After a disappointing 2018, when housing prices and sales declined, 2019 has been a year of resilience for housing markets across most of Canada. Not only did sales numbers stabilize and resume an upward climb, but prices also demonstrated some strength.
As we move closer to 2020, those involved with the real estate industry and the million-plus Canadian households who are likely to buy or sell a residential property in the next year are wondering whether things will continue to improve in the year ahead, or if there is more trouble in store.
The good news is that a review of the forecasts by leading real estate experts in Canada points to a recovery in 2020. The Canadian Real Estate Association (CREA) estimates the national home sales to reach 530,000 units in 2020, an 8.9 per cent increase over the total expected for 2019. CREA also expects the national average price to hit $531,000 in 2020, a 6.2 per cent increase.
Royal LePage, meanwhile, is predicting a 3.2 per cent year-over-year increase in housing prices next year with RE/MAX a little more optimistic at 3.7 per cent. Though their benchmark prices are different from CREA, they see the market moving in the same direction.
Likewise, a poll of 18 economists, conducted by Reuters in November, also saw gains ahead, predicting Canadian housing prices would rise by 3 per cent in 2020 and 2.9 per cent in 2021.
The positive forecast for housing markets in 2020 is supported by strong immigration numbers that are likely to maintain a sustained demand for housing in Canada’s most populous housing markets. A Royal LePage survey reported in October 2019 that “newcomers to Canada are expected to purchase one in every five homes on the market over the next five years.”
At the same time, CREA notes that the Bank of Canada is unlikely to raise interest rates in 2020, which will drive demand for mortgage finance.
While most market watchers are optimistic about housing, there are some causes for concern. For starters, not everyone expects a three-plus per cent jump in prices. Fitch Ratings, a debt assessment firm, is forecasting a mere 1 per cent growth in housing prices in 2020. When adjusted for 2 per cent inflation, Fitch is forecasting a decline in real house prices for the next year.
Another concern is that listings are not keeping pace with sales. An increase in new listings, when sales are climbing, is needed to restrict inflationary pressures. Royal LePage, in its forecast for 2020, is also mindful of a lack of growth in listings. “The story in 2020 will be lack of supply,” warns the real estate firm.
Accompanying the tightened supply is growth in mortgage credit. This has caught the attention of the Bank of Canada. In a recent address, Carolyn Wilkins, senior deputy governor of the Bank, noted that a drop in mortgage rates had “boosted” the markets. “Many of the same ingredients that were present in some housing markets three years ago — namely strong underlying demand, tight supply and low-interest rates — are present again,” she noted.
Despite the concerns, markets are better equipped to deal with the determinants of inflationary pressures. The Bank of Canada expects “the regulatory and other measures in place will support the quality of new credit and mitigate the buildup of imbalances in the housing market.”
The regulatory measure credited the most with addressing housing price inflation is the stress test, which was expanded in January 2018 to include uninsured mortgages and required borrowers to qualify at a higher rate than the negotiated rate with the lender to address the possibility of a future rate hike.
While Prime Minister Justin Trudeau has directed his finance minister, Bill Morneau, to review the tests and potentially make them more dynamic, it is not certain if or precisely how that will happen. Any changes will have to balance the needs of Alberta and the Prairies, where housing markets have been struggling, with those of regions where demand has already started to pick up.
All told, a vibrant labour market, vigorous demand for housing and low interest rates suggest conditions will be favourable for housing in 2020. The federal government’s initiative to help new homebuyers with shared equity mortgages and a possible review of the stress test are also positive signs. But as always in real estate, there are plenty of unknowns that could disrupt that positive picture.
Murtaza Haider is a professor of Real Estate Management at Ryerson University. Stephen Moranis is a real estate industry veteran. They can be reached at www.hmbulletin.com.
A real estate transaction gave me neighbours. A car crash taught me to value them – CBC.ca
This First Person article is the experience of Becky Sarafinchan who lives in Calgary. For more information about CBC’s First Person stories, please see the FAQ.
The crush of glass and metal silenced us mid-phrase, the kids and I on that early spring day. I saw their frozen expressions as I wondered if I had really heard or felt that sound. We ran outside.
Across our busy street, a SUV straddled the yellow line. Its grill faced the crumpled remains of our neighbour’s two parked cars. Two cars, swiped by one driver. My neighbours stared in shock at the sad mix of wreckage, nose to bumper.
But this is a feel-good story. It’s not about race track streets or distracted drivers. It’s about neighbours. It’s about me discovering that I care what happens to the people across the street, even when their lives merge little with mine. It’s about the unexpected cheer that brings.
For most of my 16 years on Coventry Hills Way, in the suburbs of north central Calgary, the greatest common bond I shared with my neighbours was geographical. The random act of real estate mixed me up with folks I only knew in smiles and waves outside our garage doors. My life was filled with kids and work; I rarely thought of those who lived around me.
