by Macrealty Marketing Team | Jul 26, 2022 | Market Updates
OTTAWA, July 22 (Reuters) – Canadian home prices are dropping fast after surging during the coronavirus pandemic, but that is offering little relief for consumers who face sky-rocketing rents and fading buying power as interest rates rise.
Desperate would-be buyers found themselves caught in a frenzy of bidding wars for real estate during the pandemic, when home prices in Canada rose more than 50% in just two years.
Now the competition has moved to rentals, with landlords demanding months of rent upfront and at times, even pitting tenants against one another to see who will pay more, according to real estate agents and media reports.
The average rent on a 1-bedroom apartment in Canada is up 13.7% from the start of the year, data from Rentals.ca shows, with year-on-year rents surging 18.5% in Toronto and 19.2% in Vancouver.
The shift from frantic demand for homes-to-buy to homes-to-rent makes plain a broader issue with Canadian housing: that there simply is not enough of it, said Dan Scarrow, president of Macdonald Realty in Vancouver.
“Higher (interest) rates are not destroying demand for housing, it’s just shifting the demand from buying to renting,” he said. “The demand just sloshes between renters and buyers, depending on where rates are so long as you have constrained supply.”
The Bank of Canada has raised its policy interest rate to 2.5% now from 0.25% at the start of the year to fight inflation, which hit a near 40-year high of 8.1% in June.
The rapid rise in borrowing cost has chilled the real estate market, pulling down Canada’s average home price by 18.5% from its February peak, according to data from the Canadian Real Estate Association.
But softer prices do not appear to be helping would-be buyers, who now can’t get loans due to far higher mortgage qualifying rates. And that, in turn, is driving up rental demand.
“Rents have gone insane because people have to have a place to live,” said Paul Eviston, a Vancouver-based real estate agent. “Demand on the rental market has really taken off as a lot of people that were would-be buyers are now forced to rent.”
That hot rental demand has put a floor under condo prices in large cities, real estate agents said, with investors feeling confident enough to wait out price dips and some even looking to snap up more investment properties.
Toronto agent Imran Khan just sold a loft apartment to an investor who was able to lease it out within days of closing.
“I’ve listed properties for rent … and we get multiple offers, right. Like right away,” said Khan.
Rising immigration and a post-pandemic return to urban centers will further bolster demand for city condos, said Khan. Landlords, for their part, are pushing for higher rents when units turn over, agents said.
The shift from owned-homes to rental-homes is also starting to show up in Canada’s inflation data, with homeowners’ replacement cost increases easing sharply to 10% from 13% in April, while rent inflation remains near the 32-year high hit in April.
Mortgage interest costs, which fell sharply as the pandemic took hold and rates were slashed, are now surging. Homeowners who took out variable loans or those with mortgages coming up for renewal are feeling the most pinch.
“Right now is actually one of those unique moments where buyers, sellers, and renters are probably all struggling,” said Scarrow. “Usually, there is a winner. But I think this time it’s a struggle really for everyone.”
The article was originally posted on Yahoo Finance, July 22, 2022. Written by Julie Gordon and Shreya Jain.
by Macrealty Marketing Team | Nov 2, 2021 | Company, In The News
Across the province, REALTORS® and brokerages are engaged in innovative work to support the real estate profession and the public. And we want to share those stories. On this episode of Open House by BCREA, explore an innovative way to build trusting, successful relationships with your clients through our conversation with Mark Winter. Mark is a seasoned real estate professional with 30 years of experience and is also a certified coach. He is Director of Agent Development at a BC real estate brokerage and has written a book entitled A Different Conversation: Realizing Your Potential as a Real Estate Agent.
This episode was recorded on October 22, 2021.
Listen to the podcast here.
Links:
Background
If you had to pick the most important thing you could provide your clients with, what would it be?
In a survey recently published by the Canadian Real Estate Association and Nanos Research, the most important attributes a Realtor should display in their interactions with clients are honesty and integrity. In other words, your clients want to be able to trust you.
But building that trust can be easier said than done and the survey results also highlight that there is some room to grow in that area.
