Have Home Goals? 5 New Year’s Resolutions for Homebuyers

If home buying is on your to-do list in the future, there are some tasks to tackle before you start shopping. Admittedly, many of these New Year’s Resolutions relate to finances (as they often do) and rightly so. A home is the biggest investment most of us will make in our lifetime. To help you prepare, here are five New Year’s Resolutions for homebuyers that you’ll definitely want to keep this year.

START SAVING FOR YOUR DOWNPAYMENT

This is arguably the biggest, most difficult and most time-consuming part of the home buying process. Think about it – in November 2021, the average home price in Canada rose to $720,850. To avoid taking out a high-ratio mortgage, you’ll need at least 20 per cent as a down payment, or about $145,000. It’s important to start thinking about how you will come up with the money – whether it’s using your RRSPs through the first-time Home Buyers’ Plan, savings, or financial help from the Bank of Mom and Dad.

CHECK YOUR CREDIT RATING

This one’s important, because your potential mortgage lender will be doing the same. A credit score is a number between 300 and 900 that rates your credit-worthiness. According to credit-rating company Equifax, a score of 690 or higher is considered “good.” Lenders will use this score in tandem with other factors, such as your debt-to-income ratio, to determine mortgage eligibility.

CREDIT CLEAN-UP

Remember that phone bill you forgot to pay a couple of years ago? It can come back to haunt you. Even a one-day-late payment is still considered “late,” and can negatively affect your credit rating – and your potential to qualify for a favourable mortgage. If you’re not happy with your credit score, take some time to bring it up to par before you start the pre-qualification process.

GET PRE-APPROVED FOR A MORTGAGE

With interest rates rumoured to rise in 2022, take advantage of this low interest-rate environment while you still can. Getting pre-approved for a mortgage will lock in your rate for up to 120 days. A mortgage pre-approval is not an obligation to purchase in this time frame, nor are you committed to that particular lender. It’s just a written confirmation of the approved amount and the promised rate, so you can shop with confidence within a budget you know you can afford.

START SHOPPING

Online is a good place to start your search, but nothing beats first-hand experience. With budget in mind, bundle up and hit the streets to explore different neighbourhoods and the amenities you’ll have access to. Do you rely on public transit? Is an active night life important to you? Daycares and schools? Parks and rec? Highway access? How close (or far!) do you want to be from family and your work place? Think about your day-to-day needs, and anticipate how they might change over time.

Last but not least… work with the right real estate agent who has experience in the area and the type of home you plan to purchase. They will make setting up viewings easy, and be ready and on your side to negotiate the best price when it comes time to finally make an offer.

Planning to sell your home? Read 5 New Year’s Resolutions for the Home Seller.

 

Courtesy of REMAX.ca

Canadian Housing Market Trends to Watch in 2022

The Canadian housing market has been a fixture in media headlines and an ever-present topic of conversation around dinner tables and water coolers by those who continue to work in an office setting in the wake of COVID-19. Early on in the pandemic, some expected a steep decline in home sales and prices in Canada, but nobody could have predicted what actually materialized in the market. Come May 2020, regional real estate markets began their rebound. The spike in demand continued through 2021, resulting in record-breaking price growth and what many would consider to be the hottest year in Canadian real estate. So, what can we expect in 2022? Here are five trends to keep your eye on.

Interest rates are expected to rise.

Rumour has it that interest rates will start rising as early as April. This will be the first movement by the Bank of Canada, following a trio of rate cuts in March 2020, prompted by the pandemic and the ensuing economic impacts. The economy started to bounce back with vaccines making their way into arms, businesses reopening and consumer confidence returning. We’re not out of the woods yet, as the Omicron variant prompts further public health measures and threatens lockdowns in some provinces, pumping the brakes on certain industries. Real estate is not one of them. The Canadian housing market resumed its upward trajectory after a steep but short-lived decline in activity at the start of the pandemic, seemingly with no end in sight. High demand resulted in record-breaking price growth, with sales held back only by a lack of supply.

With interest rates expected to start rising in time for the busy spring real estate market, some buyers may be looking to lock in a rock-bottom rate now, since they aren’t likely to get any breaks on prices. Will higher interest rates serve to cool the hot Canadian housing market? The Big 6 banks have predicted the Bank of Canada will raise its overnight rate by one per cent by the end of 2022. Only time will tell what impact this will have on the market, but given current levels of supply and demand, a one-per-cent hike is unlikely to be a significant factor on sales or prices.

Canadian real estate prices will likely continue rising.

