COVID-19 immigration to weigh upon Vancouver prices – analyst

Ephraim Vecina
Mortgage Broker News

The single most important factor that would affect Vancouver’s sky-high housing prices is the coronavirus pandemic’s impact on immigration, according to veteran markets observer Douglas Todd.

With immigration accounting for roughly 85% of Metro Vancouver’s population increase in recent years, the global travel restrictions currently in force will almost certainly take a significant chunk off this growth metric, Todd said.

“Start with the drastic drop in tourist numbers. With borders virtually closed to international travellers, investors who relied on short-term rentals like Airbnb to hold onto their properties have been left in the lurch. Many Airbnb hosts will likely be forced to sell,” Todd said. “Citizenship ceremonies have been cancelled during COVID-19 confinement and the processing of would-be permanent residents is being held back.”

Government measures to limit the impact of this slowdown might also prove insufficient.

“The BC NDP government has tried to respond … by strengthening the surcharge on foreign property buyers and by introducing the speculation and vacancy tax, which has an impact on ‘satellite families’ in which the breadwinners earn their incomes outside the country and therefore aren’t subject to Canadian income taxes,” Todd said.

And despite the optimistic post-coronavirus scenarios offered by multiple observers, predicting the long-term impact on the relationship between immigration and housing prices will be trickier.

“This pandemic is sure to affect the choices of would-be immigrants,” Todd said. “And it will also affect people who might buy urban Canadian properties with money earned offshore, which is the gasoline that has been accelerating Vancouver’s already-unaffordable housing costs.”

Copyright © 2020 Key Media

Defying COVID-19 pressures, average prices might climb

Ephraim Vecina
Mortgage Broker News

Canada’s home prices are still likely to see a 5%-10% annual gain by year-end, according to Altus Group chief economist Peter Norman.

In an interview with The Financial Post, Norman said that despite the COVID-19 travel restrictions that have ground the entry of wealthy foreign homebuyers to a halt, housing will return to an upward trajectory in late 2020.

Norman acknowledged the fluidity of the situation, saying that the coronavirus might still mean worse times ahead for the market.

“Context is important for everything, and there is a lot in motion right now. It’s a difficult time to be forecasting,” Norman said. “Certainly, we see migration [being] really weak this year, and that has been a macro driver for housing in general.”

The pressures upon Canadian demographics and the economy are expected to persist throughout the second quarter and even well into the third quarter, with data in the April-June period likely to be “pretty dismal.”

However, Norman said that the housing sector’s fundamentals will pave the way for its speedy recovery once the crisis has passed.

“Don’t underestimate how fast things may come back,” Norman said. “We are not expecting prices to go down a lot. … It’s not a negative spiral; it’s not a housing crash.”

And even though prices will be “all over the map” for the next few quarters, “by the time we get to the end of the year and momentum is coming back, with pent-up demand from the downtime and supply coming back on stream in the resale market, I expect we’ll see a lot of activity,” Norman said.

Copyright © 2020 Key Media

The moving experience has changed exponentially

Connie Adair
REM

Moving is stressful at the best of times, but for residential and business clients who have the added pressure of worrying about COVID-19 and associated restrictions, it can take a toll.

Being able to relate what the moving experience might look like, and how to go about “normal” recommendations such as getting three quotes, can offer some reassurance.

As with everything else, the moving experience has changed exponentially. For one thing, the DIY move is no more. With social distancing requirements, people no longer have an option, says John Prittie, president and CEO of Two Men and a Truck Canada.

People would normally set up an appointment for a moving company to do a walk through in order to get an estimate and figure out details such as the number of trucks, movers and time required for the job.

Now, Prittie says his company is doing virtual tours and then creating estimates based on those tours. Even though they are an essential service, their office is closed to walk-in traffic. A sign on the door directs customers to call to order packing supplies and arrange a move. Free deliveries are made to a porch or garage and estimates can be done online.

A couple of days before the move, Two Men and a Truck staff will touch base with the home or business owner to ensure no one in the household has travelled or is in quarantine. The company also asks that only one person be home during the move to make it a mostly contactless experience.

Movers and drivers are checked out before they head out for a job, and they are equipped with face masks. They carry hand sanitizers in their pockets and there are disinfectant wipes in their trucks, Prittie says.

Home and business owners are asked to respect the two-meter social distancing practice, and to make a washroom, along with paper towels and soap, available for movers so they can wash their hands frequently.

Prittie says homeowners should clearly label boxes so movers don’t have to interact with anyone at the new location.

