Real eState

Real estate buyers in Toronto find competition has returned

Published

9 months ago

February 21, 2024

The real estate market in the Greater Toronto Area is shifting gears and buyers who became used to a languid pace are scrambling to keep up.

John Pasalis, president of Realosophy Realty, says people looking at properties in the fall became used to taking their time. They could submit offers with conditions on financing or a home inspection, for example, and rarely came up against rival bidders.

“It’s very frustrating for some. They go to a showing and there are four other buyers there. They’re finding themselves in a more competitive market.”

In mid-February, 40 per cent of homes in the low-rise segment in the GTA were selling above the asking price, he notes. That figure has been climbing from a relatively low 15 or 20 per cent in the fall but remains well below the 70 or 80 per cent of homes in the GTA that sold above asking during the high-octane run-ups of previous years.

And while bidding often erupts when agents set asking prices markedly below market value, Mr. Pasalis notes that that strategy only works when demand is high.

Mr. Pasalis says one reason for the increased competition this month is that listings are scarce at this time of year and it’s typical to have more bidding contests in February when inventory is tight. By April, when more homeowners are willing to list, the intensity cools down.

Some of the properties that languished through the end of the year were overpriced, he says. Others were poor-quality renovations by builders hoping to do a quick flip.

But recently he began receiving alerts that buyers were submitting offers on some of those properties.

Some homeowners who have delayed listing as they wait for a market rebound are feeling more optimistic, he adds. But Mr. Pasalis also wonders how long the current upturn will last.

He notes that interest rates on fixed term mortgages have been heading up again in recent weeks after dipping at the end of 2023. If that trend continues, many buyers will be in a less of a hurry, he adds.

“That’s going to cool the market, not crush it,” Mr. Pasalis says.

Financial markets are also betting that the Bank of Canada will cut its key interest rate in June or even later after economic data on both sides of the border showed more strength in jobs and inflation than economists were expecting.

Katherine Judge, senior economist at Canadian Imperial Bank of Commerce, says the housing market and the consumer spending that flows from it are set to rebound towards the end of 2024 as demand recovers with interest rate cuts.

She cautions that new factors, such as the introduction of caps on permits for international students, will come into play.

Those limits will impact British Columbia and Ontario the most, she says. While the change will ease the housing shortage and contain rent inflation, it may also cut into demand growth, she says.

Ms. Judge is forecasting that the Bank of Canada will trim interest rates by 125 basis points this year, with the first cut of 25 basis points expected in June.

For Pritesh Parekh, real estate agent with Century 21 Legacy Ltd., calls have already picked up.

“All of the conversations started Feb. 1.”

Buyers who were ready financially and psychologically to buy a few months ago have been feeling antsy, he says.

“Often times people are waiting for a signal without knowing what the signal is,” he says.

One cue came from Bank of Canada Governor Tiff Macklem following the meeting of his rate-setting committee on Jan. 24. When the council held the benchmark rate at 5 per cent and hinted that it’s unlikely to hike again, many buyers felt some relief.

Mr. Parekh says people are feeling guardedly optimistic but they remain cautious because interest rates are still fairly high.

“Buyers are not overbidding. Buyers are bidding what they believe is value for the property,” he says.

That’s in contrast to more frenzied times in the past when buyers were pushing their budgets as far as they could.

Now if a couple has a budget of $1.2-million based on a pre-approved mortgage, they will ask Mr. Parekh to find a house for $1.1-million.

“That is, I think, an excellent mindset,” he says.

Mr. Parekh believes part of the reason for the hesitancy is that first-time buyers in particular have been hearing tales of financial strain from friends and family affected by swiftly-increasing rates.

People say, “anything can happen – let’s stay within our means.”

Anita Springate-Renaud, broker with Engel & Volkers Toronto Central, has also noticed the uptick in multiple offers in the GTA, but she adds that buyers are in no mood to overpay.

In Whitby, Ont., east of Toronto, a colleague recently listed a house with an asking price of $1.479-million.

The agent figured that was fair market value, she says, and offers were welcome any time.

When buyers learned that one offer had landed, four more arrived.

“One person registered and the rest trickled in,” says Ms. Springate-Renaud.

Despite receiving five offers, the house sold below asking for $1.451-million.

Ms. Springate-Renaud sees the sale as a barometer of a balanced market: Buyers have come off the sidelines but they remain calm.

Still, bidding skirmishes mark a change from the fall when even attempting to draw multiple offers was rare.

“If you had an offer date, it was a guarantee that no one would show up,” she says. “It was the kiss of death.”

Source link

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.

Source link

Real eState

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.

Source link

Real eState

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.

Source link