National home sales, prices fall in April

Fergal McAlinden
other

The news marks the latest stage in Canada’s housing market cooldown
National home sales and prices fell across Canada in April as the country’s housing market continued to cool following two years of record-breaking activity, according to the Canadian Real Estate Association (CREA).
Home resales were down 12.6% across the country from March to April, with the home price index also falling by 0.6% to $866,700. That marks the first time that measure, which accounts for pricing volatility, has declined since April 2020, just before the housing market began its unprecedented pandemic-era surge.
The actual national average home price was around $746,000 in April, CREA said, meaning that figure has now declined for two months in a row after peaking at over $816,000 in February. Still, prices remain around 7% higher than the same time last year.
CREA chair Jill Oudil said in a press release that many housing markets across the country had cooled off “pretty sharply” over the last two months, with the steady climb of interest rates and buyer fatigue two of the main reasons for the slowdown.
On a year-over-year basis, national home sales plummeted by 25.7% after setting a record for the month of April in 2021. The number of newly listed homes declined by 2.2%.

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Canada’s average home price slides to $746,000, sales plummet amid rising rates

Stephanie Hughes
The Vancouver Sun

Sales fell across 80% of local markets.

 Home prices across Canada appear to be slipping under the weight of rising interest rates, with the nationwide average home price falling to $746,000 in April, down 6.3 per cent from March’s average of $796,000, according to data from the Canadian Real Estate Association.

The organization’s benchmark home price index — a metric designed to create an “apples-to-apples” comparison of typical home sales over time — also posted a decline of 0.6 per cent month-over-month, the first such decline since April 2020, CREA noted.

Sales volumes dropped precipitously as well, falling 12.6 per cent month-over-month and 25.7 per cent since a record April last year. While the decline was largely led by the Greater Toronto Area market, sales fell across 80 per cent of local markets. 

 

“Following a record-breaking couple of years, housing markets in many parts of Canada have cooled off pretty sharply over the last two months, in line with a jump in interest rates and buyer fatigue,” CREA chair Jill Oudil said in a press release.

While prices slipped from March to April, the association noted that the average price was still up more than seven per cent over the same month last year and the benchmark price was still up 23.8 per cent year-over-year.

CREA senior economist Shaun Cathcart said this month’s data was less a reflection on the moves the Bank of Canada has already made and more about the sentiment around how far the central bank is prepared to go to tamp down inflation.

“After 12 years of ‘higher interest rates are just around the corner’ here they are,” Cathcart said in a release. “But it’s less about what the Bank of Canada has done so far. It’s about a pretty steep pace of continued tightening that markets expect to play out over the balance of the year, because that is already being factored into fixed mortgage rates.”

Despite the drop in demand reflected in CREA’s numbers, a shortage of supply across the country is keeping some upward pressures on prices.

A second set of figures released Monday, however, suggests some relief on the supply front may be on the way, as the pace of homebuilding began to pick up in many of the country’s markets.

• Email: [email protected] | Twitter: StephHughes95

 

 

© 2022 Vancouver Sun

Entering A Balanced Market Spells Relief for Many Buyers: CREA

Patti Cosgarea
other

 While national home sales dropped by 12.6% on a month-over-month basis in April, it was still the third-highest April sales figure, trailing closely behind 2021 and 2016, according to the Canadian Real Estate Association’s (CREA) latest release. 

The decline in monthly activity was more apparent in the Greater Toronto Area (GTA), which is in part because of its size. Sales were down in 80% of these local markets, most notably in Mississauga and Hamilton-Burlington where sales dropped by 32.0% and 23.1% month-over-month respectively. There were some exceptions across the country including in Victoria, Montreal and Halifax-Dartmouth where sales did experience a small bump. 

• Read: March Housing Market Cooling Could Be a Good Signal for Home Buyers: CREA

We Are Inching Closer to a Balanced Market Across the Country 

The number of newly listed homes scaled back by 2.2% on a month-over-month basis in April. This small decline is in part due to the split between markets that saw the number of listings rise and those that saw a decrease in new listings. “For buyers, this slowdown could mean more time to consider options in the market. For sellers, it could necessitate a return to more traditional marketing strategies. Of course, there are significant regional differences, so your best bet is to contact your local REALTOR®. They have the information, guidance & negotiation skills to help you navigate this rapidly-changing market as it evolves,” said Jill Oudil, Chair of CREA.

