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Ontario housing markets to lead Canada heading into 2021

Ontario housing markets to lead Canada heading into 2021

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Ontario housing markets to lead Canada heading into 2021

Housing markets across Canada are expected to remain active for the remainder of 2020 due to pent-up demand and low inventory levels – with price growth in Ontario leading the way, according to a new report from ReMax Canada.

The ReMax Fall Market Outlook Report forecasts the average sale price in Canada could increase by 4.6 per cent during the remainder of the year, compared to the 3.7 per cent increase that was predicted in late 2019.

The pandemic has prompted many Canadians to reassess their living situations. According to a survey conducted by Leger on behalf of ReMax, 32 per cent of Canadians no longer want to live in large urban centres, and instead would opt for rural or suburban communities. This trend is stronger among Canadians under the age of 55.

Pent-up demand

“The classically hot spring market that was pushed to the summer months due to the COVID-19 pandemic created a surprisingly strong market across Canada and across all market segments,” says Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada. “Looking ahead, government financial aid programs may be coming to an end in September, which could potentially impact future activity. However, the pent-up demand and low inventory dynamic may keep prices steady and bolster activity for the remainder of 2020. Overall, we are very confident in the long-term durability of the market.”

Not only are Canadians more motivated to leave cities, but changes in work and life dynamics have also shifted their needs and wants for their homes. According to the survey, 44 per cent of Canadians would like a home with more space for personal amenities, such as a pool, balcony or a large yard.

Ontario housing market

With Ontario one of the provinces hit hardest by the pandemic, markets such as Niagara, Mississauga and Kitchener-Waterloo experienced significant drops in activity, but bounced back aggressively in June as economies began to reopen. Toronto continues to be a sellers’ market, with low listing inventory and high demand. An uptick in new listings is anticipated for fall, now that buyers and sellers are more comfortable engaging in the housing market. ReMax estimates a five-per-cent increase in average residential sale price in Toronto for the remainder of the year, with the potential for modest price increases of up to six per cent in regions such as Hamilton, Brampton and London.

Luxury market thriving

Canada’s overall luxury market has remained strong throughout the pandemic, with market conditions unchanged from the beginning of the year in most regions.

The luxury segment in Toronto is considered balanced, with Vancouver pushing into a sellers’ market. Vancouver is beginning to see more interest from move-up buyers instead of the foreign buyers who drove demand in Vancouver’s luxury market prior to COVID-19. This was likely due to travel restrictions brought on by the pandemic. In Toronto, activity was slower than usual this spring as buyers did not have any urgency to transact during the pandemic.

Luxury housing in secondary markets such as Hamilton is seeing a slight uptick in activity, with high-end buyers seeking more square footage and larger properties outside of city centres. Hamilton has experienced an increase in buyer interest from residents from Brampton and Mississauga looking to relocate to the region.


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Toronto and Canada to lead global markets in post-COVID-19 real estate recovery: ReMax

Toronto and Canada to lead global markets in post-COVID-19 real estate recovery – ReMax

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Toronto and Canada to lead global markets in post-COVID-19 real estate recovery – ReMax

Canada’s – and Toronto’s – real estate markets will be among the strongest in the world in a post-COVID-19 recovery, according to a new report from ReMax Canada.

A Leger survey conducted on behalf of ReMax indicates that 56 per cent of Canadians who are planning to engage in the real estate market expect to do so in less than a year, showing an eagerness to get back to buying and selling.

Almost half (44 per cent) of Canadians believe the real estate market will bounce back to the strength it was before COVID-19 by 2021. Moreover, 29 per cent believe that before the end of 2020, the market in Canada will return to its pre-pandemic strength.

“While the Canadian market has seen a steep year-over-year decline in the volume of transactions during the peak of COVID-19 this spring, transactions have been happening and prices in particular have been resilient in much of Canada,” Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada, told Condo Life.

Christopher Alexander
Christopher Alexander

Alexander points to data from the Canadian Real Estate Association (CREA), showing that national home sales in May were up 59.6 per cent from April. “Now that economies are beginning to reopen across the country, and in light of some of the recent activity we’ve seen in various cities across Canada, we anticipate that demand could begin to improve much faster than we initially anticipated at the beginning of COVID-19.”

In Toronto, Canada’s largest market, housing demand is already showing signs of rebounding. “The city has experienced an uptick in activity and a number of multiple-offer scenarios, pointing to a post-lockdown housing market outlook that is not nearly as dire as some suggested. Actual May 2020 sales increased by 55.2 per cent compared to April 2020.”

“Canada’s housing market was strong before COVID-19 hit, and despite the tragic impacts of the pandemic, we are optimistic that housing market could be restored much sooner than initially expected,” says Elton Ash, regional executive vice-president, ReMax of Western Canada. “As we saw in our 2020 Liveability Report, Canadian communities are resilient and people love their neighbourhoods, showing a collective commitment to bounce back.”

