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The latest real estate stats for hot markets are bad news for homebuyers – Calgary Sun

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‘There is still a lot of demand chasing an increasingly scarce number of listings’: CREA

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Here’s hoping the last six months of declining home sales didn’t give homebuyers the false impression that Canada’s real estate market has cooled. It’s still historically hot.

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Home sales in September showed a modest month-over-month increase, according to data from the Canadian Real Estate Association . Despite only rising by 0.9 per cent, the increase was the first since March.

At this point in Canada’s seemingly inexhaustible real estate boom, when the number of homes on the market is scraping rock bottom, any increase in sales is near miraculous. But it doesn’t mean conditions have improved for buyers.

If anything, they’re just getting worse.

The national picture

Last month, home sales across Canada fell by 17.5 per cent compared to September 2020. But demand isn’t tapering off. In fact, CREA says it was the second-busiest September on record.

Fewer sales aren’t always the result of buyers leaving the market. In Canada’s case, they just have far fewer properties to make offers on than they did a year ago.

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“There is still a lot of demand chasing an increasingly scarce number of listings, so this market remains very challenging,” Cliff Stevenson, chair of CREA, says in a statement.

One stat to keep an eye on is the sales-to-new-listings ratio, which is a solid indicator of supply-demand dynamics. A balanced market is typically in the range of 40 per cent sales to 60 per cent new listings, with 60 per cent and above for listings indicating a sellers’ market.

In September, Canada’s sales-to-new-listings ratio hit 75.1 per cent, meaning buyers snapped up more than three-quarters of new listings by the end of the month.

It’s no surprise, then, that the national average price of homes sold in September — $686,650 — was 13.9 per cent higher than a year ago.

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Regional highlights

Ontario

Sales in Ontario were down 20.8 per cent compared to September 2020, but they were still 11.8 per cent higher than the ten-year average for the month, according to the Ontario Real Estate Association. Home sales for the first nine months of the year were up 28 per cent compared to the same period last year.

Here’s where things get ugly for Ontario homebuyers. The number of new listings was down 25.6 per cent versus last September, and was the lowest figure recorded for the month in more than a decade. Active residential listings were down 38.9 per cent year-over-year and are at their lowest point in more than 30 years.

There’s only one direction prices can move when supply is this low.

The average price of resale homes in Ontario was $887,290 in September, showing a 19.7 per cent annual increase. Three areas of the province saw the average price increase by even more:

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  • Western Ontario (Windsor, Chatham-Kent, London, Sarnia): 27.4 per cent ($585,298)
  • Northeastern Ontario (Barrie, Kawartha Lakes, Muskoka, Peterborough): 24.1 per cent ($761,102)
  • Southern Ontario (Brantford, Hamilton-Burlington, Niagara, Guelph): 20.3 per cent ($774,626)

In the Greater Toronto Area, the average price of detached, semi-detached and townhouse properties all increased by more than 20 per cent . The average price of a detached home in Toronto’s 416 area code hit $1.8 million.

British Columbia

Canada’s second-busiest real estate market experienced a similar month as Ontario. According to data from the British Columbia Real Estate Association , sales were down 19.9 per cent year-over-year in September. The average price still managed to increase by 14 per cent, hitting $913,471 by month’s end.

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Active residential listings were down a colossal 36.8 per cent compared to September 2020. In the Fraser Valley and Victoria, two of the province’s hottest markets, residential listings were down by more than 50 per cent.

Prices saw the most movement in Chilliwack, Powell River and Vancouver Island. The average price in each area increased by more than 27 per cent annually.

Prices in B.C.’s largest cities, Vancouver and Victoria, continue rising, but at a less scorching pace. The average price in Greater Vancouver, $1,174,305, was 6.5 per cent higher than a year ago, while Victoria’s, $889,515, showed a 5.8 per cent increase.

Quebec

Sales in Quebec are also being suppressed by evaporating supply, but buyers there have a ways to go before they’re paying prices in the same ballpark as those in Ontario and B.C.

