BILD Supports Construction Sites as “Essential Workplace”

Last week, the Provincial Government ordered at-risk workplaces to close-down to prevent the spread of COVID-19. In a list of “essential workplaces” that can stay open during the corona virus pandemic, constructions sites are among the 74 businesses deemed as a priority.

With families waiting to close on new properties, sales of existing homes, and countless other logistical details associated with buying and selling a property, BILD states that it is vital to keep the industry working.

“The health and safety of employees, suppliers and customers is the industry’s top concern,” said David Wilkes President and CEO of BILD. “The industry has taken proactive steps such as reducing staff to a bare minimum, practicing social distancing for inside work, prioritizing outside work where trades are not in close proximity with each other and increasing on-site sanitation and sanitation facilities.”

According to the organization, buying a home is not like other transactions and for new home owners can involve the sale of an existing home, legal transactions and moving logistics.

“It is simply not feasible to delay the completion of homes near closing without a significant effect throughout the GTA. In addition, with housing supply already at crisis levels, stopping construction will create long term implications to housing supply in the future,” says BILD in a recent release.

Wilkes notes that Premier Doug Ford stated that Ontario workers have the right to refuse unsafe worksites and should report these conditions to the appropriate authorities. Many BILD members have adopted policies to close down work sites if someone is feeling unwell.

The COVID-19 situation is rapidly evolving and the Building Industry and Land Development Association will continue to follow the guidance of Public Health officials, municipalities, the province and of course the Federal Government.

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GTA new home sales sees highest number since 2002

The GTA home market was up 211 per cent in February 2020 with 4,665 total new home sales — the highest number of new homes sold in February since 2002, according to, according to Altus Group, BILD’s official source for new home market intelligence.

The number of sales also saw a 57 per cent increase above the 10-year average, and was the strongest February since 2004 for sales of new single-family homes, including detached, linked, and semi-detached houses and townhouses (excluding stacked townhouses).

With 2,247 new single-family homes sold, sales were up 228 per cent from last February and 44 per cent above the 10-year average.

Sales of new condominium apartments, including units in low, medium and high-rise buildings, stacked townhouses and loft units, at 2,418 units sold, were up 197 per cent from February 2019 and 48 per cent above the 10-year average. It was the second strongest February of the past 40 years for new condominium apartment sales, after the record high of February 2017.

“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. “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.”

In February, the benchmark price for new condo apartments was $961,268, which was up 21.3 per cent over the last 12 months, and the benchmark price for new single-family homes was $1,097,987, which was down 2.2 per cent over the last 12 months.

Total new home remaining inventory at the end of February was 17,199 units, representing about five months of inventory at the pace of sales in the past 12 months, well below the longer-term average of about eight months. Remaining inventory includes units in preconstruction projects, in projects currently under construction, and in completed buildings.

“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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Canadian housing market recovery may begin by early summer: RBC

Canada’s spring house hunting season — typically the busiest time of the year for home transactions — will be effectively cancelled this year.

The strict social distancing measures that are critical to the fight against COVID-19 will make it all but impossible to follow through with the activities that the conventional home sales process necessitates.

That’s the takeaway for the near term Canadian housing picture from RBC Senior Economist and housing market expert Robert Hogue from a thought leadership piece published earlier this week.

“We expect realtors to suspend open houses and cut any private showings to a bare minimum,” he wrote. “There will be plenty of reasons for sellers to wait and see as well. A shock like this one is an inauspicious time to get full value for a property. We expect for-sale inventories to shrink, which will further contribute to stall activity.”

While the outlook for the spring months is bleak, Hogue delivers some much appreciated optimism about a timeline for a housing market recovery. This message is you shouldn’t expect activity to resume overnight, but RBC is currently “penciling in” an early summer “restart.”

Of course, as with all things during this uncertain period, the exact timing is highly dependent on the duration of the COVID-19 crisis and how soon the strict measures are lifted or gradually relaxed.

