{"id":8476,"date":"2016-11-30T09:21:51","date_gmt":"2016-11-30T14:21:51","guid":{"rendered":"https:\/\/www.zoocasa.com\/blog\/?p=8476"},"modified":"2016-11-30T11:50:27","modified_gmt":"2016-11-30T16:50:27","slug":"monthly-real-estate-news-recap-november","status":"publish","type":"post","link":"https:\/\/www.zoocasa.com\/blog\/monthly-real-estate-news-recap-november\/","title":{"rendered":"Monthly Real Estate News Recap: November"},"content":{"rendered":"

We may be edging closer to the holiday season, but Canadian real estate<\/a> is showing no signs of easing up. November has been a busy month of change for the market, with several new rules, taxes and stats shaking up the status quo. From booming suburb sales to rising mortgage rates, here\u2019s this month\u2019s top real estate headlines.<\/p>\n

An Expos\u00e9\u00a0<\/span>on Unethical Agent Practices<\/h2>\n

A scathing expos\u00e9\u00a0<\/span>from CBC\u2019s Marketplace<\/em> casts new scrutiny on the practice of multiple representation in a real estate transaction, also known as \u201cdouble ending\u201d a deal. Armed with hidden cameras, journalists posing as prospective homebuyers caught\u00a0six real estate agents making promises \u2013 such as revealing\u00a0other buyers’ offers and guaranteeing the home sale \u2013 in exchange for representing them as well as the seller. In Ontario, where agents representing both ends of a transaction must inform all parties in writing, such tactics are highly unethical, drawing condemnation from both the Real Estate Council of Ontario (RECO) and the Ontario Real Estate Association (OREA).<\/p>\n

It is also\u00a0highly unfair to the seller, wrote Zoocasa Realty Broker of Record Lauren Haw in the Huffington Post<\/a>.<\/em> \u201cIn these situations, it is the home seller who has the most to lose. When you’ve contractually agreed to represent your seller clients, you must do everything in your power to represent their best interest,\u201d she states.<\/p>\n

\u201cIn today’s market that means attracting and working with as many\u00a0great offers as possible. In order to effectively represent your seller’s interests requires working with every potential buyer — including those represented by other agents. Controlling the situation in order to ensure both side’s commissions risks ostracizing the buyer who was actually willing to pay the most for the property.\u201d<\/p>\n

Related Read: What You Should Know About Multiple Representation in Real Estate<\/a><\/strong><\/p>\n

Buyers Swarm to the Suburbs<\/h2>\n

For homebuyers priced out of city real estate, the suburbs offer a much more affordable alternative \u2013 and they\u2019re moving past municipal lines\u00a0in droves, finds the Toronto Real Estate Board\u2019s latest report. According to TREB, the areas around Toronto saw the greatest sales and price growth in October, with some cities in the 905 experiencing as much as a 40% increase. There were 6,053 homes sold in the 905 compared to 3,715 in the 416, and buyers have their sights set on the detached home dream \u2013 single-family house sales were up a whopping 13.4% in the burbs. By contrast, and due to lack of supply, Toronto detached home demand rose only 1.5% last month. The hottest new affordable locale? South Simcoe County, which saw the greatest year-over-year growth at 25.38% for all home types, followed by York Region at 24.48%.<\/p>\n

Americans Vote to #MovetoCanada<\/h2>\n

Following the surprise outcome of the U.S. election, Americans unhappy with the prospect of a Donald Trump presidency turned north for their relocation options. Not only does interest in #MovetoCanada<\/a> spike in the week leading up to the vote, but real estate websites see a steep uptick in visits\u00a0from U.S.-based buyers. The\u00a0Canadian immigration website crashed from the traffic surge, and American visitors accounted for 30% of all traffic on Zoocasa<\/a> in the election aftermath.<\/p>\n

Empty Homes Tax is Passed in Vancouver<\/h2>\n

Vancouver mayor Gregor Robertson made good on his June promise to tax empty homes<\/a> in the city, to go into effect January 1, 2017. Not only will absentee homeowners need to pay up 1% of their home\u2019s total value, but they\u2019ll face steep fines \u2013 potentially daily \u2013 if they lie about whether their home is sitting empty. The tax is a measure to cut back on purchases made by out-of-country investors who don’t intend to dwell in their homes, and to improve the supply of rental housing from the nearly non-existent vacancy rate of 0.6% to a healthier 3.5%.<\/p>\n

\u201cIt\u2019s absolutely unacceptable for all that housing to be treated as a commodity first \u2013 as a business holding \u2013 when housing is in such short supply,\u201d Robertson said. \u201cVancouver is in a rental-housing crisis. The City won\u2019t sit on the sidelines while over 20,000 empty and under-occupied properties hold back homes from renters.\u201d<\/p>\n

