There is a certain desperation in the air these days for evidence that speaks to any kind of return to normalcy in the near future. As I wrote last time, it promises to be a long, dark winter.
The only thing that can make it more bearable is some glimpse of light in the distance.
With this in mind, I listened in on the recent 2020 Ottawa Real Estate Forum (virtual edition). It featured a lot of talk, but not many facts to hang your hat on.
Other articles on the RENX site offer a recap of the Forum’s highpoints, so I won’t repeat them here, beyond the following:
* A hybrid model of work from home and work from the traditional office is likely to prevail versus one becoming overly dominant at the expense of the other;
* The pandemic (as I have noted before) is not a harbinger of doom for most segments of commercial real estate. Rather, it is an accelerant for those paradigm shifts that were already underway – such as the federal government already looking to reduce its real estate footprint across the country by about 25 per cent over the next couple of decades;
* Issues previously present in a large urban market, such as Ottawa’s pressing need for new residential rental stock, haven’t disappeared and will remain a factor. The fix for the issue, however, may now take a modified form thanks to the pandemic-driven shifts in how people will choose to live and work.
I don’t profess to have a crystal ball, but if these conclusions prove true, I see the following consequences:
Middle managers redundant?:
Those management types who like to keep a constant eye on everyone haven’t been able to do so with remote working.
We’ve had more than enough time now to gauge the true impact on productivity, creativity and team cohesion of a dispersed team. It works well for some and not so for others.
Why? There are two reasons – how any one person’s brain is wired and what type of work they do.
What the surge in remote working may prove for many workplaces is that if you have in place a proper workflow and communications structure and performance metrics (to flag underachievers), along with competent people in the right positions, middle management may prove to be an unnecessary layer of the org chart that just doesn’t add much value for the money.
Demand for more flexible housing designs:
Working from home from the kitchen table or the edge of the bed loses its lustre rather quickly, particularly if the kids are attending school remotely.
Families need the flexibility of a housing design that may offer two segregated spaces for a proper home office, without having to purchase a home of 4,000 square feet or more to get it.
Upward pressure on salaries:
But even so, incorporating this additional space into a design will still mean a somewhat larger home than what a family would have normally required if the breadwinners worked away from home at an office. Larger homes, of course, cost more.
This may mean that remote workers may come to demand higher salaries and jump ship as needed to find an employer willing to accommodate.
Standard office designs will no longer cut it:
The recent trend of packing more people into a smaller footprint likely will be at an end. Either because it’s a government-mandated requirement or because people will demand it, there will have to be more square footage assigned to an individual.
If a large proportion of the workforce is working from home full-time or even part-time, this may not be a problem.
But . . . people will have new expectations and awareness around personal hygiene now, too. They say it only takes about 30 days to develop a new habit and we are now seven months and counting into the pandemic.
This means things like the traditional office bathroom design may have to go.
Demand for more space between sinks and urinals, and the replacement of standard entry doors with the kind of barrier-free entrances we see in airport and shopping mall bathrooms, may become the norm. All this will increase space requirements and demand a reno.
What the dollars and cents say
Regardless of what the next year or two holds for us, this much is certain – people continue to buy, sell and invest in real estate.
This is a highly speculative industry, after all, driven by two things – most of our lives are spent under one kind of roof or another, and how we design and use space has never remained the same.
I track commercial transaction data in Ontario and the numbers continue to suggest resilient levels of activity. Looking at transactions worth $10 million or more, we have seen 261 transactions across the province from the beginning of March 2020, versus 353 in the same period in 2019.
The total dollar value of these transactions is down almost 18 per cent – from about $10.6 billion to $8.7 billion. While there has been a decline, there are still transactions taking place.
Meanwhile, fuelled in part by bargain basement interest rates, housing markets in many regions continue to be on a tear. Ottawa is a prime example.
Some anecdotal reports attribute this to a flight to safety, as people flee the urban core for the perceived safety of more space in the ‘burbs or even adjacent rural areas – why continue to live in a congested city if you’re going to be working from home?
This may account for some of the activity and price inflation we have seen in, for example, Ottawa and nearby rural communities. But, it by no means accounts for all of it – bidding wars on properties are happening even in old central urban neighbourhoods like mine.
It remains to be seen how sustainable these current spikes and patterns in residential resale activity will be, but these price increases are not just in the large cities. In recent data from across the country, the greatest percentage increases were in New Brunswick.
Whether it’s the commercial or the residential end of things, we can only continue to wait and see and let the markets speak for themselves.
To discuss this or any valuation topic in the context of your property, please contact me at email@example.com. I am always interested in your feedback and suggestions for future articles.
Real estate booms in the West Kootenay – WellandTribune.ca
It’s a seller’s market out there for people thinking of buying or selling property in the West Kootenay.
