Real eState

LACKIE: Real estate market stewing in anticipation of what's to come – Toronto Sun

Published

3 years ago

April 24, 2022

Harry Miller

Real estate sales in Toronto aren’t going down, despite the pandemic. Photo by Files /Submitted

To a casual observer, the real estate market punditry probably inspires whiplash.

And possibly fury.

For months upon months, years upon years, we have witnessed almost breathless coverage of the Toronto real estate market and its mind-bending run. Average sale prices climbing steadily, inventory levels getting tighter and tighter, and market conditions for first-time buyers going from inhospitable to almost entirely impenetrable.

Loads of coverage of how the escalating prices and record-level unaffordability is unsustainable. How historically low interest rates, even in stereo with the much-maligned “stress test,” are emboldening people to get in way over their heads and fueling rampant speculation. How eventually the party would end, it was only a matter of when. The why and the how were up for debate.

The almost universal conclusion: something’s gotta give.

Cut to the present when we are now having a moment. Interest rates are on the rise and the market is clearly responding. As buyers bow out and some of that upward pressure on prices and inventory dissipates, the holding pattern we have been in for much of the pandemic seems to be easing.

And here we now find ourselves, surrounded by uncertainty while deluged by sledgehammer analysis.

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Some of the same pundits who screeched supply, supply, supply as the only mechanism available to make a dent in the prices are now shifting to alarmist shrieks about interest rate hikes, inflation, and economic uncertainty signifying the end of days.

And while I get that it can feel that way, why, oh, why are we treating it like a forgone conclusion when so much of what’s to come remains squarely in the realm of hypothesis and conjecture?

In the last few weeks I have read countless articles dedicated to exploring how the rate hikes that have not yet been announced, in increments that have not yet been decided, will cripple the average Canadian homeowner. The ones that make me want to scream are the ones that lay it out as if it’s a universally applicable scientific equation. You know, if CanadianCottageGuy416 has a mortgage of x and that mortgage payment increases by y, his financial ruin will be complete in xy number of months.

Messaging like that isn’t helpful. Not because we should all be burying our heads in the sand, but because it’s not helping us understand the nuances of what’s at play right now.

Our market has been on a tear. Prices have risen higher than even imaginable two years ago. Canadians are divided into a few camps: those who own homes and are thrilled by the gains and those who don’t and now feel functionally blocked from ever owning anything. Of course, there’s a third group that got in while they could and did so by taking on more debt than they could ever feel good about during their 3 a.m. thinks.

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Is it hugely annoying and problematic that Tiff Macklem, governor of the Bank of Canada, essentially drove that bus when he declared that rates would stay low? Yes, yes it is.

“If you’ve got a mortgage or if you’re considering making a major purchase, or you’re a business and you’re considering making an investment, you can be confident rates will be low for a long time,” Macklem said back in July 2020.

But of course, “long time” is a subjective term. And in the face of rampant inflation, interest rates are an essential tool to keep our economy humming.

So now they are on the rise, as we knew they one day would be. Which is why we have a stress test in the first place. And, even though rates are still below pre-pandemic levels, we are seeing resultant uncertainty out there on the ground.

I know this because I am experiencing this with my clients.

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Yes, there are people now priced out of the market, which is brutal. But is that what’s causing the slowdown after a bump of just 50 basis points?

Or is it more likely that there are people who are now, in anticipation of what’s to come, taking stock of the situation and deciding now is not the time to make a move with so much up in the air.

We like to draw parallels to the 2008 and 2017 market crashes, but if you look to those moments, so much of what was behind them was buyer sentiment. People looked around and saw what was happening and what others were doing and decided that caution was prudent. Which is why the “recovery” in 2017 began with nothing much happening — the market just woke itself back up again.

So yes, the market is having a moment as it stews in anticipation of what’s to come. My suspicion is that we are on the cusp of a real transition with prices softening and a slow summer ahead as we all come to grips with higher borrowing costs.

Some markets will have a sharp correction and others will simply hover. And some people will feel it harder than others.

But has the sky fallen? No. Will it? Probably not. But freaking everyone out with conjecture masquerading as fact is clickbait pure and simple.

@brynnlackie

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Real eState

Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

Published

1 week ago

November 6, 2024

Anne Joseph

TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.

The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.

The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.

“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.

“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”

The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.

New listings last month totalled 15,328, up 4.3 per cent from a year earlier.

In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.

The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.

“I thought they’d be up for sure, but not necessarily that much,” said Forbes.

“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”

He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.

“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.

“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”

All property types saw more sales in October compared with a year ago throughout the GTA.

Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.

“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”

This report by The Canadian Press was first published Nov. 6, 2024.

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Real eState

Homelessness: Tiny home village to open next week in Halifax suburb

Published

3 weeks ago

October 24, 2024

Anne Joseph

HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.

Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.

Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.

The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.

Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.

They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.

The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.

This report by The Canadian Press was first published Oct. 24, 2024.

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Real eState

Here are some facts about British Columbia’s housing market

Published

4 weeks ago

October 17, 2024

Anne Joseph

Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.

Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.

Average residential home price in B.C.: $938,500

Average price in greater Vancouver (2024 year to date): $1,304,438

Average price in greater Victoria (2024 year to date): $979,103

Average price in the Okanagan (2024 year to date): $748,015

Average two-bedroom purpose-built rental in Vancouver: $2,181

Average two-bedroom purpose-built rental in Victoria: $1,839

Average two-bedroom purpose-built rental in Canada: $1,359

Rental vacancy rate in Vancouver: 0.9 per cent

How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent

This report by The Canadian Press was first published Oct. 17, 2024.

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