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April 2024 Market Report 🏡
In last month's market analysis, a surprising trend emerged amidst what is typically the busiest time of the year for real estate: subdued demand for houses contrasted sharply with a surge in condo listings.
 
The anticipation of rate cuts from the Bank of Canada had set the stage for a lively spring market. Buyers were hopeful for reduced mortgage payments, while sellers anticipated increased property values. However, with rate cuts delayed and expectations dampened, the market has taken a different turn. Fixed mortgage rates stubbornly remained above 5%, offering little respite to prospective homebuyers.
 
April 2024 witnessed house sales plummeting to 35% below the 10-year average, with Peel experiencing an even steeper decline of 43%. Despite this, competitively priced homes continued to attract swift sales, often sparking bidding wars, even in the higher-end market segment.
 
While the housing market maintained a competitive edge, the condo market felt the chill of a significant uptick in active listings, soaring 56% above the 10-year average. Investors, seeking exits, contributed to this surge, resulting in a condo market noticeably cooler than its housing counterpart.
 
Despite these shifts, both house and condo prices remained steady in April compared to the previous year. The median house price dropped by 2%, while the average price for both houses and condos remained unchanged.
 
Key indicators such as the Months of Inventory (MOI) ratio provide insights into market competitiveness. In April, the MOI for houses edged up to 2.2, suggesting a balanced yet slightly cooling market. Similarly, the MOI for condos increased to 3.3, indicating a shift towards a cooler market.
 
While these metrics provide a snapshot of the current market landscape, they also offer predictive cues for future trends. Understanding the MOI direction can shed light on the market's trajectory, influencing buyers' and sellers' strategies in navigating the evolving real estate landscape.
 
As always we want to say thank you for taking the time in reading the current real estate landscape. We hope this analysis has provided valuable insights into the shifting dynamics of the housing and condo markets in April 2024.
 
If you have any questions or would like further clarification on any aspect discussed here, please don't hesitate to reach out. You can contact us via email or phone, and we'll be more than happy to assist you.
 
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I have sold a property at 704 345 Wheat Boom DR in Oakville

We have sold a property at 704 345 Wheat Boom DR in Oakville. See details here

Welcome to this brand new 1 Bedroom + Den corner unit - Never been lived in! It features a modern open-concept layout with sleek finishes and laminate flooring throughout. Floor to ceiling windows allow for plenty of natural light. The kitchen is equipped with stainless steel appliances and a center island. Enjoy an expansive balcony at your leisure. Residents can also enjoy building amenities such as the gym and party room.

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New property listed in Rural Oakville, Oakville

We have listed a new property at 704 345 Wheat Boom DR in Oakville. See details here

Welcome to this brand new 1 Bedroom + Den corner unit - Never been lived in! It features a modern open-concept layout with sleek finishes and laminate flooring throughout. Floor to ceiling windows allow for plenty of natural light. The kitchen is equipped with stainless steel appliances and a center island. Enjoy an expansive balcony at your leisure. Residents can also enjoy building amenities such as the gym and party room.

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I have sold a property at Bsmt 7397 Manion RD in Mississauga

We have sold a property at Bsmt 7397 Manion RD in Mississauga. See details here

Spacious and bright one bedroom basement unit in a family friendly community. Featuring a separate entrance with above grade windows, it offers newly upgraded laminate flooring and is very clean - ready to just move in. Conveniently located close to schools, library, major hwys, airport and a bus stop across the street.

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New property listed in Malton, Mississauga

We have listed a new property at Bsmt 7397 Manion RD in Mississauga. See details here

Spacious and bright one bedroom basement unit in a family friendly community. Featuring a separate entrance with above grade windows, it offers newly upgraded laminate flooring and is very clean - ready to just move in. Conveniently located close to schools, library, major hwys, airport and a bus stop across the street.

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Embracing Transformations in Ontario Real Estate: Expertly Navigating the Latest Regulations with The Olivera Group

As of December 1st, Ontario's real estate landscape is undergoing a transformation through the implementation of Phase Two of the Trust in Real Estate Services Act (TRESA), replacing the previous REBBA. This signals a significant shift in the conduct of real estate transactions, impacting almost 100,000 realtors in Ontario. At The Olivera Group, we are dedicated to navigating you through these changes, ensuring a seamless transition while upholding the excellence of our services.

HOW THIS IMPACTS YOU

Disclosures
There will be a heightened emphasis on disclosures, especially when engaging in Multiple Representation scenarios.

Agency
The option for a customer relationship is no longer permissible. If someone prefers not to receive services from an agent, they have the choice to represent themselves.