Pre-existing pent-up demand for homes in hot markets such as Vancouver, Toronto and Ottawa may help mitigate the decline in buyers who are suffering pandemic-related job losses, ReMax says. Exceptionally low inventory in much of Canada may also contribute to upward price pressure as restrictions ease and demand increases further.

In line with economists’ predictions, ReMax Canada estimates relative price stability by the end of 2020, with a possible price correction in the single digits. Exceptions include regions such as Alberta and Newfoundland, which are still struggling to rebound from a host of shocks, the dive in resource revenues, and the potential for a second wave of COVID-19.

Real estate technology

The pandemic has pushed the global real estate industry to embrace a variety of technology tools that were previously available but not always adopted to facilitate a transaction. Now, professionals are integrating 3D home tours and virtual open houses into their listing and selling practices. Given that almost half of Canadians (46 per cent) say that in a post- COVID-19 landscape, they’d prefer to work with real estate agents who use technology and virtual services in order to adhere to social distancing guidelines, agents will need to adapt in order to secure and build their businesses.

This sentiment is shared across both the U.S. and Europe, which have witnessed a shift in consumer wants toward a more digitalized homebuying and selling experience, such as e-signatures, virtual meetings and digital paperwork. ReMax notes that in some instances, buyers are still requesting in-person home tours before completing a transaction.

RELATED READING

Canadians loving their neighbourhoods in COVID-19

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Outlook 2020 – 5 things you need to know about real estate this year

 

 

 

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Canadians loving their neighbourhoods in COVID-19

Canadians loving their neighbourhoods in COVID-19

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Canadians loving their neighbourhoods in COVID-19

If the crisis of the few last months has proven anything, it’s that Canadians love their neighbourhoods.

According to a Leger survey conducted on behalf of ReMax, 82 per cent of Canadians say they would sacrifice at least one desirable attribute in order to live in the neighbourhood they believe meets their liveability “must-haves,” and 90 per cent of Canadians love the neighbourhoods they live in.

Liveability is about quality of life at a local level. A neighbourhood’s dynamism involves a delicate convergence between independent small businesses, public institutions, arts and culture, greenspaces and housing and other factors. COVID-19 will impact neighbourhood ecosystems differently across the country, just as the virus itself has. Yet, civic and local pride has been proliferating throughout this crisis in inspiring ways, giving Canadians hope that micro-economies, including real estate, have the resilience to be restored in the near- and mid-term.

“For the benefit of local small businesses and the capacity of residents to restore a high quality of life, or liveability, to their respective communities, the degree of local pride should give us all optimism,” says Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada.

The 2020 ReMax Liveability Report explores the qualities that give each homeowner the true satisfaction of living in their neighbourhood, such as access to greenspaces or restaurants and entertainment. According to the report, 91 per cent of Canadians have at least one important liveability factor that’s very important to them when it comes to the neighbourhood they live in now or would like to live in, in the future.

Not surprisingly, housing affordability came in at the top at 61 per cent, followed by:


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Ontario markets among Canada's least affordable: ReMax

Ontario markets among Canada’s least affordable – ReMax

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Ontario markets among Canada’s least affordable – ReMax

Despite a commonly held notion that housing in Canada is unaffordable, a majority of Canada’s largest cities (75 per cent) are currently undervalued, according to the 2020 ReMax Housing Affordability Report.

Unfortunately, seven centres in Ontario rank in the top 10 markets that are least affordable.

“Affordability was a cornerstone narrative during last year’s election, perpetuating the overall banner statement across Canada that real estate is increasingly unaffordable and unattainable, particularly for younger, first-time home buyers,” Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada, told HOMES Publishing. “This perception is largely influenced (and skewed) by the Toronto and Vancouver markets, which represent some of the most expensive housing markets in North America. However, the housing market is more than these two cities and paint quite a different story. More markets are affordable than not, and most are accessible, with 75 per cent of brokers agreeing that their markets are undervalued.

In markets such as Toronto, demand is far outstripping supply, pushing prices up considerably as a result. “We need to continue to push for an increase in housing supply for buyers and renters, but we have yet to see a comprehensive national housing strategy to help facilitate this shift,” says Alexander.

“Given that approximately 110,000 new Canadians are settling in the GTA each year, the lack of available supply is a huge problem. This is concerning for affordability and needs to be addressed by a national housing strategy. Otherwise, we’ll only see the problem continue to grow and the home prices will continue to climb across the GTA.”

Of the regions surveyed, Winnipeg, Regina and Halifax are currently the most affordable markets, with average sales prices of $281,105, $301,473 and $319,071, respectively. Vancouver, Toronto and Mississauga are currently the least affordable regions in Canada, with average sales prices of $1.19 million, $883,520 and $760,005, respectively.

