Canadians on the move: Not an exodus, but the re-location trend across Canadian housing market is real

RE/MAX Staff
other

• 35% of RE/MAX brokers indicate that “move-over” buyers from other cities and provinces will continue to spark market activity in 2021
• 45% of RE/MAX brokers indicate that move-up buyers will likely be a primary driver of the housing market demand in 2021
• Half of Canadians (53%) are confident that Canada’s housing markets will remain steady in 2021
• 52% of Canadians believe real estate will remain one of the best investment options in 2021

RE/MAX Canada is anticipating healthy housing price growth in 2021, with move-up and move-over buyers continuing to drive activity in many regions across the Canadian housing market. An ongoing housing supply shortage is likely to continue, presenting challenges for homebuyers and putting upward pressure on prices. Due to these factors, the 2021 RE/MAX Housing Market Outlook Report estimates a four to six per cent increase in the average residential sales price nation-wide.

 

 

Click to download the data table

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“We’ve seen a lot of anecdotal evidence since the summer that households are considering significant lifestyle changes by relocating to less-dense cities and neighbourhoods,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada. “This has sparked unprecedented sales this year in suburban and rural parts of Canada and we expect this trend to continue in 2021.”

Despite the disruption of the virus, consumers are feeling optimistic, according to a Leger survey conducted on behalf of RE/MAX Canada, with 52 per cent of Canadians eyeing real estate as one of the best investment options in 2021, and expressing confidence that the Canadian housing market will remain steady next year.

 

The impacts of COVID-19 on the Canadian housing market

While many economists predicted employment disruptions would negatively impact the Canadian housing market, the pandemic directly influenced only six per cent of Canadians to sell their home, according to the survey. Furthermore, 40 per cent of Canadians realized that their home needed renovations during the pandemic, and 29 per cent discovered that they need more space.

When it comes to where Canadians would prefer to live – urban, suburban or rural – they are evenly split, with roughly three in 10 preferring to live in each area. In fact, many suburban markets across the country have been heavily impacted by out-of-town buyers, a segment that is expected to drive market activity in 2021. This was a trend that was evident in many regions across the country, including North Bay, Kingston, Moncton and Greater Vancouver, among others.

Unsurprisingly, younger Canadians (under age 35) are significantly more likely to have realized that they need more space and are motivated to move out of their current neighbourhood.

“Despite the tragic impacts of the pandemic, our optimism in the strength of Canada’s housing market has always remained,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “While we’ve seen a significant shift in buyer preferences this year, we believe factors such as the supply issue, pent-up demand and historically lower interest rates will continue to fuel activity in 2021.”

 

A deeper dive: 2021 Canadian housing market insights

RE/MAX brokers and agents were asked to provide an analysis on their local market activity in 2020, as well as an outlook for 2021. Heading into the new year, 84 per cent of RE/MAX brokers and agents surveyed are anticipating sellers’ markets.

 

WESTERN CANADA

Vancouver and Greater Vancouver are good examples of the steady activity that’s anticipated to continue in 2021. According to the RE/MAX broker network in western Canada, sellers’ markets are likely in both regions next year, driven in large part by low inventory levels, low interest rates and high demand, as was the case in 2020. In Greater Vancouver, suburban neighbourhoods such as Pitt Meadows, Ladner and Maple Ridge are expected to be top neighbourhoods next year due to affordability and easy access to more outdoor space. Both regions are expected to see average residential prices increase by four and five per cent respectively in 2021.

Markets in Calgary and Edmonton, on the other hand, are currently balanced, which is anticipated to continue into 2021. The luxury market in Edmonton continues to be strong, with seemingly no impact felt by the pandemic. Both regions are predicting to see average residential prices increase by two and three per cent next year.

 

Get more insights and download the infographics:

 

Victoria, BC

Nanaimo, BC
Vancouver, BC

North Vancouver, BC

West Vancouver, BC

Tri-City (Greater Vancouver), BC 

Fraser Valley, BC

Kelowna, BC

Edmonton, AB

Calgary, AB

Saskatoon, SK

Regina, SK

Winnipeg, MB

 

ONTARIO

According to the RE/MAX broker network in Ontario, market activity across the province is estimated to remain very steady in 2021, with the potential for average sale price increases of between seven and 12 per cent in regions like London (10 per cent), Kitchener-Waterloo (seven per cent), Hamilton-Burlington (seven per cent), Niagara (12 per cent), and Kingston (10 per cent), Cornwall (10 per cent) and Thunder Bay (10 per cent). This is being attributed to high demand and low supply, coupled with shifting home-buying trends toward local liveability factors such as more space, larger yards and closer proximity to amenities like parks.

