August 2023 Market Stats

In this article, we'll delve into the August 2023 real estate market statistics and explore the factors that influenced these trends. From increased borrowing expenses to ongoing economic uncertainty and decisions made by the Bank of Canada, we'll dissect the data to gain a better understanding of what's happening in the housing market. Let's start by examining the key highlights.

Home Sales Decline in August 2023

Increased borrowing expenses, ongoing economic uncertainty, decisions made by the Bank of Canada, and limited listing availability led to a decline in home sales in August 2023 when compared to the same month in 2022. During this period, the average selling price remained relatively stable. When considering monthly adjustments for seasonal factors, both sales and the average price experienced slight declines

Greater Toronto Area Statistics

In August 2023, REALTORS® in the Greater Toronto Area recorded 5,294 sales, marking a 5.2 percent decrease from August 2022. However, there was a positive development in new listings, which saw a 16.2 percent year-over-year increase, offering some relief in terms of supply. Nonetheless, when looking at year-to-date listings, there remains a significant decrease compared to the same period in the previous year. On a seasonally adjusted basis, sales showed a marginal one percent month-over-month decline when compared to July 2023, while new listings experienced a slight 1.3 percent increase compared to July.

Stability in Average Selling Prices

"During the summer, we witnessed more balanced market conditions compared to the tighter spring market. Consequently, selling prices remained relatively stable, hovering around last year's levels and showing a slight dip compared to July. The increase in interest rates, which resumed in May after a pause in the winter and early spring, necessitated adjustments from many buyers to meet higher monthly payment requirements. Notably, not all sellers chose to accept prices lower than their expectations, leading to a reduction in the number of sales," explained TRREB Chief Market Analyst Jason Mercer.

In terms of statistics, the MLS® Home Price Index Composite benchmark for August 2023 demonstrated a year-over-year increase of 2.5 percent. Similarly, the average selling price experienced an uptick, albeit a modest one, of less than one percent, reaching $1,082,496 over the same period. On a month-over-month, seasonally adjusted basis, the MLS® HPI Composite benchmark remained largely unchanged, while the average price declined by 1.6 percent.

Impact of Interest Rates on Affordability

"As higher interest rates have unquestionably affected affordability, the anticipation of increased taxes will additionally strain households' financial positions, particularly younger buyers who may have limited savings. As the City of Toronto deliberates raising the municipal land transfer tax (MLTT) rate for properties exceeding $3 million as a source of revenue, it should also contemplate offering support to first-time homebuyers grappling with the challenge of entering the market. Adjusting the tax rebate threshold to align with today's elevated home prices could be a viable solution," suggested TRREB CEO John DiMichele.

Tactics and Trends in Home Listings

On a side note - Over the past month, We’ve observed an increasing number of homes listed for sale at notably aggressive prices. In certain instances, sellers opt to list their homes with artificially low asking prices as a tactic to draw in multiple buyer offers. However, when the offer date arrives and they receive multiple offers, the sellers often reject all of them because none meet their price expectations. Subsequently, these sellers relist their homes at the desired price, resulting in their properties languishing on the market for weeks as buyers are unwilling to meet those price demands.

While some sellers are gradually reducing their asking prices, others are taking their homes off the market temporarily, with plans to relist them in September. Although this is a common approach among real estate agents during the summer months when buyer activity typically slows, it remains intriguing to see how effective this strategy will be this year, given potential shifts in the market beyond the usual seasonal patterns.

The Unique Challenges of 2023

The uniqueness of this year stems from a changing market influenced by today's significantly higher interest rates. Some buyers are hitting the pause button because they find it increasingly challenging to afford a home at the current interest rates, especially when undergoing stress testing for a mortgage at around 8%.

Source: Market Watch

For the latest updates and in-depth analysis of real estate trends, stay tuned to Market Watch.

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The State of the Canadian Economy in Q2 2023

In the latest data released by Statistics Canada (StatCan) this morning, the Canadian economy experienced stagnation during the second quarter of the year.

Key Economic Figures for Q2 2023

StatCan reports that the Canadian economy contracted by an annualized rate of 0.2% in Q2 2023, a figure significantly lower than the Bank of Canada's earlier prediction of 1.5% growth. Additionally, StatCan revised the growth rate for the first quarter, reducing it to an annualized rate of 2.6% from the previously reported 3.1%.

