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Real eState
Posthaste: What downturn? Canadians across all generations still bullish on real estate
Dropping home prices and economic uncertainty hasn’t turned Canadians off the housing market, with people across all age groups bullish on real estate, new research suggests.
Members of the baby boomer, generation X, millennial and generation Z cohorts are confident owning a home is a good financial investment, and 49 per cent think a home purchase will produce a similar or better return than other investments over the next 12 months, according to a generational trends report released March 15 from Mustel Group and Sotheby’s International Realty Canada. People are even more bullish about real estate’s performance in the long term, the survey said, and 60 per cent think property will match or exceed other financial investments in the next 10 years.
As a result, Canadians of all ages are eager to get into the housing market, and the survey suggests the pandemic may have helped accelerate homeownership dreams. Across all generations, 35 per cent say they are more likely to buy a house than they were in January 2020. Homeowners are also more eager to sell. One-third say they are more likely to put their house on the market within the next five years than they were before the pandemic started.
Those findings come amid a housing market that has cooled significantly from its peak as elevated inflation and resulting higher interest rates weighed on prices. The average price of a home fell 12 per cent in 2022, and is expected to fall another six per cent this year, according to the Canadian Real Estate Association. The economy is also softening, and many economists predict the country will tip into a recession sometime this year. To add to that, a rising cost of living is boosting every-day expenses, and many people are taking on more debt to help make ends meet. Higher interest rates have also made the prospect of paying down a mortgage much more expensive, putting homeownership out of reach for many.
Still, that’s not enough to put people off wanting to buy real estate, Sotheby’s Canada said.
The pandemic played a key role in stoking the desire to own a home. While lockdowns during the pandemic initially pushed people to seek out more space, fuelling sales and prices, the pandemic also highlighted the value of including property in a financial plan. Stock market volatility during the pandemic made real estate an attractive alternative to traditional investments, Sotheby’s Canada said.
“One of the most transformative and enduring social and economic outcomes of the pandemic is that Canadians now place a heightened importance on primary home ownership,” Kottick said, “not only as an investment in their lifestyle and personal security, but as an investment in their financial future.”
And while a third of Canadians say they’re more likely to buy a house in the next five years than they were pre-pandemic, intentions differ among generations. Baby boomers say they’re 29 per cent more likely to buy a house, but 23 per cent say they’re less likely. Among gen X, 35 per cent are more likely to make a home purchase, with 23 per cent less likely. Millennials are a bit more eager to get in on homeownership, and 36 per cent say they’re now more likely to buy a house. Similarly, gen Z-ers say they’re 40 per cent more likely to become homeowners.
Mustel Group and Sotheby’s Canada polled 2,000 people aged 18-77 living in Vancouver, Calgary, Toronto and Montreal.
The yield on short-term Canada bonds is falling at the fastest rate in decades, as investors bet the Bank of Canada will cut rates in coming months to counter fallout from the collapse of United States regional banks.
Traders in overnight interest swaps are now pricing in rate cuts from the Bank of Canada by June. Last week, traders were expecting the next move to be a hike.
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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.
The Canadian Press. All rights reserved.
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.
The Canadian Press. All rights reserved.
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.
The Canadian Press. All rights reserved.
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