Brian O'Donoghue

Sales Representative

Direct 647-405-3126 | bodonoghue@bosleyrealestate.com

Canada’s Renter Population is Growing at More Than Twice the Rate of Homeowners

There’s a significant shift happening in Canada — and it’s between the renter population and the homeowner population. While the number of homeowners in Canada is growing at 8.4%, the renter population is growing at 21.5%, more than double the rate, according to Statistics Canada data that was published this week.

After hitting a peak of 69.0% in 2011, the overall proportion of Canadians who own a home was 66.5% in 2021. For comparison, the rate of homeownership was 65.5% in the United States, 67.3% in the United Kingdom, and 69.6% in Mexico.

The provinces that saw the biggest declines in homeownership from 2011 and 2021 were Nova Scotia (from 70.8% to 66.8%) and Prince Edward Island (from 73.4% to 68.8%).Homeownership rates declined in some of Canada’s most populous provinces as well, with British Columbia seeing the third-largest decline (from 70.0% to 66.8%) and Ontario seeing the fourth-largest decline (from 71.4% to 68.4%).

While the population of homeowners increased by 8.4% between 2011 and 2021 that same number increased by 23.7% from 1996 to 2006, indicating that while we’re still seeing increased amounts of homeowners, the momentum is now going the other way. And, as is usually the case, when homeownership goes down, rental rates go up, and the Statistics Canada data shows that is exactly what is happening.

Approximately 33.1% of Canadians, or 5 million people were renters in 2021, but what’s particularly noteworthy is both of these numbers — a 33.1% rental rate and 66.5% homeownership rate — are trending in opposite directions, regardless of where in Canada you look.

“The growth in renter households outpaced the growth in homeowner households from 2011 to 2021 in each of Canada’s 41 large urban centres,” Statistics Canada says. “In 30 CMAs [Census Metropolitan Area], the growth of renter households was more than double the growth of owner households over this period.”

The five CMAs in the Canada that saw the highest renter population growth rate between 2011 and 2021 came exclusively from two provinces: British Columbia and Ontario. Those CMA’s were Kelowna (+54.1%) and Nanaimo (+40.0%) in BC and Barrie (+47.7%), Oshawa (+41.1%), and Kitchener– Cambridge–Waterloo (+40.9%) in Ontario.

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 Housing market crash unlikely … Immigration and smaller household sizes are expected to help drive prices upward.


New data released Monday by Statistics Canada found home prices increased by a mere 0.1 per in July compared with June — the smallest increase in more than two years and well below the average annual inflation rate of 7.6 per cent for that month.


But while experts are predicting the housing downturn could be the largest in four decades, they say two factors will protect the market from a full-blown crash: immigration and additional households as a result of Canadians choosing to live alone or in smaller groups.


If the rate of immigration and current changes in household formation behaviour persists, we would likely not have a housing crash over the mid-to long-term,” said Kate Choi, an associate professor of sociology at Western University.


A crash refers to a scenario where prices fall by about 30 per cent and housing demand completely erodes, said Carrie Freestone, an economist at RBC and the report co- author. The bank forecasts benchmark prices to fall by 13 per cent during this correction period — significantly less than the 30 percent threshold for a crash.


Between 2016 and 2021, the average Canadian household size declined by 0.02 people, according to a new report released Aug. 17. There were about 140,000 new households nationwide between 2016 and 2021 as a result of Canadians, especially young adults, starting out new, and that households have become smaller as more people are choosing to live alone and parents are having fewer children.


This trend will be responsible for just under 90,000 of the 555,000 new households created by 2024 and will provide a significant boost in housing demand.


“A greater number of households overall means that those households will need more housing,” said Choi. “So that, in turn, will exert an upward pressure on housing prices.”


That, paired with the federal government’s targets to bring in a record 1.3 million new permanent residents by 2024 — adding about 555,000 new households — will help drive housing demand and “contain a housing spiral.”


Between 2017 and 2019, there was a “pretty significant” housing correction because of Ontario’s Fair Housing Plan and the new federal mortgage stress test. That led to the first wave of demand, which was unleashed during the pandemic amid low-interest rates and households sitting on a significant amount of money.


However, when this housing correction period began in February, largely due to rising interest rates, the market never got a chance to fully catch up or satisfy all the organic demand that was coming through from that first correction. A caveat to the report’s findings, Choi noted, was demand and housing prices could dampen further if household size trends reverse and more young adults choose to live with their parents longer due to the rising cost of living, thus leading to fewer new households. Despite this housing correction, there is still a severe lack of housing supply to meet the demands of the market when this correction is over.

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Canada’s Tax Authority Has Been On A Multi-Billion Dollar Real Estate Crackdown!

 

Canadian real estate owners are stuck paying huge penalties after trying to avoid taxes owed.

New data from the Canadian Revenue Agency (CRA) shows their crackdown on real estate

owners/sellers has led to billions in recouped revenue. Data provided by the agency also shows

they’ve collected substantial fines adding up to hundreds of millions, after diving into real estate

transactions. The program is largely focused on Greater Toronto and Vancouver, as a high volume

of red flags were being set off.