Factors Contributing to Second-Quarter Weakness

A significant contributing factor to this weakness was a 0.2% decline in output in June.

Impact of High Interest Rates and Housing Prices

As expected, given the prevailing high interest rates and housing prices, investment in the housing sector continued to decline in the second quarter, primarily due to reduced new construction activity.

Consumer Spending and Its Trends

Consumer spending showed a modest increase of 0.2%, but this was the smallest uptick since the pandemic lockdowns in Q2 2021. Furthermore, the growth in real household spending slowed to 0.1% in Q2, compared to 1.2% in the first quarter, reflecting the significant impact of inflation and higher borrowing costs.

Other Contributing Factors: Inventory and Exports

The data indicates that the second-quarter weakness can also be attributed to reduced inventory accumulation and a slower pace of growth in exports. Canada's exports of goods and services only increased by 0.1% in Q2, compared to a more substantial 2.5% increase in the first quarter.

Stability in July's GDP and the Rise in Inflation

Preliminary estimates suggest that the GDP for July remained relatively stable. In August, the country's inflation rate ticked higher as mortgage costs continued to rise for the fifth consecutive month, marking the most significant increase on record.

Anticipation for the Bank of Canada's Decision

Many Canadians are eagerly awaiting the Bank of Canada's (BoC) upcoming interest rate decision next week, especially after the BoC raised its key interest rate target by a quarter of a percentage point to 5% in July.

Impact of Higher Interest Rates and RBC's Insights

These latest statistics reveal that the effects of higher interest rates are beginning to have an impact, resulting in a cooling economy with reduced consumer spending – precisely the intended outcome of monetary policy. In response to the latest economic data released this morning, RBC Economics, in their Daily Economic Update, has indicated that these numbers are likely to strengthen the prevailing expectations that the Bank of Canada (BoC) will abstain from implementing another interest rate hike.

Analyzing RBC Economics' Perspective

The commentary in the update notes that the minor decline in the second quarter is not entirely unexpected, as previous early estimates of GDP have exhibited a tendency to be revised. Furthermore, there have been indications suggesting that the obstacles to economic growth resulting from elevated interest rates have been quietly accumulating beneath the surface.

The Path Forward for Interest Rates

RBC recognizes that the central bank is unlikely to overly emphasize a single data point and acknowledges that inflation remains persistently above the targeted levels. Nonetheless, a cooling economy may provide some relief for borrowers. The update contends that there is accumulating evidence that the delayed consequences of earlier interest rate hikes are starting to exert a more pronounced impact in moderating both GDP growth and labor markets. Consequently, this should lead to a gradual slowdown in inflationary pressures. The update further posits that policymakers will want to maintain the option of resuming rate hikes if necessary. However, if the unemployment rate continues to rise, as anticipated, a resumption of rate hikes may not be required.

Unveiling the Building Faster Fund: Premier Ford's $1.2 Billion Incentive Initiative for Housing Construction

In the midst of escalating criticism surrounding the Greenbelt land exchange, Premier Doug Ford has introduced an ambitious and far-reaching incentive initiative. Valued at a substantial $1.2 billion, the primary objective of this program is to incentivize municipalities to substantially ramp up their efforts in the realm of housing construction.

Premier Ford's Bold Initiative: Encouraging Municipalities to Boost Housing Construction

Unveiling the program, aptly named the "Building Faster Fund," Premier Doug Ford took the center stage during his address at the Association of Municipalities Conference in London on a Monday. He underlined that the central focus of this pioneering initiative is to provide substantial incentives to municipalities that successfully achieve their annual housing goals.

Addressing the Housing Challenge: Premier Ford Announces the Building Faster Fund

Premier Ford emphasized during his announcement that, while these housing targets will undoubtedly be ambitious, they will be thoughtfully grounded in the realm of realism.

Ontario's Housing Ambitions: Premier Ford's Commitment to Construct 1.5 Million New Homes by 2031

The Ontario Government's commitment to overseeing the construction of a staggering 1.5 million new homes within the province by the year 2031 is a well-established fact. This ambitious vision comes with a clear framework that allocates specific objectives to individual municipalities. However, the practical feasibility of realizing this goal has now come under intense scrutiny due to the inherent limitations posed by the current construction capacity.