Speaking of prices, the 2022 Canadian Housing Market Outlook Report analyzed 38 Canadian housing markets, identifying rising prices in 100% of them in 2021 and further growth expected across the board in 2022. RE/MAX brokers and agents anticipated price growth ranging from a low of +2.5 per cent in Calgary, to a high of +20 per cent in Muskoka. From a national perspective, the average residential price expected to increase by 9.2 per cent.

Low supply will remain a concern across the Canadian housing market.

Housing affordability has been on a steady decline in Canada, and was a key focus for all political parties in the 2021 federal election. Ontario has become ground zero for unaffordability, so it’s expected that this will also be a hot topic in the provincial election slated for June 2, 2022. What’s the culprit behind rising prices? Low supply.

Industry experts have attributed the rapidly rising price of homes to the housing supply shortage, which was amplified by a notable spike in demand in 2020 and 2021. This is expected to continue, with 1.2 million people expected to immigrate to Canada by 2023 and all of them presumingly in need of a home. With no major increase in listings or new construction expected, industry experts suggest market pressures could mount, putting ever greater pressure on prices.

While opinions vary on how to effectively add supply to the market, RE/MAX executives have pointed to a few possible solutions, including:

  • A National Housing Strategy to boost supply, in a coordinated effort between the federal, provincial and municipal governments.
  • Incentivizing developers to build more affordable, family-sized homes close to transit hubs, such as tax rebates, cutting the prohibitive red tape and easing the building application and approval process.
  • Incentivizing homeowners to move and easing the financial burden associated with selling a home by offering tax rebates and re-evaluating Toronto’s double Land Transfer Tax (currently, homebuyers here pay a provincial and municipal LTT). This could help increase the supply of listings.

The federal and provincial governments are also encouraged to collaborate on ways to improve local economies to help attract residents. Canada has lots of “affordable” cities which don’t always have the same appeal as large urban centres do. Shifting the focus from cities like Toronto and Vancouver could help ease the pressure and prohibitive price growth.

Canadian real estate will be dominated by seller’s markets.

By the end of 2021, 97 per cent of Canadian housing markets analyzed by RE/MAX Canada (37 out of 38) were expected to be seller’s markets in 2022, characterized by low supply, high demand and rising prices. This is likely to continue in 2022, given that adding supply to the market isn’t a quick fix.

Virtual transactions are the way of the future.

Virtual home-buying and -selling wasn’t just a temporary trend that carried us through the pandemic lockdowns. Quite simply, consumers have had a taste of this sweet convenience and they’re unlikely to give it up when COVID-19 is behind us. From websites like REMAX.ca and Realtor.ca bringing listings right to your fingertips, and virtual tours offering opportunities to view a home without ever leaving the comfort of your own, to the ease of digital paperwork, it’s safe to say the virtual trend will be the new reality for many buyers and sellers.

 

Courtesy of REMAX.ca

Canadian Real Estate Prices Expected to Rise 9.2% in 2022: RE/MAX

Confidence continues in Canadian real estate market, with the inter-provincial relocation trend likely to remain strong in 2022

  • Migration between provinces expected to continue in 2022, potentially impacting local Canadian real estate conditions, according to 53 per cent of RE/MAX brokers (20 out of 38)
  • 49 per cent of Canadians believe the housing market will remain steady in 2022 and view real estate as one of the best investment options over the next year
  • Some of the highest outlooks are anticipated for Atlantic Canada, with Moncton and Halifax projecting average residential sales prices to increase by 20 per cent and 16 per cent respectively in 2022
  • 95 per cent of regions (36 out of 38) surveyed are likely to remain seller’s markets in 2022

Toronto, ON and Kelowna, BC, December 1, 2021 – RE/MAX is anticipating steady price growth across the Canadian real estate market in 2022, with inter-provincial migration continuing to be a key driver of housing activity in many regions, based on surveys of RE/MAX brokers and agents, as reflected in the 2022 Canadian Housing Market Outlook Report. The ongoing housing supply shortage is likely to continue, putting upward pressure on prices. As a result of these factors, RE/MAX Canada estimates a 9.2-per-cent increase in average residential sales prices across the country*.

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“Based on feedback from our brokers and agents, the inter-provincial relocation trend that we began to see in the summer of 2020 still remains very strong and is expected to continue into 2022,” says Christopher Alexander, President, RE/MAX Canada. “Less-dense cities and neighbourhoods offer buyers the prospect of greater affordability, along with liveability factors such as more space. In order for these regions to retain these appealing qualities and their relative market balance, housing supply needs to be added. Without more homes and in the face of rising demand, there’s potential for conditions in these regions to shift further.”

