GTA clocks surge in new homes sales pre-COVID-19

Home sales in the Greater Toronto Area (GTA) increased significantly in February, according to the latest market report from the Building Industry and Land Development Association (BILD).

Citing figures from Altus Group, BILD said there were a total of 4,665 home sales in the month, 211% higher than the sales recorded over the same month last year. February sales were also 57% above the 10-year average.

Of the total sales, 2,418 units were for new condominium apartments, which include low- to high-rise buildings, stacked townhouses, and loft units.

Over the month, the benchmark price for condos was $961,268, up 21.3% annually. For new single-family homes, the price was down by 2.2% to around $1.1m.

Patricia Arsenault, executive vice president for data solutions at Altus Group, said GTA was slated to record a strong sales performance this year. However, the outlook for home sales in the region is now uncertain due to the impacts of the COVID-19 outbreak.

“Low mortgage rates were triggering the release of pent-up demand that had been building on the back of strong employment and population growth, which helped boost February sales,” she said.

At the end of the month, the remaining inventory of new homes was at 17,199 units. The BILD market report said this represents about five months of inventory at the pace of sales in the past year, below the longer-term average of about eight months. This inventory includes units in preconstruction projects, in projects currently under construction, and in completed buildings.

“We are working diligently to coordinate responses with provincial and municipal authorities, protect workers and customers and ensure that we continue to fulfil our responsibilities to new home buyers. One of those responsibilities is building enough homes to top up depleted inventory and ensure our region’s new home supply keeps up with demand,” said David Wilkes, BILD president and CEO.

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China’s housing market springs back to life as sales in 30 major cities triple with coronavirus crisis abating

Property sales in 30 tier-1 and tier-2 cities triple in March from February in sign coronavirus crisis is abating
Sizzling sales in pockets of market unlikely to compensate for expected decline in nationwide sales this year, analysts say

China’s private housing market is springing back to life as more sales offices reopened across the country following a nationwide shutdown, saving home builders from a deeper financial slump this year. Transactions in at least eight large cities – Shenzhen, Chengdu, Fuzhou, Hangzhou, Huaian, Yangzhou, Jiaxing, Shantou – indicated buyers have returned in recent weeks, with volume surpassing the average levels in the final quarter of 2019, according to China Real Estate Information Corporation (CRIC). The rebound comes as a relief to the industry after measures to contain the coronavirus outbreak kept buyers away and almost froze the market. Developers have since offered discounts to boost sales and avert a liquidity crunch as factories resumed production and lockdowns eased in signs the health crisis is abating. “Prices of some new projects were capped [by the government], lower than the market price, so some projects are popular” with the buyers, said Yang Hongxu, deputy head of E-house China Research and Development Institute. “Restrictions on housing and land prices also created some room for arbitrage, so people are rushing to buy houses and property developers scramble to buy land.”

Home sales in 30 large and medium-sized cities, a bellwether for the nationwide trend, reached 8.6 million sq m (92.6 million sq ft) this month, more than treble the 2.33 million sq m recorded in February, according to Wind Information. In Suzhou, a tier-2 city close to Shanghai, some 175,800 sq m of homes were sold in the week ended March 8, according to CRIC. That is higher than the 65,000 sq m weekly average in February and 132,000 weekly average in January.

Guangdong-based Country Garden said 97 per cent of its 1,327 sales centres, except in Hubei province, have reopened for business. Almost all of its 2,951 development sites have also resumed construction work, it added.

In Shenzhen, Hong Kong-based developer New World Development sold 70 flats in its Bayhouse at Prince Bay project from January 1 to March 15, fetching 21 million yuan to 51 million yuan each. Buyers also snapped up 288 smaller flats at a project in Baoan district in Shenzhen, according to CRIC data.

“Shenzhen is a young city where housing supply is limited and demand for housing is stronger” than many urban cities, said Zhang Yiping, analyst at China Merchants Securities. “Except for Shenzhen, many tier-1 cities will not see a big jump in sales [for the rest of 2020] under tight property policies,” he said. The pockets of sizzling sales in some cities are unlikely to make up for the lost ground this year, with property consultancy Knight Frank predicting a 30 to 40 per cent slide in unit sales in tier-1 cities in the first half. In the week to March 22, sales in tier-1 and tier-2 cities were still 50 per cent and 24 per cent below their year-ago levels, according to the consultancy, despite developers resorting to price discounting and a record number of supporting policies. “The sales outlook for the whole year depends on development of the coronavirus condition,” said Martin Wong, Greater China research and consultancy associate director at Knight Frank. “It appears that control of the epidemic has improved in China. But imported infections could increase as people travel to China when other parts of the world are facing the pandemic.” Sales in even lower-tiered locations won’t rebound as quickly, according to Xie Rui, senior property analyst at Golden Credit Rating. Property sales in terms of [square metres] across the nation are expected to show a 13.8 per cent drop in the first half, and 4.5 per cent for the full year, assuming the pandemic comes under control by April domestically, and no significant state policies to stimulate demand, Xie added.

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Toronto Property Management Company Shows How to Support Residents During COVID-19

In a time when many Torontonians fear they might not be able to pay their rent, let alone put food on the table, amidst the coronavirus emergency in the city, a property management company is going above and beyond to show its residents that they’re supported during this challenging time.

In light of everything going on, Greenrock has reassured its residents that no one should be concerned about losing their home as a result of this emergency and the many circumstances that are out of everyone’s control.

“These may be early days as we address this emergency. As you’ve no doubt heard in the media, we might be housebound for many more weeks, and while all three levels of Government have promised various measures of support, it will take time for relief funds to be distributed and other measures to take effect,” said Greenrock in a statement.

And to further assist its residents, Greenrock announced a number of new measures that will help them with everything from paying for groceries to their upcoming rent.

To provide some relief, Greenrock announced it will be spending $200,000 on grocery gift cards and each of its residential suites will be mailed a $100 gift card that will be redeemable at a local grocery chain.

The company also announced it has created a program whereby residents who are experiencing financial difficulty can apply their last month’s rent (LMR) deposit as a credit towards their regular rent payments. Residents may choose to use a portion of this credit or the full amount.

