Canada Mortgage and Housing Corp. (CMHC) is predicting Toronto home prices could bottom out at between 7 per cent and 18 per cent below where the average price of a home stood at the end of the first quarter of this year, which was $892,000.
That was just before businesses and activities were locked down for the pandemic.
It is expected to take until late in 2022 for Toronto prices to return to those levels, according to a CMHC forecast released Tuesday.
In Toronto, CMHC expects average prices to land in the range of $735,421 to $831,075 in the second quarter of next year.
The low number represents a pessimistic outlook in the event that the economic recovery is hampered by continued high unemployment or another wave of COVID-19. The higher number is the top range of the forecast for that quarter, which would depend on a faster recovery.
This year, which started strong, is expected to end with average prices ranging between $778,748 and $843,724. By the end of the fourth quarter of 2022, CMHC says the city’s home prices will have recovered, with the forecast ranging from $796,349 in the worst-case scenario to $912,828 if the recovery is relatively unimpeded.
The deep uncertainty around the impacts of COVID-19 led CMHC to forecast a range of price, sales and housing construction outcomes, said Aled ab Iorwerth, deputy chief economist.
“Both the future path of the virus and the extent and pace of the economic recovery are unknown. This uncertainty extends to the global economy, which is a critical source of demand for Canadian exports,” he said on a conference call with reporters.
“This means households will delay making decisions on purchasing or listing properties,” said ab Iorwerth.
Even if the pandemic drags on, Toronto’s “heavy concentration of office-based companies will enable a greater number of employees to work remotely,” said the CMHC analysis.
“Short-term job losses will occur primarily in the retail and hospitality industries, which typically employ lower-paid workers,” it said.
Because those workers are more likely to rent, their circumstance will likely have less impact on the home ownership market.
An increased supply of purpose-built rentals and condos will loosen Toronto’s historically high vacancy rates. At the same time, CMHC predicts a softer demand for rentals due to the uncertain job market that causes some younger adults to remain with their parents or in shared housing arrangements. Lower-than-expected immigration levels and interprovincial migration will also dampen demand.
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But any relief in vacancy rates in big cities such as Toronto will likely be short-term because the overriding demand persists, said ab Iorwerth.
He said there is also “a lack of clarity on what will happen with short-term rentals.” The drop in tourism has caused some operators to put their properties on the long-term rental market or to list them for sale.
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Health Unit reports 35 new COVID-19 cases Saturday – Windsor Star
The number of confirmed COVID-19 cases in Windsor and Essex County jumped by 35 as of Saturday morning, with at least one grocery store employee testing positive.
The Windsor-Essex County Health Unit is reporting 35 new cases for a total of 1,656 confirmed cases in the area, with the number of deaths holding steady at 68.
An employee at the Real Canadian Superstore at 4371 Walker Rd., recently tested positive on a presumptive test for COVID-19, said a Loblaw’s public relations spokesperson.
“We are working with the local public health team and have taken a number of steps to minimize risk, including increased sanitization protocols and enforcing social distancing practices in the store,” according to the emailed response. “The store also arranged for additional cleaning and has since reopened.
“Team members who worked closely with this individual are now at home in self-isolation, monitoring for any symptoms.”
Health Unit Announces 35 New Cases of COVID-19 – AM800 (iHeartRadio)
The Windsor-Essex County Health Unit has announced 35 new cases of COVID-19.
The newest cases announced Saturday includes 20 in the agri-farm sector.
Among the other cases, two involve healthcare workers, 12 are community based while one remains under investigation.
There are now 1,656 confirmed cases in the area with 68 deaths while 994 cases have been resolved.
The health unit also reports outbreaks at two long-term care homes.
There is also an outbreak at four workplaces, two in Kingsville and two in Leamington, which means there is two or more positive cases involving the workforce.
Oil pares weekly gain amid virus fears, signs of tighter supply – BNNBloomberg.ca
Oil slipped on Friday, paring a weekly gain, as concern of demand erosion from a coronavirus resurgence countered strong U.S. economic data.
Futures fell to about US$40 a barrel in New York as the virus continues to spread unabated across large parts of the U.S., clouding the outlook for energy demand. Crude prices gained 4.2 per cent for the week as data showed a rebound in the U.S. jobs market accelerated in early June and American crude stockpiles shrank by the most this year. A survey showed OPEC oil production dropped last month to the lowest since 1991.
The worsening pandemic may not have been fully captured in the jobs data, which provided a snapshot of hiring in the middle of the month before many states reversed course on their re-openings.
“We have had a sharp recovery in demand for energy products that has occurred from March to end of May,” Daniel Ghali, a TD Securities commodity strategist, said by phone. “Since then the pace of recovery has slowed. There is concern that this stall may be a signal of weakness in demand that’s tied to the rise in coronavirus cases in the U.S.”
Adding to the murky demand outlook, Chinese oil inventories swelled to a record this week, satellite data show, after the world’s biggest oil importer went on a buying spree last quarter as the economy rebounded. The stockpiles may indicate a slowdown in buying by the East Asian country.
That outlook was balanced by the OPEC+ alliance’s commitment to reducing output, with Russia showing near total compliance with its targets. The group hasn’t made any decision yet on whether to extend its full cutback — which stands at 9.6 million barrels a day — into August, Russian Energy Minister Alexander Novak said. Ministers from the coalition next meet on July 15.
West Texas Intermediate for August delivery fell 51 cents US to US$40.14 a barrel on the New York Mercantile Exchange as of 11:18 a.m. local time, after closing up 2.1 per cent on Thursday. Brent for September settlement declined 49 cents US to US$42.65 on the ICE Futures Europe exchange, paring its weekly gain to four per cent. Trading volumes were low as the U.S. took a day off ahead of the July 4 holiday.
The global benchmark crude’s three-month timespread remained in contango — where prompt contracts are cheaper than later-dated ones — but the spread has narrowed in recent days, indicating that concerns about oversupply have eased slightly.
The decline in U.S. oil production continued as working rigs fell for a 16th week to the least since 2009, according to Baker Hughes data released Thursday. Exxon Mobil Corp., meanwhile, reported an unprecedented second straight quarterly loss as almost every facet of the energy giant’s business slumped.
Other oil-market news
-India’s oil market is showing an uneven recovery two months after easing virus-control measures. Provisional fuel sales from the three biggest retailers were at 88 per cent of 2019 levels in June.
-The oil market is “currently perhaps too optimistic” as COVID-19 cases haven’t peaked yet and there’s still a large inventory overhang, FGE said in a note. Prices could fall to US$35 a barrel in the near-term before recovering in the fourth quarter.
-Angola is under intense pressure from other OPEC+ members to speed up its oil output cuts, and the response from the African nation has so far failed to appease the group.
-Several crude cargoes floating near China have been re-offered or sold to other buyers in Asia as long lines of oil-laden tankers continue to wait for their turn to discharge in Asia’s top importing nation, said traders who asked not to be identified.
–With assistance from James Thornhill.
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