In Toronto, factors such as the OSFI mortgage stress test, listing shortages, rising prices and saving enough for a down payment are cited as preventing buyers from purchasing property. Buyers in this region are primarily looking to purchase condominiums, but as one of Canada’s least affordable housing markets, they continue to be priced out.

Emerging trends such as co-ownership with friends and family have become common in hot markets such as Vancouver and Toronto, in order to overcome the hurdle of high housing prices. In regions such as Brampton, Edmonton and Ottawa, sharing a single-family home between two families, dividing the floors between them or children seeking financial support from parents for down payments are becoming more common practices.

“All levels of government must work together to find a solution to Canada’s inventory issue, as the market will remain elusive for many otherwise,” says Elton Ash, regional executive vice-president, ReMax of Western Canada.


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The Power Seat – building industry CEOs call for government change

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The Power Seat – building industry CEOs call for government change

The Power Seat is a new feature series in which we put one pointed question to a select, specific audience.

We asked CEO level executives among the homebuilding community:

“You have been invited to a meeting with representatives of municipal, provincial and federal governments, and it’s your turn to speak. What do you say to them?”

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This year is one of continual growth, which presents the opportunity to respond to the current and future challenges Ontarians face. All levels of government project an increase in Ontario’s population of 2.6 million #homebelievers by 2031. Change is where need meets opportunity.
We need more housing supply and choice across Ontario, and that means housing can be a cornerstone solution to climate change, the employment skills gap and the economy. Instead of viewing growth as a problem, let’s view it as the change opportunity for the type of future, communities and neighbourhoods that Ontarians want to call home.

Joe Vaccaro
CEO, Ontario Home Builders’ Association

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All three levels of government need to work collaboratively, rather than in silos, and with one agenda, rather than competing ones. With a housing affordability and supply problem impacting the GTA, we need solutions-oriented collaboration.
We need to make it simpler to bring new homes to market by streamlining the process, faster to build new homes by reducing approval times, and fairer by making sure fees and taxes are equitable

Dave Wilkes
President and CEO, BILD

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Help us do our job to create new housing. We have a shortage of housing because of the lack of supply. Don’t look at new housing as a golden goose that you can keep laying on more and more municipal charges. Right now, about 24 per cent of the cost of all new housing is going to some level of government in the form of taxes, levies, charges and fees.

Gary Switzer
Chief Executive Officer MOD Developments, Toronto

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The three levels of government, as well as builders and developers, may all have different constituencies, but our objectives are remarkably similar.

Affordable housing works for all of us. Good planning works for all of us. Good design works for all of us. Building Green buildings works for all of us. Governments working together with developers works for all of us and can help facilitate all of this.

At The Rose Corporation, we accomplished exactly this, working with York Region, the Town of Newmarket and the federal government (CMHC). Together, we are now building a sustainable, complete and better overall community for having worked in close consultation with each other.

Daniel Berholz
President, The Rose Corporation

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The largest issue surrounds climate change, GHG emissions and resilience in new housing. Over the next decade, these may be some of the biggest changes our industry will face. Our building code is about to be changed to begin steering the industry towards net-zero homes.

Government needs to support the R&D side of the construction industry so that new and better products can be developed. Net-zero homes are achievable. There are a number of builders that have already constructed a discovery home and are looking at the ability to market this in a production capacity. Although from a technical perspective this is achievable, it will come at a significant cost. Net-zero homes will not be cheap.

The bigger question, then, is, will such initiatives be affordable? This is what governments will have to balance. When they regulate such a high minimum standard, our industry will be forced to meet the requirements. This is where R&D pays back. We need materials and products that are approved and available at the best price points possible to adopt into our building program.

Government should keep a close eye on the timing for mandating high standards of construction, and be mindful that affordability must be a top priority in the implementation.

Johnathan Schickedanz
General Manager, FarSight Homes, President, Durham Region Home Builders’ Association

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Housing affordability is one of the most important issues facing Canadians today. TREB remains diligent, along with other real estate boards and associations across Canada, in urging all levels of government to remove barriers and reduce the cost of homeownership.

With all levels of government in Canada, plus reputable international bodies acknowledging that we have a housing supply problem, and specifically the affordability pressures facing the GTA, it’s imperative for the growth of our city and region that we have flexible housing market policies that will help sustain balanced market conditions over the long term.

The time is now and policymakers need to translate their acknowledgment of supply issues into concrete solutions in 2020 to bring a greater array of ownership and rental housing online. As always, TREB will be there to help policymakers have the right impact on the market and Canadians.

John DiMichele
CEO, Toronto Real Estate Board

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The bottom line is this: Unless we can shorten the time it takes to bring developments through the approval process and to market faster, demand is going to continue to outstrip supply.

There have been some very positive enhancements the provincial government has put through to try and reduce these timeframes, by reducing red tape and other changes, and we’re grateful for that.

But in many cases the Province and the municipalities do not see eye to eye on how policies should be applied, and this constant fighting continuously thwarts the positive efforts and mires the process.

