Canadians hoping to buy a house in 2020 better brace themselves for limited choice and plenty of competition, the latest housing market data suggests.
While conditions remain ho-hum in the Prairies and Newfoundland and Labrador, in the rest of the country, there are plenty of buyers and not much for sale.
A lack of housing supply would be “the story” for 2020, the Canadian Real Estate Association (CREA) warned in its housing market forecast in mid-December.
The latest national statistics, released by CREA Jan. 15, seemed to confirm the trend. The number of existing homes available for purchases was at a 12-year low in December, the association said.
The issue has been long in the making, according to CREA senior economist Shaun Cathcart.
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Millennials, for example, now in their late 20s to late 30s, are eager to buy homes, but baby boomers are in no rush to downsize. Young condo owners are also struggling to find larger apartments or townhomes to upsize to. Those who own houses, meanwhile, are increasingly resorting to renovations — finishing basements and adding third floors, for example — in order to add living space instead of looking for a bigger home.
These long-term trends have been weighing on housing supply for years, Cathcart said. And now that buyers’ demand is bouncing back from the lows of 2018, market conditions are once again tightening, he added.
“All of these factors are coming together to make things the way they are to start this year.”
Nationally, home price growth hit the breaks in 2017 and stagnated throughout 2018 and the first half of 2019, after a series of policy measures blew cold air on the market. In B.C. and Ontario, provincial governments have slapped surtaxes on foreign homebuyers. In Ottawa, the federal government imposed a stress test for both insured and, later, uninsured mortgages. Meanwhile, the Bank of Canada gradually hiked its key interest rate, pushing up borrowing costs.
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But in the latter part of 2019, buyers’ demand — and prices — started to heat up again.
“Now it looks like most buyers in most markets have adjusted to those measures,” said Robert Hogue, senior economist at RBC.
In part, that’s likely because people have had enough time to save for the larger down payment required by Ottawa’s tougher borrowing rules. In part, it may be that some buyers have just resigned themselves to purchasing cheaper homes. In addition, mortgage rates declined through part of 2019, tracking lower long-term borrowing costs in the bond market. That, in turn, lowered the benchmark interest rate used for calculations in the mortgage stress test, bringing some aspiring homebuyers back in the game.
High rates of immigration have also been adding to the ranks of buyers in search of a home, including in places like Halifax and Prince Edward Island, Hogue said.
The tight market, in turn, may be discouraging some sellers, he added. People worry about selling their home without having bought a home to move to, he said. Many want to line up a new property before they put up the “for sale” sign.
“But if everybody does that, it means that there’s not that many homes up for sale,” Hogue said.
It’s common for this to happen when housing market activity rebounds after a slow period, he added.
First time home buyer mistakes
It doesn’t help that, in much of the country, there have been relatively few inaugurations of new condo towers for the past several months.
Even though residential construction remains elevated, it’s easy for large, multi-unit building projects to run into delays, Hogue said.
And while condo units are usually sold pre-construction, once the apartments become available, many of them may be resold or made available for rental, said Thomas Davidoff, professor of real estate finance at the University of British Columbia’s Sauder School of Business.
Luckily, the condo shortage may not last long. In Greater Vancouver, many apartment buildings currently under construction are expected to be completed in the next two years, Davidoff noted.
“A lack of inventory in the condo market in Vancouver — I am not convinced that by the end of this year that will be the story.”
Hogue offered a similar assessment for both Vancouver and Toronto.
In the Prairies and Newfoundland and Labrador, on the other hand, there are still lots of homes in search of buyers. While employment levels have been recovering from the oil price shock of 2015, incomes aren’t what they used to be for many households, the CREA’s Cathcart said.
Sellers, on the other hand, are loath to take a big price cut, so the market has been adjusting slowly, he added.
While conditions seem to be stabilizing even there and the warmer season may bring some new momentum to the market, selling a home in those regions remains “tough,” he said.
© 2020 Global News, a division of Corus Entertainment Inc.
Hoping Omicron won’t wreck Christmas, Bethlehem lights up tree
Residents lit up a giant Christmas tree outside Bethlehem’s Church of the Nativity on Saturday, hoping that a new coronavirus variant doesn’t ruin another holiday season in the traditional birthplace of Jesus.
The Palestinian city in the Israeli-occupied West Bank was all but closed last Christmas, losing its peak tourist season to the pandemic.
This December has seen Israel shut out foreign travellers for 14 days to try to prevent the Omicron variant taking hold, and the hope is that the ban will end as scheduled, in time for Christmas travel. In its last pre-pandemic winter, in 2019/20, Bethlehem hosted 3.5 million visitors.
The giant tree, topped with a bright red star, was lit up with hundreds of coloured lights as red, white and green fireworks illuminated the night sky.
Mayor Anton Salman said the travel ban had prevented several foreign delegations attending.
Nonetheless, the audience in Manger Square in front of the church was far bigger than last year, when coronavirus restrictions kept even local spectators away.
“It is very joyful, a very nice evening. The air is full of hope, full of joy, full of expectation,” said Maria, a tourist from Finland who did not provide her full name.
(Reporting by Mohammed Abu Ganeyeh and Yosri al-Jamal in Bethlehem and Roleen Tafakji in Jerusalem; Writing by Maayan Lubell; Editing by Kevin Liffey)
Stuck in South Africa, new travel rules put this Canadian's trip home for the holidays at risk – CBC.ca
Andrew Neumann’s hopes of making it home for the holidays have been cast into doubt by the emergence of the omicron coronavirus variant and the swift implementation of new pandemic border restrictions around the world.
