by Ephraim Vecina

The real estate industry will be closely looking at the re-elected Liberal government to see if it will live up to its mandate of serving the people’s best interests, according to RE/MAX Ontario-Atlantic Canada executive vice president and regional director Christopher Alexander.

“Affordability is a top priority for Canadians, and it’s encouraging to see the theme of affordability and housing dominating the 40-day campaign period,” Alexander stated. “But for the time being, these are still just promises. All eyes will be on Trudeau to see what transpires in the coming weeks and months.”

From the economic turmoil in Western Canada to consistently high prices in Ontario, the federal government should focus on addressing the multiple pressures on the industry.

“The Liberal government needs to commit to supporting a healthy housing market, which remains fragile in many regions across Canada,” Alexander added. “A healthy economy and low unemployment are the foundation of a good market, in every industry.”

The 2019 National Housing Survey by real estate information portal Zoocasa found that more than four out of five (84%) Canadians consider housing affordability a crucial economic and political issue.

Furthermore, 78% of the poll’s respondents, along with 90% of renters, said that the new government should place housing affordability at the top of the issues to address.

Meanwhile, 91% of Canadians indicated a belief that housing prices in their locales have been rising faster than incomes, and 92% said that this price growth has made it all but impossible for the average household to own a home.

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The Canadian Press

OTTAWA — The pace of Canadian housing starts slowed in September compared with August, but still came in better than expected.

Canada Mortgage and Housing Corp. said Tuesday the seasonally adjusted annual rate fell 2.5 per cent month-over-month to 221,202 units in September compared with 226,871 in August.

However, economists on average had expected an annual pace of 214,500 for September, according to financial markets data firm Refinitiv.

“This continues to reflect strong demographic demand, both from international inflows and new households created within Canada,” said Robert Kavcic, a senior economist at Bank of Montreal.

“There’s a lot of homebuilding activity going on across the vast majority of Canada.”

The overall decrease in the rate of housings starts last month came as the pace of urban starts fell 2.4 per cent to 208,503 units.

Urban starts of apartment, condo and other types of multiple-unit housing projects dipped 0.2 per cent to 159,742, while starts of single-detached urban homes fell 9.2 per cent to 48,761 units.

Rural starts were estimated at a seasonally adjusted annual rate of 12,699 units.

The six-month moving average of the monthly seasonally adjusted annual rates of housing starts was 223,507 in September, up from 218,782 in August.

The CMHC’s monthly report follows industry figures that show home sales have been stronger than last year and stronger than the early months of 2019.

Last month, the Canadian Real Estate Association raised its 2019 forecast sales of existing homes to 482,000 units, up five per cent from 2018.

“Canada’s housing sector is back on the front foot with resales picking up as the year progresses and homebuilding activity clearly displaying some momentum,” Josh Nye, a senior economist at Royal Bank, said Tuesday.

“Ontario, the Prairies and Atlantic Canada are on the rebound while the trend in B.C. and Quebec remains strong despite slower starts in the last month or two.”

In a separate report, Statistics Canada said Tuesday the value of building permits issued by Canadian municipalities rose 6.1 per cent to nearly $9.0 billion in August.

The value of permits for multi-family dwellings increased 18.8 per cent to $3.3 billion in August, while the value of permits for single-family homes rose 3.2 per cent to $2.4 billion.

Industrial permits rose 18.9 per cent to $675 million, while commercial permits fell 5.9 per cent to $1.9 billion. Institutional permits slipped 10.7 per cent to $651 million.

by Ephraim Vecina

Roughly 1.34 million homes across Canada lie empty or merely hold temporary occupants, according to a report by Point2 Homes.

The 2016 figure, the most recently available batch, represented 8.7% of the units available in the national market. This share was noticeably larger than the 8.4% proportion seen a decade prior, and was far larger than the 2.8% peak registered in the U.S. market during the same time frame.

Toronto accounted for 66,000 of those empty homes, while Montreal had 64,000. Markets with more than 20,000 unoccupied dwellings include Calgary, Ottawa, and Edmonton.

