• Post-Election Changes in Canadian Real Estate

    The federal election, dubbed as a “Groundhog Day Election,” came and went, dominated by a few issues, particularly affordability in the Canadian housing market. Prime Minister Justin Trudeau and the Liberals proposed a series of measures to cool down the Canadian real estate market. But, considering the outcome of the election and the current make-up of the House of Commons, the Grits may need to garner the support of the New Democrats, Conservatives and Green Party to see some action.

    From bans to taxes, Ottawa has developed multiple tactics to curb the housing affordability crisis. Whether they are successful or not remains to be seen.

    Industry observers purport that the red-hot housing sector needs two things to be doused: collaboration between all three levels of government and more supply. It is unclear if policymakers will heed their advice. It is clear, however, that post-election changes will be take place within the Canadian real estate market.

    Post-Election Changes in Canadian Real Estate

    On the demand side, the affordable housing platform of the minority government consists of greater incentives to improve affordability in Canada, extending more cash in the form of a Tax-Free First Home Savings Account, First-Time Home Buyer Incentive and Tax Credits, and a decrease in mortgage insurance fees.

    Will these efforts be enough to ease substantial price growth? These policy prescriptions could bolster prices, but, according to many economists, they would not make housing more affordable.

    Essentially, some have argued that these mechanisms push free money to those who can already afford to get their foot in the door. “The focus on demand-side policies should help a small cohort of buyers looking to get into the market soon but, ultimately, will only push up house prices in the long run,” said Stephen Brown, senior economist for Capital Economics Canada, in a research note.

    Canadian officials are also facilitating slowing demand, which has already been seen in multiple housing markets across the country. These tools include an anti-flipping tax and a temporary ban on foreign buyers. The prime minister has also demanded a vacant home tax, because “houses shouldn’t sit empty when so many Canadians are trying to buy a home.”

    It was recently estimated that Canada maintains approximately 1.3 million vacant homes. This ranked the fifth-highest for economies in the Organization of Economic Co-Operation and Development (OECD).

    Another component of the Canadian housing sector that could face change is the regulatory process. The federal government has recommended a ban on blind bidding, enhanced price transparency, disclosure of all parties in each transaction, and legal rights to home inspections.

    That said, many of these issues are managed by provincial governments, so action might require a partnership between the federal government and the provinces.

    What Are the Provinces Discussing?

    Some provinces are not waiting for Ottawa to act on the Canadian real estate market, with local premiers and lawmakers making their own suggestions to improve affordability or ensure greater supply for local buyers.

    Premier Tim Houston will be slapping a deed transfer tax on any residential property acquired by individuals who do not pay taxes in Nova Scotia. The premier has also requested Finance Minister Alan MacMaster to implement a levy of $2 per $100 of the assessed property value of every non-provincial taxpayer owning property in Nova Scotia.

    Atlantic Canada, including Nova Scotia, has witnessed a tremendous population boom throughout the COVID-19 public health crisis. This has led to many out-of-province buyers scooping up homes with the equity they earned from their urban dwellings.

    For professional investors, experts believe this will be the cost of doing business. However, for small-time investors, it will eat into their earnings.

    The average home price in Halifax climbed a whopping 23 per cent year-over-year in September to $471,746.

    Queen’s Park has proposed a new housing affordability task force amid high home prices and sales within the red-hot Ontario real estate market. One local group thinks one of the best strategies to employ is updating single-family zoning laws. Today, it is illegal to convert single-family homes into multi-unit properties in a Toronto neighbourhood, such as a townhome or a triplex.

    The Ontario Real Estate Association (OREA) calls the zoning law “archaic” and “exclusionary.”

    “In too many Ontario cities, it defies common sense that you can take a bungalow and turn it into a monster four-storey home for one wealthy family, but you cannot build affordable townhomes for multiple families without red tape, runaround, and exorbitant costs,” said OREA CEO Tim Hudak in a news release. “Exclusionary zoning policies are at the heart of Ontario’s housing affordability crisis in high-growth areas and it’s time the Province steps in to modernize these archaic laws.”

    Since housing development is restricted south of Lake Ontario and north of the Greenbelt, OREA purports it is critical to manage the land more effectively so more Canadians can acquire a home.

    Is Relief on the Way for Canada’s Housing Market?

    Fortunately for homebuyers, Canadian new home price growth slowed for the first time since 2019. Could it be the beginning of a sharp correction, or is this merely a monthly outlier that will be resuscitated over the next year? Either way, young families and first-time homebuyers will be monitoring the situation to find an opening.



