Real eState

Peterborough real estate called 'most overvalued' in Canada – The Peterborough Examiner

Published

3 years ago

April 27, 2022

Peterborough has a new title: Most overvalued city for housing. This came after Moody’s Analytics released its Q4 2021 assessment of housing price valuations.

Peterborough took the top spot as the city with the most overvalued housing market in southern Ontario, coming in at 107.8 per cent over value, just ahead of the St. Catharines-Niagara area at 106.9 per cent.

Housing prices have continued to soar above expected trends, a sign of an overinflated market, said the assessment, which continues to drive up prices and push more people out of the already expensive housing market.

With an average price of more than $864,000 — a stark increase from 2019, when the average house prices was about $416,000 — first time homebuyers are at their most vulnerable in the market with limited choices and out-of-control pricing.

The average household income in the Peterborough area of just under $70,000 after taxes, meaning people in the Peterborough area are under pressure to afford the rising housing cost.

Based on that average income, a household would typically be approved for a mortgage of about $300,000, not nearly enough to afford a local house, let alone be competitive in the current market.

“I can tell you our standard rule of thumb for income without putting into effect the stress tests and other debts owed, somebody who came in at any point over the last five years, making $50,000 with no observable debts, could be pre-approved for $250,000,” said Christina Ward, mortgage broker with Dominion Lending.

Ward added these numbers are very fluid with regards to what is happening in the market, and what people can afford based on their stress test.

She said a lot of people who are unable to afford in this market are turning to multi-generational housing, which includes any number of generations of a family sharing a house, to afford the monthly costs.

Ward notes this is not the only option she has seen for people who are wanting to enter the housing market and who are first-time home buyers.

“We’re seeing people doing ownership pools, where they’ve got three friends wanting to enter the market,” she said. “They’ve been priced out, so they get together and buy a house and their families live in it.”

Overvaluation in Peterborough can be attributed to the rise in housing market investors, the number of which has doubled in the last couple of years.

“In 2021, material suggested investors in the market were twice the number seen in 2020,” said Paul Armstrong, author of the Housing is Fundamental Report.

“Investment in the market does not include people who buy the house to live in, we’re talking about investors looking at real estate as a commodity.”

Armstrong said there are many contributing factors, but the one impacting the overvaluation of housing, especially in the Peterborough area, are real estate investment trusts.

“Large real estate investment funds attract money from investors, usually conservative investors. They don’t want to invest in anything too risky,” said Armstrong.

“The money goes into the real estate investment trusts, so anybody who’s buying units in a real Estate Investment Trust is an investor, they are the one’s driving up the market.”

Armstrong is also concerned with how realtors are conducting business when it comes to accepting bids on housing.

“There will be a stipulation the listing agent puts in, which will say you can make offers, the offers will be sealed, and will not be open until such a date,” Armstrong added.

This method of bidding, called blind bidding, sees potential homebuyers speculate about what others are bidding to try to blindly outbid other potential buyers, which inflates the market value, creating overvaluation of housing.

Armstrong said this creates a speculative market. “The offers should be put in, the owners should be able to look at them and accept an offer when it comes out,” he said.

“But that’s not how this thing is being orchestrated at all, it is an accomplice driving the market.”

Armstrong notes the whole idea of blind bidding is amoral and should be detested, and if governments truly cared about this issue, they would put a stop to it.

“If we had governments that cared about this, they would be trying to do something about it,” he said.

“They would stop this whole methodology, let people put in an offer, an offer that is looked at, rather than this idea of there’s a date at which we look at these and that’s the date for the auction.”

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Real eState

Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

Published

3 days ago

November 6, 2024

Anne Joseph

TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.

The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.

The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.

“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.

“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”

The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.

New listings last month totalled 15,328, up 4.3 per cent from a year earlier.

In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.

The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.

“I thought they’d be up for sure, but not necessarily that much,” said Forbes.

“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”

He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.

“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.

“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”

All property types saw more sales in October compared with a year ago throughout the GTA.

Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.

“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”

This report by The Canadian Press was first published Nov. 6, 2024.

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Homelessness: Tiny home village to open next week in Halifax suburb

Published

2 weeks ago

October 24, 2024

Anne Joseph

HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.

Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.

Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.

The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.

Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.

They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.

The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.

This report by The Canadian Press was first published Oct. 24, 2024.

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Here are some facts about British Columbia’s housing market

Published

3 weeks ago

October 17, 2024

Anne Joseph

Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.

Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.

Average residential home price in B.C.: $938,500

Average price in greater Vancouver (2024 year to date): $1,304,438

Average price in greater Victoria (2024 year to date): $979,103

Average price in the Okanagan (2024 year to date): $748,015

Average two-bedroom purpose-built rental in Vancouver: $2,181

Average two-bedroom purpose-built rental in Victoria: $1,839

Average two-bedroom purpose-built rental in Canada: $1,359

Rental vacancy rate in Vancouver: 0.9 per cent

How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent

This report by The Canadian Press was first published Oct. 17, 2024.

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