Optimistic real estate association, life leases and the Home of the Week: Canadian real estate news for June 21

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Here are The Globe and Mail’s top housing and real estate stories this week and one home worth a look.

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Canadian real estate association reports slower home sales in May, but interest rate cut could lead to growth in June

According to the Canadian Real Estate Association (CREA), May was another slow month for the housing market — with sales falling 0.6 per cent from the month before — but said the Bank of Canada’s recent interest rate cut should lead to higher sales in June. However, realtors say that despite forecasting an increase in home sales after the rate cut, that growth has not yet materialized, writes Rachelle Younglai. The number of new listings rose 0.5 per cent in May, pushing the supply of homes for sale to their highest level since the fall of 2019.

One Yonge teardown proposal fires up carbon cost debate

Vancouver-based real estate developer Pinnacle International Realty Group is exploring the option to demolish the 25-storey office building at 1 Yonge St. — the 53-year-old former headquarters of the Toronto Star — and replace it with 90- and 95-storey towers on the same site, according to documents viewed by The Globe and Mail. But the plans come at a time when experts and cities are increasingly grappling with the environmental cost of demolishing old buildings, writes Shane Dingman. New construction projects are a major source of carbon emissions, particularly in the production of materials such as concrete and steel, and experts say it has become much more vital to prolong the life of the materials we’ve already created. Some studies also suggest that buildings over 40 storeys become even more carbon intensive as increased materials are needed to support their height.

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Rob Carrick: What happened to all the real estate investors?

It would really help housing affordability if real estate investors take a break, and there’s a sign this is happening as we head into a crucial period for housing, writes personal finance columnist Rob Carrick. A recent survey of the Carrick on Money newsletter audience found that only 1.7 per cent of readers selected real estate as the overall best place to invest. The flipping strategy has flopped – you need a fast-rising market for that. Income investors have been stretched by high mortgage costs that make it hard to generate a net return after paying all landlord costs. Broadly speaking, the old narrative that home ownership always delivers a financial reward has broken down for people who bought in recent years. But if housing prices fall from current levels, real estate investing could start to get interesting again for people willing to wait out a recovery.

Seniors turning to life leases, but pitfalls remain

A growing number of Canadian seniors are downsizing and turning to a new housing agreement known as a life lease. Instead of renting or owning a home, prospective tenants can buy a lease on a property to live there for an extended period of time. The contracts don’t give them ownership on the home, but usually allow them to live there for the remainder of their lives — their loved ones can sell the lease back to the property owner upon their death. But thanks to specific clauses in the life lease contracts, some people are now waiting on hundreds of thousands of dollars in the value of these sold leases, with no set timeline on when they’ll be paid, writes Kate Helmore. Part of the difficulty is that life leases have until fairly recently fallen into a legislative grey zone, being neither rental nor ownership.

Home of the week: Toronto Victorian has the character brought back

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63 Metcalfe St., Toronto - Full gallery here

When the current owners of the Victorian home in Toronto’s Cabbagetown neighbourhood first considered buying the property a decade ago, it was dilapidated after years of neglect. But it was a completely different house when it came back on the market years later — a new staircase was installed, raccoons were evicted and walls were removed on the main floor to create an open living space. Since buying the home three years ago, they removed a banquette in the kitchen and replaced it with floor-to-ceiling French doors, raised the level of the outdoor deck and refitted the space with reclaimed Victorian elements, such as plaster ceiling rosettes — all in an effort to put some character back into the 19th-century building.