Toronto’s new single-family home market recovering faster than condos

New single-family homes sold by developers across the Toronto region in June beat new condo units sold during the same period by a wide margin.

Last month’s data, published today by the Building Industry and Land Development Association (BILD), signals that the market for new detached and semi-detached homes and townhouses is recovering faster than new condos.

There were 1,160 new single-family homes sold in June, the best result for the month since 2016 despite it being 12 percent below the 10-year average.

BILD’s data partner, Altus Group, said that during the same period, 744 new condo units were sold, down 73 percent from June 2019 and 70 percent below the 10-year average for the month.

“Single-family demand recovered more quickly as buyers returned and new supply started to come back into the market,” said Altus Group Vice President Matthew Boukall, in a media release.

“Given the challenges around COVID-19 restrictions, we’ve seen developers adopt new strategies to reach consumers and have seen success in the lower density segments,” he added.

The total number of new homes sold in June, at 1,904, was down 43 percent over the previous year. BILD was quick to point out, however, that the monthly total was a major improvement from May and April’s results. Both months were severely affected by restrictions in place to combat the spread of COVID-19 and saw new home sales totals well below 1,000.

“The June new home sales numbers are encouraging, though much remains to be seen as the GTA re-opens and begins recovery,” said BILD President David Wilkes.

“Now is the time to implement what we learned about facilitating the delivery of housing during the pandemic, to address our long-standing housing supply and affordability challenge while stimulating the local economy. Our industry is working with all three levels of government to help achieve these goals,” he continued.

Even with the ongoing slowdown in new condo sales, prices remained resilient. According to BILD and Altus Group, the benchmark price for a new condo was $999,228 in June, up nearly 25 percent from the previous year. The benchmark price for new single-family homes also saw an annual increase, rising nearly 4 percent to $1,141,848 in June.

As for the relative weakness of the new condo market, there are several explanations that are likely all contributing to the sluggish sales numbers.

For one, new condo sales rely more heavily on property investors who are reluctant to jump into the market with such an uncertain economic outlook prevailing. There is now emerging data-backed evidence that some investor-owners in downtown Toronto condos are beginning to sell their investment units. It is unclear how widespread this is and whether it will last through the fall, but it surely had an impact on the June sales numbers.

Secondly, there are simply far fewer new condo projects being brought to market by home builders. The spring months, which typically see the highest volume of new condo launches, saw only six projects hit the market this year. This pales in comparison to the 40 projects brought to market in the Toronto region during the same time in 2019.

Finally, there is a similar trend being observed in the resale housing market. Condo resales in the City of Toronto saw a 21 percent decline over the previous year in June while the region as a whole only saw a 1.4 percent decline in overall home resales. Meanwhile, sales for detached homes and townhomes in the Toronto region’s suburban markets saw a 10 percent year-over-year increase.

/by

Will Bill 197 make condos more expensive for Ontario home buyers?

Ontarians may still be wary of going back to the office, but the provincial legislature has had a very busy July. After passing the controversial Bill 184 on July 6, and the far less contentious Bill 159 eight days later, the Ontario government passed yet another bill last week that should be of interest to the province’s realtors, mortgage brokers, and home buyers.

While Bill 197 is unlikely to make headlines for its real estate components – it is an exceptionally broad piece of legislation – it could lead to increased costs for developers. Anyone who has dabbled in the new construction space will know what that means.

“At the end of the day, when they say ‘The developer has to pay this, and the developer has to pay that,’ there’s only one person who pays for that – that’s you and me who buy the house,” says Leor Margulies of Robins Appleby Barristers and Solicitors. “The developer doesn’t pay for anything. If the cost is too high, he doesn’t do the project. If the cost can be passed on in a purchase price, then the purchaser pays for that.”

Essentially a companion piece to the province’s much-touted Bill 108, aka the More Homes, More Choices Act, Bill 197 tweaks Bill 108 in three ways that could lead to higher prices in much of Ontario.

Increased development charges

In the mid-1990s, under Mike Harris’ Progressive Conservative government, developers were given a minor break on the development charges associated with new projects. While they were required to pay 100 percent of the expected hard costs – the infrastructure costs forced onto cities because of local population growth – developers were only asked to pay 90 percent of the expected soft costs – the money a municipality would require to provide services to that growing population, like social housing or libraries.

Bill 197 puts an end to that 10 percent discount.

“Now, developers pay 100 percent of the soft cost component of the development charge, which means that gets added to the cost, and that gets passed on to purchasers,” Margulies says. “That’s a big change.”

Section 37

Section 37 of Ontario’s Planning Act, which essentially allows cities to ask for benefits in exchange for density-increasing amendments to a development’s zoning, received a significant tweak.

Prior to Bill 197’s passing, Margulies says there was no formula in place to calculate what a developer owed a municipality under Section 37. The municipality may ask for money, day care facilities, art – whatever it wants, really, with no pre-set limits.

“There’s historical precedent, but it really is the wild west,” Margulies says, adding that the city of Toronto alone is currently sitting on around $600 million worth of unspent Section 37 collections.

Under Bill 197, 60 percent of the money collected must be spent or designated for spending every year. The bill also implements a formula for calculating what developers owe municipalities if their zoning needs change – a set percentage of the site’s total land value.

“What we don’t know is what that percentage is,” says Margulies. “We think it will be under 10. I think the industry feels two percent is correct.”

Either way, prices are likely to increase, particularly in municipalities where Section 37 funds were not previously being collected.

Parkland dedication fees

Once change contained in Bill 197 may actually benefit buyers.

Bill 197 contains significant changes to the province’s approach to calculating parkland dedication fees. In Ontario, developers are required to dedicate a certain percentage of the area they are developing to green space. For residential projects, it’s equivalent to five percent of the land in question. Because few developers in densely populated areas have the luxury of having that much extra space to play with, they have been given the option of paying cash instead.

But the cash option is by no means a lifeline for developers. Because of the formula used by the province to calculate the rate of parkland dedication fees, the equivalent of one hectare of land per 500 units, they tend to be brutally expensive. Margulies explains that in the 905 area code, parkland fees have ranged between $20,000 and $60,000 per unit.

“Developers have been fighting very hard with municipalities to cut them back,” he says.

Their calls for a more realistic formula for determining parkland fees are not reflected in Bill 197. But developers now have the option of appealing fees they find to be arbitrary and egregiously expensive – a definite win. Going forward, parkland development fees will need to be justified by a background study that explains a municipality’s future parkland needs.

/by

New Home Sales in GTA Heat up Again in June: BILD

Following two months of “historically slow” sales as a direct result of the COVID-19 pandemic, new home sales are starting to surge again in the Greater Toronto Area (GTA).

In fact, during the month of June, sales of new single-family homes – which includes detached, linked, and semi-detached houses and townhouses (excluding stacked townhouses) – accounted for 1,160 of the total of 1,904 new homes sold. This marks the highest number of transactions for June since 2016, according to a new report from the Building Industry and Land Development Association (BILD).

However, while still a notable milestone, this is 12% below the 10-year average, according to Altus Group, BILD’s official source for new home market intelligence.

Sales numbers for new condominium apartments – including units in low, medium and high-rise buildings, stacked townhouses, and loft units – accounted for 744 units sold, which is up compared to April and May, but still down 73% from June 2019, and 70% below the 10-year average.

