Federal budget: Will it provide any relief for Canadian homeowners and buyers?

Fergal McAlinden
CMP

The announcement contained protections for mortgage holders and updates on the tax-free first-home savings account

Amid a flurry of new policies in Tuesday’s federal budget were a couple of announcements that may have caused mortgage professionals to sit up and take note.

One was the promise of a new code of conduct to help existing mortgage borrowers, a set of guidelines that would protect Canadians who are facing “exceptional circumstances” related to meeting their mortgage payments.

That measure would require lenders to provide Canadians with access to appropriate relief options including extended amortizations, amended payment schedules, or the authorization of lump-sum payments, with amortization extension periods past the current 25-year limit also on the table.

Another noteworthy takeaway from the budget was the launch of the tax-free first home savings account, aimed at improving the affordability crisis facing new entrants to Canada’s mortgage market.

Having first announced the scheme in last year’s budget, the government revealed that it would be available to borrowers as of April 1, giving them the option to save up to $40,000 on a tax-free basis to put towards a down payment on their home.

Tuesday’s budget billed the scheme as a “tax-free in; tax-free out” plan that would feature tax-deductible contributions and non-taxable withdrawals to purchase a first home.

The measure for new homebuyers was described by Alexandre Laurin (pictured top), director of research at the C.D. Howe Institute thinktank, as a “very generous tax shelter” without an equivalent in Canada.

“It’s money that will never be taxed, and that’s the only shelter in Canada that has this feature,” he told Canadian Mortgage Professional. “It’s the only one where you don’t pay taxes going in, but you also don’t pay taxes going out.

“The TFSA [tax-free savings account], you pay taxes going in – it’s after-tax money, but not this one. And if you invest in housing, your principal residence is not going to be taxed either. So it is a very generous tax incentive where you can earn income completely untaxed.”

How fiscally prudent was the budget?

Economic observers were watching closely to see how the Liberal administration and federal finance minister Chrystia Freeland would achieve a tricky balance between addressing the overall affordability crisis facing Canadians and demonstrating fiscal prudence in an uncertain economic climate.

Laurin said the government had failed to strike that sweet spot, describing the budget as a plan whose theme was “borrowing to spend again and again and again.”

According to the Institute’s research, every successive budget and fiscal update since 2019 has featured additional spending, he noted, with higher borrowing factored in until 2024-25 despite the fact that COVID relief measures are expected to have been phased out completely by then.

“It’s really a staggering amount of new spending since 2019, just before the pandemic,” he said. “Our view hasn’t changed on this: it’s not prudent [on a macro perspective].

“It’s also not fair to future generations. It’s not fair because ultimately, there are deficits all the way through to 2027-28, the end of the projection period.”

Some of that spending will be recouped through plans to raise billions of dollars from banks and insurance companies through tax rule changes for dividends obtained from Canadian firms.

New protections “good news” for mortgage holders

Dominion Lending Centres (DLC) economist Sherry Cooper said the budget contained little in the way of measures to improve housing affordability for Canadians, although she highlighted the code of conduct as one to watch.

“We will see what OSFI [the Office of the Superintendent of Financial Institutions, Canada’s banking regulator] has to say about this, as the details are always of paramount importance,” she said.

Cooper also emphasized the budget’s reduction of the legal limit on interest rates, with the government intending to lower the criminal rate of interest from 47% to 35%.

Overall, the government’s recognition of the challenges facing Canadians on variable-rate mortgages who have seen their payments and interest rates skyrocket over the last year is good news, Cooper said.

“If the banks can extend remaining amortizations when borrowers renew, the pressure on their pocketbooks will be markedly lower,” she said.

Copyright © 1996-2023 KM Business Information Canada Ltd.

Scotiabank’s Holt blasts federal spending plans

Ephraim Vecina
CMP

Economist describes “divisive” budget as “an assault on relatively wealthy folks”

Through its latest budget, the federal government reiterated its commitment to, among other things, improving housing access and affordability across Canada – but Derek Holt of Scotiabank condemned Budget 2023 as a “divisive” plan that represents “an assault on relatively wealthy folks.”

With the federal budget outlining a net total of $43 billion in spending over six years, Holt – the banking giant’s vice president and head of capital markets – said that part of the cost is likely to be defrayed by approximately $22 billion in internal savings and taxes. However, half of these savings and taxes will materialize from tax hikes on high-earning Canadians and large corporations.