 

The CRA has been on a mission to crack down on real estate tax evasion, especially in Ontario and

BC. Red flags they’re looking for include:

 

Property flippers: People who regularly flip property for income without properly disclosing the

funds might get a second look.

 

Unreported capital gains: Sold property and didn’t declare? That’s a problem, even if taxes aren’t

owed.

 

Unreported worldwide income: Have cash coming in from outside of the country? If the CRA finds

hints of it and you haven’t told them where it’s coming from, they might have some questions.

 

Unreported GST/HST on a new or substantially renovated home: Built a new home on a lot and

sold it? You were supposed to collect GST/HST. Ditto in some cases where owners “substantially

renovate” a property before selling it (think gutting it and leaving a shell, probably not just adding

a new kitchen).

 

Lifestyle Assessments: If the owner is rolling in a high value home and there’s a big gap between

income and the payments, the CRA might want a second look.

There are other flags as well since the agency can correlate data, but those are the big ones they

mentioned.

 

Just in Ontario and BC. From April 2015 to March 2022, the CRA’s real estate crackdown produced

$2.2 billion in audit assessments. Included in that amount was $298.9 million in penalties for nonpayment.

The audit assessment values are split into three major categories: Income tax, GST/HST, and GST/

HST New Housing and new residential property rebates. Ontario and BC both showed about $1.1

billion in audit assessments respectively, but for very different reasons.

 

Ontario’s audit assessment included $147.6 million of income tax, and another $332.2 million

GST/HST. Most of the value was in GST/HST New Housing and new residential property rebates,

coming in at $662.9 million for the period.

 

The tax authority says they primarily focus on Greater Toronto and Greater Vancouver. Pricey

real estate combined with high transactional value, and aspiring investors that might not know

the rules are concentrated in these regions. The recent real estate boom and our recent dive into

property registry data shows a huge investment surge across the country, perhaps resulting in wider crack downs.

 

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Toronto saw one of the biggest jumps in rent prices in the GTA, and experts warn a cooling housing market could mean high rental costs are here to stay.

A new real estate report shows that the price of housing in the GTA has skyrocketed and rents have returned to pre-pandemic rates. Recent data from Bullpen Research & Consulting and TorontoRentals.com shows the amalgamated average cost for rental units and condos combined in downtown Toronto is $2,325 a month, a 15.9 per cent annual increase. The price tag is much higher when square footage is taken into account, as Toronto has by far seen the most dramatic uptick in rent prices in the GTA.

How much is rent in Toronto? Rental rates have skyrocketed in Toronto, more than any other city in the GTA. Here's how the situation looks right now.

$2,065 One Bed Average monthly rent for a one-bedroom unit in Toronto.

$2,849 Two Bed Average monthly rent for a two-bedroom unit in Toronto.

$3,347 Three Bed Average monthly rent for a three-bedroom unit in Toronto.

$2,428 Average Average monthly rent for all unit arrangements in Toronto.

Real estate expert Ben Myers, president, and owner of Bullpen, says rental costs will only worsen as the larger housing market continues to cool off.

“So many people are returning to work, and tourism’s ramping back up … several cohorts of graduates will also be moving to downtown Toronto, who may be started full-time jobs online and are now ready to move into the office. They stayed in their university towns or with Mom and Dad, and now they’re ready to move,” said Myers. “The pandemic sent rents down 20 per cent, and so we’re just now getting back to prepandemic rental rates.

” Myers says the inflated price of single-family homes could be part of why the rental market has heated up so significantly. “After several consecutive months of monthly increases last year, average rent flattened out in the GTA, but higher interest rates could have tipped the scales, pushing would-be buyers back into the rental market, or simply preventing them from leaving it,” says Myers.

Interest in two-bedroom units also appears to have increased, presumably due at least in part to a higher need for home office spaces as the pandemic triggered a shift to working from home. Two-bedroom rent prices have increased by at least 10 per cent every month since January, according to the data. “If the ownership market continues to soften, expect rents to pick up,” says Myers.

Here are the average rental rates of all the GTA's municipalities

$2,177 Vaughan 1.9 per cent rate increase over last year.

$2,168 Etobicoke 15.0 per cent rate increase over last year.

$2,129 Richmond Hill 26.0 per cent rate increase over last year.

$2,096 Mississauga 8.5 per cent rate increase over last year.

$2,012 North York 5.0 per cent rate increase over last year.

$1,988 York 7.1 per cent rate increase over last year.

$1,870 East York 6.4 per cent rate increase over last year.

$1,869 Brampton 0.6 per cent rate decrease over last year.

$1,805 Scarborough 0.5 per cent rate increase over last year.

$1,795 Markham 5.2 per cent rate decrease over last year.

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A Bubble, Eh? Scotiabank’s “Very Pessimistic” Outlook Is Real Estate Prices Rise 10%

Here we go again with another prediction! Canadian real estate is so bubbly a large bank sees prices soaring in a downturn. Scotiabank (BNS) reported earnings today, filing the bank’s macroeconomic forecasts. These forecast scenarios help to determine outlook, and include a base case, optimistic case, and two pessimistic ones. Even in the bank’s worst-case scenario, they forecast home prices will still rise at a breakneck speed.