“Single-family demand recovered more quickly as buyers returned and new supply started to come back into the market,” said Matthew Boukall, Altus Group’s Vice President, Data Solutions. “Given the challenges around COVID-19 restrictions, we’ve seen developers adopt new strategies to reach consumers and have seen success in the lower density segments.”

The BILD report says that with several projects launching in June, the total remaining new home inventory increased slightly from the previous month to 13,863 units —this includes units in preconstruction projects, projects currently under construction, and in completed buildings.

What’s more, the benchmark prices for both new condominium apartments and new single-family homes increased last month compared to May. The benchmark price for new condo apartments was $999,228, up 24.2% over the last 12 months, while the benchmark price for new single-family homes was $1,141,848, up 3.9% over the last 12 months.

When breaking it down by municipality, Toronto had the highest number of new condominium apartment sales, with 408 transactions in June. Peel followed behind with 134, while York had 107 sales, Halton had 70, and Durham had just 25.

As for new single-family homes, York leads the pack with 451 sales, followed by Durham (277), Halton (274), Peel (152), and then Toronto with just six sales.

This could be an example of how more homeowners are beginning to flee the downtown core and turning to the 905 regions and surrounding areas in the search for more space and affordability.

David Wilkes, BILD President and CEO, said the June new home sales numbers are promising, though, much remains to be seen as the GTA re-opens and begins recovery.

“Now is the time to implement what we learned about facilitating the delivery of housing during the pandemic, to address our long-standing housing supply and affordability challenge while stimulating the local economy. Our industry is working with all three levels of government to help achieve these goals,” added Wilkes.

/by

New legislation allows for eviction orders without Landlord and Tenant Board hearing

 

Province says changes meant to encourage negotiated settlements between landlords and tenants

Newly passed changes to landlord/tenant law will permit ex parte eviction orders, allowing landlords to obtain an eviction order without appearing before the Landlord and Tenant Board.

With Bill 184, the Protecting Tenants and Strengthening Community Housing Act, when a tenant is behind on rent, they can now enter into an enforceable repayment agreement with their landlord without oversight from an LTB adjudicator, says Caryma Sa’d, a Toronto-based lawyer who practises criminal, landlord/tenant and cannabis law. If the tenant fails to meet the repayment agreement’s terms, they can be subject to an ex parte eviction, or eviction without a hearing, says Sa’d, who acts for both landlords and tenants.

“Major, major, major change compared to the past, where in order to be evicted, there has to be some sort of attendance at the tribunal,” she says.

Bill 184 has sparked protests from housing advocates who say the legislation will lead to mass evictions. Throughout July, activists have staged rallies at Queen’s Park, the home of Mayor John Tory, as well as the Landlord and Tenant Board office in Ottawa.

The Provincial Government said the Act encourages negotiated settlements by allowing landlords and tenants to make an agreement on outstanding rent, without needing to appear before the LTB.

Harry Fine is a paralegal who works for both landlords and tenants and was a former adjudicator at the LTB, from 2001 to 2005. In a blog Fine wrote on the Act, he details the process for an ex parte eviction. The landlord must first serve the tenant a Form N4 Notice to End a Tenancy Early for Non-payment of Rent, file a Form L1 Application to Evict a Tenant for Non-payment of Rent with the LTB, fill out another LTB form, which becomes the repayment agreement, with the tenant and then wait to receive the consent order from the board on that agreement. If the tenant breaches the agreement, the landlord can then file an L4 application for eviction and does not have to serve notice to the tenant, nor have a hearing with the LTB. The tenant has 10 days to file a set aside motion, to appear before the LTB to address the breach. The tenant can also file a request to review the eviction order until 30 days post-eviction order.

“It is a change that may result in some evictions. But not every eviction is an unfair eviction and most of them for rent are warranted. And tenants have had their way with landlords since 2007 [with the passage of the Residential Tenancies Act]. And so there’s some small return to balance,” Fine told Law Times.

Sa’d notes that the idea of an ex parte eviction order is not new, but previously the parties would have already attended the LTB to deal with the initial non-payment of rent. She adds that the legislation also shifts the onus to the tenant to prove why they did not uphold the agreement, while at a typical non-payment of rent hearing, the landlord has the onus to prove rent was not paid, to which the board then applies an “equity reasoning” exploring whether there are circumstances that may justify delaying or refusing the eviction.

A problem with the repayment agreements lacking LTB oversight is that unsavvy tenants may have been bullied into signing an agreement they did not fully understand, or may have language comprehension difficulties, says Sa’d.

Natalia Czechowski, a lawyer for Mississauga Community Legal Services, says appearing before the LTB gives tenants the benefits of safeguards such as mediators, tenant duty counsel and the board members themselves.

“Tenants who are unaware of the changes may unknowingly enter into unrealistic agreements out of confusion, desperation or fear and landlords will be able to bypass the hearing process completely. This will inevitably lead to an increased risk of groundless evictions,” says Czechowski.

“Bill 184 further tilts the scales of the power imbalance already present in the landlord and tenant relationship in favour of the landlord by removing an opportunity for tenants to access much-needed assistance and protection at the Board.”

/by

These are the average rents for condos and apartments in Toronto by neighborhood

Average rent prices for condos and apartments in Toronto have been consistently declining thanks to the effects of the COVID-19 pandemic, and a new report suggests that trend is ongoing in many of the city’s neighbourhoods.

According to the Toronto GTA July Rent Report 2020 from TorontoRentals.com and Bullpen Research & Consulting, the average rent for all property types (singles, semis, row, condo apartment, rental apartment, basement apartment) in the former City of Toronto (pre-amalgamation boundaries) is down 8 per cent year over year.

“When looking at data on the average rent for all property types in the Greater Toronto Area, the market continues to experience a decline,” said Ben Meyers, president and owner of Bullpen Research & Consulting Inc., in a statement.

“However, when breaking down the data by property type, municipality, neighbourhood, and project, conflicting results arise.”

The report indicates that asking rents for single-family, townhouse and basement apartment listings on TorontoRentals.com actually increased from the first quarter to the second.

But, unsurpisingly at this point, condominium apartments for rent in the former City of Toronto, also known as Old Toronto, were nearly $260 cheaper per month in the second quarter of 2020 compared to the same period last year.

And when looking at the average rent for condominium and rental apartments in the 10 neighbourhoods in Old Toronto for Q2, rent declines are fairly consistent across the board.

In The Annex, for example, the average rent for condominium and rental apartments in Q2 was $2,559, compared to $2,606 in Q1 and $2,857 in Q2 of 2019.

In the Bay Street Corridor, the average rent was $2,448. This marks a 10 per cent decline from Q2 in 2019, when the average rent was $2,710, and it’s also down from Q1 in 2020 when the average price was $2,684.

Seven of the eight remaining Old Toronto neighbourhoods also experienced annual declines in Q2, including:

  • Waterfront Communities-The Island ($2,427, down 10 per cent)
  • Niagara ($2,302, down 8 per cent)
  • Church-Yonge corridor ($2,296, down 8 per cent)
  • Little Portugal ($2,218, down 11 per cent)
  • Mount Pleasant West ($2,144, down 8 per cent)
  • Moss Park ($2,098, down 14 per cent)
  • South Parkdale ($1,974, down 12 per cent)

The only area to experience an increase in its annual average rental price in Q2 was North St. James Town, but the report points to a logical explanation for this.