“We think the recovery will come in stages — taking buyers up to a year to regroup and rebuild confidence amid high unemployment,” wrote Hogue.

Even in an optimistic recovery scenario, Canadian home sales will take a huge hit on the year, with Hogue projecting a nearly 30 percent dive as sales reach a 20-year low at the national level. But looking to 2021, the economist sees a massive sales surge on the horizon when the “temporary shock” of the pandemic sits comfortably in the rearview mirror.

“Exceptionally low interest rates, strengthening job markets and bounce-back in in-migration will generate substantial tailwind. We project home resales to surge more than 40% to 491,000 units in 2021,” wrote Hogue.

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Toronto is Now a Buyers’ Market Due to COVID-19

Despite a strong start to the spring housing market in the Greater Toronto Area (GTA) in February, evolving conditions around the COVID-19 pandemic have had a profound short term impact on housing activity in the region. Among a slew of measures being announced at all three levels of government – including a number of initiatives in direct support of homeowners and renters – Ontario declared a state of emergency across the province on March 17 to help contain and minimize the spread of the virus.

As a result, housing market activity began to slow in reaction to these escalating measures and buyers and sellers began holding off on home sales and purchases amid uncertain health and economic circumstances. Using data from the Toronto Regional Real Estate Board (TRREB), Zoocasa reviewed how real estate market activity evolved in tandem with these emergency measures being put into effect.

According to our calculations, the sales-to-new-listings ratio (SNLR) – a measure of market competition calculated by dividing the number of sales by the number of new listings – dropped to 38 per cent for detached and semi-detached homes in the GTA between March 17-23; compared to 53 per cent for the week prior to the emergency declaration. For condo apartments and condo townhouses, the SNLR dropped from 55 per cent to 40 per cent for the same time period. When the SNLR is between 40% – 60%, this indicates a balanced market, while above and below that threshold reveals sellers’ and buyers’ markets, respectively. As such, these numbers represent a visible shift in market conditions over a very short period of time.

Here’s a closer look at how GTA market conditions have evolved as we enter our third week under a state of emergency in Ontario.

One Week After: GTA House Market is Now a Buyers’ Market
With increased social distancing measures in place following the state of emergency declaration, there was a resulting 14 per cent dip in new listings for detached and semi-detached houses between March 17-23, compared to one week earlier. Sales were down 38 per cent from 1,203 to 748 sales on a week-over-week basis.

We saw a similar trend of fewer sales and listings unfolding within the condo market, which was enough to nudge the market slightly closer to buyers’ market conditions. For the week following the announcement, sales dropped 35 per cent for the same period, from 724 to 482, and there were 10 per cent fewer listings for condo apartments and townhouses compared to the week prior, dropping from 1,312 to 1,177, based on the listing entry date.

Two Weeks After: GTA Condo Market Borders on Being a Buyers’ Market
While real estate fundamentals indicate that housing demand will bounce back over the long term in major urban centres like Toronto, COVID-19 has caused an immediate slowdown in housing market activity and across the economy more broadly. Just two weeks following the announcement of a state of emergency, there was a noticeably visible impact on the house and condo market in the GTA.

Stronger health advisories coupled with directive recommendations to cease all in-person interactions from real estate bodies including the Ontario Real Estate Association, encouraged a 53 per cent drop in detached and semi-detached sales for the period between March 17-30. There were 1,153 sales during this period, compared to 2,435 between March 3-16. New listings dipped from 4,503 to 3,140, representing a 30 per cent drop.

In the condo market, sales dropped a whopping 53 per cent from 1,541 to 729, and new listings were down 26 per cent from 2,490 during the week of March 3-16 to 1,842 in the two weeks following the announcement. This was a swift shift from sellers’ market conditions between March 3-16 when the SNLR was 62 per cent, to market conditions bordering those of a buyers’ market just two weeks later where the SNLR was 40 per cent.