Empowering Municipalities: The Funding Incentive for Housing Targets

Under this newly unveiled program, municipalities that successfully achieve 80% of their individual annual housing targets will be deemed eligible for funding. This funding eligibility will be allocated based on the proportionate contribution of each municipality to the overarching objective. Drawing a striking analogy, Premier Ford likened this qualification process to the world of academics, where those meeting or surpassing the prescribed standards would receive funding, while those falling short would not.

Achieving Housing Milestones: Municipality Successes and Funding Rewards

In addition to the baseline funding, municipalities that exceed their designated housing benchmarks will receive additional incentives. Premier Ford illustrated this with the example of Pickering, a municipality that is currently on track to significantly outperform provincial expectations, surpassing them by a remarkable margin of over 150%. If this trend persists, the city stands to gain access to more than $5 million in additional funding, as indicated by Premier Ford.

Strategic Funding: Disbursements and Infrastructure Investment for Housing

Beginning in the year 2024, the disbursement of funds will commence. Municipalities will have the flexibility to allocate these funds towards various housing-supporting infrastructure projects, encompassing activities such as site development, road construction, and the establishment of public utilities. These funds will also be directed towards other projects that can be swiftly implemented, all of which harmonize with the overarching objective of enhancing both housing and community development.

Equal Opportunity: Housing Initiatives for All Communities

It's important to note that the program has taken into consideration the concerns of smaller, rural municipalities that were not assigned specific provincial housing quotas. As a proactive measure, a dedicated portion of the program's funding, equivalent to 10% or an impressive $120 million, will be set aside to support housing initiatives within these communities.

Enhancing Mayoral Powers: An Extension of Authority for Housing Commitment

In a parallel announcement within the same speech, Premier Ford introduced an extension of the debated extensive mayoral authority to an additional 21 municipalities. However, this extension is contingent upon the pledge of these municipalities to adhere to the ambitious provincial housing objectives that have been set forth.

Auditor General's Report Fallout: Premier Ford's Response to Selection Process Critique

In recent times, the Ford administration has been grappling with the repercussions stemming from a critical report issued by the Auditor General. Released earlier this month, this comprehensive report meticulously outlined a selection process for Greenbelt lands that seemed to exhibit a distinct bias, favoring specific developers and landowners.

Bill 23 and Development Charges: Impacts on Ontario's Urban Landscape

In the closing months of the preceding year, the Ford administration ushered in Bill 23, widely known as the More Homes Built Faster Act. This legislative move resulted in the substantial reduction of development charges imposed by municipalities.

Mayoral Concerns and Property Tax Implications: Responding to the Reduction of Development Charges

Mayors representing the largest cities within Ontario have united in their appeal to Provincial authorities. Their collective call revolves around the reconsideration of the reduction in development charges. Many mayors are voicing concerns that the reduction in charges could potentially necessitate a corresponding increase in property taxes. Such a move would be critical to secure the requisite funding for pivotal infrastructure projects, including the creation of new roads and efficient sewage systems.

With the unveiling of the Building Faster Fund, the Ontario Government seeks to address the pressing need for accelerated housing construction. Amidst ongoing debates and challenges, this initiative not only aims to stimulate housing development but also to provide a framework for municipalities to achieve their housing targets while balancing the demands of sustainable growth.

Introduction:

In the realm of real estate, understanding the balance between supply and demand is crucial. One key metric that sheds light on this delicate equilibrium is the concept of "Inventory Months." In this comprehensive guide, we will delve into the significance of this metric, its calculation, and how it determines whether a market is in favor of buyers or sellers.

The Significance of Inventory Months:

Inventory Months, often referred to as "Months of Inventory," serves as a valuable supply metric that assesses the interplay between available homes for sale and their potential to be sold. By measuring this ratio, we gain insights into whether the real estate market is facing an abundance or scarcity of listings. This, in turn, provides a snapshot of the balance between demand and supply from an inventory standpoint.

Understanding Market Dynamics:

In economic terminology, the calculation of Inventory Months plays a pivotal role in identifying the market's status. An excess demand scenario arises when the quantity of homes sought by buyers exceeds the number available for sale at a given price point. This state, also known as a "shortage," translates to a seller's market in real estate, where sellers hold the advantage.

Conversely, an excess supply situation occurs when the quantity of homes demanded falls short of the available listings at a particular price. Termed a "surplus," this market state corresponds to a buyer's market in the real estate domain, granting buyers a stronger position in negotiations.