• Read: Now is the Time to Sell: Durham Cities Currently Have the Shortest Average Property Days on Market 

The sales-to-new listings ratio (SNLR) hit the lowest level since June 2020 at 66.5%. This ratio is used to determine if the market favours buyers, sellers, or is balanced. This spring, we have been inching closer to a balanced market, which usually sits around 50%. The long term average for the national sale-to-new listings ratio is 55.2%. A little over half of local markets were balanced based on the SNLR, while a little less than half remained in seller’s market territory.  

Fatigued Buyers Should Remain Hopeful 

At the end of April, we had 2.2 months of inventory on a national basis. Although this is still a historically low figure, it is up from the past eight months. We continue to see a rise month-over-month which is a positive sign for apprehensive or fatigued buyers. 

• Read: The 5 Stages of Buying a Home

Prices are Down from March in Some Key Markets

Many markets in Ontario saw a decline in the Aggregate Composite MLS Home Price Index. Nationally, it decreased by 0.6% month-over-month in April 2022. This is the first month-over-month decline since April 2020. The actual (not seasonally adjusted) national average home price was a little over $746,000 in April 2022. This figure is heavily influenced by sales in Greater Vancouver and the GTA, two of Canada’s largest and most expensive markets. Excluding these markets cuts $138,000 from the national average price. 

 

 

 

 

 

 

Here are the Ontario markets that saw the biggest dip in home price:

Oakville-Milton

Great news for buyers looking to secure a home in the Oakville-Milton area; the month-over-month MLS Home Price Index Benchmark (MLS HPI) price was down by -5.6% in the region. Although the seasonally adjusted average price remains high at $1,583,000, the market is changing and allowing more buyers to make their move.  

London & St. Thomas

We’ve watched this market become more steady throughout 2022, and now the MLS HPI is down -4.0% month-over-month. This is great news for those looking to buy in this in-demand market, within commuting distance to Waterloo Region. The April 2022 MLS HPI benchmark price was at $716,800. 

Cambridge

Another in-demand market that saw a -3.9% decrease month-over-month. The MLS HPI benchmark price was at $903,400 in Cambridge in April, marking this the second consecutive month of MLS HPI price decreases in the city.

Sudbury

This is the first MLS HPI benchmark price decrease that the city of Sudbury has experienced this year, now down -3.0% from the month of March. Sudbury is one of the most affordable markets in Ontario, with the March MLS HPI benchmark price being $471,200.

 

© 2015 – 2022 Zoocasa Realty Inc., Brokerage

Home sales drop in April as mortgage rates shoot higher

CREA Staff
other

 Ottawa, ON, May 16, 2022 – Statistics  released today by the Canadian Real Estate Association (CREA) show national home sales were down in April 2022.

Highlights:

• National home sales dropped by 12.6% on a month-over-month basis in April.
• Actual (not seasonally adjusted) monthly activity came in 25.7% below the monthly record set in 2021.
• The number of newly listed properties was down 2.2% month-over-month.
• The MLS^® Home Price Index (HPI) edged down 0.6% month-over-month but was still up 23.8% year-over-year.
• The actual (not seasonally adjusted) national average sale price posted a 7.4% year-over-year gain in April.

Home sales recorded over Canadian MLS^® Systems dropped by 12.6% between March and April 2022. The decline placed monthly activity at the lowest level since the summer of 2020.

While the national decline was led by the Greater Toronto Area (GTA) simply because of its size, sales were down in 80% of local markets, with most other large markets posting double-digit month-over-month declines in April. The exceptions were Victoria, Montreal and Halifax-Dartmouth where sales edged up slightly.

The actual (not seasonally adjusted) number of transactions in April 2022 came in 25.7% below the record for that month set last year. That said, as has been the case since last summer, it was still the third-highest April sales figure ever behind 2021 and 2016.

“Following a record-breaking couple of years, housing markets in many parts of Canada have cooled off pretty sharply over the last two months, in line with a jump in interest rates and buyer fatigue,” said Jill Oudil, Chair of CREA. “For buyers, this slowdown could mean more time to consider options in the market. For sellers, it could necessitate a return to more traditional marketing strategies. Of course, there are significant regional differences, so your best bet is to contact your local REALTOR^®. They have the information, guidance & negotiation skills to help you navigate this rapidly-changing market as it evolves,” continued Oudil.