Take a look at our infographic below for a snapshot of GTA sales and new listings activity one and two weeks following the state of emergency declaration from the Province of Ontario:

 

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6 tips for homebuilders moving to online sales through COVID-19 crisis

The COVID-19 pandemic has disrupted every aspect of our lives and no industry has been left unaffected. It can be particularly challenging for those in the new home industry where buyers still value that personal connection and in-person experience before they sign on the dotted line. A house, after all, remains the biggest purchase most people will make in their lifetimes. But with presentation centres and model homes closed, how can developers navigate through the pandemic and continue making sales?

“It doesn’t have to be complicated,” said Lianne McOuat, VP Client Service and Strategy at McOuat Partnership, a Markham-based real estate advertising agency. “Now is a great time to modernize your operations and get ready to sell online.”

To support new home sellers during this tumultuous time, McOuat developed a guide with suggested steps that developers can take to transition to a digital sales office and start selling homes online.

1. Create a sales presentation and e-blast

Condense useful information about your development into an easy-to-follow, single-page brochure. Tell your story by clearly outlining what you’re offering and include relevant information like your unit availability, site plan, pricing and floorplans. “Ideally this follows the ‘macro to micro’ approach, just as you would in a face-to-face sales presentation,” said McOuat.

She also suggests sending out an email to your database, informing them of your shift to online sales, and including a link to book an appointment. Make sure to include a photo of your salesperson to add a personal touch.

“Make this email your auto-reply and then every person that registers will get the email to book an online appointment,” said McOuat. “Add another call-to-action button somewhere with a tease of some sort (eg. see our new design!). You will know who opens this email and who clicks on the link, even if they don’t book an appointment so you can follow up with those people via phone/text/email.”

2. Set up appointments with potential buyers

Apps like Calendly are free to download and make setting up appointments easy. Customers can book an appointment on their own by choosing an available 15-minute time slot during the day.

“Once they book, they will receive a notification of their booking via email and then a reminder leading up to the scheduled appointment,” said McOuat. “These emails can include a Zoom/GoTo meeting link for a virtual appointment and can even be added to their Google Calendars.”

3. Organize video meetings

You’ve likely already heard about the use of Zoom during this pandemic. The video conferencing platform has skyrocketed in popularity as students, businesses and celebrities around the world communicate remotely while isolating.

“Zoom allows you to easily connect to a meeting, share your screen to present your sales pitch, and see the person as if you were sitting face-to-face,” said McOuat. “Clients can either connect to the meeting by downloading the app or connect through their browser, without downloading the software.”

4. Use DocuSign to obtain e-signatures

Real estate agents in the resale market have already been using DocuSign software to make it easier for their clients to approve and sign legal documents. DocuSign allows customers to sign PDF documents with an electronic signature, and can be emailed to all parties involved including the homebuilder, sales team and lawyers. “Once the potential buyer is ready to purchase, you can bring up the agreement on your screen to walk them through it and explain how signing via DocuSign works,” said McOuat.

5. Send a congratulatory email with next steps

When all documents are signed and the sale is finalized, be sure to send a message of congratulations from the president. Include next steps, such as where to send their deposits, when their decor appointment will be, and who they can contact if they have any questions. “Send this via email and also via Canada Post,” suggested McOuat. “This will assist with buyers remorse, which is likely to happen at times like these.”

6. Accept deposits using Bank Wire Transfers

Talk to your bank about accepting wire transfers for deposits. Once this is set up, you can include all relevant information and instructions to purchasers in the follow-up email sent immediately after the purchase. “Purchasers can mail the balance of their deposit cheques to your office, rather than you sending a courier to pick them up,” said McOuat. “Make sure to include who to make the cheques out to in the follow-up letter.”

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GTA investors call for rent bank in wake of COVID-19

If you were to make a list of groups that will never have a fan club, Ontario’s Landlord Tenant Board would likely be one of the first to get jotted down. Investors have long been calling for improvements to the LTB’s methods, particularly the Board’s slow and costly approach to resolving issues with problematic tenants.