Calculating Inventory Months:

Calculating Inventory Months is a straightforward process that involves three steps:

1. Determine the total count of active listings from the preceding month.
2. Identify the total number of completed sales transactions for the same month.
3. Divide the number of active listings by the sales count to ascertain the remaining inventory in months.

Market Transition Thresholds:

A critical question often arises: At what point does a market shift from being buyer-oriented to seller-oriented, or vice versa? While this threshold varies from market to market, prevalent data suggests some general benchmarks. When Inventory Months is less than 4.0, sellers typically have the upper hand in pricing negotiations. Conversely, if the metric exceeds 6.0, buyers tend to have more negotiation leverage.

Real-Life Scenario: Canada's Market:

Currently, Canada's real estate market provides a tangible example of Inventory Months in action. With an inventory of 3.2 months, a slight increase from 3.1 in May and June, the market experiences growth of around 3.2%. However, this growth is outpaced by a 5.6% increase in newly listed properties. This dynamic underscores the challenge of maintaining equilibrium between supply and demand.

Conclusion:

Inventory Months stands as a vital metric that offers invaluable insights into the real estate market's health and dynamics. By grasping the concept, understanding its calculation, and interpreting the thresholds, both buyers and sellers can make informed decisions in navigating the ever-evolving real estate landscape. As demonstrated by Canada's market, the delicate balance between supply and demand underscores the need for continuous vigilance in assessing Inventory Months.

In July, Canada's Economic Landscape: Rising Inflation Rates and Market Dynamics

Canada's economic landscape experienced notable shifts in July, as rising inflation rates and dynamic market changes made their mark. This comprehensive analysis sheds light on key trends that shaped the economic scene, from surging mortgage costs to the impact of electricity and energy prices. Stay informed and gain valuable insights into these crucial economic fluctuations.

Introduction: Unveiling July's Economic Dynamics

July witnessed significant movements in Canada's economic indicators, with inflation rates taking center stage. This analysis delves into the intricate details of these shifts, highlighting the driving factors behind inflation and the influence of base-year effects on key sectors.

Surging Inflation Rates and Contributing Factors

Surging mortgage expenses and the upswing in gasoline prices were pivotal contributors to Canada's annual inflation rate increase. Statistics Canada's latest Consumer Price Index (CPI) reveals a rise from June's 2.8% to July's 3.3% year-over-year inflation rate. Notably, the mortgage cost index played a central role, surging remarkably by 30.6% annually. This surge was fueled by a growing number of Canadians opting to renew or initiate mortgages at higher rates. This surge follows a substantial 30.1% rise in June, marking the fifth consecutive month of record-breaking increases. Excluding mortgage interest costs, the headline CPI still demonstrated a noteworthy 2.4% rise in July.

Gasoline and Energy Prices: The Base-Year Effect

Gasoline and energy prices faced their own dynamics, influenced by the base-year effect. Despite a mere 0.9% monthly increase in July and a significant 12.9% yearly decrease, the substantial 9.2% drop in July 2022 no longer impacted the 12-month price trajectory. This shift exerted upward pressure on the year-over-year metric. Such nuances highlight the complexity of economic calculations and the factors driving them.

Electricity Prices: Base-Year Influence and Market Impacts

The base-year effect extended its influence to electricity prices as well. July saw an 11.7% annual surge in electricity costs, surpassing the 5.8% increase observed in June. A remarkable 127.8% increase in electricity prices within Alberta was a key driving force. The introduction of policy interventions in July 2022 led to a notable 24.4% monthly price reduction at that time. However, with these interventions ceasing, last year's price drop no longer affected the 12-month calculation. Similarly, natural gas prices experienced a 15.7% decline in July, a reversal from the 5.8% decrease in June. This shift was primarily attributed to a base-year effect in Ontario, where prices had risen by 22.6% on a monthly basis.

Energy and Grocery Prices: Emerging Trends

Overall, energy prices encountered an 8.2% reduction in July, following a 14.6% decrease in June. Grocery prices, although maintaining an elevated position, displayed a slower annual growth rate in July, rising by 8.5% compared to the 9.1% increase registered in June. This deceleration was largely influenced by the pricing of fresh fruit, which experienced a 4.1% annual rise in July, a notable drop from the 10.4% increase in June. On a monthly scale, prices experienced a significant decline of 6.5%, the largest drop since February 2008. This downturn was driven by a 40.9% fall in grape prices and a 1.8% decrease in orange prices.