“We have the most divisive inclusive budget I think I’ve ever seen,” Holt said. “It picks winners and losers by heaping $21 billion of annual subsidies on ‘clean’ stuff… Politically saleable things that the Biden administration is subsidizing by even more and so Canada has to sheepishly follow. Sectors that loosely claim to be good for the environment over time.”

Holt said that the focus on such sectors is “an overt example of tilting the playing field and making every other taxpayer pay for it either at present or in future” – a misplaced focus that will actually end up driving more costly “macroeconomic distortions”.

In particular, Holt slammed Budget 2023’s language on housing as “confusing”.

“The BoC is trying to contain inflationary pressures and soften previously raging house prices,” Holt said. “The Feds have thrown open the immigration doors into a market with no supply while another tax subsidy to housing starts up on [April 1].”

Holt warned that given these trends, Canadian housing is likely to enter yet another phase of volatility “after a temporary retrenchment – and there goes the BoC’s efforts.”

“Governments did a fantastic job in the early days of the pandemic,” Holt added. “The problem is that they are now addicted to high spending and delivering divisive jabs at certain interests. Nothing is being done about productivity and competitiveness pressures that are mounting year by year. Big spending, big deficits, big debt, high taxes, high inflation, and bond market challenges are not the path to prosperity.”

Copyright © 1996-2023 KM Business Information Canada Ltd.

These Canadian housing markets have home prices below the national average

Hilary Punchard
CTV News

Home prices have fallen below the national average in 14-out-of-20 regional housing markets, according to a report by Zoocasa.

In a release on Thursday, the real estate brokerage said it analyzed 20 housing regions across Canada and found 14 markets where the average home prices fell by more than $25,000.

Saint John, N.B., took the top place for the most affordable region, with an average home price of $268,400.

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The next most affordable city to buy a home in is Regina ($310,200), followed by Quebec CMA (census metropolitan area, $315,300.)

Earlier this month, the Canadian Real Estate Association reported the average price of a home in Canada was $662,437 in February.

While the national home price is down 18.9 per cent from the all-time record posted in February 2022, it’s still up more than $50,000 from January.

PROPERTIES IN THE MOST AFFORDABLE MARKETS

If you were looking to buy a home in Canada’s most affordable market, you could potentially have at least two bedrooms for less than $300,000.

For example, a house currently listed in Saint John has a price tag of $259,900 with three bedrooms, two baths, a fireplace and a view of the Saint John River.

Another home in one of Canada’s most affordable markets has two bedrooms, and four baths for $299,990. The Regina house listing also advertises a soaker tub, double car garage and a backyard that looks bigger than many parks in Toronto.

A home for sale in Regina. (Re/Max Crown Real Estate)

MOST EXPENSIVE MARKETS

The most expensive real estate markets above the national average won’t take most avid housing observers by surprise.

There are only two major regional housing markets with average home prices above $1 million.

The Greater Vancouver Area takes the cake for the highest home price above the national average ($1,123,400), which is almost double the Canadian average.

The Greater Toronto Area was close behind in February with an average price of $1,091,300, and while that might seem like a lot, it’s still 17.7 per cent lower than prices from the same time a year ago.

© 2023 All rights reserved.

CMHC amends ‘illogical’ foreign homebuyer ban to help boost housing supply growth

Denise Paglinawan
Financial Post

Changes will allow non-Canadians to purchase a residential property in certain circumstances

Changes have been made to the foreign homebuyer ban to ease some restrictions on purchasing. Photo by Getty Images/iStockphoto

The federal housing minister has made amendments to regulations on foreign purchases of residential property, saying the move will give more flexibility to newcomers and businesses looking to add to Canada’s housing supply.

The Canada Mortgage and Housing Corporation on March 27 announced the changes, which include increasing the corporation foreign control threshold and enabling those with work permits to purchase a home.

“These amendments will further support individuals and families seeking to build a life in Canada by pursuing home ownership in their communities sooner and address housing supply issues,” the CMHC said in a press release.

The foreign homebuyer ban, which took effect on Jan. 1, blocks non-Canadians from buying residential property — either directly or indirectly — for two years. The ban carries the potential for $10,000 fines for violations.

Officially known as the Prohibition on the Purchase of Residential Property by Non-Canadians Act, the ban was meant to take some pressure off home prices amid an affordability crisis only made worse by the rising cost of living brought on by inflation and elevated interest rates.

The changes to the regulations, which came into force on March 27, will expand exceptions to allow non-Canadians to purchase a residential property in certain circumstances, the government said.

