Real eState

LACKIE: Summer on the real estate sidelines – Toronto Sun

Published

2 years ago

July 30, 2022

Harry Miller

The real estate market has well and truly ground to a halt

Real estate for-sale sign. Photo by Stock art /Toronto Sun

So far, this summer has been pretty lovely.

Maybe it’s that the previous two went by in such an all-consuming blur, me just doing my best to keep my head above water as pandemic real estate boomed, and my kids happy and fed, toothbrush’d and sunscreen’d. I barely remember much, to be honest.

This summer, however, we are back in what feels like uncharted territory.

The real estate market has well and truly ground to a halt. Prospective buyers are on the sidelines, sellers are having to come to grips with the upper hand no longer being theirs, and those fortunate enough not to have to actively engage with the real estate market are likely still unable to escape talk of interest rates, mortgage trigger points, and declining property values.

Depending on who you feel like engaging with, you will likely hear that we are in one of three scenarios: the throes of a catastrophic market collapse, a return to a healthy balanced market, or feeling the pinch of (temporary!) interest rate hikes as a means of driving down inflation.

The reality, of course, is that anyone speaking at all definitively or authoritatively about any of this likely hasn’t a clue what they are talking about. At best it’s an educated guess, at worst it’s a narrative being sold.

There are so many variables at play with few, if any, true points of comparison. Yes, there have been market shifts and slowdowns before, but none to date have been precipitated by such an all-in-one type situation.

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We have had a run up of historic proportions with Canadian property values rising by close to 50% over the past two year. Inflation is raging. There’s a war in Europe that has destabilized world markets. Household debt is at record highs. And all of this coming on the heels of a once-in-a-lifetime health and economic event that resulted in unprecedented levels of both job interruptions and of stimulus money flooding our economy.

Now that recession looms (or has it already started? It’s hard to keep up) and tinkering with interest rates is quite literally the only tool left to cool things down, what this is going to look like is anyone’s guess.

Will the Bank of Canada jack up the rates to trigger a recession only to quickly pivot and bring them back down again? Some certainly think so. I hear lots of agents and mortgage brokers stating this as fact in their glass-half-full market takes.

Sure, maybe.

Do I believe for one minute that the Bank of Canada hasn’t clearly indicated their position that the risk of rampant inflation is far greater than a recession and the collateral damage to our housing market as they reel it back in? Nope. To me, they seem pretty forceful and committed all of a sudden. But that’s just my take. And there are people with lofty credentials who would likely disagree with me on that one.

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But have we learned nothing over the past two and a half years?

When the pandemic first hit and banks released economic outlooks predicting a disastrous fall to real estate values it sounded completely reasonable. Did it come to pass? Well, no.

When Tiff Macklem, in a clear effort to keep the economy humming right along, flat-out promised that rates would stay low well into 2023 buyers believed it. How’s that going?

Talking heads on the evening news predicting rate hikes of 25 basis points only to have the Bank of Canada come out with a full 100.

And to be clear, among the deluge of hot takes there are smart, successful people making calls that turn out to miss the mark entirely.

So when you read about buyer confidence being at all-time lows, it’s not simply because the media has fearmongered them into submission. It’s because in almost all scenarios at this present moment, the sidelines is the wisest place to be. If you are standing on a ship that may be sinking, you’re not a sheep for hopping into a lifeboat as you wait for more information.

Will more information come this fall? Well, the next announcement from the Bank of Canada should be pretty telling.

Until then, enjoy the summer. Winter is coming.

@brynnlackie

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Real eState

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

Published

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

Published

2 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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Here are some facts about British Columbia’s housing market

Published

3 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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