Toronto home sales plunge further in September

Fergal McAlinden
other

The city’s housing market slowdown is continuing

September home sales in the Toronto area were down 10% from August and 44% over the same month last year, while the number of new September listings was at its lowest for two decades.

That news, revealed by the Toronto Regional Real Estate Board (TRREB) on Wednesday, arrives as the market continues its pronounced slowdown amidst rising interest rates, a cost-of-living crisis, and declining home values across many segments.

The 11,237 new listings in the Greater Toronto Area (GTA) in September marked the month’s lowest number for 20 years, down by nearly 17% over the same time last year.

The composite benchmark price of a home in the GTA, just over $1.08 million, increased by 1% over August – but was 4.3% lower than in September 2021.

Read next: Where prices are set to rise (and fall) in Canada’s housing market

TRREB’s chief market analyst Jason Mercer noted in remarks accompanying the release that the average selling price “may have found some support” towards the end of the summer, with some homebuyers potentially seeing tighter conditions in certain GTA markets as new listings plunged year over year.

The average price of detached homes across the GTA took a substantial hit, dropping by 10% compared with the same month last year to just under $1.37 million. Semi-detached properties posted a 6.5% decline (to $1.04 million) and condos saw their average price tick upwards to $730,818 – an increase of about 3%.

Those figures come a day after the real estate board in Vancouver, another of Canada’s hottest marks in recent years, revealed that the Greater Vancouver Area (GVA) had also seen a substantial decline in sales in September, by 46% year over year and by 10% from August.

 

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Metro Vancouver homes sales slide but prices stick

Frank O’Brien
Western Investor

With more than 15,700 homes listed for sale in a slowing market, prices may face further downward pressure

Sales are down, listings up and pricea are holding steady. | Western Investor
September housing sales across Greater Vancouver and the Fraser Valley dropped as much as 50 per cent compared to a year earlier, but benchmark home prices are holding relatively firm.
However, with more than 15,700 homes for sale in a slowing market, prices may face downward pressure.
Sales fell to 1,687 in the month, the lowest level for September since 2018, which marked the slowest sales month in 30 years, according to data from the Real Estate Board of Greater Vancouver (REBGV).
Total transactions through the multiple listing service were down 47 per cent from a year earlier, with some markets seeing declines above 51 per cent.
Last month’s sales were 35.7 per cent below the 10-year September sales average.
Despite the year-over-year sales skid, the composite benchmark home price in Greater Vancouver was up 3.9 per cent from September of last year to $1.15 million.
Sales of detached houses dropped 44.7 per cent over the year, but the benchmark price was 3.8 per cent higher than a year earlier and down just 2.4 per cent from August 2022, at $1.90 million.
In the Fraser Valley, total housing sales in September nosedived 51.9 per cent compared to September 2021, but the benchmark price of a detached house was up 4.1 per cent on the year, to $1.46 million. Townhouse benchmark prices increased 11.6 per cent from a year earlier to $822,400, while condo apartment prices were up 14.5 per cent in the same period to $530,400, despite slumping sales.
Home prices across Metro Vancouver, however, have been declining by an average of about 1.5 per cent per month for the past six months, real estate data shows.
“There’s no question that interest rates continue to be a primary factor in the market trends over the past six months or so,” said Sandra Benz, president of the Fraser Valley Real Estate Board. “The sales slowdown we’re seeing reflects a level of caution exercised by buyers, who are likely waiting for the market to settle further before jumping in.”
She added, “ In the meantime, we anticipate prices may continue to decline across all categories.”
Kevin Skipworth, a partner in Dexter Associates Realty of Vancouver, noted that interest rates have increased less than prices have fallen, on a percentage basis.
The average five-year fixed-rate mortgage rate increased by 1.95 per cent in the last six months, but the price of a detached house in East Vancouver has fallen 10.6 per cent and it dropped by 13.4 per cent in North Vancouverm he said, and by double-digits in East and South Burnaby, Port Coquitlam, Maple Ridge, Pitt Meadows and Ladner, compared to April 2022.
“The benchmark detached house price in Greater Vancouver is now $173,400 less than it was six months ago, and it has fallen by $270,000 in the Fraser Valley,” Skipworth said, “That covers a lot of mortgage payments”
Listings are increasing, which may keep prices from rallying.
In Greater Vancouver, the total number of homes currently listed is 9,971, an 8 per cent increase compared to September 2021 and up 3.2 per cent from August 2022, the REBGV reports.
There are now 5,805 homes for sale in the Fraser Valley, up 52.3 per cent compared to September of 2021, the Fraser Real Estate Board reports.

