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Ontario markets lead Canada in Q2 price growth

Ontario markets lead Canada in Q2 price growth – Royal LePage

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Ontario markets lead Canada in Q2 price growth – Royal LePage

Once again proving their strength and resilience – even in the face of an ongoing pandemic – Ontario housing markets led Canada in price growth in the second quarter of 2020.

According to the Royal LePage House Price Survey and Market Survey Forecast, the aggregate price of a home in Canada increased 6.8 per cent year-over-year to $673,072 in the second quarter. Once provinces allowed regular real estate activity to resume, demand surged in many markets. Inventory levels, already constrained pre-pandemic, have failed to keep pace.

“Home prices shot up in the second quarter as a crush of buyers entered the market, attracted by extremely low interest rates and the perception of bargains to-be-had,” says Phil Soper, president and CEO of Royal LePage. “Across Ontario and Quebec, in particular, the demand for housing outpaced the growth in supply, especially in the early weeks post-lockdown. The surge in the number of first-time buyers was felt acutely, as these housing consumers soaked up supply without contributing to it.

Stable prices

“We are now seeing sellers return to the market in key supply-constrained regions in numbers sufficient to meet demand,” Soper adds. “Homebuyers should enjoy more reasonable conditions with stable prices and improved selection in the second half of the year.”

When broken out by housing type, the median price of a standard two-storey home in Canada rose 8.0 per cent year-over-year to $794,392, while the median price of a bungalow increased 3.9 per cent to $550,289. The median price of a condominium increased 5.3 per cent year-over-year to $503,983. Price data, which includes both resale and new build, is provided by Royal LePage’s sister company RPS Real Property Solutions.

“COVID-19 shaped the real estate market during the second quarter in every possible way,” says Soper. “As consumers and realtors complied with April’s shelter-at-home directives and only urgent housing needs were serviced, sales volumes plummeted to one-third of normal in our largest cities. As the reality of extended and potentially permanent work-from-home employment sunk in, people pondered both the location and size of their homes. Simply put, larger homes in smaller communities have become more fashionable. As competition for these properties heats up, bidding wars are more common in what were our quieter cities and towns.”

Greater Toronto Area

Pent-up demand coupled with a lack of supply in the GTA resulted in significant price appreciation in the second quarter, with the aggregate median price increasing 10 per cent year-over-year to $899,001. When broken down by housing type, the median price of a standard two-storey home increased 10.7 per cent year-over-year to $1.05 million; bungalows rose 6.4 per cent to $852,260; and condominiums increased 9.3 per cent to $599,235.

“Prior to the market disruption caused by the pandemic, the GTA was on track for doubledigit price growth in 2020,” says Kevin Somers, chief operating officer, Royal LePage Real Estate Services Ltd. “While the first half of the second quarter saw market activity severely curtailed, as soon as the market woke up in late May, sales quickly accelerated. However, with listings not keeping pace and buyer competition high, we are again seeing double-digit price appreciation in the region.”

Royal LePage is forecasting that the aggregate price of a home in the GTA will increase four per cent to $882,000 in the fourth quarter of 2020 compared to the same quarter last year.

“While buyer demand outstripping inventory has been typical of the Toronto market, the return of buyers before sellers in the second half of the quarter amplified price growth, says Somers. “Sellers are now returning, and while buyers should not expect bargains, they may find the second half of the year more reasonable for inventory and price appreciation.”

RELATED READING

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

Toronto still one of the fastest growing cities in North America – even with the impact of COVID-19

Canadian, GTA markets to show resilience through COVID-19: Royal LePage

 


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Can you still buy a home during the coronavirus lockdown?

Can you still buy a home during the coronavirus
lockdown?

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Can you still buy a home during the coronavirus
lockdown?

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Even though the sun is high in the sky, we’re still in self-isolation and cannot fully enjoy it – unless we have a decent-sized balcony or a fancy garden. If we don’t have the latter, then we may also think of moving into a new house for a change.

Those who think of doing so now think about one thing only – namely, can one still buy a house during the coronavirus lockdown? While it may be easy to search for North Shore movers online, for example, the whole process of buying and moving into a new house during these times became a bit more complex.

Let’s now answer this question and make everything clear for you.

The short answer

Naturally, you are still able to buy a house at the moment – especially given that the restrictions imposed by many governments are not that harsh, and that one can still protect themselves from the coronavirus.

However, there are a couple of things that have to be done differently. For example:

  • You can no longer browse houses on your own – or visit them either. In such times, it is more than recommended to work with an experienced agent, as they’ll be able to do more for you in a safe environment than you will.
  • The agents we mentioned have available entire databases full of properties that they can send you to look at. You won’t have to put yourself at risk and visit the house yourself.
  • Sellers, on the other hand, are not able to hold an open house anymore. This thing alone may make many property owners temporarily withdraw from the market.
  • Moreover, due to the fear of coronavirus, sellers may not even invite you to visit the house. Again, in this case, an agent may have an easier time getting into the house.

Virtual showings

If you still want to be involved in the process of looking for and buying a new house, then you can rely on something called virtual showings.

