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You’ve checked listings, scouted your favorite neighborhoods, compared market prices and even picked the perfect shade of blue for your future kitchen. It’s safe to say you’re ready to become a homeowner.

While purchasing your first home is one of the most exciting experiences you’ll ever have, it can also be extremely daunting, especially if you’re not sure where to begin. To make things easier, we’ve put together a list of steps to help you get started in the right direction.

Step 1: Take a Look at Your Finances
Before scheduling any house tours, you’ll want to do a thorough assessment of your finances, so you know exactly how (and if) you can pay for that dream home. “Buying a house is a major commitment, which means the person should feel that their job is secure, they must have sufficient financial resources for the down payment, and a few extra months of reserve funds, just in case there could be some disruption in their life,” says Lawrence Yun, Chief Economist and Senior Vice President of Research at the National Association of Realtor (NAR).

Most people can’t buy a house out of pocket, so you’ll likely end up getting a mortgage to finance your purchase. You’ll need some savings to cover the down payment, the closing costs, and third-party fees associated with this type of loan. Your down payment could be as low as 3% of the total loan amount or as high as 20%. Closing costs and third-party fees, such as home inspection, flooding certificate, appraisal, title search, courier and attorney fees, could amount to up to 5% of the total loan amount.

Additionally, as of 2018, the average yearly cost of owning a home in the US was between $12,000 and $18,000. Although these numbers may seem insignificant compared to your yearly rent, they only take into account basic expenses, like utilities, property taxes, and insurance.

So make sure you factor in all of these things, in addition to other miscellaneous expenses, like repairs, maintenance and — depending on the neighborhood you live in — homeowners association fees, to determine whether you’re financially ready to take this step.

Step 2: Check Your Credit
You’ll need a minimum credit score of at least 620 to get approved for most mortgages, unless you’re applying for a government-backed loan, or for some special program provided by the lender. Your credit score will also play a big role in determining your interest rate: the lower it is, the higher your interest rate will be.

Besides that, most lenders require you to have a debt-to-income ratio (DTI) of no more than 43%, although 36% or less is preferred. The DTI is what measures how much of your monthly gross income is compromised after taking into account your current financial obligations, like credit card and student loan payments.

Pulling up your credit report will allow you to get a clearer picture of your outstanding debts, payment and account history. This should help you determine whether it’s the right time to apply for a loan or if you should pay off some debt first.

It’s also worth noting that your credit report won’t include your credit score, only information about your financial history. Your credit score is calculated by your lender, since each creditor uses its own credit scoring model — but there’s common ground on how they choose which score to use.

“Each borrower has three scores: one from Experian, Equifax and TransUnion,” says Matt Jolivette, a Certified Mortgage Consultant and Owner of Associated Mortgage Brokers. “The lenders usually take the middle score, so if someone has a 700, a 720 and a 740, the lender is going to use the 720 one.”

If you’re planning on taking out a mortgage with a spouse or a partner, the lender then compares both middle scores and chooses the lowest one, so it’s something you should be aware of if you’re thinking about buying jointly.

Step 3: Learn the Lingo
Getting to know the house-buying lingo can be quite tedious — after all, most of us would rather jump straight to the fun stuff, like actually looking at places, than sit and debate about interest rates, DTIs, and credit scores.

Still, knowing a few keywords can help you choose the right financing option for you, so here are some of the most important ones you’ll encounter throughout the home purchase process:

  • Term: this is the length of the mortgage, or for how long you’ll be paying it. It usually ranges from 10 to 30 years, depending on the lender.
  • Annual percentage rate (APR): some people confuse it with the interest rate, but this number — which is expressed as a percentage — actually combines the interest rate, points, and lender fees. When shopping for mortgages, this is the number you need to pay attention to, as it reflects the actual cost of the loan.
  • Fixed-rate mortgage: with this type of loan, the interest rate remains the same from start to finish.
  • Adjustable-rate mortgage (ARM): also known as a “variable-rate mortgage.” With this loan, the interest rate is fixed for a number of years, then turns into a floating rate for the remainder of the loan.
  • Conventional loan: this type of mortgage isn’t guaranteed by any government agency and usually has a fixed term and interest rate.
  • Government-backed loan: these are insured by the government and offer benefits, like lower down payments or full financing, and have a different set of requirements. Government-backed loans include VA, USDA and FHA loans.
  • Jumbo loan: these are mortgages that exceed the limits established by the Federal Housing Finance Agency (FHFA). They can be for as much as $1M depending on the lender, and require higher credit scores, income and down payments than conventional loans.

Step 4: Check for Federal, State and Local Programs
One of the best things about buying your first home is that you may be eligible for different programs that can facilitate your transition into homeownership and offer everything from flexible requirements to assistance with down payments and access to affordable housing.