© 2022 Western Investor

Vancouver home sales down 46% from last Sept., 10% from August: board

Canadian Press
The Vancouver Sun

The B.C. board says sales in the region totalled 1,687 last month, down from 3,149 the September before and 1,870 in August.

Houses are seen on a hillside in Burnaby, B.C., on Saturday, April 17, 2021. The Real Estate Board of Greater Vancouver says September’s homes sales dropped by 46 per cent since last year and 10 per cent from August. Photo by DARRYL DYCK /THE CANADIAN PRESS

VANCOUVER — The Real Estate Board of Greater Vancouver says September’s home sales dropped by 46 per cent from last year and 10 per cent from August as interest rate increases cooled buyer sentiment.

The B.C. board says sales in the region totalled 1,687 last month, down from 3,149 the September before and 1,870 in August.

Last month’s sales were almost 36 per cent below the 10-year September sales average.

Andrew Lis, the board’s director of economics and data analytics, attributed the lower sales levels to the Bank of Canada hiking interest and mortgage rates in an effort to tamp down inflation.

Those hikes have contributed to the market’s composite benchmark price reaching $1,155,300 last month, up 3.9 per cent from last September but down 2.1 per cent from August.

The number of homes currently listed for sale in the area is 9,971, an eight per cent increase compared with September 2021 and a roughly three per cent jump from August.

“With fewer homes selling and new listings continuing to come to market, inventory is beginning to accumulate, providing buyers with more selection compared to last year,” Lis said, in a news release.

“With more supply and less demand within this market cycle, residential home prices have edged down in the region over the last six months.”

 

© 2022 Vancouver Sun

Ten most affordable places to rent in Canada in 2022

Jonathan Russell
other

It is important to compare average rent prices with the cost-of-living in each city

 Not ready to buy? There are still plenty of great places to rent in this country, whether you are ready to leave the more expensive rental markets or you’re able to work remotely. Here are the 10 most affordable places to rent in Canada in 2022.

Montreal, Quebec

Montreal, Quebec, is the major centre in Canada that currently offers the cheapest rent. It is also the city where the rent has increased the least year over year (0.7%). The one-bedroom median rent price in Montreal is under $1,400 and you can find one-bedrooms for as low as $600.

One of the reasons Montreal’s rent is so low is that there are more than enough apartments available compared to other major centres in Canada (such as Toronto and Vancouver, for instance). This excess in supply, coupled with the low cost-of-living in Montreal and government subsidies available for renters, make this city one of the more affordable places for rents in the country.

London, Ontario

The one-bedroom median rent price in London, Ontario, is $1,390, with a year-over-year increase of 13%. Those figures represent one of the cheapest cities in Canada for renters in 2022. It is also significantly lower than in Toronto (only 170 kilometres away), which has an average rent for a one-bedroom apartment closer to $2,000.

London is also an ideal place to work remotely, being a city in its own right but close enough to the Big City, if need be. It also offers a burgeoning tech scene, one of the best universities in the country, and a thriving arts scene.

Calgary, Alberta

With the average price of a one-bedroom rental at $1,230 (and a year-over-year increase of 12%), Calgary, Alberta, is one of the cheapest cities in Canada to rent in 2022. While Calgary consistently ranks as one of the more expensive cities in Canada in other areas, the average rent for two-bedroom apartments is roughly $1,290 per month. Despite low rental rates, the cost-of-living in Vancouver is nearly 50% lower than in Calgary and the cost-of-living in Toronto is almost 30% lower.

Windsor, Ontario

The average price of a one-bedroom apartment rental in Windsor, Ontario, is $1,210, a year-over-year increase of 15%. Rent here is significantly cheaper than in Toronto and Vancouver, and even Montreal. While being one of the most diverse cities in Canada, Windsor is also diversifying its economy, with the tech industry quickly catching up to the automotive sector as a major employer.

The city itself offers great restaurants, parks, trails, and bars, as well as close proximity to Detroit, Michigan, making it an excellent choice not only for budget-conscious renters but commuters and day-trippers as well.

Winnipeg, Manitoba

The average price of a one-bedroom apartment in Winnipeg, Manitoba, is $1,060, which is a year-over-year increase of 2%. Winnipeg is also one of Canada’s most affordable cities, making it a great spot for anyone who is money conscious. With a strong economy and low unemployment rate (just 4.5% in 2019), Winnipeg’s GDP growth has been 2.5% on average over the last five years. The cost-of-living here is relatively low compared to other cities in Canada. The Consumer Price Index in Toronto is 131. In Winnipeg? Just 118.7.