Let’s start with what the bank thinks is the most probable outcome — the base case. This involves everything carrying on as is, with no improvement or deterioration. In the base case, the bank has forecast annual growth of 16.6% from April 2022. In contrast, they had forecast annual growth of just 9.9% back in January. Higher rates have somehow accelerated their forecast. Which is a little odd since they’re also forecasting the higher end for interest rates.

The best case, or optimistic scenario, sees slightly higher growth than the base. Home prices are expected to show annual growth of 19.5%. This is a huge jump from the 12.5% prediction in January.

The worst-case scenario, called a “pessimistic scenario” involves another downturn. They split this one up into two, and the first one involves short-lived stagflation - (a mix of slow growth and high inflation). In this scenario, home prices fall. BNS doesn’t actually see prices falling in their worst-case scenario over the next 12 months. Prices are seen rising 11.4%, up from the 3% in January. Since the last forecast, a conflict broke out, inflation soared to a multi-decade high, and interest rates are climbing. Somehow this boosted their outlook.

Then there’s the “very pessimistic” scenario for BNS, in which things become unhinged. It involves high commodity prices, financial uncertainty, and supply chain disruption. But the point is this is a terrible economy in this case. BNS sees this driving home prices 9.8% higher, accelerating from the 3.5% drop forecast in February.

The strangely high forecast is at odds with their interest rate forecasts. BNS has one of the highest forecasts in the industry and has been outspoken about inflation. Somehow reducing leverage doesn’t impact their outlook.

Bank chief executives and finance chiefs stressed they still expect economies to grow as COVID-19-related headwinds ease. They noted that most households are in good financial health, as many stashed away extra savings during the pandemic, while unemployment remains low in a tight labour market. Businesses are borrowing to bulk up inventories as demand for products outstrips supply, and some sectors, such as commodities, are booming.

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The pandemic housing boom is winding down. Economists forecast a 10-20% price correction?

Economists are predicting that Canadian home prices will fall as much as 20 per cent this year as higher interest rates begin to hit the country’s booming real estate market. Mortgage rates are expected to climb again as the Bank of Canada aggressively hikes interest rates to deal with runaway inflation. Economists expect higher borrowing costs will lead to a significant price drop in some of the hottest markets.

Toronto-Dominion Bank economist Rishi Sondhi forecasts a double-digit percentage decline in the national average home price over the March to December period this year. Bank of Montreal senior economist Robert Kavcic predicts a 10-per-cent to 20- per-cent drop in the home price index in certain regions. “When we speak of housing correction it’s not a question of if, but where, how much and for how long,” Mr. Kavcic said in a research note.“Suburban markets in Ontario look shakiest,” he said.

The housing slowdown has been triggered by a rapid increase in borrowing costs over the past few months. The Bank of Canada’s next interest-rate announcement is scheduled for June 1. The central bank is widely expected to hike interest rates by another 50 basis points.

Realtors have described a sudden change in buyer sentiment. Some homes are not fetching any offers and sitting on the market for upward of a month. That is in contrast to the first two years of the pandemic when homes drew dozens of bidders and sold for hundreds of thousands of dollars over the listed price.

We are still seeing multiple offers happening in certain areas of the city, but we are not seeing the same frenzy that was present in the early months of the year. Showings have dropped off and buyers don’t seem to be in hurry to buy.

Don’t forget what CHMC said back in March 2020:

“Canada’s national housing agency is predicting home prices could plummet up to 18 per cent and mortgage arrears could soar to 20 per cent”

CMHC president and CEO Evan Siddall points to unforeseen circumstances as the reasons for their forecast error. CHMC lost its credibility after their failed housing crash prediction.

No one really knows what will happen to the real estate market. No one has a crystal ball to predict the future. We know we are state of change, and we will all learn to adjust to the changing market.

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The Pandemic Has Made Canadians Feel More Emotionally Connected to Their Homes


The pandemic has transformed many aspects of society, but perhaps none so much as the concept of home: for many of the Canadians who locked down in efforts to stop the spread of the virus, where they lived became their gym, restaurant, and office. That’s had a significant impact on how we view our homes, according to new national data.


In a recent survey conducted by Ipsos a full 75% of Canadians (based on a sample of 1,002 respondents aged 18+) agreed that their home has become more important to them due to the pandemic, with an additional 65% saying they feel a stronger emotional connection to it. This has been reflected in an intensified demand for residential ownership since 2020, says Ipsos, despite rising prices and the supply challenges facing those trying to break into the market. Not surprisingly, this enhanced appreciation of the emotional benefits of home was stronger among those who own (70%) compared to those who rent (59%).


The survey also found that the most important considerations among Canadians looking to move have shifted. According to respondents, as of March 2020, the top two considerations when deciding where to live were the level of comfort in their home (73% ranked this between 8 and 10 in terms of importance) and level of safety within their community (71%). This outweighs the 58% who indicated the cost to maintain their home was the most important factor.


Location seems to have fallen by the wayside when it comes to buyer considerations; proximity to work, school, or other regular commitments has become more important to only a minority (30%) of Canadians — likely due to an increase in remote school and work options over the last two years.