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Active listings for single-family homes and condos were both down by more than 25 per cent in September, which helped drive the price of each asset class higher. The median price of a detached home rose 16 per cent to hit $365,000. The median condo price increased 17 per cent to $335,000.

While prices in Quebec City fall well within the provincial averages, those in Montreal can be considerably higher. The median price of a detached home in Montreal was $504,500 in September; that of condos was $365,000.

The Prairies

Things are much more stable on the Prairies, where market softness from 2015 until 2020 has left a fair amount of excess housing stock for buyers to choose from.

The most active province of the bunch in September was Alberta . A rocking Calgary market helped increase provincial activity a healthy 8.7 per cent year-over-year, with the average detached price increasing 6.2 per cent to $473,541.

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Sales dipped between 12 and 20 per cent in Regina, Saskatoon and Winnipeg, with the average price in Regina ($335,656) rising by five per cent and Winnipeg’s ($318,400) increasing by 11.5 per cent. Saskatoon’s average price dropped by three per cent to $327,104.

Atlantic Canada

Even though Atlantic Canada was late to the real estate bacchanal, housing markets out east are getting their share of the action:

  • New Brunswick set a new record for activity in September, with sales coming in 32.9 per cent higher than the ten-year average for the month. The provincial average price, $262,200, was 31.1 per cent higher than a year before.
  • Nova Scotia just wrapped up the second-busiest September in history, which drove the average price of homes sold to $356,757.
  • A historic increase in new listings helped make Prince Edward Island’s market somewhat more approachable for buyers. The average price still managed to rise by 13 per cent year-over-year to reach $337,801.
  • The Newfoundland and Labrador market broke its sales record for September and had its second-highest monthly sales total in history. The benchmark price for single-family homes in the province — $325,000 — was 12.3 per cent higher than a year before.

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

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Red-hot Canadian property market to lose some steam in 2022: Reuters poll

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Canada‘s double-digit house price inflation will lose steam next year, but affordability is still almost certain to worsen in one of the world’s hottest property markets, according to a Reuters poll of analysts.

A rush to purchase homes ahead of expected increases in Canadian interest rates https://www.reuters.com/world/americas/bank-canada-q3-2022-rate-hike-expected-q2-rise-possible-2021-12-03 next year is boosting the housing market in the final quarter, with prices skyrocketing 18.2% https://www.reuters.com/article/canada-economy-housing-idCAKBN2I01EP in October compared to the year-earlier period.

Extra froth in the market, driven by investors fueling perceptions that prices will keep rising, has prompted the Bank of Canada https://www.reuters.com/markets/us/canadas-housing-market-higher-risk-correction-says-bank-canada-2021-11-23 to recently warn of an increased risk of a correction.

“Affordability is unlikely to improve next year as prices should march higher, even as interest rates creep upwards as well,” said Rishi Sondhi, economist at TD Economics, who expects house price inflation to slow considerably next year.

“We think rate hikes will weigh on, but not upend, demand, as the macro backdrop should remain supportive for sales.”

Average house prices in Canada are expected to rise 18.6% this year, up from a 16.0% rise predicted in an August poll.

But those increases were forecast to slow significantly, to 5.0% in 2022 and 2.0% in 2023, according to the poll of 15 market analysts which was conducted from Nov. 17 to Dec. 6 and released on Tuesday. That compared to rises of 3.2% and 2.6%, respectively, in the August poll.

Only two respondents expected prices to fall in 2023, and by modest amounts.

Asked what would have the biggest impact on house prices next year, nine of 14 respondents said higher interest rates or tighter monetary policy. The remaining five cited supply constraints.

A follow-up question on how many basis points of interest rate hikes would significantly slow housing market activity had a median forecast of 100, with predictions in a range of 75 to 175 basis points.

Canada‘s central bank is expected to start raising interest rates by the end of the third quarter https://www.reuters.com/world/americas/bank-canada-q3-2022-rate-hike-expected-q2-rise-possible-2021-12-03 next year.

