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Toronto real estate listings swell, taking the edge off buyers – The Globe and Mail



A realtor’s sign in front of a home in Toronto, on March 8.Fred Lum/the Globe and Mail

Capricious buyers are throwing the Toronto-area real estate market off kilter in April.

Patrick Rocca, broker with Bosley Real Estate Ltd., describes the market as “spotty” in midtown Toronto.

“Stuff is moving, but there are some quirks,” he says.

At 492 Sutherland Dr., in Leaside, a semi-detached house set a new milestone with a sale price of $1.925-million and five bidders in competition. The house was listed with an asking price of $1.499-million.

A week earlier, Mr. Rocca sold a two-bedroom semi-detached house in the popular Leaside neighbourhood with six offers. The property, listed with an asking price of $1.099-million, sold for $1.425-million.

That was the outcome Mr. Rocca was anticipating when he set a low asking price and an offer date one week later.

But a few days earlier, Mr. Rocca was taken aback when a house with an asking price of $1.699-million attracted only one bidder. Despite the lack of competition, the property sold above asking.

“Only one offer kind of threw me,” he says.

Around the same time, a condo unit had some attention and one agent signaled that a client was preparing to make an offer, but the buyers backed away.

“I was told I would have a bully and the bully never came.”

Mr. Rocca says one reason for the uncertainty may be that a bump in listings is taking the pressure off buyers to make quick decisions.

According to data from the Toronto Regional Real Estate Board, new listings in the Greater Toronto Area (GTA) swelled 42 per cent in March compared with February.

The average price in the GTA slipped 2.6 per cent in March from February, bucking the seasonal trend.

Mr. Rocca has heard from a few buyers that they plan to wait on the sidelines for a drop in prices. But he notes that it’s hard to time the market with so many unknown factors ahead.

The 2022 federal budget unveiled last week won’t sway the market, in his opinion.

A move by the Trudeau government to ban foreign buyers for two years will have a negligible effect because many groups are exempted, including students, permanent residents and people who say they will make the property their primary residence.

When Ontario’s provincial government imposed a foreign buyers’ tax in 2017, there was a short pause in the market in the GTA, but overseas investors soon found a way around the rules, Mr. Rocca says.

“Foreign buyers are not stupid. They can find other avenues.”

Stephen Brown, senior Canada economist at Capital Economics, notes that measures targeting foreign buyers have little track record of success – largely because their role in driving up prices is overstated, he says.

The 15-per-cent tax Ontario brought in in 2017 has not prevented house prices from rising by more than 35 per cent since then, while house prices in New Zealand have surged by 60 per cent since the government there imposed a blanket ban on foreign buyers in 2018.

Mr. Brown predicts that house price inflation is likely to slow sharply in the coming year, but that will be due to tighter monetary policy rather than any other factor.

On the matter of interest rates, Mr. Rocca says he hears some rumbles from buyers but most clients are more focused on finding the right property.

“People need houses – they are still out there looking.”

Toronto-Dominion Bank senior economist Leslie Preston says the Bank of Canada is justified in moving aggressively to raise interest rates, given the country’s hot economy.

Ms. Preston points out that Canada’s unemployment rate fell to 5.3 per cent in March – the lowest level since comparable data became available in 1976.

While wage growth has picked up, it is not keeping pace with inflation, which was 5.7 per cent year-over-year in February, says the economist.

Pritesh Parekh, real estate agent with Century 21 Legacy in Toronto, says the change in tempo from frantic buying in January and February to a more sedate pace in March and April can be unsettling to sellers and buyers.

“It’s kind of a weird period right now. Everyone’s confused about what’s going to happen next.”

In March, sales tumbled 30 per cent in the GTA from March, 2021, according to TRREB. New listings dropped 11.9 per cent in the same period.

The average price stood at $1,299,894, marking a gain of 18.5 per cent from the same month last year.

“In January and February, sellers had completely unrealistic price expectations – and guess what – they beat them,” Mr. Parekh says.

But the winds shifted in March: the steepest drop was the 38-per-cent plunge in sales of detached houses in the 905 area code.