Your agent will most likely visit the house that you want to buy and, via a camera, show you around while also allowing you to ask questions and even move to areas that you need to see.

Moving into a new house

Naturally, the hardest part is the actual move. Since gatherings of multiple people are not allowed, you won’t be able to ask friends to help you pack and then move your things to the new house.

In this case, a simple Google search for Montreal movers will get you in touch with not only a team of professional movers but also with a business that will adhere to the current safety and health measures – thus almost completely reducing the risk of anything unfortunate happening.

The bottom line

While you can still buy a new house during the coronavirus lockdown, you will have to follow a lot of additional steps to ensure the safety of your agent, the seller of the house, yourself, and of the moving professionals that will be helping you.

Everything will have to be disinfected – before and after the move -, not to mention that you may want to perform a full clean of your new house before unpacking.

In short, almost everything is possible as long as you engage in social distancing and adhere to all the regulations that are in place to avoid the spread of the coronavirus!


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Canadian, GTA markets to show resilience through COVID-19: Royal LePage

Canadian, GTA markets to show resilience through COVID-19: Royal LePage

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Canadian, GTA markets to show resilience through COVID-19: Royal LePage

Average Canadian – and GTA – home prices are expected to remain stable this year, despite the challenges brought on by the COVID-19 pandemic, according to the latest Royal LePage House Price Survey and Market Survey Forecast.

If the strict, stay-at-home restrictions characterizing the fight against COVID-19 are eased during the second quarter, prices are expected to end 2020 relatively flat, with the aggregate value of a Canadian home up a modest one per cent year-over-year, to $653,800. If restrictions are sustained through the summer, the negative economic impact is expected to drive home prices down by three per cent to $627,900 year-over-year, the realty firm says.

In December 2019, Royal LePage forecast the national aggregate price to increase 3.2 per cent by the end of 2020.

“The impact of COVID-19 on the Canadian economy has been swift and violent, with layoffs driving high levels of unemployment across the country,” says Phil Soper, president and CEO, Royal LePage. “While it is sad that these people skewed strongly to young and to part-time workers, for the housing industry, the impact of these presumably temporary job losses will be limited as these groups are much less likely to buy and sell real estate.

“From our experience, with past recessions and real estate downturns, we are not expecting significant year-over-year price changes in 2020,” Soper adds. “Home price declines occur when the market experiences sustained low sales volume while inventory builds. Currently, the inventory of homes for sale in this country is very low, matching low sales volumes as people respect government mandates to stay at home.”

Broad-based measurements of industry activity point to a sharp decline since the provinces declared states of emergency. Home showings are down by more than two-thirds, based on Royal LePage sampling, while open house gatherings at properties for sale have been reduced to almost zero nationwide. ”

As we ease out of strict stay-at-home regimens, sales volumes will return; traditional home sales practices will not,” says Soper. “The popular ‘open house’ gathering of buyers on a spring afternoon is gone, and it won’t be coming back any time soon. The industry is leveraging technologies that allow a home to be shown remotely and social distancing protocols, where we restrict client interaction with our realtors to limited one-on-one or two meetings, will continue for months and months. This process is inherently safer than a trip to the grocery store.”

The aggregate price of a home in Canada increased 4.4 per cent to $655,276 in the first quarter. When broken out by housing type, the median price of a two-storey home rose 5.1 per cent year-over-year to $770,005, while bungalows and condominiums rose 2.1 per cent and 4.4 per cent to $541,040 and $493,917, respectively. Price data, which includes both resale and new build, is provided by Royal LePage’s sister company RPS Real Property Solutions.

“If the fight against the coronavirus requires today’s tight stay-at-home mandates to remain in place for several more months, with no semblance of normal business activity allowed, temporary job losses will become permanent and consumer confidence will be harder to repair,” says Soper. “This would place downward pressure on both home sales volumes and prices.

“Equally, if the collective efforts of Canadians slow the spread of the disease to manageable levels, and if promising science and therapeutic drugs are announced, people will return to their jobs, market confidence will bounce back quickly, and we could see Canada’s real estate markets roar back to life, with 2020 transactions delayed but not eliminated.”

GTA market

In the GTA, housing demand outstripped supply, putting significant upward pressure on home prices. During the first quarter of 2020, the aggregate home price rose 7.5 per cent year-over-year to $866,211.

When broken out by property type, the median price of a condominium saw the highest appreciation, rising 8.8 per cent year-over-year to $580,508, while two-storey homes and bungalows rose 7.7 per cent and 3.7 per cent to $1.01 million and $826,186, respectively.

If business activity resumes by the end of the second quarter, the GTA may see a year-over-year increase of 1.5 per cent to its aggregate home price by the end of 2020, to $861,100. If business activity resumes in late summer 2020, the region could see a decrease of 0.5 per cent year-over-year in aggregate home price to $844,200.


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Get ready for a hot market in the GTA this spring

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Get ready for a hot market in the GTA this spring

From the economy to interest rates, to government involvement and the mortgage stress test, to new home supply and affordability, there’s a lot to pay attention to this year as you go through the new-home buying experience. But, for all the challenges that these topics represent, know this: Ontario, and especially the GTA, is once again positioned for a hot market this spring.