Despite the global pandemic, many Canadians still feel confident in the real estate market. According to a Leger survey conducted on behalf of RE/MAX Canada, 49 per cent of respondents believe Canadian real estate will remain one of their best investment options in 2022 (59 per cent of homeowners vs. 34 per cent non-homeowners which included renters, those not looking buy, and those currently looking to purchase). Additionally, 49 per cent of respondents are confident the Canadian real estate market will remain steady next year.

“Canadians recognize the value and investment potential in their homes. However, market challenges such as rising prices and limited supply have impacted local markets from coast-to-coast, causing angst this past year among those looking to get into the market and those hoping to move up in it,” says Elton Ash, Executive Vice President, RE/MAX Canada. “Despite this, it’s encouraging to see that many are feeling confident in the housing market in 2022 and view Canadian real estate as a solid investment.”

2022 Regional Canadian Real Estate Insights

RE/MAX brokers and agents in Canada were asked to provide an analysis of their local market in 2021 and share their estimated outlook for 2022. Based on their insights, 95 per cent of Canadian real estate markets are expected to favour sellers, impacted by limited housing supply and high demand.

WESTERN CANADA

The Calgary and Edmonton markets shifted from balanced conditions in 2020 to seller’s markets in 2021, which brokers and agents in the region expect to continue into 2022. This is attributed to heightened demand prompted by the inter-provincial migration trend that took place throughout 2021, which saw many homebuyers from Ontario and British Columbia driving demand high, while supply remained low.

In addition to an increase in out-of-province buyers flocking to Edmonton, the region has also welcomed investors who found themselves priced out of other markets. RBC’s provincial outlook for Alberta puts this province ahead of all others in terms of economic growth in 2022, which should bode well for homebuyers and investors alike 2022.

Regions such as Victoria, Nanaimo, Regina and Kelowna also experienced an influx of buyers in search of larger properties and greater affordability, which is likely to continue pushing demand and prices up in 2022. This trend has notably increased demand for single-family detached homes and in some regions, condos as well, which may continue in 2022.

Despite some buyers choosing to move away from urban centres such as Vancouver/Greater Vancouver in favour of suburban areas within British Columbia, or leaving the province entirely, Vancouver/Greater Vancouver has remained a quality place to live. The region continues to draw interest from Canadian and international buyers, a trend that is likely to grow next year, in tandem with rising immigration. Vancouver/Greater Vancouver is expected to remain a seller’s market in 2022, providing inventory stays tight and current demand continues, according to a RE/MAX broker in Greater Vancouver Area.

Winnipeg is a slight outlier in Western Canada, with a buyers’ market that is anticipated to continue in 2022. Young couples enjoying the freedom to work from home have been driving much of the demand in the region, especially for one- and two-story detached homes. The appeal of Winnipeg has had less to do with affordability, and more with lifestyle shifts such as hybrid working environments.

ONTARIO

According to the RE/MAX broker network in Ontario, market activity across the province is anticipated to remain steady in 2022, with continued average price growth, although at widely varying degrees. RE/MAX brokers anticipate average sale price increases in smaller markets such as North Bay (four per cent); Sudbury (five per cent); Thunder Bay (10 per cent); Collingwood/Georgian Bay (10 per cent); and Muskoka (20 per cent), where the move-over trend has remained strong. Meanwhile, in larger markets within the province, there’s a possibility that more immigration could weigh on supply levels and prices, including Ottawa (five per cent); Durham (seven per cent); Brampton (eight per cent); Toronto (10 per cent); Mississauga (14 per cent).

When it comes to price appreciation year-over-year, there are a few regions that stood out in 2021 for their exponential increases across all property types, including Brampton, which rose from $869,107 in 2020 to $1,085,417 in 2021 (25 per cent); Durham from $706,818 in 2020 to $914,48 in 2021 (29 per cent); and London from $487,500 in 2020 to $633,700 in 2021 (30 per cent). In comparison, Toronto experienced a modest seven-per-cent increase year-over-year ($986,085 in 2020 to $1,054,922 in 2021).

ATLANTIC CANADA

All of Atlantic Canada’s regions analyzed are currently seller’s markets, with potential for average sale prices to increase between five to 20 per cent in 2022, according to RE/MAX brokers and agents. Larger urban centres including Moncton, Fredericton, Saint John, Halifax, Charlottetown and St. John’s have all experienced an influx of out-of-province buyers, especially from Ontario, moving to the region in search of greater affordability and liveability.

Due to this spike in demand, much of the region has experienced increasing competition, especially among single-family detached homes and condos in some cities. There’s a possibility that this may further be amplified as immigration continues to grow in the region.