“One or two rate increases is unlikely to have a meaningful impact, but if we see four or more rate increases in 2022, this should take some demand out of the market, especially from interest rate-sensitive investors,” said John Pasalis, president of brokerage and research firm Realosophy Realty.

For many first-time home buyers, prices have climbed beyond their reach and a supply shortage of housing units has only aggravated their woes.

“Investors, house ‘flippers,’ and speculators, who according to the Bank of Canada account for over 20% of home purchases, have aggravated the severe demand-supply imbalance, boosted prices even higher and made housing more vulnerable to a correction,” said Tony Stillo, director of economics for Canada at Oxford Economics.

All 15 analysts who answered a question about affordability over the next two to three years said it would worsen.

“Out-of-reach housing prices will invariably lead more Canadians to rentals, especially if they have to live close to where they work. However, people who can work remotely will continue to migrate out of more expensive urban centres and ‘drive until they qualify,'” Stillo said.

(For other stories from the Reuters quarterly housing market polls:)

 

(Reporting by Swathi Nair; polling by Indradip Ghosh and Sarupya Ganguly; Editing by Ross Finley and Paul Simao)

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Grand County real estate transactions, Nov. 28-Dec. 4 – Sky-Hi News

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Grand County’s real estate transactions Nov. 28-Dec. 4 were worth more than $21.9 million combined.

• Valquero Subdivision Lot 2, Access Easement/Drainage Easement – Byersview Inc to Triton DG Granby LLC, DGGrand LLC, As Investments LLC, $2,050,000

• 448 Condominiums Unit 303 and Garage Unit 1 – Virga Corporation to Timothy Smith, $634,496



• Wells Minor Subdivision Lot MH-1A – Colton and Jeffrey Powley to Colorado Mountain Resorts Investors LLC, $381,741

• Fairways at Pole Creek PH 1 & Open Space Lot 4 23 – Linda and Donivan Ridgway Jr to Melissa and Joe Penn Jr, $2,480,000



• Eggert Subdivision Lot 5, Block 1 – Marjorie and Robert Noakes to Matthew Herron and Heidi Keyes, $412,250

• Fraser Crossing-Founders Pointe Condominium Unit 4470 – Copernicus LLC to Winter Park Drive 4470 LLC, $480,000

• 448 Condominiums Unit 101 and Garage Unit 5 – Virga Corporation to Jeffrey Vose, $725,944

• Roam Filing 1, Lot 18, Block 5 – Ski Idlewild Property LLC to Hunt Vac Services LLC, $950,000

• Zephyr Mountain Lodge Condo Bldg 1 & 2, Unit 2605 – Scott and Kimberly Balfanz to Scott and Anne Steputis, $850,000

• Zephyr Mountain Lodge Condo Bldg 1 & 2, Unit 2401 – Erik Amy LLC to Jeffrey McDonald, $579,000

• SEC 6 TWP 1N R 76W Partial Legal – See Document – Ellen Pacheco to Samuel and Monika Conger, $600,000

• Ptarmigan Subdivision Fraser Lot 102, Block MH – Fiona Russell to Derek Jotzat, $725,000

• Inn at SilverCreek PH 1, Condo Unit 322 – Glenda Sinardi and Parker Clonts to Charles and Lea Maxwell, $225,000

• Frontier Investment Company Addition to Kremmling Block 6, Lots 1,2,3 – Lodema Reinier, Lodema Cullum to Kelsy and Devin Ailport, $479,000

• Heinis Addition to Kremmling Block 1, Lots 5,7 – Benjamin and Kellie Steinle to Kristina Costa, $440,000

• Base Camp 9200 Second Replat Unit B2 – Sandhills Capital LLC to David and Marla Schmidt, $395,000

• Granby West Business Park Block 1, Lots 1,2 – Granby Industrial LTD Liability Co. to Elk Mountain Adventure Properties LLC, $300,000

• Mildred June Weaner Outright Exemption Lot J – Monarch Cabin LLC to Jerry Johnson, $430,000