We have to work together – the politicians, building industry and public – to accept growth, have growth pay for growth, and not for unrelated municipal spending as well. We need to plan to have adequate supply of all types of housing, but especially what is missing in our urban areas today – the two- and three-bedroom midrise condos – the “missing middle.”

 cl_feb2020_the_power_seat_bob_finniganBob Finnigan
Principal and COO of Acquisition & Housing, Herity, Toronto

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It’s vital that all three levels of government work together to address the housing affordability issue by increasing the supply of housing to meet demands of growth in the GTA for decades to come.

Sustained infrastructure growth requires multi-level government support partnering with private enterprise to foster innovation in procurement and delivery and that the planning approval process is streamlined to avoid increased costs which impact housing affordability.

The cities in the Greater Golden Horseshoe need to actually adopt and implement provincial policies on development densities near transport nodes. Ultimately, the homeowners carry the burden of the increased costs from a lack of land supply, approval delays and development charge increases.

Niall Collins
President, Great Gulf Residential, Toronto

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Canadian economists and politicians have spent the better part of the last decade sighing with relief and sharing kudos for having skirted the U.S. housing crisis. Meanwhile, north of the border, Canadians are on a rollercoaster ride, as a result of government intervention and other factors. We’ve experienced record-high housing prices, record-low interest rates, economic downturns, and domestic speculators and foreign investors pushing people out of their homes because they can’t afford to live there anymore. We’ve seen housing inventory drop, and new development hindered by red tape and mounting development fees.

We need to keep up with housing demand to maintain sustainable housing values. It’s a complex issue with many moving parts.

To Mayor John Tory: Eliminate the municipal Land Transfer Tax, or at the very least, cap it. With Toronto’s ever-increasing property values, this tax is prohibitive in an already unaffordable market. The prospect of having to pay double LTT is deterring some move-up buyers from listing their homes, further straining the already low housing supply. How do you intend to stimulate housing market activity?

To Premier Doug Ford: Domestic and foreign immigration to Ontario is critical to a healthy economy, but as you work to continue attracting the biggest and best businesses to the province, where will you house the employees and their families? Housing supply is critically low, with developers stuck behind red tape and buried under development fees, preventing them from building the homes Ontarians so desperately need.

To Prime Minister Justin Trudeau: Canada needs a National Housing Strategy that addresses inventory and affordability in our cities. Many Canadians, especially Millennials, new immigrants and those employed in the so-called “gig economy” feel homeownership is becoming less tangible by the day. While politicians of all stripes acknowledge the mounting urgency of affordable housing, few are offering any timely or compelling solutions. Focus on creating supply and affordability in a sustainable way, instead of continuing to support corrective measures that have constrained Canadians from participating in the economically beneficial practice of homeownership.

Christopher Alexander
Executive Vice-President and Regional Director, ReMax of Ontario- Atlantic Canada

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ReMax Housing Market Outlook Report

Ontario markets expected to continue to lead home price growth in 2020

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Ontario markets expected to continue to lead home price growth in 2020

ReMax Housing Market Outlook Report

Housing markets in Southern Ontario will lead in home price growth this year, and are expected to continue to do so in 2020, according to a new report from ReMax.

ReMax is expecting a leveling out of the highs and lows that characterized the Canadian market in 2019, particularly in Vancouver and Toronto, as we move into 2020. Healthy price increases are expected next year, with the ReMax 2020 Housing Market Outlook Report estimating a 3.7 per-cent increase in the average residential sales price.

Some regions in Ontario continue to experience higher-than-normal year-over-year gains from 2018 to 2019, including London (10.7 per cent), Windsor (11 per cent), Ottawa (11.7 per cent) and Niagara (12.9 per cent).

“Southern Ontario is witnessing some incredibly strong price appreciation, with many regions still seeing double-digit gains,” says Christopher Alexander, Executive Vice-President and Regional Director, ReMax of Ontario-Atlantic Canada. “Thanks to the region’s resilient economy, staggering population growth and relentless development, the 2020 market looks very optimistic.”

As more Canadians have adjusted to the mortgage stress test and older Millennials move into their peak earning years, it is anticipated that they will drive the market in 2020, particularly single Millennials and young couples. A recent Leger survey conducted by ReMax found that more than half (51 per cent) of Canadians are considering buying a property in the next five years, especially those under the age of 45.

Ontario leading the way

Toronto is set to experience a strong housing market in 2020. Lower unemployment rates, economic growth and improved overall affordability in the GTA are expected to drive the market forward. ReMax is forecasting average sale price growth for 2020 of six per cent, two points higher than the increase from 2018 ($835,422) and 2019 ($880,841 ). While Toronto is experiencing a busy construction season this year, housing supply still falls short of the demands of the city’s rapidly growing population.

