Buckle up in your bubble, as we head into the last month of 2020 and down the rabbit hole of stagnating provincial health policies. The B.C. Health Authority has again enacted the “essential only travel policy” province wide, because of our rising positive COVID-19 testing numbers. We are told that Christmas this year will be different, and that it is a sacrifice we must make for the exceptional circumstance we are living under. Other provinces are living under even more draconian measures, the most prominent example being Manitoba, where residents are now banned from purchasing non essential goods. Lockdown 2.0 is creating a growing movement of resistance across the country and across the world, raising the question, are these health measures really the best way to combat viral spread?
While it can be argued that the necessity of these policies is for the greater good of all, there exists a double standard in allowing large chain and big box stores to remain open, while smaller stores are again closing their doors. This imposed anti-small business policy has created an animosity of unfairness. Deciding who and what is deemed essential has further divided the masses at a time when we really need a unified effort and openly collaborate. Politicians are rife to keep telling us that we are all in this together, but anyone who is collecting a federal or provincial government salary has not seen any change in their income stream, while millions of Canadians are collecting emergency wage benefits just to keep the lights on in their all but empty refrigerators.
Banks, land registration services, and real estate agent services were deemed essential services in the spring, and thank goodness for that designation, as this summers “land rush” was a major factor in helping to keep our shutdown economy ebbing forward. The last five months of record property sales across Canada, encouraged spin off spending and helped to keep many other sectors from faltering.
The Canadian Real Estate Association released mid-November stats showing 461,818 homes were sold over Canadian MLS Systems in October an 8.6 per cent increase from the first 10 months of 2019.
The compelling reasons to live in small-unit, high-density areas like Metro Toronto or Greater Vancouver are gone. If you now work from home and your pastimes like the gym, large concerts, sporting events, eating out in restaurants and club night life are no longer happening being locked down in less than 800 sqare feet of space makes little to no sense.
This mass residential migration trend is prevalent around the world; billions of people have already packed their belongings and moved in 2020. Now being dubbed the “Great Relocation”, this relocation from urban to rural locations continues through the winter months, a trend showing no signs of slowing. Over 300,000+ residents left the metropolis of New York City this summer and it is estimated that millions of Americans have moved or are in the process of a relocation, Zillow surfing has become an American pastime.
We must assume at some point there will be adverse longer-term effects on urban housing in general, and the market cracks have started to appear in the urban condo markets first. Analysts are already ringing the alarm bells about the Toronto condo market being flooded with inventory, reducing rents and sales prices. Existing condo owners, who were poised to sell and enter the single detached market, are now having a tough time selling in this now burgeoning buyers market. The Vancouver condo market is seeing similar slow activity with softening sales prices due to rising inventory and lower asking rents.
The demand for condos fell dramatically this summer, as many rental units became vacant when occupants chose to make a move to more affordable rural options or back home with their parents out of fiscal necessity. Those rental vacancies then prompted investors to sell units that could no longer be considered money makers, further adding to the inventory glut and thus a down cycle was set in motion. While the Greater Vancouver condo market is seeing devaluation, rural and recreational condo units in B.C. resort towns and low density areas have not been effected in the same way.
Real estate is historically documented and remembered by its cycles of highs and lows, and the Lower Mainland has been enjoying a boom cycle since the last correction ended in late 2015. Vancouver has been showcased worldwide as one of the best cities in the world to live in, and more recently, a hub for attracting international tech companies looking to set up offices in the metropolitan centre. The inspiring natural beauty and warmer climate, along with all the year round outdoor activities makes Greater Vancouver a very sought after place to live, work and play. When the pandemic broke and lockdowns ensued, it made more sense to live work and play somewhere cheaper with more indoor and outdoor private space.
The statistical data used to produce market predictions comes from national and regional real estate boards and lenders, who rarely like to paint the industry with negative insights, but alas, have real concerns about the immediate future of urban housing. Historically, B.C. has weathered market correction better than other provinces because of two factors, geography and diversity of industry. When all of our industries were working optimally, we were a great economic force, and in past when an industry was in tough times, we had other robust industries who picked up the slack and kept people working. Tourism, agriculture, forestry, mining, oil and gas, and fisheries are just a few of the provinces top economic drivers, all made possible with B.C.’s great wealth of natural spaces and resources.
We have been blessed to live in a region that has so much potential for employment and enjoyment. Unfortunately, many of B.C.’s workers were already unemployed before the pandemic began, benched by shortsighted NDP policy that saw hundreds of layoffs in the forestry sector, lumber mills closed in great numbers leaving smaller B.C. communities struggling. The oil and gas sector was then hard hit by the cancellation of the Northern Gateway pipeline and further riots and protests that culled many would be jobs for northern and indigenous communities. Having gone through what can only be described as an assault on Western Canadian natural resource sectors and the added economic fallout of lockdowns, 2021 will be a test of resiliency for our provincial real estate markets.
Land in B.C. has historically been a very good investment, and offers a very unique lifestyle no matter what part of the province you live in. Pessimistic predictions brought on by B.C.’s rising insolvency numbers are creating great speculation amongst investors, who watch these cycles closely to determine when the market reaches its low point to invest. But, the true effects of the mortgage deferral program and insolvency fall out will not be known until March or April of 2021, after every option to keep people in their homes has been administered by lenders.
In my opinion, the single family detached market will continue its busy pace through the spring of 2021, and if your life plan included the sale of your home for retirement income then you still have a strong market and high price point to begin the process. Your strategy should include a geographical re-homing plan. Know where it is you plan to go, and get pre-approved to ensure you can quickly execute a purchase in your desired region. Purchasing contingencies are getting accepted on many interior region properties, subject to the sale of your lower mainland home over winter, with possession dates into April and May of 2021, so don’t let winter slow down your plans. My advice is to work with a qualified, experienced realtor, who can ensure your investment is maximized and your safety is not compromised.
Freddy Marks, together with his daughter Linda Marks, runs Agassiz’s 3A Group Sutton Showcase Realty. He has been a Realtor in Canada and Germany for more than 30 years, and currently lives in Harrison Hot Springs.Read the full column online at www.agassizharrisonobserver.com.
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.
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.
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.
