New REIN report: How the coronavirus outbreak will impact Canadian real estate
Vancouver, BC: The Real Estate Investment Network (REIN) reports the facts behind the global coronavirus outbreak and its possible impact on Canadian economy and real estate. With the seventh case of the virus recently confirmed in Canada, Canadians have begun speculating its impact based on memories of the Severe Acute Respiratory Syndrome (SARS) outbreak in 2003.
According to the REIN Special Report: The Coronavirus’ Impact on Canadian Real Estate, Canadian real estate will see an immediate cool down with long-term lift due to:
Temporary, small decrease in GDP growth
Increased immigration
Increased foreign capital
Increased demand
Leading to increased property values
These factors represent a buying opportunity now.
Analysis shows potential short-term impact to Canada’s economy including:
Canadian GDP remains forecasted at 3.3%, factoring in a -0.1% coronavirus hit
Slight decrease in oil prices
Stifled commodity prices
Disrupted industry supply chains
Slowdown in business sales
Decline in international travel to Canada
GDP growth is a strong indicator of an economy’s continued growth. Disruptions in GDP growth rates can affect real estate markets within an 18-month period, according to REIN’s Long-Term Real Estate Success Formula.
These effects are already noticeable in highly competitive markets such as Toronto and Vancouver. The projected fear and concern surrounding the coronavirus is impacting trade, travel, tourism, and the Canadian economy. But, given historical and projected data, it could have less effect than anticipated.
Sensationalized headlines have gone viral on social media, spreading misinformation and confusion, instilling panic in the general public. Meanwhile, Canadian public health officials have assured the risk of Canadians contracting the virus remains very low.
“It’s still premature to predict how the coronavirus outbreak will be resolved, but data suggests that panic will only worsen the country’s economic situation. There is reason to be alert, but there’s absolutely no reason to further raise alarm and cause more public fear. In fact, as a Canadian real estate investor, this may represent a buying opportunity for investors with a likely future positive lift in rental and housing markets,” says Jennifer Hunt, Vice President Research for REIN.
“This analysis is by no means 100 per cent accurate, but much like what happened to SARS in 2003, fear and panic are the biggest risks to the country’s economic and real estate outlook. These findings are based on REIN’s Long-Term Real Estate Success Formula that outlines the economic drivers and market influencers shaping the Canadian real estate market today,” says Don R. Campbell, Senior Real Estate Analyst for REIN.
“We hope the outbreak is contained, limiting both health and economic impacts. When the situation normalizes, one can expect an influx of Chinese immigrants and capital to Canada resulting in increased demand for real estate. For a myriad of reasons, including continued Canadian GDP growth, the coronavirus represents a buying opportunity for Canadian real estate. In times like these, rely on trusted sources, like REIN, to unpack these confusing and evolving situations,” adds Hunt.
About the Real Estate Investment Network
REIN was founded in 1992. It is Canada’s most trusted source of real estate investment education, analysis, research, and strategic leadership. It offers a platform and environment where its clients have transacted more than 39,300 properties, representing more than $5.1 billion of real estate holdings.
REIN delivers balanced and impartial research and economic insights integrated with relevant analysis. It brings critical information, opinions of industry thought leaders, and proven strategies of success together in a way that helps homebuyers and investors make the right decisions on where, when, and why to invest in real estate.
REIN sees a bright future for the Canadian real estate marketplace. Its clients, armed with current and insightful research and provided with strategic guidance and help from an exceptional like-minded community, are set to continue to thrive and achieve their personal investment goals.
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.