According to RE/MAX brokers and agents in the region, new construction is anticipated to remain strong into 2022, although construction activity may be dampened by ongoing supply shortages and delays in permits related to the pandemic backlog.

Seller’s market conditions are expected to prevail across the region in 2022, with the exception of Charlottetown and Southern Nova Scotia, which may return more to a balanced state as activity gradually begins to decrease.

These factors have led to some of the highest price outlooks in the country, with Halifax and Moncton projecting estimated average residential sales price to increase by 16, and 20 per cent respectively.

Additional findings from the 2022 Canadian Housing Market Outlook Report

  • Two-in-five Canadians trust their agent to advise them during the current real estate landscape (43 per cent)
  • 23 per cent of Canadians now have a greater desire to build their own home or buy pre-construction
  • 26 per cent of Canadians have the desire to purchase a home while mortgage rates remain low
  • 62 per cent of Canadians currently own a home. This is higher among those ages 35+ (70 per cent) compared with Millennials, ages 18-34 (42 per cent)
  • The majority of Canadians (72 per cent) said rising home prices did not impact their purchasing decisions in 2021.

About the 2022 Housing Market Outlook Report

The 2022 RE/MAX Housing Market Outlook Report includes data and insights from RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments. Regional summaries with additional broker insights can be found at REMAX.ca. The overall outlook is based on the average of all regions surveyed, weighted by the number of transaction in each region.

*2020 average residential sale price numbers were full-year, 2021 were from January 2021 – October 31, 2022.

About Leger
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,554 Canadians was completed between October 29-31, 2021 using Leger’s online panel. Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.5 per cent, 19 times out of 20.

About the RE/MAX Network
As one of the leading global real estate franchisors, RE/MAX, LLC is a subsidiary of RE/MAX Holdings (NYSE: RMAX) with more than 140,000 agents in over 8,600 offices across more than 110 countries and territories. Nobody in the world sells more real estate than RE/MAX, as measured by residential transaction sides. RE/MAX was founded in 1973 by Dave and Gail Liniger, with an innovative, entrepreneurial culture affording its agents and franchisees the flexibility to operate their businesses with great independence. RE/MAX agents have lived, worked and served in their local communities for decades, raising millions of dollars every year for Children’s Miracle Network Hospitals® and other charities. To learn more about RE/MAX, to search home listings or find an agent in your community, please visit remax.ca. For the latest news from RE/MAX Canada, please visit blog.remax.ca.

Forward looking statements
This report includes “forward-looking statements” within the meaning of the “safe harbour” provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as “believe,” “intend,” “expect,” “estimate,” “plan,” “outlook,” “project,” and other similar words and expressions that predict or indicate future events or trends that are not statements of historical matters. These forward-looking statements include statements regarding housing market conditions and the Company’s results of operations, performance and growth. Forward-looking statements should not be read as guarantees of future performance or results. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. These risks and uncertainties include (1) the global COVID-19 pandemic, which has impacted the Company and continues to pose significant and widespread risks to the Company’s business, the Company’s ability to successfully close the anticipated reacquisition and to integrate the reacquired regions into its business, (3) changes in the real estate market or interest rates and availability of financing, (4) changes in business and economic activity in general, (5) the Company’s ability to attract and retain quality franchisees, (6) the Company’s franchisees’ ability to recruit and retain real estate agents and mortgage loan originators, (7) changes in laws and regulations, (8) the Company’s ability to enhance, market, and protect the RE/MAX and Motto Mortgage brands, (9) the Company’s ability to implement its technology initiatives, and (10) fluctuations in foreign currency exchange rates, and those risks and uncertainties described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (“SEC”) and similar disclosures in subsequent periodic and current reports filed with the SEC, which are available on the investor relations page of the Company’s website at www.remax.com and on the SEC website at www.sec.gov. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date on which they are made. Except as required by law, the Company does not intend, and undertakes no duty, to update this information to reflect future events or circumstances.

 

Courtesy of REMAX.ca

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.

Sources:

 

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

GREATER VANCOUVER CONDO MARKET TRENDS

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

CALGARY CONDO MARKET TRENDS

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

GREATER TORONTO AREA CONDO MARKET TRENDS

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

OTTAWA CONDO MARKET TRENDS

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

HALIFAX-DARTMOUTH CONDO MARKET TRENDS

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

Canadian Housing Market Outlook, Fall 2021

Canadian housing market expected to remain strong this fall, despite Delta variant, say RE/MAX brokers and realtors

Young families driving demand for single-detached homes in cities across the country

  • Canadian housing market prices are anticipated to increase by 5% in the remaining months of 2021, according to RE/MAX brokers and agents.
  • 26/29 major Canadian housing markets analyzed are seller’s markets, driven by lack of supply and high demand.