“Rents are up 10% annually in North St. James Town, but the area was boosted by an increase in the number of listings on TorontoRentals.com at the new high-end purpose-built rental apartment called The Selby on Sherbourne, south of Bloor,” notes the report.

“The biggest decline was seen in the Moss Park area with a 14% annual decline. A condominium apartment at 320 Richmond Street East called The Modern, which was one of the most active projects in terms of monthly listings in that area, witnessed a 20% rent decline annually.”

According to Meyers, the overall declines can be partially attributed to the many homes which were previously being used as short-term units and are now hitting the regular market.

“Condominium apartment rents continue to experience rent deflation, as the much talked about short-term units hit the full-time rental market, students stay home, immigration is low, and new supply hits the market,” he said.

“The 2,229 condominium apartment completions in May was the third highest monthly total over the last three years per CMHC data, and a significant portion of those units were purchased by investors and are hitting the rental market.”

On top of all this, Meyers says it’s still too soon to truly understand how damaged the market has been by COVID-19.

“It will still take several months to assess the damage done to the market by COVID-19, when all of the GTA enters Stage 3 of the re-opening,” he said, “and we are able to see data on how many employees are hired back to their previous jobs, and how quickly consumers start spending again.”

/by

Downtown condo listings surge in June as former Airbnb units hit market

Preferences around home buying have continued to shift through the course of the pandemic, particularly among those who aren’t even on the property ladder yet.

A quarter of Ontario renters who are currently active in the real estate market are now more interested in buying a home than they were before the pandemic, according to new consumer data collected by Nanos Research. Conducted on behalf of the Ontario Real Estate Association (OREA) for their monthly Pulse Check on Consumer Attitudes report, the research highlights changing attitudes and preferences of prospective homeowners.

As a result of the COVID-19 pandemic, 25 percent of Ontario renters who are active in real estate have expressed that they are more interested in buying a home now, compared to just 13 percent of renters who said they are now less interested. About 54 percent of renters said that they are just as interested in purchasing now as they were pre-pandemic.

Millennials and those between the ages of 35 to 54 make up the bulk of the interested buyer pool, with 62 percent and 59 percent of those age groups currently looking in the market. More renters are also actively seeking real estate in contrast to current homeowners — 63 percent of renters are searching for a home to purchase compared to 47 percent of homeowners surveyed.

“Despite the uncertainty stemming from the pandemic, housing remains a strong sector of our province’s economy, with the Canadian Dream of home ownership continuing to be a strong value for many Ontarians,” said OREA President Sean Morrison in the consumer report. “As we look ahead and move towards economic recovery in a post-COVID era, we can expect even more interest as renters and first-time home buyers look to enter the market.”

With many Ontarians locked down at home over these recent months with time to reassess their needs, it’s not uncommon for homebuyers to consider moving outside of the city in search of extra space. Three in five of those who are active in the real estate market said that living in rural areas is now more appealing to them than it was pre-pandemic, according to the survey. Similarly, three in five of those surveyed now find suburban living more attractive too.

Last week, in-person open houses were permitted to run once again throughout the majority of Ontario’s public health regions. About eight in ten active Ontarians in the market have expressed that they are comfortable or somewhat comfortable attending an in-person private showing. Sixty-six percent of those active have also reported that they would be comfortable or somewhat comfortable attending an open house with other buyers present.

/by

Central Toronto neighbourhoods see home prices jump 26% in 2020’s first half

Despite the unprecedented turbulence real estate markets have experienced over these last few months, prices for single-family homes in some of Toronto’s most sought-after communities have shown few signs of wavering.

A new market report released by RE/MAX Ontario-Atlantic Canada today found that central Toronto neighbourhoods delivered strong average home price gains through the first half of 2020 even as the market endured months of uncertainty while the pandemic disrupted everyday life across the city.

Of the 65 Toronto Regional Real Estate Board (TRREB) districts, 60 percent of those within the ‘416’ region saw double-digit price increases during the first six months of 2020, particularly in areas C02, C08 and C03.

In the C02 district, which includes the Annex, Yonge-St. Clair, Casa Loma and Wychwood neighbourhoods, average prices of detached homes jumped by 25.7 percent year-over-year in June to $2,918,968. Last month, homes in this area sat on the market for an average of 17 days, with a sale-to-list price ratio of 98 percent. According to RE/MAX, move-up buyers were fairly active in this area amidst a shortage of homes, particularly in the Annex.

In June, housing inventory dropped to levels that are far below average. Active listings in the Greater Toronto Area hit 14,000, the low total for the month since 2016. Unlike typical spring seasons, this year’s spring market saw no uptick in homes hitting the market.

“[B]uyers and sellers paused in April, then cautiously resumed home-buying activity as COVID-19 cases dropped and local economies re-opened,” said Christopher Alexander, executive vice president and regional director of RE/MAX of Ontario-Atlantic Canada, in the report. “With the easing of restrictions and the province moving into the third, and perhaps final phase, we anticipate that the housing market will likely accelerate.”

Price gains were seen in Toronto’s C08 region, comprising mainly of the Waterfront Communities and the Church-Yonge Corridor, where annual prices for detached homes rose 55.7 percent year-over-year from $1,641,813 to $2,555,500. Forest Hill South, Oakwood-Vaughan and Humewood, located in the C03 district, experienced a 17.7 percent price increase, boosting the year-over-year average to $2,371,546 from $2,014,072.

Outside of Toronto’s central areas, two communities book-ending the eastern and western portions of the Lakeshore were a hotbed for annual price increases. District W01, which includes Roncesvalles and High Park, saw average prices leap from $1,731,382 to $2,050,596, an 18.4 percent year-over-year increase.

Average prices in E06’s Birchcliffe-Cliffside and Oakridge communities topped the $1 million mark, rising 18.4 percent to $1,095,287. Both of these districts saw a surge in young family buyers seeking affordability and proximity to the shoreline, according to the report.

/by

Home prices forecast to rise 8% by 2022: Capital Economics

A surprisingly strong showing from the Canadian housing market in June is leading economists to swiftly revise their forecasts as homebuyers returned to the market in larger than anticipated numbers.

June market data published last week by the Canadian Real Estate Association (CREA) showed country-wide home sales up 63 percent over May and more than 15 percent compared to the same period last year. Home price growth also came roaring back, almost completely erasing the losses suffered through the worst months of the COVID-19 pandemic.

The performance was so strong it led Capital Economics’ Stephen Brown to revise his home price forecast upward to 3 percent in 2021 and 5 percent in 2022. By the end of 2022, he now predicts that prices will have risen by 8 percent from their current levels.

In a research brief published late last week, Brown wrote that the June figures had “made a mockery of the near-unanimous view among economists that [Canadian] house prices would fall this year.”

Indeed, economists projecting varying degrees of home price declines were a staple of media reporting on the pandemic’s housing market impacts since the crisis began. Oxford Economics predicted a nine percent fall by early 2021 just a month ago. Earlier on, RBC forecast a seven percent decline by mid-2021, while National Bank of Canada pegged the drop to be close to 10 percent.