Conclusion: Navigating Economic Changes

Stay informed about these dynamic market shifts as you navigate through evolving economic changes. Canada's economic landscape reflects the interplay of various factors, from inflation trends to the intricate impacts of base-year effects. By staying updated on these trends, you can gain valuable insights into the shifting economic terrain.

Transforming Pickering Town Centre Mall: CentreCourt's Ambitious Vision

CentreCourt, in partnership with Cowie Capital Partners Inc and Salthill Capital, is poised to redefine Pickering with a dynamic 55-acre community known as Pickering City Centre. This transformative endeavor, located at 1355 Kingston Road near the Brock Road interchange on Highway 401 and in proximity to Pickering GO station, will seamlessly integrate residential, retail, and public spaces. As the heart of Pickering evolves, its ties to the Greater Toronto Area will strengthen, solidifying CentreCourt's mission to establish this area as the authentic downtown of Pickering.

Revitalizing Pickering: A Decade-Long Urban Revival

CentreCourt envisions a vibrant urban hub emerging from the current mall site, a decade-long endeavor that will reshape Pickering's landscape. This visionary project introduces extensive residential, retail, and public zones, replacing the existing surface parking. Over ten mixed-use towers, ranging predominantly from 40 to 55 stories, will grace the skyline with over 6,000 residences. As Pickering Town Centre mall undergoes revitalization, a new era dawns for the region.

Block 1: Unveiling the Residential Oasis

In Phase 1, Block 1 will take center stage, featuring four residential towers comprising approximately 2,200 units and an impressive 111,483 m² of mixed residential and commercial space. These towers will also house a ground-level retail area spanning about 1,672m².

Elevated Living: Amenities for Every Lifestyle

Residents of Block 1 will revel in a lavish array of amenities, spanning approximately 4,552m² indoors and 7,246m² outdoors. This enticing offering encompasses a fitness center, rooftop pool, outdoor lounges with grilling stations, co-working and social spaces, a golf simulator lounge, and inviting interior courtyards that seamlessly connect with lush green spaces.

Discover more about this exciting development at pickeringcitycentre.com and witness the transformation firsthand. Your journey to the future of Pickering begins here.

On Wednesday, the Bank of Canada raised its overnight rate by 25 basis points, bringing it to 5.0 percent. This decision is part of a significant tightening of monetary policy, returning interest rates to levels not seen since the 2007-08 financial crisis. For some, this latest rate hike feels like the decisive blow that solidifies a troubling situation, while others hope it truly marks the end of rate increases. Tiff Macklem, the governor of the Bank of Canada, expresses uncertainty and asserts that further rate hikes are not off the table if deemed necessary.

The recent unexpected rate hike appears to have had an immediate impact on the sentiment of the real estate market. It could be seen as another minor warning sign, similar to the initial 25 basis point hike in February 2022, as it has achieved a comparable outcome. There are reports of distress among homeowners circulating within the real estate community, with many professionals publicly expressing empathy towards those facing difficulties.

As a result of the rate hike, commercial bank prime rates have risen to 7.20 percent. Consequently, variable rate mortgages are now hovering around the 6.0 percent range, while HELOCs (Home Equity Lines of Credit) are surpassing 7.50 percent for most borrowers. This represents a significant increase from the rates of approximately 3.0 percent that instilled great confidence in the market during the peak of the pandemic era.

Following the announcement of the rate hike, the Canada 5-Year Government Bond yield experienced a consistent decline throughout the day on July 12. It started at 3.950 percent at the opening and closed at 3.812 percent. The yields have remained relatively stable within this range, which holds crucial importance as it serves as the primary pricing gauge for fixed-rate mortgages.

In Canada, fixed-rate mortgages are closely linked to government bond yields, specifically the yields of Government of Canada bonds with similar maturity periods. As bond yields rise, lenders are compelled to raise mortgage rates to make them more attractive investments compared to those bonds. If not, banks would prefer investing their funds in bonds, which are regarded as one of the safest investment options. Typically, banks add a risk premium to mortgage products, resulting in pricing at "GOC+2" or the bond yield plus 2.0 percent. Based on the current yields, this would translate to mortgage rates in the range of high 5.0 percent to low 6.0 percent.

Conversely, when bond yields decline, fixed mortgage rates tend to follow suit, making them more affordable for borrowers. Therefore, fluctuations in Canadian bond yields play a significant role in influencing the direction of fixed mortgage rates in the country.