According to a city-commissioned study, there are 10,800 homes sitting empty, with an additional 10,000 not fully used by their owners. The 2011 Census conducted by the Federal Government also found more than 22,000 homes are sitting empty.<\/p>\n

British Columbia is No Longer a Seller\u2019s Market<\/h2>\n

The latest data out of the British Columbia Real Estate Association and the Canadian Real Estate Association show sales in the province \u2013 and especially in Metro Vancouver \u2013 continue to droop following the implementation of a 15% foreign investor tax in the city as well as new restrictive mortgage rules. Sales in BC fell by 16.7% year over year, with just 7,272 homes changing hands. The dollar volume of sold units also plunged by 24.2%, with an average price of $606,787 \u2013 a 9.1% decline.<\/p>\n

According to CREA, the sales-to-new-listing ratio in the province is now in the mid-fifites range, signaling that conditions are no longer favourable to sellers (considered above a ratio of 60%).<\/p>\n

Ontario First Time Buyers Catch a Break<\/h2>\n

In what seems like the only boost for first-time buyers in ages, the Ontario Government has announced measures to reduce the steep costs they\u2019ll face when closing their home purchases. The land transfer tax rebate will be doubled<\/a> to $4,000 from $2,000 for first-timers as of January 1. The minimum threshold for the tax has also been raised \u2013 those buying homes priced up to $368,000 will avoid the tax altogether (from the previous $277,500). Stated Ontario Finance Minister Charles Sousa, \u201cThe housing market is an important source of economic growth and employment in Ontario.\u00a0Improving housing affordability will help more Ontarians take part.<\/p>\n

\u201cPurchasing your very first home is one of the most exciting decisions in a young person\u2019s life, but many are worried about how they will be able to afford their first condo or house.\u201d<\/p>\n

For a first-time buyer putting the minimum 5% down, an extra $2,000 may go a long way; it could help them make a larger down payment, thereby reducing the amount of CMHC mortgage default insurance they must pay.<\/p>\n

Currently, Toronto is the only city where buyers must pay a municipal land transfer tax as well as the provincial one, and it appears it will stay that way, as Minister Bill Mauro announced two days later that the province will not be implementing MLTT in other municipalities.<\/p>\n

CMHC Proposes Raising the Minimum Down Payment<\/h2>\n

Could there be more changes to come for Canada\u2019s mortgage market? Canada Mortgage and Housing Corporation President Evan Siddall alluded to the possibility in a speech made to the Bank of England. While admitting hiking interest rates would be too drastic a move in\u00a0current economic conditions,\u00a0he did say the housing watchdog was looking to its other options to control the market, including upping the minimum down payment<\/a> in order to qualify for a mortgage. This would be the second time in as many years the down payment minimum was raised, and also follows new stress testing rules for high ratio buyers introduced in October.<\/p>\n

A New National Housing Plan<\/h2>\n

The CMHC also releases its \u201cLet\u2019s Talk Housing Report<\/em>\u201d, the result of thousands of consultations conducted by the Conference Board of Canada. The report, which highlights the top issues facing Canadian real estate and housing, coincides with National Housing Day, an initiative to bring awareness to the housing needs of Canada\u2019s most vulnerable. In addition to these findings, the federal government also announces a five-year plan to improve affordable rental housing throughout the country, investing $2.5 billion to build 10,000 units.<\/p>\n

A Warning from OSFI<\/h2>\n

Mortgage rates couldn\u2019t stay at such record lows forever \u2013 and now that they\u2019re slowly rising, Canada\u2019s banking watchdog \u2013 the Office of the Superintendent of Financial Institutions \u2013warns relying on the cheap cost of borrowing will lead to disaster for lenders and consumers alike. Jeremy Rudin, OSFI head, stated, \u201cA pronounced or prolonged economic downturn could well involve a meaningful house price correction. This could translate into significant losses for lenders and insurers.\u201d<\/p>\n

It\u2019s Getting Easier to Rent \u2013 Just Not in Toronto or Vancouver<\/h2>\n

CMHC\u2019s Fall Rental Report finds that while rental vacancy rose in several markets \u2013 and is dangerously high in Alberta \u2013 conditions are still incredibly tight for Vancouver and Toronto home seekers. Vacancies rose to 0.7% in the west coast city, and to 1.3% in Toronto, along with prices \u2013 it is now 5.7% more expensive to rent a two-bedroom unit in Vancouver, and 3.1% more expensive in Toronto.<\/p>\n

New Rules Targeting Lender Funding Take Effect<\/h2>\n

On November 30, new rules limiting how lenders can insure their mortgage portfolios<\/a> will take effect, impacting their ability to fund their business. While mortgage insurance must be purchased by consumers paying less than 20% on their home purchases, lenders have the option to purchase additional insurance for higher-equity mortgages as well \u2013 a common tactic used to bundle them into mortgage-backed securities, and sell them for funding. Under the new rules, the following mortgage types cannot be insured:<\/p>\n