• Rangeview Subdivision #2, Lot 33 – Randall Claeys and Stephanie Conners to Colin and Krystal Steward, $90,000

• Lake Forest 1st Addn Subdivision Lots 42,43,48,49; Laurent OE Lots A,B – Serge Laurent to Margaret J Blakley Revocable Trust, $800,000

• Meadow Ridge Lodges Court 7, Unit 9 – Eric Stanczak Jr to Rachael Watton, $580,000

• Muddy Creek Minor Subdivision TRT D – Muddy Creek Partners LLC to Areceli and Hugo Gonzalez, $325,000

• Bussey Hills Subdivision Block 7, Lots 7,14 – Michael Blasi and Arthur Aguilar to Heather and Michael Rinaldi Jr, $45,000

• Grand Lake Block 10, Lots 1,2,3 – GLL Real Estate LTD to McCarthy 401K Plan Trust, $1,150,000

• Rendezvous Center Condominiums Lot 3 – Rendezvous VC LLC, Koelbel Company to Brandon Kunz and Keith Jensen, $1,719,000

• Fraser Crossing-Founders Pointe Condominium Unit 3523 – FC 3523 LLC to Geoffrey and Rachel Nuwash, $485,000

• Crestview Place Condominiums Unit 604H – Debra and Robert Reehoorn to Beryl Foster and Robert Henry, $731,400

• East Mountain Filing 11, Lot 25 – Rendezvous Colorado LLC to Duncan, Peter and Suzanne Griffiths, Rochelle Rabeler, $1,465,904

• East Mountain Filing 10, Lot 138 – Rendezvous Homes LLC to Bawcom Living Trust, $1,424,366

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Treasury wants more oversight of all-cash real estate deals – North Bay Business Journal

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WASHINGTON (AP) — The Biden administration is looking to expand reporting requirements on all-cash real estate deals to help crack down on bad actors’ use of the U.S. market to launder money made through illicit activity.

The Treasury Department was posting notice Monday seeking public comment for a potential regulation that would address what it says is a vulnerability in the real estate market.

Currently, title insurance companies in just 12 metropolitan areas are required to file reports identifying people who make all-cash purchases of residential real estate through shell companies if the transaction exceeds $300,000.

“Increasing transparency in the real estate sector will curb the ability of corrupt officials and criminals to launder the proceeds of their ill-gotten gains through the U.S. real estate market,” said Himamauli Das, acting director of Treasury’s Financial Crimes Enforcement Network.

Das said the move could “strengthen U.S. national security and help protect the integrity of the U.S. financial system.”

The metropolitan areas currently facing reporting requirements are Boston; Chicago; Dallas-Fort Worth; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle.

The U.S. real estate market has long been viewed as a stable way station for corrupt government officials around the globe and other illicit actors looking to launder proceeds from criminal activity.

The use of shell companies by current and former world leaders, and those close to them, to purchase real estate and other assets in the U.S. and elsewhere was recently spotlighted by the International Consortium of Investigative Journalists’ publication of the “Pandora Papers.”

The leaked documents acquired by the consortium showed King Abdullah II of Jordan, former U.K. prime minister Tony Blair and other prominent figures used shell companies to purchase mansions, exclusive beachfront property, yachts and other assets for the past quarter-century.

The tax dodges can be legal but have spawned various proposals to enhance tax transparency and reinforce the fight against tax evasion.

The effort to push for new real estate market regulation comes as the Biden administration on Monday issued its “U.S. Strategy on Countering Corruption.”

The strategy was published as President Joe Biden prepares to host the first White House Democracy Summit, a virtual gathering of leaders and civil society experts from more than 100 countries that is set to take place Thursday and Friday.

The strategy offers broad brushstrokes for confronting corruption at home and abroad. It includes calls for the U.S. government to shore up regulatory gaps, elevating anti-corruption in U.S. diplomatic efforts and bolstering the protection of civil society and members of the media, including investigative journalists, who expose corruption.

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