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LACKIE: Now's the time for prudence in Toronto real estate – Toronto Sun

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Can the media crash a real estate market?

According to a vocal group of frustrated realtors on social media, it surely can. And it has.

Everything was fine, thank you very much, until the media machine, bored and hungry for fresh click-bait fodder, decided to take heightening anticipation of interest rate hikes alongside a typical seasonal market slowdown and declare impending real estate apocalypse.

As someone who works full-time selling real estate and has been noting the mounting (albeit sometimes subtle) signs of a shifting market in these columns since March, it has taken some time for concrete data to land that loudly tells us this isn’t just something being made out of nothing.

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Now, to be fair, for as long as the market has been doing well there have been countless voices warning of unsustainability and calling for imminent collapse. Of course that collapse has never come to pass. Dips and blips to be sure, but nothing even remotely resembling the decimation of the early 1990s.

It feels like a lifetime ago but many may have forgotten that when COVID first hit CMHC predicted an 18% decline in the subsequent 12 months, a projection breathlessly reported by everyone, everywhere, if only for a break from coverage on the actual virus.

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And why would that not have been the expectation? The country’s entire workforce was effectively grounded at home, CERB was not yet a thing, and we had no frame of reference for how we might come out the other side. It seemed impossible to fathom.

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But come through it we did. And now here we are.

Sure, buyer sentiment is easy to sway. Mountains have certainly been made out of molehills before. One need only look to the 2017 introduction of the foreign buyer tax, which temporarily seized our real estate market. We now understand that the proportion of our market comprised of foreign buyers who would be impacted by such a levy was grossly overestimated. That slowdown has been almost entirely attributed to the rest of the marketplace expecting a hit to land, so stepping back to wait and see. One might say that the media did that.

But if the media can drive a market down, surely the opposite must also be true. How else might the FOMO frenzy of the past two years have been sustained? Stories of bidding wars, record-breaking sale prices, charts and graphs and figures of how Toronto stacks up against other world cities.

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The media certainly helped fuel the COVID market. Loads of coverage about how bananas the market was, people being priced out faster than they could ever hope to save, the outrageousness of blind bidding. But was it the catalyst and driver of the market?

Of course not. Rock bottom interest rates and work-from-home afforded people a seemingly once-in-a-lifetime opportunity to reassess their living situations. Everything else was just spectacle.

Fast forward to now when declining values are undeniable, sales have dropped off, and many buyers are wisely taking a beat. Saying the quiet part out loud may well have an impact, but the band simply playing on would be indefensible.

So to all the TikTok realtors screeching about how buyers are foolish for not seeing through the media manipulation and missing this moment of shining opportunity, I would encourage them to take a very deep breathe and get a grip.

If your clients hearing, “Hey pal, watch your leverage because there’s legitimate cause for pause” sounds like alarmist fearmongering to you, then you’re probably letting your own bottom line drive theirs. So stop, please just stop.

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Canadian Real Estate Correction Is Becoming The Deepest In Half A Century: RBC – Better Dwelling – Better Dwelling

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Canadian Real Estate Correction Is Becoming The Deepest In Half A Century: RBC – Better Dwelling  Better Dwelling



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Real estate prices continue to fall in Waterloo region – CTV News Kitchener

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The average sale price for all residential property types in Waterloo region continues to fall. The newly formed Waterloo Region Association of Realtors (WRAR) says the average price across all property types in July was $752,301.

This represents a 4.9 per cent decrease compared to June 2022, and a 1.2 per cent decrease from prices seen in July 2021.

“In the wake of July’s interest rate hike, home sales in Waterloo region continued to slow,” says Megan Bell, president of WRAR, in a media release. “We’re seeing a clear shift in the market and what people can afford to purchase or are willing to pay. On the bright side for buyers, it’s not the extreme sellers’ market it was.”

This is the fifth straight month the average home sale price in Kitchener-Waterloo has fallen.

Monthly sales by property types. (WRAR)
  • In July, the average sale price for all residential properties in Waterloo Region was $752,301. This represents a 1.2 per cent decrease compared to July 2021 and a 4.9 per cent decrease compared to June 2022, according to WRAR.
  • The average price of a detached home was $842,241, representing a decrease of 7.0 per cent compared to June 2022 and a 6.0 per cent decrease from July 2021.
  • A townhouse’s average price is $642,750, representing a decrease of 3.3 per cent compared to June 2022, but a 3.6 per cent increase from July 2021.
  • The average sale price for an apartment-style condominium was $521,731. This represents an increase of 4.1 per cent compared to June 2022 and an increase of 20.4 per cent from July 2021.
  • The average sale price for a semi was $661,087. A decrease of 5.4 per cent compared to June 2022, but an increase of 1 per cent compared to July 2021.
Average sale price in July across Waterloo Region. (WRAR)

Real estate sales in Waterloo region also saw a major decline in some property types.

