OTTAWA, July 22 (Reuters) – Canadian home prices are dropping fast after surging during the coronavirus pandemic, but that is offering little relief for consumers who face sky-rocketing rents and fading buying power as interest rates rise.
Desperate would-be buyers found themselves caught in a frenzy of bidding wars for real estate during the pandemic, when home prices in Canada rose more than 50% in just two years.
Now the competition has moved to rentals, with landlords demanding months of rent upfront and at times, even pitting tenants against one another to see who will pay more, according to real estate agents and media reports.
The average rent on a 1-bedroom apartment in Canada is up 13.7% from the start of the year, data from Rentals.ca shows, with year-on-year rents surging 18.5% in Toronto and 19.2% in Vancouver.
The shift from frantic demand for homes-to-buy to homes-to-rent makes plain a broader issue with Canadian housing: that there simply is not enough of it, said Dan Scarrow, president of Macdonald Realty in Vancouver.
“Higher (interest) rates are not destroying demand for housing, it’s just shifting the demand from buying to renting,” he said. “The demand just sloshes between renters and buyers, depending on where rates are so long as you have constrained supply.”
The Bank of Canada has raised its policy interest rate to 2.5% now from 0.25% at the start of the year to fight inflation, which hit a near 40-year high of 8.1% in June.
The rapid rise in borrowing cost has chilled the real estate market, pulling down Canada’s average home price by 18.5% from its February peak, according to data from the Canadian Real Estate Association.
But softer prices do not appear to be helping would-be buyers, who now can’t get loans due to far higher mortgage qualifying rates. And that, in turn, is driving up rental demand.
“Rents have gone insane because people have to have a place to live,” said Paul Eviston, a Vancouver-based real estate agent. “Demand on the rental market has really taken off as a lot of people that were would-be buyers are now forced to rent.”
That hot rental demand has put a floor under condo prices in large cities, real estate agents said, with investors feeling confident enough to wait out price dips and some even looking to snap up more investment properties.
Toronto agent Imran Khan just sold a loft apartment to an investor who was able to lease it out within days of closing.
“I’ve listed properties for rent … and we get multiple offers, right. Like right away,” said Khan.
Rising immigration and a post-pandemic return to urban centers will further bolster demand for city condos, said Khan. Landlords, for their part, are pushing for higher rents when units turn over, agents said.
The shift from owned-homes to rental-homes is also starting to show up in Canada’s inflation data, with homeowners’ replacement cost increases easing sharply to 10% from 13% in April, while rent inflation remains near the 32-year high hit in April.
Mortgage interest costs, which fell sharply as the pandemic took hold and rates were slashed, are now surging. Homeowners who took out variable loans or those with mortgages coming up for renewal are feeling the most pinch.
“Right now is actually one of those unique moments where buyers, sellers, and renters are probably all struggling,” said Scarrow. “Usually, there is a winner. But I think this time it’s a struggle really for everyone.”
The article was originally posted on Yahoo Finance, July 22, 2022. Written by Julie Gordon and Shreya Jain.
We are proud to announce that effective July 1st, 2022 Jeannie Shaver has been appointed Managing Broker for Macdonald Realty’s boutique office in Parksville. Born and raised on Vancouver Island, Jeannie joined Macdonald Realty as an agent in 2018 and received the company’s Sales Achievement Award in each of the next 3 years. Active in the Oceanside community, Jeannie has served on the board and managed the Qualicum Beach Farmers Market, as well as serving on the Official Community Plan Review Steering Committee in Qualicum Beach. She will continue to assist clients with buying and selling properties in the community, while also helping to expand Macdonald Realty’s presence in Central Vancouver Island.
“We’re excited to work with Jeannie to grow our Parksville office,” says Rosey Hudson, VP of Operations for Macdonald Real Estate Group. “For agents, Macdonald Realty offers many leading technology tools such as Skyslope for efficient transaction management, kvCORE their agent website, lead generation and CRM, and the Macdonald Online Marketing Centre for quick listing brochures and social media posts. For the public, our marketing channels cover digital, local print and global syndication through the Leading Real Estate Companies of the World and Luxury Portfolio International networks. Best of all, as a locally owned company, Macdonald Realty is able to focus 100% of our efforts on building programs and services for people who live and work in BC.”
Those who are interested in joining a brokerage in the Parksville-Oceanside area can connect with Jeannie by visiting careersinBCrealestate.com to schedule a meeting.
KELOWNA, B.C. – (February 1, 2022) – Macdonald Realty Kelowna, an award-winning brokerage in the Okanagan, is excited to announce that it has converted to a Macdonald Realty corporate office, joining one of Canada’s largest independent brokerages and a market leader in British Columbia. The merger further strengthens Macdonald Realty’s position as BC’s premiere independent brokerage, and fills a key need for Macdonald in the growing Okanagan market.
“We are excited to have a company with the quality and history of Macdonald Realty Kelowna join us as a corporate office,” says Dan Scarrow, President of Macdonald Realty. “We continue to be open to working with great BC companies and agents who want to take their business to the next level.”
Founded in 1995, Macdonald Realty Kelowna has been the premier real estate brokerage in the Okanagan for nearly 30 years. With over 40 licensed real estate agents and nearly $1 billion in sales in 2021, Macdonald Realty Kelowna has a sterling reputation and significant market share throughout the Okanagan. Wayne Judiesch, part owner of Macdonald Realty Kelowna and a stalwart in the community, was instrumental in the merger negotiations.
