Trust in Real Estate Services Act (TRESA) came into effect December 1, 2023. There are many changes, but for today I’d like to focus on 2 changes. The first one is that Ontario will now allow open biding. The seller may choose to allow in a multiple offer situation bids to be be shared with others. The comments on this seem to be both positive and negative. I see it as a positive. Sometimes buyers will bow out of a multiple offer situation as they can’t handle the stress and don’t want to overpay. As a Realtor when you have a client successfully bid you wonder how much more did we offer. Did we offer too much! Sometimes, the other Realtor will say you did well! Your offer was correct. But now you’d be able to offer just enough to get the home.
The other change is representation. Where a brokerage represents the seller and the buyer, in the past the Realtor would then act as a facilitator providing information but not advice. Now a designated agent can provide the needed advice.
Airbnbs are making the news once again. This time, as potential options to help with the housing crisis. Of course, Airbnb is frowned upon in most condo buildings – seen as a potential compromise to security but the short-term rental of homes takes it out of the much needed long-term rental pool or sale. Details here.
The Canadian Real Estate Wealth addresses points to consider when investing in pre-construction real estate.
Understanding pre-construction investments
Financial aspects of investing in pre-construction condos
- inital costs and down payments
- Maintenance fees
- Potential for apppreciation
- Initial costs and down payments
- Maintenance and upkeep
- Resale Value
- Market Trends
- Property management
- Long-term goals
You may have read, in YahooFinance the post “Canada home prices slide as homebuyers go into ‘hibernation’“.
It was based on statistics released by CREA November 15, 2023. Highlights include:
- National home sales fell 5.6% month-over-month in October.
- Actual (not seasonally adjusted) monthly activity came in 0.9% above October 2022.
- The number of newly listed properties declined 2.3% month-over-month.
- The MLS® Home Price Index (HPI) decreased by 0.8% month-over-month but was still up 1.1% year-over-year.
- The actual (not seasonally adjusted) national average sale price posted a 1.8% year-over-year increase in October.
CTVNews has put together a list of 9 homes in Ottawa that can be purchased for approximately $700,000.
OTTAWA, November 7, 2023 – The number of homes sold through the MLS® System of the Ottawa Real Estate Board totaled 816 units in October 2023. This was a small reduction of 2.7% from October 2022.
Home sales were 36.4% below the five-year average and 30.8% below the 10-year average for the month of October.
On a year-to-date basis, home sales totaled 10,700 units over the first 10 months of the year. This was a substantial decline of 12.3% from the same period in 2022.
“Life is expensive these days, which likely has both buyers and sellers staying put,” says Ken Dekker, OREB President. “We’re seeing a slow decline in sales activity but it’s minimal and not unexpected for this time of year. Prices are adjusting and coming down, which is also indicative of the types of homes that are selling — apartments seeing the largest increase in sales activity over last October. While Ottawa’s inventory is slowly building, chronic supply issues mean there’s always an undercurrent of demand. Don’t let the lull fool you: now is a prime time for buyers to be looking for opportunities before the current carries us from a balanced market into seller’s territory.”
By the Numbers – Prices:
The MLS® Home Price Index (HPI) tracks price trends far more accurately than is possible using average or median price measures.
- The overall MLS® HPI composite benchmark price was $638,600 in October 2023, nearly unchanged, up only 1.8% from October 2022.
- The benchmark price for single-family homes was $721,600, up 2.2% on a year-over-year basis in September.
- By comparison, the benchmark price for a townhouse was $501,100, nearly unchanged, up 1% compared to a year earlier.
- The average price of homes sold in October 2023 was $660,836, increasing 2.9% from October 2022. The more comprehensive year-to-date average price was $671,983, a decline of 5.9% from the first ten months of 2022.
- The dollar value of all home sales in October 2023 was $539.2 million, unchanged from the same month in 2022.
OREB cautions that the average sale price can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The calculation of the average sale price is based on the total dollar volume of all properties sold. Price will vary from neighbourhood to neighbourhood.
- The number of new listings saw an increase of 6.6% from October 2022. There were 1,895 new residential listings in October 2023. New listings were 2% above the five-year average and 5.4% above the 10-year average for the month of October.
- Active residential listings numbered 3,062 units on the market at the end of October, a sizable gain of 16.7% from the end of October 2022. Active listings haven’t been this high in the month of October in more than five years.
- Active listings were 43.8% above the five-year average and 10.9% below the 10-year average for the month of October.
- Months of inventory numbered 3.8 at the end of October 2023, just up from the 3.1 months recorded at the end of October 2022. The number of months of inventory is the number of months it would take to sell current inventories at the current rate of sales activity.
More than 3 million Canadians have a mortgage renewing in the next 18 months, and most of them are worried about it. Royal LePage has recently issued a press release. These are the highlights:
- 16% of current mortgagees will be renewing their lending agreements within the next 12 months, while another 15% will be renewing in 12 to 18 months
- Almost three-quarters (74%) of Canadian mortgage holders currently have a fixed-rate mortgage; 20% have a variable-rate mortgage
- 40% of variable-rate or hybrid mortgage holders concerned about their upcoming renewal say they plan to switch to a fixed rate
- 64% of variable-rate or hybrid mortgage holders say that higher interest rates have caused their mortgage payment to hit its trigger rate and thus increased their monthly cost
- 76% of variable-rate or hybrid mortgage holders say that higher interest rates have caused financial strain on their household, causing them to reduce spending and dip into savings
Here are specifics of the mortgage renewal survey