Even Capital Economics itself had, less than two months ago, predicted that average Canadian home prices would bottom out at 10 percent below their pre-pandemic levels while the less volatile Teranet Home Price Index would see a 5 percent drop.

After the CREA June data was released, Brown didn’t mince words when it came to the accuracy of those forecasts.

“Either way, nearly everyone was wrong, as prices have moved in the opposite direction,” he said.

Brown pointed to both substantial rises in average selling prices and a 0.5 percent increase in the MLS Home Price Index, which is a more reliable measure of home price movement over time.

Considering the unanticipated strength of the market so soon after it suffered some of the worst drops in sales activity ever recorded, Capital Economics revised its outlook for Canadian home prices in the coming years.

Brown wrote that the firm now believes prices will be more or less unchanged through the remainder of the year and begin trending upward by 2021, propelled by a recovering economy and low interest rates.

Despite this clear, rapid improvement in the market’s fortunes, the economist still included a measure of caution in the new forecast. There are still a considerable number of Canadians currently deferring their mortgage payments who may be forced to sell their homes when the deferral programs wind down in September.

He also flagged the precipitous pandemic-induced decline in immigration — the fundamental driver of population growth — as a key challenge on the horizon for the market.

/by

York University Campus in Markham Gets Green Light to Start Construction

York University has officially received the green light from the provincial government to move forward with its long-awaited Markham Centre Campus (MCC).

Construction for the campus, which will focus on courses geared toward themes of technology and entrepreneurship, will commence July 2020 and will be completed in time for the fall semester 2023. The campus will accommodate up to 4,200 students in Phase 1, with the flexibility to respond to future growth demands.

The Ontario government will help fund the new campus, which will become the first publicly assisted university in the York Region.

According to the province, this new campus expansion is the first project proceeding under the government’s updated Major Capacity Expansion Policy Framework, which encourages the responsible development of new postsecondary campuses, ensuring minimal cost to the taxpayer, a high-quality education that aligns with labour market needs, and expansion plans that align with community planning and industry partnerships.

The new state-of-the-art campus will offer students innovative, relevant job-ready academic programming and research opportunities focusing on digital media, engineering and technology, entrepreneurship, new media and communications.

The campus will also consolidate York University’s already strong academic presence in the City of Markham (YSpace, IBM Innovation Space – Markham Convergence Centre and the IBM Partnership). Finally, the campus will help to fulfill York Region’s future labour market and civic leadership needs by providing transferable 21st-century skills that are at the core of future economic competitiveness and community development in Markham, York Region, and across Ontario.

“The time has come for a new, innovative approach to financing college and university expansions. Instead of the province writing multi-million-dollar cheques, we have developed a system that encourages the development of new campuses with a much smaller cost to the taxpayer,” said Premier Doug Ford. “The new Markham Centre Campus is a model of responsible expansion which will offer local students access to a world-class education and prepare them for the jobs of the future.”

The construction of the Markham campus will begin this month and will aid in York Region’s post-COVID-19 economic recovery, as it is expected to generate over $350 million in immediate economic benefits and to create over 2,000 jobs.

The economic impact of COVID-19 has noticeably increased the need for postsecondary institutions to modernize and focus on job-market relevance by preparing students to succeed in the global job market.

The Markham campus will specialize in flexible learning formats to serve a diverse population of students, including young adults, as well as mature and mid-career learners, newcomers to Canada and workers impacted by technological change.

/by

House prices have soared in these Toronto neighbourhoods in 2020

Detached homes around Regent Park and Scarborough’s Birchcliff saw the biggest price gains in Toronto’s pricey real estate market, according to RE/MAX

Regent Park and Scarborough’s Birchcliff are some of the neigbourhoods where Toronto house prices saw the biggest gains in 2020, according to the RE/MAX 2020 Hot Pocket Communities report. The report compares the average price for detached homes over the first six months in 2019 and 2020.

The city’s average home price hit an all-time high in June, despite the COVID-19 pandemic. Low supply has fuelled demand. But some areas are feeling the heat more than others.

The average price for the rare detached homes in the area containing Regent Park, Cabbagetown, Jamestown and the Church-Yonge corridor jumped $2,555,500 from $1,641,813. That 55.7 per cent increase is the highest for any neighbourhood in the GTA. But it coincides with a 75 per cent drop in sales, from eight transactions in 2019 to two in 2020.

Highs and lows
“Strong demand characterized much of the first quarter of 2020, setting the stage for a record-breaking spring market in the Greater Toronto Area,” says Christopher Alexander.

The RE/MAX of Ontario-Atlantic Canada executive vice president says the real estate market has been bouncing back after the severe downtown caused by COVID-19. “With the easing of restrictions and the province moving into the third, and perhaps final phase, we anticipate that the housing market will likely accelerate.”

The Annex, Wychwood and Deer Park area came second place in terms of price growth, climbing 25.7 per cent to $2,918,968. The Birchcliffe-Cliffside area in Scarborough has seen a significant uptick in new developments and businesses. It tied with the High Park and Roncesvalles area for third place with 18.4 per cent gains. Detached homes in the east end area just west of the Scarborough Bluffs rose to $1,095,287. That’s nearly half the $2,050,596 figure for homes the High Park and Roncesvalles area.

Toronto’s priciest real estate had the steepest declines. The Rosedale and Moore Park area plunged 15.2 per cent from $3,687,292 to $3,127,643. The Bridle Path and Windfields area were not far behind. The average home price dropped 9.5 per cent from $3,697,343 to $3,346,422. While sales in Toronto were down between 5 and 75 per cent depending on the neighbourhood, Bridlepath and Windfields is the only area that had an increase in sales at 20 per cent.

Beyond Toronto
The 905 hasn’t seen any declines in average detached home prices. The Township of Brock near Lake Simcoe made the biggest climbs, rising 15.2 per cent to $552,711. Essa township in Simcoe is close behind with 14.6 per cent at $626,003. And then comes Vaughan, rising 13.5 per cent to $1,369,407.

“While the strength of the market is underscored by rebounding economic fundamentals, it’s clear that we are not out of the woods yet, given what’s happening around the world,” adds Alexander. He echoes warnings from realtors and the Canada Mortgage and Housing Corporation.

The CMHC predicts a sharp downturn beginning in the fall as COVID-19 relief programs are expected to dry up. The lack of immigration, low employment, a subsequent increase in supply and other economic impacts from COVID-19 could be factors that bring real estate prices drastically down.

/by

Toronto homebuyers won’t leave city for suburbs as pandemic drags on

Throughout the COVID-19 pandemic, homeowners have had a lot of time to reassess what they need in a home. For some, this has meant considering a new property outside of the city, somewhere that might offer more space for fewer dollars.

While there’s been much discussion within the real estate industry about homebuyers wanting to relocate to communities outside of Toronto, some experts say that this won’t necessarily translate into a boom for suburban growth, or waning interest in city-living.

“I would still prefer to have and enjoy the downtown, or what any urban centre has to offer, versus living in the suburbs and getting into my car and only being able to drive to Walmart,” said Naama Blonder, a Toronto-based architect, urban planner and co-founder of Smart Density.

Blonder explained that there’s been much discussion around the perks of suburban living versus city life during the pandemic. This dialogue often touches on how city homeowners tend to lack large, private backyards — a resource that urban dwellers have craved after months of lockdown — and may face more space-related challenges when working from home.

