Here are The Globe and Mail’s top housing and real estate stories this week, with the lowest mortgage rates available in Canada today and one home worth a look.
Canadian home sales jumped 9% in December, but prices continued to fall
The 8.7-per-cent bump in transactions from November to December was the first monthly increase since June, according to the Canadian Real Estate Association (CREA). But CREA and bank economists cautioned against reading too much into last month’s sales, writes Rachelle Younglai. Experts say the increased activity was likely because some sellers finally accepted that they would not get the prices they saw in early 2023, instead of the start of a bigger recovery in the housing market. CREA said 443,511 Canadian homes were sold in 2023, 11 per cent fewer than in 2022 and similar to the period after the 2007 U.S. housing crash and global recession.
Rob Carrick: Does owning a house in Toronto make you rich enough to afford a 10.5-per-cent property-tax hike?
Toronto city staff’s new budget features a 10.5-per-cent property-tax increase. If approved, the increase could add $500 to $1,000 or more to the annual cost of residents’ property taxes, writes personal finance columnist Rob Carrick. Given the $1.1-million average cost of a house in the city, it’s easy to say Toronto residents can afford the proposed increase. But at a time when many homeowners are bracing for mortgage renewals at much higher rates, it’s not that simple.
The reno flip house at 61 Shannon Blvd. in Toronto’s pricey Trinity Bellwords neighbourhood serves as an object lesson in the challenges of the current market.Emerald Builders
Reno flips gone bad lead to 2024 hangover
As experts and potential buyers alike continue to try and predict this year’s real estate outlook, one issue from 2023 still looms over the market: observers say a remarkably high number of homes are still being sold under power of sale, writes Shane Dingman. One broker says it’s due to renovation projects gone bad, which lead to a “collapse of speculation.” Real estate analysts — as well as social media content creators — have been highlighting the latest evidence of enormous losses that come when a house bought at the peak of the market in 2022 goes up for sale or is sold for significantly less than the buyer paid.
Massive residential tower near Vancouver’s downtown goes into receivership
The major development project in Vancouver’s downtown peninsula went into receivership after Bank of Montreal filed a petition saying it’s owed most of the $95-million it loaned the consortium that owns the property in August, 2018, writes Frances Bula. The consortium appears in court documents as 14 corporate entities under the umbrella name of Harlow Holdings. A B.C. Supreme Court order last week said the consortium owes $82.7-million plus $24,000 a day in interest charges from Oct. 16, 2023, onward.
The three-bedroom condo located in Toronto’s ritzy Yorkville neighbourhood was initially planned to be two-and-a-half individual units, but the previous owner worked with the developer to combine them into a unique living space (the final half became a single one-bedroom unit). That move led to the condo having its own private terrace, which looks over the city’s east side. The open-concept living room and dining room make for an ideal space for entertaining guests.
What do you think is the asking price for the property?
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.
