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The Canadian Real Estate Trends Set to Define 2022: PwC – Storeys

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Not only has COVID-19 upended the lives of millions of Canadians, but the pandemic has caused a tidal wave of setbacks: thousands of deaths, closed borders, political conflicts, shuttered workplaces, and economic turmoil. Of course, the Canadian real estate market has experienced this unprecedented crisis in its own unique way too.

Throughout the pandemic, Canada’s real estate market saw months of volatility in which large cities lost residents in droves when the work-from-home phenomenon took hold, with large cities like Toronto seeing record population loss during the height of the pandemic.

As a result, a tsunami of demand flooded smaller, suburban areas, with buyers snatching up the already limited inventory, driving up prices (even higher) in the process.

Fundamental forces of change, such as this, continue to reshape the real estate industry, according to PwC Canada and the Urban Land Institute’s Emerging latest Trends in Real Estate (ETRE) report. The annual survey of the Canadian real estate industry suggests feelings of optimism, with business prospects for 2022 returning to above pre-pandemic levels.

READ: Average Canadian Home Price Forecast to Reach $771,500 By End of Year

While COVID-19 concerns still loom, real estate businesses have proven successful. With the worst of the pandemic behind us, the report says the Canadian housing market has boomed, industrial real estate continues to strengthen, segments of the retail sector fared better than expected, and the office sector, while under continued pressure, has shown some positive signs.

Key Real Estate Trends to Watch

According to the report, Canada’s leading real estate businesses will keep a close eye on the key forces reshaping real estate. This includes the significant shifts in the workplace and ways of working, the increasing significance of environmental, social and governance (ESG), and rising costs and competition.

“Renewed strategies on innovation, transformation and repositioning portfolios are essential for real estate businesses to successfully embrace these disruptions in the industry,” said Frank Magliocco, National Real Estate Leader PwC Canada. “Technology and data analytics can assist with analyzing opportunities of growth and making better-informed investments.”

Richard Joy, Executive Director of Urban Land Institute Toronto, also noted that these trends would have a “transformative” impact on the industry. “Working together to find creative solutions to these challenges will enable real estate leaders to shape the future and uncover new opportunities,” said Joy.

Markets to Watch

While the Vancouver and Toronto real estate markets continue to lead Canadian cities in terms of investment and development prospects, every region has its own opportunities and challenges. According to the report, for the third year in a row, Vancouver remains the top market to watch.

“Investors and developers alike are feeling optimistic given Vancouver’s strong economic outlook, the restart of immigration activity and an abundance of capital,” reads the report.

The next market to watch is Toronto. The Greater Toronto Area’s real estate market is a crucial source of strength from industrial assets to housing as the region’s economy kicks into gear after multiple lockdowns. However, the report says the power of these sectors is also creating challenges for Canada’s largest city.

Other major cities to watch include Montreal, Calgary, Ottawa, Halifax, Winnipeg, Edmonton, Saskatoon, and Quebec City. 

Outlook for Canada’s Housing Market

Amid the pandemic, building and buying single-family homes across Canada has been particularly strong, with products moving quickly and prices continuing to rise. While the expectation is that this segment will slow after a buying frenzy during the pandemic, the survey believes activity will remain strong.

Affordability remains an issue, even in cities where it previously wasn’t. As a percentage of household income, ownership costs reached 56.8% for single-detached homes in January 2021, RBC Economics noted in its June 2021 housing trends and affordability report. This was the highest since 1990.

Compared to single-family homes, affordability has improved for condominiums. However, some developers say they are cautious about starting new projects, even with an improving outlook for condos, given cost uncertainties.

“Broadly speaking, real estate players identified multifamily housing as a strong category, and that demand will be steadfast in many cities as people struggle with homeownership affordability,” reads the report.

The survey found a growing interest in single-family rental housing as a means to offset ownership affordability challenges. However, interviewees from this year’s ETRE report are divided on whether single-family rental housing in Canada will be a success, as it has been south of the border. 

“Regardless, innovation and collaboration with governments are necessary to help address the affordability crisis in Canada,” the report said.

As the real estate industry navigates these trends and other business pressures — including the growing concern about housing affordability — in 2022 and beyond, real estate companies have an opportunity to “embrace creative solutions to stay ahead of the challenges and plot their growth strategies for the future.”

You can read the full report here.

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A Large Canadian Real Estate Brokerage Has Forecast Prices Will Rise Up To 20% – Better Dwelling

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  1. A Large Canadian Real Estate Brokerage Has Forecast Prices Will Rise Up To 20%  Better Dwelling
  2. House prices in Canada will rise higher in 2022, real-estate report says  CTV News
  3. Canada’s Real Estate Prices are Expected to Rise 9.2% in 2022: RE/MAX  Storeys
  4. Housing prices in Ottawa will rise five per cent in 2022, Remax estimates  CTV News Ottawa
  5. 2 Factors That May Impact the Real Estate Market in 2022  Real Simple
  6. View Full coverage on Google News



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Why real estate agents are urging Canadians not to wait for spring to sell their house – Ottawa Sun

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Rising mortgage rates could mean a spring slowdown for Canada’s housing market

Article content

The pandemic-triggered housing boom has shredded a number of long-standing assumptions Canadians have about real estate.