However, Blonder pointed out that if home office culture is here to stay, city homes, even without access to a yard, offer proximity to a wealth of park and public amenities that exist outside of the home that suburban and rural residences wouldn’t.

A proponent of family-friendly housing, Blonder explained that city condos and units can do more to accommodate families by addressing their needs in tandem with public spaces. For instance, condos don’t necessarily need to be the size of a house, but can offer smart layouts with more bedrooms and amenities within the building that can’t be included in the unit itself. One analogy she uses is Paris — young families thrive in the European city without private backyards.

“I know as someone who advocates for family-friendly housing and high-density for working families, this product currently does not exist, or is not enough,” she said. “And it’s something that I’ve been talking a lot about. I think that the demand is here, and the people won’t give up the city.”

 

Along with the convenience of a shorter commute time that Millennial buyers often seek, and the independence cities can offer for growing teenagers, Blonder believes the suburbs will not necessarily flourish post-COVID while the desire to live in Toronto continues to grow.

“I don’t think we will need to face that, the question of cities, not just Toronto, but cities declining,” said Blonder. “I think we now understand, for decades, even if we’re not there yet, that building compact cities is better for the environment.”

Real estate agents have noticed that homebuyers have used the pandemic as an opportunity to analyze what’s important to them. Agents in outer-city communities are receiving higher-than-normal levels of buyer inquiries. Kori Marin and Ralph Fox, Toronto real estate brokers and managing partners at Fox Marin Associates, have noted buyers weighing their options more and strategizing for the long-term.

“I think real estate is a very large component to that obviously, but we just don’t see people, in our experience, throwing caution to the wind and saying, ‘That’s it, we’re out,’” said Fox.

The pandemic has forced us to live in new ways, whether it be going outside less and being around family more. Similarly, Marin said that the same scenario is happening for owners about the perspective of their homes — the idea of living in a rural setting may seem dreamy at the moment for city residents, but the appeal could wear off over time.

“I do think [it’s] kind of a temporary romanticism of what it might look like only because of the state that we’re in right now,” explained Marin. “I’m one of those people that does that all the time. I can see why people are attracted to it, but I don’t think it will be a long-lived trend. I can’t anticipate that it will last forever.”

/by

Toronto’s rental vacancy rate hits highest level in over 5 years

When it comes to competition in the market, Toronto’s renters are finally getting some relief as the city’s vacancy rate within purpose-built apartments increased to 1.8 percent in the second quarter of 2020, the highest level in over five years.

Real estate research firm Urbanation began tracking the vacancy rate at the beginning of 2015. To determine the rate, it looks at purpose-built rentals completed in the Toronto region since 2005. The second quarter reading is the highest level observed since the firm began its quarterly surveys.

Toronto’s rental availability rate, which adds units that are set to be vacated by tenants, also hit the highest level recorded since Urbanation began tracking it in 2015. The firm reported the availability rate as 3.2 percent this past quarter, compared to 2.3 percent in the first quarter of the year and 2 percent in the second quarter of 2019.

On the rental pricing side, units that were listed for rent during the second quarter averaged $2,420, a 3.7 percent year-over-year decline. While this sounds like a sharp drop, Urbanation noted that on a per square foot basis, rents declined by a more modest 0.6 percent to $3.22 per square foot over the same period in 2019. This suggests the larger monthly rent price drop was likely weighted by the composition of units listed during that period.

As the vacancy rate rises and demand cools amid the ongoing disruptive effects of the pandemic, Urbanation found that over 40 percent of buildings it surveyed had offered incentives such as a month of free rent to attract potential new tenants.

The rising vacancy rate came as purpose-built rentals under construction in the Toronto region continued to hover around a 40-year high, meaning more supply for the market is on its way. At the end of the second quarter, there were 13,358 purpose-built rental units under construction across the Greater Toronto Area, up 17 percent from the second quarter in 2019.

/by

Interest rates won’t rise until at least 2023

The pandemic has forced most of us to learn to live with a good dose of uncertainty when it comes to our ability to make even short-term plans.

But despite being faced with unprecedented challenges brought on by COVID-19, Canada’s central bank still has to confidently make strategic policy choices with an eye to the seemingly distant future.

So, when the bank said last week during a regularly scheduled announcement that it would not be moving its key interest rate from the current historically low level of 0.25 percent, many read deeper into its language.

Several economists well-versed in parsing its announcements arrived at this conclusion: the bank is comfortable keeping interest rates at their current level until at least 2023.

At the outset of the pandemic, the Bank of Canada slashed its key interest rate, also known as the overnight rate, several times in quick succession to stabilize the economy. The bank has since signalled that it will not move the rate any lower than the current 0.25 percent level, calling it the “effective lower bound.” But, it has also said that it won’t be ratcheting the rate back up until certain economic recovery criteria have been met.

“The Bank of Canada’s pledge today to keep the policy rate unchanged until the ‘2 percent inflation target is sustainably achieved’ implies that it has no plans to raise interest rates until at least 2023,” wrote Capital Economics’ Stephen Brown in response to the bank’s announcement last week.

TD Senior Economist Brian DePratto echoed this assessment, noting that the heavy toll the pandemic has taken on the economy and the uncertainty in the months and years to come require the Bank of Canada “to stay in repair mode for some time.”

While the Bank of Canada rate announcements may not be marked on the calendars of most homebuyers, they play a critical role in determining where mortgage rates are heading in the years to come. Mortgage lenders are sensitive to where the central bank’s key interest rate is moving and adjust their borrowing rates accordingly.

The current low mortgage rate environment is a major reason why many experts believe Canada’s housing market — which posted a strong performance in June — will bounce back relatively quickly from the economic downturn and widespread business shutdowns spurred by the pandemic.

“As the real estate market continues to rebound, competitive pressure between mortgage lenders is causing both fixed and variable rates to inch down on a continuous basis,” mortgage comparison site Ratehub.ca shared in an email alert to subscribers following the Bank of Canada’s announcement last week.

Of course, mortgage rates can only fall so low, but with the Bank of Canada’s forward-looking signalling last week, it’s likely that homebuyers don’t exactly need to rush to take advantage of these rock bottom rates.

As BMO Senior Economist Robert Kavcic put it in a research note published last week on the bank’s interest rate outlook: “In case it’s not clear, we’re talking years here, not months or quarters.”

/by

Interest in home buying surges among Ontario renters amid pandemic: OREA

Preferences around home buying have continued to shift through the course of the pandemic, particularly among those who aren’t even on the property ladder yet.

A quarter of Ontario renters who are currently active in the real estate market are now more interested in buying a home than they were before the pandemic, according to new consumer data collected by Nanos Research. Conducted on behalf of the Ontario Real Estate Association (OREA) for their monthly Pulse Check on Consumer Attitudes report, the research highlights changing attitudes and preferences of prospective homeowners.

As a result of the COVID-19 pandemic, 25 percent of Ontario renters who are active in real estate have expressed that they are more interested in buying a home now, compared to just 13 percent of renters who said they are now less interested. About 54 percent of renters said that they are just as interested in purchasing now as they were pre-pandemic.