Throughout Toronto, Mr. Parekh noticed hundreds of price changes on listings in March, which indicates that properties failed to sell at the original asking price. In many cases, that means a house was listed with a low asking price and a date set for reviewing offers. If it doesn’t sell on the offer date, agents will often relist at a higher price and welcome offers any time.

That kind of change in tactics can confuse buyers, he adds.

“Everybody’s trying to feel out the situation.”

Now the spectre of rising interest rates is spooking buyers, and the slight dip in the average price in March has some wondering if prices have farther to fall.

“Psychologically, it has weighed on people quite a bit.”

Mr. Parekh sees the demand for condos picking up as buyers look for affordable options in the core instead of moving to the suburbs as they did at the start of the pandemic.

Mr. Parekh recently worked with an investor who purchased a condo unit in Kingston to rent to students, despite not yet owning a condo in Toronto, where he lives.

Mr. Parekh says the investor doesn’t feel ready to settle in one spot yet, but he figures prices may be higher by the time he’s ready to buy. Meanwhile, Kingston is less expensive than Toronto.

“In the past, people would save for their dream home. Now they’re buying a stepping stone.”

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Canada real estate: When the appraisal falls short – CTV News



The red-hot housing market over the last several months pushed many buyers fighting through bidding wars to put in unconditional offers at high prices.

But now that the market is cooling, some are ending up with mortgages that can’t cover the full cost of their home following an appraisal.

Toronto-based mortgage broker Mary Sialtsis says there are “very few options” for these buyers.

“In the last couple of years, but especially in the last couple of months, I’ve had a few different clients that have dealt with this situation,” she told CTV’s Your Morning on Friday. “Unfortunately, there are very few options when you’ve purchased a property with no conditions and no financing conditions.”

Nationally, home prices fell 6.26 per cent between March and April 2022 after peaking in February, according to the Canadian Real Estate Association. That’s meant some buyers are ending up with mortgages that are more than $100,000 shy of what they need.

In some cases, especially when the down payment from the buy is 50 per cent more, Sialtsis says the lender may just move forward with the mortgage based on the original price of the home, even if the appraisal is a lot lower.

“It’s a case-by-case situation,” she said.

Another option may be to get a second mortgage from a private or alternative lender. But if no other option works, buyers can try and negotiate a mutual release, which usually means forfeiting the deposit.

“For most, they end up going to the bank of mum and dad,” said Sialtsis. “I highly recommend if anyone is in this situation, reach out to your mortgage professional immediately.”

Sialtsis warns that putting in offers without any financing conditions puts buyers at a huge risk, as the buyer is legally bound to close the deal regardless of whether they’re able to get a sufficient mortgage.

“I really don’t think buyers fully understand the impact of those unconditional offers when they submit an offer to purchase a property,” she said. “It becomes a legally binding contract and that buyer is expected to close on the closing date. So, that’s one of the reasons why there’s very few options for this.”

But the cooling housing market isn’t all bad news. For those looking to buy a home, Sialtsis says now is a good time to jump in as buyers have a lot more leverage to negotiate.

“For many Toronto-area buyers, where often we’re dealing with multiple offers… it might be a good chance for you to get in and get a decent property with less competition or no competition and the opportunity to actually include a financing condition,” she said.

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Edmonton real estate resales fall after months of high demand – Edmonton Journal



Slowing sales and more inventory coming on sees the market leaning toward balanced conditions.

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Edmonton real estate sales are falling — at least from the all-time highs set earlier this year.

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April saw 2,919 resales in the Greater Edmonton Area, down almost 11 per cent from March, based on the latest statistics from Realtors Association of Edmonton.

Still, sales last month were up, year over year, by two per cent from the previous April.

The moderation in pace from the all-time record set in March with 3,283 sales is not surprising, says Paul Gravelle, chair of RAE.

“You can only keep breaking records for so long,” Gravelle says. “We’re starting to see the market cool with spring inventory rising, leading to more balance between supply and demand.”

April saw new listings grow by almost nine per cent from the same month last year and expand by nearly 12 per cent from March to more than 4,700.

Prices continued to climb, however, with the average price rising by seven per cent in April over the same month last year to about $417,000. Yet the average price only gained about one per cent from March, reflecting better conditions for buyers who have faced continually tight supply, particularly among affordable price ranges for single-family detached homes, Gravelle says.