ReMax Housing Outlook Report

 

Cities such as Ottawa and Windsor are seller’s markets, showing substantial increases in average residential sale price at 11.7 and 11 per cent, respectively. This strong growth is expected to continue into 2020, with Ottawa’s new LRT system impacting surrounding development and Windsor’s continued affordability attracting young professionals to the area. Buyers are also not burdened by the mortgage stress test, as they were in 2018, ReMax says.

The Niagara region is also showing strong growth, with average residential sale price increasing almost 13 per cent, from $378,517 in 2018 to $427,487 in 2019. Value-conscious consumers from the GTA are buying in droves, with many choosing to live in the region and commute to Toronto.

REGIONAL HIGHLIGHTS ACROSS CANADA:

BC

Consumer confidence in regions such as Vancouver West in early 2019 was extremely low and remained relatively shaky throughout the year, resulting in an average residential sale price drop of 7.5 per cent, from $2.27 million in 2018 to $2.10 in 2019. However, consumers have acclimatized to the mortgage stress test, and confidence has begun to return and will prevail in 2020, with prices expected to rise four per cent.

ReMax Housing Outlook Report

Fraser Valley also experienced a price drop of almost four per cent year-over-year, from $724,740 to $696,502. However, the region is also expected to witness substantial growth, particularly in downtown Surrey, due to the high number of real estate developments catering to businesses and educational institutions. First-time buyers are expected to drive the market in 2020 due to the relative affordability of the region compared to Vancouver proper.

“The drop in sales in some key British Columbia markets represents the last of the ‘down’ market spillover from 2018,” says Elton Ash, regional executive vice-president, ReMax of Western Canada.

“Consumer confidence is poised for a comeback, leading to more healthy and sustainable growth, as more buyers come to terms with the stress test and interest rates are unlikely to increase in any meaningful way in 2020.”

Prairies

ReMax Housing Outlook Report

Alberta continues to experience slowing economic conditions, leading to a decrease in average residential sale prices in Calgary, from $478,088 in 2018 to $460,532 in 2019. Condos are the easiest way for first-time homebuyers to get into the market, with starter units going for as low as $150,000. While the city’s unemployment rate continues to remain high compared to the rest of Canada, the population is increasing, with more people moving to the city from other parts of the province.

Winnipeg, on the other hand, has shown a small increase in average residential sale price, both for freehold and condominium properties, by 1.5 and 0.8 per cent, respectively. Immigration to the city, in combination with reasonable prices and ample supply, is expected to drive sales going into 2020.

Atlantic Canada

ReMax Housing Outlook Report

Halifax, NS and Saint John, NB have experienced solid price appreciation of six and five per cent, respectively. Affordability continues to attract many buyers in the region, most of whom are buying single-detached homes. At the same time, the region’s condominium market is being driven by retirees. Conversely, the market in St. John’s, Nfld. is expected to recover in 2020, with increased consumer confidence expected to bring about stabilization. However, the city’s aging population and high rate of outbound migration is expected to have an impact on housing market activity at some point.

RELATED READING

Outlook 2020 – what’s in store for GTA housing next year?

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Cannabis industry a boon to local economies

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Cannabis industry a boon to local economies

Canada’s largest cannabis producers are being credited with micro-booms in some local economies, and the trickle-down effects are visible in nearby housing sales and price increases, according to realty firm ReMax. The trend is more pronounced in eastern Canada, where there’s a greater number of large-scale cannabis producers.

Smiths Falls, Ont. is one such market transformed by Canopy Growth, the largest cannabis producer in the world. After taking over the abandoned Hershey factory, the Ottawa-area production facility now employs 1,300 people and has a market value of more than $11 billion.

“The impact of Canopy Growth on Smiths Falls cannot be understated, and it’s growing,” says Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada. “The economy in the Rideau-St. Lawrence area is experiencing a boom, which is triggering home sales, which rose by 27.1 per cent year-over-year, and average prices increased 10.5 per cent. Demand is up and there’s a housing shortage in the region. We expect to see similar cannabis industry-related growth in other regions, as well.”

Markets to watch include Windsor-Essex, where Aphria has set up shop in nearby Leamington and employs 1,000 people. The region saw September 2019 home sales increase 7.82 per cent and average prices rise 9.10 per cent year-over-year. In Atlantic Canada, the area surrounding Wentworth, NS will be of interest, where Breathing Green Solutions operates. Similarly, Atholville, NB is also experiencing a renaissance, thanks to Zenabis Global Inc., employing more than 420 people from the town and neighbouring communities ReMax says.

“The legal cannabis industry is already being credited with invigorating some lagging economies and as a result, those housing markets could soon see a flurry of activity,” Alexander adds.

While eastern Canada appears to be a hot spot for cannabis producers, and western Canada has some large-scale facilities, the west is seeing a much heavier influx of cannabis retailers compared to Ontario and Atlantic Canada. Calgary alone has more than 50 retail locations and Greater Vancouver has 23, whereas Toronto has only six. None of these markets have seen a meaningful impact on real estate activity or values. This is despite the results of a ReMax consumer survey, which found that 65 per cent of Canadians would not like to live near cannabis retail stores.