Leading the way was semi-detached homes with a drop of 41 per cent in sales and only 36 sold, followed by a 39.3 per cent drop in condominium units with 65 sold. Townhouse sales dropped 32.9 per cent with 112 sold. Detached home sales dropped 30.4 per cent with 337 sales.

In total, 550 residential homes were sold through the Multiple Listing Service System of the WRAW.

LOCAL REALTOR ASSOCIATIONS MERGE

WRAR is an amalgamation of the Cambridge Association of Realtors (CAOR) and the Kitchener-Waterloo Association of Realtors (KWAR). The groups announced their amalgamation on Wednesday.

The amalgamation of the two means housing prices from Cambridge will now be included in the average monthly sales and prices of properties. Prior, KWAR only included the sales and prices of homes in Kitchener and Waterloo.

Bill Duce, who has served as KWAR’s Executive Officer since 2008, is the Chief Executive Officer of the new regional association.

“Bringing these two associations together just makes sense,” says Duce in a media release. “As one board, we can better serve the needs of our Realtor members and stakeholders and give a voice to the region’s real estate market.”

The board of directors of WRAR appointed Megan Bell as president, Christal Moura as president-elect, and Val Brooks as immediate past president as officers of the new entity.

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GTA home sales tumble nearly 50% from last year, real estate board says – CBC.ca

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The moderation of the Greater Toronto Area’s housing market intensified last month as the region’s real estate board found July sales fell 47 per cent from the same time last year and 24 per cent from this past June.

The Toronto Regional Real Estate Board revealed Thursday that last month’s 4,912 sales were almost half of the 9,339 homes that changed hands the July before and are an indication that the market is easing from the frenzied pace seen in the first half of the year and at the end of 2021.

The board and real estate agents have attributed much of the moderation to the increased cost of carrying a mortgage after Canada’s key interest rate was increased by one percentage point in mid-July, making it the largest hike the country has seen in 24 years.

The hike has encouraged people to rethink their housing intentions. Prospective buyers are holding out for further drops they and brokers anticipate could materialize in the fall, while sellers are debating making what they can from their home now or waiting for the market to turn in their favour again.

Some sellers are even terminating their listings to take advantage of the hot rental market, where vacancies are dropping and prices are up.

While January’s hot market saw 380 terminated condo listings in the GTA, real estate company Strata said June brought 2,822 — a 643 per cent increase.

The moderation taking shape within sales is taking longer to appear in home prices.

TRREB found the average home price was $1,074,754 last month, a one per cent hike from $1,061,724 in July 2021, but a six per cent drop from $1,145,994 in June 2022.

The composite benchmark price was more than $1.1 million, up by 12.9 per cent year-over-year.

Detached home prices were down three per cent on a year-over-year basis to $1,362,598 last month, while their sales dropped by 46 per cent to 2,203.

Prices of semi-detached homes were up by nearly five per cent from last July to $1,077,750, while sales fell 45 per cent to 474.

Townhouse prices crept up by six per cent to $903,899 as their sales fell by 52 per cent to 816, and condo apartment prices saw a seven per cent leap to $719,273 and a 48 per cent fall in sales to 1,365.

The market also saw a drop in new listings, which amounted to 12,046 last month, down four per cent from a year ago.

TRREB felt the numbers necessitate government intervention, including boosting housing supply and reviewing mortgage policies.

Data firm Urbanation Inc. said Tuesday that it expects almost 10,000 GTA condo units to be delayed this year as increasing mortgage rates weigh on home sales.

“Many GTA households intend on purchasing a home in the future, but there is currently uncertainty about where the market is headed,” said TRREB CEO John DiMichele, in a release.

“Policymakers could help allay some of this uncertainty.”

He recommended the government review the Office of the Superintendent of Financial Institutions’ stress test. The mandatory test set the qualifying rate on uninsured mortgages at either two percentage points above the contract rate, or 5.25 per cent, whichever is greater.

Kevin Crigger, TRREB’s president, echoed DiMichele’s plea, saying longer mortgage amortization periods of up to 40 years on renewals and switches should be explored.

“With significant increases to lending rates in a short period, there has been a shift in consumer sentiment, not market fundamentals,” he said, in a release.

“The federal government has a responsibility to not only maintain confidence in the financial system, but to instill confidence in homeowners that they will be able to stay in their homes despite rising mortgage costs.”

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