OUR PLEDGE TO YOU

At The Olivera Group, your needs and aspirations have always been our top priority. These legislative changes provide us with an opportunity to reinforce our commitment to your success in the real estate market. Our team is extensively trained and continuously updated on these regulations to provide you with the most precise and effective guidance.

LOOKING AHEAD

The real estate industry is dynamic, and these changes are crucial for its growth and integrity. As these new regulations come into effect, we anticipate a period of adjustment. However, with our experienced team and dedication to staying ahead of industry developments, we are well-prepared to navigate these changes.

With The Olivera Group, you can confidently embark on your real estate journey, secure in the knowledge that you will receive professional guidance and support at every stage. Our objective remains unwavering: to assist you in achieving your real estate aspirations with trust, transparency, and unparalleled expertise.

Together, let's embrace these changes and continue building a thriving future in real estate.

Find out more about TRESA here: https://www.orea.com/TRESA

Read the RECO information guide here: TRESA GUIDE

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RE Market Update - Is the Worst Behind Us?🏡

Since the peak in 2022, Toronto's real estate market has encountered a period of adjustment. Notable developments during this timeframe include:

1. A decline in property values, followed by a stabilization leading to a lateral market movement, in line with typical seasonal trends.
2. A reduction in property transactions, intensifying the competitive landscape for real estate professionals.
3. An increase in property listings, empowering buyers with greater negotiating leverage.
4. A rise in distressed sellers, evidenced by the prevalence of power of sale listings.

The Greater Toronto Area (GTA) underwent significant changes in its housing landscape in 2023, particularly within the rental sector, due to persistent affordability challenges. Reduced home sales characterized the year, primarily attributed to elevated mortgage rates and stringent qualification criteria.

Highlights from the January release by the Toronto Regional Real Estate Board (TRREB) include:

1. A 12.1% decrease in home sales compared to 2022, with 65,982 sales reported.
2. The average selling price for all types of homes experienced a 5.4% decline from the previous year, settling at $1,126,604.
3. Increased demand for rental properties was observed, influenced by record levels of immigration.

In 2023, the GTA recorded fewer than 70,000 home sales, a figure reminiscent of 2008 when the realtor population was significantly smaller, resulting in a substantial reduction in transactions per realtor. Jennifer Pearce, TRREB's President, remains optimistic about 2024, anticipating a decline in borrowing costs and a resilient economic outlook, potentially fostering a rebound in home sales.

While concrete evidence supporting the economy's resilience is currently elusive, the decline in bond yields suggests a forthcoming reduction in borrowing costs, a typical precursor to an economic downturn. This challenges the assumption of a robust economic performance in the upcoming year.

There is a possibility that the months of December and January mark the nadir in transaction volume (not price) within this housing cycle, reflecting the lowest activity months at the conclusion of the least active year in decades. Consequently, a resurgence in home sales appears plausible.

While real estate professionals may see improved prospects as transactional activity rebounds, the outlook for sellers remains uncertain. The trajectory of housing prices appears contingent upon housing affordability, a multifaceted dynamic encompassing house prices, interest rates, income levels, and job stability. In essence, the resurgence in home purchases may only occur when affordability aligns, and current indicators suggest this milestone is yet to be reached.

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Unveiling the Unsettling Trends: Canada's Housing Market Navigates Challenges Amidst Interest Rate Hikes

The decline in Canada's housing market deepened in November, exacerbated by the cumulative impact of interest rate hikes affecting both buyers and sellers.

Recent data from the Canadian Real Estate Association (CREA) reveals a 0.9% month-over-month decrease in sales and a 1.1% drop in the MLS Home Price Index (HPI) for November.

Since the resumption of interest rate hikes by the Bank of Canada in June, sales have plummeted by nearly 13%, essentially erasing the rebound observed in the spring. Prices have experienced a continuous decline for three consecutive months, with November witnessing the most substantial drop in almost a year.

At a regional level, the MLS HPI recorded monthly declines of 1.7% in Ontario, 2% in Nova Scotia (the first decline since March), 0.9% in Manitoba, and 0.4% in British Columbia. Meanwhile, previous price gains have leveled off in Quebec and New Brunswick.

According to RBC's Robert Hogue, Assistant Chief Economist, and Rachel Battaglia, Economist, most major markets are now in a "correction mode." The anticipation is that persistently high interest rates will continue to suppress demand in the coming months, leading to further price reductions in the new year.

Even in Calgary, where prices increased by 1.2% on a monthly basis in November, analysts, including RBC, believe it is only a matter of time before softer market sentiments rein in those gains.

Economists like Robert Kavcic from BMO and Marc Desormeaux from Desjardins expect further price declines, noting that conditions in major markets are shifting in favor of buyers. However, Farah Omran, Senior Economist at Scotiabank, highlights that many potential buyers are looking ahead to 2024, anticipating interest rate cuts that may offset any short-term price declines.