Greenrock says it will also be donating $300,000 to a group of local charities to address concerns surrounding food security, mental health, domestic abuse, and senior care during this crisis

Finally, in addition to the company’s already increased cleaning measures, as an extra precaution to keep the common areas of its buildings sanitary, Greenrock says it has treated all high-touch surfaces in its buildings with the GermGuard Treat and Protect Program, which kills up to 99% of germs on contact and works as a safety net between cleanings to reduce and protect against germs and bacteria for up to six months.

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Something odd is going on with mortgage rates: they’re going up, even as the key rate goes down

A second surprise rate-cut this month from Canada’s central bank, has mortgage experts reluctant to predict what is in store for consumers, who are reeling from lost income in the COVID-19 pandemic.

The Bank of Canada’s decision to lower its key rate to 0.25 per cent was primarily aimed at easing the economic shocks of virus containment and plunging oil prices — but its effect on mortgage rates is downright confusing.

Paul Taylor, CEO of Mortgage Professionals of Canada, says there could be a slight reduction in mortgage rates but it may not occur immediately because the banks’ margins on mortgages are already thin and investors are demanding such rates of return, there isn’t enough money to go around.

“So consumers may not see an immediate pass-through of the rate reduction that occurred today,” said Taylor.

“If the market remains turbulent, they may not see any of it.”

Since last week, some mortgage and commercial lending rates have actually risen.

It usually takes about three business days for the banks and major lenders to announce whether they will move their rates in response to the Bank of Canada’s, said James Laird, founder of mortgage site Ratehub and president of CanWise Financial.

Around March 17, the best fixed rates being offered by most lenders were between 2 and 2.5 per cent, Laird said. Just over a week later, those had gone up by an average of half a per cent.

It is impossible to predict what will happen in the coming days, he said.

What the bank rate means to different borrowers varies depending on whether a consumer holds a loan already or is applying for a new one.

“Everyone’s complete financial picture has probably changed a lot in the last two weeks. The mortgage is only one part of the whole household finance picture,” he said.

Those with variable rate mortgages and loans such as Home Equity Lines of Credit, “are doing great.” They have already seen a full one-per-cent drop this month and it’s likely they will benefit by the latest 50-point fall, he said.

“Prime is likely going to be 2.45 per cent if (lenders) pass along the entire 50 basis points. A lot of Canadians have something like prime, minus one per cent. Many Canadians’ variable rate mortgage will certainly be less than two per cent and a lot of them will be around 1.5 per cent — really cheap money,” said Laird.

For those who are applying for new loans, variable rate discounts have been shrinking and fixed rates have been rising.

“Even though logic suggests they should drop, the history of the last three weeks suggests that might not happen. It’s possible they stay the same or they go up,” said Laird.

Fixed rates are more difficult to analyze. Typically the central bank cut would result in reduced fixed-rate loans. But since about the middle of last week lenders have been inserting an unusual “fixed-rate premium” into their mortgage pricing, he said.

Those who believe Canada is heading for a long recession may expect the variable rates to stay low. Consumers who expect the country to rebound later this year or early next year could lock in a fixed rate, because, when the economy improves, variable rates will rise.

“The bank has extended an extraordinary monetary stimulus to deal with this extraordinary time. When the extraordinary time is over, you can expect that monetary stimulus will go away,” said Laird.

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What the government is offering you in coronavirus-related benefits and how to get them

The federal government this past week announced a variety of tax measures to help Canadians facing hardship as a result of the COVID-19 outbreak. Here’s a quick summary of the major tax changes affecting individuals.

TAX PAYMENT AND FILING DEADLINES
The government is extending the deadlines for filing personal tax returns and paying balances owing. You now have until June 1, 2020, to file your personal tax return, which is one month later than the usual April 30 deadline. Self-employed taxpayers (and their spouses or partners) still have until June 15, 2020, to file.

You also now have until Aug. 31, 2020, to pay any balance owing on your 2019 tax returns, which is four months later than the usual April 30 deadline. You may have to pay interest on any balance owing after Aug. 31 for your 2019 tax return.

But if you expect to receive income-tested benefits, such as the Goods and Services Tax credit (GSTC) or Canada child benefit (CCB), it is recommended that you still file your tax return by April 30 to help ensure your benefits can be properly calculated in time to receive the 2020-21 program payments that begin in July 2020.

If you are expecting a tax refund, it’s also a good idea to file your tax return as soon as possible since the Canada Revenue Agency will continue to process refunds throughout tax season.

TAX INSTALMENTS
Under the tax rules, quarterly tax instalments (due March 16, June 15, Sept. 15 and Dec. 15) are required for 2020 if your “net tax owing” this year will be more than $3,000 ($1,800 for Quebec tax filers) and was also over $3,000 in either 2019 or 2018. Effectively, the definition of net tax owing is your net federal and provincial taxes, less income tax withheld at source. If you are self-employed, your instalments must include any Canada Pension Plan (CPP) contributions and voluntary Employment Insurance (EI) premiums.

You now have until Aug. 31, 2020, to pay your March 2020 and June 2020 quarterly personal tax instalments, and any other instalments that would normally be due between March 18 and Aug. 31. The government has confirmed that neither interest nor penalties will accumulate on these amounts during this period.

TEMPORARY INCOME SUPPORT FOR WORKERS AND PARENTS
The government introduced a variety of new measures for Canadians without paid sick leave who are sick, quarantined or forced to stay home to care for children. The first is waiving the one-week waiting period for those individuals in imposed quarantine who claim EI sickness benefits, and waiving the requirement for a medical certificate to qualify for those benefits

Secondly, the government is introducing the Emergency Care Benefit (ECB), which will provide up to $900 bi-weekly for up to 15 weeks. This flat-payment benefit will be administered through the CRA and provide income support to workers (including those who are self-employed) who are quarantined or sick with COVID-19 but do not qualify for EI sickness benefits.

The ECB will also be paid to workers (including self-employed) who may be taking care of a family member, such as an elderly parent, who is sick with COVID-19 but does not quality for EI sickness benefits, and to parents with children who require care or supervision due to school closures and are unable to earn employment income, regardless of whether they qualify for EI or not.

ECB applications will be available in April and require applicants to attest that they meet eligibility requirements. They will need to re-attest every two weeks to reconfirm their eligibility. You can apply for the ECB either using the secure CRA MyAccount portal or My Service Canada Account website, or by calling a toll-free number that will be equipped with an automated application process.