According to the latest Royal LePage House Price Survey, the aggregate price of a home in Canada increased 2.2 per cent year-over-year to $648,544 in the fourth quarter of 2019. And for this year, the realty firm is forecasting 3.2-per-cent price growth to $669,800. For the GTA, the news is even better, and homeowners and homebuyers can expect a hot market this spring.

Greater Toronto Area

Low supply, population growth and increased consumer confidence continue to fuel home prices in the GTA. In the fourth quarter last year, the aggregate price of a home in the region increased 4.8 per cent year-over-year, rising to $843,609. During the same period, the median price of a standard two-storey home rose 4.4 per cent to $982,944, bungalows 2.4 per cent to $806,977, and condominiums increased 7.8 per cent to $565,919.

“The Greater Toronto Area is at a pivot point where we are seeing signs that prices could begin to rapidly increase,” says Kevin Somers, chief operating officer, Royal LePage Real Estate Services Ltd. “The region has a very low supply of listings while we are seeing more potential buyers trying to enter the market.”

Home price growth varied significantly across the region in 2019. While some areas showed stabilizing prices and healthy price growth, many regions, including the city centre, showed the potential for rapidly accelerating appreciation rates driven by high demand and low inventory. Significant price gains were seen in Pickering and Mississauga, where the aggregate price increased 9.7 per cent and 7.9 per cent year-over-year, respectively. The aggregate price of a home in the City of Toronto increased 6.6 per cent year-over-year.

Ajax and Oshawa were the only two areas to show a year-over-year decline in aggregate price. The aggregate price of a home in Ajax and Oshawa decreased 1.2 per cent and 1.8 per cent to $661,049 and $524,423, respectively.

Changes to the stress test?

In the first half of 2019, some buyers remained on the sidelines waiting to gauge the potential impact of the federal mortgage stress test, but began to return to the market in the third quarter.

“The federal government has signaled that changes could come to the mortgage stress test mechanism in 2020,” says Phil Soper, president and CEO, Royal LePage. “The stress test pushed people out of real estate markets across Canada temporarily. For the most part, buyers have adjusted, yet it still represents a significant hurdle as families pursue the dream of owning their own home.”

Soper adds that the impact of the regulations-driven drop in demand is felt very differently in different parts of the country.

“We believe policy makers have the necessary experience to modify the tool to meet the reality of today’s Canada – that we have very different and varied economies, and by extension housing policy needs, from region to region.”

RELATED READING

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

Forecast 2019 – where are Canada’s hottest housing markets?

 

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Neighbourhood Watch - Markham

Markham is a hotbed of economic development and growth

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Markham is a hotbed of economic development and growth

As the fourth most populous community in the GTA – after Toronto, Mississauga and Brampton – Markham has been a hotbed for economic growth and development for years.

It’s long been known as a centre for growing sectors such as technology and life sciences – and therefore employment growth – one of the key drivers of housing demand.

Today, Markham is home to more than 1,000 such companies, with IBM, Huawei, Honeywell, Advanced Micro Devices, Motorola and Oracle all having their Canadian headquarters located in the city.

Residence has its price

Buying a home in Markham will cost you, however, as it has also become one of the GTA’s most expensive housing markets.

According to the Royal LePage Home Price Index for the fourth quarter of 2019, aggregate home prices grew two per cent year-over-year to $951,228, condos grew 4.9 per cent to $486,898.

Still, new-home development is a priority for Markham City Hall and Mayor Frank Scarpitti, who was first elected in 2006 and is known as developer- and builder-friendly. The city has a number of new home developments underway, including some high-profile condo projects.

The revitalization of Downtown Markham has been spearheaded by The Remington Group’s multi-use development along Main Street, which includes expansive retail shops, a Marriott Hotel, a Cineplex, as well as a variety of condo buildings and townhomes.

Cultural diversity

Culture is also an important attraction in Markham, with The Flato Markham Theatre offering more than 300 live performances each year, showcasing the diversity of the city. In addition, Varley Art Gallery encompasses the historic Kathleen McKay House, which was the home of Group of the Seven’s Frederick Horsman Varley for the last 12 years of his life. Measuring 15,000 sq. ft., the gallery is the second most popular tourist attraction in York Region.

Markham also has dozens of parks with baseball diamonds, soccer pitches and children’s play areas and splash pads. The city also boasts more than 22 kms of scenic pathways with 12 bridges that provide recreational activity for joggers and cyclists.

The largest park in the city is the Milne Dam Conservation Park. Measuring 305 acres, it is bordered by thick forest on the south and east and the Rouge River runs through the middle.

Toogood Pond is an 82-acre park that features a partially naturalized pond and marsh, and it recently underwent revitalization to remove sediment, restore the shoreline and plant native foliage.

Getting around Markham is facilitated by easy access to Hwys. 404 and 407 and the DVP, and for public transit, York Region Transit/Viva connects with all nine York Region municipalities, and GO Transit provides regular train and bus service.

