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LACKIE: Uncertainty in the world creates opportunity in real estate – Toronto Sun

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I spend a lot of time thinking about Toronto real estate, talking about Toronto real estate, and reading all of the things and scrolling all of the tweets to see what others are saying about Toronto real estate.

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And that’s when I am not actively selling it.

Opinions are everywhere and consensus is surely limited, but there are a few things that almost everyone seems to agree with: in the span of three decades, Toronto real estate has gone from mostly accessible to increasingly aspirational to broadly inaccessible.

We know that we have insufficient supply of both resale and rental housing.

We know that we have seemingly endless demand — thanks to bold immigration targets, job-seekers coalescing around the country’s business, financial and tech centre, not to mention historically low interest rates that have inarguably driven speculation, the ratio of available properties to active buyers is woefully inadequate.

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And while it feels like there may be an ever so slight cool settling into the market in the past few weeks, if two years of forward momentum is any indication, it’s hard to believe this will be anything larger than a blip. But there are some signs. Houses that just weeks ago would have sold in a frenzy of over ten offers are now welcoming just a handful on offer night.

  1. It should surprise exactly no one that this past February was yet another banger of a month in Toronto real estate. It was really more of the same.

    LACKIE: Real estate demand seemingly endless

  2. A real estate sign that reads

    LACKIE: Real estate buyers happy to pay tomorrow’s price today but they’re not dummies

  3. Ever the hot topic, it's virtually impossible to discuss Toronto's real estate market without people getting riled up, writes Brynn Lackie.

    LACKIE: More transparency would improve trust in real estate industry

From there it seems to go one of two ways — the house still hits a strong number, likely driven by two motivated buyers battling it out between themselves, or it fails to sell and so is relisted the next day.

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I sold a house this past week where we had over 50 showings. Respectfully declined a bully offer on day one, asking instead that they wait until offer night. This was one of those houses in one of those neighbourhoods that was sure to do well as it was the perfect starter home and a way of getting in. The house was adorable. It was staged perfectly. We were priced slightly below market value in order to ensure that we were driving activity and not confusing people about what our expectations were. I answered every phone call, followed up with every agent for feedback, sent out the home inspection report more times than I can count.

The morning of our offer day I started to make my calls to get a sense of who might be coming forward. And I couldn’t believe it — agents who had shown the property two, three and four times were telling me some variation of the refrain that their clients loved the house but were worried it was going to go too high and didn’t want to compete. They were going to sit it out.

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In the end we had three offers. And all of them were strong. The buyers who showed up came to play. Gone were the buyers who were simply taking their shot. With all of the discussion about the perils of blind bidding, this was fascinating to me. It wasn’t a frenzy, no one lost their heads, the house sold for exactly what I expected it would.

But I do think the stars aligned for us. I think if my sellers had unrealistic expectations or the house had some challenges, or there had been a blizzard that made the parking situation difficult, we could have had a very different result.

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And based on conversations with my colleagues, my experience this week was not unique. A friend had a similar scenario play out on her listing in the west end. In the end she got a record-setting price, but it was a small handful of offers that got her there. Another didn’t hit her number and they relisted the next day.

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What could this mean? Well, for those who have made a full-time gig out of predicting the great crash, they will likely say that this is the sign that a seismic shift is underway. I think it’s a little simpler than that. People are uncertain and unsettled by what’s happening in the world. We are all exhausted. We are coming off of two years of a global pandemic while a hideous and horrifying war in Europe is now unfolding in real time on cable news and social media.

Buyers have been spooked by a lot less. The bump to interest rates was nominal relatively-speaking. Could people be alarmed by an economy grappling with elements we barely understand? Inflation that is clearly not transitory, an energy crisis, and gas prices that seem like typos? Absolutely.

Investors who actually know what they are doing are likely taking a good hard look at what’s driving current inflation and I’ll bet that many are now taking a pause. And I would also bet that there is a solid group of buyers who are now wondering if this is the moment some sanity starts to return to our real estate market. And for their sake I hope that’s exactly what’s happening.

But if recent history is any indication, this is just as likely to be one of those little blips that could actually represent a rare sliver of opportunity before the train powers up once again.

@brynnlackie

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Greater Toronto Area real estate approaching ‘buyer’s market’: BMO – Global News

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In the midst of the COVID-19 pandemic, Canadians hoping to buy homes have had to brave a sizzling seller’s market where waiving inspections, blind bidding, and dozens of competing offers are the norm.

Now, BMO’s chief economist says what many potential house-hunters are hoping for — a balanced or, better yet, buyer’s market — may finally be arriving.

