Financial Post - January 6, 2023
The question after a tough 2022: How much further do real estate prices have to fall?
Home prices in Canada’s biggest markets ended 2022 well below the soaring peaks posted earlier in the year. Now the question is: How much further do they have to fall?
When comparing each region’s peak against December’s benchmark price results, Toronto, Vancouver and Calgary have dropped by 21 per cent, 19 per cent and nearly five per cent, respectively.
CityNews Business Report - Dec. 12, 2022
Continued near-term struggles for the market ahead
November real estate data showed close to a 50% drop in overall sales for many markets, and buyers and sellers staying on the sidelines are just waiting to see how much higher borrowing costs will go, or prices to fall. For first time buyers looking to enter the market, well those stress test levels just to qualify for a mortgage jumped to about 8%.
"It's really making it impossible for folks who are already stretched at their limits, to come close to even qualifying - even with some of the reduction in pricing, it's not enough to bring their payments inline." says John Lusink, President of RealServus, Right at Home Realty and Property.ca.
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The Globe and Mail - Oct. 12, 2022
Real estate observers see rocky road ahead￼
Crumbling consumer confidence is dampening hopes for a rebound in Canada’s real estate market as economic signposts point to more strife ahead. One industry executive who holds that view dives into statistics and forecasts, but he also relies on one proprietary yardstick: his firm’s trust account. When buyers have an offer accepted by the sellers, the buyers provide a deposit, which is held in trust by the real estate brokerage until the deal closes. The sharp decline in funds held in trust is an accurate measure, Mr. Lusink says, and he sees no signs of a turnaround.
“The continuing decline in transactions is going to continue into the fall,” he says. “Based on the data, it’s going to be challenging for the next eight months.” Mr. Lusink advises that agents analyze and really understand the data. Having a strong grasp of the numbers will help with accurate pricing for sellers and accurate expectations for buyers, who need to understand what they can afford, he says.
Could it really be — at long last — a homebuyer’s market?
In one of the most chaotic, unpredictable housing markets in years, Toronto real estate experts see a small window this fall that favours buyers.
Right at Home Realty president John Lusink said he’s not ready to call the GTA a buyer’s market even though he expects home values to drop another eight to 10 per cent this fall, returning values to 2019 levels. His reasoning — desirable properties in the right neighbourhoods are still attracting multiple offers.
He does see a surge on the rental side of the market. In a typical September, about 28 per cent of Right at Home transactions would be leases. Last week, it was edging up to 40 per cent. “You’re seeing a whole group of buyers who may have been at their max, now relegated to going back into the rental market,” said Lusink.
Buyers Refusing to Close May Not Be as Common as Some Think￼
As interest rates rise and home values continue to decline, worries about buyers refusing to close on deals have become increasingly common. But John Lusink, President of Right at Home Realty, says it may not be as prevalent of a problem as some may think.
Those in the industry, from real estate lawyers to mortgage brokers, have reported seeing an increasing number of buyers backing out of deals months after having their offers accepted and deposits submitted. But in an analysis of Right at Home Realty’s transactions year to date, Lusink found that less than 1% of deals involved a buyer who refused to close.
“Certainly the errors and omissions insurance and Real Estate Counsel, as I’m speaking with them, they have reported an increasing volume, but under our brand, at the moment, it’s not significant enough to say there’s a huge problem,” Lusink said.
Soaring prices leaving some renters priced out [Video]
While the housing market may be cooling down, the rental market is on fire, with the price of an average unit up 10 per cent compared to last year. That has left many renters scrambling to find suitable housing.
Housing experts say rents are high across the country, primarily due to life getting back to normal after the height of the COVID-19 pandemic.
"Right now there's definitely very high demand for rentals, we are in a very busy rental market. I also think that we have a lot of people that are just moving back into the city in general." -Shay Asnani, REALTOR® at Right at Home Realty, Brokerage
- In the News