Saskatoon, Saskatchewan

The average rental price of a one-bedroom apartment in Saskatoon, Saskatchewan, makes it one of the cheapest on this list—$1,000 per month. That is a year-over-year increase of 8%. While that price may be attractive to most, it is important to note that the cost-of-living in Saskatchewan’s largest cities is still fairly high.

Quebec City, Quebec

With an average rental price for a one-bedroom apartment at $960 per month, you can’t really go wrong with Quebec City. Even at that price, it is a year-over-year increase of 28%. And despite its history, architecture, and culture—it is also one of the most affordable cities in the entire country to live.

Edmonton, Alberta

The capital city of the province of Alberta, Edmonton offers one-bedroom apartments with a rental price of just $940 per month, which is a year-over-year increase of 4%. Just to put it into context: the average one-bedroom apartment rental in Toronto is $1,350 per month. The reason Edmonton is so affordable is that it has a lot of apartments to offer compared to other Canadian cities and it also boasts a strong economy. These factors, coupled with a generally favourable cost-of-living, make Edmonton a great place to live.

Regina, Saskatchewan

One-bedroom apartments in Regina, Saskatchewan, will cost you $930 per month on average, which is a year-over-year increase of 6%. The capital city of Saskatchewan, Regina also boasts a relatively inexpensive cost-of-living.

St. John’s, Newfoundland and Labrador

St. John’s, Newfoundland and Labrador, offers one of the most affordable housing markets in all of Canada. It also offers the cheapest rent, with a one-bedroom median rent price at $880, which is a year-over-year increase of 2%. Once you’re there, however, it is important to note that the cost-of-living is higher than you might expect—and the winters just a little colder.

 

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East Vancouver 102,000 sq.ft. office tower sells for $123 million

Western Investor Staff
Western Investor

New building is in False Creek Flats and will complete in 2024 adjacent to the new St. Paul’s Hospital, which is now under development.

Avison Young, Vancouver, for Western Investor

 

Property type: New office building

Location: 220 Prior Street, Vancouver

Property size: 102,000 square feet

Sale price: $123 million

Purchaser: Masimo Corp., California

Seller: Keltic Canada Development Inc., Vancouver

Date of sale: February 14, 2022

Brokerage: Avison Young, Vancouver

Broker: Michael Buchan

 

© 2022 Western Investor

Late Summer Cool Off for the Edmonton Area Real Estate Market

Carrie Lysenko
other

 Like most of the country, the real estate market in the City of Edmonton and surrounding areas have been on a roller coaster ride since record-breaking peaks earlier in Spring 2022.  Being bolstered by the high prices of oil this year as well as the greater affordability of homes in the area has given Edmonton and most of Alberta a bit of a softer landing. According to the Realtors Association of Edmonton, August saw total sales volume decrease by -8.3% in the Greater Edmonton Area and -8.9% dip over July in the City of Edmonton proper.  This is a larger decline versus Alberta’s largest city, Calgary, which saw a decrease of only -2.6% versus July.  Edmonton is also down -12.7% year-over-year (y-o-y) which is slightly more than the Greater Edmonton area which posted a -12% drop.  Calgary posted only a modest y-o-y decline of -0.5% while comparatively, the Greater Toronto Area posted a sizable drop of -34% in sales volume versus 2021.

• Read: Hidden Gems for Sale in Edmonton Alberta

Price Drops Since Peak in May 2022 Still Showing Growth Over 2021

A drop in home sales volume is not the only decline the market is seeing.  As Canadians are feeling the pinch of higher inflation and the 300 basis points increase to the Bank of Canada interest rates this year; this has made some buyers hesitant to enter the market and caused a steady price decline month-over-month (m-o-m) since the peak in May 2022.  In the City of Edmonton, the composite benchmark home price has dropped to $392,400, according to the Canadian Real Estate Association (CREA).  This represents a 3.0% drop m-o-m and 4.25% dip since May.  However, the benchmark price is still up y-o-y by 4.1% across all property types.  A similar scenario can be seen across the Greater Edmonton Area with benchmark prices declining -2.8% versus July but still up 4.3% y-o-y.  

