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Will Canadian Real Estate Prices Cool This Winter? – RE/MAX News

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The COVID-19 pandemic shook the Canadian (and global) economy, causing business closures and job losses across many industries. But the public health crisis has failed to drive a stake through the Canadian real estate market – so far. Despite a slowdown at the height of the pandemic earlier this year, the nation’s housing sector has enjoyed a record-setting recovery from coast to coast, thanks in part to a combination of tech-savvy real estate agents, low interest rates and high demand. Although homebuyer trends are evolving, major urban centres and small towns are experiencing booming sales activity and rising prices.

With winter on the horizon, can the housing market maintain its upward trajectory? Some believe that pent-up demand has likely been exhausted, but that real estate prices will continue to edge higher across the country. What does the data say? Let’s explore some of the latest analysis and numbers to see what has been occurring in the broader Canadian real estate market, and what trends may emerge as we approach 2021.

Will Canadian Real Estate Prices Cool This Winter?

The Federal Reserve Bank of Dallas recently published a report analyzing the real estate markets in the Group of Seven countries during the second quarter. Researchers revealed that Canadian residential real estate prices reported the biggest jump in the G7, rising 2.42 per cent from the previous quarter. The next closest in G7 is France, rising 1.71 per cent. This occurred despite soaring vacancy rates and very little immigration during the April-to-June period.

It is remarkable to see how much home valuations have increased and how sales have popped during an unprecedented public health crisis. Here are just some of the August 2020 average sales prices and the year-over-year growth based on Canadian housing market data:

  • Greater Toronto Area: $890,400 (+11.1%)
  • Greater Vancouver Area: $1,038,700 (+5.3%)
  • Ottawa: $517,800 (+19.9%)
  • Greater Montreal Area: $408,200 (+16.4%)
  • Halifax: $372,982 (+18.1%)

The unforeseen developments of 2020 may have stumped market watchers, but the upward trends make sense since a key factor helping in the recovery of the national real estate market has been an inventory shortage that surfaced long before COVID-19 reared its head in Canada. According to the Canadian Real Estate Association (CREA), inventory levels fell to an all-time low of 2.6 months in August. This is the length of time it would take to liquidate the current stock of listings at the current sales rate.

Can Canada sustain this momentum heading into winter and 2021? RBC Economics recently published a report that suggested pent-up demand has been exhausted, which could mean the Canadian real estate market will lose some of this fierce momentum in the months to come. Despite the possibility of a slow down, the report suggests that prices will continue to climb.

“With pent-up demand now largely exhausted, we see activity cooling later this fall,” economist Robert Hogue wrote. “The pent-up demand created this spring proved a powerful driver of activity. Question is: how much longer can it be such a dominant factor? We think there’s probably little pent-up demand left to satisfy in most markets.”

The expectation for higher prices is in line with the RE/MAX Fall Market Outlook Report, which forecasted a continuation of growth in valuations and activity in most housing markets. But why? The Canadian real estate market has plenty of growth factors working in its favour:

  • Interest rates are at an all-time low.
  • Real estate agents are still utilizing virtual tools to facilitate transactions.
  • Some levels of pent-up demand continue to linger in the background.
  • The federal government has made it clear that it would not allow any substantial downturn in the industry.

Where to Buy in Canada

Whether homebuyers’ sights are set upon Atlantic Canada, the Greater Toronto Area, the Prairies of the West Coast, the Canadian real estate market is ripe with a wide range of opportunities for both new homebuyers and homeowners looking to upgrade. Now that more people are working remotely, many professionals are no longer confined to living within close proximity to their workplace, which is opening up a wave of growth everywhere – namely within small suburban or rural municipalities.

The Bank of Canada (BoC), which is anticipated to maintain an accommodative monetary policy for a few more years, projects that the road to recovery will be a long one. Despite the remaining roadblocks within the economy, including business closures and widespread job loss, the real estate sector is booming, suggesting that any significant price cooling activity is unlikely to correlate with Canada’s cooling temperatures. When it comes to the national real estate market, all signs point to a hot winter market ahead.  

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Record month for South Georgian Bay real estate pushing pricing out of reach for many – CTV Toronto

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COLLINGWOOD —
October was another record-breaking month for real estate sales in the region.

