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“And for sellers, if they think they will wait six months because prices will go up, they will wait, too.”
This wait and see attitude may be one reason why the city is expected to lag behind the national average in the forecast. Royal LePage predicts prices nationally will increase 5.5 per cent in 2021, led by large centres like Vancouver, which is expected to see prices grow by nine per cent on average.
Unlike condominium-dominated Vancouver, Edmonton’s market will continue to be driven by demand for single-family detached homes. The forecast calls for prices to gain 1.5 per cent to $430,700.
Realtor Kathy Schmidt says demand for single-family homes under $400,000 will continue to be a hot spot in Edmonton.
“In some areas supply will be low enough to cause multiple offers,” says the broker/owner of Schmidt Realty Group Inc.
“Above that price point, buyers expect more house for their dollar,” as supply will continue to outpace demand.
Yet even demand in the higher end homes should gain momentum as it has already shown in 2020, says realtor Shami Sandhu, president of Realty One Group of Western Canada.
“Edmonton saw an increase of 28 per cent in homes over $1 million sold in 2020 versus 2019,” to 158 from 123 homes sold in this category.
Even the slumping condominium segment is expected to grow with the median price gaining one per cent to about $215,000.
“In general, overall transaction activity will be up in 2021,” Sandhu says.
Yet while the Edmonton market will see growing demand, it does not appear in danger of overheating like larger centres.
“Your buying power still just gets you way more here in Edmonton versus other cities,” Shearer says. “It’s a good place to be.”
Calgary real estate showing shift to seller's market – Calgary Herald
A recent survey of major real estate resale markets across Canada has found Calgary is now a sellers’ market.
Zoocasa, an online realty firm, ranked the nation’s most competitive markets, and it found Alberta’s major markets were much more competitive than a year ago.
“Going into 2020, much of Canada was in a sellers’ market, but Calgary and Edmonton were not,” says Lauren Haw, CEO of Zoocasa. “They were balanced, so if you were buying in Canada, they were the place to be.”
But now both are in sellers’ markets, with Calgary being the hotter of the two.
The measure Zoocasa used, however, only offers a rough picture of actual conditions, Haw admits. The realty firm used the sales-to-new-listings ratio, dividing sales by new listings.
“As a rule of thumb, anything over 60 per cent means it’s a sellers’ market,” she says.
Haw notes Calgary’s ratio was 87 per cent in November (the period used for the survey) compared with 60 per cent for the same month in 2019. Edmonton’s was 76 per cent in November.
As she further explains, a ratio below 40 per cent is considered a buyers’ market, while one between 40 and 60 per cent is balanced.
The caveat, she adds, is Calgary’s low- to mid-range single-family detached home segment is driving sales while experiencing low supply. At the same time, the condominium and higher-price segments still mostly favour buyers.
By comparison, the most competitive market in Canada was Sudbury, with a ratio of 117 per cent. Greater Vancouver and Greater Toronto had ratios of 76 and 75 per cent respectively.
Short supply, GTA migration boosts Hamilton real estate market 15 per cent – TheSpec.com
Hamilton’s housing and rental market continued its hot streak even as a second wave of COVID-19 hit the city in December.
The price of a home in Hamilton increased 15.3 per cent year over year to $659,409 in the fourth quarter of 2020, according to a survey released Friday from Royal LePage.
That’s higher than the national aggregate price of a home in Canada, which increased 9.7 per cent to $708,842 year over year.
The median price of a two-storey home increased 17.1 per cent to $698,511, while the median price of a bungalow increased 11.8 per cent to $604,827. The price of a condominium increased 0.7 per cent to $381,008.
Overall, Hamilton’s real estate market saw double-digit gains in home prices in 2020.
Joe Ferrante, broker of record with Royal LePage State Realty, said he expects this trend to continue well into 2021.
“Multiple-offer scenarios have become commonplace and buyers are offering tens of thousands of dollars above the asking price to secure deals,” Ferrante said in a statement.
“With inventory at an all-time low, some sellers held off on listing their properties in 2020 on account of having little or no purchase options.”
Ferrante attributes the rising prices to a “combination of two things — interest rates and a definite shortage of product.”
“It’s a simple supply and demand issue when you think about it,” he said. “People are just not putting their houses up for sale like they used to, while the amount of people into our market outside the Hamilton area and from around the GTA seem to be buying up whatever we have, thus driving the prices up.”
The rental market has become quite competitive as well, noted Ferrante, as many people who can’t find property to buy are renting in the meantime.
“The lack of inventory is causing first-time buyers, who want to take advantage of low borrowing rates, to be priced out of the market,” he said. “These buyer hopefuls now find themselves competing for rental properties instead.”
