Most Canadians have affordability concerns about buying or selling a home in 2023, though a third of people are optimistic about a more balanced housing market this year, according to a new survey from RE/MAX Canada.
All of the top three concerns related to affordability in some way. Cost of living and inflation was the number one concern for 34 per cent of respondents, followed by lack of affordable options in their community for 25 per cent of people and rising cost of rent for another 25 per cent.
Despite concerns, 32 per cent of homebuyers and sellers said they were optimistic about the housing market moderating and regaining balance this year.
RE/MAX Canada president Christopher Alexander said this year could see “major shifts in how brokers run their business” as the market moderates and the industry responds to a slowing economy.
“We may start to see some consolidation as brokerages adapt to the economic slowdown. On an individual level, part-time agents could have a harder time progressing, as they may not be able to meet the needs of Canadians, or their brokerages. And one-on-one, personalized meetings with clients will be more important than ever before,” he said in a written statement.
“This year, the industry needs to be focused on client service, education, and transparency in order to best serve clients.”
The report pointed to possible broader economic effects from challenges in the housing market. It said employers may struggle to attract new workers due to the lack of secure housing, and local communities may be unable to attract and retain new businesses amid higher office rental costs.
A majority of survey respondents – 66 per cent – said addressing the housing affordability and supply crisis should be a top priority for governments across Canada.
“Our severe lack of supply in every town, community, and city across the country, seeps into almost every facet of the lives of Canadians,” Elton Ash, executive vice-president at RE/MAX Canada, said in a written statement.
Alexander encouraged “visionary thinking” from governments to tackle the housing crisis, suggesting reforms to municipal zoning laws, expanding laneway development capacity and building more housing supply “in a manner that doesn’t compromise climate adaption and mitigation efforts.”
Nearly a quarter of people at 22 per cent said they support new building developments that address “the missing middle” housing gap. (what is the missing middle?)
Forty-one per cent of survey respondents said removing red tape around zoning and redevelopment is a “key measure” to improve housing supply, and one that they hope continues to expand.
Even more people, at 66 per cent said protecting the environment is “essential” for long-term quality of life, and something they expect will be a factor in their real estate journey. The report pointed to plans to develop the protected Greenbelt in southern Ontario as a “particularly contentious topic.”
METHODOLOGY
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,554 Canadians was completed between January 20-22, 2023, using Leger’s online panel. Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.5 per cent, 19 times out of 20.
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.
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.
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.
