turkey after concluding that the equipment had been used by Azeri forces fighting Armenia in the enclave of Nagorno-Karabakh, Foreign Minister Marc Garneau said.

Turkey, which like Canada is a member of NATO, is a key ally of Azerbaijan, whose forces gained territory in the enclave after six weeks of fighting.

“This use was not consistent with Canadian foreign policy, nor end-use assurances given by Turkey,” Garneau said in a statement, adding he had raised his concerns with Turkish Foreign Minister Mevlut Cavusoglu earlier in the day.

Ottawa suspended the permits last October so it could review allegations that Azeri drones used in the conflict had been equipped with imaging and targeting systems made by L3Harris Wescam, the Canada-based unit of L3Harris Technologies Inc.

In a statement, the Turkish Embassy in Ottawa said: “We expect our NATO allies to avoid unconstructive steps that will negatively affect our bilateral relations and undermine alliance solidarity.”

Earlier on Monday, Turkey said Cavusoglu had urged Canada to review the defense industry restrictions.

The parts under embargo include camera systems for Baykar armed drones. Export licenses were suspended in 2019 during Turkish military activities in Syria. Restrictions were then eased, but reimposed during the Nagorno-Karabakh conflict.

Turkey’s military exports to Azerbaijan jumped sixfold last year. Sales of drones and other military equipment rose to $77 million in September alone before fighting broke out in the Nagorno-Karabakh region, data showed.

(Reporting by David Ljunggren in Ottawa and Tuvan Gumrukcu in Ankara; Writing by Daren Butler; Editing by Gareth Jones and Peter Cooney)

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Investigation finds Suncor’s Colorado refinery meets environmental permits

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By Liz Hampton

DENVER (Reuters) – A Colorado refinery owned by Canadian firm Suncor Energy Inc meets required environmental permits and is adequately funded, according to an investigation released on Monday into a series of emissions violations at the facility between 2017 and 2019.

The 98,000 barrel-per-day (bpd) refinery in the Denver suburb of Commerce City, Colorado, reached a $9-million settlement with the Colorado Department of Public Health and Environment (CDPHE) March 2020 to resolve air pollution violations that occurred since 2017. That settlement also addressed an incident in December 2019 that released refinery materials onto a nearby school.

As part of the settlement, Suncor was required to use a third party to conduct an independent investigation into the violations and spend up to $5 million to implement recommendations from the investigation.

Consulting firm Kearney’s investigation found the facility met environmental permit requirements, but also pinpointed areas for improvement, including personnel training and systems upgrades, some of which was already underway.

“We need to improve our performance and improve the trust people have in us,” Donald Austin, vice president of the Commerce City refinery said in an interview, adding that the refinery had already undertaken some of the recommendations from the investigation.

In mid-April, Suncor will begin a turnaround at the facility that includes an upgrade to a gasoline-producing fluid catalytic cracking unit (FCCU) at Plant 1 of the facility. That turnaround is anticipated to be complete in June 2021.

Suncor last year completed a similar upgrade of an automatic shutdown system for the FCCU at the refinery’s Plant 2.

By 2023, the company will also install an additional control unit, upgraded instrumentation, automated shutdown valves and new hydraulic pressure units in Plant 2.

Together, those upgrades will cost approximately $12 million, of which roughly $10 million is dedicated to Plant 2 upgrades, Suncor said on Monday.

 

(Reporting by Liz Hampton; Editing by Marguerita Choy)

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