Statistics from the South Georgian Bay association of realtors show the number of sales increased 47 percent over October last year. The benchmark price of a single-family home Climbed 21.8 percent to 513 thousand dollars, vacancies are down, while rents are also seeing an increase.

“Rents have been a surprise to me how quickly they have escalated and how out of context they are with the local market, wage rates and labour force,” says community activist Marg Scheben-Edey.

A flood of buyers from the GTA is fuelling the hot housing market. Still, there’s mounting evidence that rising prices make the communities around Southern Georgian Bay unaffordable, especially for service industry workers and single-income families who spend more than half their income on housing.

Pamela Hillier, the Executive Director of Community Connection, says that’s not sustainable and adds calls for help to 211 are up 153 per cent.

“At the end of the month, there’s no money left to buy food, or prescription medicine, or things like that, so people call to see if there are other income sources or help out there to pay for other services that they need.”

Advocates for purpose-built housing, including Gail Michalenko, say a bad situation just got worse in Collingwood.

“Our current council is certainly more supportive and recognizes that there’s a huge issue with this,” says Michalenko, “so now it’s time for some action.”

“There’s a sense of urgency to start addressing the situation,” says Scheben-Edey. It’s not something we can take likely sometimes it’s life and death.”

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Real Estate Brokerage Compass Taps Banks for IPO – BNN

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(Bloomberg) — Compass, a SoftBank-backed company that’s among the largest real estate brokerages in the U.S., has selected underwriters for a potential initial public offering, according to a person with knowledge of the matter.

The New York-based startup is working with Goldman Sachs Group Inc. and Morgan Stanley ahead of a listing that’s slated for 2021, said the person, who requested anonymity because the information isn’t public.

Representatives for Compass and Goldman declined to comment. A spokesman for Morgan Stanley didn’t immediately have a comment.

Compass was founded in 2012 by Ori Allon and Robert Reffkin, a Goldman alum who was once Gary Cohn’s chief of staff at the bank. It positions itself as a real estate firm that uses technology to give its agents an advantage over rivals. The company has used capital from venture investors to expand by acquiring smaller brokerages across the U.S.

Low mortgage rates have fueled a housing rally in the U.S. as Americans seek more space to spread out in the pandemic. That’s boosted residential real estate companies, including Zillow Group Inc. and Opendoor, another SoftBank-backed company. Realogy Holdings Corp., which owns Compass competitor Corcoran Group, has seen its shares rally about 28% this year.

In addition to SoftBank, which participated in a $370 million funding round last year that valued Compass at $6.4 billion, investors include Goldman Sachs, Fidelity, Wellington Management, Founders Fund, Dragoneer Investment Group and Canada Pension Plan Investment Board, according to its website.

Former American Express Chief Executive Officer Ken Chenault and Salesforce.com CEO Marc Benioff are also investors.

©2020 Bloomberg L.P.

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Commercial Real Estate: Navigating Opportunities And Challenges Ahead (Video) – Real Estate and Construction – Canada – Mondaq News Alerts

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Canada:

Commercial Real Estate: Navigating Opportunities And Challenges Ahead (Video)

To print this article, all you need is to be registered or login on Mondaq.com.

Uncertainties currently abound in many sectors and commercial
real estate is no exception. While the COVID-19 pandemic has caused
some level of distress in certain sectors of the commercial real
estate market, it has also opened doors for stakeholders and
presented opportunistic transactions with their own unique set of
risks and important structuring considerations, particularly in the
restructuring and insolvency space.

In this video, Graham Rawlinson and Charlene Schafer briefly
discuss what to expect in our upcoming webinar on December 3 on
commercial real estate. Some of the key topics to be explored
are:

  • preparing for bankruptcy or insolvency opportunities that may
    affect the Canadian real estate market, and what to consider when
    dealing with assets going through some type of a debtor/creditor
    process;
  • funds focused on distressed and opportunistic real estate
    assets, and whether the ongoing distress in the market will
    continue to present new opportunities; and
  • distressed opportunities south of the border and unique
    considerations affecting the U.S. commercial real estate
    market.

Play the short clip below and register for the webinar here.

self

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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Asserting Privilege In The Condominium Context

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The issue of asserting solicitor-client privilege in the condominium context is an interesting one, especially as between the condominium corporation and the individual unit owners

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