Millennials and those between the ages of 35 to 54 make up the bulk of the interested buyer pool, with 62 percent and 59 percent of those age groups currently looking in the market. More renters are also actively seeking real estate in contrast to current homeowners — 63 percent of renters are searching for a home to purchase compared to 47 percent of homeowners surveyed.

“Despite the uncertainty stemming from the pandemic, housing remains a strong sector of our province’s economy, with the Canadian Dream of home ownership continuing to be a strong value for many Ontarians,” said OREA President Sean Morrison in the consumer report. “As we look ahead and move towards economic recovery in a post-COVID era, we can expect even more interest as renters and first-time home buyers look to enter the market.”

With many Ontarians locked down at home over these recent months with time to reassess their needs, it’s not uncommon for homebuyers to consider moving outside of the city in search of extra space. Three in five of those who are active in the real estate market said that living in rural areas is now more appealing to them than it was pre-pandemic, according to the survey. Similarly, three in five of those surveyed now find suburban living more attractive too.

Last week, in-person open houses were permitted to run once again throughout the majority of Ontario’s public health regions. About eight in ten active Ontarians in the market have expressed that they are comfortable or somewhat comfortable attending an in-person private showing. Sixty-six percent of those active have also reported that they would be comfortable or somewhat comfortable attending an open house with other buyers present.

/by

Home price gains in June erase almost all pandemic losses

Canada’s housing market came roaring back in June, with country-wide home sales tracked by the Canadian Real Estate Association (CREA) returning to normal levels for the month.

Toronto, Montreal and Vancouver led the way in sales gains for June, with transactions rising 83.8 percent, 75.1 percent and 60.3 percent, respectively, over May totals.

And, according to the data released today, it wasn’t just home sales picking up steam. At the national level, CREA said the average price for a home sold in June was close to $539,000, a 6.5 percent increase from the same month a year ago.

This gain was strong enough to claw back nearly all the pandemic-spurred price losses that occurred through the spring.

“Average prices posted a huge gain in June, almost entirely erasing pandemic-related losses, with prices down only 0.5% compared to February,” wrote TD Economist Rishi Sondhi.

“Notably, in markets such as Toronto, there was a resurgence in activity in the high end of the market. This reinforces the notion that markets are getting stronger, as it’s not just low-priced inventory that’s moving,” he added.

In a research brief published this morning in response to the June housing data, BMO Chief Economist Douglas Porter noted that pent-up demand from the spring was a major driving force in this strong performance and that it would be a case of wait-and-see when it comes to whether the momentum can be sustained.

“But certainly the early indications are that housing is one sector that has managed to hold up remarkably well on balance in the pandemic,” Porter wrote with guarded optimism about the market’s prospects.

While there’s still plenty of uncertainty surrounding the market’s trajectory in the coming months, Porter predicted that low interest rates and tight housing supply will beat out negative factors such as lingering effects of large-scale shutdowns and lower immigration levels.

In the shorter term, CREA said preliminary sales figures have July slated for an even stronger performance than what was observed in June.

/by

Home prices forecast to rise 8% by 2022: Capital Economics

A surprisingly strong showing from the Canadian housing market in June is leading economists to swiftly revise their forecasts as homebuyers returned to the market in larger than anticipated numbers.

June market data published last week by the Canadian Real Estate Association (CREA) showed country-wide home sales up 63 percent over May and more than 15 percent compared to the same period last year. Home price growth also came roaring back, almost completely erasing the losses suffered through the worst months of the COVID-19 pandemic.

The performance was so strong it led Capital Economics’ Stephen Brown to revise his home price forecast upward to 3 percent in 2021 and 5 percent in 2022. By the end of 2022, he now predicts that prices will have risen by 8 percent from their current levels.

In a research brief published late last week, Brown wrote that the June figures had “made a mockery of the near-unanimous view among economists that [Canadian] house prices would fall this year.”

Indeed, economists projecting varying degrees of home price declines were a staple of media reporting on the pandemic’s housing market impacts since the crisis began. Oxford Economics predicted a nine percent fall by early 2021 just a month ago. Earlier on, RBC forecast a seven percent decline by mid-2021, while National Bank of Canada pegged the drop to be close to 10 percent.

Even Capital Economics itself had, less than two months ago, predicted that average Canadian home prices would bottom out at 10 percent below their pre-pandemic levels while the less volatile Teranet Home Price Index would see a 5 percent drop.

After the CREA June data was released, Brown didn’t mince words when it came to the accuracy of those forecasts.

“Either way, nearly everyone was wrong, as prices have moved in the opposite direction,” he said.

Brown pointed to both substantial rises in average selling prices and a 0.5 percent increase in the MLS Home Price Index, which is a more reliable measure of home price movement over time.

Considering the unanticipated strength of the market so soon after it suffered some of the worst drops in sales activity ever recorded, Capital Economics revised its outlook for Canadian home prices in the coming years.

Brown wrote that the firm now believes prices will be more or less unchanged through the remainder of the year and begin trending upward by 2021, propelled by a recovering economy and low interest rates.

Despite this clear, rapid improvement in the market’s fortunes, the economist still included a measure of caution in the new forecast. There are still a considerable number of Canadians currently deferring their mortgage payments who may be forced to sell their homes when the deferral programs wind down in September.

He also flagged the precipitous pandemic-induced decline in immigration — the fundamental driver of population growth — as a key challenge on the horizon for the market.

/by
,

Toronto Luxury Home Prices Up 11.9% in June From 2019: Report

As the COVID-19 curve continues to flatten across the country and more Canadians are returning to the housing market, a new report from Engel & Völkers reports a notable spike in demand for luxury real estate.

The Canadian Luxury Real Estate brand released its Mid-Year 2020 Report on Wednesday, which says demand for luxury properties is spiking across the country as the curve continues to flatten in Canada.

The market report provides an analysis of residential real estate through April, May, and June across five markets including Halifax, Montréal, Ottawa, Toronto, and Vancouver and it discusses luxury real estate across three price segments of under $1 million, $1-4 million and over $4 million as listed in the Multiple Listing Service (MLS).

On a national level, Canada’s major metropolitan areas have shown market resiliency following a significant pause during the COVID-19 pandemic.

The report says April was marked by “generational lows” and that home sale activity fell by a record 56% compared to an already affected March. Year-over-year, national sales dropped by 57.6% and the number of newly listed homes across Canada declined by 55% in April compared to March.

Despite these declines, prices held in most markets through the pandemic and national home sales rebounded in May by a record 56.9%, amounting to one-third of a return of the activity lost between February and April.

What’s more, the number of new listings across the country climbed by a record 69% in May compared to April. By June, home prices returned to pre-pandemic levels, as inventory increased, however, Engel & Völkers says this still wasn’t enough to meet pent-up buyer demand.

The luxury real estate brand noted it specifically saw a 30% year-over-year increase in closed sales volume and a 28% year-over-year increase in average sales price across Canada from January to June 2020.

On a local level, the report showed that sales of homes and townhomes accelerated in June, while the condo slowdown presented a temporary buying opportunity in Toronto’s downtown core.

In the lead up to the pandemic, Q1-2020 was busy in Toronto and resales were up 49% year-over-year during the first two weeks of March. However, as lockdowns began, home sales plummeted 16% in the latter half of the month.