Here are some of the federal programs that you may qualify for:

  • Federal Housing Administration (FHA) loans
  • Homeownership Vouchers
  • HomePath Ready Buyer
  • Good Neighbor Next Door
  • The Indian Home Loan Guarantee

Programs like the FHA loans and HomePath Ready Buyer allow you to qualify with credit scores lower than 620, and you could purchase a home with a down payment as low as 3%. The Homeownership Vouchers provide subsidies for low income individuals looking to purchase property.

The Good Neighbor Next Door program offers up to 50% off on qualified home listings for those working in careers that can revitalize communities, like teachers, first responders, and police officers. The Indian Home Loan Guarantee offers down payments as low as 2.25%, plus flexible underwriting to American Indians, Alaska Natives, and other federally recognized tribes.

Also: If you have an IRA, you can withdraw up to $10,000 without incurring any penalties for the purchase of your first home, in addition to applying for other state and local programs.

Step 5: Get Pre-Approved
Fact: not getting pre-approved before checking out houses is a rookie mistake. “We always recommend you get pre-approved. This allows us to look at your income, assets, and pull up your credit, to make sure you’re all buttoned up,” Jolivette says.

Getting pre-approved not only saves you time, but can also narrow down your choices and spare you the disappointment of falling in love with a piece of real estate that’s out of your price range.

In order to get the best term and interest rate for your situation, do research by comparing quotes from multiple lenders. Getting pre-approved won’t hurt your credit, as lenders only do a soft credit pull for this process.

To get you pre-approved, you’ll need to provide the following:

  • A form of ID
  • Social security number
  • Up to two months worth of pay stubs
  • Copies of your two most recent W-2s and tax returns
  • Statements of assets (certificates of deposits, savings, or any other investments).

Filling out the pre-approval form will only take a few minutes and, depending on the lender, you may be able to submit all the paperwork via email, instead of regular mail.

It can take lenders a couple of days to a week to get back to you. If you’re pre-approved, the lender will send you a letter stating the amount you’re qualified for. Having this letter at hand allows you to close faster and could also speed things up come time to persuade sellers to accept your offer.

If you’re unsure of where to start, MONEY has put together a list of the Best Mortgage Lenders of 2020, to help you choose wisely.

Step 6: Hire a Good Real Estate Agent
Once you’re pre-approved, the next step is to get in touch with a real estate agent. “Realtors can protect your interest and your investment,” says Diane Schall, a seasoned realtor at Ferrari-Lund Real Estate in Reno, Nevada.

Although you may check for listings online, these usually contain general information about the property, and could be outdated. “I get so many texts and phone calls from people looking at listings online, and sometimes the home isn’t even on the market, or it was already sold,” says Schall. “They just don’t give the consumer accurate information.”

The obvious benefit of hiring a real estate agent is that they’re knowledgeable about the market. They have updated information on listings that are within your price range, which can help you narrow your options. Additionally, they can give you in-depth details about the property, including things that would be hard to find on your own, like homeowners association fees and history of insurance claims. This can be a serious advantage for you, as it can help you negotiate a better price.

Real estate agents can also tell you things to watch out for, so you get the full picture of what you’re getting into. “I always point out everything that I possibly can, so they are aware. Like, ‘Look there’s a gap in the flooring, or there’s a water leak in the ceiling,’” says Schall. “I treat people like they’re my friends and family. I’m not gonna just sell a home just for the money, it’s about building lasting relationships,” she adds.

On average, real estate agents charge a commission fee that’s between 5% and 6% of the home’s final sale price, but they can also charge a flat fee. This fee is negotiable, and agents don’t get a single penny until the purchase is finalized. However, it should be noted that this fee is paid by the seller.

Step 7: Consider the Location
When looking at houses, a lot of people consider things like commute, whether the property is in a good school district, hospital proximity, and if there are plenty of restaurants and entertainment options nearby.

While these are all valid things to consider when searching for the ideal home, you should also take into account if that cute little house by the trees is a prime location for wildfires, floods, and other natural disasters.

According to the Insurance Information Institute’s latest data, the average American pays over $1,200 a year on homeowners insurance premiums. However, the price of premiums varies greatly from one location to the next. For example, the average annual premium paid by homeowners in Louisiana was $1,968 versus $829 in Arizona. This is due to the fact that Louisiana’s properties are more exposed to hurricanes and other natural disasters than those in Arizona.

If you purchase a home in a high-risk area, you may have a harder time getting insurance, and if you do, chances are it’ll be much more expensive, so it’s something to consider before you buy.

Additionally, if the house is close to a highway or any busy main roads, it’s possible that it’s resale value may be affected, since potential buyers can cite noise, pollution and lack of privacy as valid reasons to offer you a lower amount than your asking price.