This is the primary challenge faced by the Bank of Canada. Currently, a majority of homebuyers opt for fixed-rate mortgages due to their more favorable pricing compared to variable-rate mortgages. Consequently, when the central bank raises the interest rate, it does not significantly affect the demand side of the equation. Instead, it exerts pressure on the supply side, leading to financial strain and creating an incentive for property owners to sell. From the sounds of it, this is precisely the outcome they have achieved, as an increasing number of sellers are conceding to the Bank of Canada's influence. As a result, new property listings are generally surpassing sales, a trend that hasn't been observed for some time.

The Bank of Canada's focus on the housing market became evident through its Quarterly Monetary Policy report. Additionally, during the subsequent press release, Governor Macklem indicated a shift in reliance from unemployment as a key performance indicator (KPI) to placing increasing importance on the housing market and immigration in establishing potential outcomes for the Canadian economy.

In the release, Macklem acknowledged the significant impact of the interest rate hikes on the housing market, leading to a notable slowdown. However, he also noted that the slowdown was not as substantial as initially anticipated, and housing activity has since rebounded.

Macklem referred to the previous year's significant decline in house prices, which began following the initial rate hike in February. This decline resulted in a nearly 20 percent year-over-year drop in house prices, surpassing the previous record "crash" in house prices experienced by Canada in 1989.

Now we come to the significant questions: Is the ordeal reaching its conclusion? When will things start improving?

Initially, Macklem hinted that 5.0 percent might be the limit or the point at which he would cease increasing the overnight rate. We must remember that the Bank of Canada (BoC) has a mandated target rate of 2% to achieve. Finally, the overnight rate has significantly exceeded the inflation rate. This indicates that, when adjusted for inflation, the real interest rate has become positive.

The real interest rate is calculated as the nominal interest rate minus the inflation rate.

Traditionally, the nominal interest rate needs to align with the inflation rate before a reversion begins. On average, interest rates tend to remain at their peak for around nine months before rate cuts are implemented.

In June 2023, home sales and the average selling price in the Greater Toronto Area (GTA) remained higher compared to the previous year. However, when considering seasonal adjustments, sales showed a decline compared to the previous month. On the other hand, the seasonally adjusted average selling price and the MLS® Home Price Index (HPI) Composite benchmark increased compared to the previous month.

 According to Paul Baron, President of the Toronto Regional Real Estate Board (TRREB), the demand for owning a home is stronger than last year, despite the increased costs of borrowing. However, uncertainty surrounding the Bank of Canada's stance on inflation and interest rates affected home sales last month. Additionally, the persistent lack of available properties likely deterred some potential buyers who couldn't find a home that suited their needs. Essentially, if a home isn't available, it cannot be purchased.

In June 2023, GTA REALTORS® recorded a total of 7,481 sales through the MLS® System of TRREB, marking a 16.5 percent increase compared to June 2022. However, the number of listings decreased by three percent during the same period.

 The rise in sales compared to the previous year, along with the decline in new listings, indicates that market conditions in June were more competitive than during the same period last year. The average selling price experienced a 3.2 percent increase, reaching $1,182,120. However, the MLS® HPI Composite benchmark still showed a 1.9 percent decrease compared to the previous year, marking the slowest annual rate of decline in 2023. On a month-over-month basis, both the seasonally adjusted average price and the MLS® HPI Composite benchmark demonstrated an increase.

“A resilient economy, tight labour market and record population growth kept home sales well above last year’s lows. Looking forward, the Bank of Canada’s interest rate decision this month and its guidance on inflation and borrowing costs for the remainder of 2023 will help us understand how much sales and price will recover beyond current levels,” said TRREB Chief Market Analyst Jason Mercer.

 “GTA municipalities continue to lag in bringing new housing online at a pace sufficient to make up for the current deficit and keep up with record population growth. Leaders at all levels of government, including the new mayor-elect of Toronto, have committed to rectifying the housing supply crisis. We need to see these commitments coming to fruition immediately, or we will continue to fall further behind each month,” stressed TRREB CEO John DiMichele. “In addition to the impact of the listing shortage, housing affordability is also hampered on an ongoing basis by taxation and fees associated with home sales and construction as well as the general level of taxation impacting households today. Going forward, we need to look at all of the factors influencing the household balance sheet and people’s ability to house themselves,” continued DiMichele.

