The postponed spring housing market has now extended its run well into the fall, with home sales in Toronto and Vancouver up 25% and 29%, respectfully, compared to a year ago.
The high demand is continuing to put pressure on prices as well. The average selling price for all home types in Toronto rose 13.7% to $968,318, according to the Toronto Regional Real Estate Board (TRREB). However, there was a divergence between market segments, with detached home prices rising 14.8% to $1.204 million, while average condo prices were up just 0.7% to $622,122.
In Vancouver, the MLS Home Price Index composite benchmark price for all property types rose 6% to $1.045 million, according to the Real Estate Board of Greater Vancouver (REBGV).
It was a similar story in Greater Montreal, where sales and prices were also up sharply in October. The Quebec Professional Association of Real Estate Brokers (QPAREB) reported that Montreal saw a 37% jump in sales, while home prices were up 21% for single-family homes and 16% for condos.
“Home has been a focus for residents during the pandemic. With more days and evenings spent at home this year, people are re-thinking their housing situation,” REBGV chair Colette Gerber said in a release.
But there’s another factor at play that’s helping to keep housing relatively affordable despite the recent run-up in prices.
“Extremely low interest rates have also made homeownership more accessible for first-time buyers and altered the calculations for potential move-up buyers,” Mortgage Professionals Canada chief economist Will Dunning noted in his latest consumer report. “For people in reasonably stable economic situations who expect that stability to continue (and the survey data indicates that most of us are in this situation), there is currently heightened interest in home buying.”
Fixed Rates Favoured by New Homebuyers
With today’s fixed mortgage rates at record lows and available for about the same as a variable rate, or even less, it’s no wonder more homebuyers are again flocking to fixeds.
A recent BMO survey confirmed this, finding that 57% of homebuyers said they would opt for a fixed mortgage rate when it comes time to secure a mortgage. Of those on the fence, another 30% said the pandemic has made them more likely to gravitate towards a fixed rate.
Just 8% of respondents said they would choose a variable rate.
The survey also found…
- Over half (56%) of buyers will rely on family or friends for help with their down payment
- Of those who will require financial assistance…
- nearly a quarter will require between $10,000 and $50,000
- 11% expect to receive more than $100,000 (25% for Millennials)
- The average amount of financial assistance sought by first-time buyers is $44,500
Brookfield to Acquire Genworth, Now Known as Sagen MI Canada
Genworth MI Canada, now officially operating as Sagen MI Canada, has entered into an agreement with U.S.-based Brookfield Business Partners L.P.
Under the deal, Brookfield, which already owns 57% of Genworth’s common shares, will purchase the outstanding shares at a price of $43.50 each, a 22% premium on the company’s closing share price on October 23.
The deal was approved unanimously by the company’s board of directors, except for one director who was recused due to a conflict of interest.
“The Transaction, together with our Company’s recent rebranding as Sagen MI Canada, represents an exciting new chapter for the Company,” Stuart Levings, President and CEO, said in a release. “We look forward under Brookfield’s ownership to continuing to work with lenders, regulators and mortgage professionals to help people responsibly achieve and maintain the dream of home ownership.”