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Distance from, not nearness to, downtown cores is now a key buyer desire. Communities that were unpopular with buyers two years ago because of a lack of jobs or amenities are some of today’s most active markets. Even taking out a gargantuan mortgage in the midst of a crushing global recession went from “undeniably risky” to “par for the course” seemingly overnight.

And this Great Real Estate Rethink continues: A new survey by real estate brokerage Royal LePage finds that 79 per cent of real estate professionals think sellers should list their homes this winter rather than waiting until spring 2022.

Winter is traditionally the slowest season for home sales in Canada. But buyers have already tossed aside so many real estate traditions. What’s one more?

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Survey says…

The pro-winter listing sentiment is strong across all regions.

Realtors in British Columbia led the way, with 93 per cent of respondents in the province saying they would advise their clients to sell this winter; 87 per cent of agents in Quebec and 85 per cent of those in Atlantic Canada shared the same view.

The proportion of agents in favour of winter listings were lower in Ontario (72 per cent), Alberta (73 per cent) and the remaining prairie provinces, Manitoba and Saskatchewan (75 per cent).

While those numbers are all high, many of the real estate agents surveyed — at least half in every area of the country — were advising their clients to list in the winter even before the pandemic. The reason then is the same as it is today: A painfully low number of homes for sale has created a seller’s market so rabid that weather is the last thing desperate buyers are worried about.

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“Typically we see a seasonal adjustment in real estate activity,” says Adil Dinani of Royal LePage West Real Estate Services in Vancouver. “However, last year, we saw one of the busiest winter markets in our history. Even if there are fewer buyers in the winter, it is unlikely there will be enough inventory on the market to satisfy demand.”

That could be especially true in Toronto, where there were only 7,750 homes left on the market at the end of October.

“That’s versus 17,000 last year,” says Cameron Forbes, general manager and broker at RE/MAX Realtron Realty in Toronto.

But Forbes still believes that a spring listing is better for sellers, pointing out that since 1999 there have, on average, been more homes on the market in the winter in the GTA than in the spring. If selling in a low-supply market is the goal, why not wait until the spring, when the market will be even more depleted?

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“All things being equal, that’s a better time to sell your home,” he says. “That’s why agents will generally recommend that you wait to list in the spring market, when your home shows well and, frankly, when buyers are out looking to buy.”

Low supply vs. the harsh Canadian winter

You may have noticed that the areas where the preference for winter listings were lowest are in parts of the country where winter can be especially brutal. (Ontario’s placement in this category may have more to do with fears around what an extra three or four months might do to the province’s already sky-high prices.)

And this one could be particularly messy. Both The Weather Network and the Farmer’s Almanac are preparing Canadians for a potentially long, storm-filled winter.

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Article content

Can sellers in hard-hit markets really plan on buyers being hungry enough to brave the elements and view properties when winter’s at its most miserable?

Regina-based Royal LePage agent Shayla Ackerman, no stranger to extreme winter weather, says listing in the winter is not something she would recommend unless a seller has no other choice.

“Our winter market slows right down,” she says.

But in Montreal, which also receives its fair share of colossal snow-dumps, Century 21 Immo-Plus agent Angela Langtry expects buyers to be out in droves.

“We are still in a low-inventory market, especially for houses,” Langtry says. “I always say that the serious buyers come out in the snow storms.”

A spring housing slowdown?

Capitalizing on raging buyer demand is not the only reason to list your home this winter.

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Article content

The Bank of Canada announced in late October that it is ending a key pandemic emergency measure: buying billions of dollars in bonds to keep interest rates low, including those attached to mortgages.

If mortgage rates begin rising, and mortgage amounts begin shrinking, buyers may have less buying power in the spring. Listing now may give sellers one last shot at enticing buyers while they have more money to play with.

But Paul Taylor, president and CEO of trade association Mortgage Professionals Canada, isn’t sure a rise in interest rates will impact buyers’ budgets in the next few months.

“Almost everyone is qualifying at a 5.25 per cent stress test rate today,” Taylor says, referring to the benchmark interest rate lenders use to evaluate mortgage applicants’ ability to repay their loans.

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Even if the Bank of Canada were to raise interest rates by 100 basis points, or one per cent, over the next 12 months, Taylor says buyers who qualified at 5.25 per cent would still have at least 200 basis points worth of breathing room, meaning their mortgage budget “will be effectively unchanged.”

Taylor expects a 0.25 per cent increase in the BoC’s overnight rate, which should trigger a rise in variable mortgage rates, in the spring. He says two additional increases could occur before the end of 2022.

“I expect the media coverage of the tiny rate increases will scare many and slow the market, which is likely very good for everyone, but I don’t think we’ll see enough of a slowdown to erode prices,” Taylor says.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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Why real estate agents are urging Canadians not to wait for spring to sell their house – Financial Post

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 on


Rising mortgage rates could mean a spring slowdown for Canada’s housing market

Article content

The pandemic-triggered housing boom has shredded a number of long-standing assumptions Canadians have about real estate.