Step 8: Make an Offer
So, you’ve finally found that special place that’s going to put an end to your renting days. Guess what? Three other buyers seem to share your good taste. This is when a good offer letter comes in handy.

Your real estate agent will most likely help you with this step, but here are some of the things that are usually included:

  • Purchase price – this is how much you’re willing to pay for the property.
  • Earnest money amount – also known as an “initial deposit,” this is separate from the down payment, and shows sellers you are serious about purchasing the property and it’s usually 1% to 2% of the property’s value.
  • Copy of the pre-approval letter from the bank or financial institution – to show the sellers you’re approved for funding and are ready to close.
  • Closing details – this includes information about the costs you’ll be responsible for, as well as those you expect the seller to cover.
  • A list of contingencies – these are deal breakers that would make the offer void, or a list of things that need to be in place for the offer to be valid. A home inspection can shed light on some of these, like for example, if there’s exposed wiring, you can ask the seller to fix this before you move in, as a condition for the purchase.
  • Expiration date – at the end of the letter, you must include a deadline for the seller to respond to your offer, as this helps to get things moving. Some states, like California, give sellers up to three days to respond to it, but this can be flexible. In most cases, sellers respond within 24-48 hours after receiving the offer.
    Yun also recommends including an emotional appeal within your letter stating the reasons behind your intent to purchase. “They should express whether they are a family raising a kid, and are looking for a good school district, or if they just have a certain connection with that particular house,” says Yun, noting that your chances could certainly increase by taking this route. “They want the next buyer to be somebody they can relate to, and that takes care of the home,” he adds.

If the seller accepts your offer, the next step is to send the purchase contract to the lender, so they can schedule a closing date and get everything in place for funding.

Step 9: Get an Inspection
The home inspection takes place once your offer is accepted, to ensure the house you’re purchasing is safe. Some of the things inspectors look for are faulty or exposed wiring, poor ventilation, roofing problems, mold, presence of rodents or other pests, and plumbing issues. The inspection process takes 3 to 4 hours to complete, depending on the size of the property, and it usually takes the inspector a few days to a week to complete the report.

The seller is required to inspect the property prior to listing it on the market, but it’s always recommended you also hire your own inspector, that way you know if the property is being sold at a fair price and if you’re getting your money’s worth.

Although inspections are commonly held after the offer is accepted, most buyers ignore that they can request a “pre-offer inspection.” However, they must be careful when doing so. The reason behind this is that requesting a pre-offer inspection could be seen as a sign of distrust from the seller’s point of view, which could lead them to reject your offer.

In Jolivette’s opinion, it is best to schedule inspections after making an offer. “We always recommend folks do get a home inspection once their offer has been accepted,” says Jolivette. If something seems off during the inspection process, you can always get the seller to make the adjustments prior to closing, or ask them to lower their price.

Step 10: Get Ready to Close
Closing is the final step in purchasing a home, and is when you sign all of the remaining paperwork to become the legal owner of the property. This happens between 30 to 45 days after your offer is accepted and your lender receives the purchase contract.

A day before closing, your real estate agent will schedule a final walkthrough to see that everything in the property is the way it should be for final approval. Some of the people you can expect to see at the closing are your real estate agent, a closing attorney, escrow officer, home inspector, a title insurance agent and the loan officer, in addition to the seller.

At closing, you’ll be asked to bring the following:

  • A photo ID to verify your identity
  • The copy of the purchase agreement
  • A cashier’s check or a certified check to pay for the down payment and remaining closing costs and fees
  • Proof of insurance

The actual process can take a while, since you’ll have to sign a lot of documents, including the deed of trust or mortgage, promissory note, and a closing disclosure. Yun advises to review these documents carefully, to avoid any unpleasant surprises.

“Closing is just the validation of all the expectations, so there should be no surprises. Everything should be as negotiated,” says Yun.

After everything is signed and validated, the title is transferred under your name, and you officially become the legal owner of the house. Next step: get your keys, and start packing!

The site of Toronto’s famous Honest Ed’s department store is once again buzzing with activity. The beloved retailer closed its doors in 2017 to make way for Mirvish Village, a brand new purpose-built rental community by Westbank. Demolition of the building, including many of its iconic signs and marquee lights, took place through 2017 and 2018, followed by framing and forming work on the development’s four-storey parking garage.

Today, the 4.5-acre site at Bloor and Bathurst Street is packed with heavy machinery, scaffolding and five tower cranes as construction on the mixed-use community progresses past grade level.

On the western edge, Markham Street is closed to traffic and pedestrians as many of the homes on the street will be preserved, renovated and incorporated into the new complex. The rear portions of these homes have been demolished and the interior connections have been temporarily sealed off with wood panels.

