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Home sales surge 32.1% in November, cottage country leads in price gains

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Canadian home sales rose 32.1 per cent in November compared with the same month last year, matching the record-breaking year-over-year increase seen in October, the Canadian Real Estate Association said on Tuesday

But the real .estate association also says home sales edged back 1.6 per cent between October and November, as the market settled into the traditionally slower winter season after COVID-19 delayed the spring rush.

“As expected, the level of activity continues to recede from the massively elevated levels observed a few months ago,” wrote Rishi Sondhi, an economist at TD Economics, in a note to clients.

“However, November was still a strong month, with overall activity firm and sales remaining high across the country. It’s likely that low interest rates and resilient employment in higher-wage industries (where homeownership rates are high), continue to underpin housing demand.”

Nasma Ali, founder of One Group Toronto Real Estate, Inc. says that after peaking in spring, the real estate market normally sees a slight uptick after Labour Day and quiets by December, with little activity until after the new year.

But this year, COVID-19’s spring lockdowns created a bottleneck in June, and things have not died down much since, Ali says.

“It’s been very busy,” she says. “Obviously less busy than October. But it’s much busier than previous years around this time.”

CREA said 511,449 homes have been sold so far this year, putting Canada’s real estate market on pace for a potential annual sales record. For the first 11 months of the year, the real estate market is within 0.3 per cent of 2016’s record, CREA’s report said.

“That means it’s possible that more people have moved this year than ever before, and I think it’s because there is something major that has come and changed all of our lives,” says Ali. “There are some companies that are never going to go back to being in a physical office, and so now people have reconsidered their future.”

The association says the inventory of home listings sits at a record low and is currently on track to last only 2.4 months, as new listings fell 1.6 per cent in November.

Ali says she is seeing a “severe” shortage of single-family homes for sale in her area, as people often wait until the new year to list. Meanwhile, properties in outlying markets, like Oshawa, Ont. are seeing multiple offers as demand to buy homes stays steady.

The real estate association says the national average home price was $603,000 in November, up 13.8 per cent from the same month last year. The figure would be nearly $122,000 lower if Vancouver and Toronto were excluded.

Ontario’s cottage country is leading with price gains of nearly 30 per cent in some regions, while Ottawa, Montreal and Moncton have all seen price hikes of 15 per cent or more, CREA said.

“Markets outside the core of the major cities remain extremely tight, and price growth should carry into 2021,” wrote BMO Capital Markets senior economist Robert Kavcic, who called the demand for recreational properties “ravenous.”

Despite the “blistering” increase in home sales this year compared to last, TD economist Sondhi noted that condo prices in Montreal, Toronto and Vancouver are not keeping up with the price increases for detached homes.

Although condo prices have not held up as well during the ongoing recession, Ali says the recent news of a vaccine has some of her buyers and sellers feeling more optimistic.

“Everybody needs bigger space, and everybody’s leaving the core for that. Restaurants, businesses, they’re all closed, so there’s no real need to be in a walkable area. Nobody wants to take transit anymore. It’s like the world is upside down right now,” she says,

“When the vaccine comes in, immigration comes back, students come back, tourism comes back. Condos will have a comeback, as well.”

