Whether you are buying or selling a property, it is a major financial decision that involves a complex legal process.There are various legal documents, contracts, and potential risks. You need to get a real estate lawyer.
Click to read the full article on Concept Clarity’s real estate site
TORONTO — The Toronto Regional Real Estate Board says July’s home sales, listings and prices edged up from the same time last year, but activity looks to be slowing in the face of higher interest rates.
The Ontario board revealed Thursday that sales across the market reached 5,250 last month, up 7.8 per cent compared with July 2022.
Paul Baron, the board’s president, saw the increase as a sign that households have adjusted to higher borrowing costs after the Bank of Canada restarted its cycle of interest rate hikes because inflation has proven too stubborn.
“With that being said, it does appear that the sales momentum that we experienced earlier in the spring has stalled somewhat since the Bank of Canada restarted its rate tightening cycle in June,” he said in a press release.
His observation was borne out in month-over-month sales figures that July marked the second month in a row for lower sales. July sales were down almost 30 per cent from 7,464 in June and nearly 42 per cent from 8,987 in May.
They paint a picture of picture of a market that was picking back up despite a rapid succession of interest rate hikes last year but has since been spooked by further raises and high inflation.
The conditions have left many buyers on the sidelines awaiting further price declines or more favourable interest and mortgage rates, while sellers hold off listing properties because the bidding wars seen early in the COVID-19 pandemic have dissipated and buyer sentiment has dramatically shifted.
Toronto real estate agent Cailey Heaps said the market is accustomed to a seasonal slowdown in the summer months, but she noticed it started a little earlier this year and thought that was likely a result of recent interest rate announcements.
“The July announcement pushed some buyers back into the market more actively to take advantage of their existing mortgage approvals and rates, but it was still slower than June,” she said in an email.
“While we’re only halfway through, 2023 is shaping up to be a complicated year driven by uncertainty around the direction of interest rates, inconsistent demand from buyers in the central core of Toronto, and an economy that is trying to find balance.”
Those that are on the market for a new home have been finding fewer properties to chose from, though the board said their selection was more plentiful this July than last.
New listings sat at 13,712, almost 12 per cent higher than they were in July 2022.
The lack of inventory is driving prices up, Heaps and the board found.
The average selling price was up 4.2 per cent in July from a year earlier to $1,118,374, while the benchmark price was up 1.3 per cent.
The average cost of a detached home in the market rose 4.8 per cent year over year to top $1.4 million, while semi-detached properties rose 2.8 per cent to $1.1 million.
Over the same period, townhouses ticked up almost six per cent to $956,000 and the condo and apartment segment of the market edged up about two per cent to $735,000.
Overall prices, however, trended lower from June on a seasonally adjusted basis with the average price down 0.7 per cent.
The July price pullback marked the first time since February that such costs saw a retreat.
Toronto’s July figures came a day after the Real Estate Board of Greater Vancouver revealed the area’s composite benchmark sat at just over $1.2 million in July, up 0.6 per cent from the previous month and 0.5 per cent compared with the same month last year.
Sales in the market totalled 2,455 last month, a 28.9 per cent increase from a year ago. Sales were 15.6 per cent below the 10-year seasonal average of 2,909.
In order to beat the next round of interest rate increases by the Bank of Canada, move-up buyers, or Canadians who already own a home but find themselves in a position to upgrade, have been driving growth in the spring 2023 housing market, according to a new report from RE/MAX Canada. These are the general conclusions and emerging patterns in nine of Canada’s largest property markets.
With July’s 0.25 basis point rate hike, the BoCs key rate now sits at five per cent, and honwbuylng activity Is expected to slow through the summer months in most major Canadian housing markets. However. once it’s clear that the BOC is nearing the end of quantitative tightening and rates start to unwind, demand for housing will likely ramp up yet.
removing the possibility of financing uncertainties. Supply should remain the primary concern both in the move-up market and generally. that will put pricing under new upward pressure.
The catastrophic effects the housing scarcity will continue to have on real estate and affordability simply cannot be understated, according to Alexander. While the BoC’s changes could limit the market for houses. particularly at price ranges. We anticipate that they will serve as an unanticipated temporary dam, causing pent-up demand to increase and new home development to decrease. When the dam bursts and the BOC eventually decides to ease quantitative measures, the housing supply will decline even worse despite record population growth.
The Bank of Canada has been raising interest rates at the fastest and most significant pace since 1998. The central bank started an aggressive campaign of interest rate increases in 2022, with the objective of cooling the inflation rate.