Move-up and move-over buyers are also impacting luxury segments in the province. Cities such as Ottawa and Hamilton-Burlington have seen a massive spike in demand for luxury homes since the start of the pandemic. This is expected to continue in 2021.

The urban-to-suburban buyer interest in Ontario has impacted Toronto’s downtown core, specifically for condos, which is currently a buyer’s market. Supply levels throughout Toronto are continuing to drop and are not expected to improve in 2021, which will impact average home prices. Immigrants are also expected to drive some market activity next year, which alludes to those coming to Toronto for education purposes, along with the expected influx of immigration from outside the country. Similar to Ottawa and Regina, Toronto’s luxury market remains unimpacted by COVID-19 and is driven by move-up buyers.

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Get more insights and download the infographics:

 

Windsor, Ont.

London, Ont.

Niagara Region, Ont.
Kitchener-Waterloo, Ont.

Hamilton-Burlington, Ont.

Oakville, Ont.

Mississauga, Ont.

Toronto, Ont.

Durham Region, Ont.

Brampton, Ont.

Barrie, Ont.

Collingwood, Ont.

Muskoka, Ont.

Sudbury, Ont.

North Bay, Ont.

Thunder Bay, Ont.

Kingston, Ont.

Ottawa, Ont.

Cornwall, Ont.

 

ATLANTIC CANADA

Much like the rest of the country, the majority of Atlantic Canada is a sellers’ market, which is anticipated to continue next year. In Moncton, Halifax and Saint John, housing activity has been driven primarily by out-of-province buyers and move-up buyers who have either expedited retirement plans or are working from home and no longer need to be in an office.

Overall, similar to other areas across the country, increased space has become a prominent buyer demand in the wake of the pandemic, with detached homes serving as the most popular home type in cities like Moncton, Saint John and Charlottetown. This is expected to persist in 2021 according to RE/MAX Canada brokers in the region.

 

Get more insights and download the infographics:
Fredericton, NB

Saint John, NB

Moncton, NB

Halifax, NS

Charlottetown, PEI

St. John’s, Newfoundland

 

Additional findings from the 2021 RE/MAX Canadian Housing Market Outlook Report:

• More than one-third (36 per cent) would prefer to work with realtors who use technology/virtual services to enhance the buying/selling process
• 15 per cent of Canadians have spent more time researching/monitoring the real estate market during the first and second wave of the pandemic

 

About the 2021 RE/MAX Canada Housing Market Outlook Report
The 2021 RE/MAX Canada Housing Market Outlook Report includes data and insights supplied by RE/MAX brokerages and local real estate boards. RE/MAX brokers and agents are surveyed on market activity and local developments. Regional summaries with additional broker insights can be found at blog.remax.ca.

 

About Leger
Leger is the largest Canadian-owned full-service market research firm. An online survey of 1,534 Canadians was completed between November 6 and 8, 2020 using Leger’s online panel. Leger’s online panel has approximately 400,000 members nationally and has a retention rate of 90 per cent. A probability sample of the same size would yield a margin of error of +/- 2.51 per cent, 19 times out of 20.

 

 

Copyright © 2020 RE/MAX Ontario-Atlantic Canada Inc

Builders aim to pandemic-proof new homes

Frank O’Brien
Western Investor

Landmark: designs for “the new normal.” | Submitted

Vancouver developer Qualex-Landmark is among the first to implement a number of measures to reduce the spread of COVID-19 in two new residential projects, part of a trend that is gaining traction across North America.

“Just as the Spanish flu gave us the vanity room, which originated as a hand-washing basin immediately inside the front entry of a home, COVID-19 will influence innovation in home design,” Chris Marlin, president of Lennar International, one of the largest U.S. home builders, wrote in a recent report to a World Economic Forum COVID-19 action platform.

The modifications to new home design include variations in open floor plans, changes to ventilation systems, touchless technology and the use of antimicrobial metals, such as bronze, copper and brass, for touchpoints, he noted.

Some older designs that added work space in condos could also be revised, Beedie Living’s executive vice-president Houtan Rafii told Business in Vancouver.

Homes used to be built with small alcoves that included built-in tables large enough for computers, he said. The alcoves fell out of favour when technology enabled people to easily move around with their laptops, and Rafii thinks that they could make a comeback.

