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Housing articles: 1) Asking Rents In Canada Jump 8.6% In December To Hit Record $2,178 On Average, 2) Home Sales Expected To Rebound As Rate Cuts Begin In 2024, But Experts Urge Caution; 3) Barrie Council Approves New Affordable Housing Strategy 4) CMHC Says Annual Pace Of Housing Starts Up 18% In December 5) Housing Crunch Prompts Efforts To Stabilize Immigration Levels, Say Federal Ministers

ByPatricia Dent

1) Asking Rents In Canada Jump 8.6% In December To Hit Record $2,178 On Average

Courtesy of Barrie360.com and Canadian PressPublished: Jan 15th, 2024

A new report says the average asking price in December for a rental unit in Canada was a record $2,178 per month, relatively flat from the previous month but an 8.6 per cent jump year-over-year.

The data released Monday by Rentals.ca and Urbanation, which analyzes monthly listings from the former’s network, showed the average monthly cost of a one-bedroom unit in December was $1,932, up 12.7 per cent from the same month in 2022.

The average asking price for a two-bedroom was $2,301, up 9.8 per cent annually.

As for Barrie, the city ranked 14th between Kitchener (13th) and Kelowna B.C. (15th).

  • One-bedroom: $1,915
    • Up 0.9% month-over-month
    • Up 2.7% year-over-year
  • Two-bedroom: $2,233
    • Down 2.8% month-over-month
    • Down 6.4% month-over-month

Rents also increased by an average of 8.6 per cent for 2023 as a whole. This followed a 12.1 per cent increase in 2022 and a 4.6 per cent gain in 2021. Asking rents in Canada over the past two years have increased overall by a total of 22 per cent, or an average of $390 per month, according to the report.

Traditional purpose-built rental apartments posted the fastest price growth in 2023 with a 12.8 per cent increase, as rents averaged $2,076. Condominium rentals, with an average rent of $2,340, and home rentals, at $2,354, had slower annual growth of 6.9 per cent and 5.9 per cent, respectively.

Asking rents in December for a one-bedroom unit in Canada’s two most expensive major cities, Vancouver and Toronto, continued to come down on monthly basis.

The west coast city had an average price of $2,700, which was 5.8 per cent lower than November, while the Ontario capital came in at $2,521, 2.8 per cent below the previous month. Despite that, the cities still marked increases on an annual basis of four per cent and 2.6 per cent, respectively.

Alberta had the fastest-growing rents among provinces for purpose-built and condominium apartments in 2023, with a 15.6 per cent annual increase in December to reach an average of $1,691.

Meanwhile, B.C. remained the most expensive province for apartment rents with an average asking rent of $2,500, despite a 1.4 per cent annual decrease. The average apartment rent in Ontario was slightly below at $2,446, increasing 3.7 per cent annually in December.

The report said the rental market in Canada will remain undersupplied in 2024, but there should be more balance, with rent growth expected to be closer to its five-year average of approximately five per cent.

“Rental demand is expected to remain strong, experiencing some moderation compared to 2023 due to a slowing economy, a reduced number of non-permanent residents, and an improvement in homebuying activity as interest rates begin to decline,” it stated.

2) Home Sales Expected To Rebound As Rate Cuts Begin In 2024, But Experts Urge Caution

Courtesy of Barrie360.com and Canadian Press Published: Jan 15th, 2024

By Sammy Hudes

With interest rate cuts likely on the horizon, the Canadian Real Estate Association expects the number of homes changing hands this year to grow following a slowdown in 2023.

However, experts say they remain cautious about the timing and scale of a potential rebound.

CREA updated its 2024 housing forecast on Monday as it also reported national home sales data for December. 

The association said it expects 489,661 residential properties to be sold this year — a 10.4 per cent increase from 2023 — and the national average home price to climb 2.3 per cent on an annual basis to $694,173.

Noting that Canadian housing markets have remained quiet since the Bank of Canada’s interest rate hikes last summer, the association said there’s reason to be optimistic in the new year with expectations for the timing of the first 2024 rate cut pulled forward.

“The real test of the markets’ resilience will be in the spring,” said CREA chair Larry Cerqua in a press release, adding that the data for December offered up “a bit of a surprise in sales numbers to cap the year.”

December home sales were up 3.7 per cent compared with the same month in 2022, marking the largest year-over-year gain since August. The actual national average price of a home sold in December was $657,145, up 5.1 per cent from December 2022.

