Real eState
Will Ontario’s spring real estate market be hot or cold? Here are signs to watch for – Global News
This article is the first in Global News’ Spring Housing Buzz series, where we will investigate a number of different areas related to the spring real estate market in Ontario.
As the days grow longer, real estate markets generally grow stronger across Ontario in what is known as the spring market.
Global News spoke to realtors and an economist in an attempt to explain what the spring market is as well as to look at recent trends which may help to discern what could happen with the spring market in 2024.
Now, there is no hard and fast rule as to when the spring market actually arrives as it is not marked on the calendar and there are a number of variables involved.
“We usually see a slow build from early February, in through March,” Guelph realtor Beth Waller said. “And then I would say after March Break is maybe the time.”
Kingston realtor Matt Lee shared that view but noted that the warmer-than-expected weather created some early action in the Kingston housing market.
“March 15 is what I tell my clients. I think that you’re starting to kick off then is the norm,” he explained in mid-February, noting that the early warm spell in his area caused the market to warm up as well.
“If we get six inches of snow, you might see it taper a bit and then it will pick back up.”
Generally, most realtors will tell you that the market then slows down in July and August before things pick up again in September for the fall market.
“People are taking vacations a bit and they’re starting to taper off a little bit,” Lee said. “But then you get a bump between September and December.
“So I would say that the busiest market is spring, and that’s where we’re going to come into.”
Is spring a good time to sell?
Realtors say the spring market is considered the best time to be a seller followed closely by the shorter fall market.
Toronto realtor Rahim Jaffer said the spring and fall markets are definitely a good time to be a seller rather than the winter and summer when there are lulls in the market.
“Sellers typically have a greater pool of buyers out there interested in their properties and usually end up with better sale prices,” he explained.
For buyers, the time to get a better deal might be in August or November and December, but while they will have less competition, there will also be less inventory available.
“In terms of the best time to be a buyer, I mean, it’s a great question because you’re so limited with inventory in the summer and the winter,” Jaffer explained. “But a lot of your competition is not paying attention to the market as well.”
Hamilton realtor Rob Golfi explained that depending on the year, there are deals to be had in the offseason, although during the early stages of the pandemic, there was no offseason.
“You buy in November, December,” he offered. “You sell in March, April or February, March or whatever you sell then.”
The Hamilton market has cooled off from its Apex in 2021 and early 2022 but Golfi said there were options to turnover a home quickly for strong profit if things fell right.
“You could literally buy a house in let’s say Burlington for $950,000, which that house, it should have been sold for maybe $1,000,050,” he explained. “And you could literally buy that house at 950, close on the deal in probably March, put it up for sale five days later and probably make $150,000.”
Those were the volatile days early on in the pandemic as there were incredibly low interest rates but prices have fallen since the federal government began to raise interest rates.
When spring has sprung, what might we see across Ontario?
The last few months have been a tale of two markets as realtors say November and December were pretty quiet, while others saw things pick back up in January.
“It has picked up. In the Hamilton area, unit sales are up five per cent from December and it’s going to continue climbing,” Golfi said.
In Toronto, realtors are painting a similar picture as interest rates have dropped.
“It seems like buyers are returning to the fold in a big way,” Jaffer said. “What I think has somewhat prompted that has been some of the major lenders out there lowering their fixed interest rates over the course of December.”
Those sentiments were echoed by the Canadian Real Estate Association, which reported that national home sales were up 22 per cent year-over-year, with much of southern Ontario leading the charge.
That said, realtors in other Ontario markets are seeing a different start over the first couple of months of 2024.
“The January market is on track to be equal to or slightly less than, the number of homes sold last year,” said Ryan Waller of the Guelph market. “And definitely a decline, almost a 50 per cent decline, from the prior three years.”
It is a somewhat similar story down in London, where prices have levelled off over the past 18 months.
Local realtor Marcus Plowright said that it is somewhat of a buyer’s market in the Forest City but it all depends on what you are looking to buy.
“It really depends on what price point you want to buy in. So if you’re looking for affordable housing, there’s limited inventory,” he explained, noting that there are a lot of higher-end homes available on the market.
Lee believes it is going to be a busy time going forward in Kingston.
“I think we’re going to have a busy market,” he said, noting that people have adjusted their expectations with prices having steadied.
