Real estate: Feb 9, bulls vs bears

Bulls versus the bears

CMHC project a decline of up to 18%, while RBC expect big gains.

Meanwhile, 20% of Canadians can not afford to live in cities, GDP is down
5% on the year and it now takes 60 months for Canadians to save for a down
payment on a house.

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Informative Real Estate Articles

REAL ESTATE

Against all odds, home prices are jumping across Canada
(FP - Liz Beddall) - Risk Management Issues

The number of homes sold in September rose a whopping 45.6% compared to the same month last year. And average prices reached an all-time record of $604,000 — up 17% since the beginning of the year. All this during the worst economic crisis in decades.

Toronto’s condo market sees a resurgence as buyers eye an eventual end to the pandemic
( G&M - CP) - Attitude and Preference Issues

When Sajeela Siddiqui planned to buy her first home during a pandemic, she looked to move outside of the Greater Toronto Area like so many others in search of more space.

Canadian home prices expected to keep rising this year, outpacing inflation
(FP - Mumal Rathore and Richa Rebello) - Attitude and Preference Issues

The Jan. 12-29 poll of 15 property market analysts showed house prices would rise 5 per cent on average this year nationally. That was the highest prediction since Reuters began polling for 2021 in February 2019.

Greater Vancouver Real Estate Prices Jump, While City Condos Slump
(Better Dwelling - Kaitlin Last) - Financial Services Industry Structural Issues

The price of a typical home in Greater Vancouver made a sharp monthly move higher. The composite benchmark across REBGV reached $1,056,600 in January, up 0.9% from the month before. This works out to an annual increase of 5.5%, bringing the 3-year price movement to a virtually flat 0.1% decline. Monthly gains have been amplified in the media, but growth was only 0.1 point bigger than last year at this time. It certainly does feel bigger during a recession though.

The Bottom Fifth Of Canada’s Households Can No Longer Afford Housing In Big Cities
(Better Dwelling - Stephen Punwasi) - Financial Services Industry Structural Issues

The lowest quintile, the bottom 20% of households by income, have few options for housing. Both Toronto and Vancouver have only had 0.2% of rentals affordable for this demographic. Montreal is a little better with 15.3% of rental affordable to this quintile. Calgary has a drop off, with only 10.7% of housing affordable for their lowest income level. In all cases, there’s insufficient housing for this particular demographic. In Toronto and Vancouver, don’t even bother moving there if you’re going to be at this income level.

CIBC Sees Canada’s Suburban Flight Subsiding When Pandemic Ends
( Bloomberg - Shelly Hagan) - Financial Services Industry Structural Issues

“Should Covid fade into the background, as is expected, the vibrancy of cities will return and so will the demand for housing within them,” Tal and Mendes wrote in the report published Thursday.

Canadian Households Now Need Up To 34 Years Of Savings For A Downpayment
(Better Dwelling - Stephen Punwasi) - Financial Services Industry Structural Issues

The number of months to save a downpayment for a home across Canada has reached a record high. The median household needs 60 months of savings for the minimum downpayment. According to NBC data, this beats the 57 months briefly experienced around 1989. By 1992, that number had dropped down to 26 months. Now it’s up to 60 months, increasing by almost 58% since the Great Recession. Remember, this is at the national level. It’s faster to save in some markets, and much worse in others.

Clients may want to rethink their moving plans: CIBC
(Investment Executive - IE) - Attitude and Preference Issues

“Despite the wave of companies announcing permanent work-from-home policies, much of the post-pandemic world might revert back to operating like the pre-pandemic one,” CIBC said.

Bank of Nova Scotia vacating top floors of Toronto’s Scotia Plaza skyscraper
( G&M - Rachelle Younglai) - Financial Services Industry Structural Issues

Scotia Plaza’s owners publicly announced that Scotiabank renewed part of its lease but that the bank would give up the top floors of the 68-storey office building.

Canada’s ‘Energizer Bunny’ Housing Market: 2021 Forecasts
(Mortgage Broker News - Staff) - Financial Services Industry Structural Issues

The year ended with the seasonally adjusted MLS Home Price Index up 13% year-over-year and the average house price surpassing the $600,000 mark.

Could Mortgage Rates Start to Rise Sooner than Expected?
(Mortgage Broker News - Staff) - Attitude and Preference Issues

“That carries potentially strong policy implications for the Bank of Canada that is increasingly looking as if it over-committed itself to keeping rates on hold until 2023,” wrote Scotiabank economist Derek Holt in a recent research note.

Over Two-Thirds Of Toronto Real Estate Investors Plan On Listing Properties For Sale
(Better Dwelling - Daniel Wong) - Financial Services Industry Structural Issues

Just over two-thirds of Toronto real estate investors are looking to sell this year. The survey found 67% of investors were either “very likely” or “somewhat likely” to sell within the next year. This number is up slightly from the 66% in 2019, and the 61% in 2018. Intention and reality tend to be two different things though. In many markets, investors don’t sell until they see returns pull back a little. Now that rental arrears rates are rising, and condo apartment prices are falling, it might be time.

The Pandemic Was Bullish For Canadian Real Estate, Confirms National Stats Agency
(Better Dwelling - Daniel Wong) - Financial Services Industry Structural Issues

Canadian real estate prices made one of the biggest jumps in history. Prices in the 6-City index increased 2.5% in Q4 2020, the fastest acceleration since Q2 2017. Virtually all gains are from single-family homes, which increased 3.5% in the quarter. Condo apartments increased just 0.16% over the same period. The trend of single-family homes outperforming in price growth is consistent.