Advertisement

Article content

Distance from, not nearness to, downtown cores is now a key buyer desire. Communities that were unpopular with buyers two years ago because of a lack of jobs or amenities are some of today’s most active markets. Even taking out a gargantuan mortgage in the midst of a crushing global recession went from “undeniably risky” to “par for the course” seemingly overnight.

And this Great Real Estate Rethink continues: A new survey by real estate brokerage Royal LePage finds that 79 per cent of real estate professionals think sellers should list their homes this winter rather than waiting until spring 2022.

Winter is traditionally the slowest season for home sales in Canada. But buyers have already tossed aside so many real estate traditions. What’s one more?

Advertisement

Article content

Survey says…

The pro-winter listing sentiment is strong across all regions.

Realtors in British Columbia led the way, with 93 per cent of respondents in the province saying they would advise their clients to sell this winter; 87 per cent of agents in Quebec and 85 per cent of those in Atlantic Canada shared the same view.

The proportion of agents in favour of winter listings were lower in Ontario (72 per cent), Alberta (73 per cent) and the remaining prairie provinces, Manitoba and Saskatchewan (75 per cent).

While those numbers are all high, many of the real estate agents surveyed — at least half in every area of the country — were advising their clients to list in the winter even before the pandemic. The reason then is the same as it is today: A painfully low number of homes for sale has created a seller’s market so rabid that weather is the last thing desperate buyers are worried about.

Advertisement

Article content

“Typically we see a seasonal adjustment in real estate activity,” says Adil Dinani of Royal LePage West Real Estate Services in Vancouver. “However, last year, we saw one of the busiest winter markets in our history. Even if there are fewer buyers in the winter, it is unlikely there will be enough inventory on the market to satisfy demand.”

That could be especially true in Toronto, where there were only 7,750 homes left on the market at the end of October.

“That’s versus 17,000 last year,” says Cameron Forbes, general manager and broker at RE/MAX Realtron Realty in Toronto.

But Forbes still believes that a spring listing is better for sellers, pointing out that since 1999 there have, on average, been more homes on the market in the winter in the GTA than in the spring. If selling in a low-supply market is the goal, why not wait until the spring, when the market will be even more depleted?

Advertisement

Article content

“All things being equal, that’s a better time to sell your home,” he says. “That’s why agents will generally recommend that you wait to list in the spring market, when your home shows well and, frankly, when buyers are out looking to buy.”

Low supply vs. the harsh Canadian winter

You may have noticed that the areas where the preference for winter listings were lowest are in parts of the country where winter can be especially brutal. (Ontario’s placement in this category may have more to do with fears around what an extra three or four months might do to the province’s already sky-high prices.)

And this one could be particularly messy. Both The Weather Network and the Farmer’s Almanac are preparing Canadians for a potentially long, storm-filled winter.

Advertisement

Article content

Can sellers in hard-hit markets really plan on buyers being hungry enough to brave the elements and view properties when winter’s at its most miserable?

Regina-based Royal LePage agent Shayla Ackerman, no stranger to extreme winter weather, says listing in the winter is not something she would recommend unless a seller has no other choice.

“Our winter market slows right down,” she says.

But in Montreal, which also receives its fair share of colossal snow-dumps, Century 21 Immo-Plus agent Angela Langtry expects buyers to be out in droves.

“We are still in a low-inventory market, especially for houses,” Langtry says. “I always say that the serious buyers come out in the snow storms.”

A spring housing slowdown?

Capitalizing on raging buyer demand is not the only reason to list your home this winter.

Advertisement

Article content

The Bank of Canada announced in late October that it is ending a key pandemic emergency measure: buying billions of dollars in bonds to keep interest rates low, including those attached to mortgages.

If mortgage rates begin rising, and mortgage amounts begin shrinking, buyers may have less buying power in the spring. Listing now may give sellers one last shot at enticing buyers while they have more money to play with.

But Paul Taylor, president and CEO of trade association Mortgage Professionals Canada, isn’t sure a rise in interest rates will impact buyers’ budgets in the next few months.

“Almost everyone is qualifying at a 5.25 per cent stress test rate today,” Taylor says, referring to the benchmark interest rate lenders use to evaluate mortgage applicants’ ability to repay their loans.

Advertisement

Article content

Even if the Bank of Canada were to raise interest rates by 100 basis points, or one per cent, over the next 12 months, Taylor says buyers who qualified at 5.25 per cent would still have at least 200 basis points worth of breathing room, meaning their mortgage budget “will be effectively unchanged.”

Taylor expects a 0.25 per cent increase in the BoC’s overnight rate, which should trigger a rise in variable mortgage rates, in the spring. He says two additional increases could occur before the end of 2022.

“I expect the media coverage of the tiny rate increases will scare many and slow the market, which is likely very good for everyone, but I don’t think we’ll see enough of a slowdown to erode prices,” Taylor says.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

Advertisement

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

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