The data also reveals that many Canadians, especially younger ones, became all around more knowledgeable about the real estate market during the pandemic; eroding affordability and lack of available supply have been especially hot-button issues over the last two years. According to the Canadian Real Estate Association, the average price for a home nation-wide has exceeded the $800,000 for the first time, following an annual increase of 20.8%.


“Emotional connection and long-term investment intersect even more as Canadians adapt to the socio-economic shifts resulting from the pandemic. Just under half (48%) of Canadians agree that they have become more knowledgeable about the real estate market in Canada during the pandemic, and 41% say they are more likely to see purchasing a home as a capital investment because of the pandemic,” states the report. This is especially apparent among the 18 – 34 age group with 59% agreeing they’ve become more knowledgeable, compared to 48% of those aged 35 – 54, and 40% of those aged 55+. A total of 57% of the youngest age group also indicated they’re more likely to consider real estate as an investment opportunity.


“This highlights the impact the pandemic has had in broadening younger generations’ understanding of the market and perceptions of investment opportunities in the lead up to their peak home-buying years,” reads the release.


An overwhelming majority of respondents indicated just how tough entering the market has been over the course of the pandemic, with 81% saying they believe there’s a severe supply shortage in Canada, especially among renters (87%) compared to homeowners (77%).

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It may be difficult to buy a home or a plot of land in Toronto, so why not try the metaverse? Ever since Facebook announced it would change its name to Meta and focus on building its own digital world, interest in metaverse real estate has skyrocketed. In fact, real estate sales in the metaverse surpassed $500 million in 2021 and could double in 2022, according to data from MetaMetrics Solutions. Are we ready for this?

 

It’s becoming increasingly clear that commercial real estate in the metaverse is going to play a huge part in the global real estate industry in the years to come. In fall 2021, Tokens.com inked a letter of intent to buy a 50% stake in a digital real estate portfolio owned by Metaverse Group, which then plans to market the offerings as the first REIT (real estate investment trust) for digital real estate. The Metaverse Group believes that a public listing could come in 2022 or 2023.

 

The popularity of buying and selling digital property means companies like the Metaverse Group work for the most part, on the same type of tasks related to buying, selling and marketing as a traditional real estate company. As prices rise and buyers seem frenzied over virtual land — some express skepticism that investing in digital real estate will prove to be prudent down the road.

 

Yet despite the high prices, interest in metaverse real estate continues to grow, especially as the pandemic has driven more people online and made them more apt to virtually socialize. You can go into the metaverse and go to a museum. You could meet other friends there regardless of where they’re geographically located. Those interested in metaverse real estate also have competition, namely celebrities who have not been shy about touting their digital real estate activity.

 

The attention and interest given to the Metaverse have not escaped other companies besides Meta, formerly Facebook, and Microsoft, who are also eager to jump in on the action.

 

Like traditional real estate which often maintains value even during tough economic times, metaverse properties continue to boom despite ebbs and flows with Bitcoin (BTC) and other cryptocurrencies.

 

Investment firms are even dipping their toes into the Metaverse and continue to learn more about how they can get involved. High prices, popularity and the ease of buying and selling virtual land (in contrast to traditional real estate) mean the Metaverse will be more than a buzzword. Like the domain name scramble during the early ages of the internet, savvy investors and buyers who snap up properties in prime locations will look very smart as more and more people jump into the metaverse.

 

Keep in mind when assessing the metaverse as an investment opportunity, you can equate it to cryptocurrencies; getting in early can make you rich – but could also get you burned.


As the Metaverse continues to grow and expand — so will digital real estate. You can’t apply the rules of the real world into the metaverse. Savvy buyers and investors would be smart to stay ahead of the curve and assume the metaverse real estate boom is here to stay.

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Canadian real estate prices are soaring, but the fastest growth is not coming from big cities. BMO chief economist Douglas Porter tells clients to really think hard about this growth. Home prices are now rising even faster than at the peak of the 1980’s real estate bubble. Most of that growth isn’t coming from emerging global hubs, but small towns. He asks investors to consider: Do all small towns have supply shortages? Or is the madness of the crowd taking over?

 

Canadian real estate prices are rising at a record rate, dismissing more supply and higher rates. Annual growth of the Canadian Real Estate Association (CREA) benchmark price reached 28% in January 2022, the “record” for the index. It’s not just a base-effect either, says the bank, with prices up 46.4% since January 2020. Most of this growth also isn’t occurring in larger cities, but small towns in the country.

 

Some of the wildest markets in the country are in smaller and medium-sized cities in Ontario. Not to pick on Brantford, but that fine city—previously known mostly as the home of Wayne Gretzky—has seen prices sky-rocket 86% in two short years.

 

A similar trend can be seen across Ontario’s “cottage country,” where prices rose the fastest. Places like Barrie, Welland, Tillsonburg, Woodstock, Chatham, and Guelph are further examples. These are all charming places that might be future global hubs at some point. However, they’re closing the gap between prices in Toronto so fast, they might be killing growth pre-maturely.

 

The CREA Home Price Index only goes back to the year 2000, so there might be questions about how it compares to the ‘80s bubble. For that, BMO has to use the average transaction price from land registries. But even on the somewhat more volatile average transaction price measure, where records go back to 1980, the two-year gain is also a record, at 48%.