Location, location, location

Population of 328,940, located in the Regional Municipality of York in the GTA.

Distance from downtown Toronto, 30 km

Key landmarks

  • Flato Markham Theatre
  • Varley Art Gallery
  • Milne Dam Conservation Park
  • Angus Glen Golf Club

Select housing developments

9999 Markham Road by OnePiece Holding

Canvas on the Rouge by Flato Developments

Gallery Towers by Remington Group

Langstaff Gateway by Kylemore Communities

Panda Markham Condos by Lifetime Developments

Riverview by Times Group


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First-time homebuyers catch a break with slowing home price growth

First-time homebuyers catch a break with slowing home price growth

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First-time homebuyers catch a break with slowing home price growth

We have some good news and we have some bad news, prospective homebuyers in Canada.

First, the bad news: According to the latest Royal LePage House Price Survey, home price growth in many of Canada’s real estate markets is slowing. This means, if you’re looking to buy a home, its value may not grow as much as it has recently. The good news, however, is that this same slowing price growth presents a window of opportunity for first-time homebuyers to get while you can.

The price of a home in Canada increased just 2.7 per cent year-over-year to $621,575 in the first quarter of 2019, Royal LePage says, well below the long-term norm of approximately five per cent. When broken out by housing type, the median price of a two-storey home rose 2.6 per cent year-over-year to $729,553, while the median price of a bungalow rose 1.1 per cent to $513,497. Condominiums remained the fastest growing housing type, rising 5.4 per cent year-over-year to $447,260.

Looking ahead to the second quarter, Royal LePage expects national home prices to stay relatively flat throughout the 2019 spring market, with the national aggregate price of a home increasing just one per cent over the next three months. Meanwhile, the housing markets in several larger Canadian cities have shown noticeable signs of slowing, with nearly half of the regions in Royal LePage’s Quarterly Forecast anticipating quarter-over-quarter price declines.

But these are national numbers, and as we’ve written before, there really is no such thing as a Canadian housing market.

But more on this later.

Silver lining

Early in 2018, Canada experienced the most significant housing correction since the 2008 financial crisis. Markets showed signs of recovery late in the year, yet the figures for early 2019 suggest that the market has once again slowed.

We are expecting this to be a sluggish year overall in Canada’s residential real estate market, with the hangover from the 2018 market correction and weaker economic growth acting as a drag on home price appreciation, balanced by lower for longer interest rates,” says Phil Soper, president and CEO, Royal LePage. “There is a silver lining here. This slowdown gives buyers, and first-time buyers in particular, an opportunity to buy real estate in our country’s largest cities.”

In the federal budget tabled by Finance Minister Bill Morneau in March, the Canadian government announced three new or enhanced housing programs. The First-Time Home Buyer Incentive is a three-year, $1.25-billion shared equity mortgage program whereby  Canada Mortgage and Housing Corp. (CMHC) will co-invest up to five per cent of the purchase price of an existing home. Further, for the first time in a decade, there was an increase in the registered retirement savings plan withdrawal limits in the Home Buyers Plan. The increase, from $25,000 to $35,000, was the largest since the program’s inception in 1992. Finally, an additional $10 billion in financing over nine years was earmarked for the construction of purpose-built rental housing.

Real estate is local

Illustrating our point that real estate is local and not national, the GTA housing market is still showing healthy growth.

“The city of Toronto is still one of Canada’s fastest appreciating real estate markets,” says Soper. “Detached home prices are rising in line with inflation, but condominium prices are increasing at near double-digit levels as vertical living has become the primary new-build option in this growing, world-class city.”

Median home prices in Toronto rose 5.8 per cent year-over-year in the first quarter of 2019. Two-storey home prices and bungalow home prices rose 4.8 per cent and 2.5 per cent year-over-year, respectively, while condo prices rose 9.3 per cent year-over-year. The overall GTA’s aggregate home price rose 3.4 per cent over the same period.

Real estate values in Ontario’s Greater Golden Horseshoe region continued to appreciate at a brisk clip, as local economies grew and workers from the GTA looked to trade commuting time for lower house prices. Niagara-St. Catharines, Hamilton and Kitchener-Waterloo-Cambridge aggregate prices were up by 6.9 per cent, 6.3 per cent and 8.9 per cent, respectively.


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2019 web

Forecast 2019 – where are Canada’s hottest housing markets?

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Forecast 2019 – where are Canada’s hottest housing markets?

2019 web

Wondering where Canada’s hottest housing markets are, as 2018 comes to a close and 2019 is just around the corner? Well, that all depends on who you ask.

Two of Canada’s large realty firms – Royal LePage and ReMax – both issued their 2019 housing market outlooks on Dec. 11.

Yes, the very same day.

Rather than produce two stories on the exact same topic, just from different sources, we thought it would be interesting to compare them. And while there are some commonalities in their forecasts, there are also some interesting discrepancies.

There is no ‘Canadian’ market

Let’s begin with the headline of ReMax’s 2019 Housing Market Outlook: “Canadian home prices expected to increase by 1.7 per cent in 2019.”