Toronto, ON and Kelowna, BC, October 5, 2021 – Early indicators from RE/MAX brokers and agents across the Canadian housing market suggest steady activity for the remainder of 2021. According to the RE/MAX Canada 2021 Fall Housing Market Outlook Report, RE/MAX brokers and agents expect the average residential sale price for all home types could increase by five per cent from now until the end of the year.

Single-detached homes experienced the biggest price gains when comparing 2021* to 2020 data, rising between 6.8 and 27.3 per cent across 26 markets surveyed in the report. RE/MAX brokers and agents expect this trend to continue into the fall, driven by strong demand by young families.

“As our brokers and agents predict, the fall market activity is expected to remain steady, which is promising, despite the ongoing challenges presented by the Delta variant,” says Christopher Alexander, Senior Vice President, RE/MAX Canada. “This is particularly relevant given the Canadian housing markets is often a good indicator of economic activity in the country, and with the Bank of Canada forecasting economic growth of 4.5 per cent in 2022, a strong fall housing market is a good sign that things may be starting to return to a more natural rhythm.”

Regional Canadian Housing Market Overview

WESTERN CANADA

High housing prices, driven up by low supply and high demand, have created challenging conditions for many homebuyers across Canada, especially in cities such as Toronto and Vancouver. However, affordable options still exist for homebuyers who are considering alternative markets, thanks to their continued ability to work remotely. RE/MAX brokers have reported this trend in Edmonton and Calgary, where buyers are leveraging increased purchasing power thanks to local housing affordability coupled with lower interest rates. RE/MAX brokers and agents anticipate this trend to continue through the remainder of 2021.

When comparing activity year-over-year (YoY) average sale prices across single-detached homes, condos and townhomes, British Columbia’s Nanaimo, Victoria and Vancouver experienced significant price growth, at 23 per cent, 19.1 per cent and 16.4 per cent, respectively. Nanaimo also saw one of the largest price surges in its condo and townhome segments when compared to other Western Canada regions, with average condo prices currently sitting at $343,713 (a 17.6-per-cent increase YoY), and townhomes at $492,536 (a 21.9-per-cent increase YoY). In Calgary and Regina, the fall outlooks are relatively status quo, with prices expected to remain flat in Calgary and up one per cent in Regina. Meanwhile, Edmonton, Saskatoon, Vancouver, Victoria, Winnipeg and Nanaimo are expected to see price gains ranging between four and nine per cent through the remainder of the year, according to RE/MAX brokers and agents.

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ONTARIO

Unsurprisingly, Ontario has seen some of the highest average residential price increases across single-detached homes in the country, with the majority of regions (13 out of 16), experiencing increases between 20 and 35.5 per cent YoY. The outlier markets that experienced price increases below 20 per cent include Toronto (+14.6 per cent), Thunder Bay (+17.1 per cent) and Mississauga (+19.7 per cent).

The condo and townhome segment in all of these regions has also performed well, with smaller and more suburban markets such as Kitchener, North Bay, London, Peterborough, and Southern Georgian Bay seeing a higher surge YoY. The estimated price outlook for the remainder of the year ranges from a two-per-cent price decrease in North Bay, to increases across the other regions ranging between two and 15 per cent.

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ATLANTIC CANADA

Housing market activity in Atlantic Canada remained persistent YoY, with Halifax and Moncton seeing significant price increases across all property types. Single-detached homes in Halifax rose 24.3 per cent YoY, from $402,484 to $500,147. Meanwhile, Moncton detached prices gained 21.2 per cent YoY, from $233,676 to $282,886. The condo and townhome segments in Halifax, Saint John and Moncton all saw prices surge between 12.5 per cent and 48.9 per cent YoY.

Housing prices in St. John’s, NFLD were more tempered, with single-detached homes rising 8.4 per cent YoY (from $343,070 in 2020 to $371,970 in 2021) and townhomes experiencing a 2.8-per-cent increase, from $247,432 in 2020 to $254,462 in 2021. Condominiums were the only property segment to see a decline in average price, down 1.9 per cent YoY, from $261,425 in 2020 to $256,415 in 2021. However, sales in the region have been brisk across all property types, with detached-home sales up 60.4 per cent YoY, condominium sales up 75.7 per cent, and townhome sales up 94.1 per cent.

