The OSFI stress test continues to impact homebuyers ability to qualify for a mortgage countrywide. Many real estate boards are arguing that the stress test provisions and mortgage lending guidelines generally, including allowable amortization periods for insured mortgages, should be reviewed.
The condo units in the entry-level range are near depletion as first-time homebuyers are trying to get into the market at the lowest possible price. Moreover, previous renters may have been pushed into condo ownership with rental vacancy decline and rental price increases. If there were concrete incentives for investors to purchase properties to lease or develop purpose-built rentals – it could certainly stimulate the rental market.
Ontario - mortgage stress test continues to impact homebuyers' ability to qualify for a mortgage.
Toronto, 05 April 2019 -- Toronto Real Estate Board President Garry Bhaura announced that Greater Toronto Area REALTORS® reported 7,187 residential sales through TREB's MLS® System in March 2019. This result was in line with 7,188 sales reported in March 2018. For the first quarter of 2019, sales were down by one% compared to Q1 2018.
"The OSFI stress test continues to impact homebuyers' ability to qualify for a mortgage. TREB is still arguing that the stress test provisions and mortgage lending guidelines generally, including allowable amortization periods for insured mortgages, should be reviewed. The supply of listings in the GTA also remains a problem. Bringing a greater diversity of ownership and rental housing online, including 'missing middle' home types, should be a priority of all levels of government. TREB is happy to be taking part in the City of Toronto's consultations for the Housing TO – 2020-2030 Action Plan, and will certainly be raising the supply issue during these discussions," said Mr. Bhaura.
"While the City of Toronto's recently announced Housing TO – 2020-2030 Action Plan is exciting and commendable and TREB looks forward to contributing solutions as a Member of the External Advisory Committee, the recently proposed increase to the Municipal Land Transfer Tax on higher priced properties is problematic. As the recent City budget process showed, the MLTT is not a sustainable revenue source from which to fund municipal programs. On top of this, additional MLTT on higher priced homes could have a trickle-down effect on the supply of homes throughout the housing price continuum," said TREB CEO John Di Michele.
The MLS® Home Price Index Composite Benchmark was up by 2.6% year-over-year in March, while the average price for March sales was up by a lesser annual rate of 0.5% to $788,335. The average selling price for Q1 2019 was up by 1.1% year-over-year.
"Market conditions have remained tight enough to support a moderate pace of price growth. Despite sales being markedly lower than the record levels of 2016 and early 2017, the supply of listings has also receded. This means that in many neighbourhoods throughout the GTA, we continue to see competition between buyers for available listings, which provides a level of support for home prices," said Jason Mercer, TREB's Chief Market Analyst.
Ottawa - A Slow March into Spring Market for Ottawa Real Estate
Ottawa, April 3, 2019 -- Members of the Ottawa Real Estate Board sold 1,511 residential properties in March through the Board’s Multiple Listing Service® System, compared with 1,654 in March 2018, a decrease of 8.6%. March’s sales included 1,136 in the residential property class, a drop of 12.4% from a year ago, and 375 in the condominium property class, an increase of 5% from March 2018. The five-year average for March unit sales is 1,402.
“Lack of inventory is responsible for March’s deficiency in residential unit sales,” states Ottawa Real Estate Board’s President, Dwight Delahunt. “This tightness of supply is manifesting in significant reductions in DOMs (days on market) and properties selling very quickly. Residential DOMs are down 14%, and condo DOMs are down 36% from last year.”
“In some pockets of the city, buyers are facing multiple offer situations, and properties are often selling over list price. These dynamics of low inventory reduced days on market, and multiple offers are signs of a seller’s market in these areas. While a benefit to those sellers, it’s stressful and time consuming for buyers. The experience and guidance of a REALTOR® are essential in these types of market conditions,” he adds.