Read more:

Canada needs new homes built, but construction industry headed for retirement wall

In a new data snapshot issued by the bank on Tuesday morning, Doug Porter said there’s been a “quick fall” in the sales-to-new-listing ratio which is a key part of assessing who holds more power in the Canadian real estate market.

That ratio dropped from 76 per cent to 66 per cent last month, a level not seen since June 2020.

The Canadian Real Estate Association (CREA) said Monday that level is “right on the border between what would constitute a seller’s and a balanced market.”

As a result, CREA noted home prices have just seen their first monthly decline in two years.

When it comes to the Greater Toronto Area (GTA) specifically, Porter raised the possibility of a buyer’s market.

“The GTA sales-listing ratio plunged to just 45 per cent in April, which is suddenly getting into buyers market terrain,” Porter wrote in the BMO snapshot data assessment.

In contrast, he said that number has been around 70 per cent over the past year, making for a “firmly seller’s market.”

“And what the ratio is now telling us is that prices are about to go from 20%+ gains to a sudden stall. And that’s assuming the sales/listings ratio doesn’t fall further in the coming months.”

Read more:

Bidding war no more: How to make an offer in Canada’s cooling housing market

The decision by the Bank of Canada to keep interest rates at rock-bottom levels during the pandemic has been attributed as one significant factor fuelling Canada’s surging home prices over recent years.

But the shift in market sentiment comes as the central bank is in the midst of a series of rate hikes taking aim at rampant inflation, which has hit 30-year highs as a result of reopening economies, supply chain problems and Russia’s invasion of Ukraine.

A lack of housing supply has also prompted growing political pressure on governments of all levels to increase construction — a challenge, given a wave of retirements poised to hit the construction sector.

Right now, though, BMO economist Shelly Kaushik said in a separate data snapshot on Tuesday that new home construction is increasing, with the industry “firing on all cylinders.”

Whether and for how long that will continue remains to be seen.

© 2022 Global News, a division of Corus Entertainment Inc.

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Ontario housing market: What $1 million will get you | CTV News – CTV News Toronto

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Both the Canadian and Ontarian real estate markets saw a record-breaking first quarter in 2022, with housing prices reaching new heights and sellers remaining well-positioned.

As of March, the average price of an Ontario home was $1,052,920. In the Greater Toronto Area, the average price is sitting at $1,269,900.

The Greater Toronto Area isn’t the only area breaking real estate records in the first quarter of the year either — prices of detached homes in the four Golden Horsehsoe communities — Barrie, Cambridge, Kitchener-Waterloo and Oshawa  — all surpassed $1 million for the first time.

The rise in prices is indicative of a larger national trend. Since last year, the national average home price climbed by more than 20 per cent to hit a record $816,720 in February.

With so many price tags hovering around the $1-million mark, buyers might be wondering how far a budget of that amount could get them across Ontario’s real estate markets.

Well, it depends on where you’re looking.

Here are a selection of Ontario real estate listings for under $1 million.

TORONTO

117 North Bonnington Ave can be seen above. (RE/MAX)

Address: 117 North Bonnington Avenue, Toronto, ON.

Property type: Townhouse

Asking price: $999,900

Bedrooms: Three

Bathrooms: Two

KITCHENER

22 – 93 Gage Ave can be seen above. (RE/MAX)

Address: 22 – 93 Gage Avenue, Kitchener, ON.

Property type: Condo

Asking price: $829,000

Bedrooms: Three

Bathrooms: Three

WINDSOR

533 Mountbatten Crescent can be seen above. (RE/MAX)

Address: 533 Mountbatten Crescent, Windsor, ON.

Property type: Detached home

Asking price: $999,900

Bedrooms: Four

Bathrooms: Three

NORTH BAY

59 Janey Avenue can be seen above. (RE/MAX)

Address: 59 Janey Avenue, North Bay, ON.

Property type: Detached home

Asking price: $779,900

Bedrooms: Five

Bathrooms: Three

OTTAWA

711 Spring Valley Drive can be seen. (Google Maps)

Address: 711 Spring Valley Drive, Ottawa, ON.

Property type: Detached home

Asking price: $999,900

Bedrooms: Four

Bathrooms: Three

NIAGARA-ON-THE-LAKE

23 Windsor Circle can be seen above. (RE/MAX)

Address: 23 Windsor Circle, Niagara-On-The-Lake, ON.

Property type: Townhouse

Asking price: $999,900

Bedrooms: Four

Bathrooms: Four

THUNDER BAY

2316 Falconcrest DrIve can be seen above. (RE/MAX)

Address: 2316 Falconcrest Drive, Thunder Bay, ON.

Property type: Detached home

Asking price: $969,000

Bedrooms: Four

Bathrooms: Four

HEARST

908 Halle Street can be seen above. (RE/MAX)

Address: 908 Halle Street, Hearst, ON.