“These amendments strike the right balance in ensuring that housing is used to house those living in Canada, rather than a speculative investment by foreign investors,” said Ahmed Hussen, Minister of Housing and Diversity and Inclusion.

One of the amendments introduced will allow those holding a work permit or who are authorized to work in Canada to purchase residential property while working here.

Work permit holders who have not purchased more than one residential property are now eligible if they have 183 days or more of validity remaining on their work permit or work authorization at time of purchase, it said. This will repeal current provisions on tax filings and previous work experience in Canada.

The existing provision on vacant land will also be repealed and the ban will no longer apply to all lands zoned for residential and mixed use. This means non-Canadians can now purchase vacant land zoned for residential and mixed use for any purpose, including residential development.

There will also be an exception allowing non-Canadians to purchase residential property for the purpose of development. This also extends the exception currently applicable to publicly traded corporations to publicly traded entities formed under the laws of Canada or a province and controlled by a non-Canadian, the CMHC said.

Lastly, the threshold of corporation foreign control has been increased to 10 per cent from from three per cent. This applies to privately held corporations or privately held entities formed under the laws of Canada or a province and controlled by a non-Canadian. The government said this aligns with the definition of “specified Canadian Corporation” in the Underused Housing Tax Act.

Mortgage expert Rob McLister said the foreign buyer ban was impulsively rushed into law without due consideration and will barely move the needle on housing affordability, with the long list of exceptions and low foreign ownership to begin with.

“This whole ban is so loop-holed and illogical that its political impetus could not be more transparent,” McLister said, adding that policymakers should incentivize enough construction to house “the hundreds of thousands of immigrants they keep ushering in.”

© 2023 Financial Post

Bank of Canada ready to act against banking turmoil, deputy governor Toni Gravelle says

Stephanie Hughes
Financial Post

Silicon Valley Bank crisis will factor in the central bank’s next monetary policy report

The Bank of Canada in Ottawa. Photo by David Kawai/Bloomberg files

Bank of Canada deputy governor Toni Gravelle said the central bank stands “ready to act” against a market-wide financial sector stress, making a point to calm any nerves that remain frayed from the turmoil that came in the wake of the collapse of Silicon Valley Bank almost three weeks ago.

Gravelle told a gathering of financial professionals in Montreal that it is the Bank of Canada’s mission to keep the financial system stable, and that policymakers are confident that banks are much more resilient now than they were during the global financial crisis in 2008.

“The bank’s mandate to promote the stability of the financial system means that we’re ready to act in the event of severe market-wide stress and provide liquidity support to the financial system,” Gravelle said in a speech at the National Bank Financial Services conference on March 29.

“We did so during the 2008–09 global financial crisis, and we did so again during the critical market disruptions that occurred at the outset of the COVID-19 pandemic,” he added.

Silicon Valley Bank collapsed on March 10 following a run on deposits, triggering ripple effects that shook regional banks across the United States, led to the subsequent failure of New York-based Signature Bank, and contributed to a crisis of confidence in Switzerland that caused authorities to force a shot-gun sale of Credit Suisse Group AG’s to its larger domestic rival, UBS Group AG.

The turmoil spooked investors around the world and even weighed on Canadian bank stocks, despite Canada’s reputation for having one of the soundest financial systems in the world.

Authorities appear to have kept the troubles of a handful of banks from turning into something more. Gravelle said regulators learned their lesson after the global financial crisis 15 years ago. He pointed to global banking reforms that have substantially increased the capital and liquidity buffers to safeguard against financial system shocks.

“Canadian banks weathered the global financial crisis well, and, since then, their resilience has been further strengthened with the implementation of new, higher global standards,” Gravelle said.

Still, Gravelle said the Bank of Canada will be keeping an eye on the Silicon Valley Bank crisis and global banking stresses. He said the crisis will factor in the central bank’s next monetary policy report on April 12, when policymakers will also decide whether to increase interest rates and leave them unchanged for a second consecutive meeting.

The banking crisis probably won’t be a major factor in the policy decision, assuming things stay calm. Jon Hountalas, head of Canadian banking at Canadian Imperial Bank of Commerce, downplayed concerns of a spillover effects from the U.S. banking crisis during his own fireside chat at the conference.

“It’s so far pretty restricted to the U.S.,” said Hountalas, adding the episode raised questions with his team on how things could have changed after the crisis, but it ended up being a non-issue. “We were preparing for things but nothing came.”

A new detail from Gravelle’s speech was an anticipated end date for the Bank of Canada’s quantitative tightening — the policy of allowing assets to roll off the balance sheet when they mature, rather than replacing them.