Those calls have only grown more strident as the COVID-19 crisis has destabilized the Canadian rental market and put thousands of Canadians behind on their monthly rental obligations, compounding whatever tenant issues landlords were already dealing with.

“Landlords cannot apply to the LTB as they are currently not hearing eviction orders,” says Kayla Andrade, founder and president of Ontario Landlors Watch. “If there was a tenant currently abusing the system and not paying rent prior to all of this, then the shutdown is going to be delaying it even further. Also, if a tenant was trying to fight for safe housing and an urgent repair was required, this too has been stalled. The concern goes both ways.”

There is concern among some investors that statements made by government and banking officials about deferred mortgages and halted evictions are being exploited by tenants to justify rent strikes, even though no official rent-relief policy has been put in place.

“It has also caused tenants to believe that since mortgages are being deferred that they do not have to pay rent, regardless of their circumstances. Some are also expecting rents owing in this case to be waived and not caught up in the future,” Andrade says, adding that a backlog of cases already before the Board prior to the COVID-19 pandemic means “tenants who decide to abuse the current situation could essentially live rent free during the pandemic and possibly many more months thereafter.”

Real estate investors are encouraged to chase predictable, reliable returns. Chaos, like what has been kicked into gear by the coronavirus, is bad for business. That is why Andrade is proposing a government-managed “rent bank” that would make up the difference between what landlords are due every month and what they actually receive.

“A rent bank will protect important parts of our housing stock, today and for the future,” she says. “It will ensure that housing providers can maintain their rental properties in good repair and provide a safe home for tenants through this difficult time for everyone.” Andrade says the proposed rent bank should remain available post-pandemic, as unpaid rent will remain a problem whether or not there’s a catastrophic backdrop to play out in front of.

Government coffers are going to be drained, strained and pained by the cascading effects of the coronavirus, so additional financial help for people who were experiencing positive cash flow on investment properties may not be priority number one for any level of government. But any improvements to the LTB will be welcome.

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Commercial investments poised to weather COVID-19

Despite the uncertainties the COVID-19 outbreak is bringing to Canada’s economy, the commercial real estate sector is positioned to weather the effects of the pandemic, according to a market expert.

Mark Paterson, vice president at Marcus & Millichap, said that activity in the commercial real estate sector is slated to grow despite the volatile times.

“We’re still doing trades. People are buying and selling. Everything is worth less today. But it’s more about fear and caution than reality. There are still buyers out there, and there’s opportunity,” he told Bisnow.

A market study by Marcus & Millichap said commercial real estate offers buyers stability despite the uncertainties. It said that while the COVID-19 outbreak is expected to moderate the economy, some fundamentals remain strong.

“While the coronavirus will weigh on the Canadian economy through the second quarter, a recession is not imminent. Expectations of weaker exports, reduced tourism and supply chain-related shortfalls will moderate the pace of economic growth, but low unemployment and comparatively strong consumption levels should offset the headwinds,” the study said.

However, a separate analysis by Vishesh Raisinghani, researcher and representative at MarketCurrents, said commercial property is particularly vulnerable to economic shocks brought about by the spread of COVID-19.

“Unlike residential real estate, commercial properties like factories, retail stores and office units are much more exposed to economic cycles. Commercial property owners and real estate investment trusts already pay higher interest rates for borrowed capital,” he said in a commentary for The Motley Fool Canada.

A CBRE report released last month said Canada could potentially break the record for commercial real estate investment this year, hitting the $50bn mark.

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Resilient Toronto condo market faces test after March sales surge: Sotheby’s

Everyone’s spring plans are up in the air at the moment, and it’s no different for Toronto’s luxury condominium market.