And while Vancouver had a relatively restrained 25,000 vacant houses, it had the largest empty-to-occupied ratio across Canada, at 8.2% of the market’s homes.

“Vancouver has been in this crisis for over a decade,” former mayor Gregor Robertson told Point2 Homes.

“We had ramped up our rental housing supply, [and] focused on supportive housing for our most vulnerable population, but the pressure in the real estate market continued to escalate dramatically. The influx of foreign capital wasn’t well regulated by our federal government. The result was untethered speculation, jacked-up prices and flipping in the local real estate market.”

Aside from the usual suspects of “foreign buyers jacking up prices and unaffordability taking over major cities,” Point2 Homes also noted that “investor speculation and short-term rentals are the main culprits behind high vacancy rates in places like Toronto and Vancouver.”

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by Neil Sharma

The two frontrunners in next month’s federal election are appealing to Canadians concerned about the state of the environment.

As an election promise, the Conservatives are offering tax credits for renovations oriented towards energy-efficiency, which leader Andrew Scheer says will help the country meet its target for reducing greenhouse gas emissions. The tax credit would allow up to $3,800 on home renovations of up to $20,000.

The Liberals announced they would help Canadians at risk of flooding, including a national plan to help relocate homeowners near high waters.

NDP leader Jagmeet Singh made British Columbia’s money laundering problem the focus of his Wednesday campaign stop in Delta, where he said his party will dedicate an RCMP unit to fighting the province’s scourge of dirty money. Money laundering has been identified as a key component to exorbitant housing costs in B.C.

The proposed federal crime fighting unit would receive $20 million per annum in funding.

Singh additionally announced that a national beneficial ownership registry—which experts have stated would significantly curtail money laundering through the housing market—and impose a 15% nationwide tax on foreign buyers.

The national foreign buyer tax would be especially significant in B.C. because it would be added onto the existing 20% foreign buyer tax already implemented by the provincial government.

Singh also took a potshot at the Prime Minister.

“When B.C. families asked for help with the out-of-control housing market, Justin Trudeau spent $4.5 billion of their money on a pipeline project,” Singh said Wednesday. “Liberals and Conservatives have failed people here for too long. British Columbians deserve real partners in Ottawa—a New Democrat government that has the courage to do what’s right to make sure that everyone has an affordable place to call home.”

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The Canadian press

As Canadian home prices rose from 2014 to 2017, many households tapped the growing value in their homes for other spending, according to study by Bank of Canada economists.

About two million households used home equity lines of credit (HELOCs), but another 380,000 got mortgage financing to raise equity, taking advantage of interest rates that fell in 2015, the researchers say in an analysis released Friday.

That led to an increase of 0.5 per cent in GDP annually because of increased spending, proving the importance of home values to boost consumption and renovation spending, according to researcher Anson Ho.

“Total equity extraction peaked at $89 billion in 2017. Of this, $49 billion was through HELOCs and $40 billion through mortgage refinancing,” the study found.

It’s generally been a good thing for the economy. Household spending would have been materially lower without equity extraction, the researchers say.

Where the money goes

About 25 per cent of the spending went to home renovations and another quarter went to consumption of other big-ticket items, including cars and furniture. Only about 28 per cent went to debt consolidation, with another 22 per cent going to investments.

The study found household spending tends to rise with home prices. Canadians find it easier to borrow against their homes as values rise.

In 2017, household spending jumped 3.5 per cent, while house prices rose an average of 13 per cent across the country.

Starting in 2015, Albertans were big on tapping HELOCs and refinancing mortgages to tide them over the drop in oil prices.

Conversely, house prices stalled or fell in 2018 and stock markets stumbled. That led to a decline in consumer spending and in borrowing against homes. That could have had a negative impact of 0.1 per cent on the GDP, the researchers found.

“If this collateral effect is strong, it could leave the economy more vulnerable to adverse events, such as a large decline in house prices,” the study said.

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