Moncton in particular is expected to continue strong, with one of the highest price outlooks for the remainder of 2021, between 12 and 15 per cent. Saint John is expected to see more-tempered price growth, ranging between one- to three-per-cent across all property types, while Halifax could see a six-per-cent increase in average sale price for the remainder of the year. In St. John’s, detached home prices are expected to rise one per cent through the remainder of 2021, while condo and townhome prices should hold steady.

“Housing activity throughout the pandemic has remained strong, so it comes as no surprise that the outlook for the remainder of the year continues on an upward trajectory, which is great for homeowners and their equity, but challenging for first-time buyers who have been priced out of the market,” says Elton Ash, Executive Vice President, RE/MAX Canada. “We must continue to educate Canadians from a practical, real world, point of view. What is affecting the Canadian housing market right now? Low Interest rates, economic stimulus, higher home-buying budgets, a higher savings rate, homeowners too scared to sell, and not enough new construction. These factors have created current market conditions.”

Adds Alexander, “The Canadian housing market has historically given homeowners great long-term returns and solid financial security, but there’s no doubt that the rapid price growth we’ve experienced recently is cause for concern. However, it’s not cause for panic. The data shows single-detached home price acceleration may be starting to level off in some urban centres, but prices continue to rise in many smaller cities and communities that were once havens for affordability. Real estate has been a boon to the Canadian economy, during the pandemic and before it. We believe in the long-term health of Canada’s housing market, but in order to protect it, we need to acknowledge and address the housing supply shortage. Our current government needs to stop applying band-aids and cure the problem at its root.”

About the 2021 RE/MAX Fall Housing Market Outlook Report

The 2021 RE/MAX Fall Housing Market Outlook Report includes data and insights from RE/MAX brokerages. RE/MAX brokers and agents are surveyed on market activity and local developments. Regional summaries with additional broker insights can be found at REMAX.ca. The fall outlook is based on predictions of RE/MAX brokers and agents. The overall outlook is based on the average of all regions surveyed, weighted by the number of transactions in each region.

*2020 average residential sale price numbers were full-year, 2021 were from January 2021-August 31, 2021.

 

Courtesy of REMAX.ca

Fall Real Estate Selling Myths

Autumn is the golden season – the sun, the foliage, and a great time to sell your home. There are also some fall real estate market myths floating among the leaves. If you’re thinking about listing your home for sale, we dispel some common fall real estate myths and offer useful tips to help turn that “For Sale” sign to “Sold.”

Curb appeal doesn’t matter in the fall real estate market.

False! Summer may have come to a screeching halt, but that doesn’t mean your home’s exterior should fall by the wayside (pun intended!). Curb appeal counts, regardless of the season. During the autumn months, ensure walkways and gutters are cleared of leaves and debris, the lawn is mowed and trees are neatly trimmed. Take your exterior a step further with some hearty landscaping that can weather the cool nights.

The weather is cold, and so is your home.

The first sign of fall is the plummeting temperature. But just because it’s cooler outdoors doesn’t mean your home should give you the chills. Before listing your home for sale, consider giving it a fresh coat of paint in a warm, neutral shade. Fun fact: Second only to a kitchen and bathroom renovation (cha-ching!), a fresh coat of paint gives you the best return on your investment on the resale market. (Source: RE/MAX 2021 Renovation Investment Report)

For open houses or showings, turn the thermostat up a couple of degrees to make buyers feel comfortable. Turn on your fireplace to crank up the cozy factor. In addition, some easy and cost-effective extras like pillows and throws can go a long way to show the comfort of your home during the cooler months.

Buyers pay less attention to price.

Wrong! Price is always a key factor for homebuyers and sellers alike, and pricing your home incorrectly is the biggest mistake you can make when selling in the fall. Landing on the right list price can be complicated, depending on a number of factors such as season (that’s right!), and market factors such as supply, demand and economic conditions. If you’re wondering what your home is worth in your local resale market, work with an experienced real estate agent. A RE/MAX agent will help ensure your home is priced correctly.

Once the home is sold, you’re done.

The papers are signed and the deal is done, so all that’s left to do is pack up and move, right? Not quite. Everyone is very busy leading up to the holidays, which means you may have issues finding time to pack or booking a company to help you move. Even family and friends may be hard to nail down for a day of lugging furniture. To eliminate these issues, plan well in advance. Make sure your moving date is scheduled firm in everyone’s calendar, and plan ahead to ensure you aren’t left without a solution if someone is forced to back out. A stress free move will make a world of difference in the first couple days in your new home.

Now that you know the common myths about the fall real estate market, you can tackle these small projects in preparation for the fall selling season. Despite the cool weather, it’s bound to be a hot one!

