There are signs P.E.I.’s red-hot real estate market could be starting to cool — but that doesn’t mean it’s going to be any easier to break into the Island’s competitive real estate market.
Nationally, the market showed signs of cooling in March as both the number of homes sold and the average selling price declined compared to the previous month. But that’s not the case on P.E.I.
“The flattening hasn’t necessarily hit us yet here,” said James Marjerrison, the newly minted president of the P.E.I. Real Estate Association.
“But I would not be surprised, with rising interest rates and record highs, that there would be a bit of a flattening period — I just haven’t seen that just yet.”
The latest stats show prices continue to rise, for now. According to the P.E.I. Real Estate Association, of the 194 homes or units that sold on P.E.I. in April, the average price was a record $414,742, up more than 20 per cent from April 2021.
Low inventory
Despite those record prices, there were fewer homes sold in April on P.E.I. — almost 23 per cent fewer compared to last April’s all-time record sales. During the first four months of 2022, there were nine per cent fewer home sales than the same period last year.
James Marjerrison, president of the P.E.I. Real Estate Association. (Submitted by James Marjerrison)
That’s because, in part, there were fewer homes available to sell — what agents call low inventory. The number of new listings on the Island in April, at 265, was down more than 17 per cent from April 2021.
None of which is good news for buyers hoping the market cools so they can buy their first home or move up to a larger home.
“If housing prices were to fall a bit or if there was a bit of a correction, you might think that it could make it more affordable for people getting into the market,” said Marjerrison.
“But if interest rates continue to rise, that could put more pressure on affordability in terms of the monthly payment and the stress test, so that could level it off.”
Buyers might need to come up with a bigger down payment to keep their monthly mortgage commitments more manageable considering the higher interest rates, he explained.
“It’s a bit of a shell game when you’re juggling interest rates and house prices.”
‘Blessing and a curse’
Shaun Cathcart, a senior economist with the Canadian Real Estate Association who spoke to CBC P.E.I. from his home in Ottawa, said prices are rising more slowly than they were a year ago, which represents “a very slow topping out.”
“Our forecast is for things to sort of flatten out and to some extent … they kind of have been,” he said.
‘More affordable markets tend to be more immune to [mortgage] interest rate increases like this,’ says Shaun Cathcart, a senior economist with the Canadian Real Estate Association based in Ottawa. (CBC)
“Not so much in P.E.I.,” Cathcart explained. “More affordable markets tend to be more immune to interest rate increases like this.”
The wild card for the Maritime provinces of P.E.I., New Brunswick and Nova Scotia is buyers coming from outside the region who have just sold their homes in a hot market, and have plenty of money to spend, he said. They don’t care about mortgage rates, he said, because homes are still comparatively very affordable.
“It’s a blessing and a curse that it can keep activity going at a higher level than you’re seeing elsewhere in Canada, where we’ve seen some big slowdowns, but it’s also not great for locals competing for an almost record-low inventory of homes for sale.”
‘Going to make it worse’
Marjerrison said he has heard from potential buyers who have decided to keep renting until real estate prices come down.
If Cathcart’s predictions hold true, those buyers could be waiting a very long time.
Fewer homes for sale on P.E.I. means prices have continued to rise, CREA says. (Jonathan Hayward/Canadian Press)
In fact, he said the current market could make it even more difficult for locals who’ve been priced out of the market in the last few years.
“I think it’s going to make it worse,” Cathcart said.
“Typically what happens when markets slow down is you get a disconnect between buyers and sellers: sellers still want what the house across the street sold for last year, and buyers are not able to offer as much, or not willing to, and so what happens is the transaction doesn’t happen.”
Low inventories will rebuild as those homes sit on the market longer, he said, and prices will eventually flatten.
Affordability is going to come by way of decreasing the scarcity of homes.— Shaun Cathcart— Shaun Cathcart
“You go from everything selling to multiple offers, to the nicest homes still getting their asking prices and some of the other ones sitting around,” he said.
“That’s what I would expect: a flattening out of prices and a more normal number of sales. And that’s what our forecast is for most places in Canada.”
Mortgage rates will drive the change, Cathcart said. Bank rates that were 3.3 per cent last month have risen almost a full percentage point in one month, to 4.1 per cent.
“The market’s getting out in front of what the Bank of Canada is expected to do, which is to go from the overnight rate of one per cent right now to close to three per cent by the end of this year,” he said.