SPECIAL ONE-TIME PAYMENT
The government announced a one-time special payment to be given out by early May 2020 through the GSTC, thereby doubling the maximum annual GSTC payment amounts for the 2019-20 benefit year. The government has estimated the average boost to income for those who qualify for this measure will be approximately $400 for single individuals and nearly $600 for couples. The government estimates this will help more than 12 million low- and modest-income families.

INCREASED CANADA CHILD BENEFIT
The government is also increasing the maximum annual CCB amounts for the 2019-20 benefit year by $300 per child. It estimates the average increase for families receiving the CCB will be approximately $550. These families will receive the extra benefit as part of their May 2020 payment. It is estimated that more than 3.5 million families will benefit.

RRIF MINIMUMS
You must start making minimum withdrawals from your RRIF in the year after it is established. Minimum withdrawals are calculated as a percentage of the fair market value of your RRIF assets at the beginning of the year, and the percentage is based on your age at the beginning of the year. Withdrawals from your RRIF, including the minimum amount, are taxable as ordinary income at your marginal tax rate. The federal and provincial pension income credits are available for RRIF withdrawals once you are at least 65 years old.

The government announced it is reducing the minimum withdrawal from RRIFs in 2020 by 25 per cent “in recognition of volatile market conditions and their impact on many seniors’ retirement savings.” For example, a taxpayer who was 71 on Jan. 1, 2020, now only has to withdraw 3.96 per cent of the fair market value of their RRIF (as of Jan. 1), down from the normal rate of 5.28 per cent.

This decrease will provide needed flexibility to seniors who are concerned they may be required to liquidate more of their RRIF assets than they need for living expenses to meet the current legislated minimum withdrawal requirements.

For those who already withdrew the higher RRIF minimum for 2020, it remains to be seen whether the government will permit them to re-contribute all or a portion of their excess withdrawals into their RRIF, as was permitted in 2015 when the RRIF minimums were last revised.

STUDENT LOANS
Finally, the government announced a six-month interest-free moratorium on repaying Canada Student Loans for all individuals currently in the process of repaying these loans. No interest will be added on these loans for six months.

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Big banks cut prime rates to 2.45% after Bank of Canada’s surprise move

TORONTO — Canada’s top lenders lowered their prime rates by 50 basis points on Friday, hours after the central bank unexpectedly cut its key interest rate to help the county weather the economic fallout of the coronavirus pandemic.

Royal Bank of Canada, Toronto-Dominion Bank, Bank of Nova Scotia , Bank of Montreal and Canadian Imperial Bank of Commerce all cut their prime rates to 2.45 per cent, effective March 30.

The Bank of Canada cut its overnight interest rate by 50 basis points to 0.25 per cent, its lowest level since June 2010 and the third cut in March.

Separately, Canada’s financial regulator eased its capital and liquidity requirements for banks, changed credit loss provisioning and allowed more loans to be securitized.

The pandemic has forced several governments to take actions as businesses grind to a halt and several retailers close stores to curb the spread of the highly-contagious diseases, leaving many people jobless.

The U.S. Federal Reserve has also cut interest rates twice in less than two weeks in March, emergency moves to help shore up the economy in the face of the damage caused by the virus.

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Something odd is going on with mortgage rates: they’re going up, even as the key rate goes down

A second surprise rate-cut this month from Canada’s central bank, has mortgage experts reluctant to predict what is in store for consumers, who are reeling from lost income in the COVID-19 pandemic.

The Bank of Canada’s decision to lower its key rate to 0.25 per cent was primarily aimed at easing the economic shocks of virus containment and plunging oil prices — but its effect on mortgage rates is downright confusing.

Paul Taylor, CEO of Mortgage Professionals of Canada, says there could be a slight reduction in mortgage rates but it may not occur immediately because the banks’ margins on mortgages are already thin and investors are demanding such rates of return, there isn’t enough money to go around.

“So consumers may not see an immediate pass-through of the rate reduction that occurred today,” said Taylor.

“If the market remains turbulent, they may not see any of it.”

Since last week, some mortgage and commercial lending rates have actually risen.

It usually takes about three business days for the banks and major lenders to announce whether they will move their rates in response to the Bank of Canada’s, said James Laird, founder of mortgage site Ratehub and president of CanWise Financial.

Around March 17, the best fixed rates being offered by most lenders were between 2 and 2.5 per cent, Laird said. Just over a week later, those had gone up by an average of half a per cent.

It is impossible to predict what will happen in the coming days, he said.

What the bank rate means to different borrowers varies depending on whether a consumer holds a loan already or is applying for a new one.

“Everyone’s complete financial picture has probably changed a lot in the last two weeks. The mortgage is only one part of the whole household finance picture,” he said.

Those with variable rate mortgages and loans such as Home Equity Lines of Credit, “are doing great.” They have already seen a full one-per-cent drop this month and it’s likely they will benefit by the latest 50-point fall, he said.

“Prime is likely going to be 2.45 per cent if (lenders) pass along the entire 50 basis points. A lot of Canadians have something like prime, minus one per cent. Many Canadians’ variable rate mortgage will certainly be less than two per cent and a lot of them will be around 1.5 per cent — really cheap money,” said Laird.

For those who are applying for new loans, variable rate discounts have been shrinking and fixed rates have been rising.

“Even though logic suggests they should drop, the history of the last three weeks suggests that might not happen. It’s possible they stay the same or they go up,” said Laird.

Fixed rates are more difficult to analyze. Typically the central bank cut would result in reduced fixed-rate loans. But since about the middle of last week lenders have been inserting an unusual “fixed-rate premium” into their mortgage pricing, he said.

Those who believe Canada is heading for a long recession may expect the variable rates to stay low. Consumers who expect the country to rebound later this year or early next year could lock in a fixed rate, because, when the economy improves, variable rates will rise.

“The bank has extended an extraordinary monetary stimulus to deal with this extraordinary time. When the extraordinary time is over, you can expect that monetary stimulus will go away,” said Laird.

Denise Laframboise, a broker with Element Mortgage Group, said she gets asked every day why consumer loan rates are climbing at the same time the Bank of Canada rate has been dropping.

