Real eState

Real estate: Mortgage changes may support the spring housing market – Saskatoon StarPhoenix

Published

5 years ago

March 9, 2020

“The (new) mortgage stress test gives buyers about $15,000 worth of additional buying power.”

(FILES)A woman walks past the Bank of Canada building in Ottawa on April 12, 2011. – Canada’s central bank on March 4, 2020 cut its key lending rate by 50 basis points to 1.25 percent in response to the growing economic risk posed by the coronavirus epidemic. The interest rate drop was the first in Canada since mid-2015, and followed a similar move by the US Federal Reserve on Tuesday. (Photo by GEOFF ROBINS / AFP)

GEOFF ROBINS / AFP via Getty Images

It’s hard to say whether Ottawa’s new mortgage stress test plus the Bank of Canada’s lower benchmark interest rate will equal a silver lining to recent cloudy economic news … but they certainly won’t hurt.

As the world freaks out about a possible COVID-19 pandemic — which has caused stock markets to plummet and some economies to slow — both the Canadian and American federal banks decided to drop their benchmark rates.

On March 4, in light of falling business and consumer confidence, the BoC dropped its rate 50 basis points to 1.25 per cent.

“Before the outbreak, the global economy was showing signs of stabilizing, as the Bank had projected in its January Monetary Policy Report (MPR). However, COVID-19 represents a significant health threat to people in a growing number of countries,” the bank noted in a news release.

“In consequence, business activity in some regions has fallen sharply and supply chains have been disrupted.”

Just before that call from the BoC, in late February, Ottawa finally saw the error of its ways and changed the mortgage stress test rules, which were originally implemented in 2017 to cool hot markets in Toronto and Vancouver. At first, it targeted those who required mortgage insurance, making qualification much harder for a first-time buyer.

Right now, buyers have to prove they can afford mortgage payments at a rate two points above the Bank of Canada’s five-year rate. This is calculated from the big banks’ rates.

As of April 6, however, the stress test rate will be two points above the median five-year rate country-wide. When the change was announced, that amounted to a drop of 30 basis points. (There are 100 points in a percentage point.)

It seems a minor alteration, to be sure, but every little bit helps.

First, mind you, consumers will have to see whether the big bankers actually reduce their mortgage rates, although it’s likely they will. Even they want your business.

So, what might that mean for the spring housing market in our very own fair city?

“It is going to be interesting,” says Norm Fisher, broker/owner of Royal LePage Vidorra. “The Toronto real estate market’s on fire. Out east they’re seeing 20 offers on a home. You wonder what kind of turmoil it’s going to drive those markets into, if in fact this rate reduction translates into lower mortgage rates. It doesn’t always, (but the banks) definitely have more room to lower rates.

“The (new) mortgage stress test gives buyers about $15,000 worth of additional buying power. I think that will make some difference in our market. We’re seeing renewed interest in the entry level of the market, for sure. Prices have come down enough over the last four years that first-time buyers are beginning to re-engage with the market.

“We’ve seen an increase in entry-level condo sales, for instance, and townhome sales have been fairly brisk, and even showing some price appreciation. At the end of February, townhomes were up $7,000 from where they were a year earlier. And actually, single family home prices were up about $1,300 on a year-over-year basis as well, which is the first time we’ve seen that in four years.

“In certain price ranges and certain kinds of housing, we’re starting to see the balance shift. It’s still in balanced territory, but leaning toward a seller’s market.”

Fisher noted home supply relative to demand is fairly light in the $300,000 category.

“We may see some competitive bidding in certain categories as the market heats up in the spring.”

That would definitely make a change. While last year’s market was not bad, from a seller’s point of view, the last four years have been fairly moribund with an over-supply of housing.

It’s unfortunate that fears around a rapidly-moving virus scenario are forcing such changes, to be sure. A slowing economy does not contribute to a healthy housing market — neither for buyers who need their jobs, nor sellers who may need to retire, buy “up” to accommodate growing families or (sadly) move away.

But at least Ottawa has slightly fixed a stress test that was indeed stressful for buyers in many housing markets, including ours, and the Bank of Canada is reacting to current economic conditions.

Meanwhile, wash your hands before signing any contracts, and don’t touch your face. As I write this, there are no cases of COVID-19 in Saskatchewan, thank goodness, but there’s still a flu bug roaming around. (Don’t ask me how I know.)

Joanne Paulson is a Saskatoon author and freelance journalist who has been covering real estate, off and on, for more than 25 years. Do you have a fascinating real estate story to share? Get in touch at jcpwriter@sasktel.net.

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Real eState

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

Published

2 days ago

September 11, 2024

Anne Joseph

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.

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Montreal home sales, prices rise in August: real estate board

Published

1 week ago

September 6, 2024

Anne Joseph

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.

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Canada’s Best Cities for Renters in 2024: A Comprehensive Analysis

Published

2 months ago

July 24, 2024

Harry Miller

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.