The facades of several other heritage buildings scattered around the development will also be preserved including the Wrigley Building at 585 Bloor Street West. The three-storey brick frontage, which dates back to 1906, is currently being held up by a bright yellow exoskeleton of steel supports. Similar steel frames are visible at the corner of Bathurst and Lennox Street, where a row of heritage facades will become the southeast gateway into the community.

When construction wraps up in 2022, Mirvish Village will consist of a vibrant mix of rental residences, affordable housing, public spaces and retail amenities. Modern towers designed by Henriquez Partners Architects will be joined by low- and mid-rise buildings as well as a series of micro-towers, which are narrower and have a smaller floorplate than typical buildings in Toronto. Markham Street is also planned to re-open as a pedestrian-friendly street lined with restaurants, boutiques and a new public park.

Toronto’s rental market saw average prices drop eight percent for two-bedrooms and four percent for one-bedrooms in April over March, according to data released earlier this month by Rentals.ca.

While a single month doesn’t make a trend, market dynamics are not moving in a direction that favours property investors accustomed to strong monthly rent increases.

Viewed as notoriously tight only months ago, the rental market in Canada’s largest city has been far from immune to the effects of the COVID-19 pandemic, with activity freezing up in response to physical distancing and business shutdown measures.

A recent brief published by Capital Economics dives into the multitude of reasons that explain the growing threats to property investors in Toronto’s rental market. A top concern identified by the firm is the staggering decline in immigration to Canada already underway as a result of the pandemic.

Stephen Brown, an economist with Capital Economics whose work focuses on Canada, wrote that net immigration to the country has fallen from 30,000 monthly arrivals to close to zero. Alongside Vancouver, Toronto is the destination for the highest number of immigrants to the country, most of whom rent upon their arrival.

Brown wrote that the impact of this drop in immigration and the corresponding rise in rental supply could be “very significant,” not just to the rental market but also to resale home prices and the broader real estate market’s overall stability.

But it’s not just immigration that is poised to radically change the rental landscape in Toronto. Brown also pointed to a potential influx of former Airbnb vacation rentals added to the long-term rental pool.

Faced with an unprecedented decline in tourism and business travel and short term rentals temporarily banned in Ontario, many investor-owners are shifting their units to the long-term rental market. Brown estimated that this could add 7,900 vacant units to the Toronto rental market, more than the total number of vacant units in the city at the beginning of 2020.

While the economist admitted that his work only made crude estimates based on the data currently available, Brown suggested that even a less extreme scenario could see Toronto rents likely falling 5 to 10 percent by mid-summer as a result of a higher citywide vacancy rate, with rental supply rising as demand declines.

Toronto’s vacancy rate has been painfully low for years and renters have long been hoping for relief in the form of lower prices and more options in the market. Purpose-built rentals and new condo units were poised to hit multi-decade and multi-year highs, respectively, in 2020. Some of these units may face construction delays as a result of the pandemic, but with all housing construction resumed in Ontario earlier in May, a large-scale disruption is unlikely to materialize.

Taken together, this increase in supply sounds like a win for the city’s renters. However, this group has also been more severely affected by layoffs since mid-March, as BMO Senior Economist Robert Kavcic noted earlier this month. Clearly, it remains to be seen if this crisis will produce a winner for any group in the market.

Canada’s real estate market slowed down considerably since COVID-19 measures were introduced across the country in March. With public health and safety top of mind, a number of real estate associations (like the Ontario Real Estate Association and BC Real Estate Association), put forth guidelines for realtors to prioritize virtual communications over any in-person meetings. Such physical distancing measures in tandem with broader economic uncertainty pushed many buyers and sellers to the sidelines, as they await more stability.

In addition to record declines in sales activity across the country, the latest data from the Canadian Real Estate Association (CREA) for April – which is the first full month after COVID-19 measures were implemented across the country – reveals that the average home price in Canada is now $488,203. This price is 10 per cent lower than the average home price of $539,724 in February, which was well before any COVID-19 measures were introduced at the federal or provincial level.

To get a snapshot of how the market activity shifted in the short run since COVID-19 measures were introduced across Canada, Zoocasa used data from CREA to compare average home prices and sales between February and April 2020 for 20 real estate markets across the country. Average home prices were used as this is the price metric used and most widely available across regions in official monthly reports from CREA. As always, our analysis serves to provide a high-level overview of market dynamics and a broad perspective on market activity. Prospective home buyers will benefit from a more detailed analysis of price and sales trends for specific home types of interest or at the city, town, or neighbourhood level.

Canada Moves Into Balanced Market Territory, From Sellers’ Market

In terms of buyer competition, at the high level, the Canadian housing market shifted from sellers’ territory toward more balanced market conditions, as indicated by the monthly sales-to-new-listings ratio (SNLR). In April, Canada’s SNLR was 58 per cent, down from 62 per cent in February 2020. For reference, a range between 40 – 60 per cent indicates balanced conditions, while below and above that threshold indicate local housing market conditions favouring buyers and sellers, respectively.

