People who pay attention to Canadian real estate probably heard too much of this term already.
It’s ‘pent-up demand’.
Depending on who says or hears it, the phrase rouses a variety of reactions.
For many, pent-up demand is music to their ears.
They consider it as a major factor that propelled the housing market to new heights this summer following the spring ravages of the COVID-19 pandemic.
For others who consider real estate in Canada as a Ponzi scheme, pent-up demand represents a good example of fake news.
Some even offered an alternative phrase to argue that the market does not look good. It’s ‘pent-up supply’.
Pent-up demand is simply this: buyers and sellers largely stayed away from the market last spring because of uncertainties brought about by the pandemic. Then they returned in force in the summer.
RBC Economics has issued a new housing report, and well, it has a lot to say about pent-up demand.
“With pent-up demand now largely exhausted, we see activity cooling later this fall,” economist Robert Hogue wrote.
This leads to one inevitable conclusion.
According to Hogue, the rally posted by the real-estate market this summer will “lose momentum this fall”.
“The pent-up demand created this spring proved a powerful driver of activity. Question is: how much longer can it be such a dominant factor?” Hogue asked.
Answering the same question, the RBC economist wrote: “We think there’s probably little pent-up demand left to satisfy in most markets.”
How much?
“Perhaps just enough to keep the heat on in September but not much beyond that,” Hogue stated.
The economist recalled that home resales hit a record high in August, rising 6.2 percent from July.
The benchmark price of homes in Canada increased 9.4 percent year over year last month.
The price growth surpassed the eight percent record in July, and 5.7 percent before the COVID-19 pandemic pandemic in February.
With the market cooling in the fall, the economist noted that this will likely “let some of the steam out of prices though not to the point of causing outright declines on a large scale”.
“All signs point to still-higher prices in the near-term,” according to Hogue.
Hogue explained that “tight demand-supply conditions in the majority of markets” will “keep the balance tilted toward faster price increases (or slower price declines in Calgary’s case) in the coming months”.
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.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
