Darwyn Sloat
200-1505 Harvey Avenue V1Y 6G1 Kelowna, BC, Canada

First National's weekly market update. Canadians appear to be cautiously optimistic since the onset of Covid-19. "Residential Market Commentary - Canadian consumers’ cautious optimism Oct 26, 2020 Be the expert First National Financial LP... "Canadians’ confidence in the economy moved back to the optimistic side of the ledger in the third quarter. The Bank of Canada’s latest Canadian Survey of Consumer Expectations suggests the outlook has turned positive compared to the second quarter, but cautiously so. Among the key findings in the third quarter report is a return to expectations that home prices will continue to increase. During the second quarter those expectations plunged to near zero, now they are back to just slightly below pre-pandemic levels. The survey also suggests a change in the type of housing preferred by buyers, with a shift to less crowded and more remote environments. In other words, bigger homes away from urban centers. Many market watchers attribute this directly to the pandemic lockdowns and the accompanying surge in working from home. Expectations for interest rate increases are virtually unchanged from Q2, but are down significantly from a year ago. This is, of course, is in keeping with the BoC’s stated policy of rock bottom rates until there is a sustained growth in the overall economy and inflation. The consumer outlook for household income and spending have improved modestly but still indicate caution. Canadians say they are shopping less, but are doing more of it online. Compared to Q2, more people say they are cancelling or postponing major purchases. Lower spending and less recreational and social activity have led to greater savings for many consumers. Most indicated they will hold on to those savings as a safeguard."

First National's weekly market update. Home prices are up and it is a seller's market so far. "Residential Market Commentary - Hot August for home sales Sep 21, 2020 Be the expert First National Financial LP... "Canada’s housing market has yet to take its summer vacation. August numbers from the Canadian Real Estate Association show sales rose 33.5% compared to a year ago and were up more than 6% from July’s record setting pace. Nearly 59,000 properties changed hands last month, making it the busiest August ever. Prices took a hike in August as well. The national average rose 18.5% year-over-year to $586,000. As usual, Toronto and Vancouver had an outsized influence on the number. When those two markets are factored out the national average price drops to $464,000, up 18% year-over-year. CREA’s Home Price Index, which compensates for anomalies like Vancouver and Toronto, posted a 9.4% y-o-y increase. The sales-to-new-listings ratio improved slightly in August, easing to 69% from more than 72% in July. A little good news for buyers, but still firmly in sellers’ market territory. While the summer boom has made up for the COVID induced slump earlier in the year, market watchers are looking ahead for signs of another slowdown, or worse." Concerns continue to focus on what will happen once $267 billion in mortgage and loan deferrals expire and government COVID supports, like CERB, come to an end.

First National's weekly market update. Jobs added but we still aren't where we were prior to the pandemic. Also, sales appear to up and prices are also up. "Residential Market Commentary - Caution and patience as we look ahead Oct 13, 2020 Be the expert First National Financial LP... "The latest employment numbers coupled with the September reports from the Toronto and Vancouver real estate boards have triggered a lot of optimism about Canada’s economic recovery and the state of the housing market. Statistics Canada reports the economy added 378,000 jobs in September, and the unemployment rate dropped to 9%. Toronto realtors posted a record breaking 11,083 sales last month, up 42% from a year earlier. The benchmark price rose 14%, y-o-y. Vancouver had its best September ever: 3,643 sales, up more than 56% y-o-y. The benchmark price rose nearly 6%. All of these numbers continue to defy expectations and so caution and patience need to be the guiding principles as we try to figure out what will happen next. The employment numbers which are a key indicator of economic health surely got a boost with the reopening of schools. Parents who had been staying home to look after their kids became available for work again. But many are not back to full employment. The number of mothers working less than half their usual hours was 70% higher last month than before the shutdowns. For working-fathers the number is 23% higher. Overall, employment is still 25% lower than it was before the pandemic. And many of those jobs will not be coming back. Further job growth remains in jeopardy as the two, biggest jurisdictions in the country, Ontario and Quebec, re-introduce closures and restrictions to slow the spread of COVID-19. At the same time, signals from the housing sector are mixed. Realtors continue to forecast rising sales and prices. But the market is imbalanced. Most of the gains are coming in ground-oriented units singles, semis and townhouses. Condos are seeing significantly smaller increases. Canada Mortgage and Housing Corporation continues to forecast that price declines, in the 10% area, will start showing up sometime around the middle of next year. Moody’s Analytics predicts a national peak-to-trough price decline of 7%. Both reports cite employment shortfalls, reduced immigration and increasing loan delinquencies."

First National's weekly market update. CMHC has its report regarding their views up to the end of July. "Residential Market Commentary - Housing market stable, but prices in question Sep 28, 2020 Be the expert First National Financial LP... "After six months in COVID quarantine Canada Mortgage and Housing Corporation is, once again, releasing its quarterly Housing Market Assessments. The most recent HMA covers up to the end of June so the very busy period through July and August does not figure into the report. Overall, the federal housing agency ranks the vulnerabilities to Canada’s housing market as moderate, the same as its last report in February. Overvaluation continues to show moderate risk while the other three factors overheating, price acceleration and overbuilding are ranked as low risk. No individual markets remain in the high risk category. CMHC cites the evidence of rising imbalances in some local housing markets coupled with the general weakening of housing market fundamentals as the reason for maintaining the moderate risk ranking. The agency is also maintaining its forecast for a 9% to 18% decline in home prices from pre-pandemic levels. When I say I stand by our forecasts, it’s really with respect to what are the broad trends we expect moving forward, says CMHC Chief Economist Bob Dugan. When I look at the housing market there are a tremendous number of risks. The latest Canada Housing Market Assessment by Moody’s Analytics sides with CMHC. It calls for an average, national price drop of about 7% next year. Moody’s points to weakening market fundamentals such as rising unemployment, reduced earnings and diminished affordability."

First National's weekly market update. Home sales have been brisk with an uptick in prices and the busiest August ever. "Residential Market Commentary - Hot August for home sales Sep 21, 2020 Be the expert First National Financial LP... "Canada’s housing market has yet to take its summer vacation. August numbers from the Canadian Real Estate Association show sales rose 33.5% compared to a year ago and were up more than 6% from July’s record setting pace. Nearly 59,000 properties changed hands last month, making it the busiest August ever. Prices took a hike in August as well. The national average rose 18.5% year-over-year to $586,000. As usual, Toronto and Vancouver had an outsized influence on the number. When those two markets are factored out the national average price drops to $464,000, up 18% year-over-year. CREA’s Home Price Index, which compensates for anomalies like Vancouver and Toronto, posted a 9.4% y-o-y increase. The sales-to-new-listings ratio improved slightly in August, easing to 69% from more than 72% in July. A little good news for buyers, but still firmly in sellers’ market territory. While the summer boom has made up for the COVID induced slump earlier in the year, market watchers are looking ahead for signs of another slowdown, or worse. Concerns continue to focus on what will happen once $267 billion in mortgage and loan deferrals expire and government COVID supports, like CERB, come to an end."