 

In other words, the Canadian housing market has just seen bigger increases than ever witnessed through any two years of the great housing bubble of the late 1980s. Just as a reminder, that episode ultimately saw the overnight mortgage rate climb to 14% to suppress inflation and bring the market to heel. Prices then went into the wilderness for a decade.

 

If you think it’s different this time due to population growth, one should consider the pace in the 80s. At the height of the late-80s real estate bubble, population growth outpaced today’s recent cycle peak. In 1989, the population growth rate was more than a quarter larger than the 2018-2019 peak. It turns out immigrants stop moving to a place when the value proposition collapses. Shocking right?

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Canada’s real estate market forecasts a strong spring – supercharged by the bank of mom and dad

Economist Benjamin Tal is forecasting a strong spring market in Canadian real estate and, with it, an even larger presence for the “bank of mom and dad”.

 

“You basically see people trying to get into the market before it’s too late,” Mr. Tal says. Parents have become increasingly generous in recent months as they pull out the stops so their adult children can buy a first home or move up to a better one. FOMO – fear of missing out – has infused the market with interest rate hikes on the horizon. Mr. Tal, deputy chief economist at CIBC World Markets, says the share of first-time buyers receiving help from parents has been climbing steadily to about 30 per cent at the end of the third quarter last year from about 19 per cent in 2015. His most recent data show the share of young buyers receiving gifts had edged up an additional one per cent by the end of 2021. The gifts have been getting larger as the average price has soared. Mr. Tal says the parents injecting cash have not been motivated by the pandemic as much as the trajectory of prices. The size of the average gift had jumped another $10,000 by December from the $82,000 earlier in the fall. In a market as richly priced as Toronto, that gift was more likely to be in the $130,000 range last year. Parents are also sharing their abundance with adult children who simply want to improve their living circumstances now. Mr. Tal warns that older generations should be cautious about being too generous with their gifts – whether they are handing over cash, signing on as a guarantor on a mortgage, or buying an investment condo for a young child’s future. Mr. Tal at CIBC is forecasting that the Bank of Canada will begin to raise interest rates in March. The economist expects the growth in real estate prices to slow in the second half of 2022 as rates rise. A gradual increase in rates would moderate demand and prove healthy for the market, in his opinion. Mr. Tal believes population growth and limited supply will cushion real estate prices from a correction. But he cannot rule out a pullback after the unharnessed run-in prices, he adds. “When prices go up by 20 or 25 per cent during the course of a year there’s always a risk. One possible trigger would be a faster pace of rate hikes than Bay Street is expecting. Currently, the narrative shared by many economists is that the supply chain issues will clear up and inflation will subside. But there is also the chance that narrative won’t play out as predicted, he cautions.  Mr. Tal notes that economic downturns in 1990 and 2008 were triggered by central bankers raising rates too quickly. “That can shock the system.” He cautions that parents who want to help their children should not do so by jeopardizing their own finances. 

“I definitely suggest that they should not take on a lot of debt,” he says. “If you get yourself into a situation where you are risking your retirement, think twice.

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The average price of a Toronto condo is now $740,000 - Condo prices continue to rise in Toronto, like pretty much everything else lately, as more and more potential homebuyers look up to the sky for cheaper alternatives to detached homes.


Those who entered the condo market last year after prices dipped hard due to the pandemic are likely sitting pretty now, but many others are finding it increasingly hard to afford what used to be the affordable option for home ownership in Canada’s most populous city.


The Toronto Regional Real Estate Board (TRREB) is reporting a “record fourth quarter” for condominium apartment sales in 2021. A total of 5,336 condo units were sold in the City of Toronto proper between Oct. 1 and Dec. 31 of 2021 for an average price of $739,683, according to TRREB. The average price during this same period of time in 2020? Approximately $645,000.


This represents an average value increase of nearly $100,000 over the course of just 12 months — a solid return on one’s investment, whether a property was purchased in early 2020 while the market was lagging or pretty much any time before then.


The City of Toronto saw more condos sold than any other GTA region, followed by Peel and York Experts have been warning for a while that such a thing would happen as housing prices grew out of control. With even the suburbs growing unaffordable for most young first-time home buyers, the only places left to go for those looking to own is up into vertical communities, and the data is showing clear evidence of this trend.


The resurgence in the condo market was a key real estate story for 2021. First-time buyers, who arguably remained on the sidelines longer than existing home buyers during the earlier stages of the pandemic, re-entered the market with vigour last year.


TRREB’s Chief Market Analyst Jason Mercer predicted similarly, as other experts have, that condo prices will continue to rise at a clip well into 2022. “In the early days of the pandemic, we saw a spike in condominium apartment listings and a brief lull in condo price growth,” said Mercer. “The situation reversed dramatically in 2021, with the number of available units dropping in the face of strong demand. The resulting double-digit price growth will carry forward into 2022.”