Overall home sales in Canada were down 46 per cent, dropping to 20,630 in April from 38,161 in February. Similarly, new listings dropped 42 per cent in April, down to 35,795 from 61,816 in February.

Greater Toronto, Hamilton-Burlington, Niagara Region and Kitchener-WaterlooMove Into Balanced Market Territory

At the regional level, four housing markets shifted from sellers’ to balanced territory – notably, all these markets are in Ontario. While each of these areas experienced a drop in sales of at least 50 per cent in April from February, the corresponding decrease in new listings only ranged from 29 per cent to 42 per cent, thus resulting in theoretically more buyer-friendly market conditions

The Greater Toronto market moved from an SNLR of 68 per cent in February to an SNLR of 48 per cent in April, putting it firmly in balanced market territory. Home sales were down 59 per cent in April from February, while new listings only dropped 42 per cent. Kitchener-Waterloo (K-W) followed a similar trend – moving from an SNLR of 75 per cent in February to 54 per cent in April, meaning buyers faced less competition for new listings in April than they did in February. Home sales in K-W fell 51 per cent but new listings only dropped 32 per cent.

The Hamilton-Burlington area experienced a 52 per cent decline in sales in April from February, but only a 32 per cent drop in new listings; pushing the SNLR to the edge of a balanced market at 58 per cent from being a sellers’ market at 73 per cent in February. Niagara Region’s market conditions changed from being firmly in a sellers’ market with an SNLR of 70 per cent in February to 44 per cent in April after a 55 per cent decline in sales.

Ontario Cities See Largest Decline in Average Home Price Dollar Value

Our analysis further revealed that Ontario regional markets led the country when it came to average price declines – claiming the top five spots when ranked by dollar declines.

The Greater Toronto average home price dropped a staggering $88,898 between February and April, marking a 10 per decline to $821,392 in April as reported by CREA. This was followed by Ottawa, where home prices declined by $34,652 from $510,139 in February to $475,487 in April 2020. Rounding out the top three was Hamilton-Burlington, where a $32,255 decline marked a 5 per cent decrease in the average home price to $614,412 in April.

Niagara Region and Windsor-Essex saw average home prices decline $31,467 and $30,661 respectively since COVID-19 measures were introduced in March. The average home price in Niagara in April was $457,026 and in Windsor-Essex, was $345,771.

Out of the five markets with the largest average price drops, Ottawa and Windsor-Essex experienced the lowest decline in sales at 21 and 30 per cent respectively. In comparison, Greater Toronto, Hamilton-Burlinton and Niagara Region home sales halved from February with drops of 59 per cent, 52 per cent and 55 per cent, respectively.

BC Housing Markets See Consistent Sales Declines; Varying Impact on Average Prices

In all three BC markets studied, roughly half the number of homes sold in April, compared to February. In Victoria and in Fraser Valley, home sales declined 48 per cent, whereas in Greater Vancouver there were just 1,119 sales in April; 49 per cent lower than the number of sales in February.

Despite the consistent rate of decline in sales for each of these markets, there was a diverging impact on average home prices. In Greater Vancouver, home prices grew two per cent between February and April from $1,006,708 to $1,031,321 (a $24,613 increase). On the other hand, the average home price stayed flat at $769,666 in Fraser Valley and also remained unchanged in Victoria at $701,632.

Canada’s Biggest Regions Experience the Worst Sales Declines

Across Canada, home sales were slashed nearly in half between February and April. More specifically, 20,630 homes changed hands in April compared to 38,161 in February, marking a 46 per cent decrease in sales.

Regionally, some of Canada’s largest markets experienced a rate of sales decline that outpaced the national average. Canada’s largest housing market – Greater Toronto – noted substantial declines in both average home price and sales. Sales in particular dropped 59 per cent, with 2,975 versus 7,256 in April. Similarly, Hamilton-Burlington and Niagara also noted sales declines of 52 and 55 per cent each.

Montreal, one of the regions most affected by the coronavirus that causes COVID-19, was also most impacted when it came to a decline in sales. Sales dropped a whopping 65 per cent between February and April from 5,338 to 1,890. Average home price declined at a much slower rate, dropping $5,125 to $434,720 in April. Elsewhere in Quebec, sales followed a similar trajectory. In Quebec CMA, sales declined 64 per cent, but the average home price rose one per cent to 277,075. In Gatineau, although the average home price rose by four per cent to $295,175, sales dropped a dramatic 59 per cent.

Calgary, a market already experiencing a slowdown in recent years, saw a 49 per cent drop in sales from 1,521 in February to 776 in April. The average price fell by -$27,960, or 6 per cent, to $409,318, hitting the lowest average price in the past five years.