“In Kingston, we’ve seen the median sale price level off in our area so people feel comfortable that there’s not going to be this dramatic drop.”
Waiting for the rate announcement
As the heart of the real estate market moves closer in time, it is not easy for realtors to paint a clear picture of what to expect.
“We’re only in the second week of February, so it is a little too early to tell whether we’re going to see this continue,” Jaffer said on Feb. 16. “But the market certainly has shown signs of picking up in 2024 already.”
Robert Hogue, assistant chief economist for RBC, said the pace of the real estate market in early 2024 was somewhere in the middle of what the realtors have seen over the past few months.
“If you look beyond just the normal seasonal flows, on a seasonally adjusted basis, things have picked up a little bit, but they’re still slow,” he said. “The whole market is still slow. You know, affordability is a huge issue.”
Hogue said that the problem remains the relatively high Bank of Canada rate that was put in place to tame inflation although some banks have begun to lower interest rates.
“Still, we’ve seen since December and into January some slight declines in fixed mortgage rates that probably cracked the door open for some buyers,” the economist said. “So that’s why probably you’ve seen a little bit more activity.”
The Wallers warned sellers to be more cautious in their expectations as prices remain stagnant in the Guelph area.
“I think that sellers need to sort of tame their expectations,” Ryan Waller said. “Unless it’s a really unique house, you’re going to find potentially one or two offers, but they’re not going way over the asking price.”
It will be interesting for those in real estate to see how the spring market does play out as it appears that there are plenty of potential buyers sitting on the sidelines.
“From what I’m hearing from mortgage brokers, there have been a lot of people that have had pre-approval done that haven’t done anything yet,” Lee said. “That tells me that they’ve held off just to see how the market is shaping up.”
“It has allowed some more inventory to get on the market, but we are still very short in regards to inventory.”
While some of the realtors are anticipating a stronger market this spring, Hogue believes things will truly not pick up until the feds lower the interest rate.
“We all are looking at this kind of slow, small uptick we’ve seen the last couple of months whether that’s going to be sustained or built on, going forward,” the economist said. “We think until you get the Bank of Canada cutting rates, which we think is going to start in mid-year, you’re unlikely to see the market really pick up from a meaningful perspective.”
He said the prices have continued to drift lower as affordability remains an issue and the expectations are that the interest rates will not fall during the spring market.
And while some might expect that drop to be quick, Golfi thinks the feds will slowly ratchet them down.
“I think they’re just going to do a quarter point at a time, just little bits and pieces, just so that we don’t stir up the market too much,” the Hamilton realtor explained.
The Bank of Canada will make its next interest rate announcement on March 6.
A not-so-perfect time to renew
While the higher interest rates will keep some out of the market, they will also have a dramatic effect on those that currently have mortgages.
The higher interest rates can not only cause issues for those looking to buy but also for those who purchased back in 2020 and 2021.
There is a cohort of homeowners who purchased at that point who will face a dramatic shock when renewal arrives as prices were at their peak and rates were at their lowpoint.
“One of the things that we monitor very closely is sellers and the kind of sellers that may be a bit more desperate,” Hogue explained. “The mortgage renewal shock is huge for many and the concern is that there might be a certain number of those experiencing this shock who may not be able to continue owning that property.”
He noted that the higher interest rates might lead to a wave of sellers although RBC has not seen that happen just yet.
“We’re continuing to keep an eye on (it) because that mortgage renewal shock can be massive,” Hogue said.
“Now, it’s not just 100 bucks more a month. In some cases, it is $1,000, if not more, a month and that’s huge for many people.”
But realtors have been getting calls from clients who are already experiencing the pinch from higher interest rates.
“They’ve been trying to hold on as long as they can, and they’re getting to the point where it’s getting a little bit uncomfortable for them,” Ryan Waller said.
Golfi said that some of his clients have also looked ahead to the horizon and are trying to get ahead of the issue.
“People can’t afford the interest rate on the mortgage that’s coming,” the Hamilton realtor said. “Some people, if they know the renewal is coming, they’re getting out before it happens.”
We would love to hear your trials, tribulations, thoughts and victories with regards to the real estate market. Please contact us below.
Real eState
Here are some facts about British Columbia’s housing market
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.
The Canadian Press. All rights reserved.