Normally, if the bond market goes down, banks wait a little while to see if that’s where they’ll stay and then they move down accordingly. But in the unstable environment of COVID-19, lenders are worried about risk premiums. Among the 57 lenders she deals with, rates “are all over the map,” Laframboise said.

“They are changing daily. Sometimes they are changing hourly,” she said. “People who are shopping are going to be so confused.”

Laframboise advises most of her clients to choose variable loans under the current circumstances, saying, “It offers a bit of stability in a chaotic world.

“Inflation is not happening any time soon and that is what will make the Bank of Canada increase. So I think we’re down here for the long haul. If the fixed rates go down, you would have the opportunity to lock in if you wanted to,” she said.

A backlog of deferral applications — some lenders are seeing a 300- or 400-per-cent increase — may also be contributing to the spread in rates, said Laframboise. She said one lender was trying to process 24,000 deferral requests.

One of her clients spent eight-and-a-half hours on hold waiting to talk to a bank.

“That’s terrible to have to do that, but that’s the mass influx of what they’re dealing with,” she said.

Many consumers are choosing to refinance their loans to survive the crisis, said Laframboise.

People are pulling money out of their houses as an emergency fund, to defer work to look after children, or they are worried about employment and want to apply for refinancing while they can show income from their job. Employment Insurance does not qualify as income on a loan application.

“A lot of people that are self-employed are pulling out money to sustain their business. If you have a big commercial rent, you have to pay and you’re closed, it’s a bad situation for a lot of people,” said Laframboise.

The federal government’s response to the COVID-19 crisis is almost identical to that of the financial crisis in 2008-2009, said Taylor. The catalyst this time isn’t the collapse of the housing market affecting credit; it is investors pulling their money out of the market because they can see the drop in business and profit.

In the housing crisis, there were service industry jobs for those who lost their source of income. This time, there’s no work because the hospitality industry has shut down.

“As soon as the first government makes an announcement that individuals can convene again and it’s safe to go out for a meal, there’s probably going to be quite a bit of pent-up demand. People are already going stir-crazy in their home offices so they’ll be happy to go out,” said Taylor.

“But it will take a while before all those hospitality businesses are up to capacity again.

“So it’s going to be a slow climb out of the economic turmoil we’re in.”

Bank of Canada governor Stephen Poloz played down the idea of sending interest rates negative, saying on Friday, they’re not sensible at this stage.

With files from The Canadian Press

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CMHC Expands Mortgage Buying Program to $150 Billion

Ontarians struggling to make ends meet during the novel coronavirus pandemic have received some respite for their housing concerns.

Last week, Premier Doug Ford suspended all evictions and the federal government has announced residents may defer their mortgage payments for additional financial assistance.

In turn, the Canada Mortgage and Housing Corporation (CMHC) announced it’s expanding the Insured Mortgage Purchase Program to $150 billion of insured mortgage pools to further support the Canadian economy during this unprecedented time.

The taxpayer-funded agency, which supports the vast majority of Canada’s housing market by insuring the loans that finance them, previously announced it was willing to take up to $50 billion worth of loans off of banks’ books. However, CMHC said Thursday its mortgage-buying program is being expanded to $150 billion. This move will ensure banks have more money for loans amid the COVID-19 crisis.

“This action will expand the stable funding available to banks and mortgage lenders in order to ensure continued lending to Canadian consumers and businesses,” the CMHC said in a statement.

According to the CMHC, this support to the financial sector builds on previous measures announced by the federal government to provide significant and effective action to support Canadian individuals and businesses facing financial hardship as a result of the economic impacts of the global COVID-19 outbreak.

As the coronavirus pandemic continues and more Canadians require mortgage payment relief from borrowers, Canada’s top banks continue to be flooded with requests. According to Bloomberg, 213,000 Canadians have requested mortgage deferrals as of Thursday.

Evan Siddall, president and CEO of CMHC, is now calling on mortgage holders to stop overloading the system to ensure that relief goes to those who need it most.

“Banks and mortgage lenders are struggling to keep up,” said Siddall. “And if you have a paycheque and can afford it, please pay your bills.”

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CMHC suspends dividend payment to Ottawa

There will be no dividend payments to the Canadian government from the Canada Mortgage and Housing Corporation during the coronavirus crisis.

CMHC usually makes regular and special dividend payments to Ottawa, ranging from a hundreds of thousands of dollars thorough to $4 billion, the largest amount paid, in 2017.

But with the corporation supporting Canadian homeowners, multi-unit borrowers and housing providers experiencing financial difficulty resulting from the current crisis, along with measures to strengthen the financial system, its board has decided to suspend payments temporarily.

“Temporarily suspending the dividend is a prudent measure that allows us to conserve capital to support Canadians and the economic recovery through the crisis should the need arise. As a key stabilizing component of the Canadian financial system, we will be substantially increasing our appetite for risk as we and other institutions absorb the impacts of these events,” CMHC said in a statement.

CMHC added that, as of December 31, 2019, its capital position remains strong with approximately $3 billion in excess capital for our mortgage insurance and mortgage funding activities.

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Toronto new home sales surge 211% in February: Altus

It was an “exceptionally busy” February for new home sales before the coronavirus slammed into the Toronto region just weeks later.

Data released today by the Building Industry and Land Development Association (BILD) and its source for home sales and price tracking, Altus Group, showcased several examples of a market heating up for a busy spring homebuying season.

Altus Group recorded 4,665 new home sales in the Toronto region last month, up 211 percent from the previous year and 57 percent higher than the 10-year average for February. The new home sales tally meant that it was almost the market’s best performance in February since 2002 and the third-best in 40 years.

“Prior to the uncertainty due to the COVID-19 situation, the new home sector in the GTA was on track for a strong sales performance in 2020,” said Patricia Arsenault, Altus Group’s Executive Vice-President, Data Solutions, in a media release.

“Low mortgage rates were triggering the release of pent-up demand that had been building on the back of strong employment and population growth, which helped boost February sales,” she continued.

Within the February sales total, single-family homes, which include detached, semi-detached and townhouses, saw 2,247 sales during the month, up 228 percent over the previous year and good enough to make it the strongest result since 2004. New condo sales totaled 2,418 for the month, up 197 percent from February 2019. This marked the second-highest new condo sales total recorded in 40 years, behind only February 2017.

