All posts for the month July, 2021

Buyer Fatigue a Possibility in Slightly Moderated Canadian Housing Market

Published July 26, 2021 by Real Estate Leads

For the longest time it was the term ‘red hot’ that was applied to the Canadian real estate market, and a big part of that resulting from the fact demand far outstripped supply and so buyers were willing to paly the obscenely high costs attached to many of the homes being sold in desirable locations in Canada. Much has been made of how bidding wars were driving up the final sale prices to be WAY above asking prices for the homes, and while that’s great for the homeowners it’s not in the interest of the collective good as it prevents many would-be homeowners from getting into the market with homes that are good fits for their families.

The consensus in the industry is that now – in the middle of the summer of 2021 – the market is still fairly hot, but that it’s cooled down some. Some will suggest it’s a temporary pause, while others think that there is something of a more permanent correction coming. Like any major trend, this affects people working in real estate and for some the decrease in activity will factor into their business more than it will for others. That’s why our online real estate lead generation system here at Real Estate Leads is so beneficial for realtors who want to ensure they continue to drum up new clients consistently.

But back to our topic for this week. One of the things that all these bidding wars do is create buyer fatigue, and that shouldn’t come as a surprise if you can imagine what being constantly outbid will do to a prospective homebuyer’s psyche. Whether that’s leading more and more of them to drop out of the game remains to be seen, but it’s certainly a believable theory.

Huge Detached Home Demand

One thing that’s well established is that families will prefer to raise their children in a home with a backyard, and not in multi-family housing as is usually the case for people in major metro areas. The pandemic has amplified that too, and to give you an example of this possible buyer fatigue a realtor selling a detached home in Burnaby BC for a clients received 42 offers above asking price on the home.

That’s 41 buyers who were willing to pay more than the listed price going away disappointed, and this is increasingly the norm in the Greater Vancouver and Greater Toronto areas. This house in particular sold for $216,000 over asking price at 1.715 million.

It’s not difficult to imagine that some of these buyers will become disillusioned to the point that they’re choosing to sit on the sidelines for a while and let this frenzy pass. If so, that could and would cool sales although you could also believe that given population inflows into these areas that there would be other willing buyers to replace those who are taking a ‘time out’.

Buyer Fatigue?

The increase in buyers that will come with opening to immigration and international students will be a factor too, and some buyers may be even less enthusiastic knowing that median prices are likely going to rise again once this happens. There is a report that states real estate markets across Canada are moderating nationally, but what is the cause of this?

Fewer bidders willing to engage in bidding wars may have homeowners keeping properties off the market knowing that the frenzy that would otherwise accompany the sale of the home isn’t going to be to the same extent. Another factor is that easing restrictions related to COVID will cause attention to wane from real estate over the next few months, and the thinking of wanting more ‘space’ won’t be as pronounced as it was at this time last year.

The desire to buy a home could start subsiding as pandemic measures are lifted and many workers return to offices, and while that is likely true it’s also accurate that the country’s housing market remains near record-high sales levels. And the signs of moderation that have begun to appear over the past few months are really very small indicators to this point.

Statistics Canada noted a 0.7 percent drop in new home listings in June 2021.

What’s not small is the percentage of the decline. Stats Can has stated that sales activity was down 92% in all local markets for June 2021 on a month-over-month basis and that is a marked contrast from both previous months and this time last year, when real estate was as hot a commodity as you could ever imagine.

Along with this national home sales decline by 8.4% on a month-over-month basis for June, and that’s the 3rd straight month with a decline. The average price of a home in Canada rose 0.9% however during that same time, but that’s not as relevant to the discussion of volume of sales

The association also reported that the typical price of a home in Canada rose 0.9 percent month-over-month in June 2021, “continuing the trend of decelerating month-over-month growth that began in March”.

British Columbia is an ideal example of this, with the B.C. Real Estate Association reporting sales and prices across the province dropped for the third month in a row in June after the market peaked in March 2021.

However, there is good news in the fact that despite the month-over-month deceleration in new house price increases, year-over-year gains remained near record highs for June and that is predicted to continue for the duration of the year


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Toronto Considering Following Vancouver’s Lead with Vacancy Tax

Published July 19, 2021 by Real Estate Leads

For a few years now homeowners in Vancouver have had to declare that they have lived in their residence for at least 6 months (half) of the previous year in order to avoid having to pay a vacancy tax. One that the city introduced to make more housing stock available to rent in the city – something that is VERY much needed there and in Canada’s other major metro city, Toronto. Data indicates the vacancy tax has raised revenue for the city, and as you would expect the city earmarks that money for investment in new affordable housing.

It’s a slow change process, but it’s in the greater civic interest to prevent owners from buying homes and then leaving them vacant while they wait for the home’s value to appreciate before selling it. Any realtor working in Vancouver or Toronto will tell you this practice has been very common for a long time, but in Vancouver at least now it’s going to cost those investor buyers more to protect their investment that way.