“It appears that there were a lot of anticipated reservations surrounding cannabis retail and the negative impacts on local property values that did not come to pass,” says Alexander. “We have not seen a decrease in home sales or prices that can be attributed to legal cannabis. In fact, the opposite may be true. As the retail footprint grows and diversifies into edibles and other formats, buyers and sellers may start to feel less resigned.”

A ReMax consumer survey found that two in 10 Canadians already live in proximity to a cannabis retailer, and 72 per cent of respondents say living near one is not a factor in their decision to move.

“The increasing number of retail cannabis stores in Calgary shows no signs of stopping, with city officials having approved more than 200 since legalization,” says Elton Ash, regional executive vice-president, ReMax of Western Canada. “The presence of more stores may influence how home buyers approach certain neighbourhoods.”

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GTA new home sales

GTA new home sales in July remain strong

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GTA new home sales in July remain strong

GTA new home sales

It was a busy month by July standards, as sales for both condos and single-family homes were up year-over-year, according to the latest statistics from the Building Industry and Land Development Association (BILD).

There were 566 new single-family homes, including detached, linked and semi-detached houses and townhouses, sold in July, according to Altus Group, BILD’s official source for new home market intelligence. Although sales increased 136 per cent from last July, they were 29 per cent below the 10-year average.

Sales of new condominium apartments in low-, medium- and highrise buildings, stacked townhouses and loft units, with 2,297 units sold, were up 22 per cent from July 2018 and 42 per cent above the 10-year average.

Brisk openings

“Typically, buyers take a bit of a vacation from the new condo apartment market in July” says Patricia Arsenault, Altus Group’s executive vice-president, Data Solutions. “This year was no different, although the decline in sales was less pronounced than usual, resulting in the second strongest July on record. While few new projects launched in July, sales at projects opened in June were brisk.”

The benchmark price of new condominium apartments increased from last month, to $838,824, up 8.3 per cent over the last 12 months. The benchmark price of new single-family homes decreased slightly from last month, to $1.09 million, down 4.5 per cent over the last 12 months, continuing its moderating trend in 2019.

ALSO READ: Detached home sales and prices roar back to life in first half of 2019 – ReMax

Strong July sales, paired with traditional fewer summer openings, saw inventory decrease in July to 12,873 condominium units and 4,409 single-family homes. Remaining inventory includes units in preconstruction projects, in projects currently under construction and in completed buildings.

Total new home sales in the first seven months of 2019, at 20,268 units sold, are up 45 per cent from the same period in 2018 and nine per cent below the 10-year average.

Price gap narrows

“The price gap between single-family homes and condos continues to shrink, leaving new-home buyers with a lack of choice,” says David Wilkes, BILD president and CEO. “We must provide more ‘missing middle’ type development that can support transit in established neighbourhoods. More ‘gentle density’ housing in the form of midrise buildings, condos with street level retail, and stacked townhouses is needed to give consumers more choice.”

 

New home sales by municipality, July 2019

Municipality Condominium units Single-family homes Total
Region 2019 2018 2017 2019 2018 2017 2019 2018 2017
Durham 29 6 27 118 44 60 147 50 87
Halton 59 46 18 82 25 18 141 71 36
Peel 415 150 148 142 87 0 557 237 148
Toronto 1,522 1,557 1,118 46 8 6 1,568 1,565 1,124
York 272 120 461 178 76 34 450 196 495
GTA 2,297 1,879 1,772 566 240 118 2,863 2,119 1,890

Source: Altus Group

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What Bill 108 means for housing affordability in the GTA

Behind the numbers : The GTA housing market in June 2019

Examining the GTA affordable homeownership crisis

 

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Detached home sales and prices roar back to life in first half of 2019 – ReMax

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Detached home sales and prices roar back to life in first half of 2019 – ReMax

The bounce-back in single-detached home sales is contributing to an uptick in average price, with more than 50 per cent of neighbourhoods in the Greater Toronto Area reporting an increase in detached housing values the first half of 2019, according to a new report from Re/Max of Ontario-Atlantic Canada.

Re/Max examined trends and developments in 65 Toronto Real Estate Board (TREB) districts, finding that detached home sales were up in almost 88 per cent of markets, while prices were up in 51 per cent of markets between January and June 2019, compared to the same period one year ago. The 905 area saw the greatest increase in homebuying activity, with all 30 areas reporting rising detached home sales, and 43 per cent of 905 communities experiencing price appreciation. Meanwhile, in the 416, just 20 of the 35 districts experienced an uptick in sales, while detached home prices increased in 57 per cent of neighbourhoods.