“After 12 years of ‘higher interest rates are just around the corner’ here they are,” said Shaun Cathcart, CREA’s Senior Economist. “But it’s less about what the Bank of Canada has done so far. It’s about a pretty steep pace of continued tightening that markets expect to play out over the balance of the year, because that is already being factored into fixed mortgage rates. Of course, those have, for that very reason, been on the rise since the beginning of 2021, so why the big market reaction only now? It’s likely because typical discounted 5-year fixed rates have, in the space of a month, gone from the low 3% range to the low 4% range. The stress test is the higher of 5.25% or the contract rate plus 2%. For fixed borrowers, the stress test has just moved from 5.25% to the low 6% range – close to a 1% increase in a month! It won’t take much more movement by the Bank of Canada for this to start to affect the variable space as well.”

The number of newly listed homes edged back by 2.2% on a month-over-month basis in April. The small monthly decline was the result of a fairly even split between markets where listings rose and those where they fell. Notable declines were seen in the Lower Mainland and Calgary while listings jumped higher in Victoria and Edmonton.

With sales falling by quite a bit more than new listings in April, the sales-to-new listings ratio eased back to 66.5% — its lowest level since June 2020. This reading is right on the border between what would constitute a seller’s and a balanced market. The long-term average for the national sales-to-new listings ratio is 55.2%.

A little more than half of local markets were balanced markets based on the sales-to-new listings ratio being between one standard deviation above or below the long-term average in April 2022. A little less than half were in seller’s market territory.

There were 2.2 months of inventory on a national basis at the end of April 2022, still historically very low but up from slightly lower readings in the previous eight months. The long-term average for this measure is a little over 5 months.

The Aggregate Composite MLS^® Home Price Index (HPI) edged down 0.6% on a month-over-month basis in April 2022 – the first month-over-month decline since April 2020. Regionally, most of the monthly declines were seen in markets in Ontario, although many Ontario markets were also up, while some others were flat. Prices climbed modestly across the Prairies in April, while price growth remained robust in Eastern Canada. 

 

The non-seasonally adjusted Aggregate Composite MLS^® HPI was still up by 23.8% on a year-over-year basis in April, although this was a marked slowdown from the near30% record increase logged just two months earlier.

The actual (not seasonally adjusted) national average home price was a little over $746,000 in April 2022, up 7.4% from the same month last year. The national average price is heavily influenced by sales in Greater Vancouver and the GTA, two of Canada’s most active and expensive housing markets.

Excluding these two markets from the calculation in April 2022 cuts $138,000 from the national average price.

 

©THE CANADIAN REAL ESTATE ASSOCIATION

Edmonton 1.47-acre multi-family site trades at $4.2 million

Re/Max Excellence Commercial
Western Investor

The site in northwest Edmonton could be developed as mixed-use residential and retail, motel or multi-family property.

Property type: Commercial land

Location:10410 Allendale Road NW, Edmonton

Land size in acres: 1.47 acres

Zoning: DCI

Sale price: $4.2 million

Date of sale going firm: April 22, 2022

Closing date: April 1, 2023

Brokerage: Re/Max Excellence Commercial, Edmonton

Brokers: Dale James & Humaira Naikyar

© 2022 Western Investor

As market cools, significant opportunity remains – leading broker

Fergal McAlinden
other

A less intense market could lead to favourable conditions for many buyers and brokers alike

Activity in Canada’s housing market has slowed noticeably compared with last year, if recently released April sales figures are anything to go by – but significant opportunity still exists in the current market.

Some of the country’s busiest cities on the housing front posted sizeable year-over-year decreases in home sales last month, with Toronto and Vancouver among those that moderated substantially.

Still, less intense bidding wars, the impending arrival of new housing supply and price moderation in recent months are all likely to spur a continuing healthy market even if it drops off from the heights of last year, according to a top Toronto-based mortgage broker.

“We’re still seeing good preapproval activity, because I do feel there is a lot of opportunity for buyers right now,” Matthew O’Neil (pictured top), broker at Connolly Capital Team, told Canadian Mortgage Professional. “The market appreciated from November, December between 15-20%, and I think those gains have pretty much wiped out.

“On the freehold side, we’re kind of back to where the pricing was in November of last year. I think that’s helped some buyers; if there’s ever been an opportunity to buy a house in the last couple of years, I’d say now would be a time for buyers because lots of inventory is coming up and not as much competition.”