Here’s a snapshot of how average home prices and sales changed in 20 regional markets across Canada between February and April 2020. Further below, you’ll find roundups of the markets with the largest dollar increases and decreases in average home price and those with the most and least significant decreases in sales volumes during this period.

 

Markets With The Largest Dollar Drop in Average Price

  • 1. Greater Toronto

April 2020 price: $821,392
Change in price from Feb 2020: -$88,898 (-10%)
April 2020 sales: 2,975
Change in sales from Feb 2020: -4,281 (-59%)

  • 2. Ottawa

April 2020 price: $475,487
Change in price from Feb 2020: -$34,652 (-7%)
April 2020 sales: 920
Change in sales from Feb 2020: -244 (-21%)

  • 3. Hamilton-Burlington

April 2020 price: $614,412
Change in price from Feb 2020: -$32,255 (-5%)
April 2020 sales: 482
Change in sales from Feb 2020: -516 (-52%)

Markets With The Largest Dollar Increase in Average Price

  • 1. Saskatoon

April 2020 price: $327,539
Change in price from Feb 2020: +$29,815 (+10%)
April 2020 sales: 283
Change in sales from Feb 2020: -31 (-10%)

  • 2. Greater Vancouver

April 2020 price: $1,031,321
Change in price from Feb 2020: +$24,613 (+2%)
April 2020 sales: 1,119
Change in sales from Feb 2020: -1,066 (-49%)

  • 3. Winnipeg

April 2020 price: $313,022
Change in price from Feb 2020: +$20,952 (+7%)
April 2020 sales: 739
Change in sales from Feb 2020: -26 (-3%)

Canadian Markets With The Largest Percentage Drop in Sales

  • 1. Montreal CMA

April 2020 price: $434,720
Change in price from Feb 2020: -$5,125 (-1%)
April 2020 sales: 1,890
Change in sales from Feb 2020: -3,448 (-65%)

  • 2. Quebec City CMA

April 2020 price: $277,075
Change in price from Feb 2020: +$2,953 (+1%)
April 2020 sales: 403
Change in sales from Feb 2020: -705 (-64%)

  • 4. Greater Toronto (tied)

April 2020 price: $821,392
Change in price from Feb 2020: -$88,898 (-10%)
April 2020 sales: 2,975
Change in sales from Feb 2020: -4,281 (-59%)

3. Gatineau CMA (tied)

April 2020 price: $295,175
Change in price from Feb 2020: +$10,095 (+4%)
April 2020 sales: 193
Change in sales from Feb 2020: -279 (-59%)

Markets With The Smallest Percentage Drop in Sales

  • 1. Winnipeg

April 2020 price: $313,022
Change in price from Feb 2020: +$20,952 (+7%)
April 2020 sales: 739
Change in sales from Feb 2020: -26 (-3%)

  • 2. Regina

April 2020 price: $299,896
Change in price from Feb 2020: -$2,756 (-1%)
April 2020 sales: 171
Change in sales from Feb 2020: -10 (-6%)

  • 3. Saskatoon

April 2020 price: $327,539

Change in price from Feb 2020: +$29,815 (+10%)
April 2020 sales: 283
Change in sales from Feb 2020: -31 (-10%)

Methodology

Home prices and sales were sourced from the official Canadian Real Estate Association (CREA) monthly reports for April and February 2020.

As the coronavirus pandemic continues and social distancing measures remain in place, recent sales data shows Toronto’s typically steadfast housing market continues to see a decline in activity, while home prices remain steady.

The most recent data from the Toronto Regional Real Estate Board (TRREB) shows home sales declined by 69% in early April compared with the same period last year. At the same time, new listings also declined, falling 63.7% compared with the same period in 2019.

But you know what didn’t substantially fall? Home prices.

Those hoping that housing prices would go down – especially here in Toronto where prices are some of the most expensive in the country – have seen a small, but barely significant change given the current economic climate, with the average selling price for all home types reaching $885,371, a -3.7% decline compared to the same period last year in Toronto proper. The GTA as a whole also saw little, if any, damage; its average prices remained flat, increasing 0.1% to $821,392 during the same time.

This raises the question: if sales and listings are both down, why aren’t prices also dropping?

The price of homes, like stocks, for example, depend heavily on the law of supply and demand. With both demand and supply down in Toronto, you might assume prices would show some flexibility, but it appears that isn’t the case specifically because both supply and demand are down.

According to Walter Melanson, co-founder of PropertyGuys.com, normally, the market is plagued by a lot of non-serious buyers and noise, but all the “tire-kickers” have left, he says. Simply just being in the market at all right now is a statement. “If you’re in the market right now, we’re considering you as a very serious buyer.”

“There are still lots of reasons to buy right now, including people who need to move because of work, people who have moved to the country or region recently, and people who have the money to enter the market at a time when others don’t,” Melanson adds.