Joining us to talk about an innovative way to build trust in your relationships with your clients is Mark Winter. Mark has been a part of the same BC brokerage since 1992 and now has over 30 years of experience in the real estate business. He started off as a Realtor and now works in a senior leadership role as Director of Agent Development.
He’s also a certified coach and putting his two passions together has written a book entitled A Different Conversation: Realizing Your Potential as a Real Estate Agent. Mark joins us to talk about the coaching approach and how this approach can lead to more success and fulfillment as a Realtor, which in turn means more satisfied clients.
The article was originally posted on British Columbia Real Estate Association (BCREA), November 1, 2021. Written by Shaheed Devji.
by Macrealty Marketing Team | Sep 7, 2018 | Market Updates
Here are the latest real estate market statistics from Macdonald Realty on the Greater Vancouver listings and sales in August 2018.
Vancouver-West
In the Vancouver Westside, there were 59 sales of detached homes and 821 active listings at the end of the month. The benchmark sale price was $3,278,500, with average days on market of 66. The hottest markets for sales was Kitsilano with 11 sales.
In comparison, the condo market had 276 sales, 1,139 active listings and a benchmark sale price of $825,000 with an average of 30 days on market. The hottest market for sales was Downtown VW, 66. sales.
Townhome sales were 33, active listings were 203. The benchmark sale price was $1,267,800 with an average days on market of 43. Fairview VW with 8 sales was the hottest market of the month.
It’s a buyer’s market for townhouses and houses.
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by Macrealty Marketing Team | Mar 9, 2018 | In The News
Vancouver’s luxury market, already experiencing a downturn since 2016, will likely take another hit with the introduction of higher tax rates for foreign and luxury home buyers, experts say.
The provincial government of British Columbia on Tuesday announced a basket of measures as part of its 2018 budget; among them was a hike, effective immediately, on property transfer taxes for foreign buyers and buyers of $3-million-plus homes (US$2.36 million and above).
Starting Wednesday, tax rates for foreign buyers were raised to 20% from 15%, while all C$3-million-plus home purchasers must now pay 5%, instead of the current 3% property transfer tax.
Not only will these taxes be applied to homes in Metro Vancouver, but they’ll also be levied in the Capital Regional District, the Fraser Valley, the Central Okanagan and the Nanaimo Regional District.
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by Macrealty Marketing Team | Aug 8, 2016 | In The News
The new 15% property purchase tax (the “PTT”) explained.
WHAT IS THE NEW TAX?
It is a property transfer tax of 15% payable by “foreign” buyers IN ADDITION TO the regular property transfer tax at the time a property transfer for residential property is registered in the land title office for properties located in “The Greater Vancouver Regional District” (the “GVRD”). This includes places like Surrey, Richmond, Delta, West Vancouver, Coquitlam, etc. but not Squamish, Whistler, Abbotsford, Vancouver Island, the Okanagan, etc.
So if a foreign buyer buys a $7 million residential property in West Vancouver the total property purchase tax would be:
WHO HAS TO PAY?
The tax has to be paid by “foreign entities”. That means foreign citizens, foreign companies and taxable trustees. Canadian citizens and Canadian permanent residents do not have to pay. Foreign corporations include companies set up outside Canada and Canadian companies that are controlled by foreign persons or by foreign companies.
WHAT SORT OF TRANSACTIONS ARE SUBJECT TO THIS TAX?
The tax is payable in respect of residential properties in the GVRD purchased by foreign buyers on or after August 2, 2016 at the time the transfer is registered in the land title office. It is payable even when the contract was finalized before August 2, 2016 and the parties unaware there would be a new tax.
ARE THERE ANY LOOPHOLES?
Not many. Non-residential property is not subject to the extra tax nor are properties outside the GVRD. Real estate investment trusts and mutual fund trusts are not subject to the extra tax. Penalties of $100,000 for individuals and $200,000 for corporations apply to anyone who participates in illegal tax avoidance. Presumably this includes lawyers, accountants and realtors who assist in illegal tax avoidance.
Written by Peter Scarrow, former immigration lawyer, currently is the Director of Asian Business at Macdonald Real Estate Group.
