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Toronto real estate poses bubble risk, while Vancouver homes are overvalued, UBS says – CP24 Toronto's Breaking News

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TORONTO — UBS says Toronto is one of seven world cities most at risk of a residential real estate bubble.

Toronto scored 1.96 in the UBS Global Real Estate Bubble Index, the third-highest score below Frankfurt and Munich, which scored 2.26 and 2.35, respectively.

The bank’s report scores 25 cities across the world, sorting them into four tiers: bubble risk, overvalued, fair valued, and undervalued with higher scores going to locations with higher risk.

Toronto is in the bubble risk category for the third consecutive year, surpassing Hong Kong, Paris and Amsterdam.

UBS says Vancouver real estate had dropped this year out of bubble risk territory but is still overvalued, with a score of 1.37, down from 1.92 in 2018.

Other overvalued cities in the report were New York, San Francisco and Sydney, Australia with scores less than 1, while Boston, Singapore and Dubai had fair real estate values and Chicago real estate was considered undervalued.

This report by The Canadian Press was first published Oct. 1, 2020.

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Canada real estate: RBC Economics housing report notes condo prices stuck in a rut – The Georgia Straight

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A recent housing report by RBC Economics states that prices of condo properties haven’t been seeing much action.

“Condo prices, in fact, have already stagnated over the past six months both at the national level…,” bank economist Robert Hogue wrote.

According to Hogue, this is happening as well in “some of Canada’s largest markets (including Vancouver, Toronto and Hamilton)”.

“This contrasted with a solid 7.3% increase for single-detached homes nationwide over that period,” Hogue also noted.

Hogue’s observation about condo prices form part of his October 15, 2020 report about the performance of the real-estate market for September.

Hogue noted that the benchmark price of homes in Canada increased 10.3 percent year-over-year in September.

That was the “first time it’s been in double-digits in three years”.

“The strength was generally concentrated in single-detached homes,” Hogue wrote, adding that the benchmark price for this type of home rose 12 percent year-over-year last month.

“This was almost double the 6.2% rate for condo apartments,” the RBC economist wrote.

In some markets, the picture has not been good.

“Condo prices have flattened in Vancouver, Toronto and Hamilton relative to pre-pandemic levels,” Hogue wrote.

In a previous report on September 30, Hogue wrote that the “impact of COVID-19 on the housing market is complex”.

“The bottom line is we expect condo prices to weaken in larger markets next year…,” Hogue predicted.

In September 2020, the benchmark price of a condo property in areas covered by the Real Estate Board of Greater Vancouver was $683,500.

This represents a 4.5 percent increase from September 2019, and a 0.3 percent decrease compared to August 2020.

In areas under the Fraser Valley Real Estate Board, the benchmark price of a condo in September was $436,900.

The number represents a 0.1 percent per cent drop compared to August 2020, and an increase of 4.7 percent compared to September 2019.

In Victoria, the benchmark price of a condo in September 2019 was $512,500.

Last September, the value for the same condominium decreased by 0.4 percent to $510,600.

The figure also represents a 0.6 percent drop from the August 2020 value of $513,900.

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Why the London, ON Real Estate Market Continues to Thrive – RE/MAX News

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London was considered by many to be Ontario’s best-kept secret. It was a city with everything you would want: affordable housing, jobs and even lauded as the brain capital of province. With more people desiring to escape the big city and find refuge in an urban locale with a small-town charm, London’s popularity is skyrocketing. This is great news for the London real estate market.

Recent data point to an incredible recovery in the housing industry in the wake of the COVID-19 public health crisis. With tight supply and growing demand, the Canadian real estate market is enjoying record-setting numbers in every possible category. All the early forecasts suggest that London can sustain this trend to finish the year and head into 2021.

Although the coronavirus pandemic continues to threaten the broader national recovery, accommodative monetary policy and pent-up demand are driving the country’s real estate industry. So, what is going on in London, Ontario?

Why the London, ON Real Estate Market Continues to Thrive

London is witnessing some strong Fall market activity as the city basks in the afterglow of the best performance for the month of August in more than 40 years, followed by a record-breaking September. According to the London and St Thomas Association of REALTORS® (LSTAR), 960 homes were sold in September, the best September since 1978! Local headlines also spotlighted that the average home sales price reached $521,883, up a whopping 98 per cent compared to the same time five years ago.

Industry observers also point out that homes are being exchanged at a faster pace. In London, the median number of days that a home sat on the market fell from 12.5 in July 2020 to just 10 days in August and a mere eight days in September.