Understanding and being receptive to buyer prerogatives in the best way possible is what a realtor should strive for. But when you’re new to the business you won’t have learned the ropes in the same way as someone who’s a more experienced realtor. You gain that experience one way, and one way only – working with clients. That’s why our online real estate lead generation system here at Real Estate Leads is such a good choice for realtors new to the business. You’ll be directed to prospective clients, and given that opportunity to convince them you’re a good choice as their realtor.

But back to our topic here this week. It appears as if Toronto is starting to see the same merit in a vacancy tax that Vancouver has for a while now, and may be following suit with a vacancy tax of their own.

Stumping Speculation

The City of Toronto’s aim of course is to try to stop real estate speculators from buying up homes and having those homes sit empty while residents find finding affordable housing to be a major struggle. The mayor’s executive committee unanimously supported a city staff recommendation that would implement a 1% vacant home tax beginning the first day of 2022. It’s very likely that council is going to approve the proposal, so we can go ahead and assume this is probably going to go through.

The rate for the tax that Vancouver put into place when introduced in 2018 was raised 3% in the fall of last year, and it’s estimated the vacancy tax put around 5,000 condo units on to the rental market in and brought down the number of empty homes by 25%.

Spokespersons for the city in Toronto have said they estimate their vacant home tax will generate between $55 and $66 million per year. Again in the same way as Vancouver, the city would use the money to fund affordable housing projects. The hope with these taxes is that they will compel property buyers to either live in the home themselves, or add it into the rental stock that is in extremely short supply in both cities and likely will be for the long foreseeable future.

Questions about Rate

Apparently Toronto intends to introduce the vacant homes tax at 1% of the home’s assessed value, but some are suggesting it’s too low and they should follow Vancouver’s lead exactly and start at the same 3% of assessed value.

Some people think 1% is not enough of a disincentive. Rental vacancy rates are as low as they’ve ever been right across Canada, and the pandemic has driven up rental apartment vacancy rates to a 50-year high. Numbers have shown that just under 6% of rental apartment units were vacant in Q4 last year.

As the pandemic becomes more under control, students will return to schools in big cities and this will put even more pressure on the rental market.

Luxury Tax Too?

Toronto city’s executive committee is also considering a study proposing a luxury home tax, where owners of homes valued over $2 million would havean increased municipal land transfer tax up going up to 3 / 4% from the current 2.5%. The estimate there is that this tax could generate up to $30 million more a year in revenue that will be invested into affordable housing projects.

However, some experts say not to loo past the effect of some homeowners choosing not to upgrade to luxury homes and this meaning fewer upper scale detached single-family homes being available for sale on the real estate market.

$1.5 million was the average detached home value in Toronto for 2020, so the concern is that this tax will target homeowners who aren’t extremely rich way too predominantly, as well as have a dampening effect on the housing market.


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Continued Role of ‘Boomers’ in Real Estate Market Activity in Canada

Published July 12, 2021 by Real Estate Leads

The nature of what we do here means we spend a lot of time reading about real estate market trends in Canada, and many times we read what is called expert insight. On more than a few occasions we’ve read some of these insights suggesting that the Baby Boomer generation is going to less of a factor in the real estate market as they enter later senior years now. In theory it makes sense, but that’s really about it. Or so it would seem.

We say in theory because it would seem to make sense that people who’s children are fully grown and long gone and who are also not as independent as before would be looking to either stay put or move somewhere smaller or where extended care is more readily available. However, new information made available to the public seems to suggest otherwise.

This is very much information that new realtors should be taking note of, and if you’re one of the many who are new to the business then our online real estate lead generation system is a sure fire way to get more out of the efforts you put into building your client base. You want to move towards making a good living in real estate as soon as possible, and nothing does that better than acquiring clients that are so pleased with you and your knowledge of real estate that they refer you to other clients.

So if we’re speaking about being knowledgeable about real estate, one thing you can know is that rumour of the baby boomer generation starting to be less of a factor in real estate isn’t such an accurate prediction it would seem. Let’s look at that here today.

Continued #1 For Home Equity Wealth

One thing that has never been suggested is that the boomer generation doesn’t have the greatest amount of equity amassed in their homes. Fortuitous timing for when you were born has been great for these people, but that is what it is these people hold a lot of wealth in the real estate market that they plan to unleash over the next half-decade, according to a recent Royal LePage survey that also had Stats Can in on it.

It appears that about 35% of people born before 1965 are considering the purchase of a home some time in the next five years, and that works out to more than 3 million people. In a country where the supply (low) to demand (high) ratio is already majorly skewed to make it a buyer’s market, this is a VERY major consideration moving forward.

45% of these people indicated they thought now is a good time to buy, despite there being a recent dip in the frenzy of real estate activity in Canada. The most likely belief here is that prices are going to rise even higher, and so the old ‘no better time than the present’ adage fits yet again.

40% of respondents said they have 50% or more of their net wealth tied up in real estate. This may be the most telling finding of all of them to indicate why the Federal government is hesitant to intervene too much in the industry and force the ‘correction’ many people were hoping for. 17% own more than one home, and 64% of homeowners in this age bracket own their home completely – no mortgage.

