Real estate downturn could be good news for Sault home buyers - SooToday | Canada News Media
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Real estate downturn could be good news for Sault home buyers – SooToday

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RBC – Canada’s largest bank – foresees the country’s real estate bubble popping with a big downturn in both sales and prices.

With inflation pushing lending rates up, those rising rates are expected to cool down the real estate market.

As reported earlier, local home sales were down significantly in July as compared to July 2021 but the average price was still up at $320,314 – a 20.3 per cent increase from last year.

While RBC forecasts the overnight rate will climb to 3.25 per cent by October, the bank and real estate industry experts see the anticipated downturn in prices as a correction and a welcome change.

“What we’re experiencing in Sault Ste. Marie is more of a market stability, which to me is a good thing because it’s allowing buyers to have a little more power to buy a home,” said Jonathan Mogg, Sault Ste. Marie Real Estate Board president. 

That could turn out to be good news for first time home buyers in the Sault, some of whom lamented back in March that out of town home buyers, many from southern Ontario, were paying big money for homes in the Sault, those buyers either GTA residents eager to relocate away from the hustle and bustle or absentee buyers purchasing Sault homes and renting them out.

That trend squeezed out many Sault residents desiring to buy a house in their hometown.

“That seems to be cooling off,” Mogg told SooToday.

“Big time investors will always be in play, people who are in southern Ontario and decide that they want to invest in housing but can’t afford that market so it’s been pushing those kinds of people up north. But we’re noticing that with the interest rates going up there’s a lot less of those types of investors entering the local market, so that’s positive.”

“It’s kind of hit a point where a lot of people have cooled off on the idea of investing in housing so that’s good for the local people because now they’re starting to have a chance at buying a home again,” Mogg said.

“What I’m noticing is that a lot of buyers who were previously disillusioned are starting to come out of the woodwork and getting excited about trying to buy a house again. That’s awesome because these are people who had tried previously and the market was just too hot for them at the time. Now they’re seeing things cool off a little bit so it’s spurring them to say ‘okay, now’s the time I’m actually going to buy a house, this is it.’”

“It’s good to see that,” Mogg said.

Mogg said renting a home is still an option for those who can afford it because the average three bedroom bungalow in Sault Ste. Marie’s price is approximately $320,000 – making it hard for anyone with a budget under that amount.

That can cost between $1,500 and $2,000 a month.

That’s not the best option for most people, but the option is there for those who have the cash.

As far as apartment rentals are concerned, rates for two bedroom apartments in the Sault cost at least $1,300 a month.

Though realtors naturally prefer people to buy homes as opposed to renting them or renting apartments, Mogg said “it goes beyond a professional thing. Being a member of this community I want everybody to have the chance to have good quality housing.”

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Mortgage rule changes will help spark demand, but supply is ‘core’ issue: economist

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TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.

The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.

The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.

CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.

However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.

Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.

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

The Canadian Press. All rights reserved.

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National housing market in ‘holding pattern’ as buyers patient for lower rates: CREA

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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.

The Canadian Press. All rights reserved.

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Two Quebec real estate brokers suspended for using fake bids to drive up prices

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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.

The Canadian Press. All rights reserved.

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