The Weekly 411

TLDR:
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😮 Real Estate Commissions Are Being Challenged

⚖️ Home Prices in Ontario Stabilize 

📈 Rent Prices in Edmonton Skyrocket

🛏 Rooming Houses Now Legal Across Toronto

🌲 Cottage Country Real Estate Market Rebounds 

😮 Real Estate Commissions Are Being Challenged

• The removal of commission rules means buyers can negotiate lower rates with agents. 

• This change in the US may lead to similar changes in Canada.

• Two similar lawsuits have already been launched in Canada.

• As a result of the changes, The National Association of Realtors membership is forecasted to shrink anywhere from 20 to 40%.

Why This Matters: Realtor fees in Canada are likely to come down because the same real estate companies affected by the lawsuits in the US also operate in Canada. Consumer sentiment may change as people become more motivated to shop for the best deals among realtors and brokerages.

👉 Here's a video with more info on the changes​

⚖️ Home Prices in Ontario Stabilize 

• Canadian home prices were flat in February 2024, following five consecutive months of decline. 

• The average single-family home price in the province was $947,000, a 2.5% increase from February 2023.

• Sales increased 19.7% compared to last year, but the Canadian Real Estate Association (CREA) cautioned that February 2023 sales were unusually low.

Why This Matters: This flat trend in 2024 suggests the market may be finding a bottom. Experts predict an increase in home sales this year, driven by pent-up demand from buyers waiting for prices to stabilize. The expectation of falling interest rates will also make homes more affordable for potential buyers.

🤯 Rent prices in Edmonton Skyrocket

• One-bedroom apartment prices in Edmonton have increased by 17.1%

• While Edmonton is still cheaper than the national average of $2,200, it's a big jump from the previous average of $1,400

• Edmonton's population has grown by over 100,000 in the last 2 years, creating a high demand for rentals.

• The city is expected to see a consistent migration trend, resulting in a 4.5% growth in 2023 and a projected 4.4% population increase in 2024

Why This Matters: Skyrocketing rental prices in Edmonton, fueled by a massive population influx, create a strong rental market with the potential for high returns for real estate investors. While Edmonton remains relatively affordable compared to the national average, this trend signals the potential for property appreciation as demand outpaces supply. 

📈 Rooming Houses Now Legal Across Toronto

• On March 31, rooming houses will be permitted throughout Toronto, but landlords must obtain a license.

• Rooming houses are dwellings where four or more individuals rent separate bedrooms and share common areas like a kitchen and bathroom.

• The new regulations aim to address the various problems currently plaguing illegal rooming houses, such as health and safety violations.

Why This Matters: The legalization of rooming houses across Toronto opens up a new investment opportunity for acquiring and converting properties into multi-tenant dwellings. This change could increase rental unit availability and address the demand for affordable housing options, potentially leading to higher rental yields.

👉 Read more about the new rules here​

🌲 Cottage Country Real Estate Market Rebounds 

• The cottage market is projected to rebound with a 5% average price increase across Canada.
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  Regional variations:

  • Ontario: 8% increase (median price $662,148)

  • British Columbia: 5% increase (median price $1.14 million)

  • Alberta: 4% increase (median price $1.29 million)

  • Atlantic Canada: 4.5% increase (median price $288,002)

Why This Matters: Increased demand and limited inventory push prices upward, indicating a potential recovery for the cottage country. Recovery and growth in the recreational housing market could signal a good time for investors to consider entering.