Yeah, about that. Forget that headline. As we recently wrote, those national numbers are pretty meaningless. It’s like trying to summarize the weather, temperature or traffic as “Canadian.”

But, just for comparison purposes, ReMax estimates Canadian home prices will grow 1.7 per cent in 2019; Royal LePage, 1.2 per cent.

National numbers that do matter are interest rates, GDP growth and employment. Then there’s immigration, which affects some markets more than others, mortgage regulations and housing supply. All of these factors are the key drivers of real estate. But more on that later.

Now let’s take a look at some of the regional highlights.

GTA

ReMax says:

  • Toronto average prices down 4% in 2018 to $789,181
  • Toronto average prices forecast to rise 2% in 2019 to $804,964

In Toronto, rising interest rates and the mortgage stress test were the two major factors affecting market activity in 2018, with average sale prices dropping by four per cent from $822,572 in 2017 to $789,181 in 2018, and unit sales down by 16 per cent. Lack of affordability in the single-detached segment will make it difficult for buyers wanting to enter this market. Resale condos, on the other hand, now represent almost 37 per cent of total sales, fueled by affordability.

ReMax Housing Market Outlook, select major markets

Region 2018

 Average Home Price

 

2019

Average Home Price

(Forecast)

Year-over-Year

(%)

Vancouver $1.05M $1.01M -3.0%
Edmonton $379,539 $360,562 -5.0%
Calgary $487,399 $487,399 0.0%
Saskatoon $333,187 $343,182 0.6%
Regina $322,500 $322,500 0.0%
Winnipeg $323,001 $335,921 4.0%
Windsor $299,750 $329,725 10.0%
London $379,654 $398,636 5.0%
Kitchener-Waterloo $473,275 $487,473 3.0%
Hamilton-Burlington $707,949 $849,538 2.0%
Barrie $477,839 $492,174 3.0%
Oakville $1.08M $1.13M 5.0%
Mississauga $705,406 $733,622 4.0%
Brampton $577,846 $600,959 4.0%
Durham $594,585 $612,422 3.0%
Toronto $789,181 $804,964 2.0%
Ottawa $678,670 $705,816 4.0%
Halifax $299,982 $308,981 3.0%
St. John’s $265,523 $265,523 0.0%

 

Elsewhere in Ontario

Rising interest rates and the stress test continue to make it difficult for prospective buyers in Barrie, Oakville and Durham regions.

“This is particularly true for first-time buyers and single Millennials, as evident in cities like Brampton, Kingston and Durham,” says Christopher Alexander, executive vice-president and regional director, ReMax of Ontario-Atlantic Canada.

Hottest in the province

The hottest market in Ontario? Windsor, which showed price growth of 13 per cent in 2018, to $299,750, with another 10 per cent increase forecast for 2019. London is also expected to be strong, with prices to increase another five per cent next year, after rising 17 per cent this year to reach $379,654.

 

Royal LePage says:

  • GTA average price in 2018 $844,000
  • GTA average price forecast to rise 1.3% to $854,552

“Compared to the record pace of home appreciation seen in 2016 and 2017, the GTA housing market is now positioned for much healthier and sustainable growth in future years,” says Chris Slightham, broker and owner, Royal LePage Signature Realty.

Many regions outside of Toronto’s core saw price declines in 2018, a result of overshooting in previous years. The continued population growth should cause the suburbs to stabilize and reignite price growth. In addition, the potential subway expansion into the suburbs should stabilize and increase home prices in close proximity to new transit infrastructure.

Elsewhere in Ontario

The median price in Ottawa is expected to increase 2.5 per cent in 2019 to $487,910, benefitting from the city’s healthy economy and high income per household, driven by the public and technology sectors.

Interestingly, Royal LePage also notes that neither the new mortgage rules nor recent interest rate hikes have notably affected Ottawa’s housing market.

 

Highlights from other Canadian markets

The star performer of all major Canadian markets in 2019? Montreal, according to Royal LePage.

“Quebec will out-perform the nation in 2019,” says President and CEO Phil Soper. “Like other regions of the country, the economy is strong and people are working. What is different is affordability. We have to remember that Montreal sat out the rapid home price inflation we saw in Vancouver and Toronto this decade, and in Calgary the decade before.”

As for the ReMax outlook for Montreal, Quebec did not participate in this year’s forecast.

 

 

Royal LePage Market Survey Forecast

Region  

2018 Aggregate Home Price
(Year End Estimate)


2019 
Aggregate
Home Price 
(Forecast)
Year-over-Year (%)
Canada $631,000 $638,257 1.2%
Greater Toronto Area $844,000 $854,552 1.3%
Greater Montreal Area $409,000 $421,306 3.0%
Greater Vancouver $1.28M $1.29M 0.6%
Ottawa $476,000 $487,910 2.5%
Calgary $484,000 $473,104 -2.3%
Edmonton $386,000 $378,691 -1.9%
Winnipeg $306,000 $309,829 1.3%
Halifax $321,000 $326,096 1.6%
Regina $327,000 $311,505 -4.7%

 

Influential factors

Now for more on those national factors that do influence real estate.

