Real eState

WILD: Toronto real estate market still 'highly vulnerable' – Toronto Sun

Published

3 years ago

October 22, 2021

Harry Miller

Author of the article:

Penelope Wild

A real estate sign that reads “For Sale” and “Sold Above Asking” stands in front of housing in Vaughan, a suburb in Toronto in this file photo taken on May 24, 2017. Photo by Mark Blinch /REUTERS

When the economy begins to fire on all cylinders, buyers tend to show more interest in the housing market.

And over the past several months, the gradual reopening of the economy, high vaccination rates, historically low interest rates and government support programs have all fueled job recovery, savings and propelled many more buyers into the market.

A market over the past 18 months that’s been characterized by high demand, limited supply, wildly rising prices, record sales and intense competition in the form of multiple bids on available homes.

Those conditions have led to a warning from the Canada Mortgage and Housing Corporation (CMHC) in its recent national Housing Market Assessment report.

Rising prices for homes combined with “continued overvaluation” of home prices and a growing gap between fundamental factors such as worker income have “created a high degree of vulnerability in Canada’s housing market.”

“A high degree of vulnerability means the housing market is more vulnerable to a potential downturn, with greater consequences if the downturn were to happen,” the CMHC notes in its recent release.

“Exceptionally strong demand and home price appreciation through the course of the pandemic may have contributed to increased expectations of continued price growth for homebuyers in several local housing markets across Ontario and Eastern Canada,” said Bob Dugan, CMHC’s chief economist. “This, in turn, may have caused more buyers to enter the market than was warranted.”

The HMA looks for potential imbalances in the housing market by assessing four key factors:

Overheating: when demand is significantly stronger than supply
Price acceleration: when house prices rise at an increasing pace over a sustained period
Overvaluation: when house prices differ significantly from their level consistent with housing market fundamentals
Excess inventories: when there is an unusually high level of vacant housing units

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According to the report, the GTA housing market in particular continued to be assessed at a high degree of market vulnerability, even after existing home sales started to ease and the pandemic-induced buying frenzy calmed down during the second quarter of 2021.

Overall, CHMC found moderate evidence of imbalances in the GTA market and high market vulnerability.

Existing home sales remained elevated, relative to the number of new listings coming to market, even though we saw some easing in prices and sales in the second quarter.

It will come as no surprise to anyone that a persistently tight market led us to an overheated market with a demand-supply imbalance for existing homes that contributed to non-stop price acceleration.

The decline in new listings was enough to keep market conditions tight and price growth elevated, well into the second quarter of 2021.

As we moved into the third quarter of this year, market conditions further tightened which accounted for most of the market activity in the GTA. The seasonally adjusted sales to new listings ratio was 80% in July 2021, which was well about the five-year historical average of 58%.

The downturn in condo sales we saw heading into the pandemic as city dwellers migrated to the suburbs and cottage country to embrace the work from home model, started to rebound as regional openings resulted in workers and students returning to urban centres across the GTA looking to buy or rent, while the supply of new listings trended lower.

The HMA goes on to report that demand has persisted in suburban markets amid the pandemic due to increased prevalence of teleworking and the general desire among households to own larger homes while paying lower prices.

Home sales eased during the second quarter of 2021 while the lack of new listings on the market supported persistent price growth as a pool of buyers called it quits. Driven by tight market conditions for single-detached homes in suburban markets, average MLS price growth was higher in places such as York, Halton and Durham regions. The City of Toronto’s average MLS price growth was less obvious due to lower priced condominium apartments making up a larger share of sales.

And the HMA noted that despite high prices in Toronto, employment among high-income earners was relatively strong and remained supportive of housing demand in the second quarter of 2021. What we know is high income earners are more likely to be owners.

Looking toward next year, even with inflation on the rise, the CMHC report doesn’t suggest more than potential concern for price correction but it does seem likely we’ll see continued pressure on home and condo prices into 2022.

— Penelope Wild is the former Homes editor of the Toronto Sun and a realtor with Keller Williams Real Estate Associates.

penelopewild@kw.com

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Real eState

Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

Published

6 days ago

November 6, 2024

Anne Joseph

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.

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Real eState

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

Published

3 weeks ago

October 24, 2024

Anne Joseph

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.

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Real eState

Here are some facts about British Columbia’s housing market

Published

4 weeks ago

October 17, 2024

Anne Joseph

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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