Until the pandemic, that is. Until human interaction became a source of anxiety worldwide and we were told to run for cover. In those long and bizarre periods of isolation when I couldn’t see friends and family, I could still see my neighbours walking by every evening. We could share a weary smile and sometimes — from a distance — we talked.
On the afternoon of the accident, I noticed Jennifer standing with the stunned car owners on the other side of the street. She was talking and pointing; the first to offer assistance. Although I’ve only ever spoken with Jennifer a few times, I knew she was open and kindhearted. It relieved me when I saw her talking with the neighbours. It felt like they were in good hands.
Someone called the police and a few people left to check their home security cameras for footage. Another neighbour motioned for the driver of the SUV to move to the sidewalk; he was still standing in the street.
A group of teens, armed with the vehicle description, headed off to find an eyewitness who had left the scene. The adults compared stories of what each had seen and felt.
Across the road, a young man dragged the bumper of his car onto his lawn. He crossed the street to a group of us, onlookers, huddled in a semicircle. He was debating if he should accept the offer: should he just settle with the driver of the SUV?
The group reacted at once: No! You can get help. It will be OK.
We lingered on the sidewalk and a conversation expanded beyond the crash. We began to talk about hockey and school; about work and the vacations we hoped to take. Normal stuff, but I had never stood and talked, never opened up about anything with my neighbours before. It felt new.
Soon the teenagers returned from their search for an eyewitness. “We found the guy who left the scene!” they grinned, triumphant. They had checked his vehicle. “We even felt the tailpipe on his truck and it’s still warm!” To their delight, the police wanted to know.
I watched those tall boys talk, eager to share and flush with their success.
Standing in this group of people, suddenly feeling that they were my people, I felt lighter. It took me by surprise. I’d never thought of them as my people before. In the past, I was aloof and comfortable — a wave and smile would suffice for neighbourliness.
In truth, we don’t share interests; we don’t share the same ethnic backgrounds or weekend habits. We weren’t all on the same page about COVID-19 – some of us were supportive and others against mask and vaccine mandates.
Maybe that’s what makes the huddled conversation on the day of the accident so special. It doesn’t matter if we’d naturally be friends had we not physically lived beside each other. It doesn’t matter that we have different views and beliefs. We are neighbours. That counts for something.
In the months since the accident I’ve thought a lot about what changed for me that day. It’s like the pieces fit together and I was able to discover a gift I’d never seen before.
We visit more now. We share gardening tips and someone suggested a block party. There’s even – imagine! – an inside joke or two we share. Community is growing where once I saw a street of strangers. I don’t ever want to lose sight of that gift.
Telling your story
CBC Calgary is running a series of in-person writing workshops across the city to support community members telling their own stories.
Read more from the workshop hosted by the Northern Hills Community Association:
To find out more about our writing workshops or to propose a community organization to help host, email CBC producer Elise Stolte.
Here's what you need to know about Squamish Real Estate – Squamish Chief
With Canada’s annual inflation rates spiking in June and a market still reeling from a global pandemic, local real estate in Squamish has seen its fair share of unpredictable ups and downs.
“In May, I started saying that it felt like someone had flipped a switch,” said Jennifer Sale, a local Realtor in Squamish with Sutton West Coast Realty. “I’d say the peak was probably end of March, beginning of April. That was when I [saw] multiple offers and things going for quite a bit over. That has definitely changed.”
With various factors coming into play, such as higher mortgage rates and low inventory, Sale says that some buyers appear to be growing wary of the local market while having trouble qualifying for a mortgage.
“We were experiencing a really hot period earlier in the year because the inventory was so low that there were so many more multiple offers versus pent-up demand,” Sale said. “So buyers were competing for properties.”
“Now with the increased rates … it’s really tapered off the number of sales,” she said. “There were only eight detached home sales in July.”
Feeling the pinch
“Everybody’s feeling the pinch in one way or another,” said Lisa Bjornson of Royal LePage. “Since the beginning of June, probably into May, we started to see a shift in market trends in that … multiple offers are off the table, days on the market have lengthened, inventory has come up somewhat. So it’s definitely slowed the market down.”
Yet historically, real estate sales during the summer are often low.
“Summers traditionally aren’t a hugely active market in the Squamish area,” said Bjornson. “It’s not uncommon to have July and August be on the slower side.”
However, looking back at summer sales in Squamish real estate from last year, Bjornson says there has been a drastic difference.
“Last year was a record-breaking year,” she said. “We’d never seen the likes of it in Squamish, in B.C., in Canada.”
Originally when the pandemic first hit in 2020, Bjornson says that the Canadian Mortgage and Housing Corporation advised realtors that housing was going to plummet with a market drop of 20%. Yet their predictions were incorrect, with sales going up at the same rate they thought they would fall.