 As professionals in the industry, it is crucial for us to adapt to these changing circumstances and strategize accordingly. We must proactively assess the market conditions, provide accurate and up-to-date information to our clients, and offer suitable guidance to navigate these new challenges effectively.

By staying informed about the latest developments, tracking interest rate trends, and understanding buyer preferences, we can position ourselves to better assist both buyers and sellers in achieving their real estate goals. It is vital to offer thorough market analyses, comprehensive advice, and personalized solutions to address the concerns that our clients may have.

 Source: Market Watch

As always, we are here to guide and educate all our clients, if you have any questions we are just a text, email or phone call away!

In light of increasing household debt and elevated interest rates, the Financial Consumer Agency of Canada (FCAC) is taking measures to ensure that banks offer appropriate assistance to mortgage holders facing potential default.

Recently, the FCAC released a fresh guideline instructing federally regulated financial institutions (FRFIs) to deliver customized support to individuals who have mortgages on their primary residences and are undergoing "significant" financial challenges.

Based on findings from FCAC research, there is a notable increase in the number of homeowners with mortgages who are facing potential financial difficulties, such as relying more on borrowing for daily expenses or depleting their savings.

The FCAC emphasized that all feasible mortgage relief options should be taken into account, which may include measures like waiving prepayment penalties, internal fees, and costs, refraining from charging interest on interest, and extending the amortization periods.

FRFIs are encouraged to take proactive steps by reaching out to mortgage holders at risk and offering them details about available relief measures, enabling them to make well-informed decisions in a timely manner. Furthermore, FRFIs are expected to provide educational tools and resources at no expense to the consumer, aimed at promoting responsible financial decision-making.

Stay informed, Stay up to date - The Olivera Group Real Estate 

Anthony Olivera & Ann Rahinel - info@theoliveragroup.com

Exciting progress is unfolding in Mississauga as Exchange District Condos, developed by Camrost-Felcorp, takes center stage in the city's skyline. This remarkable multi-tower development, masterfully designed by Arcadis, is making significant strides towards becoming the tallest building in Mississauga, poised to surpass the current record held by Absolute World's 176-meter south tower.

Exchange District Condos represents the epitome of urban transformation and promises a dynamic lifestyle at the heart of Mississauga. Immerse yourself in the thriving downtown core, where culture, commerce, and connectivity seamlessly converge. With a prime location and contemporary design, Exchange District Condos offers unparalleled living spaces, workspaces, and retail options.

Two towers within this extraordinary development will exceed the impressive 200-meter milestone, making a bold statement in architectural achievement. As construction progresses, the cityscape is already undergoing a transformation, with the 60 and 72-storey towers taking shape before our eyes.

To learn more about the remarkable Exchange District Condos and delve into the exciting world of preconstruction opportunities, we invite you to reach out to Ann and Anthony from the Olivera Group. Their expertise and in-depth knowledge of real estate investing and preconstruction will guide you towards making informed and educated decisions. 

Contact Us

Anthony Olivera & Ann Rahinel - info@theoliveragroup.com or (647) 951-0850

According to Statistics Canada's report on Tuesday, Canada witnessed a deceleration in its inflation rate to 3.4 percent in the year leading up to May. This slowdown can be attributed to notably lower prices of gasoline. In April, the inflation rate stood at 4.4 percent, making the current decrease quite significant.

The primary factor driving this deceleration is the decrease in gasoline prices. If we exclude the impact of gasoline, the inflation rate would remain at 4.4 percent. The average decline of over 18 percent in gasoline prices compared to their peak levels last year has played a major role in dragging down the overall inflation rate on its own.

However, despite the apparent deceleration in consumer prices, various aspects of the cost of living continue to rise significantly.

The rate at which grocery prices are increasing is nearly nine percent, only slightly lower than the 9.1 percent rate observed in April. Moreover, this rate is nearly three times higher than the overall inflation rate.

Food prices have consistently been on the rise at a faster pace than the officially reported inflation rate for over a year now.

Moreover, the expense associated with maintaining a place to live continues to surge at an alarming rate.

The mortgage interest cost index has soared by 29.9 percent, marking the highest pace ever recorded. This escalation is a result of the Bank of Canada's aggressive increase in lending rates, aimed at dampening demand.

Variable rate mortgage holders have been particularly impacted, as the cost of servicing their loans has been skyrocketing throughout the year. Even those with fixed-rate loans are facing the need to renew and secure new loans at substantially higher rates than their previous ones.