Fixed mortgage rates at banks have already priced in that prediction, he said.
The good news is if you are looking for a mortgage now, interest rates are unlikely to rise much more, he believes.
“It’s just going to be the variable rates playing catch-up with that over the rest of the year,” he said.
‘It’s going to increase inequality’
The combination of all these factors will hit first-time buyers the hardest.
Homeowners have had several years of building huge amounts of equity in their homes, Cathcart said, which means those looking to move will continue to outbid first-timers.
“If anything, it’s going to increase inequality, which is already terrible,” he said. “Where the haves can continue to have and move around, and the have-nots, it just makes it harder for them to acquire their first home … It’s unfortunate.”
Cathcart said CREA has been encouraging politicians to invest more in new housing. It’s the only way they see the housing crunch being alleviated, he said, but it’s easier said than done.
He believes the key is higher-density multi-unit development such as townhouses with “less space for cars and more space for people.”
“Affordability is going to come by way of decreasing the scarcity of homes, because the population is just going to keep on increasing” with international immigration, he said.
The scarcity of homes in turn has put, and will continue to put, pressure on rental markets, Cathcart said, and price low-income Canadians out of even renting.
“Maybe it’s a little bit depressing … but these are things we have to think about,” he said.
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.
MONTREAL – The Quebec Professional Association of Real Estate Brokers says Montreal-area home sales rose 9.3 per cent in August compared with the same month last year, with levels slightly higher than the historical average for this time of year.
The association says home sales in the region totalled 2,991 for the month, up from 2,737 in August 2023.
The median price for all housing types was up year-over-year, led by a six per cent increase for the price of a plex at $763,000 last month.
The median price for a single-family home rose 5.2 per cent to $590,000 and the median price for a condominium rose 4.4 per cent to $407,100.
QPAREB market analysis director Charles Brant says the strength of the Montreal resale market contrasts with declines in many other Canadian cities struggling with higher levels of household debt, lower savings and diminishing purchasing power.
Active listings for August jumped 18 per cent compared with a year earlier to 17,200, while new listings rose 1.7 per cent to 4,840.
This report by The Canadian Press was first published Sept. 6, 2024.
In the quest to find cities where renters can enjoy the best of all worlds, a recent study analyzed 24 metrics across three key categories—Housing & Economy, Quality of Life, and Community. The study ranked the 100 largest cities in Canada to determine which ones offer the most to their renters.
Here are the top 10 cities that emerged as the best for renters in 2024:
St. John’s, NL
St. John’s, Newfoundland and Labrador, stand out as the top city for renters in Canada for 2024. Known for its vibrant cultural scene, stunning natural beauty, and welcoming community, St. John’s offers an exceptional quality of life. The city boasts affordable housing, a robust economy, and low unemployment rates, making it an attractive option for those seeking a balanced and enriching living experience. Its rich history, picturesque harbour, and dynamic arts scene further enhance its appeal, ensuring that renters can enjoy both comfort and excitement in this charming coastal city.
Sherbrooke, QC
Sherbrooke, Quebec, emerges as a leading city for renters in Canada for 2024, offering a blend of affordability and quality of life. Nestled in the heart of the Eastern Townships, Sherbrooke is known for its picturesque landscapes, vibrant cultural scene, and strong community spirit. The city provides affordable rental options, low living costs, and a thriving local economy, making it an ideal destination for those seeking both comfort and economic stability. With its rich history, numerous parks, and dynamic arts and education sectors, Sherbrooke presents an inviting environment for renters looking for a well-rounded lifestyle.
Québec City, QC
Québec City, the capital of Quebec, stands out as a premier destination for renters in Canada for 2024. Known for its rich history, stunning architecture, and vibrant cultural heritage, this city offers an exceptional quality of life. Renters benefit from affordable housing, excellent public services, and a robust economy. The city’s charming streets, historic sites, and diverse culinary scene provide a unique living experience. With top-notch education institutions, numerous parks, and a strong sense of community, Québec City is an ideal choice for those seeking a dynamic and fulfilling lifestyle.
Trois-Rivières, QC
Trois-Rivières, nestled between Montreal and Quebec City, emerges as a top choice for renters in Canada. This historic city, known for its picturesque riverside views and rich cultural scene, offers an appealing blend of affordability and quality of life. Renters in Trois-Rivières enjoy reasonable housing costs, a low unemployment rate, and a vibrant community atmosphere. The city’s well-preserved historic sites, bustling arts community, and excellent educational institutions make it an attractive destination for those seeking a balanced and enriching lifestyle.