“It’s actually a particularly sensitive time,” Neumann, a Canadian living in South Africa, said in an interview on CBC’s The House that aired Saturday. His son just started university in Toronto, his first year away from home, he explained. And there are other pressing concerns.
“My wife’s father is very ill. He’s in his 80s. He’s undergoing chemotherapy…. Likewise, my mother’s 91. She’s in sort of cognitive decline. I haven’t seen her in two years,” he told host Chris Hall.
“And there’s a question mark again in my mind: Am I going to be able to say goodbye?” Neumann said.
20:23Borders tighten again
Neumann has lived in Johannesburg since 2015. He was planning to return to Canada for the holidays when new travel restrictions were put in place affecting travellers from 10 countries, mostly in southern Africa. Canadians trying to come home from those countries must now meet a series of additional testing and quarantine requirements.
Travellers must get a pre-departure molecular COVID-19 test 72 hours ahead of their departure, something Canadians are now used to, but that test must be in a third country — not any of the 10 on Canada’s list. Neumann was planning to get a test during his connection in Germany, but additional rules put in place there have made that impossible.
Canadian, German restrictions clash
A letter Neumann received from the Canadian High Commission in South Africa said German airline Lufthansa would not allow Canadians to board because of that third-country testing requirement and restrictions put in place by Germany.
Neumann’s situation closely resembles that of the Canadian junior women’s field hockey team, which has also been stuck in South Africa. The team has asked for an exemption to leave the country.
Neumann said he has been struck by what he says is the “cavalier” way the government has answered the questions of would-be travellers whose plans the restrictions have thrown into limbo.
He also says the restrictions themselves make little sense given what we now know about the spread of the omicron variant.
“It just seems so disproportionate a response to southern Africa versus the rest of the world that you have to question the motivations,” he said.
In an emailed response to CBC News, Global Affairs Canada said this country’s entry requirements are meant to ensure the safety of Canadians. It said that the implementation of restrictions could disrupt travel plans but that “the decision to travel is the sole responsibility of the individual.”
“We can confirm that we are receiving reports of Canadians abroad affected by these new measures,” the statement said.
Debate over travel ban effectiveness
In a separate interview on The House, Public Safety Minister Marco Mendicino said the restrictions are being implemented to give Canada the time to assess the risk of the omicron variant and “protect the progress” the country has made against the pandemic.
“I’d acknowledge that we’re at a moment where there will be some challenges, but we put in place public health measures because of the variant of concern.”
There has been significant criticism of the travel measures put in place by Canada and other countries, with growing evidence that the new variant had been circulating in several nations before South African researchers first discovered it in late November and travel restrictions were imposed.
Part of the debate has centred on the efficacy of travel restrictions themselves, with some experts arguing they do little to stop the spread of a new variant. The president of South Africa called them “unscientific” and “discriminatory.”
Mendicino said the restrictions on the 10 countries were not politically motivated but instead based on science.
“We’re doing it because we want to protect Canadians. This is not their first go-around. We’ve done this drill before, and we want to make sure that we’re taking the right decision when it comes to protecting the health and safety of Canadians,” he said.
For one medical officer of health in Canada, the bans are of some use but should not be the focus of government.
“You know, the honest truth is that it probably would have limited impact overall, but it may help to slow the introduction of omicron,” said Dr. Lawrence Loh of Peel Region, which hosts Toronto’s Pearson International Airport.
For Neumann, it’s clear the travel bans are not justified.
“When we know now that it’s also everywhere else in the world suggests that poorer countries are at a disadvantage, certainly versus Europe and Canada and the U.S.,” he said.
Despite the challenges so far, Neumann now has a flight booked for next Friday and describes himself as “somewhat hopeful” his travel plans will work out.
Russia says airliner had to lose height to avoid NATO spy plane
A Russian Aeroflot airliner flying from Tel Aviv to Moscow was forced to change altitude over the Black Sea because a NATO CL-600 reconnaissance plane crossed its designated flight path, Russia’s state aviation authority said on Saturday.
The state airline said flight SU501 carrying 142 passengers had had to drop 2,000 feet on Friday after air traffic control told it that another aircraft had crossed its path.
The crew were able to see the other plane when they passed in the sky, it said in a separate statement.
The aviation authority, Rosaviatsia, said a smaller CL-650 aircraft flying from the Black Sea resort of Sochi to Skopje had also had to change its course.
It did not say which NATO member the reconnaissance aircraft belonged to. Russia’s Defence Ministry said on Friday it had scrambled fighter jets to escort two U.S. military reconnaissance planes over the Black Sea.
The U.S. Embassy in Moscow made no immediate comment about the incident when it was first reported by the Interfax news agency.
Rosaviatsia said an increase in flights by NATO aircraft in the region was creating risks for civilian planes and that Moscow planned to lodge a diplomatic complaint over them.
International tensions have been rising over Ukraine and the Black Sea region.
Kyiv and NATO powers accuse Russia of building up troops near Ukraine, sparking fears of a possible attack. Moscow denies any such plan and accuses Kyiv of building up its own forces in its east, where Russian-backed separatists control a large part of Ukrainian territory.
(Reporting by Tom Balmforth and Gleb Stolyarov; Editing by Helen Popper and Kevin Liffey)
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