CREB®Now sits down with Canadian Real Estate Association president
Pauline Aunger is no stranger to Canada’s real estate market. As president of the Canadian Real Estate Association (CREA), she has a unique behind-the-curtains perspective of the industry – from its performance to advocacy efforts.
CREB®Now recently sat down with Aunger, who was in Calgary recently as part of CREA’s cross-country open house series with local real estate boards. Here’s what she had to say about everything from insurance premiums to how Calgary factors into her bucket list.
CREB®Now: Calgary’s resale housing market has seen some swings this year as a result of oil patch volatility. What is CREA seeing nationally in comparison?
Aunger: Uncertainty surrounding the oil price shock has sent many buyers to the sidelines this year, not just in Calgary, but across most of Alberta and to a lesser extent in Saskatchewan as well. That said, it looks like the worst of that was back at the beginning of the year. Since then, we’ve seen a steady, though admittedly only partial, recovery in Alberta sales activity in recent months. Additionally, sales activity in Saskatchewan has rebounded and returned to normal levels.
As of May 2015, national sales were running at a five-year high, due largely to strong activity in B.C. and record level activity in and around the Greater Toronto Area (GTA). In Quebec and Eastern Canada, sales are not as strong but they are improving. In Quebec, sales are now running slightly above the 10-year average. Newfoundland and Labrador is currently seeing activity in line with its 10-year average, while New Brunswick and Nova Scotia are still below.
That said, the common thread and main defining feature of almost every market east of Toronto is higher levels of supply, which are keeping a lid on prices. The same can be said for markets in Saskatchewan and Manitoba.
Strong price growth has been largely confined to single-family properties in Greater Vancouver and in and around the GTA. In these markets, listings are in short supply relative to the number of buyers who want to buy them. Prices for condo apartments in these markets are also still rising, but at less than half the rate of single-family home prices. The other main source of price growth has been other markets in B.C., where prices are beginning to rise after having remained stable for years.
CREB®Now: How do you think recent changes to mortgage default insurance premiums will affect Canadians’ future intent to buy?
aunger The changes that came into effect June 1 only impact buyers with less than a 10 per cent down payment. That may have prompted some potential buyers to put off their purchase for a time in order to build up a larger down payment. In some cases, the changes may have prompted some potential buyers to either look for a less expensive home.
Aunger: Policymakers have been taking a very incremental approach in raising mortgage default insurance premiums. Because mortgage default insurance premiums are usually tacked onto the mortgage, a premium increase of more than $1,000 still only amounts to a couple of cups of coffee a month from the standpoint of cash flow.
Recent increases to mortgage default insurance premiums affected affordability far less than changes made to mortgage rules between 2008 and 2012. However, the recent increases to mortgage default insurance premiums was announced at the beginning of April but did not take effect until June. It’s possible that some buyers advanced their purchase decisions to lock in those lower premiums. In that case, the strength of national activity in April and May could reflect a pull-forward of what would otherwise have been future sales. Time will tell.
CREB®Now: How will technology continue to play a role in buying/selling a home?
Aunger: That’s one of the great things about our industry. We’ve always been able to channel technology changes in a way that ensures we are moving in sync with potential clients. From the earliest days of MLS® Systems and their published listings books to the first databases populated and accessed by members, as an industry we’ve always been early adopters of technological innovation.
Our efforts are shaped by solid market research and staying abreast of recent developments. One of the things that research reveals is that today about 85 per cent of consumers begin with the Internet when considering buying a home, a percentage that we expect will continue growing moving ahead.
Technology may help consumers with the research phase of their buying decision, but won’t ever replace REALTORS®.
CREB®Now: How are changing demographics impacting the market?
Aunger: The same way they’ve always impacted the market. I’ve always liked the ‘property ladder’ analogy: first a starter home, then something a little larger to raise a family and finally something a little smaller to manage in retirement.
With boomers heading into retirement, members of Generation X are expecting to take over those jobs; hopefully those vacancies will become employment opportunities for them, and the bump in salary will get them dreaming of a bigger home, or moving to a new city. That should put some starter homes back on the market for first-time buyers, such as millennials who may want to put down roots and own their own place instead of continuing to rent.
CREB®Now: You, along with several members of CREA, recently passed through Calgary as part of a nationwide roadshow. What was your impression of our city?
Aunger: I love Calgary. My first impression is how vibrant a city it is. Having visited Calgary a number of times now, I am always happy to return. On my bucket list is a visit to the Calgary Stampede so hopefully I will have a July visit in the future. And I can say without a doubt, the REALTORS® of Calgary are some of the friendliest in the country.
CREB®Now: What, if anything, do you think is Calgary’s best-kept secret?
Aunger: Calgary is such an inviting city, I cannot imagine it has a secret. Driving into the city, I am impressed by how clean the downtown is and because I love food…it’s a great city for finding great restaurants.
CREB®Now: What’s your favourite room in your home and why?
Aunger: This was actually a hard question because we designed our home and I love all of the rooms. But one of my favourite rooms is our master bedroom. We live on the Rideau Lake, and every morning I wake up to a changing view of the lake – from the frozen winter to the warm inviting waters of summer. As the CREA president, I am away from my home a great number of days, so I must admit there is always something comforting about coming home to your own bed.