Saguenay, QC
Saguenay, located in the stunning Saguenay–Lac-Saint-Jean region of Quebec, is a prime destination for renters seeking affordable living amidst breathtaking natural beauty. Known for its picturesque fjords and vibrant cultural scene, Saguenay offers residents a high quality of life with lower housing costs compared to major urban centers. The city boasts a strong sense of community, excellent recreational opportunities, and a growing economy. For those looking to combine affordability with a rich cultural and natural environment, Saguenay stands out as an ideal choice.
Granby, QC
Granby, nestled in the heart of Quebec’s Eastern Townships, offers renters a delightful blend of small-town charm and ample opportunities. Known for its beautiful parks, vibrant cultural scene, and family-friendly environment, Granby provides an exceptional quality of life. The city’s affordable housing market and strong sense of community make it an attractive option for those seeking a peaceful yet dynamic place to live. With its renowned zoo, bustling downtown, and numerous outdoor activities, Granby is a hidden gem that caters to a diverse range of lifestyles.
Fredericton, NB
Fredericton, the capital city of New Brunswick, offers renters a harmonious blend of historical charm and modern amenities. Known for its vibrant arts scene, beautiful riverfront, and welcoming community, Fredericton provides an excellent quality of life. The city boasts affordable housing options, scenic parks, and a strong educational presence with institutions like the University of New Brunswick. Its rich cultural heritage, coupled with a thriving local economy, makes Fredericton an attractive destination for those seeking a balanced and fulfilling lifestyle.
Saint John, NB
Saint John, New Brunswick’s largest city, is a coastal gem known for its stunning waterfront and rich heritage. Nestled on the Bay of Fundy, it offers renters an affordable cost of living with a unique blend of historic architecture and modern conveniences. The city’s vibrant uptown area is bustling with shops, restaurants, and cultural attractions, while its scenic parks and outdoor spaces provide ample opportunities for recreation. Saint John’s strong sense of community and economic growth make it an inviting place for those looking to enjoy both urban and natural beauty.
Saint-Hyacinthe, QC
Saint-Hyacinthe, located in the Montérégie region of Quebec, is a vibrant city known for its strong agricultural roots and innovative spirit. Often referred to as the “Agricultural Technopolis,” it is home to numerous research centers and educational institutions. Renters in Saint-Hyacinthe benefit from a high quality of life with access to excellent local amenities, including parks, cultural events, and a thriving local food scene. The city’s affordable housing and close-knit community atmosphere make it an attractive option for those seeking a balanced and enriching lifestyle.
Lévis, QC
Lévis, located on the southern shore of the St. Lawrence River across from Quebec City, offers a unique blend of historical charm and modern conveniences. Known for its picturesque views and well-preserved heritage sites, Lévis is a city where history meets contemporary living. Residents enjoy a high quality of life with excellent public services, green spaces, and cultural activities. The city’s affordable housing options and strong sense of community make it a desirable place for renters looking for both tranquility and easy access to urban amenities.
This category looked at factors such as average rent, housing costs, rental availability, and unemployment rates. Québec stood out with 10 cities ranking at the top, demonstrating strong economic stability and affordable housing options, which are critical for renters looking for cost-effective living conditions.
Québec again led the pack in this category, with five cities in the top 10. Ontario followed closely with three cities. British Columbia excelled in walkability, with four cities achieving the highest walk scores, while Caledon topped the list for its extensive green spaces. These factors contribute significantly to the overall quality of life, making these cities attractive for renters.
Victoria, BC, emerged as the leader in this category due to its rich array of restaurants, museums, and educational institutions, offering a vibrant community life. St. John’s, NL, and Vancouver, BC, also ranked highly. Québec City, QC, and Lévis, QC, scored the highest in life satisfaction, reflecting a strong sense of community and well-being. Additionally, Saskatoon, SK, and Oshawa, ON, were noted for having residents with lower stress levels.
For a comprehensive view of the rankings and detailed interactive visuals, you can visit the full study by Point2Homes.
While no city can provide a perfect living experience for every renter, the cities highlighted in this study come remarkably close by excelling in key areas such as housing affordability, quality of life, and community engagement. These findings offer valuable insights for renters seeking the best places to live in Canada in 2024.