“Detached housing is finally back on track, with year-to-date sales almost 17 per cent ahead of last year’s levels, signaling a return to more normal levels of home-buying activity,” says Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada. “Market share is also climbing, with detached homes now representing 45.7 per cent of all home sales in the Greater Toronto Area, up from 43.1 per cent one year ago.”

While improving affordability is the catalyst in the uptick in detached home sales, Re/Max says location is equally important, as first-time and trade-up buyers move to secure prime real estate before values are on the move again.

Top 5 detached home markets in 416 by price growth, first half of 2019

Neighbourhoods

Average price

% increase

1. (E01)
North Riverdale
South Riverdale
Blake-Jones
Greenwood-Coxwell

$1.38M

15.2

2. (C01)
Trinity-Bellwoods
Palmerston-Little Italy
Niagara
Little Portugal
Kensington-Chinatown
Dufferin Grove

$1.95M

12.8

3. (C11)
Leaside
Thorncliffe Park

$2.19M

11.2

4. (E04)
Dorset Park
Wexford-Maryvale
Clairlea-Birchmount
Ionview
Kennedy Park

$836,585

7.8

5. (W02)
Junction
High Park North
Runnymede-Bloor,
West Village
Lambton-Baby Point
Dovercourt-Wallace
Emerson-Junction

$1.41M

7.1

Source: Re/Max of Ontario-Atlantic Canada; E01, C01, C11, E04, W02
are TREB market districts (trebhome.com)

Top 5 detached home markets in 905 by price growth first half of 2019

Neighbourhoods Average price % increase
1. Uxbridge
2. Milton
3. Halton Hills
4. Brampton
5. Ajax
$895,490
$903,359
$842,864
$835,435
$728,923
6
4.3
3.6
2.8
2.5

Source: Re/Max of Ontario-Atlantic Canada

Despite strong demand in these hot-pocket areas, approximately 45 per cent of districts within the 416 are in a technical buyers’ market, with a good selection of homes listed for sale. ReMax says select neighbourhoods north of Bloor offered greater flexibility in terms of negotiation – this is especially true when average price topped $2 million – while market conditions were tightest south of Bloor Street.

“Heated demand clearly exists for single-detached housing south of Bloor Street, but there are pockets throughout the 416 that are scorching hot,” says Alexander. “The Oakwood-Vaughan area in C03, where homes can still be had for just over the $1-million price point, is one of those neighbourhoods, while C10, comprised of Sherwood Park, Mount Pleasant West, Mount Pleasant East, is another. The Junction Area, High Park North, and Runnymede-Bloor West Village (W02) in the west end, and Leslieville (E01) and the Beach (E02) in the east, are also highly sought-after, with proximity to transportation and vibrant shopping avenues the common denominators drawing younger buyers.”

Top performers in terms of unit sales were markets offering single-detached homes at less than the $1-million price point. Scarborough’s L’Amoreaux, Tam O’Shanter-Sullivan, Steeles neighbourhood (E05) saw the most significant upswing in terms of percentage increase in sales, with the number of homes sold up 76.2 per cent to 148 units.

“With recovery well underway in the detached housing segment, the residential real estate market is starting to fire on all cylinders,” says Alexander. “The possibility of more relaxed mortgage rules down the road – in conjunction with today’s low interest rate environment – may serve to spark up the GTA housing market yet again.”

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GTA buyers head west ReMax

GTA homebuyers continue to look west in search of affordability

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GTA homebuyers continue to look west in search of affordability

GTA buyers head west ReMax

Homebuying patterns in the GTA have increasingly shifted west over the last five years, particularly to Halton Region and west Toronto, according to a new report from ReMax of Ontario-Atlantic Canada.

“Growing demand for affordable housing buoyed new construction and contributed to rising market share in Halton Region (from 2013 to 2018),” says Christopher Alexander, executive vice-president, ReMax of Ontario-Atlantic Canada. “Product was coming on-stream at a time when the GTA reported its lowest inventory in years and skyrocketing housing values were raising red flags. Freehold properties in the suburbs farther afield spoke to affordability.”

In analyzing sales trends in nine Toronto Real Estate Board (TREB) districts over the past five years, ReMax notes that Halton Region – comprising Burlington, Oakville, Halton Hills and Milton – captured 10.1 per cent of total market share in 2018, leading with a 2.3-per-cent increase over 2013. Toronto West, meanwhile, climbed almost one per cent to 10.5 per cent. Toronto Central rose close to two per cent to 18.7 per cent of total market share, while Simcoe County jumped 0.6 per cent to 3.1 per cent. The gains came at the expense of perennial favourites such as York Region (down 3.2 per cent to 15.3 per cent); East Toronto (down 1.7 per cent to 9.3 per cent); Peel Region (down 0.5 per cent to 20.6 per cent); and Durham Region (down 0.3 per cent to 11.5 per cent). Dufferin County remained stable over the five-year period.