The increased cost of mortgages stands as the primary factor influencing the inflation rate, according to the data agency. If mortgage expenses are excluded from the calculations, Canada's headline inflation rate would have been 2.5 percent, down from 3.7 percent in April.

Leslie Preston, an economist at TD Bank, pointed out that even if we exclude volatile factors such as gasoline and mortgages, the underlying inflation remains at a level that would likely lead the Bank of Canada to consider another rate hike in the future.

"While the decrease in goods inflation is positive, it is likely that the Bank of Canada has already taken that into account as supply chain disruptions ease," she explained. "Although Canadian inflation has continued to moderate in May, it is unlikely that the progress made will be sufficient to deter the Bank of Canada from implementing rate increases in July."

Navigating the ever dreaded LOWBALL OFFER When Selling Your Home

Opinions vary regarding the definition of a "lowball offer." Some individuals consider it as an offer substantially below the listed price, while others perceive it as an offer significantly below the market value. In this blog, we will refer to "lowball offers" as those that are considerably below the asking price or below market value.

Receiving lowball offers can be disheartening but it is possible to handle them effectively. Here, we provide our top recommendations:

Understanding the Buyer’s Motivations

Gaining Insight into the Buyer's Intentions Before Responding to a Lowball Offer

When faced with a lowball offer, it is essential to comprehend the motivations driving the buyer. Typically, lowball offers originate from buyers in the following situations:

1. Bargain hunters: Some opportunistic buyers or investors are actively seeking a favorable deal and aim to purchase a property below its market value. They employ lowball offers as a strategy to identify sellers in desperate circumstances.

2. Budget limitations: Occasionally, buyers develop a strong affinity for a property that surpasses their financial capabilities. Although they may recognize the value of your home, their budget restricts them. As a result, they may submit an offer lower than your asking price, hoping for a fortunate outcome.

3. Renovation plans: Surprisingly common, certain buyers intend to renovate the property and deduct their estimated renovation expenses from the asking price. They may fall in love with a house but perceive the need to replace the kitchen and bathrooms, resulting in an offer lower than the listed price. It is important to note that personal renovation plans do not directly influence a property's market value.

4. Negotiation tactics: Some buyers, and their agents, relish the art of negotiation and utilize lowball offers as a means to shift the dynamics of the negotiation process. While their true intention might be to pay the market value, they engage in protracted negotiations as part of their strategy.

5. Lack of knowledge: Many buyers rely on their real estate agents to assist them in comprehending a property's value. Regrettably, not all agents possess extensive experience in property valuation. There have been instances where ill-informed agents have advised buyers to submit offers significantly below the asking price, leading to disappointment and frustration for both parties involved.

6. Genuine concerns about property value: While you may not necessarily agree with their perspective, some buyers may genuinely believe that your home is worth considerably less than your listed price. They may have reservations regarding its value, which drives them to present a lowball offer.

By understanding the motivations behind the buyer's offer, you can engage in more effective negotiations and potentially increase the chances of a successful sale.

Are You Priced Right?

Do you have substantial comparable sales data, indicating nearby properties with similar characteristics that support your asking price? Have you taken into account the prevailing market conditions?

HOMEBUYERS today are SMART! – they can quickly identify an overpriced residence, just as readily as they can recognize an underpriced one. If you're selling your home and have received numerous lowball offers, it may indicate that your price is set too high.

Don’t Take it Personally

While receiving a lowball offer can feel personal, it's crucial to keep in mind that buyers are primarily focused on securing the best possible deal for themselves. I've witnessed sellers react emotionally to such offers, refusing to engage in negotiations—I've even found myself in that position. However, if you can prevent yourself from becoming defensive, you'll enhance your likelihood of achieving a successful outcome.

Counteroffer with a Realistic Price

When faced with a lowball offer, it is crucial to respond with a counteroffer that reflects a realistic price. Take into account the present market conditions, recent comparable sales in the vicinity, and any improvements or renovations you have made to the property. Your counteroffer should be grounded in objective factors rather than emotions or a desire to retaliate against the buyer. Just because the buyer may be engaging in strategic maneuvers, there is no obligation for you to follow suit.

Be Willing to Walk Away

If the buyer demonstrates an unwillingness to engage in negotiations and presents an unfair price, you might need to consider withdrawing from the transaction. Certain individuals who submit lowball offers are solely seeking an advantageous deal and may never intend to pay the property's market value.