This Week’s Top Stories: Canadian Real Estate Prices Forecasted To Make Big Drop, and 1 in 5 Canadian Businesses Laid Off More Than 80% of Staff - Better Dwelling | Canada News Media
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This Week’s Top Stories: Canadian Real Estate Prices Forecasted To Make Big Drop, and 1 in 5 Canadian Businesses Laid Off More Than 80% of Staff – Better Dwelling

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Time for your cheat sheet on this week’s most important stories.

Canadian Real Estate

Canadian Real Estate Prices Could Drop Up To 30%, Moody’s Advises Institutions
Deep pocketed investors and institutions were advised Canadian real estate prices will fall. Moody’s, one of the world’s largest risk organizations, published their economic forecast. In the baseline forecast, Canadian real estate prices fall 8% in real terms, and recover a year later. It also gets worse as the pandemic carries on.

If things don’t get back to normal until July – just one month later than baseline, they expect prices to drop 20%. Reconstructing their model using projections given to parliament, prices are expected to decline 24%. The firm further added they don’t believe low interest rates can stop this trend. However, the decline in interest rates will help the recovery phase.
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Canada’s GDP Growth Is Flat, But Real Estate Outperforms
The Canadian economy is further leaning on real estate for growth, as the rest of it slows down. Real GDP in February was up 2.1%, a big decline – but a little skewed due to an unusually slow Q1 in 2019. The real estate, rental and leasing portion of GDP saw growth of 5.9% from last year though. The real estate, rental and leasing portion of GDP now represents the biggest portion of GDP since the peak in 2016, and is likely to blow past that in the next report.
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Nearly 1 In 5 Canadian Businesses Laid Off More Than 80% Of Staff
Canadian businesses are seeing big drops in revenue, and that’s causing a ripple effect for unemployment. A survey conducted by Stat Can shows 32.3% of companies experienced a decline of 40% or more in revenue. This helped contribute to nearly 1 in 5 businesses laying off more than 80% of their staff. Some layoffs are thought to be temporary. However, that won’t be clear until we see the state of the economy on the other side of the pandemic.
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Canadian HELOC Growth Was Drying Up Before The Pandemic
Canadians slowed using their homes as ATMs in February, before the pandemic was declared. The balance of loans secured by residential real estate hit $303.99 billion in February, up just 1.68% from last year. Personal loans represented $268.51 billion of the total, up just 0.67% from last year. That’s a decline in real terms, even with CPI at just 0.9% these days. What does this all mean? Typically households cool on borrowing when they’re starting to feel pinched. This is a trend we’ve been seeing since late last year, despite the return of enthusiastic real estate buyers.
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Toronto Real Estate

Altus: Toronto New Home Sales Almost Double, Expected To Cool
The market is packed with warning signs, but that didn’t slow new home buyers in Toronto. There were 3,780 new homes sold in March, up 67% from last year. The past two Marches had levels of sales not seen outside of recession, but this is still a big increase. Altus Group, the firm that provided the data, did note they expect volumes to slow as the year progresses. This is partially due to the comparison period, and partially due to the pandemic lockdown.
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Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

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TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.

The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.

The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.

“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.

“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”

The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.

New listings last month totalled 15,328, up 4.3 per cent from a year earlier.

In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.

The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.

“I thought they’d be up for sure, but not necessarily that much,” said Forbes.

“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”

He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.

“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.

“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”

All property types saw more sales in October compared with a year ago throughout the GTA.

Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.

“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

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Homelessness: Tiny home village to open next week in Halifax suburb

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HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.

Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.

Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.

The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.

Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.

They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.

The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.

This report by The Canadian Press was first published Oct. 24, 2024.

The Canadian Press. All rights reserved.

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Here are some facts about British Columbia’s housing market

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Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.

Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.

Average residential home price in B.C.: $938,500

Average price in greater Vancouver (2024 year to date): $1,304,438

Average price in greater Victoria (2024 year to date): $979,103

Average price in the Okanagan (2024 year to date): $748,015

Average two-bedroom purpose-built rental in Vancouver: $2,181

Average two-bedroom purpose-built rental in Victoria: $1,839

Average two-bedroom purpose-built rental in Canada: $1,359

Rental vacancy rate in Vancouver: 0.9 per cent

How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent

This report by The Canadian Press was first published Oct. 17, 2024.

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