• Read: Alberta is One of Canada’s Strongest Real Estate Markets Right Now, Here’s What is Setting it Apart 

 

 

Not All Home Types Created Equal

While prices may be down from their peak, they are holding value versus mid-pandemic levels in Dec 2021.  However, a deeper dive by home types shows that not all home types are holding their value as well.  In the Greater Edmonton area, Apartment / Condos have dropped -1.2% m-o-m and dropped by -0.1% y-o-y.  While the dip versus 2021 may not seem significant, in the City of Edmonton, it is more pronounced with Apartment / Condos declining -1.6% y-o-y and -0.7% m-o-m.  Apartments are the only home type that have dropped in price versus 2021.  Single family homes are still up 4.3% in the city core and townhouses are even more interesting to those looking for more space but still at an affordable price.  Townhouses have increased 8% y-o-y despite suffering a small decline of -0.9% over July.  Comparatively, Calgary’s home prices have fared slightly better with apartments gaining in price by 10% y-o-y, detached by 13% and townhouses coming in at 14% growth versus 2021. 

According to eXp Realtor and local agent Drew Carlson, “Price reductions are common in Edmonton right now. Sellers are realizing that they have to be realistic and price their home properly.”

 

© 2015 – 2022 Zoocasa Realty Inc.

Downtown heritage department store to evolve into ‘hotel for computers’

John Mackie
The Vancouver Sun

Two floors of the former David Spencer, Eaton’s and Simpsons-Sears store will be converted to the Spencer Building Carrier Hotel

 Two floors of the 1926 David Spencer department store building at 515 West Hastings St. are being converted to the Spencer Building Carrier Hotel. Photo by John Mackie

The Harbour Centre complex at 555 West Hastings St. is already B.C.’s leading Internet connectivity hub. But the data centre is about to get much bigger, with the construction of the Spencer Building Carrier Hotel.But don’t be confused by the name.

“People take hotel and they think, ‘There’s already a Delta across the street, why are they putting up another hotel?’ ” said Chris Jones, the facility’s director of data centre infrastructure and operations.

“No, we’re putting in a hotel for computers.”

The construction will be on two floors inside the former  David Spencer department store, which is also a former Eaton’s and Simpsons-Sears and now is partly occupied by Simon Fraser University.

Two floors of the 1926 art deco heritage structure will be rebuilt for the carrier hotel, which is tech-speak for “a data centre with lots of connectivity in a major city or metro area.”

“In the technology sector a carrier hotel goes back to the ’90s,” explains Jones.

 

“So you’ve got the Westin Building in Seattle, One Wiltshire in Los Angeles, 60 Hudson in New York, 151 Front Street in Toronto and Harbour Centre in Vancouver.”

The carrier hotel will have 43,000 sq. ft. of space and provide 10 megawatts of “critical power” and a 25-kilovolt “primary electrical service” to Vancouver’s burgeoning tech sector.

“We’re going to develop all of the supporting infrastructure, both mechanically and electrically, for our future customers,” said Jones.

“We will sell to someone who will then install their own servers (to meet) all their own requirements. It could be Netflix or something, saying ‘we need two mega-watts of power and 100,000 servers, can we put it in your spot?’

They’ll put in their servers to manage their stuff.”

 

The 1926 David Spencer department store (foreground) is now part of the Harbour Centre complex at 555 West Hastings St., which includes a 28-storey tower (background). Both buildings are partly used as data centres. Photo by John Mackie

To put this in perspective, “all of the Harbour Centre complex, with everything, including data centre operators, runs about half” the 10 megawatts that will be available in the carrier hotel.

And Harbour Centre is a huge tech hub.

“Harbour Centre is the incumbent primary connectivity hub for Western Canada,” said Jones. “Primarily Vancouver, specifically, but we have over 20,000 connected fibres, so you need to connect to somebody, you come to Harbour Centre.”

The Harbour Centre complex is owned by Polaris, a Toronto company that has extensive real estate holdings in B.C., Ontario and Quebec. It will operate the Spencer Building Carrier Hotel as a separate business.

The new carrier hotel is also intended to be the Canadian “landing spot” for the Cascadia Fibre Trunk, “a private entity that is running fibre, high-density fibre, from Vancouver down to Seattle.”

 

“It’s a pretty important piece, because it’s going to bring a significant amount of new fibre that will last for the foreseeable future,” said Jones. “The existing fibres between Vancouver and Seattle are getting long in the tooth, they’re starting to have issues with age.”

The Spencer building opened just before Christmas in 1926 at 515 West Hastings St. The “commercialized gothic” structure was designed by McCarter and Nairne, the architects of the Marine Building.

David Spencer Ltd. was B.C.’s first department store chain. Founded in Victoria in 1873, it once boasted nine outlets around the province.

The Hastings store was sold to Eaton’s in 1948. Eaton’s moved to Pacific Centre in the 1970s and the site was redeveloped into Harbour Centre, which has a 28-storey tower. Simpsons-Sears took over the department store, then in 1988 Simon Fraser made Harbour Centre its downtown campus. The carrier hotel will not affect SFU.