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How Baby Boomers are breaking Canada’s real estate market - In one of the tightest real estate markets ever recorded in Canada, Boomers are not letting go of their homes. It appears the real-estate wealthy Boomers are to blame for yet again disrupting markets. Traditionally, seniors sell their family homes and downsize or move into retirement communities. Born between 1946 and 1964, Boomers, who own a substantial share of Canadian real estate, are breaking that trend. They are ageing in place.


More than 20 percent of Canada’s population will be 65 within the next five years and they aren’t yet ready to move into retirement communities or nursing homes. It has been well-documented that the pandemic has intensified the problem in Canada. Boomers witnessed the tragedy that occurred during the pandemic in Canada’s long-term care and retirement facilities and are cautious of that future.


A 2020 Royal Society of Canada report that looked at long-term care in Canada during the early waves of the pandemic, highlighted its damaging state. Canada experienced a far higher proportion of total country COVID-19 deaths in nursing homes than other comparable countries — 81 percent in Canada, compared to 28 percent in Australia, 31 percent in the US and 66 percent in Spain. By March of 2021, more than 50 percent of all deaths from COVID occurred in nursing and seniors’ homes, according to the Public Health Agency of Canada.


Boomers are deciding to renovate or hire private help inside their homes. Because of the equity accrued in their homes, many can hire private help to ensure they can stay in the homes they own in communities they love for as long as possible. This trend was also noted in a study this past summer that found a majority of Boomer homeowners - 52 percent- would prefer to renovate their current property over moving. The study also found 75 percent of Boomers own their own home, and 17 percent own more than one property.


The trend is creating a bottleneck in supply for first-time buyers and young families. Millennials are starting to have families and have struggled because there is less housing supply for growing families.


In Canada, the ageing-in-place trend is running smack into one of the tightest real estate markets ever recorded. There are currently fewer properties listed for sale in Canada than at any point on record. A report by the Bank of Nova Scotia found that Ontario, Alberta, and Manitoba have the lowest housing stock per capita.


Yet another factor cited in the trend for Boomers to stay in their homes has been the rise in reverse mortgages. Canadians aged 55 and over are able to draw on a portion of their home equity to boost their liquid income while staying in their homes.


Home Equity Bank, a major provider of reverse mortgage products in Canada, recently disclosed that the country’s homeowners are now carrying more than $5 billion worth of its reverse mortgages, the largest amount ever.

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 A new report is urging Canada to consider a luxury tax on homes valued at over $1 million as a means to rein in surging real estate prices.


Home prices across Canada have skyrocketed over the past year, with month after month of record-breaking sales.

On Wednesday, non-profit advocate group Generation Squeeze released a report, funded by the Canada Housing and Mortgage Corporation, and in it, they recommended an annual surtax on all homes valued over $1 million. According to the report, homes at this price point make up just 9% of all homes, or 1,362,789 households in Canada.


In theory, the proposed surtax would reduce the tax shelter that reportedly incentives Canadians to rely on growing property prices as a strategy for savings and wealth accumulation. Since 1972, the report explains that Canadian tax policy has sheltered principal residences from taxation to help homeowners build wealth, but this has generated a “number of significant, unintended problems,” such as inflated demand and average housing costs.


The tax, as laid out in the report, would start at 0.2% and increase to 0.5% for homes between $1.5 and $2 million and go up to 1% for homes over $2 million. These taxes are estimated to bring in $4.54 billion in annual revenue.


The report noted that the government could use the collected tax to provide portable housing benefits for renters or other recommendations from the Lab, including investments in new green co-op and purpose-built rentals.


Generation Squeeze, who compiled the report with input from 80 experts, recommends that the tax be deferrable, meaning it would not need to be paid until the home is sold or the property is inherited. This would address any issues arising from individuals with limited income or whose home value is beyond their own wealth.

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December capped off a record year for real estate in the Greater Toronto Area — both in sales and price. According to the Toronto Regional Real Estate Board, 121,712 sales were reported through its MLS® System in 2021 — up an astounding 28% from 2020 which was a hot market, and 7.7% over the previous record high set in 2016. But as demand remained strong, the number of new listings on the market couldn’t keep up, with just a 6.2% increase in new listings compared to 2020.The average sale price for the GTA was up 24% from the prior year to $1,157,849, and the City of Toronto was up 15.5% to an average of $1,033,029.


While some 6,031 sales were reported in the GTA in the twelfth month of 2021, this was 15.7% below 2020’s all-time December record of 7,154. That said, prices simply did not slow down, as all home types saw between an 18% (condos), 25% (semi-detached) and 28% (detached) increase year-over-year.


The death of the downtown condo throughout 2020 could not have been more turned on its head in 2021. So much so that TRREB credits the condo recovery in the 416 as a leading reason behind the resurgence of sales within the City of Toronto. While sales in the surrounding GTA were up an impressive 23.6% compared to 2020, the City of Toronto saw a significantly higher increase in its annual rate, with 2021 clocking in a rather stunning 36.8% above 2020 — a more than 50% higher jump in sales than the suburbs. In other words, if 2020 was the great migration from Toronto, 2021 was the great return.