On the pricing side, new condos rose to an average benchmark price of $961,268, up 21.3 percent year-over-year. Meantime, single-family home prices were down 2.2 percent to $1,097,987 over February 2019.

“Following on a month of strong new home sales in February, our industry and our customers are facing a time of challenges and uncertainty due to COVID-19,” said David Wilkes, BILD President and CEO, in a statement.

“We are working diligently to coordinate responses with provincial and municipal authorities, protect workers and customers and ensure that we continue to fulfil our responsibilities to new home buyers. One of those responsibilities is building enough homes to top up depleted inventory and ensure our region’s new home supply keeps up with demand,” he added.

Home construction and an array of real estate services were deemed “essential” earlier this week by the Ontario government and thus permitted to operate during the business shutdown order.

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GTA’s single-family home sales had an explosive annual increase

The Greater Toronto Area saw its strongest February since 2004 in terms of new single-family home sales, according to the Building Industry and Land Development Association.

Citing data from Altus Group, BILD said that the region had 2,247 new single-family home transactions last month. This was a remarkable 228% higher on an annual basis, and exceeded the market’s 10-year average by 44%.

Meanwhile, new condominium apartment sales were at 2,418 deals closed, up by 197% year-over-year and 48% above the 10-year average. Overall sales activity of new homes in the GTA for February 2020 was at 4,665 transactions, 211% greater annually and 57% higher than the 10-year average.

“Prior to the uncertainty due to the COVID-19 situation, the new home sector in the GTA was on track for a strong sales performance in 2020,” Altus Group executive vice president for data solutions Patricia Arsenault said. “Low mortgage rates were triggering the release of pent-up demand that had been building on the back of strong employment and population growth, which helped boost February sales.”

“Following on a month of strong new home sales in February, our industry and our customers are facing a time of challenges and uncertainty due to COVID-19,” BILD president and CEO David Wilkes added. “We are working diligently to coordinate responses with provincial and municipal authorities, protect workers and customers and ensure that we continue to fulfil our responsibilities to new home buyers. One of those responsibilities is building enough homes to top up depleted inventory and ensure our region’s new home supply keeps up with demand.”

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February Sees its Highest Number of New Home Sales Since 2002

While February may feel like it took place years ago, given the daily coronavirus updates the city, province, and country are providing, it was fewer than just four weeks ago. And it was still on fire from a real estate perspective.

According to a new report from the Building Industry and Land Development Association (BILD), February was a record month for new home sales.

This has provided a staggering set of statistics for new home sales figures in February.

New Home Sales
A total of 4,665 new home sales were made in February 2020.

Fast stats:

  • 211% increase over February 2019
  • 57% above 10-year average
  • highest number of new homes sold in February since 2002

third highest February in past 40 years
New Single-Family Homes Sold
A total of 2,247 new single-family homes, including detached, linked, and semi-detached houses and townhouses (excluding stacked townhouses) were sold in February 2020.

Fast stats:

  • 228% increase over February 2019
  • 44% above 10-year average

New Condos, Stacked Townhouses and Lofts Sold
A total of 2,418 new condos, including units in low, medium and high-rise buildings, stacked townhouses and loft units were sold in February 2020.

Fast stats:

  • 197% increase over February 2019
  • 48% above 10-year average
  • Second strongest February in 40 years for new condo sales (after 2017)

Of course, this shouldn’t come as a huge surprise. Before the economy came to a jarring halt earlier in March, Toronto’s, and the rest of the GTA’s, housing market was off to a red-hot start reminiscent of 2017.

Only this week, are we starting to see some course correction take place, and sales starting to slow down.

However, February did set a new benchmark price point for new condo apartments at $961,268, up 21.3% over the last 12 months. The benchmark price for new single-family homes, however, dropped 2.2% over the past 12 months to $1,097,987.

“Following on a month of strong new home sales in February, our industry and our customers are facing a time of challenges and uncertainty due to COVID-19,” said David Wilkes, BILD President & CEO.

“We are working diligently to coordinate responses with provincial and municipal authorities, protect workers and customers and ensure that we continue to fulfil our responsibilities to new home buyers. One of those responsibilities is building enough homes to top up depleted inventory and ensure our region’s new home supply keeps up with demand.”

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Taking Stock of the GTA Condo Market in the Time of Coronavirus

It should come as no surprise that the recent coronavirus pandemic will have an effect on the real estate and housing market. Even one as hot as the GTA’s has been in recent months and years.

According to most, we’ve never seen anything like this – not even during the 2008 financial crisis.

So we asked Shaun Hildebrand, President of Urbanation, for his insights into what the COVID-19 crisis will likely bring to the condo market in 2020. And while we’re only now starting to see the first signs of bringing a large part of the global economy to a grinding halt, these repercussions will likely continue to play out over the coming months and year(s).

Here’s what Hildebrand sees for the GTA condo market in the wake of the coronavirus pandemic.

Slowing Down
The heightened uncertainty and physical distancing measures being encouraged across Canada right now will lead to a slower market for new condominium developments in Toronto and the GTA.

As buying a new condo requires strong confidence that the market will appreciate and the economy will remain stable, since units may not complete construction for up to 5 years, demand will scale back significantly – the extent to which this occurs will depend on how deep and long the current macro downturn becomes.

Spring Launches
From a functional standpoint, many developments have either closed their sales offices, limited their hours or have moved to a virtual environment. I expect most of the projects that were anticipated to launch this spring will be delayed until conditions improve – the first signs of which will appear in the resale market, which could take at least six months to materialize in the data. While some smaller scale projects that cater more to end-users may launch in the coming months, which would look to attract buyers in areas with more secure employment, I would expect larger-scale, investor-driven projects to hold-off coming to market for a while. Suffice it to say, new condo sales volumes and construction starts will be down quite a bit this year.

Prices, Developers, and Buyers
Condo developers are in a good position as the units in development are almost entirely pre-sold and the market was exceptionally tight leading into this. The robust market stimulus and support initiatives from the government and Bank of Canada should also combine with low inventories to help continue supporting prices. It seems more likely at this point that prices will pause rather than experience a noteworthy decline as buyers and developers mutually disengage for the most part. Low borrowing rates, support for lenders and borrowers and fiscal aid will put the market in a good position for an eventual return to growth. When and to what degree that happens depends on what happens to the economy and outlook in the coming months.