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“Supply in the $300,000 to $400,000 range still remains tight, but the higher end of the market has slowed down a little bit,” he says.

Continuing high demand pushed prices for single-family detached homes more than 11 per cent higher to $510,988 last month compared with April 2021. The city and surrounding area saw 1,704 sales for single-family detached homes in April.

That tally is actually down by more than six per cent from last year, likely reflecting reduced selection among more affordable ranges, Gravelle notes.

In contrast, sales grew in the row/semi-detached and apartment segments last month, along with price gains.

Duplex/row sales were up slightly, year over year, by about two per cent with the average price hitting almost $409,000, an increase of about 17 per cent.

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Apartment condominiums saw the fastest pace of sales increases, growing by 27 per cent, year over year. In turn, the average price reached about $237,000 in April. That’s up about three per cent from the same month last year.

“There is still a significant amount of inventory for condos, so buyers still have options,” says local realtor Bev Hasinoff with Liv Real Estate.

While sales and prices are picking up for the segment, it has still not fully recovered like the single-family detached homes, she adds.

The busiest segment of the market continues to be single-family detached homes in the $400,000 to $500,000 range, especially in surrounding communities like Sherwood Park and St. Albert. Yet Hasinoff sees demand even easing slightly in the hottest corners of the market.

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“Right now, we are still in a sellers’ market, but the frenzied pace is slowing,” she says.

Furthermore, moderating demand is not a bad sign overall for the market, Gravelle says.

“It’s great that home prices jump up, but it’s only truly beneficial for people selling and not buying a home.” Otherwise, sellers still need to buy a home, facing tight supply and rising prices, he explains.

While the pace of sales is expected to moderate further, the remainder of the busy spring market is likely to stay strong by historical norms, Gravelle predicts.

“But with the amount of inventory coming on, it’s likely buyers will not be facing multiple bids as often as in recent months.”

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Edmonton could be headed toward housing supply shortage, real estate industry leaders warn –



Supply chain problems, rising interest rates and more people moving to Alberta could contribute to a housing supply shortage in Edmonton, according to multiple industry leaders.

These trends, plus the rising cost of construction, were front and centre during multiple panel discussions at the Edmonton Real Estate Forum — a large industry conference held at the Edmonton Convention Centre — on Wednesday.

“All things are lining up for there to be a housing shortage in Edmonton in 12 months,” said Rohit Gupta, president of Rohit Group of Companies.

Following a panel discussion on the multi-residential market, Gupta told CBC News that real estate developers may not be able to build houses fast enough to meet rising demand.

Supply chain snags

Multiple commercial real estate industry leaders, participating in a panel discussion on retail trends, said supply chain problems keep them up at night.

There are long lead times on mechanical items, including refrigeration, gas coolers and transformers — perhaps because of pent-up demand during the COVID-19 pandemic, said Jarrett Thompson, chief operating officer at Cameron Corporation.

The delays are resulting in more time-consuming and expensive commercial and residential projects, he added.

“Despite there being a market right now, a lot of the builders are pulling back, which is creating some major challenges,” he said.

Among the many challenges is a lack of nails, linked to the war in Ukraine, said Gupta, of Rohit Group of Companies.

“It’s everything,” he said. 

“At some point, we’re so numb to the pain.”

Few executives predict these problems will disappear any time soon.

Darren Quayle, vice president of Alberta client services for Oberfeld Snowcap, expects supply chains to get back to normal in 18 months to two years.

Population pressures

Statistics Canada data shows Alberta saw the most interprovincial migration during the last three months of 2021, marking the first time since 2015 that the province led the country in that metric.

Most of those people came from Ontario.

Gupta said most of the people moving from Ontario to Alberta have settled in Calgary, but Ontarians’ interest in the Edmonton market has been accelerating.

The relative affordability of real estate in Alberta is a key part of their decisions to move, he said.

“We’re seeing people [from Ontario] buying houses sight-unseen.”

During Wednesday’s multi-residential housing panel, Strachan Jarvis, managing partner of real estate investments for Toronto-based Hazelview Investments, pointed out that Canada welcomed a record number of immigrants last year but housing supply has not caught up.

“We simply are not building enough,” he said.

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