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Canada’s Gen Z shows surprising optimism when it comes to owning a home according to a new survey out of Vancouver. Gen Z (born 1997- 2012) is all too aware of pressing affordability challenges in major Canadian cities, notably Toronto and Vancouver. The survey results showed that 75% of urban Gen Z intend to own a primary residence in their lifetimes, with 11% already having done so. Moreover, while 82% of respondents expressed uneasiness about being priced out of their desired neighbourhoods, 70% want to purchase a single-family home during their peak-income earning years. Perhaps unsurprisingly, saving enough money for a down payment and considering other living expenses remains the major concern of more than a quarter of Gen Z respondents.


According to the survey, 50% had given up on the dream of owning a single-family home, but one of the things we must realize is this demographic is just coming into the workforce and starting to accumulate assets, and the interesting thing is 11% have already bought a home, so over time their earning potential will increase. Adding to that Gen Z is on the cusp of receiving a massive generational wealth transfer from their parents. So, economically, their buying potential will only improve over time.


In Toronto, 73% of Gen Z reported aspirations to own a primary residence, while 46% are “very likely” to, 28% are “somewhat likely” to, and 11% already do. But 84% of respondents who haven’t bought a home are worried they won’t be able to in their communities of choice because of surging price points, with fewer than half of this group “very worried,” according to the survey.


More than the other metropolitan areas surveyed, Toronto received the largest share of Gen Z respondents who said that current living expenses are the biggest hurdle to saving enough money for a down payment on a home. Additionally, 18% of respondents reported student loan payments were a big barrier. Owning a single-family home was also more pronounced among survey respondents in Toronto than in the other cities surveyed, with 72% declaring they would like to own one during their peak earning years, while 13% and 11% respectively preferred an attached home and a condo, and 3% stating that they want to own a duplex or triplex unit.


But 52% of respondents in the GTA have abandoned aspirations to own a detached home because the average price of which is now $1,540,432. Still, 38% of the city’s Gen Z respondents believe their first home will be a single-family dwelling.

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Auto lovers can soon park their toy in its own condo. This is going to be a luxury item people don’t need, but people are going to want to have this. Metropolitan Commercial Realty is planning to convert a multistorey 1970’s-era industrial warehouse in Etobicoke into a palace for storing cars, appropriately named ToyBx.


But while the plan has a decent chance of finding enough Toronto-area car lovers willing to buy one of the 195 separate units (each capable of holding at least four cars with a car-stacker rig) and 39 penthouse suites, all spread across three floors, some have seen the idea as an extreme example of a land-use system so broken that it’s easier to create apartments for cars than for humans.


They have not released pricing details to the public yet, but buyers could expect rates close to what a parking space costs in downtown Toronto residential condominiums, somewhere between $80,000 to $120,000, and the units start at 565 square feet.


Car storage is not just for the super-rich. People collect them for emotional reasons. A ’67 Camaro is just as important to the owner as the $300,000 Ferrari is to the person who parks it over the winter. In neighbourhoods where houses are historically protected, a lot of times they only have one-car parking and for those who can afford some of the high-end condos, parking is limited.


The company doing this is not insensitive to concerns from housing activists, but the building is smack in the middle of an area zoned for industrial uses by the City of Toronto and they don’t foresee a path to rezoning the land. The building in question was formerly part of a distillery. It was built out of concrete to serve as fireproof storage for aging spirts. As such, it’s practically a bomb shelter, with floors that could manage the weight of thousands of tonnes of liquor. The embodied carbon alone of the 180,000 square-foot structure makes re-using it a greener option than tearing it down.

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 Prospective homebuyers in the Greater Toronto Area found dramatically fewer homes on the market last month than they did a year ago. October was another record-setting month for Toronto and the GTA with the average year-over-year selling price up 19.3% to $1,155,345. The Toronto Regional Real Estate Board said that 9,783 homes in the region changed hands last month, down nearly 7% from a record 10,503 in October 2020. Despite the fall, the result was still the second-highest level for the month of October even as the number of new listings fell by about a third compared with a year ago.


TRREB interpreted the numbers as a sign of tightening conditions in a market that is already among Canada’s most expensive and prone to some of the country’s most fierce bidding wars. House prices continued to lead the market as they have throughout the pandemic, but condos also showed double-digit price growth in October. The average price for a condo in Toronto is $739,647 and in the GTA $703,698 TRREB’s data showed new listings decreased to 11,740 in October, a more than 34% drop from 17,806 during the same month last year.


Detached homes hit an average price of $1.54 million in the GTA soaring 27% compared to last October. Detached homes in Toronto continued to be the most expensive residential properties selling for an average of $1.78 million up 21%. In the City of Toronto, home prices moved quickly but not quite as fast as they did in the 905 region. Compared to the same month last year, a typical home is now 15.6% ($155,600) higher. Extremely fast growth but this tells us suburban home prices are growing even faster.


Rising interest rates, something the Bank of Canada signaled last week could happen as early as spring and could push some home buyers to the sidelines if they are on the edge of being able to afford a home. Adding to that, over the next year, we’re set to see much stronger population growth as borders start to open more and allow for more immigration.

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Investors who own multiple properties within the city has in recent years overtaken first-time homebuyers as the biggest slice of Toronto’s home-purchasing market, according to a recent report by Teranet.