Qualex-Landmark, which plans to start about 300 units of housing in Metro Vancouver in 2021, will introduce extensive pandemic-proofing designs in a high-end 48-unit strata development in Vancouver and a mixed subsidized rental and market condo project it will build in Burnaby’s Metrotown, according to Jordan Beach, the company’s vice-president of marketing.

“At the Legacy on Dunbar, we have introduced a number of measures to reflect the new world we live in,” Beach said.

These included moving the two elevators for the five-storey project from inside to the north and south exterior of the building to reduce resident congestion. Most of the building amenities were move outside as well, including an open-air roof top lounge.

The ventilation system was changed to individual filtered systems for each unit to reduce the use of recycled air throughout the project. The common areas are also equipped with specific air exchangers that draw and exhaust directly to the outside, Beach explained.

In the Burnaby project, touchless entry doors and touchless faucets will be used and touchpoints in common areas, such as a children’s playroom, will be coated with antimicrobial material. Floors and countertop will use non-porous materials that allow for easy sanitization, he added. Sanitize stations are being custom-built into walls in the lobby, and Qaulex-Landmark is also looking at voice-activated smart appliances, which are widely available.

“These are all cost-effective procedures to put in place,” he said, referring to automatic doors or using ultraviolet light to sterilize ventilation systems. “It is quite shocking how little they do cost. It actually makes the home more marketable and it doesn’t cost the consumer or developer anything additional,” Beach said.

Lennar suggested that open floor plans, which are quite popular in new homes, could change in a pandemic-conscious world, because they are suspected of helping spread infections, and make it harder for people to quietly work at home.

But Beach believes open-floor designs will remain, especially in smaller condos, but he suggested they will become more flexible in larger new homes, with sliding doors that allow spaces to be divided.

Beach believes that, like the powder room, anti-virus designs will become more common in new homes, even if a vaccine ends the current pandemic.

“I think that, going forward, sanitization measures will become huge in new homes, as well as in furniture and appliance design. The pandemic has changed the way people think. This is the new normal,” Beach said.

 

Copyright © Western Investor

Concord to build 1,014 condos in two Surrey towers

Graeme Wood
The Vancouver Sun

Surrey’s downtown core is expanding with approval of two residential skyscrapers built by developer Concord Pacific and comprising 1,014 units.

Surrey City Council rezoned a parcel of land south of City Hall on November 24, with the effect of more than doubling the previously approved density for the area.

The development, like many others that have received bonus amendments to the Official Community Plan this year, drew criticism from some residents at the virtual council meeting.

“Somehow there’s got to be cumulative data on what these developments are bringing to current taxpayers,” said Ramona Kaptyn.

The towers will overshadow a local park, including the BC Lions facility, between the Surrey Central and Gateway SkyTrain stations.

Concord will provide amenity space for the new residents, such as pools and a fitness centre, plus a green roof. And it will also pay the city $1,000 per unit toward the community amenity fund, as well as $1,000 per unit for the city’s affordable housing reserve.

As a result of the added density, Concord will also be charged $20 per square foot of bonus living space. The development report to council indicates Concord is receiving a 255,807-square-foot bonus, which would result in a $5.12 million payment.

However, largely at issue is how the city is planning to accommodate school-age children.

The Concord towers will house 374 two-bedroom units; 30 two-bedroom-plus den units; and 30 three-bedroom units. City officials in conjunction with the Surrey School Board anticipate 25 elementary school children and 10 secondary school children living in the complex.

Nevertheless, residents suggest officials are underestimating how many kids will be living in these new towers. In the past year the same question has been raised on a number of occasions.

“I have to admit it does sound quite odd when there are 173 units and just six students identified,” said Coun. Brenda Locke, speaking to another development that was approved Monday and with similar child-to-unit ratios.

Prompted by Locke’s comment, general manager of planning and development Jean Lamontage said the number is “calculated with a number of factors.

“So the school district will look at similar building within the area that are in existence with people living in it,” Lamontage said. “And they know exactly how many kids are in school from those buildings from their statistics and enrolment.

The provincial government pays for new schools. Cities collect fees from new developments, but these fees are relatively meagre, as they are outdated, having not been adjusted in 20 years.

Minister of Education Rob Fleming told Glacier Media last March he is looking at raising the fees to pay for new schools, particularly in growing municipalities such as Surrey.

Known as a School Site Acquisition Charge, these legislated fees are intended for new developments to pay, in part, for new schools. A new house is presently charged $1,000; a townhouse is charged $800 and a new condo unit is charged $600. Buyers of these new homes pay these fees.

The Concord development will result in $614,400 for new school spaces.

 

Copyright © Western Investor

New analysis says GTA home prices could drop by as much as 26%

Ephraim Vecina
Mortgage Broker News

A potential housing supply shock might send Canadian home prices plunging by up as much as 11% on average, according to equity think-tank Veritas Investment Research.

In a note to institutional clients, Veritas cautioned that inventory might surge once the nation’s remaining mortgage deferrals expire and spending behaviour veers ever closer to the pre-pandemic normal. This is assuming that 5% to 15% of homeowners with deferrals turn into sellers.

At present, approximately 297,000 mortgages with the country’s largest banks remained in some state of deferral as of September 30, according to the Canadian Bankers Association.

September saw the return of 498,000 mortgages to regular payments, accounting for roughly 63% of the total deferred volume during the pandemic. However, 5.97% of mortgages at the CBA’s member institutions were still on payment deferral that month.

Overall, the potential price decline might be anywhere between 4% and 11% on average, excluding additional supply that is already in the process of being built “and is often flipped back into resale markets,” real estate information portal Better Dwelling said.

Of the major urban markets, Toronto is expected to suffer the largest price drops, which may be anywhere between 15% and 26% on average. Veritas also projected prices in Vancouver to post declines between 10% and 17%.

“The firm expects this price movement around six months after the inventory increase,” Better Dwelling said. “The timeline puts it fairly close to when the CMHC has been forecasting. The forecast is a little more aggressive than those of banks and other vested interests. However, it’s similar to what other institutional risk advisory firms have forecasted.”

 

Copyright © 2020 Key Media

Applications open for fed?s new commercial rent relief program

WI Staff
Western Investor

Download Document

November City Centre?Update

UrbanSurrey
other

The November issue of the City Centre Monthly Update is now out at SurreyCityCentre.ca. This month’s newsletter includes a round-up of new Development Applications, Council Approvals, and Construction activity during the previous month.

 

New Development Applications

20-0233 (Center Block)

View from Civic Plaza of the initial phase of Centre Block – 14 + 35-Storey Office & Retail

A preliminary Rezoning and General Development Permit application has been submitted for the first phase of the much anticipated redevelopment of the North Surrey Recreation Centre site, known as ‘Center Block.’ The applicant, Surrey City Development Corporation (SCDC), is proposing 1,446,088 sq.ft. of office and commercial space, next to Civic Plaza and Surrey Central Station as part of this initial phase, which will include 2 office buildings at 14 & 35-Storeys, with retail at grade. The current application is for rezoning and master plan approval only. Separate applications will be submitted in the future for each building / phase.

The Center Block project plans to transform the city’s core with a number of new office towers, an expanded SFU campus, retail, and a new transit plaza integrated with a revamped Surrey Central Station, expected to be built over the coming decade.

 

20-0244 (9525 King George Blvd)

 

This application replaces a previously approved Seniors Living & Care Facility project known as ‘Innovation Boulevard’ originally planned for a site across from Surrey Memorial Hospital. Since failing to attract investment in that project since its approval in 2016, WestStone Group has now submitted a new application for the site. The new application is proposing a mixed-use residential, office, and retail development, which is to include 920 residential units, and 10,841 sq.ft. of commercial space.

 

Council Approvals

18-0443 (13245 104 Ave)

 

13-Storey Rental Apartment at 13245 104 Ave

This mixed rental and market residential project at 13245 104 Avenue received 3rd Reading (Conditional Approval) in October 2020. The current application included a detailed Development Permit for just Phase 1 of the project, which will include a 13-storey rental apartment building (115 Units) on the north portion of the site. Phase 2, subject to a future detailed Development Permit application, is to include a 16-storey market residential building, containing 157 units, on the south portion of the site fronting 104 Avenue.

The site is adjacent to, and will eventually become integrated, with a similar application to the east, which received Conditional Approval in September 2020 for a 21-storey rental and 26-storey market residential project.

 

Master Plan for adjacent rental & market residential projects at 13245 & 13264 104 Ave

 

19-0105 (The Holland 2)

The Holland 2 – 32-Storey Market Residential

The second phase of Townline Homes ‘The Holland’ project received Conditional Approval in October 2020. This phase will include a 32-storey market residential tower consisting of 308 units at 13333 Old Yale Rd. The first phase of the project, consisting of a 25-storey market residential tower, began construction in September 2020.

 

Construction

The month of October 2020 saw continued construction on 15 major projects within City Centre, including 15 high-rise towers (>6 Storeys) and 4 low-rises (6-storeys or less) representing:

• 5,190 Residential Units
• 312,179 Sq.ft. of Office Space
• 164,220 sq.ft. of Retail

A 6-storey residential project at Fraser Hwy and 140 Street known as Fraser Landmark completed in October 2020.

 

Fraser Landmark at Fraser Hwy & 140 St completed construction in October 2020

Construction progress at King George Hub (Phase B)

King George Hub (Phase C) – 34-Storey Rental Apartments

Linea – 28-Storey Market Residential nearing completion at 133 St & 104 Ave

City Centre 3 – 10-Storey Office across from Surrey Memorial

Georgetown One – 30-Storey Residential & Retail at 102 Ave & Whalley Blvd

One Central – 44-Storey Residential under construction in West Village

 

 

Copyright © UrbanSurrey

October?s Housing Marketing Snapshot: The Numbers Aren?t Slowing Down

CREA
BCREA

October was another busy month for Canadian home buyers and sellers! Housing activity across the country continued to increase from September into October, begging the question: is this trend here to stay?

 

Large multi-family portfolios listed in Vancouver

Frank O?Brien
Western Investor

West 10th tower among 10-building portfolio for sale. | CBRE

For decades Vancouver had the highest rents and the lowest vacancy rates in Canada, creating a multi-family mega-market that turned small landlords into paper millionaires and attracted and entrenched some of the biggest players in the business.

But the pandemic has hardened anti-landlord legislation and honed the razor-thin margins in a city now characterized by soaring costs and restricted incomes.

B.C. rent increases have been frozen since March and are expected to remain locked until the end of 2021. The City of Vancouver has restricted multi-family renovations, outlawed demolitions of older apartment buildings and tethered development of market-rental housing.

With immigration to B.C. hitting negative levels – more people left the province for other countries than arrived in the first half of 2020 for the first time in history – Vancouver rents are declining while insurance premiums for apartment buildings have increased an average of 75 per cent, property taxes soar and capitalization rates have flatlined in the sub-3 per cent range.

This has resulted “in a dampening of enthusiasm to invest in the province’s biggest city,” according to Avison Young’s BC Multi-Family Report, released this October

It has also encouraged at least two of Vancouver’s largest, long-time landlords to shove substantial portfolios onto the market, part of what Mark Goodman of Goodman Commercial Inc. in Vancouver calls an “avalanche” of new listings. Goodman said that within a recent two-day period he heard from 12 apartment property owners who want to sell, and 11 of the buildings are in the city of Vancouver.

The largest package being marketed is a 10-building Vancouver concrete tower portfolio with 411 rentals in prime Vancouver neighbourhoods that Hollyburn Properties Ltd. put up for sale in October through a bid process. The portfolio represents about a third of Hollyburn’s multi-family buildings in the city, but less than 10 per cent of its total rental units in three provinces.

The Hollyburn buildings for sale are in the West End, South Granville and Kitsilano neighbourhoods. An example is the 14-unit University Manor on West 10^th Avenue, which is assessed at $6 million, or the equivalent of approximately $428,000 per suite.

Hollyburn, founded in 1972 in West Vancouver, is a family business that manages and operates more than 90 rental apartment properties with approximately 5,700 suites in Vancouver, Calgary, Toronto and Ottawa. The company owns 33 apartment buildings in Vancouver and four in West Vancouver.

Hollyburn did not reply to a Western Investor request for comment. Listing agent Lance Coulson, head of the apartment properties group with CBRE, Vancouver, said there “has been substantial interest” in what he calls a “legacy portfolio.”

Nearly a year ago, rental giant Belmont Properties, based in Vancouver for 45 years, offered a four-building portfolio of Vancouver concrete rental towers with a total of 188 units. Belmont owns seven apartment buildings in Vancouver and a total of 28 across Metro Vancouver and Victoria.

The typical per-door selling price for concrete rental buildings in Vancouver is around $490,000, based on rare recent sales.

Some see the increase in listings as a comment on the restrictive rental restrictions in Vancouver, but Coulson believes it reflects a pent-up release after markets stalled this spring due to the pandemic.

Others say they could be an early warning of a potential change in capital gains taxation early next year in the delayed federal budget.

Currently, 50 per cent of the profit on a multi-family property sale is exempt from taxes, but a federal government eyeing a record trillion-dollar debt could see a sudden hike in the capital gains tax as politically palatable and financially prudent, according to Goodman, who said there would be no forewarning that the tax is coming.

“A sudden hike in the tax could wipe out years, even decades, of price appreciation [for landlords]”, he warned in a recent Goodman Report newsletter

 

Copyright © Western Investor