Real eState
B.C. voters face atmospheric river with heavy rain, high winds on election day
VANCOUVER – Voters along the south coast of British Columbia who have not cast their ballots yet will have to contend with heavy rain and high winds from an incoming atmospheric river weather system on election day.
Environment Canada says the weather system will bring prolonged heavy rain to Metro Vancouver, the Sunshine Coast, Fraser Valley, Howe Sound, Whistler and Vancouver Island starting Friday.
The agency says strong winds with gusts up to 80 kilometres an hour will also develop on Saturday — the day thousands are expected to go to the polls across B.C. — in parts of Vancouver Island and Metro Vancouver.
Wednesday was the last day for advance voting, which started on Oct. 10.
More than 180,000 voters cast their votes Wednesday — the most ever on an advance voting day in B.C., beating the record set just days earlier on Oct. 10 of more than 170,000 votes.
Environment Canada says voters in the area of the atmospheric river can expect around 70 millimetres of precipitation generally and up to 100 millimetres along the coastal mountains, while parts of Vancouver Island could see as much as 200 millimetres of rainfall for the weekend.
An atmospheric river system in November 2021 created severe flooding and landslides that at one point severed most rail links between Vancouver’s port and the rest of Canada while inundating communities in the Fraser Valley and B.C. Interior.
This report by The Canadian Press was first published Oct. 17, 2024.
The Canadian Press. All rights reserved.
News
No shortage when it comes to B.C. housing policies, as Eby, Rustad offer clear choice
British Columbia voters face no shortage of policies when it comes to tackling the province’s housing woes in the run-up to Saturday’s election, with a clear choice for the next government’s approach.
David Eby’s New Democrats say the housing market on its own will not deliver the homes people need, while B.C. Conservative Leader John Rustad saysgovernment is part of the problem and B.C. needs to “unleash” the potential of the private sector.
But Andy Yan, director of the City Program at Simon Fraser University, said the “punchline” was that neither would have a hand in regulating interest rates, the “giant X-factor” in housing affordability.
“The one policy that controls it all just happens to be a policy that the province, whoever wins, has absolutely no control over,” said Yan, who made a name for himself scrutinizing B.C.’s chronic affordability problems.
Some metrics have shown those problems easing, with Eby pointing to what he said was a seven per cent drop in rent prices in Vancouver.
But Statistics Canada says 2021 census data shows that 25.5 per cent of B.C. households were paying at least 30 per cent of their income on shelter costs, the worst for any province or territory.
Yan said government had “access to a few levers” aimed at boosting housing affordability, and Eby has been pulling several.
Yet a host of other factors are at play, rates in particular, Yan said.
“This is what makes housing so frustrating, right? It takes time. It takes decades through which solutions and policies play out,” Yan said.
Rustad, meanwhile, is running on a “deregulation” platform.
He has pledged to scrap key NDP housing initiatives, including the speculation and vacancy tax, restrictions on short-term rentals,and legislation aimed at boosting small-scale density in single-family neighbourhoods.
Green Leader Sonia Furstenau, meanwhile, says “commodification” of housing by large investors is a major factor driving up costs, and her party would prioritize people most vulnerable in the housing market.
Yan said it was too soon to fully assess the impact of the NDP government’s housing measures, but there was a risk housing challenges could get worse if certain safeguards were removed, such as policies that preserve existing rental homes.
If interest rates were to drop, spurring a surge of redevelopment, Yan said the new homes with higher rents could wipe the older, cheaper units off the map.
“There is this element of change and redevelopment that needs to occur as a city grows, yet the loss of that stock is part of really, the ongoing challenges,” Yan said.
Given the external forces buffeting the housing market, Yan said the question before voters this month was more about “narrative” than numbers.
“Who do you believe will deliver a better tomorrow?”
Yan said the market has limits, and governments play an important role in providing safeguards for those most vulnerable.
The market “won’t by itself deal with their housing needs,” Yan said, especially given what he described as B.C.’s “30-year deficit of non-market housing.”
IS HOUSING THE ‘GOVERNMENT’S JOB’?
Craig Jones, associate director of the Housing Research Collaborative at the University of British Columbia, echoed Yan, saying people are in “housing distress” and in urgent need of help in the form of social or non-market housing.
“The amount of housing that it’s going to take through straight-up supply to arrive at affordability, it’s more than the system can actually produce,” he said.
