The president of the Guelph and District Association of Realtors sees the local real estate market returning to normal next year.
A recent survey by Royal LePage is predicting a one per cent drop in the aggregate price of a home in Canada by the fourth quarter of 2023, to an estimated $765,171. That’s a drop from the $772,900 for Q4 this year.
Broken down, it’s seeing a two per cent decline in aggregate housing prices in the Greater Toronto Area, from $1,078,300 to $1,056,734.
The report didn’t discuss Guelph specifically in its forecast, but local association head Tyson Hinschberger noted Guelph and southern Ontario is always influenced by the GTA market.
So what does this all mean for Guelph?
“Certainly I think that at the end of the day, it speaks more to a return to normalcy and stability than probably a lot of the frenzy that we’ve seen over the last 12 to 18 months,” he said.
Speaking on behalf of the association, he believes the worst is behind us, and there seems to be more of an interest in buyers at least exploring making moves.
“I’ve spoken to a few people about making upsizing decisions or buying that second property lately,” said Hinschberger, who is also a real estate broker with Planet Realty.
“That’s anecdotal, but if you look at statistics across Wellington region, we’ve seen average prices, days on market and months of inventory, which we use to determine whether we’re in a buyers, sellers or a balanced market. They’ve all been pretty level since about the end of August.
“The declines that we had seen in the middle six months of the year, those have levelled off to a relatively balanced scenario.”
But there is a question mark for first-time buyers, and it’s all about timing and the interest rate.
“Variable rates have surpassed fixed rates in terms of their pricing, so what that suggests is that any future rate increases by the Bank of Canada would have less of an effect on the market because a buyer can opt into a fixed rate, which is determined by bond yields rather than the overnight lending rate,” he said.
Hinschberger said we’re in a better situation now than the summer, adding it’s easier to make plans to move in the balanced environment rather than a market that severely favours buyers or sellers.
But wanting to buy a house is one thing. It’s another to take a look, and it’s no secret there is a lack of supply being felt across this part of the province.
On supply and demand, Hinschberger said a supply shortage would suggest an increase is imminent to the prices of homes because more want homes than the supply available.
And even though we’ve seen changes made by the government to bring supply to market – most notably the controversial Bill 23 – Hinschberger said these things don’t happen overnight.
In Guelph, the province wants to see 18,000 new residential units built by 2032 as part of Bill 23.
Looking further down the line, the province has a target Guelph will grow to a population over 200,000 by 2051.
“You have a new permanent resident target of around 465,000 people next year (across Canada), and that supply will take a while to come to fruition,” he said. “It won’t provide immediate relief to that supply shortage. To the extent that the interest rate environment is still volatile, how much demand there is for that supply is still somewhat up in the air.”
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.
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.
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.