The recent slowdown was “inevitable,” O’Neil said, with the market having set a blistering pace over the last two years before year-over-year sales plummeted in April amid a rising-interest-rate environment as both the Bank of Canada and institutional lenders hiked their borrowing costs. “Something had to give eventually, and I think the rates going up as rapidly as they did was kind of the tipping point,” he said.

Read next: Canadians worried over possible recession despite BoC reassurances

“Rates couldn’t stay at 1% forever. They had to go back up, so my opinion is this was bound to happen and it’s just returning to where the rates should be.”

That cooling-off has been evident with refinances as well as purchases, particularly since there’s little incentive to refi as rates continue to surge. While many clients refinanced to invest in 2021, capitalizing on lower interest rates, that’s no longer possible following those sizeable recent rate hikes.

“The stock market’s been going down concurrently,” O’Neil – recently named among the top 75 brokers in Canada by CMP – pointed out. “I think everybody’s really backed off on both sides of the coin, and a lot of people are having a wait-and-see approach to see what’s going to happen over the next six months.”

A shift away from the intense heat of Canada’s pandemic-era housing market could bring benefits for brokers and their clients alike – not least in the growing ability of homebuyers to attach conditions of finance to their offers as competition for properties begins to ease.

O’Neil said that many mortgage professionals will be breathing a “sigh of relief” at the increasing prevalence of offers with conditions in the current market, with a less frenetic bidding process affording clients greater flexibility, protection and a lower chance of having to overpay.

Read next: CIBC: Economy, rate hikes will have significant cooling impact on market activity

In fact, there’s a more significant cause for concern than rising rates for many brokers in the current market, according to O’Neil: appraisals, many of which are coming in significantly lower than the amount offered by the borrower.

“The biggest issue we’ve been running into in the last 30 to 45 days is the appraisal value coming in lower,” he explained. “Since January, it’s down somewhere between 10-15% in most freehold markets. That’s been our biggest battle – it’s not so much the interest rates, [which] are what they are. It’s more trying to manoeuvre a light appraisal when they come in.”

That struggle means it’s imperative for realtors and clients to realize that as soon as the offer is accepted, an appraisal should be ordered immediately, O’Neil said, instead of the buyer waiting for weeks or months before arranging the inspection.

That’s particularly important because appraisers use the data based on when they go out to the property, rather than when the client’s offer was accepted. “If the client bought in January and they don’t make the appointment until March, [the appraisers are] going to use March comparables,” he said.

“It’s an important thing for clients and realtors to know: As soon as that offer is accepted, get the appraisal ordered right away.”

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Manitoba invests more than $1 million in mineral exploration

Ian Graham
Western Investor

Retaining workers, attracting investment are key challenges for the mining sector, says the province’s economic development minister

Junior mining companies are the big winners in the latest round of funding from the Manitoba Mineral Development Fund.

Manitoba Economic Development Minister Cliff Cullen announced more than $1.6 million for projects on May 9 as part of the latest quarterly awards.

Two-thirds, or more than $1 million of the funding approved in the first quarter of 2022 is going to support mineral exploration activities by mining and exploration companies such as Snow Lake Lithium, Wolfden Resources Corp., which is also operating in the Snow Lake area, KG Exploration and Willeson Metals.

Manitoba Chambers of Commerce president Chuck Davidson said the MMDF funding covers no more than 25 per cent of total project costs, meaning that the fund’s investments are supporting at least $3 million more in mineral exploration activity.

“A lot of these are the juniors that are looking at potential new mines for Manitoba,” he said.

Interest in certain minerals, particularly those like nickel and lithium that are instrumental in the manufacturing of electric vehicle batteries, is on the upswing right now, Davidson said.

“If we can assist on the exploration side, that’s the potential for new mines,” said Cullen. “And that’s really the economic development that we’re all looking for.”

In addition to exploration, the MMDF also supports community development projects in the hopes that more economically resilient communities with more amenities and services to offer will make things easier for the companies that operate there to entice people to stay or to move there for employment.

“It’s about attracting labour,” said Cullen. “Everywhere we go, it’s a competition for labour, so anything we can do to help make communities more labour-friendly, it helps companies like Vale.”

Manitoba also needs to promote itself as a mining-friendly jurisdiction.