Among the three leaders, Yan said it was Furstenau who had focused on the role of the “financialization” of housing, or large investors using housing for profit.
“It really squeezes renters,” he said of the trend. “It captures those units that would ordinarily become affordable and moves (them) into an investment product.”
The Greens’ platform includes a pledge to advocate for federal legislation banning the sale of residential units toreal estate investment trusts, known as REITs.
The party has also proposed a two per cent tax on homes valued at $3 million or higher, while committing $1.5 billion to build 26,000 non-market units each year.
Eby’s NDP government has enacted a suite of policies aimed at speeding up the development and availability of middle-income housing and affordable rentals.
They include the Rental Protection Fund, which Jones described as a “cutting-edge” policy. The $500-million fund enables non-profit organizations to purchase and manage existing rental buildings with the goal of preserving their affordability.
Another flagship NDP housing initiative, dubbed BC Builds, uses $2 billion in government financingto offer low-interest loans for the development of rental buildings on low-cost, underutilized land. Under the program, operators must offer at least 20 per cent of their units at 20 per cent below the market value.
Ravi Kahlon, the NDP candidate for Delta North who serves as Eby’s housing minister,said BC Builds was designed to navigate “huge headwinds” in housing development, including high interest rates, global inflation and the cost of land.
Boosting supply is one piece of the larger housing puzzle, Kahlon said in an interview before the start of the election campaign.
“We also need governments to invest and … come up with innovative programs to be able to get more affordability than the market can deliver,” he said.
The NDP is also pledging to help more middle-class, first-time buyers into the housing market with a plan to finance 40 per cent of the price on certain projects, with the money repayable as a loan and carrying an interest rate of 1.5 per cent. The government’s contribution would have to be repaid upon resale, plus 40 per cent of any increase in value.
The Canadian Press reached out several times requesting a housing-focused interview with Rustad or another Conservative representative, but received no followup.
At a press conference officially launching the Conservatives’ campaign, Rustad said Eby “seems to think that (housing) is government’s job.”
A key element of the Conservatives’ housing plans is a provincial tax exemption dubbed the “Rustad Rebate.” It would start in 2026 with residents able to deduct up to $1,500 per month for rent and mortgage costs, increasing to $3,000 in 2029.
Rustad also wants Ottawa to reintroduce a 1970s federal program that offered tax incentives to spur multi-unit residential building construction.
“It’s critical to bring that back and get the rental stock that we need built,” Rustad said of the so-called MURB program during the recent televised leaders’ debate.
Rustad also wants to axe B.C.’s speculation and vacancy tax, which Eby says has added 20,000 units to the long-term rental market, and repeal rules restricting short-term rentals on platforms such as Airbnb and Vrbo to an operator’s principal residence or one secondary suite.
“(First) of all it was foreigners, and then it was speculators, and then it was vacant properties, and then it was Airbnbs, instead of pointing at the real problem, which is government, and government is getting in the way,” Rustad said during the televised leaders’ debate.
Rustad has also promised to speed up approvals for rezoning and development applications, and to step in if a city fails to meet the six-month target.
Eby’s approach to clearing zoning and regulatory hurdles includes legislation passed last fall that requires municipalities with more than 5,000 residents to allow small-scale, multi-unit housing on lots previously zoned for single family homes.
The New Democrats have also recently announced a series of free, standardized building designs and a plan to fast-track prefabricated homes in the province.
A statement from B.C.’s Housing Ministry said more than 90 per cent of 188 local governments had adopted the New Democrats’ small-scale, multi-unit housing legislation as of last month, while 21 had received extensions allowing more time.
Rustad has pledged to repeal that law too, describing Eby’s approach as “authoritarian.”
The Greens are meanwhile pledging to spend $650 million in annual infrastructure funding for communities, increase subsidies for elderly renters, and bring in vacancy control measures to prevent landlords from drastically raising rents for new tenants.
Yan likened the Oct. 19 election to a “referendum about the course that David Eby has set” for housing, with Rustad “offering a completely different direction.”
Regardless of which party and leader emerges victorious, Yan said B.C.’s next government will be working against the clock, as well as cost pressures.
Yan said failing to deliver affordable homes for everyone, particularly people living on B.C. streets and young, working families, came at a cost to the whole province.
“It diminishes us as a society, but then also as an economy.”
This report by The Canadian Press was first published Oct. 17, 2024.
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