Two Men and A Truck is limiting the number of movers per truck to two and is staggering arrival times for movers/trucks so they don’t overlap. The same two men will work in each truck rather than rotating. Employees are being asked to wash their uniforms every day and to go home right after work and stay there.

When recommending or hiring a mover, Prittie says it’s important to remember all moving companies are not created equal. Some movers may offer a price that seems less expensive, but charge extra for everything, from the number of steps movers have to climb, to surcharges for heavy objects. Look for a company that has a per hour price that’s all inclusive, he says. He also suggests looking for a company that hires, trains and pays benefits to its employees and has appropriate insurance.

To narrow the search for three companies to provide quotes for comparison, he suggests contacting the Canadian Association of Movers for a list of reputable movers.

Larger, more successful moving companies should have online estimate generating systems.

“We have built out our website so people can soft book,” he says. The home or business owner fills out an inventory of everything that needs to be moved and the system will generate a cost and time estimate.”

He says to keep in mind the old saying, “garbage in, garbage out. You have to put in the proper information – make full disclosure – to get an accurate price.”

Along with residential moving, it’s a busy time for small businesses that are moving to new locations, putting their businesses into storage or reconfiguring spaces. So it helps if you hire a full-service moving company that offers storage for businesses that need facilities until they can get back to business. This service is also handy for military personnel redeployed to other areas or overseas, or people who have to move temporarily to smaller quarters to weather the COVID-19 storm.

Two Men and A Truck was founded by Mary Ellen Sheets of Michigan. Her two sons, Jon and Brig Sorber (the stick figures on the well-known logo) drove the first beat-up truck to make money for school, Prittie says. When they returned to college, business kept coming and Sheets hired more people. Now 30 years later it’s one of the largest franchises, with 2,800 trucks in 380 locations worldwide.

© 1989-2020 REM Real Estate Magazine

Listings mirror sales by dropping in the near term

Ephraim Vecina
Mortgage Broker News

A vital component of the Canadian housing sector’s post-coronavirus recovery phase is homeowners refraining from selling their assets, according to TD Economics.

“Absolutely key to our forecasts is the assumption that listings mirror sales by dropping substantially in the near term and recovering gradually thereafter,” said TD economist Rishi Sondhi. “This puts a floor on prices and sustains relatively tight supply-demand balances across most markets, allowing for the resumption of positive price growth as provincial economies are re-opened.”

Such estimates have to be tempered by the reality of dwindling budgets forcing some homeowners to sell in a suboptimal market environment, however.

“Indeed, we anticipate the gap between listings and sales to grow in coming months, as financial stresses force some homeowners to list their properties,” Sondhi said.

Sales fell by 14.3% month-over-month, while new listings declined by 12.5% during the same period, according to March data from the Canadian Real Estate Association.

The Teranet–National Bank of Canada House Price Index predicted that this trend would only intensify, especially in traditional hotspots like Toronto and Vancouver, over the next few months.

“At the national level, resale home prices were still gaining momentum in March. But this is based on home sales reported in land registries,” Teranet said. “The most important real estate boards all mentioned a clear break of activity during the second half of March due to measures to contain propagation of COVID-19.”

On the other hand, homeowners might find a measure of relief in “a jobs market that will likely improve starting next month,” Sondhi said. “Next year should see much stronger activity, as markets benefit from significant pent-up demand and historically low interest rates.”

Copyright © 2020 Key Media

The impact of the coronavirus outbreak on the value of Canadian housing will fully manifest by next year

Ephraim Vecina
Mortgage Broker News

The impact of the coronavirus outbreak on the value of Canadian housing will fully manifest by next year, according to economists with the Canadian Imperial Bank of Commerce (CIBC).

“The expected volatility in overall economic activity in the coming quarters will not skip the resale market,” said CIBC economists Benjamin Tal and Katherine Judge in a report last week. “By 2021, as the economics of housing returns to fundamentals, we expect an array of factors to result in a weaker market with some downward pressure on prices.”

Among the most influential of these factors is the already-weakening employment sector, latest Statistics Canada figures indicated.

The national market suffered a 5.3% decline from February to March, representing more than 1 million lost jobs. Meanwhile, the unemployment rate rose by a record high 2.2% monthly, ending up at 7.8%.

Tal and Judge said that this trend will almost certainly lead to much slower demand. Rapidly-depleting budgets might also force some homeowners to sell in a less-than-ideal market environment, The Financial Post reported.

“Overall, as the fog clears, we expect to see average prices 5%-10% lower relative to 2019 levels, with high-cost units in the high-rise segment of the market seeing the most notable price declines,” the economists said. “The cumulative damage suggests that when we recover, potentially at one point in 2021, we will be recovering into recessionary conditions.”