“I would call attention to two factors influencing our forecast that deserve special consideration,” says Soper. “Firstly, home prices are appreciating, albeit at a snail’s pace. Secondly, the Canadian market is supported by strong economic fundamentals, including a robust rate of new household formation and excellent employment growth.

“The future for Canadian housing remains bright, perhaps too bright. With an increasing number of gainfully employed people looking to put a roof over their heads, and the scarce availability of rental accommodation, policy makers in our major markets will once again be struggling with housing shortages. More than an affordable housing problem, we will once again be facing an overall housing supply crisis.”

As for interest rates, the Bank of Canada held its benchmark interest rate of 1.75 per cent on Dec. 5, citing a weaker than expected energy sector. Further rate increases are expected in 2019, making it more difficult for Canadians to buy a home in 2019.

The Bank forecasts GDP will increase 2.1 per cent in 2019, a modest increase over 2018, while Canada’s unemployment rate fell to 5.6 per cent in November, the lowest on record since 1976.

RELATED READING

5 things we can learn from real estate in 2018

7 factors that will affect GTA housing in 2019 – and 5 reasons to consider buying NOW

GTA moving into balanced market for 2019

GTA new home market gains further momentum in October

Delays in approval process contributing to housing affordability issue in GTA

What the GM plant closure means for Oshawa economy and housing market

 

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Oshawa

What the GM plant closure means for Oshawa’s economy and housing market

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What the GM plant closure means for Oshawa’s economy and housing market

Oshawa

General Motors Canada has confirmed that it plans to close all assembly operations in Oshawa, Ont. after next year, leaving the community reeling with concern for the local economy and housing market.

And with good reason.

Auto manufacturing in the city of about 170,000 dates back as far as 1907, and the plant is still a major employer. It employs about 2,500 hourly and 400 salaried workers, with many more engineers working at GM’s adjacent Regional Engineering Centre.

Oshawa Mayor John Henry has said the closure would have ripple effects well beyond the city, hurting businesses and families throughout the Durham Region.

“From a personal finance perspective, this news is devastating for the people of Oshawa,” says Rubina Ahmed-Haq, personal finance expert. “Not only the ones whose jobs will be affected and have the obvious financial impact of losing a steady income. But, also those who depend on those workers to run their businesses – everything from restaurants to dry cleaners to places of interest around the area will be impacted. As well as property values, which are already much lower in Oshawa compared to other parts of the GTA, will take a further hit.”

Durham Region home prices

Illustrating Ahmed-Haq’s point, home prices in the Durham Region have already been feeling the pinch.

 

Historical average home prices, Durham Region
2018: $591,739 (as of October)
2017: 624,225
2016: $528,475
2015: $439,842
2014: $388,610
2013: $354,548

Source: Canadian Real Estate Association

 

Values continued to decrease during the third quarter of 2018, according to the latest Royal LePage House Price Survey. Over the three-month period, the aggregate home price in Oshawa and Ajax decreased 2.8 per cent and six per cent year-over-year to $538,757 and $664,640, respectively. Home values in Pickering also depreciated when compared to the same time last year by 4.4 per cent to $709,260, and the aggregate price in Whitby decreased 3.5 per cent to $677,243.

Oshawa median home prices

Standard two-storey homes
Q3 2018 $557,071
Q3 2017 $576,922
Q/Q % change 0.8
Yr/yr % change -3.4

Detached bungalows
Q3 2018 $512,001
Q3 2017 $517,237
Q/Q % change 2.3
Yr/yr % change -1.2

Standard condos
Q3 2018 $278,224
Q3 2017 $281,864
Q/Q % change 0.3
Yr/yr % change -1.3

Aggregate
Q3 2018 $538,757
Q3 2017 $554,070
Q/Q % change 1.2
Yr/yr % change -2.8

Source: Royal LePage National House Price Composite, October 2018

 

What we can expect in the housing market

“After an announcement such as this, we often witness an immediate softening of purchase demand in the city and its surrounds, while the shock and reality of the situation settles in,” Don R. Campbell, real estate expert and author told HOMES Publishing. “This slowdown doesn’t hit the stats immediately, as there are a lot of deals that are already in the process of closing in the next couple of months. However, come February, the numbers begin to reflect the new reality. That is phase one.

“Phase two is when average sale prices begin to fall, as confidence in the market begins to slip further. In other scenarios, it is just a sign of a move ‘down-market’ or to lower priced properties. However, in today’s world, the existing ‘stress-test’ will be combined with this lack of confidence to exacerbate the normal situation.”

A third phase may follow eight months to a year after the actual closure, when EI benefits begin to run to the end of their course, confidence in the potential return of the GM jobs begins to fade and families have to start making big decisions of relocation to find new appropriate jobs.

“In other words,” Campbell says, “the announcement of and the subsequent closing of the plant kicks off a predictable but sad ripple effect that will last for years.”

If there is one potential saving grace in this news, it’s that Oshawa and the surrounding area has a more diverse economy than in the past, which will help slightly buffer the pain, says Campbell.