Gravelle said the Bank of Canada estimates that it will shrunk its holdings to an appropriate level between the end of 2024 and the first half of 2025. He added that the timing could slightly shift as the size of other parts on the central bank’s balance sheet change over time.

During the pandemic, the central bank undertook the most dramatic bond purchasing program in its history, piling up about $440 billion in government bonds at the peak.

© 2023 Financial Post

BC needs significantly accelerated housing construction, says real estate board

Ephraim Vecina
CMP

The next half-decade will be a crucial period for the province’s housing supply

To compensate for further depletion of housing supply, the rate of housing construction in British Columbia needs to increase by at least 25% above its historical average level over the next five years, according to the BC Real Estate Association.

This accelerated pace will complete an unprecedented 43,000 new homes per year during that half-decade period. This volume will help offset the likely surge in demand that will come about due to the federal government’s immigration targets over the next few years, the BCREA said.

“BC will welcome an estimated 217,500 new permanent residents from 2023 to 2025 or 100,500 more new permanent residents than would be expected based on historical average immigration levels,” the BCREA said. “This translates to a 20,500-unit increase in housing demand from new permanent residents.”

The BCREA expressed scepticism towards the foreign buyer ban’s ability to lower home prices during its two-year effectivity.

“The demand impact of the increase in immigration is approximately five times as large as the foreign buyers’ ban and is estimated to place significant upward pressure on home prices,” the BCREA said. “As the population continues to grow and global migration patterns persist, it is essential to create policies and programs that support and welcome immigrants while addressing the consequent pressures on an already stressed housing market.”

Brendon Ogmundson, chief economist at the BCREA, said that lower prices will help income growth catch up to housing values, ultimately fuelling more sustainable market conditions.

“In our simulations, an appropriate supply response can offset the negative impact on affordability from an immigration-driven demand shock – and if sustained, can achieve a permanent improvement in affordability in BC,” Ogmundson said.

Copyright © 1996-2023 KM Business Information Canada Ltd.

Unprecedented construction needed in B.C. to offset record immigration: Report

The Canadian Press
The Vancouver Sun

The B.C. Real Estate Association says the province must build 25 per cent more new homes than usual for the next five years to address deteriorating housing affordability.

Houses and townhouses are seen in an aerial view in Langley, B.C., on Wednesday May 16, 2018. A new report says home construction in British Columbia will need to quickly rise to unprecedented levels to offset the impact of record immigration on the housing market.THE CANADIAN PRESS/Darryl Dyck Photo by DARRYL DYCK /THE CANADIAN PRESS

Home construction in British Columbia will need to rise to unprecedented levels to offset the impact of record immigration on the housing market, the B.C. Real Estate Association said in a new report on Tuesday.

The province must build 25 per cent more new homes than usual for the next five years to address deteriorating housing affordability.

The association said construction needs to be ramped up to a record 43,000 housing completions a year for the next five years to counteract rapid population growth.

“While this pace of completions is close to that achieved from 2020 and 2021, higher interest rates and weaker market conditions make that rate of completion less likely,” the association said.

Lowering price growth so incomes can catch up to prices is integral to improving housing affordability in B.C., said Brendon Ogmundson, chief economist with BCREA.

He said increasing supply would ease the upward pressure on housing prices from an immigration-driven demand shock and if sustained, help improve overall affordability.

B.C. is expected to welcome an estimated 217,500 new permanent residents from 2023 to 2025, nearly double the historical average immigration levels, the

In that time, two federal government policies — the ban on foreign homebuyers and record-high immigration targets — will be the key factors shaping housing demand in B.C., the association said.

Bill C-19, which implemented a two-year ban on home sales to non-Canadian buyers, will help offset some of the demand for housing, said BCREA, but not nearly enough compared with the expected demand from new immigrants.

The association said there is “weak evidence” that the ban will achieve its objective of lowering home prices given that a relatively small number of transactions involve purely foreign buyers.

“The potential impact of the increase in immigration is much more significant than the decline in sales due to the prohibition on foreign buyers,” the report said.

BCREA said an “unfortunate unintended consequence” of the ban on foreign homebuyers is that financing new home construction is more difficult without access to international capital markets.

© 2023 Vancouver Sun

‘Rising economic uncertainty’ facing Canada: RBC

Miko Pagaduan
CMP

Despite resilience, headwinds from aggressive rate increases are gathering

The announcement of Canada’s federal budget will take place against a backdrop of “rising economic uncertainty” with the impact of interest rate increases becoming increasingly clear, according to new analysis from RBC.