May brought the first look of market recovery as Canada’s largest city saw housing activity resume with home sales increasing by 55.2% and new listings jumping by 47.5% compared to the previous month. At the close of the month, prices rose by 3% year-over-year, indicating the market was regaining traction and moving toward normalcy.

However, as June arrived, so did the pent-up buyer demand, specifically for detached and semi-detached homes. This, coupled with tight housing supply and growing consumer confidence post-COVID, effectively positioned Toronto as a seller’s market.

Residential home prices were up 11.9% year-over-year and average sales price was also up substantially by 7.8% month-over-month, signalling a revival in the higher price-point segment in the Greater Toronto Area (GTA).

“Despite a mid-Q2 pause, Toronto’s popularity among domestic and international migrants is keeping the market on firm ground,” reads the report.

Anthony Hitt, president & CEO, Engel & Völkers Americas, says Canadian markets are proving their resiliency and that demand in Halifax, Toronto, Vancouver, Montréal, and Ottawa held through the pandemic, with high-demand price points selling quickly with multiple offers.

“COVID-19 has caused Canadians to rethink how they want to live, causing a shift in buyer preferences and habits in real estate. This is reflected in rising demand for properties with flexible living spaces to meet both work and lifestyle needs and amenities such as pools, entertainment rooms and outdoor living spaces and entertainment spaces.”

Hitt added that he’s also starting to see a trend toward cottage country and the suburbs, which is creating a temporary buying opportunity within the urban condo market as people prioritize properties with more space.

/by

Average Home Price Rose Over $100,000 in 9 Ontario Markets This June: REPORT

The latest monthly statistics released by the Canadian Real Estate Association (CREA) for June highlighted that home sales and new listings rebounded to normal levels across Canada last month, following a period of historic lows this April and May due to the pandemic. Almost 1 million jobs were added back to the Canadian economy in June, and the housing market showed signs of growing “cautious optimism” among buyers and sellers, as CREA noted.

Further, as July 1 approached, recently announced changes to the Canada Mortgage and Housing Corporation (CMHC) mortgage insurance borrowing criteria loomed, which may have incentivized certain buyer segments to accelerate their search. As such, national home sales improved 63% since May, and there was a 49.5% monthly spike in new listings. Average home prices rose 6.5% nationally year-over-year (y-o-y) to almost $539,000 in June.

A closer look at real estate markets across Ontario for June revealed that regional market trends closely mirrored national housing activity. After all, Ontario accounted for 378,000 of the total jobs recovered in June, and much of the province graduated into Stage 2 of reopening by the end of the month. To get a gauge on how the pandemic impacted price and sales activity in Ontario, reviewed average home prices and sales data for June from local real estate boards and CREA for 28 Ontario markets, comparing changes on an annual basis to highlight how and where the market shifted since last year.

Our analysis and findings provide a bird’s eye view of market dynamics to give buyers and sellers an indication of what to expect in their local real estate market. The average home price included in this analysis applies to the local market as a whole and takes into account a number of different property types, neighbourhoods, and square footage values among other factors. As such, prospective buyers and sellers will benefit from a detailed review of sales, new listings and price trends for specific home types of interest at the city, town, or neighbourhood level.

GTA Cities Dominate List of Ontario Markets With Highest Average Home Price Increases

In 9 of the 28 markets included in our analysis, the average home price grew over $100,000 annually. Oakville topped the list, with the annual average home price increasing a whopping $177,550 or 17% since last year to $1,249,685. Markham followed close behind – the annual average home price grew $171,726 y-o-y, an impressive 19% increase to $1,086,502.

In total, 5 York Region markets posted not just six-figure annual average price growth, but double digit rates of annual average price growth as well. In addition to Markham, the average home price increased by $149,010 or 16% in Aurora to $1,068,255; by $136,466 or 13% in Vaughan to $1,154,352; by $130,514 or 12% in Richmond Hill to $1,213,191, and by $117,193 or 15% in Newmarket to $889,534. Although the average home price increased substantially in these York region markets, sales in June have yet to catch-up to last year’s levels; Richmond Hill had the largest sales gap, with transactions still down 17% from last year.

Mississauga, Halton Hills, and the City of Toronto completed the list of regions where average home prices grew in the six figures annually. Average home prices rose by $140,265 in Mississauga, $111,183 in Halton Hills, and by $106,657 in the City of Toronto.

6 Markets Experienced Annual Sales Growth Over 20%, Including Barrie at 41%

15 of the 28 markets studied experienced y-o-y sales growth this June, with 6 markets even clocking in annual sales increases of over 20%. Barrie led the pack with a staggering 41% increase in sales and 321 homes changing hands last month. New listings in Barrie were slower to catch up in the region and created strong seller’s market conditions this June with a sales-to-new-listings-ratio (SNLR) of 74%.

A seller’s market exists when the SNLR – the ratio of the number of sales to the number of properties listed in a given period – is over 60%. It implies that a greater number of properties sold relative to newly listed homes, favouring sellers over buyers. In Barrie, buyers faced even greater competition this year compared to last June when the SNLR was 56% and housing demand and supply were balanced. Balanced market conditions exist when the SNLR is between 40% and 60%.

Sudbury Region and Pickering rounded up the top three regions with the highest rate of sales growth, with sales increases of 27% and 24% each. Among all the regions included in our analysis, Sudbury exhibited the most prominent seller’s market conditions with an SNLR of 87%. It was even more competitive for Sudbury buyers this year compared to June 2019 when the SNLR was 64%. Pent up buyer demand from April and May, when economic uncertainty was the highest, may have been a contributor to these higher levels of sales in June.

Among the regions with the slowest positive sales growth were Oakville, London, and Milton. Each of these 3 regions experienced a sales increase of 5% y-o-y.

Richmond Hill (-17%), Aurora (-14%), and Mississauga (-14%) experienced the greatest sales declines y-o-y. This was followed by Vaughan (-13%) and the City of Toronto, where 2,830 homes sold in June – a 12% decline y-o-y. Despite a double-digit decline in sales in June, Toronto remained in a balanced market with an SNLR of 46%.

Below find our infographic highlighting average price and sales growth in 28 housing markets across Ontario this June followed by lists of the regions that experienced the highest annual price and sales growth.

 

Top 5 Markets for Annual Average Price Growth (Dollar)

Oakville

  • Average home price, June 2020: $1,249,685 (+$177,550 or +17%)
  • Home sales, June 2020: 322 (+5%)

Markham

  • Average home price, June 2020: $1,086,502 (+$171,726 or +19%)
  • Home sales, June 2020: 333 (-3%)

Aurora

  • Average home price, June 2020: $1,068,255 (+$149,010 or +16%)
  • Home sales, June 2020: 87 (-14%)

Mississauga

  • Average home price, June 2020: $891,012 ( +$140,265 or +19%)
  • Home sales, June 2020: 742 (-14%)

Vaughan

  • Average home price, June 2020: $1,154,352 (+$136,466 or +13%)
  • Home sales, June 2020: 293 (-13%)

Top 5 Markets for Annual Average Price Growth (Percentage)

Niagara Region

  • Average home price, June 2020: $538,946 (+$98,191 or +22%)
  • Home sales, June 2020: 628 (+8%)

Markham

  • Average home price, June 2020: $1,086,502 (+$171,726 or +19%)
  • Home sales, June 2020: 333 (-3%)