“We do have world-class minerals here in Manitoba but we as a government have to make sure that we’re telling the world that we have these products available,” Cullen said. “The other thing is for us is to make sure that we’re creating the right policies to make Manitoba attractive to that type of investment.”

The province established the MMDF in 2019 with a $20 million initial investment. Designed as a successor to the Mining Communities Reserve Fund, the MMDF receives six per cent of the mining taxes the province collects annually.

Communities, businesses and organizations including Indigenous groups, municipalities and not-for-profit entities can apply for funding. The one-time grants support activities to advance new mining opportunities and outreach to First Nations for collaborative resource development.

The Manitoba Chambers of Commerce selects projects for funding.

 

© 2022 Western Investor

Edmonton retail centre on 2.3 acres sells for $7.27 million

Re/Max Excellence Commercial
Western Investor

Westgate Crossing is fully leased to seven tenants in a 39,116-square-foot mall

Re/Max Excellence Commercial, Edmonton, for Western Investor

Property type: Retail
Location: 10104 175 Street NW, Edmonton
Leasable area: 39,116 square feet
Land size in acres: 2.36 acres
Number of tenants: 7
Sale price: $7.27 million
Date of sale: April 29, 2022
Brokerage: Re/Max Excellence Commercial Edmonton
Brokers: Dale James & Humaira Naikyar

© 2022 Western Investor

Nanaimo 27-unit multi-family building sells for $6.2 million

Macdonald Commercial Real Estate Services Ltd.
Western Investor

Strata-titled apartment property on 0.4 acres sold for $100,000 above the list price

Macdonald Commercial Real Estate Services Ltd., Vancouver, for Western Investor

Property type: Multi-family strata
Location: 116 Prideaux Street, Nanaimo, B.C.
Number of units: 27
Property size: 17,630 square feet
Land size in acres: 0.405 acres
List price: $6.1 million
Sale price: $6.2 million
Brokerage: Macdonald Commercial Real Estate Services Ltd., Vancouver
Brokers: Dan Schulz and Chris Winckers

© 2022 Western Investor

Winnipeg industrial builders ramp up to meet i’nsatiable demand’

Peter Mitham
Western Investor

Hopewell plans to develop nearly 300,000 square feet in two spec buildings

Strong demand has prompted MMI to proceed with the second phase of Steele Business Park at CentrePort Canada in Winnipeg.Submitted
Build it and they will come is the guiding principle of industrial developers in Winnipeg, which is experiencing the same historic demand for industrial space as markets across Canada – with one exception.
There’s little suitable land available for development.
“The biggest problem has been getting serviced land available,” said Paul Kornelsen, vice-president and managing director for brokerage CBRE Ltd. in Winnipeg.
The fact was highlighted in CBRE’s market review for the first quarter, where Winnipeg had the least new construction of any major market in Western Canada. All of it is being built on spec, and future projects will take months to begin.
“With a lack of serviced land available for new construction, it is projected that construction on new projects won’t begin for 12-16 months,” the report stated.
The lack of options in Winnipeg proper has sent many developers to the Rural Municipality of Rosser, on the city’s northern edge. It is home to CentrePort Canada, a 20,000-acre development that lays claim to being “North America’s largest trimodal inland port.” It’s also one of nine foreign (free) trade zones in Canada, giving companies access to tariff and tax exemptions on the purchase or import of various products.
Kornelsen said several companies have announced new developments there in recent months, which will ease but not resolve the shortage. Winnipeg’s industrial availability in the first quarter was 2.8 per cent on an inventory of 77.7 million square feet.
“We have historically low vacancy rates in our industrial portfolio, historically high asking rents and just an insatiable demand for product, and particularly new generation product,” he said. “By the time anything’s ready to come to market, it’s leased.”
One of the larger projects in the works is West Creek Industrial Park, a 294,150-square-foot development by Hopewell Development Corp. of Calgary. The project, located in CentrePort will have two buildings providing much-needed large format space.
Shovels are already in the ground for the second phase of MMI Asset Management Ltd.’s Steele Business Park, also in CentrePort. The first phase of 80,190 square feet broke ground in October 2020 and is now 75 per cent leased. The second phase will have 66,200 square feet and is set for completion later this year. No tenants have been secured.
The final phase will have 80,190 square feet, giving the development a total of 226,500 square feet.
Other projects are in the pipeline.
“Some of the other big names are quietly working through permitting on speculative builds,” Kornelsen added.

© 2022 Western Investor