Despite the caution observed in 2023, economists maintain their belief that the Bank of Canada will initiate interest rate cuts in 2024. They argue that the housing market and the broader Canadian economy are facing weakening conditions due to high interest rates, and with notable progress in reducing inflation, a shift toward rate cuts is anticipated by mid-next year.

If you have any questions or inquiries about the current real estate market, don't hesitate to reach out to us. We would be more than happy to provide insights and assistance. Feel free to send us an email at info@theoliveragroup.com or give us a call at 647 951 0850 for personalized guidance.

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New property listed in Rural Oakville, Oakville

We have listed a new property at 704 345 Wheat Boom DR in Oakville. See details here

Welcome to this brand new 1 Bedroom + Den corner unit - Never been lived in! It features a bright modern open-concept layout with sleek finishes and laminate flooring throughout. The kitchen is equipped with stainless steel appliances and a center island. Enjoy an expansive balcony at your leisure. Conveniently located to amenities such as grocery, shopping, restaurants and public transit. Close to Hwys 403 and 407, the Oakville Hospital, and Sheridan College and more. One parking spot included.

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November 2023 Market Stats - Frosty Real Estate: November Chill Drains GTA Home Sales

As the temperatures dropped, the Greater Toronto Area witnessed another month of declining home sales in November, as reported by the latest data from the Toronto Regional Real Estate Board (TRREB).

Last month, the GTA recorded 4,236 home sales, indicating an 8.8% decrease from October and a 6% dip compared to November 2022. When adjusted for seasonal variations, which typically lead to reduced activity in winter, the sales numbers showed a slight improvement from October, according to TRREB.

Throughout the year, factors such as high borrowing costs, economic uncertainty, and a persistent lack of affordability have hampered home sales, prompting prospective buyers to postpone their purchases until it makes more financial sense.

"Inflation and elevated borrowing costs have impacted affordability significantly," noted TRREB President Paul Baron. "Nowhere is this more evident than in the interest rate-sensitive housing market."

As sales declined, so did prices, with the average home price in the GTA dropping by 3.9% month over month to a new average of $1,082,179. This aligns with the average price observed in November 2022, showing minimal additional value gains for many homes over the past year. In Toronto, Ontario's busiest market, home prices fell by 6.8% month over month, accompanied by a 12.5% reduction in sales. The most substantial change was observed in Toronto's detached homes, where sales plummeted by 21.3%, and the average price decreased by over $100,000 to $1,617,918, down from $1,718,440.

"Home prices have adjusted in response to higher borrowing costs," explained TRREB Chief Market Analyst Jason Mercer. "This has provided some relief for buyers from an affordability perspective. As mortgage rates trend lower next year and the population continues to grow at a record pace, expect demand to increase relative to supply, leading to renewed growth in home prices."

Despite the overall decline, certain areas experienced minimal fluctuations in demand month over month. Halton Region, for instance, maintained nearly the same number of sales (increasing by only three), while its average price climbed by several thousand dollars to $1,208,950. Oakville, in particular, witnessed an average price rise from $1,395,752 to $1,572,012—a gain of nearly $200,000.

For those ready to make a home purchase now, there is a noticeable increase in the number of homes available compared to last year. Inventory levels received a substantial boost in November, with 10,545 new listings entering the market, bringing the total number of active listings to 16,759—a 40.7% surge from November 2022. However, with demand simmering below the surface among potential homeowners, TRREB CEO John DiMichele is urging governments to take more action, anticipating a growing housing demand "for years to come."

"We have seen some productive policy decisions recently that should help with housing affordability, including allowing existing insured mortgage holders to switch lenders without the stress test," said DiMichele. "Additionally, in the interest of household and economic stability, we continue to call on the Office of the Superintendent of Financial Institutions to apply the same approach to uninsured mortgages. It also goes without saying that further policy work is required to bring more supply online."

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Navigating the Economic Crossroads: Decoding Canada's Inflation Dip and the Bank of Canada's Next Move

Introduction:

The recently released October Consumer Price Index (CPI) report for Canada has taken analysts by surprise, revealing milder inflation than expected at 3.1% year-on-year. This blog post delves into the key findings and implications of the report, highlighting critical factors shaping the economic outlook.

A Closer Look at Canada's Economic Landscape

The October Consumer Price Index (CPI) reading turned out to be milder than anticipated, coming in at just 3.1% year-on-year (as opposed to the expected 3.2%). Notably, the headline index experienced a 0.1% month-on-month decline on a seasonally adjusted basis, marking the first monthly decrease since the onset of the pandemic in early 2020.

