Month: August 2020

Montreal and Toronto are the real estate markets exhibiting the strongest growth right now, according to CENTURY 21 Canada.

In its fourth annual report that ranks housing values based on their price per square foot (psf), CENTURY 21 said that Canadian home prices remained strong on the whole, while sales activity is steadily recovering after the initial shock of the COVID-19 outbreak.

“When the pandemic took hold in Canada in mid-March, there was a lot of uncertainty about what would happen to real estate sales during the typically busy spring market,” said Brian Rushton, executive vice president of CENTURY 21 Canada. “What we have seen is that after a dip in the number of sales early in the pandemic, the pace of sales has returned to near-normal levels as real estate agents and companies innovated new ways of doing things. The real estate industry has proved resilient through the past several months. And even further, prices have held steady as well.”

One shining exception was Montreal, which saw detached home prices in the downtown and southwest areas increase by 42.14% to $958 psf. Townhouses also had a similarly strong 44% growth to $768, while condos posted a more modest 13.55% uptick to $805.

“Even though real estate in Quebec was not considered an essential service, we have seen strong demand and a jump in prices in 2020,” said Mohamad Al-Hajj, owner of CENTURY 21 Immo-Plus in Montreal.

The Greater Toronto Area’s outskirts had the most notable increases in Ontario, with Newmarket seeing single-detached home values going up by 37.29%, and Kitchener having 17% price growth in the same asset class.

“With a work from home option more realistic for some people, they’re finding they can get a larger home if they move a bit further from Toronto,” Rushton said. “Even if their commute is a little longer they’re traveling to an office less often, which makes it more tolerable.”

Toronto’s downtown area condos had an 8.9% increase to $1,083 psf, making them the second most expensive nationwide.

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A housing inventory surge will likely precede a predicted arrears spike once payment deferrals end, according to a Better Dwelling analysis.

With the total balance of mortgage payment deferrals reaching $247 billion as of the end of the second quarter, Canadians have come to heavily rely on lenders’ deferral options to stave off the worst economic impacts of the COVID-19 pandemic.

However, these well-intentioned programs had the unintentional effect of providing a false sense of security.

“Since people haven’t seen any defaults or distressed sales … people now think housing markets have no risk,” Better Dwelling said. “This is only temporary. As these deferrals expire, we approach the cliff. Once we get there, a significant number of people that haven’t got back on their feet will start to surface.”

The widespread lack of liquidity will become more apparent in the first few months of 2021, with arrears manifesting on January at the earliest. In the interim, many struggling Canadians will be thus forced to put up their properties for sale.

“The inability to pay doesn’t always turn into defaults when there [are] buyers,” Better Dwelling said. “Instead, people list their homes for sale and hope it sells and closes before the lender tries to claim it. … We should see a spike in inventory first.”

And while improved supply would be a good thing generally, it will introduce grave risks in the context of a post-deferral market.

“Rising inventory tends to give buyers more options, which turns into longer selling times. When you can’t dispose of your home in a timely fashion, that’s when defaults rise,” Better Dwelling said. “Rising inventory is expected later this year, and defaults are forecasted to climb next year.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Montreal and Toronto are the real estate markets exhibiting the strongest growth right now, according to CENTURY 21 Canada.

In its fourth annual report that ranks housing values based on their price per square foot (psf), CENTURY 21 said that Canadian home prices remained strong on the whole, while sales activity is steadily recovering after the initial shock of the COVID-19 outbreak.

“When the pandemic took hold in Canada in mid-March, there was a lot of uncertainty about what would happen to real estate sales during the typically busy spring market,” said Brian Rushton, executive vice president of CENTURY 21 Canada. “What we have seen is that after a dip in the number of sales early in the pandemic, the pace of sales has returned to near-normal levels as real estate agents and companies innovated new ways of doing things. The real estate industry has proved resilient through the past several months. And even further, prices have held steady as well.”

One shining exception was Montreal, which saw detached home prices in the downtown and southwest areas increase by 42.14% to $958 psf. Townhouses also had a similarly strong 44% growth to $768, while condos posted a more modest 13.55% uptick to $805.

“Even though real estate in Quebec was not considered an essential service, we have seen strong demand and a jump in prices in 2020,” said Mohamad Al-Hajj, owner of CENTURY 21 Immo-Plus in Montreal.

The Greater Toronto Area’s outskirts had the most notable increases in Ontario, with Newmarket seeing single-detached home values going up by 37.29%, and Kitchener having 17% price growth in the same asset class.

“With a work from home option more realistic for some people, they’re finding they can get a larger home if they move a bit further from Toronto,” Rushton said. “Even if their commute is a little longer they’re traveling to an office less often, which makes it more tolerable.”

Toronto’s downtown area condos had an 8.9% increase to $1,083 psf, making them the second most expensive nationwide.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

A housing inventory surge will likely precede a predicted arrears spike once payment deferrals end, according to a Better Dwelling analysis.

With the total balance of mortgage payment deferrals reaching $247 billion as of the end of the second quarter, Canadians have come to heavily rely on lenders’ deferral options to stave off the worst economic impacts of the COVID-19 pandemic.

However, these well-intentioned programs had the unintentional effect of providing a false sense of security.

“Since people haven’t seen any defaults or distressed sales … people now think housing markets have no risk,” Better Dwelling said. “This is only temporary. As these deferrals expire, we approach the cliff. Once we get there, a significant number of people that haven’t got back on their feet will start to surface.”

The widespread lack of liquidity will become more apparent in the first few months of 2021, with arrears manifesting on January at the earliest. In the interim, many struggling Canadians will be thus forced to put up their properties for sale.

“The inability to pay doesn’t always turn into defaults when there [are] buyers,” Better Dwelling said. “Instead, people list their homes for sale and hope it sells and closes before the lender tries to claim it. … We should see a spike in inventory first.”

And while improved supply would be a good thing generally, it will introduce grave risks in the context of a post-deferral market.

“Rising inventory tends to give buyers more options, which turns into longer selling times. When you can’t dispose of your home in a timely fashion, that’s when defaults rise,” Better Dwelling said. “Rising inventory is expected later this year, and defaults are forecasted to climb next year.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Despite a flagging economy, the British Columbia housing market is enjoying a robust pace of recovery that will propel it to new heights in the months ahead, according to the province’s foremost real estate organization.

In the third-quarter edition of its housing forecast, the British Columbia Real Estate Association (BCREA) said that sales activity has now exceeded pre-COVID-19 levels, “combined with a decline in the supply of re-sale listings driven by the pandemic.”

“The outlook for the BC housing market is much brighter following a surprisingly strong recovery,” said Brendon Ogmundson, BCREA chief economist. “We expect home sales will sustain this momentum into 2021.”

Among the major drivers of the trend would be the prevailing environment of record-low rates, BCREA said.

Residential sales through the province’s MLS will increase by 6.5% this year, likely reaching 82,380 transactions. Activity is projected to go up by another 17.6% to 96,860 sales in 2021.

The association’s forecast also pegged average sales prices to grow by 7.7% this year, and then by another 3.7% in 2021.

Price growth might be further aggravated by supply-side issues, as Statistics Canada data suggested that housing inventory in Canada’s largest markets will need considerable time to recover from the COVID-19 slowdown.

According to StatsCan, investment in residential construction fell by 21.4% annually in May to reach $7.83 billion. Proportionally, Vancouver had the greatest year-over-year plunge in residential construction investment, declining by 44% to $852 million in May.

A July analysis by real estate portal Better Dwelling said that compared to the rest of Canada, investment in Vancouver is recovering at a much slower rate.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate