Month: May 2017

29 May

‘Boring’ Canada gripped by concerns home capital spiral will trigger a crisis

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Posted by: Frederic Pichette

14 May

Royal LePage reports sharp rise in American interest in Canadian real estate

General

Posted by: Frederic Pichette

TORONTO – A new report from Royal LePage suggests many Americans who oppose incoming president Donald Trump continue showing a desire to purchase property in Canada.

In a report released early Friday, the company says American web traffic on its website surged 329 per cent the day after the U.S. election on Nov. 8 and has climbed 210.1 per cent year-over-year the week after Trump’s victory.

For all of November, says Royal LePage, U.S. traffic to its site grew 73.7 per cent year-over-year compared to the same period in 2015 and rose 40.9 per cent annually in the fourth quarter.

During that three-month period, the report says American interest in real estate was primarily focused on Canada’s largest markets, with Ontario, B.C. and Quebec receiving 72.7 per cent of all U.S. regional page views on royallepage.ca.

Three-quarters of the American inquiries concerned residential properties.

Royal Lepage also says that in a survey of 1,226 of its real estate advisers between Jan. 12-17, 39.5 per cent say they expect U.S. interest in Canadian real estate to keep climbing under a Trump presidency.

“The United States was already a top source for immigration into Canada, and now in the period following the recent U.S. election, we are witnessing a material bump in American interest in Canadian real estate,” said Royal LePage president and CEO Phil Soper.

“With our country’s ever-growing global reputation as a financially sound, happy and culturally tolerant place to raise a family, it is not surprising that interest has moved from a place to play, to a potential place to live and work.”

Many Americans began looking north last year as Trump inched closer to the White House, as illustrated by a huge spike in web traffic on Canada’s citizenship and immigration website. The site crashed on Nov. 8 as results from the presidential election rolled in.

Immigration, Refugees and Citizenship Canada said there were more than 200,000 users accessing its website around 11 p.m. on election night and American IP addresses accounted for about half of that figure. At the same time the previous week, the website saw just over 17,000 users.

6 May

More Foreign Buyers in the Montréal Real Estate Market

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Posted by: Frederic Pichette

According to the Québec Federation of Real Estate Boards (QFREB), yesterday’s announcement by the Ontario government of a 15 per cent tax on property purchases by foreigners in Ontario could increase the presence of foreign buyers in the Montréal real estate market. However, the QFREB does not expect any major short-term impacts.

The proportion of foreign buyers in Montréal is estimated at only 1.5 per cent by the Canada Mortgage and Housing Corporation (CMHC). Although this figure is possibly underestimated, the proportion is nevertheless quite low. In comparison, the government of British Columbia estimates that the proportion of foreign buyers in the Vancouver area is 9.7 per cent, while the Toronto Real Estate Board estimates this proportion to be 4.9 per cent in the Toronto area.

In Montréal, the presence of foreign buyers would be limited mainly to certain central neighbourhoods for single-family homes and to the downtown area for condominiums. “Activity by foreign buyers in the Montréal area could have an upward impact on property prices in some central neighbourhoods, as this is where they tend to concentrate their purchases,” explained Paul Cardinal, Manager of the QFREB’s Market Analysis Department. “However, the impact would be limited given that Montréal’s real estate market conditions are very different than those observed recently in Toronto and Vancouver,” he added.

Far from overheating

The residential real estate market in the Montréal Census Metropolitan Area (CMA) has experienced very moderate price increases in recent years. The median price of single-family homes rose from $279,000 to $295,000 between 2013 and 2016, a 6 per cent increase over three years. The median price of condominiums also increased by 6 per cent over the same period ($227,000 to $240,000 between 2013 and 2016).

In addition, conditions in the Montréal real estate market remain relatively balanced: the single-family segment is slightly in favour of sellers, the plex market is balanced, while the condominium segment still shows a slight oversupply. As for the rental market, the Montréal vacancy rate is 3.9 per cent (source: CMHC), which is much higher than Toronto (1.3 per cent) and Vancouver (0.7 per cent).

“We are far from a housing shortage, whether it be the resale, new construction or rental markets. In this context, it is difficult to envisage a surge in prices like Toronto,” added Mr. Cardinal.

A popular real estate market

However, more and more foreign buyers are turning to Montréal, which has resulted in a significant increase in net migration and in the number of non-permanent residents in 2016. Several factors explain this attraction, in particular, the marked improvement in the economic and employment situation. Over the past twelve months, 81,500 new jobs were created throughout the CMA and the unemployment rate declined to only 6.6 per cent in the first quarter of the year.

Also, Quacquarelli Symonds named Montréal the best student city in the world in 2017, surpassing Paris for the first time in five years. Finally, it is important to note that property prices are among the lowest in North America.

About the Ontario 15 per cent non-resident tax

The Ontario government announced on April 20 a series of measures designed to slow down the meteoric rise of property prices in Toronto and its surrounding areas. One of the main measures introduced is the imposition of a 15 per cent tax on non-resident home purchases, as was the case for the City of Vancouver which introduced a similar tax in August.

About the Québec Federation of Real Estate Boards

The Québec Federation of Real Estate Boards (QFREB) is a non-profit organization representing the province’s 12 real estate boards and their nearly 13,000 member real estate brokers. Its mission is to support Québec’s real estate boards in order to defend, protect and promote the interests of real estate brokers through the provision of services in the areas of professional practices, public affairs and market analysis. The QFREB is guided by a collaboration-oriented approach as well as resource sharing.

 

SOURCES:  Canada News Wire via Québec Federation of Real Estate Boards

3 May

March home sales hit record high: CREA

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Posted by: Frederic Pichette

Craig Wong, The Canadian Press
Published Tuesday, April 18, 2017 9:18AM EDT
Last Updated Wednesday, April 19, 2017 7:01AM EDT

OTTAWA — Home sales across the country hit a record high last month, propped up by transactions in the fiercely hot market of Toronto, further fuelling concerns about the city’s real estate sector.

The Canadian Real Estate Association said Tuesday home sales over its Multiple Listings Service system increased by 1.1 per cent in March to top the previous monthly record set in April 2016. On a seasonally adjusted basis, sales totalled 46,353, up from 45,856 in February.

Bank of Montreal chief economist Doug Porter said where you stand on the issue of Canada’s housing market depends on where you live.

“Almost the entire province of Ontario’s housing market is now on fire, while most of the rest of the country wonders what all the fuss is about,” Porter wrote in a research note.

Policy-makers, think tanks and the Bank of Canada have issued repeated warnings that while concerns of an overheated housing market may be confined to the Toronto area, a correction could have repercussions for the national economy given the sheer scale of the city’s real estate industry.

The latest sales data came ahead of a meeting between Mayor John Tory and the federal and Ontario finance ministers to discuss soaring home prices in the Greater Toronto Area, which have leapt by more than 30 per cent in the last year.

The actual national average price for homes sold in March this year was $548,517, up 8.2 per cent from a year ago. Excluding Greater Vancouver and Greater Toronto, the average price was $389,726.

Compared with a year ago, actual sales in Canada, not seasonally adjusted, were up 6.6 per cent. Gains in the Greater Toronto Area led the way with a 17.0 per cent increase.

But it wasn’t just Toronto posting whopping hikes.

Sales in the Ontario cities of London and St. Thomas increased 44.4 per cent compared with March 2016, while in the Niagara region they grew by 30.0 per cent. Ottawa climbed 28.6 per cent.

Sales in Greater Vancouver, once the country’s hottest real estate market, fell 31.5 per cent compared with a year ago. But the region was up 4.1 per cent on a month-over-month basis.

CIBC deputy chief economist Benjamin Tal said it looks like the Vancouver market has hit bottom and started to recover.

Sales in Vancouver cooled last year in the wake of a tax on foreign buyers. Tal said the drop was due to domestic buyers waiting to see what the impact of the tax would be, but they are now back in the market.

“I think Vancouver will see a very strong spring,” he said.

CREA said the number of newly listed homes increased 2.5 per cent in March, led by gains in the Toronto region, Calgary, Edmonton and B.C.’s Lower Mainland.

The national sales-to-new listings ratio was 67.4 per cent in March compared with 68.3 per cent in February. There were 4.1 months of inventory on a national basis at the end of March 2017, down from 4.2 months the month before.