Real estate agents across the region say despite the pandemic, they’re running off their feet.
“It’s been the most active past two years in the last 12 years,” says Bill Lander of Coldwell Banker in Nelson.
In Nakusp, New Denver, and the Arrow Lakes areas, realtors report sales are up about 13% over 2019. The actual number of residential sales within the Village of Nakusp is down from last year (mainly because of low inventory), but vacant land is hot, as are commercial property sales. Overall, residential home prices in Nakusp are up about 18% this year over 2019.
In Kaslo, Kul Nijjar of Fair Realty’s Kootenay BC Property Matchmakers says 47 properties have been sold to date “with a few others that sold without even being listed.” Nijjar is on track to beat last year’s sales of 49 units. The average sale price to date in Kaslo this year is up 12.2%.
The Slocan Valley has seen ‘robust’ sales the last two years, says Lander. This year, Lander made 74 sales, at an average sale price of $279,000, about 94% of asking price. Last year, he made 81 sales up the valley, at an average $306,000.
The average sale price is murkier in the Slocan Valley, where a couple of large sales in the last two years skewed the averages. But Lander says he figures prices are comparatively flat for the last two years, compared to the rest of the province.
Demand outpacing supply
Supply is an important factor in determining price. It’s been especially tight in Nakusp.
“[A] lack of inventory has turned towards a ‘seller’s-type market,’” says Kelly Roberts of Selkirk Reality. “Our office has the lowest listing inventory that I have seen in probably the past 25 years.”
She says locals buying into the tight market have kept Nakusp hot.
“I think some of this increase may be due to the COVID pandemic,” she adds. “I think the pandemic has perhaps pushed some of the fence sitters off on our side… those that were maybe wondering if they should move out of the city decided the time had come.”
With mortgage deferrals due to the pandemic scheduled to end soon, more houses may enter the market, stabilizing prices, say analysts. But other factors may mean the good times – at least for sellers – will continue.
“The hot construction market has also helped sell existing stocks,” says Coldwell Banker’s Lander. “Increased building material costs has definitely increased the value of ‘used’ housing.
“Trades workers are booked,” he says. “Development land has had a significant increase in costs as well.”
Like for most of us, it’s been a rollercoaster of a year for real estate agents. When the pandemic hit, the industry was essentially shut down. Both buyers and sellers were concerned about participating in the sales process. But as the situation stabilized, other trends that boosted local sales began to establish themselves.
“The COVID trend of being able to work remotely is also driving the market,” says Coldwell Banker’s Lander.
“I think we’re seeing that more people are able to work from home now so these people are buying in our area,” adds Selkirk Realty’s Roberts. “There are also those that are securing property in our area to eventually build and move here.”
“Once COVID hit it certainly has changed how people viewed living in rural, smaller areas in Canada. We just got busier and busier,” says Kaslo’s Nijjar. “A lot of people who are able to work remotely are attracted to our areas – having fibre available in Kaslo and area certainly helps those buyers.
“It’s also nice to see a few more families be interested in living here. More full-time residences are being purchased, whereas in the past we have seen people buy recreational/ seasonal properties.”
And as prices rise in the Okanagan and points west, the wave has moved towards the Kootenays.
“As real estate prices were going up in the busier areas like the Lower Mainland and Okanagan, that allowed those sellers to purchase properties here for little or no financing,” explains Nijjar. “For example, someone could sell their house for around a million dollars and then be able to buy larger properties or on the lake or with lake views [here] for considerably less.
“I’m seeing many buyers from Revelstoke, Rossland and Golden coming in with equity take-outs,” agrees Lander.
However, the realtors say they’re concerned about the economic impact of the second wave of COVID, and how long the hurt will go on.
“If it continues like it has been, then I foresee another busy market this spring, providing we have the inventory to sell,” says Roberts. “However, depending on what the COVID pandemic long-term effects are to our economy, things could certainly change in the next 6-12 months.”
Provincially, analysts remain bullish on BC’s real estate outlook for 2021.
“Multiple Listing Service residential sales in the province are forecast to rise 16.9% to 90,450 units this year, after recording 77,350 residential sales in 2019,” says a release from the BC Real Estate Association, adding that residential sales are forecast to increase 9.7% to 99,240 units in 2021.
“We are forecasting the provincial MLS average price to finish the year up 9.9% and to increase a further 2.6% in 2021.”
Still, 2020 is not a year realtors will soon forget.
“All I can add is that 2020 saw very strange, unprecedented market conditions in our area – something I’ve never quite seen in the 32 years I have been in this business,” says Roberts.
Okanagan-Shuswap real estate markets not slowing down – Kelowna Capital News
Home sales in the Central, North Okanagan and Shuswap markets continue to soar.