    Courtesy of REMAX.ca

    Canadian Real Estate Report: 2021 Housing Impacts to Condo Sector

    Canadian real estate market sees higher share of condos in 2021, in wake of rising detached housing values; affordability shifts demand for condominiums into high gear in 2021

    Staggering gains in detached housing values have sent condominium sales soaring throughout the first eight months of 2021 in major Canadian real estate markets, according to a new report by RE/MAX Canada

    The RE/MAX Canada 2021 Condominium Report, which examines trends and developments in five major Canadian real estate markets and more than 100 sub-markets, found that buyers turned to condominiums in 2021, as freehold housing values escalated beyond their reach. The strongest gains in sales were made in the West, where Greater Vancouver and Calgary saw condominium sales rise 87 and 83 per cent respectively between January 1 and August 31 of 2021, compared to the same period in 2020, which experienced a notable downturn in condo sales. The Greater Toronto Area (GTA) led the East in terms of percentage increases in condo sales at 71 per cent, followed by Halifax-Dartmouth at 36 per cent and Ottawa at 29 per cent. The greatest upswing in pricing occurred in the East, with both Halifax-Dartmouth and Ottawa posting double-digit price gains of 30.0 per cent and 18.0 per cent respectively. More moderate appreciation was reported in Greater Toronto (seven per cent), Vancouver (6.7 per cent) and Calgary (three per cent).

    “Affordability, coupled with availability, set the stage for the exceptional rebound in condominium sales across Canadian real estate  markets in 2021,” says Christopher Alexander, Senior Vice President, RE/MAX Canada. “Double-digit acceleration in detached housing values revived slumping condominium sales early in the year, with demand shifting into high gear as detached supply dwindled and prices accelerated. Younger buyers have been behind the push for condominiums to date, with most looking to lock in low interest rates and buy before prices climb beyond their means.”

    Canadian Real Estate 2021 Condo Report

    Growth in condo market share across the Canadian real estate market occurred in all but one regions surveyed, according to the RE/MAX Canada 2021 Condominium Report. The greatest concentration of condo sales was reported in Greater Vancouver, where condos represented nearly half (48.2 per cent) of total residential sales in 2021, up from 46 per cent one year ago. Condominium apartments and townhomes in the GTA followed with a 34.5 per cent share of the overall market, up from 30.8 per cent one year earlier. Almost one in four properties sold in Ottawa between January 1 and August 31, 2021 was a condominium, compared to the same period in 2020 (24.3 per cent versus 23.3 per cent). Meanwhile in Halifax-Dartmouth, the condominium segment represented 17.3 per cent of total residential sales, up from 15 per cent one year earlier. While overall sales climbed in Calgary year-over-year, condominium market share declined by just under one per cent in 2021, to 14.2 per cent.

    “Home-buying activity in the condominium segment has surged in Calgary in 2021, driven in large part by their affordable price point,” says Elton Ash, Executive Vice President at RE/MAX Canada. “Supply has declined from almost eight months to just under five year-over-year, although inventory levels are still 16 per cent ahead of 2020 levels. Once excess product is absorbed – and that is occurring at a steady pace throughout the city – condominium values are likely to experience further appreciation, especially as the average price for detached housing continues to climb in the city.”

    Regional Canadian Real Estate Insights

    Canadian Real Estate Report_Vancouver condo stats


    While strong demand has contributed to a significant uptick in condominium apartment sales in the Greater Vancouver Area, more moderate gains have been reported in terms of price in 2021. According to the Real Estate Board of Greater Vancouver (REBGV), the average price of a condominium apartment hovered at $740,221 in August of 2021, an increase of 6.7 per cent over the August 2020 average of $693,691. Read more…

    Canadian Real Estate Report_Calgary condo stats


    Condominium apartment sales have soared in Calgary year-to-date as buyers seek to achieve home ownership while interest rates remain low. In the first eight months of the year, almost 2,800 apartment units have changed hands in the city, an increase of 82.6 per cent over the 1,522 units sold during the same period in 2020. Average price has climbed close to three per cent year-to-date, rising from $255,852 in 2020 to $263,480 in 2021. The lion’s share of activity has occurred at the most affordable price points in 2021, with three out of four sales taking place in the $150,000 to $349,999 price range. Read more…

    Canadian Real Estate Report_Toronto condo stats


    After bearing the brunt of the impact of the pandemic on the Greater Toronto Area’s housing market, condominium sales and prices have roared back to life in both the city and suburbs in 2021. Year-to-date sales of condominium apartments and townhomes (January 1 to August 31) have climbed 71 per cent year-over year, to 30,383 units in the GTA, up from 17,760 during the same period in 2020. Average price has experienced a modest increase, with values for apartments and townhomes rising seven per cent to $688,138 year-over-year. Read more…

    Ottawa real estate condo market report


    Condominium sales are firing on all cylinders as strong demand and tight inventory levels characterize current market conditions in Ottawa. The rapid escalation of freehold property values over the past year – up almost 28 per cent – has been a major factor in the increasing number of buyers considering the condominium lifestyle. More than 3,500 condominium apartments and townhomes changed hands between January 1 and August 31 of this year, with sales up almost 29 per cent over the same period in 2020. Read more…

    Halifax real estate market condo stats


    In-migration from outside the province has bolstered home-buying activity across the board and contributed to a serious uptick in average price in Halifax-Dartmouth and the surrounding areas. Condominium sales increased almost 36 per cent between January 1 and August 31, rising from 716 units in 2020 to 973 units in 2021. Average price has climbed close to 30 per cent year-to-date, now hovering at $398,632. Read more…


    Courtesy of REMAX.ca