More serious delinquencies are a little more choppy, but still down on the quarter. The rate of mortgages more than 90 DPD, but under 120, fell 0.56 bps in Q3 from last year. This follows an increase of 0.33 bps in Q2, and shows a generally rising trend in 2019 with Q4 being an exception. Such a sudden swing is most likely attributed to payment deferrals. Earlier stage delinquencies were generally falling, but more people are carrying over into real delinquencies.
The average price for homes sold in Canada’s largest city last year hit $930,000, the highest on record and up 13.5 per cent from 2019, the Toronto Regional Real Estate Board said Wednesday in a release.
Greater Toronto’s composite price made a big jump for the month, and is now much higher than last year. TRREB’s composite benchmark price reached $909,500 in December, up 0.78% ($7,000) from the previous month. This represents an increase of 11.05% when compared to the same month last year. Both the monthly and annual increase are substantial. It becomes much more complicated (and interesting) when this number is broken down.
Greater Vancouver real estate prices climbed last month, bringing annual gains closer to where they were a few years ago. The composite benchmark price reached $1,047,400 in December, up 0.3% from the previous month. Prices are now 5.4% higher than the same month last year, and about 0.2% from 3 years ago. Fairly substantial gains for the composite, but still just regaining ground from a few years ago.
Although the “uber-luxe” homes highlighted in the Re/Max report are a small fraction of the overall home sales market, Re/Max’s Christopher Alexander said the luxury home market reflects broader trends emerging from the pandemic. Toronto average home prices hit a new high of $929,699 in 2020, the Toronto Real Estate Board said on Wednesday, as the number of homes sold rose to 95,151, up from 87,751 in 2019.
Toronto employment did a little better, with a small uptick last month. There were 3.45 million people employed in the region in December, up 1,100 (+0.03%) jobs from the previous month. This represents a drop of 82,200 (-2.33%) jobs compared to the same month last year. The increase was within the margin of a rounding error though, so it’s too soon to say it’s bucking the trend. However, the small increase is better than nothing.
Residential investment has recovered much faster than other segments of GDP. Residential investment represents 9.43% of GDP in Q3 2020, up from 7.71% during the same quarter last year. This is not only the highest rate seen in at least 60 years, but it’s also very high for any country. For context, the U.S. residential investment peaked at 6.7% in 2006 during the housing bubble. The current rate in the U.S. is just 4.3%, having also sharply accelerated faster than GDP in the third quarter. Just not nearly as much as Canada.
Office vacancy rates have climbed across the country during the pandemic, with downtown Toronto’s jumping to 7.2 per cent in the fourth quarter, as tenants tried to offload space and did not renew leases after months of having their employees work remotely.
Retail landlord First Capital Real Estate Investment Trust cut its monthly distribution in half as economic shutdowns escalate across Canada, marking the second major retail REIT to slash its payout over thepast month.
The amount set aside for losses has climbed to a new record high, and is growing unusually fast. Allowances reached $3.9 billion in Q3 2020, up 22.01% from the previous quarter. This represents an increase of 54.11% when compared to the same quarter last year. It’s not just a record high for dollars, but also the highest rate of growth in over a decade.
Over a 12-month period ending July 1, 2020, and overlapping with the first wave of the pandemic, the metropolitan area of Toronto saw a net intraprovincial outflow of 50,375 people, according to Statistics Canada figures released Thursday. That means 50,375 more people left the Toronto area for other parts of Ontario than moved in – a record high according to data going back almost two decades.
Robert Hogue, RBC’s senior economist, has forecast real estate prices will make big gains early in the year. The economist is calling an 8.4% increase at the national level in 2021. Ontario is expected to make a 9.6% increase, followed by Quebec at 9.0%, and B.C. an 8.3% gain. He also adds, this is driven by a shortage of supply almost everywhere. The only exception being downtown condos in major real estate markets.
Areas outside downtown cores have also been affected by lockdowns, and building owners and managers, business and retail tenants and investors and developers are not only looking to respond in the short term but are looking at what trends may continue long term.
Paris-based BNP Paribas SA’s currency portfolio is “overweight” loonies and Momtchil Pojarliev is advising the bank’s clients to do the same. He reckons the Canadian dollar is undervalued, since the petrocurrency’s price hasn’t fully adjusted to the likelihood of stronger oil prices as the global economy recovers from the pandemic.
Regulatory data for Canada Guaranty Mortgage Insurance Co., which is owned by Ontario Teachers’ Pension Plan and Canadian financier Stephen Smith, showed business was booming as of the end of the third quarter.
Home starts declined to 228,300 units last month on an annualized basis, down 12.6% from a revised 261,200 units in November, Canada Mortgage and Housing Corp. said Monday in Ottawa. The overall number missed the 230,000 median forecast in a Bloomberg survey.
Getting a mortgage for a resort-area condo might become more difficult after Fannie Mae and Freddie Mac moved to tighten rules on buildings with many short-term rentals and hotel-like amenities, some Realtors and bankers say.