According to the Okanagan Mainline Real Estate Board (OMREB), residential sales in November of this year topped last year’s sales by 71 per cent, but came in at 15 per cent less than October’s 1,062 sales.
The supply of homes, OMREB found, still struggles to meet the high demand.
“We continue to see high residential housing demand despite a mild seasonal slowdown generally seen during this time of year,” said OMREB President Kim Heizmann said in an announcement on Dec. 2.
“Looking at the numbers we can see that consumer demand is not being met due to record low listings, which creates upward pressure on pricing. Essentially, the demand is so high that is difficult for inventory to build up.”
Compared to 2019, single-family homes across the board have increased in sales and price. In November, the most homes in the region sold in the Central Okanagan, totalling 291 sales. The highest average price also rested in the Central Okanagan, at $728,900, up 10. 5 per cent from last year. The lowest prices in the region, while also climbing, are found in Shuswap/Revelstoke, at $480,600. The North Okanagan fell between the two.
It’s a similar story for townhouses, as well as condos/apartments. However, condos in Shuswap/Revelstoke are closer in price to those in the Central Okanagan, at $342,000 compared to $387,300.
The average number of days to sell single-family homes substantially decreased, by about 20 per cent across the board compared to last year.
However, compared to October, the number of days to sell all home types went up 8 per cent to 88 days.
For more information on your local real estate market, visit OMREB.com, or contact your local Realtor.
Do you have something to add to this story, or something else we should report on? Email: firstname.lastname@example.org
Record-Setting Sales Continue in November on Montreal's Real Estate Market – GlobeNewswire
L’ÎLE-DES-SŒURS, Quebec, Dec. 03, 2020 (GLOBE NEWSWIRE) — The Quebec Professional Association of Real Estate Brokers (QPAREB) has just released its residential real estate market statistics for the Montreal Census Metropolitan Area (CMA) for the month of November, based on the real estate brokers’ Centris provincial database.
A new November sales record was set in the Montreal CMA despite the second wave of the COVID-19 pandemic. Residential sales jumped by 32 per cent compared to November of last year.
“We also saw a historic 57 per cent increase in the number of new condominium listings on the Island of Montreal, the highest level since the year 2000 when the real estate brokers’ Centris system began compiling market data,” said Charles Brant, director of market analysis at the QPAREB.
- Year-to-date sales have increased by 7 per cent compared to the same period in 2019.
- Sales continued to increase in several periphery markets, including the North Shore (+48 per cent), the South Shore (+37 per cent), Laval (+34 per cent) and Vaudreuil-Soulanges (+32 per cent), as well as on the Island of Montreal (+21 per cent). In contrast, sales in Saint-Jean-sur-Richelieu slowed, registering a 3 per cent increase, due primarily to a record drop in new listings in this market over the past several quarters.
- By property category, plexes (2 to 5 dwellings) registered the largest sales increase (+34 per cent) followed closely by condominiums (+31 per cent) and single-family homes (+31 per cent).
- There was a significant increase in active listings for condominiums (+14 per cent) and plexes (+7 per cent), numbers that have not been seen for a month of November since 2012 and 2014, respectively. This was in contrast to single-family homes, which registered a sharp decline (-38 per cent).
- With market conditions that are still very much to the advantage of sellers, median prices continued to increase significantly for single-family homes (+23 per cent) but tended to slow down for condominiums and plexes (+9 per cent).
If you would like additional information from the Market Analysis Department, such as specific data or regional details on the real estate market, please write to us.
Book your interview for December 16!
On December 16, the QPAREB will unveil its assessment of the 2020 real estate market, along with its forecasts for 2021 and an analysis of the impact of COVID-19. A press release will be issued on November 16. Please reserve your time slot for an interview now at email@example.com.
About the Quebec Professional Association of Real Estate Brokers
The Quebec Professional Association of Real Estate Brokers (QPAREB) is a non-profit association that brings together more than 13,000 real estate brokers and agencies. It is responsible for promoting and defending their interests while taking into account the issues facing the profession and the various professional and regional realities of its members. The QPAREB is also an important player in many real estate dossiers, including the implementation of measures that promote homeownership. The Association reports on Quebec’s residential real estate market statistics, provides training, tools and services relating to real estate, and facilitates the collection, dissemination and exchange of information. The QPAREB is headquartered in Quebec City and has its administrative offices in Montreal. It has two subsidiaries: Centris Inc. and the Collège de l’immobilier du Québec. Follow its activities at qpareb.ca or via its social media pages: Facebook, LinkedIn, Twitter and Instagram.
Société Centris provides real estate industry stakeholders with access to real estate data and a wide range of technology tools. Centris tools are used by close to 14,000 real estate brokers, as well as other industry professionals. Centris also operates Centris.ca, the most visited real estate website in Quebec.
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A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/7999a601-9834-44d3-bb9d-6e3ec1c4df6f
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