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Real Estate

These are the most competitive real estate markets in Ontario right now

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If you've been tinkering with the idea of giving up your rented pad to buy a home, now might be a decent time — at least in Toronto.
Competition among buyers in Canada's largest city has cooled significantly over the past year, according to the real estate brokerage and analysis firm Zoocasa, with figures now suggesting that Toronto is no longer a "seller's market" but a "balanced market."
"Housing competition heated up this fall across major Ontario markets despite new pandemic restrictions being rolled out by the Ontario government to slow the spread of COVID-19," reads a new report released by Zoocasa on Thursday.
"There was an annual uptick in home sales across the province with several real estate boards including the Toronto Regional Real Estate Board (TRREB) reporting a record-breaking month of sales in October."
True as this may be, there were still a few Ontario cities in which the sales-to-new-listings ratio (SNLR) showed less, not more competition among buyers.
All of them are in the Greater Toronto Area.
In terms of the SNLR, anything above 60 per cent suggests a seller's market. An SNLR between 50 and 60 per cent depicts a market where supply and demand are relatively balanced. An SNLR under 40 would mean a buyer's market.
There are currently zero buyer's markets in Ontario based on this metric.
"Our findings show that 30 of the 35 markets included in our analysis exhibit strong sellers' market conditions, where high demand and a low number of new listings meant that buyers faced strong competition for listings," notes Zoocasa.
"This is up from 27 markets that exhibited sellers' market conditions in October 2019. The remaining markets all exhibited balanced market conditions, and notably, each of these balanced markets is located within the GTA."
Toronto's SNLR as of October 20202 was just 45 per cent, according to Zoocasa, down from a seller's market rate of 66 per cent during the same month in 2019.
And yet, demand for detached homes has been steadily rising since the pandemic hit in March — so what gives?
"It's important to keep in mind that these figures are influenced by condo market activity, where sales have declined amidst the pandemic while new listings increased by more than double (109 per cent) year-over-year," explains Zoocasa.
Of all 35 cities ranked, only Toronto, Richmond Hill, Vaughan, Markham and Mississauga could be considered to have balanced markets as of October 2020.
The rest of Ontario, meanwhile, "exhibited strong sellers' market conditions in October, with an SNLR of 80% or more."
Four markets, in particular, saw a marked increase in demand with SNLR rates of more than 100 per cent detected. They are: Sudbury (SNLR of 100 per cent), Niagara Falls (105 per cent), Thunder Bay (108 per cent) and St. Catherines (112 per cent).

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Formerly a sellers’ market, Mississauga real estate market more balanced during pandemic

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With restrictions still in place for many parts of Ontario, and three regions once again in lockdown–with the possibility of more joining them–many people are looking to upgrade their living situations.

Throughout October, the Ontario housing market has seen significant competition among buyers, and there was an annual uptick in home sales across the province.

Several real estate boards, including the Toronto Regional Real Estate Board, reported a record-breaking month of sales.

Zoocasa has been tracking housing competition across 35 Ontario real estate markets during October by reviewing sales and new listings data for each region.

This data is used to determine the sales-to-new-listings ratio (SNLR), which indicates whether a market is a buyers’ market–SNLR under 40 per cent–a balanced market–SNLR between 40 per cent and 60 per cent–or a sellers’ market–SNLR over 60 per cent.

According to the findings, 30 out of the 35 markets exhibited strong sellers’ market conditions, such as high demand and a low number of new listings.

This is up from the 27 markets that favoured sellers in October 2019.

Additionally, 14 of the 19 GTA markets favour sellers. Mississauga was one of the five markets that exhibited balanced conditions–there were 943 sales and 1,665 new listings which resulted in an SNLR of 57 per cent.

This represents a pretty significant shift from last year, when Mississauga’s SNLR was 73 per cent–a sellers’ market.

The decline has been attributed to the fact Mississauga is a condo-dense market, which means it has a higher volume of listings, while sales saw a decline due to the pandemic.

“Going into 2021, I expect more competition in the first quarter, as sellers that were able to wait on the sidelines or were undecided may begin to list their homes,” Evelyn Anders, a Zoocasa agent in Toronto, said in a recent release.

“Depending on its effectiveness, the COVID-19 vaccine is likely to have a ripple effect on housing market conditions, particularly in dense urban centers like Toronto, that may see demand re-emerge across all market segments,” she continued.

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Another record-breaking month for real estate sales in London region

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The string of record-setting months for real estate sales continues in the London area.

The London and St. Thomas Association of Realtors (LSTAR) says 854 homes were sold in November, an increase of more than 33 per cent compared with the same month in 2019.

That makes it the best November for the organization since it began tracking figures in 1978.

“This is the third consecutive month of record sales, demonstrating how robust the housing marketplace is right now,” said Blair Campbell, LSTAR 2020 president.

“We continue to see increases in average sales price across the region in a market with historically low supply.”

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The average price for a home in the region climbed by more than 28 per cent to $536,178.

The biggest year-over-year increase was in London South, where a home is almost 34 per cent HIGHER compared with 2019.

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