A report by economists Nathan Janzen and Abbey Xu said that on the positive side, Statistics Canada’s advance estimate for January GDP showed a 0.3% increase from December, and February’s labor market report suggested output likely continued to rise in that month as well. The manufacturing sector has been a bright spot, with January sales surging higher, and retail sales also rose 1.4% (1.5% excluding price impacts) in January.

However, there are also areas of weakness in the economy. The housing market continues to soften, with new construction declining in eight of the last nine months, and home prices continuing to edge lower. The impacts of interest rates have lagged behind the Bank of Canada’s hikes but are increasingly weighing on household purchasing power as loans are renewed at higher rates.

Climate policy will be a key focus of the budget, particularly in response to the US Inflation Reduction Act. While an overheating economy has pushed inflation higher and boosted government revenues, plans to return the budget to balance remain aspirational at best. Fiscal tracking suggests a smaller budget deficit for fiscal 2022/23 than the $36 billion shortfall expected in the Fall Economic Statement, but no return to balance until 2027/28.

Some targeted relief to help vulnerable groups cope with higher living costs is expected, but Freeland has cautioned against excessive spending that could add “fuel to the fire of inflation.” With rising economic uncertainty, the federal budget will be closely watched as a key indicator of Canada’s economic future.

Copyright © 1996-2023 KM Business Information Canada Ltd.

BC real estate investment deals hit $3.9 billion in 2022

Peter Mitham
Western Investor

Rising interest rates dampened activity, but investors are returning as 2023 hits its stride

Meadow Crossing in Burnaby was the most expensive industrial property to change hands last year, with Beedie Group purchasing it from Hungerford Properties in December for $83 million.Hungerford Properties

B.C. real estate investment totalled $3.9 billion in 2022, despite a sharp drop in the second half of the year as rising interest rates put the brakes on deal-making.

Deal value for the year was down 26 per cent from 2021 but represented an ongoing rebound from 2020, Avison Young reported. Avison Young tracks office, industrial and retail sales valued at $5 million or more. It does not include land deals among investment sales, which would add a further $6.6 billion to the tally.

While the aggregate value of investment deals was among the lowest of the past decade, the number of deals done was the second-highest for the period as a lack of available product meant smaller transactions dominated.

Many of those were driven by private investors, who accounted for 92% of all capital investment in B.C. real estate in 2022.

“The institutions are basically nowhere to be found. And that’s why the deal sizes are smaller,” Bob Levine, principal, capital markets with Avison Young in Vancouver, said.

Transactions totalled 253 for the year, with two-thirds taking place in the first half. While this pointed to strong momentum as the year began, exceeding 2021 in both value and volume, the series of sharp interest rate hikes that followed pushed down both measures.

It also kept institutional investors, already scarce in the first half of the year, on the sidelines through the second.

“The pension funds in Canada … they have certain percentage allocations to real estate,” he said. “As the value of stocks and bonds dropped, which they did substantially last year, the real estate tends to go up in percentage.”

This meant many were less willing to buy and more likely to shed assets last year. Levine doesn’t expect this to change in 2023.

“Rates are still high, stocks are still volatile,” he said.

A lack of deals has also meant uncertainties around valuations on top of the challenge of determining an accurate purchase and sale price for assets. Without a solid measure on price, institutional investors fear buying a property at one price only to find their appraiser comes in with a lower value a few months after purchase during the annual appraisal.

Ultimately, transactions for the year reflected less an appetite for opportunities than a strategic outlook that prepared for growth following the period of adjustment ushered in by interest rate hikes. This was as true for industrial properties, which are perennially in short supply, and residential land.

“The industrial market benefited most from private investors in 2022,” Avison Young noted, with private buyers accounting for 90 per cent of the $1.95 billion in industrial deals that occurred in B.C. last year. “As pricing expectations fluctuated throughout the year, some groups were more willing to deploy their capital than others who adopted a more conservative strategy.”

The largest deal was Beedie’s purchase of 7303 Meadow Avenue in Burnaby from Hungerford Properties in December for $83 million, a late-breaking transaction that also served as a vote of confidence in the resilience of the market for long-term investors. 

Demand for residential land remained high, with vendors of these parcels seeing the greatest uptake.

“Residential land vendors accounted for the highest level of completed transactions, accounting for 39% of all deals in 2022,” Avison Young reported.

The purchases reflect the ongoing shortage of housing in B.C. and are primarily for market condos rather than rentals.