“However, the pain is coming and it is real and far reaching.”

The Oshawa plant is not the only facility to be affected by GM’s decision to “accelerate its transformation for the future.” Two locations in the Detroit area are also scheduled to be shut down, which could have spillover affects in related industries across the border in the Windsor, Ont. area.

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Hamilton

First-time homebuyers may catch a break in certain Ontario markets

Latest News


First-time homebuyers may catch a break in certain Ontario markets

Hamilton

Attention would-be homebuyers in the Greater Golden Horseshoe: Recent home price trends indicate the recovery is on, but there are still some opportunities for first-time buyers in certain areas.

According to the latest Royal LePage House Price Survey and Market Survey Forecast, year-over-year home prices made modest gains in many regions across Canada in the third quarter of 2018. The national trend was largely influenced by price appreciation in Greater Vancouver, while property in the Greater Toronto Area experienced continued year-over-year price declines, with modest gains in value when compared to the previous quarter.

The Royal LePage National House Price Composite shows that the price of a home in Canada increased 2.2 per cent year-over-year to $625,499 in the third quarter of 2018. When broken out by housing type, the median price of a two-storey home rose 1.4 per cent year-over-year to $736,337, while the median price of a bungalow climbed 1.5 per cent to $519,886. Condominiums continued to see the highest rate of appreciation nationally when compared to the detached segment, rising 6.7 per cent year-over-year to $441,240.

Looking ahead, Royal LePage projects a further uptick in home price appreciation in the fourth quarter, forecasting a 1.5-per-cent increase in the aggregate price of a home in Canada over the next three months.

ECONOMIC FUNDAMENTALS

“Positive economic fundamentals, supported by a new agreement on trade, should bolster consumer confidence across Canada and stoke demand in the nation’s real estate market,” says Phil Soper, president and CEO, Royal LePage. “Dangerously overheated regions have cooled considerably this year, while home prices have remained remarkably resilient. This is the soft landing that policy makers were hoping for.”

“I am concerned that the slower market will cause housing supply issues to be shuffled aside for other priorities,” Soper adds. “The return of runaway home prices in the country’s largest markets remains a real threat. Not this year, but in the near future. Job growth is strong, Canada is attracting more of the best and brightest from around the world and the large millennial cohort is putting increasing pressure on our limited new housing stock. It is imperative that all levels of government address looming supply shortages, particularly in affordable housing.”

After a number of years where Canada’s major real estate markets were tilted decidedly in favour of home sellers, 2018 has provided relief for many purchasers, particularly first-time buyers. “The desire to own a home remains strong with younger families,” says Soper. “Single-digit price appreciation makes pursuing the dream of home ownership a realistic proposition for many.”

FIRST-TIME OPPORTUNITIES

During the third quarter, Ontario continued to see noticeable differences between appreciation rates in the GTA and surrounding Golden Horseshoe cities and beyond. Despite some price relief in the GTA, buyers – particularly young families – from the region are venturing out to other Southern Ontario cities in search of more affordable homes, where price points are still significantly lower.

In contrast, over the same period, the aggregate price of a home in the GTA remained relatively flat year-over-year, depreciating 0.4 per cent to $836,402. The City of Toronto maintained solid ground, increasing by a healthy 5.2 per cent, while nearly every suburban region studied, except for Mississauga, posted year-over-year price declines. However, quarter-over-quarter, the aggregate price of a home in the GTA rose 1.3 per cent. By the end of the fourth quarter, Royal LePage expects the aggregate price of a home in the GTA to rise to $853,097, a further 2.0 per cent over the third quarter of 2018.

“The GTA is emerging from a housing correction that was triggered by a combination of eroding affordability and government intervention,” says Soper. “The introduction of the mortgage stress test in particular slowed activity in Toronto’s ‘905,’ bringing lower prices to the over-heated suburban region. Quarter-over-quarter trends are pointing to the end of this correctional cycle and the beginning of a modest recovery in the region.”

HOTTEST 5 GGH MARKETS BY PROPERTY TYPE

Median price growth, year-over-year, third quarter 2017-18, Royal LePage

DETACHED TWO-STOREY

Niagara-St. Catharines
9.4%
$434,946

Kitchener-Waterloo Cambridge
6.5%
$541,134

Guelph
6.2%
$589,682

Hamilton
5.1%
$606,671

Toronto
4.7%
$1.268M

 

DETACHED BUNGALOW

Niagara-St. Catharines
7.2%
$394,337

Hamilton
5.1%
$509,384

Guelph
4.9%
$501,329

Kitchener-Waterloo Cambridge
3.5%
$458,370

Vaughan
2.3%
$1.279M

 

CONDOMINIUM

Toronto
9.3%
$561,733

Mississauga
9.1%
$415,733

Hamilton
8.9%
$344,422

Kitchener-Waterloo Cambridge
7.8%
$302,184

Scarborough
6.8%
$387,149

 

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Toronto

6 Ontario municipal elections to watch regarding housing

Latest News


6 Ontario municipal elections to watch regarding housing

Toronto

By Wayne Karl

The countdown is on – just days to go to the 2018 Ontario municipal elections. In Toronto, in what’s shaping up to be a two-horse race between Mayor John Tory and challenger Jennifer Keesmaat, housing is one of the key issues.