Mississauga

  • Average home price, June 2020: $891,012 (+$140,265 or +19%)
  • Home sales, June 2020: 742 (-14%)

London

  • Average home price, June 2020: $486,372 (+$78,098 or +19%)
  • Home sales, June 2020: 748 (+5%)

Windsor-Essex Region

  • Average home price, June 2020: $401,465 (+$65,422 or +19%)
  • Home sales, June 2020: 742 (+9%)

Top 5 Markets for Annual Sales Growth (Percentage)

Barrie

  • Average home price, June 2020: $556,932 (+$67,591 or +14%)
  • Home sales, June 2020: 321 (+41%)

Sudbury Region

  • Average home price, June 2020: $317,592 ( +$33,978 or +12%)
  • Home sales, June 2020: 356 (+27%)

Pickering

  • Average home price, June 2020: $772,237 (+$74,320 or +11%)
  • Home sales, June 2020: 161 (+24%)

Thunder Bay Region

  • Average home price, June 2020: $267,537 (+$12,945 or +5%)
  • Home sales, June 2020: 269 (+23%)

Clarington

  • Average home price, June 2020: $632,112 (+$67,654 or +12%)
  • Home sales, June 2020: 240 (+22%)

Methodology

Sources for average home prices, sales and new listings:

Ajax, Aurora, Brampton, City of Toronto, Clarington, Halton Hills, Markham, Milton, Mississauga, Newmarket, Oakville, Oshawa, Pickering, Richmond Hill, Vaughan, Whitby: Toronto Regional Real Estate Board
Hamilton and Burlington: REALTORS® Association of Hamilton-BurlingtonLondon: London & St. Thomas Association of REALTORS®
Barrie: Barrie & District Association of REALTORS®
Kitchener and Waterloo: Kitchener-Waterloo Association of REALTORS®
Guelph: Guelph & District Association of REALTORS®
Niagara region, Ottawa region, Sudbury region, Thunder Bay region, Windsor-Essex region: Canadian Real Estate Association
The sales-to-new-listings ratio (SNLR) is calculated as June sales divided by new listings in June.

 

 

/by
,

Furnished apartments flood Toronto rental market as Airbnb regulations tighten

Furnished condo rental listings offered for standard 12-month leases in the Toronto region increased 52 percent in the second quarter of 2020 compared to the same time last year, according to new data released this week by Urbanation.

There were 1,877 furnished units being offered across the GTA from April to June, making up 12 percent of all condo rental listings during the quarter. The elevated figure also represented 21 percent of the increase in total condo rental listings compared to the same period a year ago.

The data from Urbanation is another clear indication that many former short-term rentals that once occupied Airbnb and similar platforms are quickly migrating to the long-term rental market.

Toronto’s short-term rental market has been hit with a one-two punch this spring as new stricter rules that require rental hosts to register with the city were coupled with ordinances prohibiting owners from renting out dwellings that are not within their principal residence.

At the same time, the COVID-19 pandemic decimated tourism and business travel and the province banned short-term rentals for all but essential uses for most of the spring.

Many experts believe that a wave of former Airbnb units hitting the long-term rental market or the resale market is one of the biggest potential sources of volatility in the Toronto region’s housing market.

“The City of Toronto estimates that there are between 8,000 and 10,000 Airbnb units that would not be compliant with new upcoming short-term rental regulations, some of which may end up on the resale market,” wrote Diana Petramala and Victoria Colantonio, researchers at Ryerson University’s Centre for Urban Research, in a note published late last week.

Beyond a pronounced rise in Toronto condo listings on the resale market this summer, there’s no direct evidence yet that a wave of former Airbnb units is hitting the market. Urbanation’s second quarter data indicates that it’s possible that owners are trying their luck with the long-term rental market first. Even then, they may not necessarily choose to sell their units if they can’t lease them out right away.

Urbanation’s report offers a clue concerning current renter demand for furnished units. According to its second quarter data, the average rental price for a furnished unit dropped 12.5 percent over the previous year to $2,492 as lease activity fell 24 percent.

Of the overall health of the Toronto region’s rental market, Urbanation President Shaun Hildebrand said it’s clearly been impacted but it remains in an “orderly” state despite the economic volatility.

“The GTA rental market has been clearly impacted by COVID-19, though the transition has been orderly so far with vacancy remaining low and rent declines being modest outside of some specific pockets in the city. Government income support has played a big role as job losses mounted and immigration dropped,” Hildebrand said in a media release.

/by

Hamilton housing prices up nearly 10 per cent despite pandemic

Aggregate price of a home increased 9.1 per cent to $592,059 in the second quarter of 2020, survey finds

Hamilton home prices are up nearly 10 per cent despite the COVID-19 pandemic, a new survey by Royal LePage has found.

According to the Royal LePage House Price Survey released Thursday, the aggregate price of a home in Hamilton increased 9.1 per cent to $592,059 in the second quarter of 2020.

Broken out by housing type, the median price of a standard two-storey home increased 9.7 per cent year-over-year to $616,992, and the median price of a bungalow increased 7.3 per cent year-over-year to $557,340. During the same period, the median price of a condominium rose 10.3 per cent to $414,110.

“I believe that interest rates are extremely low right now, which is obviously motivating people that were in the market to to seek the house they want,” said Joe Ferrante, Royal LePage State Realty broker of record.

“Are they looking possibly for a deal? A lot of people are at home right now and realizing that there are opportunities out there. But I would say the biggest thing driving it is the rates, and what’s driving the prices up is the lack of product … it’s a simple supply and demand issue.”

A buyers’ market
Ferrante said due to COVID-19, it’s a lot easier to be a buyer right now than it typically is to be a seller.

“[If] you want to buy something, you put on your mask, your gloves and off you go and you go into other people’s houses, but for sellers there’s still some reluctance there.”

“I’d say for every five people that would have potentially put their house up for sale, maybe three of them are, so that’s obviously driving up the prices.”

Home sales plunged earlier this year as the COVID-19 pandemic forced buyers to the sidelines, but they have picked up as businesses have started to reopen.
Even with the earlier plunge in prices, Ferrante said a year-on-year comparison in Hamilton shows the numbers are still relatively close.

“I think they were down by one or two percentage points for the number of sales overall, and that would be the entire Hamilton area, including Burlington,” he said.

“So it’s very, very close. Down but not substantially.”

Torontonians heading to Hamilton
Ferrante added that while there has always been healthy and steady real estate demand from Toronto, the level of interest his brokerage is seeing has significantly increased.

“The more Toronto-based buyers can work from home, the more demand there is for real estate in Hamilton,” he said.

“We are seeing young Toronto-based families who have been largely house-bound during the pandemic tell us that they need more space. Home offices and large yards quickly moved up the list of important features.”
Agents excited, but will it last?
Ferrante said it’s uncertain if the increased prices will last, and it’s clear what is the real reason for the uptick.

“I’ve got some agents that are excited but it’s too soon to tell where this is going to lead us.”

Nationally, the aggregate price of a home in Canada increased 6.8 per cent year-over-year to $673,072 in the second quarter. Once provinces allowed regular real estate activity to resume, demand surged in many markets. Inventory levels, already constrained pre-pandemic, have failed to keep pace.

/by