Gone from the current market are any distractions; only serious buyers and sellers remain.

At the same time, the COVID-related measures currently in place have helped contribute to the drop in transactions, which TRREB president, Michael Collins, believes will only be temporary. Collins says the drop will most likely persist until there’s a “sustained decline” in the number of cases. Given the sharp drop-off in sales in recent weeks, it leads us to wonder where housing prices are headed. Collins believes that once recovery from the pandemic begins market activity should accelerate due to the pent-up demand that has been, and will continue to, build up over the course of the spring and into part of the summer.

But no one really knows.

A recent report from CIBC Capital Markets economists forecast a decline in average prices of five to 10% in Canada relative to 2019 levels. The weakness in the labour market is noted as one reason for the decline, “with high-cost units in the high-rise segment of the market seeing the most notable price declines.”

At the same time, the Canada Mortgage and Housing Corporation (CMHC) predicts housing prices will not return to pre-COVID-19 levels until late 2022.

However, both of these forecasts come on the heels of TD Bank releasing a similar report, albeit one that takes a completely different outlook, suggesting that home prices will increase nationally in 2020. “Home price growth is projected to hit a national average of 6.1% in 2020, compared to a 2.3% increase last year. Here in Ontario, home prices are forecast to increase by 8.3% in 2020, while Toronto could see an increase of 7.8%, compared to 4.1% in 2019,” reads the report.

At this point, no one safely knows how long the COVID-19 crisis will last and where the consumer mindset will be once it ends. For now though, there remains enough demand in Toronto’s limited supply to ensure prices will not be offering much of a so-called ‘COVID-discount’ anytime soon.

The scale of sales may have shrunk, but don’t expect home prices will too.

Toronto remains likely to see elevated housing demand and prices this summer despite the COVID-19 market pause, RE/MAX predicted.

Data from the Toronto Regional Real Estate Board indicated that the GTA suffered a 69% annual decline in home sales in the first 17 days of April. This also accompanied a 1.5% drop in the market’s average home prices, with the most pessimistic observers predicting 5% devaluation by July.

“Yet, we cannot be sure that this trend will continue into the summer and that prices will necessarily drop further,” RE/MAX said. “[TRREB] notes that the pause on activity will lead to more demand once measures loosen. As a result of banned open houses, homebuyers have resorted to creative ways of viewing listings and engaging with the market, leveraging technology to facilitate the home-buying process while mitigating the impact of coronavirus on real estate activity in Toronto.”

And while mobility restrictions might last for much of the summer, “we expect buyers who have been waiting patiently to continue their home search will quickly re-enter the market when we return to some normalcy,” RE/MAX said.

Still, any such predictions will have to give way to just how fast the market recovers in the first place, especially considering the mounting concerns surrounding many Canadians’ long-term purchasing power.

“Those who are concerned about their employment in the coming months could pull demand down. However, those who have stable employment and cash that isn’t tied up in investments can take advantage of low interest rates,” RE/MAX said.

Located on the former Celestica Campus in East Toronto, One Crosstown Condos is the first residential phase of Aspen Ridge Homes’ 60-acre redevelopment project. The master-planned community will consist of 16 residential buildings, 13 blocks of townhomes, over five acres of new parks, a 100,000-square-foot community centre, and 700,000 square feet of office, retail, restaurants and cafes. Sales of units in the first tower were launched last year and the developer has recently released a new collection of floorplans.

Another major milestone was achieved earlier this year when demolition began on the southeast corner of the site. A hydraulic crusher was used to tear down one of the original Celestica buildings and in order to maintain environmental responsibility, the majority of the materials will be sent to a sorting facility to be recycled.

Situated at Don Mills Road and Eglinton Avenue East, One Crosstown Condos offers an ideal location close to local amenities, major highways and public transit. The brand new Eglinton Crosstown LRT station is located across the street and when the system opens in 2021, residents will be five stops away from the Yonge and Eglinton transit hub.

Even more amenities and attractions are just a stone’s throw away, including the many restaurants, cafes and boutiques that dot the nearby Bayview corridor. Plus, a little further north is the Shops at Don Mills, a sprawling shopping complex with a variety of retailers and restaurants like Anthropologie, Cineplex and Panera Bread.

Priced from $649,990, the suites at One Crosstown range in size from 667 to 1,153 square feet, including family-friendly units with three bedrooms and two bathrooms. All suites boast contemporary styling by Mike Niven Interior Design Inc with nine-foot ceilings, laminate flooring, and kitchens with granite or Caesarstone countertops. A designer Miele integrated appliance package also comes standard.

