Real eState

Real estate market still tilted in sellers’ favour

Published

1 year ago

July 26, 2023

A house in Guelph that was recently listed by agent Aimee Puthon of Coldwell Banker Neumann Real Estate.Coldwell Banker Neumann Real Estate

The spring buying spurt in Canada’s real estate market has likely run its course but sellers continue to hold sway in many cities.

Robert Hogue, assistant chief economist at Royal Bank of Canada, believes the slower pace of sales growth in recent weeks marks a shift in the Canadian housing market’s recovery.

National sales edged up 1.5 per cent in June from May, while Ontario diverged from the trend with a 1.3-per-cent dip in the same period.

Mr. Hogue points to the Bank of Canada’s resumption of its rate hike campaign and the unexpectedly solid price gains in some markets in the spring as two reasons for diminished buyers’ enthusiasm.

In June, new listings grew faster than sales for the second straight month in Canada, but much more supply is needed to bulk up historically low inventories, he adds.

“Buyers still face a scarcity of options in the majority of markets, tilting the scale in favour of sellers,” Mr. Hogue says in a note to clients.

For now, prices continue to appreciate at a rapid clip, Mr. Hogue says, pointing to the 2-per-cent jump in the aggregate composite MLS home price index in June from May. He expects that pace to moderate through the remainder of 2023 as higher interest rates trim the purchasing budget of many buyers.

Faisal Susiwala, broker at Re/Max Twin City, says buyers in the Ontario cities of Kitchener-Waterloo and Cambridge are hesitant.

“Right now people have retracted. They’re on the sidelines waiting to see what happens.”

In addition to the uncertainty surrounding rate hikes, the market typically becomes somnolent in July, he adds.

“These two weeks of July are virtually non-existent when it comes to sales.”

Even in a slow market, some sellers are continuing to receive multiple offers, but the ferocity of the bidding has calmed down since April and May.

Mr. Susiwala says sellers are disappointed when showings and sales slow to a trickle but he advises against signalling desperation by cutting the price after two weeks.

The asking price for 24 Winston Cres. is $1,150,000.Coldwell Banker Neumann Real Estate

The area west of Toronto saw new listings increase in June from May, while sales remained at about the same level.

In Guelph, Ont., the action feels less chaotic as supply rises and days on market stretch out, says Aimee Puthon, real estate agent with Coldwell Banker Neumann Real Estate.

“It feels like people have taken their foot off the gas and they’re sitting in their Muskoka chairs.”

She is seeing more conditional offers, including some buyers making the deal conditional on the sale of their existing property.

Ms. Puthon is urging sellers to remain patient.

“When a property doesn’t sell in three days with five offers, people tend to freak out a bit,” she says. But Ms. Puthon reminds homeowners that midsummer is typically a quiet time.

She has heard from a few homeowners planning to list after Labour Day but she says it’s too soon to tell how the supply will compare with previous years.

“People who really had to sell or wanted to sell came on in the spring.”

Mr. Susiwala is seeing homeowners increasingly stretched by the higher rates and strongly advises people who are struggling to pay their mortgage to work with the lender before the sheriff arrives and locks are changed.

Lenders send many letters and try to work out a plan with homeowners before they force a sale, he notes, but borrowers need to face the problem head on.

“Ultimately they show up and you’re out.”

Mr. Susiwa has sold three properties under power of sale in the past four months.

“We’ve seen some really nasty things happening.”

The problem stems from the fact that homeowners who purchased in the spring of 2018 have been seeing their mortgages come up for renewal if they signed up for a five-year term, he explains.

Rates at the time were between 2.8 and 3.2 per cent, he says, but today those homeowners will be facing a rate of around 6.25 per cent.

The homeowners who paid down the mortgage each month are not likely to be in trouble, he says.

The crisis he sees today is among those homeowners who took out a home equity line of credit (HELOC) in 2021, after their property value had soared, to pay for expensive items such as renovations, swimming pools and cars.

Mr. Susiwala is seeing distressed homeowners now that the interest rate on a HELOC is 7.5 per cent instead of the 1.25 to 1.5 per cent they were paying in 2021.

If they need to renew or refinance, they grapple with mortgage rates around 6 per cent today and may not be financially stable enough to pass the stress test at a rate 2-per-cent higher.

Mr. Susiwala expects to see more such cases and an increase in listings as a result.

“That is the sad reality of what we are going to face going into September.”

An added pressure is that people who have no choice but to sell are moving to the rental market and sending prices higher in that segment.

Mr. Susiwala urges homeowners to try to weather the storm if they can, including borrowing money from family members if possible.

“This is not a time to panic and sell at a loss,” he says.

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Real eState

Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

Published

4 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.

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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.

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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.

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