 

Courtesy of REMAX.ca

Are Investors Driving Up Canadian Real Estate Prices?

Canadian real estate has been one of the hottest in the world throughout the coronavirus pandemic. Virtually every region from coast to coast, from the major urban centres to cottage country and rural areas, have posted record-setting growth during what can only be described as chaotic times. The Canadian housing market has been so strong, that it has supported the nation’s economic recovery in the aftermath of the sharpest financial crisis in history. But it has also been a double-edged sword for many households.

Although many had anticipated a slowdown in the housing sector at the onset of the COVID-19 public health crisis (which never materialized), the rapid sales activity and the ballooning prices suggested these prognostications were incorrect. As a result, this has created a housing affordability crisis, leaving many Canadians sitting on the sidelines and unable to achieve the dream of home ownership.

While the economic data has pointed to a modest cooling period of recent sky-high gains, some industry experts believe the sector could find additional support from yield-hungry investors, albeit at a modest level. Indeed, how much investors would contribute to valuations is uncertain at this point, but even a modicum of investment could further lift prices in the critical jurisdictions of Toronto, Vancouver, Montreal, and a growing list of other municipalities.

Are Investors Driving Up Canadian Real Estate Prices?

According to data published in the Bank of Canada’s (BoC) financial system review, investors represented one-fifth of all residential purchases nationwide. Since the early days of the once-in-a-century global health crisis, investor buying advanced 20.1 per cent. In the Greater Toronto and Hamilton Area (GTHA), investors accounted for 22.7 per cent of home purchases, says BoC. This is higher than in the pre-pandemic economy, but lower than at the end of the previous housing boom.

Considering that the national average home price has skyrocketed by more than a third to north of $700,000, it would be simple to surmise that this is the doing of real estate investors. However, experts contend that it could be difficult to reach this conclusion without further study. Meanwhile, others are blaming the housing inventory shortage for rising prices.

“Determining the precise level at which investor activity should be a cause for concern is difficult and requires further study,” central bank spokesman Alex Paterson told The Globe and Mail.

Earlier this year, the BoC told reporters that there is growing evidence that real estate investors are engaging in “a lot more flipping,” creating a “fear of missing out” for both investors and buyers.

One of the data points policymakers might be looking at is gross fixed capital formation (GFCF). According to the Organisation for Economic Co-operation and Development (OECD), more than one-third of GFCF is allocated to real estate investing. The previous high was 22.4 per cent in the year 2000. Moreover, housing now imbibes more than 66 per cent of the nation’s fixed capital investment.

Better Dwelling may have said it best: “To say it’s disproportional for the size of the economy is a big understatement.”

That said, Aled ab Iorwerth, the deputy chief economist at the Canada Mortgage and Housing Corporation (CMHC), said in an interview with the media outlet that when real estate investors substantively enter the market, they will inevitably boost home prices. And, according to Jean-Philippe Deschamps-Laporte, the chief of Statistics Canada’s Housing Statistics Program, this will make it harder for homebuyers to compete, emphasizing that “that is a fact.”

Buyers could find it challenging to afford to purchase a home in Canada, even in Atlantic Canada or rural communities in the west. But, with the latest trend of developers and lucrative investment funds going on a buying spree of properties, renters could bear the brunt of higher prices. Over the next 12 to 18 months, it could be the last time to move into a somewhat affordable apartment or condominium unit as a combination of low vacancy rates, a paucity of affordable housing, and stronger competition could lead to soaring rents in the urban centres.

An Affordability Crisis in the Rental Market?

In June, social media was abuzz that investment institutions have been scooping up homes and even entire communities across the United States. Despite the conspiracy theories scattered across the Twitterverse, this has had been part of the finance industry’s plans prior to the pandemic. Still, there are fears that this would further exacerbate affordability issues, and not just for homebuyers.

Is the same trend occurring up north? With interest rates sitting at record lows, the same developments are unfolding across Canada.

Over the last year, there was nearly $13 billion in apartment building transactions. This included Starlight Investments and KingSett Capital acquiring 27,000 apartment units and several hundred short-term rental apartments throughout the country. In a market where high-income households are forced to rent, the latest investment developments make sense.

On the surface, this might seem like a worrying move. But, once you scratch underneath the surface, economists suggest that these developers are not reducing the housing supply. “They are shifting it from home ownership to rental,” noted CMHC’s deputy chief economist.

Are Buyers Giving Up?