While inflation has eased from its peak last summer, it still sits above the Bank’s two-per-cent target, driven by a wide range of factors, from expansionary pandemic-era fiscal policy to surging commodity prices. Higher interest rates are weighing on the Canadian real estate market, impacting demand volumes and moderating price growth.
In a survey of Canadians about the 2023 housing market, 45 per cent said they are concerned that interest rate increases will impact their ability to buy or sell a home this year.
A rising-rate environment reduces the purchasing power of prospective homeowners and increases the financial burden of current homeowners who have a mortgage. It is estimated that a one-per-cent hike in rates will add hundreds of dollars to mortgage payments each month.
According to Canadian Business, some homeowners who bought properties in the middle of the pandemic when interest rates were low may now find their budgets stretched thin to pay down monthly mortgage payments that have risen from the Bank of Canada’s interest rate hikes.
More than 70 per cent of those polled said another interest rate increase by the Bank of Canada would negatively impact their interest in real estate.
For mor information contact Nadia Rizk
Bank of Canada Puts Respite on Financing cost Climbs After 8 In succession
As was broadly expected, the Bank of Canada has reported today that it is holding its pattern setting loan fee at 4.5 percent. Homebuyers and borrowers with variable-rate mortgages will undoubtedly welcome this news. After an aggressive series of eight increases in a row in an effort to control sky-high inflation, the Bank has held its rate for the first time in more than a year. In June, the rate of inflation reached its highest point of 8.1%, but it has since fallen back to 5.9% in January as a result of lower prices for energy, durable goods, and some services. However, the Bank noted that the rising costs of housing and food continue to be prohibitive for many Canadians. Inflation remains above the Bank of England’s target of 2%, despite recent movement in the opposite direction.
Peruse the full declaration underneath:
Today, the Bank of Canada maintained its goal of 412 percent for the overnight rate, 434 percent for the Bank Rate, and 412 percent for the deposit rate. Additionally, the Bank is maintaining its quantitative tightening strategy.
The outlook presented in the Monetary Policy Report (MPR) for January has been broadly consistent with global economic developments. Even though inflation is still excessively high, it is decreasing primarily as a result of lower energy costs. Global growth continues to slow. Near-term growth and inflation outlooks are slightly higher than anticipated in January in Europe and the United States. Particularly, labor markets remain constrained and core inflation remains elevated. China’s economy is growing again in the first quarter. The Bank’s expectations for commodity prices have been roughly met, but the strength of China’s recovery and the impact of Russia’s war in Ukraine remain significant upside risks. Since January, financial conditions have gotten worse, and the value of the US dollar has gone up.
The Bank of Canada had predicted that Canada’s economy would grow at a flat rate in the fourth quarter of 2022. The significant slowdown in inventory investment was largely to blame for the weaker-than-expected GDP, which saw increases in net exports, consumption, and government spending. Prohibitive money related strategy keeps on burdening family spending, and business venture has debilitated close by easing back homegrown and unfamiliar interest.
The labor market is still extremely tight. Work development has been areas of strength for shockingly, joblessness rate stays close to notable lows, and occupation opportunities are raised. While productivity has decreased in recent quarters, wages have continued to rise at 4% to 5%.
Expansion facilitated to 5.9% in January, reflecting lower cost increments for energy, strong products and a few administrations. Canadians continue to face hardship as food and housing costs continue to rise. Product and labor market pressures are anticipated to ease due to weak economic growth over the next few quarters. Wage growth should be tempered by this, as should competition, making it harder for businesses to pass on higher prices to customers.
In general, the most recent data are still consistent with the expectation of the Bank that CPI inflation will fall to around 3% by the middle of this year. Core inflation measures decreased by about 5% year-over-year and by about 32% over three months. In order to bring inflation back to the 2% target, both will need to decrease further, as will short-term inflation expectations.
The Governing Council said in a decision in January that it expected to keep the policy interest rate at the same level as it is now, assuming that economic trends continue to broadly align with the MPR outlook. The Governing Council made the decision to keep the policy rate at 412 percent after evaluating the most recent data. This restrictive stance is being complemented by quantitative tightening. The Governing Council is prepared to raise the policy rate further if necessary to bring inflation back to the target of 2% and will continue to evaluate economic developments and the effects of previous interest rate increases. The Bank maintains its unwavering dedication to bringing price stability to Canadians.