There was a very good and interesting article in Maclean’s magazine a few years back called ‘Stay Away from My Housing Bubble’ and it really lays out how a general large scale decline in real estate values would crush retirement dreams for a lot of people.

Everyone will agree that these homeowners should be able to get the most value out of their homes if a good retirement depends on it, so here we are with a situation that’s going to continue.

Renovations Too

The survey found out as well that a little more than half of boomer homeowners would choose to renovate present homes rather than move. Many respondents also said they would be using their equity wealth to help their children purchase homes, and of course this is especially true in Canada’s more desirable area big cities like Toronto and Vancouver.

Long story short – Millions of boomers are expected to wade into the market over the next 5 years.

Let’s look at the rest of what the report found based on a by-Province analysis.


37% of Boomers in Ontario want to buy a home in the next five years, 41% of them in Toronto. 76% of Ontarian boomers own their own home, 60% or so of them are mortgage-free, and 16% ownmultiple properties.


29% of boomers surveyed will contemplate purchasing a home within 5 years. Montreal has among Canada’s lowest rate of boomer homeownership at 62%, but 57% of Quebec boomers are mortgage-free. 16% own more than one property and 34% have half or more of their net wealth in real estate.

British Columbia

Way out West 39% of boomers will consider a home purchase in the next five years. 79% of boomers in BC are mortgage-free, and that’s 64% in Vancouver with the country’s highest home prices. Overall 66% of boomers in all of BC own their homes outright.

48% of boomers in BC have at least half of their net wealth in real estate, and 18% own at least one other home. BC is also the province in Canada that has the number of baby boomers who own 3 or more homes, although that can include vacation properties and there are many along Canada’s Pacific coast.


Sign up for Real Estate Leads here and receive a monthly quota of qualified, online-generated buyer and / or seller leads that are delivered to you – and ONLY you – every month and providing you with the opportunity to be first-in-touch with people and families that have indicated a genuine willingness to make a move in the local real estate market. It’s a dynamite way to supercharge your client prospecting efforts and building your real estate business as effectively as possible.

May Home Sales Down 7.4% Nationally

Published July 5, 2021 by Real Estate Leads

As we move past the midway mark for 2021, it would appear that the temporary slowdown or ‘blip’ in the market indicated for April continued into May. Despite this industry experts still foresee 2021 setting a new record the number of home sale transactions, but it’s interesting to note how the slight freeze seen for April has stretched into May now that June has ended. It’s important to understand that peaks and valleys are often the norm in any industry, particularly following volatile times (no explanation needed surely) and so this isn’t exceptional really.

Being in the know regarding the market and having concrete information on it that can be provided to clients is important for realtors, and many realtors who are new to the business may brush up on this stuff as much as possible yet not have enough of that new clientele to ‘impress’ with it, if you will. That’s why our online real estate lead generation system for realtors here at Real Estate Leads comes as highly recommended as it does.

It puts the power of Internet marketing to work to straight line you to be in touch with folks who are genuinely to make a move – either buying or selling – in the local real estate market.

So let’s have a look at what the CREA determined was the case for May 2021 in the Canadian real estate market.

Slight Fall Back

Home sales across the country are beginning to fall back from highs seen earlier in the year, although as mentioned the Canadian Real Estate Association still foresees the number of transactions during 2021 setting a new record. The 56, 616 sales seen in May were a 7.4& drop from April’s 60k+ with month-over-month sales also declining in nearly 80% of all markets.

The transaction volume for May was a significant dip compared with what was seen this time last year when COVID was in full swing across the country, but the association expects sales to inch up toward more standard levels as we enter the back half of 2021 and going into 2022.

The consensus seems to be that 2021 transactions will increase 23.8% from last year, and that is predicted to work out to somewhere in the vicinity of 682,000 homes sales for this year. That would be a record, but then the same experts are foreseeing somewhere around a 13% decline to around 594,000 homes being sold for 2022.

Higher Prices, Insufficient Supply

This slowing can probably be attributed to higher prices, not enough supply and widespread buyer hesitancy as well as more and more people being affected by new mortgage stress test regulations put in place by the Feds.

The CREA believes these sales declines are going to be largest in B.C. and Ontario, the two spots where pre-pandemic bidding wars and soaring prices were amplified massively during the pandemic. The term that’s being used is ‘Simpson’s paradox’, which apparently means a situationwhere the average price in every province will see a larger year-over-year increase than the national average as sales start to shift away from provincial markets that are the most expensive.

Other predictions:

  • The average home price will rise by 19+% on an annual basis to reach $677,775 this year and then to $681,500 for 2022
  • Highest average home prices will be in B.C., with CREA forecasting gains going to $883,781 in 2021 and 896,304 for 2022
  • The most affordable housing will be homes in Newfoundland and Labrador, with ones selling for an average nearly $273,00 in 2021 and nearly $280K for 2022


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