The ongoing coronavirus pandemic has cast a long shadow over Canada’s real estate markets for 2020. Yet, despite all the economic uncertainty, sales for luxury condos in the GTA remained strong in the first 15 days of March even as concerns over the rapidly spreading coronavirus began to escalate, according to one of the country’s largest brokerages.

In a recently published report, Sotheby’s International Realty Canada voiced its confidence in the resilience of the GTA in the face of the coronavirus crisis. The brokerage’s Top-Tier Spring Outlook Report for 2020 shared not only its current findings on regional luxury condo sales activity, but also what we might expect from the market post-pandemic.

“Uniquely positioned as the country’s economic epicentre as well as its leading destination for immigration, migration, and global investment interest, the region and its top-tier real estate market are expected to remain resilient in the long-term, with any pullbacks in spring activity to be temporary,” Sotheby’s stated in the report.

From March 1st to 15th, momentum from January and February activity carried through. In the GTA, 82 condo units priced over $1 million sold, a 46 percent year-over-year jump. Toronto did slightly better in the first half of March, with sales in the $1 million-plus category up 70 percent annually to 75 units sold. The GTA and the City of Toronto shared the exact same results in the $4 million category during this period — one condo sold, an improvement from the zero sales in this category during the same period in 2019.

Luxury condo sales momentum that began at the start of the new year is credited for healthy activity during the first half of March. During the first two months of 2020, top-tier condo sales in the GTA delivered a strong performance, with sales over $1 million increasing 117 percent year-over-year, with 314 units sold. Comparably, condo sales rose 112 percent in the City of Toronto annually, for 284 units sold. Six condo units priced over $4 million sold in the same time period, an increase from the one unit sold in 2019.

“While uncertainty lies ahead, housing will remain essential, activity will continue and the long-term prospects for Canadian real estate are solid,” said Don Kottick, President and CEO of Sotheby’s International Realty Canada in the report.

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Toronto New Home Sales Doubled, Even With COVID-19 Pandemic Warnings

Greater Toronto real estate buyers rushed into the market, even amongst pandemic warnings. Altus Group data shows new home sales more than doubled in February. The impact on prices was mixed, as new single-family homes continued to fall. Condo apartment prices rallied to a new all-time high. The gap between the two narrowed to the smallest level since 2014.

In Greater Toronto, Only Condo Prices Are Rising
The typical price of a new home is still heading in two different directions. The new condo apartment benchmark reached $961,268 in February, up 21.3% from a year before. New single-family homes reached $1,097,987, down 2.2% from a year before. The condo apartment benchmark is at a new all-time high, while single-family homes remain over 15% below peak values reached in 2017. This is the closest both benchmarks have been in over half a decade.

Greater Toronto New Home Sales More Than Doubled
Greater Toronto new home sales had one of the biggest Februaries ever. There were 4,665 new homes sold in February, up 211% from the year before. Breaking it down, condo apartments represent 2,418 of those sales, up 197% from a year before. Single-family homes represented the remaining 2,247 homes, the segment is up 228% from a year before. Last year was an unusually slow February, which is why the growth numbers look so large. It shouldn’t be dismissed though – this was the biggest February for Greater Toronto since 2014.

Greater Toronto New Home Sales

York Region Sees More New Home Sales Than Toronto
Most of new home sales growth wasn’t in the City of Toronto, although it did show big growth. The City of Toronto represented 1,310 of the sales, up 121% from last year. The biggest growth was in York Region, with 1,336 new home sales, up 667% from last year. York region is now a slightly bigger market than the City.

Greater Toronto New Home Sales

Highest February Inventory In Over Half A Decade
The big difference between this climb and the one seen over the past few years is inventory. Total inventory in Greater Toronto reached 17,199 units in February, up 4% from a year before. Condo apartments represent 12,909 of those units, an increase of 15% from last year. Single-family homes represented the other 4,290 units, down 18% from last year. This is the highest level of February inventory, in at least half a decade – but likely longer.