That said, unless construction sites are shutdown or become significantly delayed, a wave of condo completions will occur this year, most of which are pre-sold to investors and will end up in the rental market. This will combine with a shift in use of some short-term rentals (which can’t attract guests in this environment) to long-term leases to boost rental supply during a period when demand will fall due to a drop in in-migration and rise in unemployment.

I don’t think anyone is talking about the fact that the recent decision to close the Canadian borders will restrict a key engine of demand at a time when condo completions could reach new highs. International immigration and non-permanent residents totalled 150,000 in the Toronto CMA in 2018 and 2019, representing basically all of our population growth. Since most new international migrants rent, we were well positioned to absorb the nearly 33,000 condo and purpose-built rental completions scheduled for 2020. Not anymore, as I can’t imagine that population inflows return to previous levels until we have a vaccine (which by some estimates may take more than a year). This should lead to higher vacancy rates, which will also be pushed higher by rising unemployment.

So, after a strong escalation in recent years, condo rents are likely to experience at least some decline in 2020, providing a temporary relief valve for an historically tight market.

Condo Investors
Condo investors will be okay this year. Because units finished this year were bought four to five years ago and rates have dropped, calculated carrying costs (including mortgage with 25% down, condo fees, taxes and insurance) will be at least $100 a month less than current average rents in Toronto of $2,400. This provides some room for rents to adjust down more easily so the units can become occupied. But this obviously presents greater challenges for investors who will see their units come to completion in 2021 and beyond who will need much higher rents to cover carrying costs.

Rentals
Rents in Toronto were already flattening before this happened as the market began to show some resistance to high rents. Same-building annual condo rent growth in Q4-2019 was 1.8% – the slowest rate of increase in four years. I think we’re headed for vacancy rates this year that rise above 3-4% for the first time since 2009 and condo rents that could decline by up to 5% (which is significant as rents are notoriously sticky).

But this will be temporary.

As fundamentals eventually recover, low structural vacancy rates will resume and rent growth will pick up again. In other words, while Toronto is still under-building rentals, it won’t feel like it this year. The impact on the purpose-built rental market will be more minimal, as the market is mostly comprised of older buildings characterized by low turnover and more affordable rents.

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CLARK: A message to Ontario renters and landlords

This is a time for all Ontarians to pull together, and we’ve seen this happening in communities right across our province.

But I know people are anxious, wondering how they will pay their April rent in just a few days, and landlords are wondering how they will keep the lights on if rents aren’t paid.

Our government has been clear from Day One — we will ensure renters can stay in their homes during this challenging time.

That’s why we acted quickly to prevent evictions. Tenants who can pay their rent must do so, to the best of their abilities. But I want to be very clear — you cannot be forced to leave your home if you cannot pay your rent on April 1. Period.

Today, I’m calling on landlords to be as flexible as possible when it comes to collecting rent, starting with April, at a time when many people are struggling. The same goes for any planned rent increases landlords are contemplating, whether already approved by the Landlord and Tenant Board or not.

Of course, some landlords are also facing challenges, especially small landlords. While mortgage deferrals are available, some of you are waiting for news from your bank. Everyone needs to do their part right now.

To the tenants out there who are having challenges paying rent, please speak to your landlord about whether it can be postponed or if other payment arrangements can be agreed to. And landlords, please be as flexible as you can. We need to come together as Ontarians and support each other.

This week, our government and the federal government both announced a range of measures that will help everyday people, including reducing Ontario electricity rates and a federal taxable benefit of $2,000 a month for up to four months for eligible workers who have lost wages.

Our government has also committed $200 million to help vulnerable people through existing programs and $52 million of this will flow directly to those in financial crisis who can’t access federal assistance. This will help cover basic needs like rent, food, medicine, transportation and other services.

We are working closely with all levels of government, and will continue to do everything we can and will consider all available options in order to help the people of Ontario get through these difficult and uncertain times.

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Reeling from COVID-19’s economic impact, residential tenants, landlords face dilemma as rent comes due April 1

As the economic impact of the COVID-19 pandemic ripples across Canada, another wave may crest within the week as rent comes due for residential tenants.

April 1 is a pressing deadline for tenants and landlords alike as the novel coronavirus keeps people at home and closes businesses, leaving tens of thousands of Canadians out of work.

“It reminds me of a ‘Mission: Impossible’ movie, where tick, tick, tick, the time is ticking down and someone has to try to save the day before everything explodes,” said William Blake, a landlord who spoke Tuesday on behalf of the Ontario Landlords Association. “This is how a lot of tenants and landlords feel about this April 1 rent deadline coming up.”

Advocacy groups for both landlords and tenants are calling on the federal and provincial governments to offer some kind of relief before April 1.

Geordie Dent, the executive director of Toronto’s Federation of Metro Tenants Associations, said tenant associations across the country plan on issuing a joint statement Wednesday morning asking for government help to address an unprecedented rental housing crisis.

“Tenants have basically had the legs cut out from under them,” said Dent, noting employment insurance applications are even higher than during the 2008 financial crisis.

On Tuesday, Manitoba’s government suspended any rent increases starting April 1 in response to the economic fallout from COVID-19.

The province joined others including Ontario, Quebec and Prince Edward Island in halting all non-urgent hearings before their landlord-tenant tribunals, effectively banning any evictions resulting from non-payment of rent.

But other provinces and territories have moved to teleconference hearings, with Saskatchewan’s Office of Residential Tenancies noting on its website that rents are still due.

Grassroots movements have sprung up in several cities in the past two weeks, calling on tenants to withhold their rent payments — either out of necessity or in solidarity with those who can’t make ends meet.

“We definitely agree that the government should be making a rent freeze and finding ways to support low-income people. But for now, we’re focusing on just organizing amongst ourselves because we can’t really wait,” said Paterson Hodgson, a spokesperson for a Toronto-based neighbourhood group calling on tenants to go on rent strike.

Dent recommends that any tenant worried about making their rent on April 1 should first check to see what steps their province or territory has taken in regards to tribunals.

“You don’t want to see people prioritizing their landlord’s mortgage payments over their ability to feed themselves and their families,” said Dent.