But it’s not the only city or town in and around the GTA where real estate development is a hot topic.

Here’s a select list of a few more municipal elections to watch, and we might as well start with the biggest and highest profile municipality:

TORONTO

Incumbent: John Tory
Challenger: Jennifer Keesmaat
What’s at stake: Housing affordability, or the lack thereof. Both Tory and Keesmaat have announced plans to address the growing affordability issue in the city – what some describe as a crisis. Keesmaat wants to build 100,000 units of “truly affordable, high-quality housing in the next 10 years.” This is a plan some sources in the industry have already declared as doomed to fail.

Tory proposes to build 40,000 affordable rental units over 12 years, or roughly 3,300 annually.

The challenge for both? Defining what affordable housing even is, in a city with median home prices of $883,892, andthe most expensive average one-bedroom rent in the country, $1,900 per month.

Home builders have been lobbying the City and the Province to address land supply and other policies which complicate this already complex issue.

 

MARKHAM

Markham

Incumbent: Frank Scarpitti
Challenger(s): Steven Chen, Shan Hua Lu, Abdul Rahman Malik, Jawed Syed
What’s at stake: As the fourth most populous community in the GTA after Toronto, Mississauga and Brampton, Markham has been a hotbed for economic growth and development for years. It has also become one the most expensive housing markets, with median home prices of almost $1 million for the third quarter of 2018, according to Royal LePageAnd Scarpitti, first elected in 2006 and known as developer- and builder- friendly, has been there through much of it.

 

BRAMPTON

Brampton

Incumbent: Linda Jeffrey
Challenger(s): Mansoor Ameersulthan, former Ontario PC Party leader Patrick Brown, Baljit Gosal, Wesley Jackson, Vinod Kumar Mahesan, John Sprovieri
What’s at stake: Brampton is booming, and Jeffrey is seeking a second term after winning the 2014 election with almost 50 per cent of the vote.

Vision 2040 is an ambitious long-term plan to reinvent Brampton, and includes transformations such as model new neighbourhoods connected by an expanding transit network, new core loop, walking and cycling networks, communities designed to promote walking, and a new eco-park and sustainability built into everything.

There’s also a significant education infrastructure project that will bring a new Ryerson University campus, with Sheridan College as an academic partner, to downtown Brampton for 2022. Oh, along with thousands of students.

 

ORANGEVILLE

Orangeville

Incumbent: Jeremy Williams
Challenger(s): Sandy Brown, Darrin Davidson
What’s at stake: Been to Orangeville lately? It’s no longer a sleepy little pit-stop town as you drive north to Collingwood or Georgian Bay.

With new home and community development taking place, particularly in the west part of town, the biggest challenge Orangeville faces is urbanization. Williams wants to preserve the small town feel and welcome development, while avoiding becoming a discount housing destination for people moving north out of the Toronto area.

Brown, a local realtor, likely understands the issues, and wants to “arrest out of control spending.”  He says Orangeville residents pay the highest property taxes in the GTA.

 

OSHAWA

Oshawa

Incumbent: Current mayor of Oshawa John Henry has given up his seat to run as Durham’s regional chair
Challenger(s): Kenneth Carruthers, Dan Carter, Joe Ingino, Adam Kunz, Sara Lear, Rosaldo Russo, Bob Rutherford
What’s at stake: In short, continued growth in population and economic diversity, which drive housing demand. Oshawa’s population grew to 379,848 in 2016, according to the 2016 Census, up 6.6 per cent from 2011. This is second in the entire province only to Guelph – and even ahead of Toronto at 6.2 per cent.

Oshawa is expected to boast one of the fastest growing economies in the province this year, with growth of 2.6 per cent, according to the Conference Board of Canada. And this is down from 3.2 per cent in each of the last two years.

In terms of housing development, several builders are active in the area with lowrise homes. Homebuyers are liking the comparative bargains and the proximity to Toronto.

 

BARRIE

Barrie

Incumbent: Jeff Lehman
Challenger: Ram Faerber
What’s at stake: Lehman is seeking his third term, while local businessman Faerber is looking to unseat him.

Barrie ceased being a weekend destination years ago, and has become a favourite among real estate investors for its population growth and the job opportunities that come with a growing and increasingly diverse local economy.

However, as a smaller centre (population of 197,059,up 5.4 per cent from 2011), Barrie is sometimes subject to market swings. Median home prices slipped five per cent for the third quarter of 2018, from the same period last year, to $505,136. Some shorter-term good news, however, is that prices are up 0.4 per cent from the second quarter of this year.

Wayne Karl is Senior Digital Editor at Homes Publishing. wayne.karl@homesmag.com 

RELATED READING

Keesmaat’s 100,000 housing plan doomed to fail

5 steps to solving the housing affordability issue in Ontario

Housing policies must focus on supply

 

 

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