Amenities start in the sleek main floor lobby, where residents will have access to a 24-hour concierge. The state-of-the-art fitness centre is fully equipped with the latest cardio equipment and weights, while the party and games room provides the perfect spot to celebrate special occasions. Other amenities include a yoga studio, dog wash station, outdoor terrace and a furnished guest suite for overnight visitors.

 

It’s been weeks since thousands of purchase agreements were left in the lurch as three major Toronto projects developed by Cresford entered into receivership.

In late March, PricewaterhouseCoopers (PwC) was appointed as the receiver and manager of assets for three of the luxury developer’s downtown projects: The Clover on Yonge, Halo Residences and 33 Yorkville. As no firm decisions have been made yet on the fate of any of these projects, the roadmap for what could happen to them may vary. The receivership process is in the early stages, meaning the outcomes of any of the buildings could go in many directions.

“It’s [the] very early stages and has a lot of implications. There’s a lot of questions in the air,” said Pauline Lierman, Director of Market Research at Urbanation. “For our purposes, we still have them active in our database, but they are no longer actively selling, so we’re maybe going to put them on hold, because we don’t know how this is going to be treated. We have our guesses, but we don’t know exactly.”

Further information released by PwC in mid-April calculates that 1,805 purchasers entered into agreements between all of the projects, totaling $252 million in deposits. On May 6th, PwC declared that it would no longer be accepting deposits from purchasers.

“In my opinion, the statement by PwC that they will no longer be accepting deposits is sensible and the only way forward at this stage,” said Jillian Siskind, Principal Counsel of Jillian M. Siskind & Associates, a boutique law firm specializing in construction and real estate litigation. “Taking additional deposits at this point would be irresponsible since there is no active project underway.”

Siskind explained that it may be possible for another developer to purchase the project’s land and work in place, a distinct action from the projects being purchased. If bought just for the construction and land, Siskind said that a new developer would likely want to start the process from scratch, meaning old project deposits would be returned through Tarion or Cresford’s insurer, and new agreements would be created.

Two of the projects in question, Halo Residences and 33 Yorkville, are in the early stages of construction, with most work still at grade-level, according to photos recently published online. The Clover, however, is nearly finished. While a developer could take over the project, Siskind explains that it is uncertain how that would happen with The Clover and whether old purchase agreements would be transferred over. Financial viability, among other factors, would influence the purchasing decision of the project or its assets.

“A new developer will examine the financial viability of the project including its assets and debt. It will also consider the purchase price for the units,” said Siskind. “It may well be that the new developer could not get those same prices in today’s market, or to the contrary, maybe they could get more.”

With The Clover nearing completion, Lierman said that the project may need to be almost comparable to resale price points now that it has phased out of preconstruction over time. In terms of what purchasers may receive at the end of the process would depend on what the purchaser decides, Lierman explained.

“You have to expect that on Yonge Street, you’re going to want to get a certain level of revenue on this site, and the gap between what your owners paid for the units versus now,” said Lierman. “At the very least, they should be getting their deposits back if they’re going to go the clean-slate route, with interest.”

Homebuyers, real estate investors and industry commentators alike are grappling with the many ways the COVID-19 pandemic will impact Canada’s housing market and the path ahead as economic activity across the country cautiously resumes.

One approach in the search for clues on both the short and long-term market implications of the pandemic’s disruptive effects is to look at how the 2008-2009 global financial crisis played out.

While there are several quickly identifiable similarities — home sales falling dramatically, cuts to interest rates, evaporating buyer confidence — there are a couple of key differences to keep in mind as the pandemic wears on and the market adjusts to the challenging new environment.

In a report published earlier this month, BMO Senior Economist Robert Kavcic highlighted that Canada’s resale market “has effectively frozen itself in time.” New home listings, he wrote, are sharply declining alongside home sales which likely means that “the deterioration in prices should be contained for now.”

“Contrast that to 2008/09, when sales fell by almost 40 percent from the end of 2007 to the 2009 lows, but new listings rose by 15 percent through the early stages of that period — that’s how you get a quick and meaningful decline in prices,” Kavcic wrote.

So even though home sales figures looked bleak in the second half of March and entirety of April, there’s reason to believe that this strong economic shock will differentiate itself by not leading to a sharp fall in home prices.

“We suspect that sales and listings could both come back in rapid fashion, leaving broad prices steady through this challenging period,” Kavcic wrote.

That prediction has, so far, played out in the data published by real estate boards in major markets across the country. Average Toronto home prices rose a marginal 0.1 percent in April over the previous year even as sales declined by 67 percent. Meantime, Vancouver’s real estate board reported a 2.5 percent increase to its benchmark home price in April with sales hitting a 38-year low for the month.

Home prices tend to respond slower to changing market conditions than monthly sales volumes, but as businesses reopen and homebuying activity creeps back up, Canada’s housing market may resume activity closer to where it left off than the bleak April data would suggest.