Sales have dropped because the supply of homes on the market has dropped while at the same time the bench mark price went up.
“Numbers this year are down in regard to number of sales year to date right around the seven per cent mark,” he said.
The supply of housing for sale has dropped, with 170 homes in the inventory, a reduction of 18 per cent in the last year.
Honch said the pandemic changed the nature of the service sector which has, in turn, changed the type of property people can buy.
“Those individuals that lost income as a reflection of their jobs, have kind of changed the type of property that we would see sell,” he said.
Houses in the 100,000 to $250,000 range are down almost 20 per cent in that price this year compared to last year.
That demographic is more impacted by changes in the interest rates than people buying higher priced homes.
Sales have continued, though, of higher-priced properties, which means a 2.3 per cent increase in the benchmark price to over $250,000.
“There are a lot more higher end sales this year, and likely a reflection of those people not having as much of a concern over an increase in interest rate,” Honch said.
Sales of homes starting at $400,000 to $500,000 are quite a bit higher this year compared to 2022.
“Landlords know there is some concern with individuals purchasing homes and when they can’t purchase a home, they will rent,” he said.
Increased crime in some neighbourhoods also changes buying patterns as people will avoid that area.
“In some areas that would have affordable housing cause buyers to stray away from purchasing as they don’t feel safe,” Honch explained.
A potential buyer also does not know if they will be able to sell their home if the crime trend in the neighbourhood continues. One or two decades can change a neighbourhood from safe to unsafe, he added.
The Bank of Canada will announce its next update on interest rates tomorrow, but it has been predicted there will be a .25 per cent increase once again.
While many buyers take a wait and see attitude when interest rates go up, the current situation is leaving some people unable to know what their next step should be.
The economy has not performed as predicted since the start of the pandemic with sales jumping in unexpected areas like home renovations and increased residential sales outside of major centres as people worked remotely.
“We’re going through a time that we’ve never been through before. We’ve never been through a global pandemic that has kind of changed the way people work or the way they spend money,” Honch explained.
Federal policy changes during the pandemic such as dropping the interest rate to 1.5 per cent and removing the stress test of an extra two per cent caused the real estate boom because buyers could add $100,000 to the value of the home they could afford.
Prince Albert still has a reasonable benchmark price which will help keep the situation more stable.
Should there be a sudden glut of houses listed, then the prices will drop but Honch estimates it will take years for the local inventory to catch up to where it once was.
Prince Albert is best served by being Prince Albert and focussing on local demographics and what the economy offers in terms of jobs, Honch said.
“I know we always want to be Saskatoon, we always want to be Regina but we’re a different community here. We just need to be P.A.,” he said.
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.