The quest for single-detached housing at an affordable price point has sent throngs of Toronto buyers into the Hamilton housing market over the past decade, ReMax says. The spillover effect has stimulated homebuying activity in most areas flanked by Toronto’s core and Hamilton. Burlington, in particular, soared between 2013 and 2018, with home sales almost doubling and average price climbing 50 per cent to $769,142.

Window of opportunity

But with such strong growth in Burlington, how long will this market remain an affordable option?

“The communities in the west will still be affordable compared to Toronto proper, but what we are going to see is a continued uptick in demand for more of the outlying communities like Brantford, Waterdown, Kitchener-Waterloo, Cambridge and even as far-reaching as London and Niagara,” Alexander told HOMES Publishing. “What will really impact the growth of these markets, outside of availability and affordability, will be the underlying transit systems and investments in local economies, as people still have a need to be connected to the GTA core.”

The upswing in new construction has contributed to the changing landscape. New housing starts in Halton Region averaged 3,100 annually between 2013 and 2016. In Simcoe County, just north of Toronto, new residential builds averaged close to 1,860 annually from 2013 to 2017.  During the same period, almost 39,000 residential units came on-stream in Toronto’s downtown-central waterfront area, while another 56,855 were active (approved with building permits applied for or issued and those under construction). Another 6,000 units came on the market in North York and Yonge-Eglinton.

 

GTA home sales ReMax

 

In Toronto’s west end, affordability has been a strong influence in helping Millennials redefine mature neighbourhoods such as The Junction, South Parkdale, Bloorcourt and Dovercourt Park through gentrification. Average price for the 8,000 plus homes sold in 2018 hovered at $755,658 – although the 10 districts within Toronto West range in price from $557,000 in Downsview-Roding, Black Creek and Humbermede to $1.2 million in Stonegate-Queensway.

“Freehold properties remain the choice of most purchasers in Halton Region and Toronto West,” says Alexander. “The same is true to a lesser extent in Toronto Central, but condominiums continue to gain ground. Just over one in three properties sold in the GTA was a condominium in 2018, and that figure is higher in the core. As prices climb in both the city and suburbs, the shift toward higher-density housing will continue, with fewer single-detached developments coming to pass.”

Toronto Central has seen rapid growth over the past five years, with Millennials fuelling demand for condos and townhomes in developments such as City Place, King West Village and Liberty Village. This cohort has also been instrumental in the gentrification of Toronto Central neighbourhoods such as Oakwood-Vaughan and Dufferin Grove as they snap up smaller freehold properties at more affordable price points, ReMax says.

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Baby Boomers have also been a major influence in Toronto Central, selling larger homes throughout the GTA and making lateral moves or downsizing to neighbourhoods close to shops, restaurants and amenities. Close to 15,000 properties were sold in 2018, with average price of $932,416, up almost 40 per cent since 2013. Properties within Toronto Central averaged 20 days on market and ranged in price from $709,660 in Bayview Village to $2.5 million in York Mills, Hogg’s Hollow, Bridle Path and Sunnybrook.

With an affordable average price point of $611,628 – and a range of $528,942 to $746,332 – younger buyers, empty nesters and retirees have flocked to Simcoe County in recent years. New construction in Adjala-Tosorontio, Bradford West, Essa, Innisfil and New Tecumseth has allowed the area to capture a greater percentage of the overall market between 2013 to 2018.

“As the Millennials move into their homebuying years, they will displace Baby Boomers as the dominant force in the GTA’s real estate market,” says Alexander. “Their impact on housing will have a serious ripple effect on infrastructure in the coming years, placing pressure on transit systems, roadways, local economies and their abilities to attract investors and new businesses, parks and greenspace development.”

The upswing in demand over the next decade is expected to re-ignite homebuying activity in Toronto East, York, Peel and Durham Regions. These areas still carry significant weight, despite the factors that have impacted softer performance in recent years, such as affordability, lack of available housing and fewer transit options.

GTA west vs east

As the west end of the GTA continues to see growth and price appreciation, a leveling effect will likely come into play (with the east region),” Alexander told HOMES. “Toronto’s GDP and the thriving economy will continue to attract people, so while affordability may continue to decrease, desire is unlikely to waver. That said, the current and next generation of homebuyers are taking this factor into account when they are making their decision to purchase – sacrificing space for lifestyle and convenience.  As they look to the greater GTA, if affordability becomes more leveled out between the west and the east, it’s likely that we will see more dispersion across the entire region as people’s desire to be connected to the GTA core remains strong.

GTA east areas such as Durham region currently don’t have the same appeal as the west. “The West end of the GTA has a greater diversity of communities that are attracting a diverse range of buyers.  In the past 10 years, there has been significant focus on the growth and development of these regions, whereas historically, Durham has not traditionally been viewed in this same regard. With the boom in areas towards the east, like Prince Edward County, and the affordability leveling out, we will likely see the tide begin to turn.”

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