Canadians ready to cash in on their property, poll finds; problem is, where to go next?

A new poll finds 41 per cent of Canadian with plans to sell their property are doing so to cash in and make a profit.

But the problem, according to the survey released Monday by Canadian Imperial Bank of Commerce, is 62 per cent say the cost of buying another house is making them “reluctant to sell” and move out of their current home.

“In today’s market, homeowners are facing a conundrum as to whether to buy, sell or stay put,” says David Nicholson, vice-president of CIBC Imperial Service.

The survey, conducted March 16-20 online with a margin of error of plus or minus 1.7 per cent points, 19 times out of 20, comes as the Greater Toronto Area housing market shows very few signs of slowing down.

The Toronto Real Estate Board reported  last week that overall prices for the GTA were up 33 per cent in March from a year ago with the average detached home in the city of Toronto selling for $1.56 million.

Rising values, which comes as some parts of the country are still watching their housing markets struggle, has policy makers grappling for a solution. Finance Minister Bill Morneau has pledged to speak with provincial and municipal officials in Canada’s largest city to work on a joint solution.

The poll finds that Canadians are worried about what the so-called solutions to the housing market might be with 48 per cent of homeowners, who are planning to sell, concerned that government tax and policy changes will lower housing prices.

Tougher rent controls continue to be discussed in the province, supported by a New Democrat private members bill, and the CIBC poll finds 28 per cent think that renting is a better option given current house prices.

More housing product could find its way into supply as the polls also finds 67 per cent of baby boomers, those 55 and over, plan to sell their homes with the top reason being to downsize at 63 per cent. Buying is also making baby boomers nervous about selling.

“Your home is where your heart is, but it’s also likely your biggest financial asset, so there is a lot to consider as you enter or near retirement that can affect your decision to sell or not,” said Mr. Nicholson.

In the millennial category, 39 per cent of those aged 18-34 are now homeowners, the rest renting or living with family. Another 23 per cent of millennials believe they will never own a home.

Overall, 62 per cent of those surveyed were homeowners, 31 per cent rented and seven per cent lived with parents or family.

-Calgary Herald

Calgary awash in record number of vacant condos and houses built at end of boom

Alberta’s boom and bust economy has left Calgary with record numbers of newly built homes and condos that sit vacant as a massive stockpile of housing goes up for sale at the end of a recession.

More than 2,000 new housing units were unoccupied in the Calgary area last month, the biggest inventory on record, driven largely by construction of apartment-style condos, according to the Canada Mortgage and Housing Corp.

This inventory of newly built homes and condos that haven’t been bought has been steadily growing since the recession began, having ballooned by more than a third, or 500 units, so far this year, CMHC data show.

 

Since pre-recession March 2014, the stockpile has nearly quadrupled in size.

Todd Hirsch, chief economist at ATB Financial, said the major housing glut shows “we’re not quite out of the woods” after a bruising recession, though he noted other indicators, from retail sales to employment, suggest the economy is improving.

“Things are moving in the right direction,” Hirsch said. “That’s not to say all of that unoccupied inventory gets absorbed right away; it could still take a year.”

Many of the residential developments causing the glut broke ground in 2014, which marked the end of a boom with a dramatic slide in oil prices, triggering a prolonged recession.

Construction began on a record 17,000 housing units in Calgary in 2014, including 6,700 apartment-style condos, according to the country’s national housing agency. A year later, the city posted another 13,000 housing starts.

The result is 144 empty units downtown and in Eau Claire. The largest concentration of new, unsold homes and condos are in 10 northeast neighbourhoods, from Skyview Ranch to Sunridge, where a total of 420 units are vacant.

While apartment-style condos account for more than half of the current housing surplus, there are large clusters of new, unsold homes in south Calgary suburbs.

Across a swath of 24 southern neighbourhoods, from Evergreen to Legacy and from Douglas Glen to Cranston, there are 400 newly built, unoccupied homes, according to Canada’s housing agency.

About 465 new single-family homes in the Calgary area haven’t been sold, well above the five-year average of 400, housing data show. Another 360 new semi-detached and row houses remain on the market.

Still, CMHC analyst Richard Cho said he believes homebuilders are preparing for the spring buying season, noting there are fewer homes on the resale market than there were a year ago.

Cho expects new construction of multi-family housing, such as condo towers, will decline this year allowing buyers to take some oversupplied units off the market.

Still, CMHC forecasts construction of single family homes will rise slightly this year and again in 2018.

Home builders broke ground on a total of 1,150 new units last month, well over the 411 housing starts reported a year ago, but below the 1,640 starts in 2015.

“The economy has been moving up so we expect demand to also climb higher,” Cho said.

-Calgary Herald