Prime Minister Justin Trudeau said Monday that federal officials are looking at ways to get money to community housing providers and the nation’s renters.

Another government source, who was not authorized to detail behind-the-scenes talks, said there is an ongoing push with at least six provinces to sign up for a new rent supplement to avoid evictions for hundreds of thousands of renters.

Blake, who owns small rental properties in Ontario, Alberta, British Columbia and Nova Scotia, said he sympathizes with his tenants and doesn’t want to have to evict any. But he said banning evictions or going about business as usual are just delaying an inevitable wave of evictions as landlords will eventually need the money to pay taxes, mortgages and maintenance fees.

“What we’re pushing for, and we were hoping the tenant groups across Canada would be pushing for, is for the government to give tenants … something like student loans, where you’re in trouble, you need a loan, you can get it to pay your rent,” said Blake, who pointed to the City of Toronto’s rent banks as a model example.

Landlords “don’t want government handouts. We only want the legal system that we use to continue to be efficient and run and operate, which means that the tenants pay rent,” he said.

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Bank of Canada cuts rate for third time to 0.25% in bid to shield economy from coronavirus fallout

The Bank of Canada slashed interest rates for a third time in a matter of weeks and announced plans to acquire more commercial paper and government securities to help shield the nation’s economy from coronavirus fallout.

The central bank lowered its policy rate Friday by another half a percentage point to 0.25 per cent, adding in a statement that the unscheduled rate decision brings the rate down to its effective lower bound. The Bank of Canada last cut rates to these levels in 2009, during the global financial crisis.

The move was necessitated by quickly deteriorating conditions, including a flood of new jobless claims last week, that suggest the economy is poised to produce one of the sharpest drops in economic activity in history.

Policy makers led by Governor Stephen Poloz announced two new programs: the Commercial Paper Purchase Program and the buying of Canadian government securities in the secondary market. The government securities purchases will begin with a minimum of $5 billion per week, across the yield curve, the bank said in its statement.

As the spreading coronavirus outbreak paralyzes economies globally, the energy-heavy Canadian economy is also having to contend with the crash in oil prices — prompting a steady drumbeat of recession calls.

The move by the central bank is part of a wave of policy rate cuts and brings Canada’s benchmark rate closer to most other advanced industrialized economies. The Bank of Canada has now lowered interest rates three times this month, with a cumulative easing of 1.5 percentage points.

The Federal Reserve has also cut by 150 basis points this month. In addition to lowering borrowing costs, the central bank has also announced in recent days a slew of new liquidity measures to inject cash into the banking system and money markets and to ensure it can handle any market-wide stresses in the financial system.

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CMHC to take more mortgages off banks’ books to free up cash for loans amid COVID-19 crisis

The Canada Mortgage and Housing Corporation is expanding the number of insured mortgages it is willing to buy from banks to give the banks more freedom to lend out more money to consumers and businesses and keep the economy humming.

The taxpayer-funded agency, which backstops the vast majority of Canada’s housing market by insuring the loans that finance them, announced earlier this month it was willing to take up to $50 billion worth of loans off of banks’ books.

On Thursday, the CMHC announced it would expand that mortgage-buying program to $150 billion.

“This action will expand the stable funding available to banks and mortgage lenders in order to ensure continued lending to Canadian consumers and businesses,” the agency said in a statement.

Moving loans from banks to the CMHC helps the banks’ books and allows them to free up cash that they can lend out to consumers and businesses while the COVID-19 pandemic is hitting them hard and threatening the overall economy.

Canada’s big banks have promised interest rate relief for up to six months to Canadian borrowers struggling to make their payments, but the CBC has reported that the fine print of those programs make it so that the deferred interest must be paid back at some point, which makes the loan longer and more expensive.

Banks flooded by requests for mortgage relief
Canada’s big banks are being flooded by requests for payment relief by borrowers — to the tune of 213,000 requests so far, Bloomberg reported Thursday.

The head of the CMHC, Evan Siddall, is asking mortgage holders to not overload the system in order to make sure any relief goes to those who need it most.

In terms of the agency’s mortgage-buying program, CMHC says all of the pools of mortgages that would be transferred are already insured by the government anyway, so there’s no additional risk to taxpayers from the transaction.

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How will COVID-19 impact the real estate market in Canada?

To say the events of the past few months have had an unprecedented impact on how our society functions would be an understatement. As the threat of the COVID-19 global pandemic grows across Canada and all levels of government enact policies to stop community spread via social isolation, millions of Canadians in the non-essential workforce are now working from home and abstaining from visiting businesses and other public places.

These efforts to “flatten the curve” are paramount to keeping high-risk citizens safe and preventing our health care system from being overwhelmed. But they’re also having a profound impact on industries that rely on in-person interactions, like restaurants and hair salons. They’ve also led to fears of a global recession and limited purchasing power for consumers when the risk of the coronavirus subsides.

The real estate industry, in particular, is a prime example of one that will need to drastically adapt if it’s to be “business as usual.” While brokerages and real estate agents have been deemed “essential services” by the Ontario government, there have been some key changes to the way agents must operate—and it remains unclear how the market will perform as the pandemic evolves.

What can buyers and sellers expect from the market during these uncertain times? Let’s take a look at what could occur in the short- and long-term.

In the short term
A cooler spring than expected
Before COVID-19 was declared a pandemic by the World Health Organization on March 11, the spring real estate market was set for a record-breaking sales season, especially in Canada’s largest cities. The Canadian Real Estate Association revealed the month of February was particularly hot for year-over-year sales, which rose 27% nationwide, indicating the busy spring buying season had started early. Similar performance was recorded for Toronto and Vancouver homes for sale; transactions rose 45.6% and 44.9% year over year in those cities, respectively. As well, a lack of new properties on the market was a prevalent theme in major urban centres, putting the squeeze on buyers, and leading to tight sellers’ market conditions.

Despite this strong start, however, we can now expect to see market activity slow down, as buyers and sellers may reach a stalemate. Buyers may decide to hold off on their home purchase amid uncertain health and economic conditions, while sellers—having seen what others got for their properties in the late winter months—may be hesitant to accept a lower offer today.

However, there are still those who need to buy and sell right now, such as those who have already sold their homes and are on a time crunch to buy a new one. These “highly motivated” buyers and sellers include people who need to relocate for work, are going through a divorce, or need to downsize or upsize quickly.