The primary factor contributing to the monthly decline was a 6% drop in gasoline prices. However, even when excluding this factor and examining core inflation, which the Bank of Canada closely monitors, there was a significant deceleration from 4.0% to 3.8%. With inflation falling, coupled with a softening labor market (a 0.7% rise in the unemployment rate over the past 6 months) and a weakening economic growth forecast (Q3 expected to be flat), it is highly probable that the Bank of Canada will maintain its current stance.

In fact, markets are currently factoring in a pause from the Bank of Canada only until the April meeting next year, before potential rate cuts commence. This is a notable shift, as earlier in the month, markets were not anticipating the first cut until the latter half of the following year. It would require substantial changes for the Bank of Canada to shift from its current "pause" mode, as the data does not support future interest rate hikes.

Governor Macklem emphasized the effectiveness of the current monetary policy in a recent speech, stating that interest rates may now be sufficiently restrictive to restore price stability. Despite such assertions, there is skepticism given the governor's past statements and the unpredictable nature of economic forecasting. The current outlook suggests that interest rates will remain low unless there are significant and unforeseen changes.

The pressing question now is when the Bank of Canada will decide to cut rates. As mentioned in the previous month's analysis, a crucial factor is the decline in inflation expectations, (to know more from the BoC click the link here). Until these expectations decrease to at least 3%, rate cuts are highly unlikely. Additionally, the Bank of Canada faces a dilemma, as cutting rates too aggressively compared to the Federal Reserve could impact the Canadian dollar and potentially lead to increased inflation through more expensive imports.

This situation is further complicated by the resilient nature of the U.S. consumer, who shows no signs of slowing down, benefiting from locked-in low rates for 30 years and lower overall debt burdens compared to Canadians. Ultimately, the actions of U.S. consumers may play a significant role in determining Canadian interest rates, irrespective of the state of the domestic economy—a somewhat unsettling prospect.

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Regions in the Greater Toronto Area (GTA) Experiencing the Most Significant Decline in Home Sales

Examining the data closely reveals an uneven performance in the market for low-rise houses and condos across the five regions of the Greater Toronto Area (GTA). Similar to the varied performance of housing markets across Canada, as discussed in a recent interview with BMO's Robert Kavcic, different regions and types of houses within a metropolitan area also exhibit diverse trends.

In this month's data analysis, we will delve into how the market for low-rise houses and condos is faring across the GTA's five regions. The chart below illustrates the year-over-year change in sales for October 2023.



Notably, condos in Peel experienced the most significant decline in sales, just under 20%, followed by houses in the Halton region with an 11% decrease. In contrast, condos in York are the only house type that has witnessed an increase in sales compared to last year.

A noteworthy observation is that most regions and house types saw sales volumes fluctuate within 5% of last year's levels. While the GTA experienced relatively soft sales last year, the substantial difference between this year and the last lies in the change in the number of homes available for sale or active listings.

Active listings across the GTA have surged by over 50% for all house types and regions, excluding a 38% decline in Halton condos. Suburban houses have witnessed the steepest increase in active listings, followed by condos in the City of Toronto. 

However, to comprehend the market balance in each area, it's crucial to examine the months of inventory (MOI).


Despite Durham's houses seeing the most significant increase in active listings, it also boasts the lowest MOI, suggesting a more balanced and competitive market compared to other regions and house types.

Across all five regions, the condo market has a higher MOI than the house market, with the City of Toronto exhibiting the most significant difference between house types. Houses have a 3.4 MOI compared to condos at 5.8 MOI, indicating a slower condo market.

There is substantial variability in the MOI for houses across GTA municipalities. The chart below illustrates the October MOI for houses in each municipality. Far-reaching areas of the GTA, such as King, Caledon, Georgina, and East Gwillimbury, show a high MOI of 7 to 8, while areas closer to Toronto's east-end suburbs, including Oshawa, Whitby, Clarington, Ajax, and Markham, have around 3 MOI.


Considering how prices have changed over the last year, it's essential to note that GTA prices have been trending downward for the past four months. Therefore, regions and house types showing year-over-year price increases do not necessarily indicate current upward trends but rather reflect that despite declining prices since spring, they remain higher than last year.

Interestingly, despite the surge in active listings and record-low demand for houses, average prices are still up year-over-year in four of the five regions. The key takeaway for buyers and sellers is that market dynamics are highly localized, and relying on aggregate trends for the Greater Toronto Area may not provide accurate insights for real estate decisions.

Feel free to reach out to Ann or myself with any questions you may have. We're here and more than willing to help you make the most informed real estate decision that aligns with your current situation. Your inquiries are valued, and we're dedicated to ensuring your satisfaction throughout this crucial decision-making process.

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