“A major factor contributing to the lack of housing stock is the shortage of quality options for those who might list their homes. Move-up sellers feed the market for first-time homebuyers. Another issue which adds to a seller’s reluctance to put their home on the market is the B-20 stress test which affects their purchasing power,” Delahunt asserts.
“In Ottawa, we have a population base that’s increasing year over year with a growth rate of 8.8 percent, which is higher than Ontario (5.7%) and Canada as a whole (5.9%). Immigration and high employment levels are bringing residents to our desirable and affordable city,” he suggests.
Delahunt continues, “With high demand and limited supply, prices will continue to be pushed upwards – it’s a simple and fundamental economic principle. Although we appreciate the recent measures the federal government has taken towards affordable homeownership, all three levels of government need to work together at implementing mechanisms that will also restore the supply side of the market.”
The average sale price of a residential-class property sold in March in the Ottawa area was $480,143, a rise of 7.2% over March 2018. The average sale price for a condominium-class property was $290,181, an increase of 5.2% from this month last year.*
The $300,000 to $449,999 price range continued to represent the most active price point in the residential market, accounting for 43% of March’s sales while 1 in 4 residential sales was in the $500,000 to $749,999 range. The most prevalent price point in the condominium market increased to the $225,000-$349,999 price range, accounting for 49% of the units sold.
“The condo units in the entry-level range are near depletion as first-time homebuyers are trying to get into the market at the lowest possible price. Moreover, previous renters may have been pushed into condo ownership with rental vacancy rates in Ottawa at less than 1%. If there were concrete incentives for investors to purchase properties to lease or develop purpose-built rentals – it could certainly stimulate the rental market,” Delahunt concludes.
In addition to residential and condominium sales, OREB Members assisted clients with renting 550 properties since the beginning of the year.
Alberta - Oversupply persists despite improved sales activity for an affordable product
City of Calgary, April 1, 2019 – March saw a modest decline in citywide sales activity compared to last year. However, sales have been rising for a more affordable product in the detached and attached sectors.
Shifts in the lower end of the market have not outweighed easing across the higher priced product. First-quarter sales dropped to 3,108 units. This is nine% below last year and 28% below typical levels of activity.
Price declines and relatively slow sales activity are impacting the number of new listings. For the second consecutive month, new listings eased compared to last year’s levels and long-term trends, but it was not enough to prevent inventory growth.
“If new listings continue to slow compared to sales, it could start to help with the persistent oversupply scenario weighing on our housing market,” said CREB® chief economist Ann-Marie Lurie.
“However, inventory is still high. It will still take time for our market to transition towards more balanced conditions and stable pricing.”
With 6,595 units in inventory in March, the months of supply eased to five months. This is an improvement over the past several months but still considered oversupplied when compared to levels traditionally recorded in March.
The oversupply in the Calgary market has caused further price declines this month. As of March, benchmark prices eased to $413,900, five% below last year’s levels and just below levels recorded last month.
British Colombia - Stress Test Creating Pent-up Demand
Vancouver, April 15, 2019. The British Columbia Real Estate Association (BCREA) reports that a total of 5,707 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in March, a decline of 23% from the same month last year. The average MLS® residential price in the province was $687,720, a decline of 5.4% from March 2018. Total sales dollar volume was $3.9 billion, a 27.1% decline from the same month last year.
“BC home sales continue to be adversely impacted by federal mortgage policy,” said BCREA Chief Economist Cameron Muir. “The erosion of affordability caused by the B20 stress test has created near recession level housing demand despite the province boasting the lowest unemployment rates in a decade.”
“The sharp erosion of affordability caused by the B20 stress test is now creating pent-up demand, as many would-be home buyers are forced to wait on the sidelines,” added Muir. “Unfortunately, new home construction is slowing as well, which will likely lead to another housing supply crunch down the road.”
Total MLS® residential active listings increased by 36.2% to 34,295 units compared to the same month last year. The ratio of sales to active residential listings declined from 29.4% to 16.6% over the same period.