“We certainly see developers of residential, particularly in the suburbs, really trying to position for new projects,” Levine said.

However, many vendors held back as the market entered what many have described as a price-discovery phase. While financing costs put downward pressure on pricing, the fundamental strength of demand for assets played a supporting role that put the spotlight on the duration of the rate hikes rather than the intensity.

“Some groups were hesitant to take properties to the open market given the uncertainty with the values that could be achieved, particularly in the latter half of the year,” Avison Young said. “While some vendors forged through with transactions, others remained on the sidelines trying to wait out the storm and internally reassess the changing landscape.”

While the Bank of Canada signalled in January that it was ready to pause, and held off on any rate increase at its most recent announcement on Mar. 8, the latest increase in the U.S. Federal Reserve’s policy rate makes further increases likely given the deep symbiotic relationship of the two countries’ economies.

“When the Fed pushes up rates, it tends to put pressure through exchange rates, it puts pressure on all the other central banks to consider what they’re doing,” Nick Axford, chief economist with Avison Young in London, England, said.

But he said the moves by the Fed, especially against the backdrop of the collapse of Silicon Valley Bank and others in the U.S., show that the impact of the latest tightening cycle isn’t over.

“It has brought back to the front of people’s minds that there are potential risks out there, there are still things that could go wrong, and that’s likely to make people just that bit more hesitant,” he said. “The fact that there is clearly stress coming through in the banking sector to some degree is going to push up the cost of credit. That’s going to represent a tightening which will feed through into the economy in the U.S. and elsewhere.”

The several factors at play make the outlook challenging to forecast, but 2023 promises a turnaround.

In its own review of investment markets at the end of February, CBRE Ltd. forecast national investment sales of $59 billion in 2023, up from $58.5 billion in 2022. All things being equal, this would put B.C. on track for more than $4 billion in deals this year.

“For 2023, the investment market faces headwinds from tougher financing conditions and a potential economic slowdown inhibiting some investors. However, the immense amount of global dry powder targeting real estate, coupled with greater certainty around interest rates, are forecast to outweigh these headwinds and lead to an active 2023,” CBRE reported. “Expectations are for another one or two quarters of softer investment volumes, similar to the levels seen in the latter half of 2022, before activity rebounds to the levels seen in the last couple years. Overall, momentum is forecast build over 2023 for another solid year of investment transaction activity.”

But based on what he’s heard in the market to date, Levine is bullish.

“We’ll wait and see the results, but I certainly sense there’s a lot more activity,” he said. “I think the first half of 2023 is going to be better than the second half of ‘22, in terms of dollar volume and the number of transactions.”

© 2023 Western Investor

GTA housing market activity muted in February

Ephraim Vecina
CMP

New report shows substantial declines in sales numbers la

The Greater Toronto Area (GTA) new home market saw sales activity decline by 76% annually in February, down to a level 69% lower than the region’s 10-year average, according to Altus Group and the Building Industry and Land Development Association.

The market saw a total of 922 new home sales last month, the second lowest number of new homes sold in February since tracking began in 2000.

“Only 225 single-family homes, including detached, linked, and semi-detached houses and townhouses (excluding stacked townhouses), were sold in February, down 65% from February 2022 and 81% below the 10-year average,” the market report stated. “It was the lowest level of single-family home sales for February since Altus Group began tracking.”

Condo sales totalled 697 units, which was 78% lower annually and 61% lower than the 10-year average for the asset class.

Total inventory saw its highest levels in more that two years, at 14,621 units. Among these are 13,031 condo apartment units and 1,590 single-family units, representing 9.3 months and 5.2 months of inventory, respectively.

“Builders have been ramping up inventory, particularly in the new condominium apartment sector, in anticipation of a stronger spring market,” said Edward Jegg, research manager at Altus Group. “As we move into spring, it appears that we may be seeing the floor in the market, which may overcome buyers’ recent hesitancy brought about by the run-up of interest rates and other economic concerns.”

“Housing inventory has been rising, which represents an opportunity for some new home buyers,” added Dave Wilkes, president and CEO of BILD. “But it would be a mistake to assume that we have overcome the structural challenges that hamper housing supply in the GTA. All levels of government must work with industry to implement the changes necessary to meet the ambitious goal of building 1.5 million new homes in a decade.”

Benchmark prices stood at around $1.759 million for new single-family homes (down by 5.4% annually) and at around $1.113 million for new condo apartments (down by 5.5%).

Copyright © 1996-2023 KM Business Information Canada Ltd.