The number of newly listed homes fell 5.1 per cent on a month-over-month basis in December.

CREA senior economist Shaun Cathcart said the December bump likely wasn’t the start of the expected recovery, but rather “just some of the sellers and buyers that were holding onto unrealistic pricing expectations last fall finally coming together to get deals done before the end of the year.”

“We’re still forecasting a recovery in housing demand in 2024, but we’ll have to wait a few more months to get a sense of what that ultimately looks like,” he said.

Some buyers may have been inclined to purchase a home as last year wrapped up in order to get ahead of the anticipated 2024 boom, said Cailey Heaps, president of the Heaps Estrin Real Estate Team in Toronto.

Although borrowing costs are still high, with the central bank holding its key rate at five per cent, she said those looking to make a move now have the advantage of potentially finding good deals on the market due to lower demand and less competition.

“The primary advantage is we will likely see upward pressure on pricing once the rates start to drop,” she said.

“You’re locking into a higher rate, but … you just factor it into your purchasing price and your overall budget.”

National Bank economist Daren King said data trends from Canada’s largest housing markets — Toronto, Vancouver, Montreal and Calgary — suggest November was likely the trough for home sales, but he agreed the strong figures last month were not necessarily “a sign that the real estate market is now on the rise for good.”

“We’re seeing economic growth decelerating, the job market also is not as good it used to be, we’re seeing the unemployment rate increasing, so of course, we’ll have some headwinds ahead,” King said in an interview.

“When we will have more confidence that the Bank of Canada will start decreasing their interest rate — we’re expecting it to decrease in April, probably — at that point, we can expect the real rebound then.”

Others feel the recovery might come earlier than that. A separate report released Monday by Royal LePage suggested the Canadian market is showing signs of home price stability, with the aggregate price of a home increasing 4.3 per cent annually to $789,500 in the fourth quarter of 2023.

Buyer sentiment can have an equal effect on market trends as inventory or interest rates, according to Phil Soper, president and CEO of Royal LePage.

“I believe the narrative suggesting that the housing market will rebound only when the Bank of Canada lowers rates misses the mark,” he said.

“The recovery will begin when consumers have confidence the home they buy today will not be worth less tomorrow. We see that tipping point occurring in the first quarter, before the highly anticipated easing of the Bank of Canada’s key lending rate.”

Heaps said the market is anticipating an increase in inventory this year, which adds another layer to the dilemma some buyers face before the cycle of rate cuts gets underway.

“Do you buy something now because you feel you’re going to get ahead of the market pricing, knowing that there might be more options in the spring? Or do you wait for more options?” she said.

“That’s a very subjective decision that people will make.”

3) Barrie Council Approves New Affordable Housing Strategy

ReleasePublished: Jan 18th, 2024

News release – City of Barrie

At Wednesday evening’s Barrie city council meeting, the city’s affordable housing strategy was approved. This document will be the guiding strategy for the city to act on housing affordability in 2024 and beyond.

“One of council’s key priorities is creating more affordable places to live,” said Mayor Alex Nuttall. “Our affordable housing strategy is a great start to move beyond intention and into action. We need to take a leadership role to create affordable living solutions while also ensuring we have high-paying job opportunities for our residents. We’re committed to building a city where everyone can find affordable homes to purchase or rent alongside fulfilling careers with a focus on true community building.”

This document is the third part of a multi-year plan to update Barrie’s strategy to create affordable housing, as the current housing market and interest rate changes have made it unattainable for many to find affordable rental housing and affordable ownership options. The city released its previous affordable housing strategy in 2015. As part of the work to create the new document, the city completed the following over the last year:

  • A housing needs assessment, which was the outcome of research, public meetings, community consultation, a public survey, and the 2023 Affordable Housing Symposium. The assessment used data to understand where the largest housing gaps exist. The city welcomed public feedback related to housing needs, housing supply, and sought to understand what residents believed the solutions to affordable housing should be.
  • Recommendation of policy options and looking at new tools to discuss the action items derived from these options to encourage affordable housing.

Barrie’s affordable housing strategy focuses on actions to improve the city’s housing affordability, however, the County of Simcoe is the city’s housing service manager and they are responsible for providing services such as emergency shelters, transitional housing and social housing.