Copyright © 2020 Key Media

Market growth and activity in the Canadian housing sector will trend downward this year

Ephraim Vecina
Mortgage Broker News

Market growth and activity in the Canadian housing sector will trend downward this year amid the sustained economic impact of the coronavirus outbreak, according to a recent study by Moody’s Analytics.

In its “Canada Housing Market Outlook: Tough Times Ahead” report released last month, Moody’s said that any pre-pandemic forecasts will have to be essentially scrapped.

“Shelter-in-place orders and social distancing have brought house hunting to a virtual halt while layoffs, the collapse in oil prices, and the plunge in equity prices have kept prospective buyers at bay,” Moody’s said. “The COVID-19 pandemic comes at a terrible time for Canada’s economy. Trade and investment were already struggling to make gains as the U.S.-China trade war and Brexit weighed on global demand. The pandemic soured this already-weak outlook almost overnight.”

With a clear majority of Canadians preparing themselves for the economy to worsen over the next few months, weaker consumer confidence and purchasing power will affect some regions more than others.

“The worst effects will be felt in regions that rely disproportionately on the leisure/hospitality, trade and energy industries,” Moody’s said, pointing at British Columbia and the Prairie provinces, in particular.

The report also said that these events will most likely aggravate other worrying trends.

On the national level, “the mortgage debt service ratio tracked by Statistics Canada increased from 6.4% of disposable income in mid-2016 to 6.8% in late 2019,” Moody’s said. “Consumer debt performance has also shown some signs of strain. In particular, bankruptcy filings and insolvency proposals have risen.”

Copyright © 2020 Key Media

Point2 Homes survey shows realtors very worried

Clayton Jarvis
Mortgage Broker News

In news that will do little to calm the nerves of antsy mortgage professionals, data released by Point2 Homes on Monday finds sentiment among real estate agents around COVID-19’s impact on their businesses to be one of pessimism and extreme concern.

The survey, which follows the far more optimistic polling of homebuyer sentiment Point2 Homes released on April 9, collected responses from 369 agents between April 7 and 14. There’s little potential for shock in some of the data, such as 86% of respondents noticing at least “quite a significant drop” in homebuyer interest. But the feelings realtors expressed around what business will look like once COVID-19 passes may take some by surprise.

When asked about their level of concern over the impact of the outbreak on their business, 97% of realtors said they are at least “somewhat worried”, but the vast majority are either “very worried and concerned” (41%) or “extremely anxious” (34%). Only 1% of realtors said they are not concerned by COVID-19’s impact “at all”.

Nick MacDonald of RE/MAX Charlottetown Realty says the negative sentiments aren’t uncommon among agents in Prince Edward Island.

“The feeling among my colleagues is generally the same,” he says. “It’s been a hilly and rocky ride for just over two months now on PEI. We’re all taking it day by day, and doing our best to support our clients, colleagues and communities.”

Vanessa Roman of Pemberton Homes in Victoria is focusing more on the cyclical aspects of selling real estate.

“As agents, we constantly face the peaks and valleys of the market conditions. We are accustomed to adapting our businesses accordingly,” she says.

The responses were grim when agents were asked to estimate the extent of the financial damage COVID-19 will ultimately do to their incomes. Over 90% of respondents are expecting losses of at least 25%, with 29% of that group projecting losses of more than 75%.

MacDonald falls into the more optimistic category, taking the increase the Island is seeing in the number of Canadians coming from out of province as a sign of positive things to come.

“That demand should help the market recover somewhat,” he says.

The remaining questions provide a somewhat muddled view of the future. Over 60% of agents say they are expecting a significant negative impact on the real estate market in general (34% expect slightly negative effects), but 80% think the post-lockdown recovery will take 12 months or less. 39% of realtors surveyed feel the recovery will be complete in three to six months. But a not insignificant 17% say the recovery could take up to two years.

Roman, for her part, is looking forward to a relatively smooth return to business as usual.

“While we certainly have had a dramatic decline in sales since the pandemic began, Victoria remains a desirable place to call home, with strong industries for job creation,” she says. “Our market will recover once the pandemic ends.”

Copyright © 2020 Key Media

Last month’s home sales were 62.7 per cent below the 10-year April sales average

Scott Brown
The Province

COVID-19 social-distancing measures led to April home sales dropping to a 38-year low in Metro Vancouver, according to the Real Estate Board of Greater Vancouver.

April home sales totalled 1,109, which is a 39.5 per cent decrease from the 1,829 sales recorded in the same month last year and a 56.1 per cent decrease from the 2,524 homes sold in March.