Demand is gaining steam, with interest booming in the market for condominiums, single-detached homes and everything in between. This has sparked interested prospects to submit bids over the asking price, and this could continue to be the norm if demand remains strong and inventories remain low.

“The strong momentum experienced during the summer months continued through September,” said 2020 LSTAR President Blair Campbell. “Similar to many other housing markets across Canada, many are still playing catch up from the COVID-19 lockdown we had during the spring.”

Campbell noted that “Each of the five major areas in LSTAR’s jurisdiction posted gains, led by Middlesex with average sales price of $575,785. Again, it’s important to note this figure encompasses all housing types, from a two-storey single-detached home to a high-rise apartment condominium.”

Campbell said in a recent interview with CTV News, that nobody is really surprised by the developments. Instead, real estate agents and the broader market are surprised by how quickly it occurred. But what is driving this surge in London real estate?

What is Driving London’s Real Estate Market?

After experiencing a brief “pandemic pause” at the height of the coronavirus outbreak in March, the wait-and-see approach was abandoned, and now the pent-up demand is stimulating London’s housing market. Like other cities across Canada, buyers and sellers have returned from the sidelines to take advantage of current conditions and trends.

Since Queen’s Park reopened the province, buyer confidence has swelled, which has been reflected in the latest housing data. Of course, real estate agents are still diligently adhering to public health guidelines. This includes social distancing, wearing face masks, showcasing listing via virtual open houses and facilitating digital paperwork completely online by means of technology.

That said, the second wave is already prompting some local governments to reimpose COVID-19 restrictions, and industry experts say that people on both sides of real estate transactions are looking to get some deals done before any drastic measures transpire. Plus, as market observers understand, cool temperatures and the flu season can impact real estate. With so much uncertainly on the horizon, the market remains hot as buyers and sellers fight to “get in while they can.”

London, like other smaller towns across the province, is witnessing an influx of buyers from the Greater Toronto Area. Although London area home prices have gone up, they remain more affordable than what you can purchase within downtown Toronto, or even other municipalities within the Greater Toronto Area.

Homebuyers are ostensibly using the work-from-home trend to their advantage, no longer tied to live close to their workplace. Plus, with greater investment in public transit within cities province-wide, if professionals needed to travel into the nearest urban centre, there are a greater number of transportation options at their disposal.

Moreover, since more people are spending significantly more time at home amid social distancing measures and remote working environments, a lot of buyers are reconsidering their living space. For example, some seek to upsize to properties that have room for an office, a learning centre for kids, and other features that may not have been important even just a year ago.

As the list of priorities for homebuyers changes, real estate trends are shifting across the country and municipalities like London, Ontario are projected to continue this trend of strong housing demand, tight supply, and swelling real estate prices into 2021!

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Canada real estate: TD Economics sees high home prices holding up in fourth quarter before dropping in 2021 – The Georgia Straight

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Home buyers looking for a bit of a discount may want to wait a little.

A housing report by TD Economics predicts that high home prices will persist for the rest of 2021.

“Regarding prices, we think they’ll hold up at these record levels in the fourth quarter…,” economist Rishi Sondhi wrote.

Then things will start to ease in 2021.

Sondhi explained that tight supply is driving high home prices.

According to the TD Bank economist, the real-estate market is currently in seller’s territory.

The economist noted that the national sales-to-new listings ratio in September “registered a drum-tight reading” of 77.2 percent.

He noted that “markets were the tightest they’ve been in nearly 20 years in September”.

Sales-to-new listings ratio is the number of sales divided by listings.

A seller’s market means that the sales-to-listing ratio is 60 percent or more, or six sales out of 10 listings.

A balanced market features a ratio between 40 percent and 60 percent.

A buyer’s market happens when the ratio is less than 40 percent, which means fewer than four sales for 10 listings.

In a report on October 15, the Canadian Real Estate Association noted that the national average price of a home set a new record in September.

The average price topped the $600,000 mark for the first time at more than $604,000.

In his report on October 15, Sondhi predicted “some easing is anticipated” for prices after the fourth quarter of 2020.

This is consistent with Sondhi’s previous report on October 8.

The bank economist noted in that earlier report that “unlike sales, an immediate fourth quarter pullback is unlikely” for prices.

 “In fact, another (modest) gain could be in the cards,” Sondhi wrote.

“After the fourth quarter,” Sondhi predicted on October 8, “Canadian prices will likely drop through the first half of 2021 by around 7%, before regaining some traction later next year.”

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