Property type: Detached home

Asking price: $750,000

Bedrooms: Four

Bathrooms: Two

LONDON

1177 Crumlin Sideroad can be seen above. (RE/MAX)

Address: 1177 Crumlin Side Road, London, ON.

Property type: Detached home

Asking price: $999,000

Bedrooms: Five

Bathroom: Three

BARRIE

207 Dunsmore Lane can be seen above. (RE/MAX)

Address: 207 Dunsmore Lane, Barrie, ON.

Property type: Detached home

Asking price: $999,000

Bedrooms: Six

Bathrooms: Four

With files from CP24’s Chris Fox. 

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Real estate in Canada: Home sales down in April, CREA says – CTV News

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OTTAWA –

Increasing mortgage rates slowed home sales in April from the frenzied pace they started the year at, the Canadian Real Estate Association said Monday.

The association found the number of homes sold dropped by 25.7 per cent to 54,894 last month from 73,907 in April 2021, when the country set a record for the month.

On a month-over-month basis, sales in April were down 12.6 per cent compared with March, but still ranked as the third-highest April sales figure, just behind 2021 and 2016.

“The demand fever in Canadian housing has broken and, who would have thought, all it took was a nudge in interest rates by the Bank of Canada to change sentiment,” said BMO Capital Markets senior analyst Robert Kavcic, in a note to investors.

CREA attributed much of the slowdown to fixed mortgage rates, which have been on the rise since 2021, but have been more impactful in recent months. The association pointed out that typical discounted five-year fixed rates have leaped from about three to four per cent over the span of a month.

The rate is also weighing on how buyers fare with the mortgage stress test, which oncerequired those with uninsured mortgages — borrowers with a down payment of at least 20 per cent — to carry a mortgage rate of either two percentage points above the contract rate, or 5.25 per cent, whichever is greater.

For fixed borrowers, CREA said the stress test just moved from 5.25 per cent to the low 6 per cent range, another roughly one per cent increase in a month.

“People are nervous. They are thinking, ‘if I take on this mortgage, when mortgage rates are going up and the price to (live) is more, what is going to happen?” said Anita Springate-Renaud, a Toronto broker with Engel & Volkers.

She noticed that many homes were still getting multiple offers last month, but instead of 20 offers, two or three was becoming the norm.

Properties are also taking longer to sell. Homes that used to find a buyer in three or four days are now sitting for two weeks, in some cases, she said.

Many other realtors have found buyers and sellers holding off on purchasing or listing properties until they see how much of an effect mortgage and interest rate changes have on the market.

“For buyers, this slowdown could mean more time to consider options in the market,” said Jill Oudil, CREA’s chair, in a news release.

“For sellers, it could necessitate a return to more traditional marketing strategies.”

This shift in sentiment was reflected in the number of newly listed homes, which, on a seasonally adjusted basis, fell by 2.2 per cent to 70,957 last month from 72,557 in March.

On a non-seasonally adjusted basis, new listings amounted to 91,559 last month, down 10.5 per cent from 102,294 in April 2022.

Even though CREA reported slowing sales and fewer listings, Canadians were shelling out even more for homes than they did in 2021.

The national average home price was a little over $746,000 in April, up 7.4 per cent from about $695,000 during the same month last year.

Excluding the Greater Toronto and Vancouver areas from this calculation, cuts $138,000 from the national average price, CREA said.

However, on a seasonally adjusted basis the national average home price slid by 3.8 per cent to $741,517 last month from $771,125 in March.

The home price index benchmark price hit $866,700 last month, down 0.6 per cent from a month ago but up 23.7 per cent from a year ago and 63.9 per cent from five years ago.

The benchmark price was lowest in Saskatchewan, where it totalled $271,100 and highest in B.C.’s Lower Mainland, where it amounted to more than $1.3 million.

Kavcic found Ontario markets “weakening most and fastest, especially further outside the core of Toronto (these were also the hottest markets in the country during the pandemic).”

Ontario’s suburban markets are the “shakiest” because of how prices have fallen from February peaks, but he said single-detached and townhomes look to be cooling quickest.

“Sales in the province slid 21 per cent in April and are now back in-line with pre-pandemic activity levels,” he said.

“The market balance has gone from drum tight with ‘not enough supply,’ to one that resembles the 2017-19 correction period.”

Within the province, TD Economics economist Rishi Sondhi found Toronto to be an outlier because sales and prices dropped more there than in the country overall.

Sondhi believes the Toronto market is now close to tipping in favour of buyers, but in the coming months, expects prices to continue falling nationally, reflecting the cooler demand backdrop.

This report by The Canadian Press was first published May 16, 2022

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