It was the lowest total for the month since 1982 and 62.7 per cent below the 10-year April sales average.

“Predictably, the number of home sales and listings declined in April given the physical-distancing measures in place,” Colette Gerber, the real estate board’s president-elect, said.

“People are, however, adapting. They’re working with their realtors to get information, advice and to explore their options so that they’re best-positioned in the market during and after this pandemic.”

Despite the slow market, home prices held steady in April, with the composite benchmark price for all residential properties up 2.5 per cent from a year earlier, and up 0.2 per cent from March, at $1.04 million.

The April benchmark price for a detached home in Metro is $1.46 million, up 2.3 per cent over last year, while apartments are at $685,500, a 2.7 per cent increase over April 2019, and attached homes sit at $795,800, up 2.8 per cent.

© 2020 Postmedia Network Inc.

Information on REBGV activities and accomplishments

REBGV

Our annual report is dedicated to informing you on the activities and accomplishments of your professional association over the last year.

Last year was the REBGV’s 100th year in business. While 2019 was an occasion to celebrate our centennial and honour our history, our primary focus was on planning our future.

We identified and delivered robust new data tools to help you better serve your clients. We partnered with boards across the country to assess what the future of MLS® should look like.

We engaged the next generation of leaders in our membership on how to advance professionalism in real estate.

We began a rigorous succession planning process to help us identify and select REBGV’s next generation of leaders. And we reimagined a public relations strategy that we believe will elevate the profile of REALTORS® and our Board.

Now four months into a new year, our personal and professional lives have been upended by a public health crisis. During this crisis, your Board is working to responsibly manage our association and support you through this challenging period.

Explore this annual report to learn more about the actions your Board has taken over the last year to provide you with the best possible products and services.

Toronto homes sales declined 67%

other

With provincial and public health safety measures in full effect, COVID-19 expectedly slowed down housing market activity across the Toronto Region this April. Home sales across the region declined 67 per cent, with 2,975 residential transactions taking place throughout the month, according to the latest report from the Toronto Regional Real Estate Board (TRREB). TRREB president Michael Collins noted however, that weekday sales continued at a steady pace, with an average of 130 transactions taking place daily. 

The number of new listings declined 64 per cent annually – a similar rate of decline as home sales – marking a significant departure from spring market conditions typically expected at this time of year. 

Toronto Region Housing Settled into Balanced Market Territory in April

With home sales and new listings dropping at a similar rate, the housing market remained squarely in balanced market territory, ending the month with a sales-to-new-listings (SNLR) ratio of 48 per cent. SNLR is a measure of market competition that is determined by dividing the number of sales by the number of new listings. A figure between 40 per cent – 60 per cent indicates a balanced market, while above and below that threshold reflect sellers’ and buyers’ markets, respectively. 

Taking a closer look at specific regions reveals that these market dynamics remain in play – the SNLR for the City of Toronto (47 per cent) York Region (44 per cent), Durham Region (58 per cent), Peel Region (44 per cent), and Halton Region (54 per cent) all reflect balanced market conditions in April. 

Average Home Prices Rise in Most Toronto Regions; Decline in the City of Toronto

Average home prices across the Toronto Region as a whole remained flat compared to April 2019, ending the month at $821,293. Detached houses and condo apartment average prices experienced annual declines of 3.5 and 3.6 per cent each, while average prices for semi-detached houses and condo townhouses grew more than the overall annual rate of average price growth across TRREB, at 7 per cent and 3.8 per cent respectively. While COVID-19 has slowed the market down considerably, TRREB’s chief market analyst Jason Mercer noted that although prices are now lower than the market peak in March,“there has continued to be enough active buyers relative to available listings to keep prices in line with last year’s levels.” 

Average home prices for all home types grew 6.6 per cent y-o-y in Peel Region ($802,155), 6.1 per cent y-o-y in York Region ($968,499), and 1.8 per cent annually in Halton Region ($870,966). Average home prices remained unchanged in Durham Region at $612,563. 

In the City of Toronto however, average home prices across all property types dipped by 2.5 per cent to $881,424. The most pronounced impact was felt in the detached home segment, where prices declined 7.8 per cent y-o-y to $1,249,730. Condo apartments experienced a 4 per cent drop in average prices annually, ending the month at $612,300. However, average prices for semi-detached houses and condo townhouses increased by 4.2 per cent to $1,096,437, and 6.2 per cent to $697,611, respectively.

Check out the infographics below to see how sales and prices have increased across all home types for TRREB and the City of Toronto in April:

© 2015 – 2020 Zoocasa Realty Inc., Brokerage