As recently as 2016, Teranet — Ontario’s title search and registration provider, found the most common kind of person purchasing a Toronto home was a first-time buyer. But from 2016 to 2018, things changed. Multiple-home owners — a group that includes real estate investors as well as those who own a vacation home like a cottage — became the most common kind of homebuyer throughout the city. This year, between January and August, Teranet found that multiple property owners made up 29 percent of Toronto purchases, nudging first-time buyers at 28.5 percent.


And across the country, Equifax Canada has noted a multi-year surge in people with more than three mortgages, with a 7.7 percent increase between June 2020 and June 2021.


While some believe investors are taking away supply from prospective homeowners looking for their primary residence, others say they have the potential to provide needed rental supply. Experts say the exact degree to which investors have affected that growth is unclear. John Pasalis, president of Realosophy Realty, presented it as a sort of chicken-or-egg question: did the surge in investors lead to rising home prices, or did rising prices attract more investors?


Either way, he sees the increase in multi-home ownership as yet another challenge facing hopeful buyers searching for their own home, particularly in the competitive single-family house sphere. Pasalis noted that investors were often attracted to average or below-average homes where they saw potential to increase the property’s value. With more capital at their disposal, Pasalis said investors could often be more aggressive in bidding wars.


As of the last census report, slightly more than half of Toronto households owned their homes — 53 percent versus the 47 percent who rented. Of homeowners, 61 percent lived in single-detached, semi-detached, or row houses, while 87 percent of renters were in apartments.


He believes there’s more to the equation, though, noting some older properties are in a state where they require extensive renovations to be in livable shape. Not everyone has the time or money to do those kinds of renovations, he said, particularly someone who barely eked out a down payment.

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September marked the transition from the slower summer market to the busier fall market in the Greater Toronto Area (GTA). Every year, we generally see an uptick in sales, average selling price and listings after Labour Day, and September was no different. Sales increased relative to August, and in September, 9,046 sales were logged through MLS, making it the third-highest mark on record for the month of September. The 905 area of the GTA represented the majority of the sales, with 5,649 transactions.


The GTA suburbs are seeing prices rise much faster. For all home types, the average selling price was up 18.3% year-over-year to $1,136,280 in the GTA. The City of Toronto saw prices move in the same direction, but at a slower rate. The average sale price for the City of Toronto is $1,090,196 up 6.7% year-to-date.That would mean suburban price growth is significantly outpacing growth in the City of Toronto.


Detached property types within the 416 area are the priciest on the market, having grown 19.5 per cent annually in value to an average of $1,778,928.


On an annual basis, September sales were down 18 percent from 2020’s record-breaking levels. This is mostly due to the lower quantities of new listings, which TRREB says have dropped 34 percent year-over-year. Across the GTA, 13,483 new listings were added to the market last month, approximately 7,000 less from the 20,441 homes that came online during the same period last year. The majority of listings that became available in September were recorded in the 905 area, with 7,537 new properties. TRREB attributed a resurgence in the condo market as a factor behind the higher share of listings sold during September.


Jason Mercer, TRREB’s chief market analyst, pointed out that last month’s price growth was supported by the low-rise market segments, which include detached, semi-detached, and townhome properties.


“However, competition between buyers for condo apartments has picked up markedly over the past year, which has led to an acceleration in price growth over the past few months as first-time buyers re-entered the ownership market,” he said. “Look for this trend to continue.”

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The Canadian election is over, and the country’s leadership remains largely unchanged. However, a laundry list of election promises means big changes to real estate are coming. Most of the promised plan seeks to create more demand for housing, which softens price drops. Expect more of the same currently being done, but with a revamped buying and selling process. Here are some of the promises the Liberals are proposing under the “Home Buyer’s Bill of Rights”


• Banning bidding wars – Sellers would be required to tell buyers the dollar amounts of competing offers on properties. Currently, most bids on homes are “blind,” meaning buyers are unaware what others are offering to pay

• Ban foreign buyers from buying residential properties for two years

• A new tax-free savings account for first-time buyers

• Establishing a legal right for buyers to conduct home inspections

• An anti-flipping tax if the property is sold within 12 months of purchase

• The pricing history of properties to be made public

• Lenders to give mortgage deferrals for up to six months if a homeowner loses their job

• Realtors would be required to disclose if they are representing both buyer and seller (double-representation situations are seen as potential sources of conflict of interest)

• 25% lower rates on CMHC mortgage insurance

•Renovictions – slap a tax on what they deem excessive rent increases where landlords oust tenants to renovate units and jack up the rent

• To build, preserve or revitalize nearly 1.4 million homes over four years

• Investing $4 billion in a new Housing Accelerator Fund for municipalities

• Pledging $1 billion in loans and grants to develop a new rent-to-own program between landlords and renters


Most of these measures are regulated at the provincial level currently. It’s unclear how the Liberals would push through the majority of changes because real estate law falls under provincial and territorial jurisdiction.

For example, the industry is super duper upset about a ban on the blind bidding process. The implementation at the federal level would require criminalizing the process. Regardless of whether you’re in favor of the ban or not, going over provincial territory isn’t easy.


This brings us to our last point — these are promises, not definitive plans. A lot can change between now and implementation, especially if home prices weaken.

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