It Was A Tighter Market Than Last Year
Sales increased faster than inventory, providing some pressure on prices to move higher. The sales to active listings ratio (SALR) reached 27.12% in February, up from just 9.09% last year. Generally, when the ratio rises above 20%, it’s a seller’s market and prices increase. When it’s below 12%, it’s a buyer’s market, and prices decrease. Between 12% and 20%, and the market is correctly priced for demand.

Greater Toronto New Home Sales To Active

Greater Toronto new home sales were huge going into the COVID-19 pandemic. The impact on prices was a little varied though, with single-family prices still falling after two years. Condo apartments on the other hand increased nearly a quarter from a year ago. Prices for both segments are now the closest they’ve been since 2014. Don’t expect a lot of changes to prices during Ontario’s shut down. However, when markets reopen, it’s most likely going to be a very different market.

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Despite Initial Drop in Real Estate Searches, Homebuyers Remain Hopeful Amid Covid-19 Pandemic

Although the Canadian real estate market started 2020 in full force and was well on its way to a red-hot season, the social distancing and home isolation measures that were put in place as a result of the COVID-19 outbreak started leaving their mark on home buying and home selling almost immediately.

Prospective homebuyers’ priorities changed almost overnight, with the first signs of this shift revealed both by Google Trends data and by traffic numbers of real estate marketplaces like Point2 Homes. For example in Google Trends, searches for “real estate,” “homes for sale,” “houses for sale” or “condos for sale” dropped, only to be replaced by words that described our new world: “work from home,” “home office,” searches related to hygiene best practices and ideas for workouts and activities during home quarantine.

The evolution of traffic numbers on Point2 Homes shows a similar trend. According to a Point2 Homes analysis, “at first, on the 11th of March, visits to the site dropped 8 per cent, only to continue the following day with a 20 per cent drop, and then 24 per cent on the 13th of March, reaching the most significant decrease on the 16th of this month – 32 per cent.”

The uncertainty was taking a toll, however despite their initial response to the pandemic, it appears home sellers and buyers are recalibrating their strategy. A flash homebuyer sentiment survey showed that Canadians are still cautiously optimistic about the homebuying process. Visitors on the Point2 Homes platform were asked how the new situation is impacting them, what changes they noticed in the process of searching for a home or buying property and what changes they themselves have made to adapt and to stay safe.

The survey results showed that almost half of respondents (44 per cent) plan to continue looking for a home, 57 per cent of survey takers stated they intend to buy in the next six to 12 months and 48 per cent said they have indeed started focusing more on online pictures and virtual tours, as opposed to viewings and going to open houses.

Out of a total of 5,081 visitors, 73 per cent stated that they still want to buy and are, at the very least, still keeping an eye on the market, with 12 per cent of these respondents actually stated that they are very determined to buy as soon as they find the right property. Demand in general may have somewhat dampened, but certain categories of buyers, like first-time homebuyers, cannot wait. And with the most recent economic and monetary measures aimed at helping homeowners and homebuyers, many might choose to take a calculated risk.

When asked about specific concerns that they have, most survey takers (35 per cent) stated that they have no concerns in particular, but they were followed closely, at 34 per cent, by respondents who cited primarily financial concerns, namely whether or not they will be financially stable enough to afford the payments. Only 19 per cent cited health and safety concerns.

When talking about the changes in the process, again the majority stated that they haven’t really noticed any changes (35 per cent), but 29 per cent said they are expecting delays in the process, while 24 per cent said that one major change they were forced to make was to start looking for cheaper properties.

The changes people have thought about making to homebuying are related to steps taken to move more of the process online: instead of meeting with the sellers face-to-face and discussing or going to viewings and open houses, almost half of respondents (48 per cent) said they will focus on the online tools at their disposal (pictures and virtual tours), while six per cent plan to rely mostly on their agent, and only16 per cent of home seekers stated that they plan to put everything on hold until the market stabilizes and returns to normal.

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