 

© 2022 Vancouver Sun

Downtown heritage department store to evolve into hotel for computers

John Mackie
The Vancouver Sun

Brokerage partners on the value of good advice

Fergal McAlinden
other

Comprehensive guidance helped borrowers absorb the shock of interest rate rises, says duo

 As Canada’s mortgage and housing markets continue to shift, many borrowers who purchased a home during the pandemic-era boom are having to contend with interest rates dramatically higher than when they initially signed for their mortgage.

That simply underscores how crucial it was for agents and brokers to emphasize to their clients during that period of unprecedented low rates that borrowing costs would likely spike upwards in the future, according to the co-founders of a Toronto-based brokerage.

Inna Bogdanov (pictured top right) and Katerina Markevich (pictured top left), of IK Financial, told Canadian Mortgage Professional that educating their customers on the likelihood of rate increases had been among their main priorities during the days of rock-bottom rates and frenzied buyer activity during the past two and a half years.

“The mortgages were [lower] than 2% and we had those low interest rates and multiple offers on the property,” Markevich said, “but it wasn’t normal. Even at that time, we were preparing the clients [and telling them] the interest rates will go up.

“No matter if you were to take the fixed rate at that point and lock it [in] for five years – once the renewal will come, you will face completely different interest rates and you have to be ready for it.”

The Bank of Canada kept its trendsetting interest rate at a resolutely low 0.25% throughout nearly two years of the pandemic but has now introduced five consecutive rate hikes since March totalling 3%.

Read next: Revealed – how much Canada home prices will fall this year

Still, comprehensive advice in times of low rates meant IK Financial’s clients were largely prepared for this year’s rising-rate environment and had factored higher borrowing costs into their budget. At present, the duo’s guidance is mainly focused on reminding clients that the real estate market moves in cycles – and today’s high-rate climate won’t last forever, according to Bogdanov.

“We are true firm believers, and understand very well, that the markets are cyclical, and everything takes turns,” she explained. “We remind our clients that while we enjoyed the low interest rates for a while and everything was booming, it was great. But even back then, everybody knew this was unsustainable, it wouldn’t last forever and there would come a point when the market would take a dip.

“Whether it would be a gradual dip or more of a severe fall, more like what we’re experiencing now, that was unknown… But when it reaches its ultimate lowest point, which we [either] may have already reached or are about to reach, it will start to slowly go back up again.”

It’s important to remind clients that the market has seen worse times than it’s currently experiencing, Bogdanov said, and that mortgage professionals and their clients alike worked through those challenging conditions regardless.

The current market has also highlighted the importance of adopting a tailored approach to each client, with the suitability of specific options depending on the personal circumstances and risk tolerance of each client.

Read next: Fixed vs. variable: What’s in store for the rest of 2022?

Borrowers’ needs, goals, and plans for the next year to five years are some of the central factors that IK Financial said it takes into consideration when recommending a path for clients, with recommendations for variable rates only made to those individuals who have room in their budget for possible future variations in their payments.

“Of course rate variations matter and we do adjust what we tell clients based on the current rates that we’re looking at today,” Bogdanov said. “However, the general strategy never changes for us and our approach with clients.”

As for the outlook for the remainder of the year? The prime rate is likely to continue rising further, the duo said, which will probably contribute to a further fall in home prices. Still, they indicated that a healthy market should persist, driven in part by strong forecasted levels of immigration in the coming years.

The federal government has said it aims to welcome 431,645 new permanent residents this year, followed by 447,055 in 2023 and 451,000 in 2024 – meaning upwards of 1.3 million new Canadians are expected to have arrived in the country by that point.

“Realistically speaking, we have lots of immigrants and we have many people who are coming – especially to Toronto [and] Ontario,” Markevich said. “So we have huge, huge demand on property right now.”

 

Copyright © 1996-2022 KM Business Information Canada Ltd.

Nanaimo 0.4-acre land assembly sells for $1.69 million

Western Investor Staff
Western Investor

The land in Vancouver Island city ‘s south end is seen as a prime for residential development.

Fraser Elliott, Vancouver , for Western Investor

 

Property type: Development land

Location: 535-545 Nicol Street, 575 Nicol Street and 120 Needham Street, Nanaimo, B.C.

Land size: 19,034 square feet

Land size in acres: 0.04 acres

Zoning; Potential for 4-6 wood-frame residential redevelopmentList price $1.69 million

Sale price: $1.65 million

Date of sale: September 1, 2022

Brokerages: Fraser Elliott, Vancouver (listing agent) and The Firm Real Estate Service, Vancouver

Broker: Fraser Elliott

 

© 2022 Western Investor