The pandemic has created an “untraditional” year for the real estate market. After slow sales in April, the ripple effect of the pandemic on consumer behaviour resulted in more residents working and schooling from home.
According to a recent report from the Realtors Association of Hamilton-Burlington (RAHB), sales of single-family homes in the area increased in December by 38 per cent compared to December 2019, while the average price rose by 29 per cent to $829,226.
In comparison, Ancaster in 2019 was the local area with the highest average home sales price at $772,811.
Condo Owners "Handcuffed" in the Toronto Real Estate Market? – RE/MAX News
Increasing valuations and surging rents had been the hallmarks of the Toronto real estate market, particularly for condominiums, in the years following the 2008-2009 Great Recession. The staggering demand for dense downtown housing, as well as investor speculation and short-term rentals, contributed to one of the hottest housing markets in the world.
Then the COVID-19 public health crisis happened.
Like other major urban centres, the coronavirus pandemic has altered the residential landscape in Toronto, which has become associated with an enormous inventory of tiny and ultra-expensive condominiums. North America’s fourth-largest city is enduring a two-pronged problem. The first is that Airbnb hosts are selling their vacant short-term units, with borders closed to non-essential travel, and short-term rental rules tightened last year. The second is that people are fleeing the hyper-dense city for green pastures in rural communities.
This begs the question: can condo owners sell their units in a market plagued by dwindling demand and surging inventory? Many savvy investors who got in on the ground floor in the last decade will likely turn a profit when they secure a buyer. However, somebody who acquired a one- or two-bedroom suite in the last couple of years may find it harder to make money off the property and use the proceeds to upgrade to a detached or semi-detached house.
Ultimately, some Toronto condo owners may be feeling trapped by a large inventory of condos, most of which had been erected in the last few years. Or, as Dale-Paul Jordan, who listed his Toronto condo, told Reuters: “One of the things we’re handcuffed to is selling our condo to help with the down payment.” But does the data reflect the notion that condo owners in the Toronto real estate market are handcuffed? Let’s explore!
Condo Owners in the Toronto Real Estate Market
Sales activity and prices slowed down in the fall, while condo stocks intensified across the city.
According to the Toronto Regional Real Estate Board (TRREB), average Toronto condo prices tumbled 4.7 per cent year-over-year in December to $625,828, a contrast to the 8.1-per-cent growth in the average detached home price ($1,475,758).
Could this be the new norm, at least temporarily?
Recent TRREB data highlights that condo inventories more than doubled in the Greater Toronto Area. This has been a remarkable turn of events, because the broader real estate sector is booming in Toronto and the surrounding areas.
TRREB’s Chief Market Analyst Jason Mercer noted in the report, “there was a dichotomy between the single-family market segments and the condominium apartment segment. The supply of single-family homes remained constrained resulting in strong competition between buyers and double-digit price increases. In contrast, growth in condo listings far-outstripped growth in sales. Increased choice for condo buyers ultimately led to more bargaining power and a year-over-year dip in average condo selling prices during the last few months of the year.”
For now, it seems as though Toronto condo owners looking to leave the city have two options: stay put or sell the unit at a deep discount. But perhaps 2021 will offer more options for “handcuffed” homebuyers.
A Rebound in the Condo Market in 2021?
It is widely expected that many of the public policy health guidelines will remain intact in the first half of 2021. This includes immigration controls and a crackdown on short-term rentals (Airbnb). But the second half of the year could see heated market activity, with more Canadians immunized with the coronavirus vaccine and consumers holding about $200 billion in savings.
Although there has been some speculation that the Bank of Canada (BoC) could be the first central bank to tighten monetary policy, the institution has yet to send any signals that it would raise interest rates anytime soon. In other words, the BoC’s benchmark lending rate of 0.25 per cent and the five-year mortgage rate of below five per cent are unlikely to change in 2021 and possibly in 2022. Put simply, borrowing has never been cheaper, which is allowing new homebuyers to delve into the real estate market.
Another lingering question impacting the direction of Toronto real estate: if life returns to some semblance of normalcy following widespread vaccinations of Canadians, will corporations maintain their work-from-home policies? Google recently announced that the company would have employees return to the office in September and only experiment with flexible telecommuting a few days per week. This matters because many professionals have been enjoying newfound freedom over the last several months and some have migrated to regions further from their place of employment, soaking up the luxury of no daily commute coupled with quieter rural living.
But this could potentially change toward the end of 2021, with businesses returning to their commercial workspaces. Will this translate to a wave of homebuyers (and condo seekers) returning the big cities? Should this wave start to trickle back to the city sooner rather than later, this along with the other strong demand trends forecasted for the coming year, should provide some relief for handcuffed condo owners in Canada’s largest real estate market.
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