“We are thrilled to be converting to a corporate office,” says Judiesch, “we have known and respected the leaders at Macdonald for over 30 years, this merger gives us a direct pipeline of business to-and-from the Lower Mainland and rest of BC, and provides a long-term future for our agents, staff, and clients.”
Across the province, REALTORS® and brokerages are engaged in innovative work to support the real estate profession and the public. And we want to share those stories. On this episode of Open House by BCREA, explore an innovative way to build trusting, successful relationships with your clients through our conversation with Mark Winter. Mark is a seasoned real estate professional with 30 years of experience and is also a certified coach. He is Director of Agent Development at a BC real estate brokerage and has written a book entitled A Different Conversation: Realizing Your Potential as a Real Estate Agent.
This episode was recorded on October 22, 2021.
Listen to the podcast here.
If you had to pick the most important thing you could provide your clients with, what would it be?
In a survey recently published by the Canadian Real Estate Association and Nanos Research, the most important attributes a Realtor should display in their interactions with clients are honesty and integrity. In other words, your clients want to be able to trust you.
But building that trust can be easier said than done and the survey results also highlight that there is some room to grow in that area.
Joining us to talk about an innovative way to build trust in your relationships with your clients is Mark Winter. Mark has been a part of the same BC brokerage since 1992 and now has over 30 years of experience in the real estate business. He started off as a Realtor and now works in a senior leadership role as Director of Agent Development.
He’s also a certified coach and putting his two passions together has written a book entitled A Different Conversation: Realizing Your Potential as a Real Estate Agent. Mark joins us to talk about the coaching approach and how this approach can lead to more success and fulfillment as a Realtor, which in turn means more satisfied clients.
The article was originally posted on British Columbia Real Estate Association (BCREA), November 1, 2021. Written by Shaheed Devji.
BURNABY, B.C. – (January 7, 2021) – Westburn Realty, an award-winning brokerage in Burnaby, BC, is excited to announce that it has joined Macdonald Realty, one of Canada’s largest independent brokerages and a market leader in British Columbia. The merger further strengthens Macdonald Realty’s position as BC’s premier independent brokerage and fills a key need for Macdonald in the important Burnaby market.
“We are excited to have a company with the quality and history of Westburn Realty join the Macdonald family,” says Dan Scarrow, President of Macdonald Realty. “We continue to be open to working with great BC companies and agents who want to take their business to the next level.”
Founded in 1987, Westburn Realty has been a leading real estate brokerage in Burnaby for over 30 years. With nearly 100 licensed real estate agents, including several top teams, Westburn Realty have a sterling reputation and significant market share throughout the Lower Mainland. Paul Prade, part owner of Westburn Realty and a stalwart in the community, was instrumental in the merger negotiations.
“We are thrilled to be joining Macdonald” says Prade, “Our business philosophy of placing customer service and Realtor support first fits perfectly with Macdonald Realty. We have known the leaders of Macdonald for many years and are confident that our tradition of operating a “family” style business will continue for many years to come”.
With the merger, Macdonald, led by CEO Lynn Hsu, is now the largest company in BC owned and operated by a woman.
About Macdonald Real Estate Group:
Founded in Vancouver in 1944, Macdonald Realty has grown to become BC’s largest full-service corporately owned real estate company, with over 20 offices, 1,000+ agents and staff in the province, and nearly $10 billion in annual sales.
In addition to residential sales, Macdonald Commercial has over 40 dedicated commercial agents with a head office in Vancouver and a Fraser Valley office in South Surrey; Macdonald Property Management currently manages over $5 billion in BC properties; and Macdonald Platinum Marketing has sold over $2 billion in luxury new construction.
VANCOUVER, B.C. – (April 24, 2020) – Macdonald Realty Victoria has committed to donating a portion of their agent’s monthly office fees to the Victoria Rapid Relief Fund which is raising money for coronavirus emergency relief in the capital region. The first monthly contribution of $1200 was delivered to The Victoria Foundation who chairs the fund, with a commitment to continue the monthly donations while Macdonald Realty agents work from home during physical distancing.
“We saw an opportunity to shift the focus and support our community during this critical time, ” says Ara Balabanian, Managing Broker of Macdonald Realty’s Victoria and Sidney offices. “Real Estate has been deemed an essential service by the BC Government so while the doors to our office are closed, we are fortunate to be able to continue offering essential services to clients from our homes. Our agents are happy to see a portion of their office fees redirected to support this worthwhile cause.”
The Victoria Rapid Relief Fund was established to provide funds to local Registered Charities and Qualified Donees providing front-line services to vulnerable populations whose staff, volunteers, programs, and operations have been disproportionately impacted by COVID-19. Since March 21st they have raised over $5 million dollars.
Picture from The Victoria Foundation Facebook Page
About Macdonald Real Estate Group: Founded in Vancouver in 1944, Macdonald Realty (macrealty.com) has grown to become BC’s largest full-service corporately owned real estate company, with over 20 offices, 1,000 agents and staff in the province, and nearly $6 billion in annual sales.
In addition to residential sales, Macdonald Commercial has over 40 dedicated commercial agents with a head office in Vancouver and a new Fraser Valley office in South Surrey; Macdonald Property Management currently manages over $5 billion in BC properties; and Macdonald Platinum Marketing has sold over $2 billion in luxury new construction.