As well, buyers may be hesitant to take the plunge on a home purchase at a time when employment and income circumstances could change rapidly; they may be wary of lost savings in the face of the financial market downturn, or fear becoming unemployed in the near term, which would jeopardize their ability to secure mortgage financing for their home.

Overall, those who don’t have urgent real estate needs will most likely stay on the sidelines for now, as the situation evolves.

Agents need to find creative alternatives to face-to-face service
In the age of social distancing, one of the most obvious challenges for real estate agents is showing homes listed for sale to prospective buyers, as everyone is wary of the public health risks showings pose, and wants to minimize in-person contact.

Most real estate bodies are also calling for a cease in open houses and showings; for instance, the Real Estate Council of Ontario has released a strong recommendation for agents to hold virtual showings instead, and cancel all planned in-person events. The Toronto Regional Real Estate Board has also suppressed open houses on Stratus MLS and their public-facing site for all GTA and Toronto real estate listings, and will not be enforcing the requirement to show a home while current government health advisories remain in effect. (Prior to the COVID-19 pandemic, listings that were not available for showings or inspections could be suspended.)

In the long term
The market will bounce back
It’s hard to predict how long COVID-19 will continue to be a threat, along with its impacts on individuals, businesses and the market.

For example, while the circumstances are wildly different, the last time the Ontario real estate market witnessed a buyer-seller stalemate was in the spring of 2017, when the former provincial government introduced the Fair Housing Plan, a package of measures that included a foreign buyers’ tax for the Greater Toronto Area, and new rent controls. While the measures themselves didn’t hinder buyers’ financial capacity, they caused a “psychological” cooldown in the market, as no one wanted to participate in a real estate transaction amid uncertain times. The effects of that cooldown lasted into the second half of 2019, before home sales and prices started showing notable year-over-year increases once again.

However, the reality is that the fundamentals of the market, particularly in the GTA and other major urban centres, don’t change; pent-up buyer demand has been slowing building as the supply of available homes for sale remains scant. Due to the limited inventory available, combined with the population growth in Ontario’s big cities like Toronto, we can expect market activity to resume and recover quickly once we’ve mitigated the health risks from COVID-19 and the financial markets stabilize.

That being said, as people react and adapt to ongoing directives from municipal, provincial and federal governments, we can expect real estate sales to be impacted.

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Site Plan Submitted for Two-Tower Complex on Eglinton near Yonge

Almost a year after two adjacent proposals on Eglinton west of Yonge in Midtown Toronto were integrated into a single plan, the proposed two-tower complex at 50 through 90 Eglinton Avenue West has been submitted for Site Plan Approval (SPA) to City staff. The proposal from developer Madison Group has advanced to this stage of the planning process following the Local Planning Appeal Tribunal’s August, 2019 approval in principle of rezoning for the site’s east tower.

Hariri Pontarini Architects serves as design architect, Turner Fleischer Architects is Architect of Record, and ERA Architects act as heritage consultants on the project. Renderings paint a largely unchanged picture since the last submission, incorporating minor revisions to the height, as well as some more subtle changes within.

The plan still calls for a 32-storey east tower, but the west tower now has 26 storeys, increasing by two from the previous submission. The new heights would reach 111.6 m / 366 ft and 93.1 m / 305.4 ft, both increasing less than one metre taller that the previous application’s heights.

Like previous versions, a primary feature in the complex’s street-level experience is the partial retention of the east and south facades of a 1920-built Toronto Hydro building at 50 Eglinton West. One notable change to the retention and modification of its facades is the deletion of a proposed 3.0 metre-wide, double-height colonnade, now replaced by glazed openings in the east facade of the Hydro Building.

A total gross floor area of 44,337.9 m² is proposed, with 37,237.4 m², or 83.9% of the building, dedicated to residential floor area within the towers and an amenity level on the fourth floor of the podium. Retail would take up 2,918.4 m² on the first two floors, and office space would count for 4,182.1 m² on levels two and three, taking up the remaining podium space.

The updated plan’s towers call for a combined 534 condominium units, an increase from the 512 in the 2019 application, with 242 units in the west tower and 292 in the east tower. These are now proposed in a mix of 252 one-bedrooms, 253 two-bedrooms, and 29 three-bedrooms, an unusually high proportion of multi-bedroom units.

Parking for the complex would be housed within a three-level underground garage with 224 spaces, 163 for long-term resident use, and 61 spaces shared between visitors, retail, and office users. 575 bicycle parking spaces would also be included.

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Peel Region new condo sales soared 329% in February before pandemic hit

February was a stellar month for new condo sales in the populous region immediately west of Toronto. But with the COVID-19 pandemic disrupting every aspect of life in Canada, it is likely to be the last high-performing sales month for a while.

Peel Region saw 545 new condo sales last month, according to new home sales numbers released this week by the Building Industry and Land Development Association (BILD) and Altus Group.

This monthly total made for a 329 percent increase over the previous year and was well over the combined sales total for the past two Februaries. The region’s total was the second highest in the Greater Toronto Area and the strongest outside of the City of Toronto.

Nearly 1.5 million people reside in Peel, home to the cities of Mississauga and Brampton. Mississauga, the region’s largest municipality, has 5,157 condo units currently under construction across 36 developments, according to BuzzBuzzHome data. While its population exceeds 500,000, Brampton has fewer condo developments, with 257 units currently under construction across 10 projects.

Impressive as the new condo sales numbers are, the expectation is they will suffer a steep drop in March as the effects of the COVID-19 pandemic begin to weigh on market activity.

New home sales teams have been quick to adapt to the need for social distancing and harness technology that will allow them to continue to support sales during this period of panic and uncertainty. However, despite their best efforts, many condo launches are expected to be pushed back from the typically busy spring season.

“Following on a month of strong new home sales in February, our industry and our customers are facing a time of challenges and uncertainty due to COVID-19,” said David Wilkes, BILD President and CEO, in a statement accompanying the February sales data.

“We are working diligently to coordinate responses with provincial and municipal authorities, protect workers and customers and ensure that we continue to fulfill our responsibilities to new home buyers. One of those responsibilities is building enough homes to top up depleted inventory and ensure our region’s new home supply keeps up with demand.”

 

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