The city’s affordable housing strategy outlines nine actions to be taken to address affordability:

  1. Undertake a comprehensive review of the city’s zoning bylaw (already underway)
  2. Update the city’s existing incentive program and increase the annual budget
  3. Use public land to deliver new affordable housing (already underway)
  4. Work towards a decision faster (shorten approval timelines)
  5. Create a concierge program to connect parties who are interested in partnering to deliver new housing
  6. Enhance the Simcoe County Secondary Suite program for Barrie
  7. Enact a rental replacement bylaw to preserve existing rental stock
  8. Continue to communicate to the public the benefits of growth, density, and affordable housing
  9. Explore the potential for inclusionary zoning (already underway)

The strategy also outlines additional considerations and advocacy initiatives that should be considered. Some of these items can be undertaken by the city of Barrie, while others are initiatives that will require participation and support from the federal and provincial governments.

Now that the strategy is approved, city staff will work on an implementation plan, including any budget requirements, and report back to the city’s affordability committee by June 2024.

To learn more about the work done to create the strategy, visit buildingbarrie.ca/AffordableHousing. To find out more about Barrie’s progress in meeting building goals, visit barrie.ca/BuildingProgress.

4) CMHC Says Annual Pace Of Housing Starts Up 18% In December

Courtesy of Barrie360.com and Canadian PressPublished: Jan 16th, 2024

Ottawa

Canada Mortgage and Housing Corp. says the annual pace of housing starts in December rose 18 per cent compared with November, helped higher by an increase in multi-unit urban starts in Vancouver and Montreal.

The national housing agency says the seasonally adjusted annual rate of housing starts for December was 249,255 units, up from 210,918 in November.

The seasonally adjusted annual rate for December for urban housing starts rose 20 per cent to 234,705 as the pace of multi-unit urban starts increased 26 per cent to 191,463. The rate of single-detached urban starts fell two per cent to 43,242.

The annual pace of rural starts was estimated at 14,550 for December.

The six-month moving average of the monthly seasonally adjusted annual rates of housing starts in December was 249,898, down 2.1 per cent from 255,198 in November.

For the full year, CMHC says actual urban housing starts in 2023 were down seven per cent at 223,513, compared with 240,590 in 2022, as single-detached home starts fell 25 per cent last year.

5) Housing Crunch Prompts Efforts To Stabilize Immigration Levels, Say Federal Ministers

Courtesy of Barrie360.com and Canadian PressPublished: Jan 13th, 2024

By Nojoud Al Mallees in Ottawa

Housing Minister Sean Fraser and Immigration Minister Marc Miller say the federal government is working to stabilize the number of people entering the country every year as housing pressures mount.

The Canadian Press reported Thursday on internal documents from 2022 showing Immigration Department employees warned their deputy minister that a major increase in immigration could affect access to housing and services.

The federal government ultimately decided to increase the number of permanent residents Canada welcomes each year to 500,000 in 2025 — nearly double the amount from 2015.

In a joint statement Friday, the Liberal ministers are defending the decision to boost immigration levels, arguing immigration supported Canada’s post-pandemic recovery. 

“Had we not increased immigration post-pandemic, the economy would have shrunk. Businesses facing an acute labour shortage would have closed. The social services Canadians needed, including in health care, would be further delayed or even more difficult to access,” the statement said. 

But Miller and Fraser also say housing pressures have pushed the government to adjust its immigration targets as well as temporary resident admissions.

Miller decided to level out the number of permanent residents coming to Canada at 500,000 for 2026, the same number as 2025. 

The Liberal government also made changes to the international student program to address issues around fraud and the cost-of-living challenges. 

The Liberal ministers say the federal government is ready to take more action if post-secondary institutions don’t ensure international students’ housing needs can be met. 

“We expect learning institutions to only accept the number of students that they are able to house, or assist in finding off-campus housing. We are prepared to take necessary measures — including significantly limiting visas — to ensure that designated learning institutions provide adequate and sufficient student supports as part of the academic experience,” the statement said. 

Conservative Leader Pierre Poilievre, who has been heavily critical of the Liberals over their housing policies, said Friday that the government should calibrate its immigration policy to match the pace of homebuilding in the country.

“Common sense Conservatives will get back to an approach of immigration that invites a number of people that we can house, employ and care for in our health care system,” Poilievre said. “Obviously, you need to build homes if you’re going to bring in people. And right now, we’re not building enough homes.”

Patricia Dent
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