It is hard to disagree with the notion that this has been a stressful and fatiguing real estate market for young families. Recent polls have found that a notable percentage of Canadian homebuyers are suffering from buyer fatigue. Other surveys suggest a considerable number of households do not think they will ever be able to buy a home. The Canadian Real Estate Association (CREA) discovered that most Canadian real estate markets are witnessing buyers dropping out of the market quicker than sellers. If this keeps up, the country could see a generation of permanent renters. That is until a significant correction or downturn takes place. Will this happen? As has been the case over the last 16 months, anything can happen.

Sources:

 

Courtesy of REMAX.ca

Liveability Factors When Buying

There are many things to consider when choosing the home for you. It may seem obvious, but the importance of liveability and your wants and needs need to be addressed. Check out this list of the main liveability factors that you should consider when finding your next home.

Location

Location is key when searching for a home, as it is the one thing you can’t change. Try not to get too caught up in the emotional side of the house hunt and overlook important factors related to location, such as how busy the street is, what the noise levels are like in the area, and the future of the neighbourhood.

Proximity to Services & Work

When house hunting, take into consideration the potential home’s proximity to different amenities, such as hospitals and grocery stores, as well as restaurants and other shops. If these are spots you visit frequently, you don’t want to be driving a great distance to get gas or pick up dinner. Schools are also an important factor to consider for parents, not just location-wise, but also the reputation of the school. Being close to good schools is also great for resale. Commute times are another important factor to consider when house hunting. Studies show that the shorter the commute time, the happier the person.

Lifestyle

Your lifestyle is a huge factor to consider when house hunting. If you’re an outdoorsy person who enjoys activities like hiking and biking, being close to lots of green spaces and bike trails might be something to look for. If you are active in your community, consider looking for a home that is close to cultural, community, and athletic centers. Taking your lifestyle into consideration when purchasing a home can help ensure that you continue living a life that you love.

Current Status & Future Plans

Taking your current status and future plans into consideration when house hunting is essential. Do you currently have kids, or are you planning on having kids in the near future? Do the homes you’re looking at work with that plan, or will you need to move up to a bigger home in the future? Regardless of what your plans are, evaluate your current situation and look at where you may be in 5 or 10 years and if the homes you’re looking at make sense.

 

Courtesy of REMAX.ca

7 Tips to Make Moving With Kids Easier

Let’s face it, moving is hard for everyone. Big moves bring up all sorts of feelings, from stress to uncertainty, and excitement. Luckily, there are a few actions you can take before the big day to make moving with kids easier on them – and you.

 

Tips for moving with kids

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Little People, Big Dreams

Whether you’re hoping to stay in the same neighbourhood or move right across the country, inviting your kids into the house-selection process from the get-go can help. Ask them what they’d like in a new home and see if you can reach a consensus — a bigger back yard would be a win for everyone!

 

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Real Estate Stakeholders

If your kids are old enough look at prospective homes with you, why not bring them along? Hearing their opinion on a property makes them feel involved and listened to. They may even think of something that you didn’t, like how the proximity to the baseball field is a major selling point for your little Major League hopeful.

 

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Memory Lane

Making a memory book filled with photos and doodads of the good times shared in your old home can help your kids find closure while still having something of the house to literally hold onto. Get friends and neighbours to sign the book along with their email addresses so everyone can keep in touch.

 

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Local Haunts

Before moving day arrives on the calendar, pencil in a farewell tour of all their favourite neighbourhood spots. Be warned: Seeing and saying goodbye to landmarks on your street may bring up all the feels…and not just theirs. Leaving a beloved home is hard but remind them (and yourself) that those precious memories go with them no matter where they are.

 

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Party Favours

Having a chance to say a proper goodbye to the people that have been a big part of their lives — neighbours, babysitters and coaches — is an important part of the emotional process of moving. Throw a casual potluck and share some stories over a plate of samosas. (And when you get into your new digs, get out there and introduce yourself to new neighbours toute suite.)

 

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Treasure Trove

Packing up the kids’ rooms has the potential to be a less-than-peaceful process. Inject some fun into the functionality by getting them to create their own “Treasure Chest.” Pull out a packing box they can decorate with special markers and stickers and then fill with their favourite objects to keep close to them on the journey.

 

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Interior Design Team

Sometimes it may feel like the adults are making all the decisions (we are, sorry) and things are out of control. Getting the kids involved in picking out new furnishing and bedding for their room allows them to feel a sense of ownership of the new space. (Plus, that Star Wars duvet cover is super cool no matter how old you are.)

 

Uprooting can be hard on the littlest member of the family but having a handle on what can help will make that move go smoothly and you’ll all be settled in in no time.

 

Courtesy of REMAX.ca

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