“COVID had the opposite effect of what everyone anticipated,” said Sale. “Since then, we’ve had these unprecedented increases not only in Squamish, but throughout B.C..”
When remote work became more of an option during the pandemic, many people realized that they did not have to remain in cities and began looking to buy outside of urban areas. Those within the Vancouver region who were of middle to high income were able to afford the prices just outside of the city, bringing an influx of buyers to Squamish.
“It locked everybody up, changed everybody’s mindset,” Bjornson said. “Many people started to work from home and people started to homeschool. People thought, ‘I’m not putting my loved one in care’. We’re going to generationally live. How people viewed housing and what their needs were changed drastically.”
Over the course of the two years from March of 2020 to now, other challenges such as supply chain issues and labour became evident and began to affect real estate.
“There’s so many forces at play when it comes to what makes up a housing market.”
In addition to an influx of people leaving the city to be in smaller areas, Sale says that she has also noticed single people moving between townhomes to condos to half-duplexes.
“People are always a little worried about getting out of the market. So it’s always nice to move within the same market,” said Sale. “Now that it’s slowed down, I think that’s gonna be a lot easier for many people.”
Overall, though interest rates are currently high, real estate prices in Squamish are seeing a return to relative normalcy.
“We’re not seeing multiple offers. We’re not seeing things go for $200,000 over ask,” said Bjornson. “We’re seeing negotiations, we’re seeing prices moderate.”
As for the coming months heading into fall, Bjornson says that she predicts longer days on the market.
“If we suddenly get an uptick COVID coming into the fall of winter, does that change people again about how they’re feeling and what their wants and needs are? Hard to say,” she said. “The general feeling kind of across the board is that we had a tremendous run-up for 20 plus months and for any real estate cycle that was long. So the normal calming and settling of the market is to be expected.”
For those currently looking to sell in Squamish, Bjornson recommends that people be reasonable and pay attention to what the market is currently doing. “It’s still an OK market; you’re not losing anything. Govern yourself according to what the market conditions are. And if you’re a buyer, get your pre-qualification and know what price point you should be shopping in.”
“I would say to list a realistic price point,” concurred Sale. “Take the advice of your realtor and watch the market carefully.”
Sale adds that comparing prices month to month with your neighbours is not helpful when trying to place a price on a home.
“It’s always hard to see what your neighbour sold for in February or March,” she said. “You have to work within the market that we’re in.”
“The last couple of years there’s greater demand for people wanting to be in Squamish,” said Sale. “I don’t think there’s going to be a big drop-off. I think now it’s changed from a seller’s market, shifted briefly into a balanced market, and I think in some product categories, it’s definitely a buyers market.”
The Self-Made Million Dollar Real Estate Entrepreneur: Steven Parks – Net Newsledger
Steven Parks always knew he was an entrepreneur at heart. Even at the young age of 14–he knew he would make it. After working on a farm in a small town in California, he chose to go big.
Steven Parks is a real estate entrepreneur. He’s purchased over 40 properties and typically flips them for a profit. He also rents them out–turning them into Airbnb’s or long-term rentals. Aside from that, he is the founder and CEO of Cash Offers LLC which is precisely what it sounds like. He makes cash offers to those looking to sell their properties. It’s easy for the seller and profitable for him. Needless to say, Steven Parks has the acumen needed for a successful entrepreneur.
His success comes from his deep dedication to himself and what he envisioned for himself. When he was young and working on a farm, he realized the blue-collar lifestyle wasn’t for him. He ventured into the auto industry where he began flipping cars. Steven was naturally interested in the successful people around him. This curiosity led him to introduce himself to the company that financed a lot of his customer’s transactions at the car dealership–and this was the moment that shifted his career trajectory.
“If you don’t ask, you don’t receive.” Steven said. Steven Parks was able to finance his first real estate deal with this company, and as people say, the rest is history. He now owns over 40 properties. Steven eventually wants to own “100 doors” which is real estate lingo for units. It’s all about the rental income in real estate–it creates wealth and the ability to procure more properties. It hasn’t been just about the money for Steven Parks, though.
For Steven, he wanted to do something big. When asked how he got into real estate he said, “I wanted to create my own story.” He had a rough start in life. His upbringing was tumultuous–having lost both parents, he was raised by his grandmother. His experience motivated him to act, so he put a focus on himself and those around him. He was interested in what other people had to offer and he always put himself out there. Even when things got bad in his career, Steven persevered. For example, in 2008 he lost his Dodge franchise due to the recession, but he didn’t allow it to stop him.
He kept going. Steven Parks is an entrepreneur: he’s an open-minded, curious, spirited, and hard-working individual. He plans to own more properties and become the 100 million dollar company he dreams of being and there’s no doubt that he will get there. Steven will continue to move and adapt through his career–writing his own story with every move.
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