Real eState

Toronto real estate market springs back to life

Published

1 year ago

April 8, 2023

Transactions have increased month-over-month with average sale price ticking upwards for the first time in a year

Photo by Michael Vi /Getty Images/iStockphoto

Several weeks back, when I first wrote that my colleagues and I were starting to see some undeniable signs of life returning to the Toronto real estate market, it was hard to believe what I was seeing, let alone saying.

But there it was.

I spoke of houses selling in multiple offers hours after hitting the MLS. And not just one or two offers — seventeen.

At that point, it was noteworthy to see, but such cases by and large felt like wild outliers — the market was still pretty quiet and mostly depressing. Few transactions, prices holding firm enough to keep affordability at bay, everything on pause.

But in the weeks that followed, particularly in the recent days following March break, the true starting point of the spring market, a pattern emerged. Anything halfway decent, priced reasonably close to market value, was drawing buyers out off of the sidelines.

If someone had told me a year ago that we could see this kind of action at these kind of price points with interest rates on the other side of 5%, I would have struggled to believe it.

The March sales figures, released late last week by the Toronto Regional Real Estate Board tells us we should try to believe it.

While the year-over-year data clearly paints a picture of a sharp market correction over the past twelve months with sales down 36.5% and average price down 14.6% from March 2022, this is not news — what’s noteworthy is seeing that transactions have increased month-over-month, and average sale price, now at $1,108,606 is trending upwards both on an actual and a seasonally-adjusted basis.

New listings are up, average days on market has decreased, list-to-sale ratio is up — all signifiers that something has shifted and the market has come back to life.

And before you dismiss this as simple market seasonality and nothing to get fired up about, perhaps I can recall your attention to last autumn and the fall market that truly never came. Typical seasonal market rhythms were not enough to pull buyers and sellers off of the sidelines and out in to the marketplace.

Uncertainty decimated it all.

This has to be something more. Even if it’s still virtually unrecognizable from what we might historically expect to see in a typical March market.

Could it be that we are looking at a spring market further compounded by pent-up demand? We already saw how impactful just three months of lockdown was to bottle-up demand and drive market activity that first COVID summer. Now, how about a year?

Have buyers decided that prices aren’t likely to dip further and made peace with the new normal in borrowing costs? After all, we have seen the trouble in the U.S. banking system result in five-year fixed rates ticking downwards.

Will there be sellers who have spent the last year feeling like they missed their shot to cash out feeling like now is the time? An increase in inventory would do a lot to unlock the chessboard.

For my clients who have properties they want or need to sell but thought they would wait until the fall, my advice to them is almost invariably not to wait. If momentum has returned, let’s catch the wave. Sure, buyer confidence seems to have improved, but markets are volatile — there are multiple factors impacting the world and the economy that could interrupt this upswing.

There are few who will deny that a recession is clearly on the horizon, but for those with equity, savings, and confidence in their job security who might also be sick of this holding pattern keeping their plans on pause, it could be go time.

The question will be is this a blip of momentum that will fizzle or has the tide turned?

My prediction: market activity will increase while prices grind sideways straight into a quiet summer. For prices to tick meaningfully upwards again, rates will need to come down. For now, all we should be hoping for is an increase in sales.

What a difference a year makes.

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Real eState

Mortgage rule changes will help spark demand, but supply is ‘core’ issue: economist

Published

2 days ago

September 17, 2024

Anne Joseph

TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.

The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.

The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.

CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.

However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.

Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.

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

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Real eState

National housing market in ‘holding pattern’ as buyers patient for lower rates: CREA

Published

3 days ago

September 16, 2024

Anne Joseph

OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.

The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.

On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.

CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”

The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.

The number of newly listed properties was up 1.1 per cent month-over-month.

This report by The Canadian Press was first published Sept. 16, 2024.

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Two Quebec real estate brokers suspended for using fake bids to drive up prices

Published

1 week ago

September 11, 2024

Anne Joseph

MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.

Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.

Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.

She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.

The two brokers were suspended in May 2023 after La Presse published an article about their practices.

One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.

This report by The Canadian Press was first published Sept. 11, 2024.

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