The latest news from the Canada Real Estate Club Team

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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing April 17, 2018 1340   0   2   0   0   0
{JoomFuse FirstName} Real estate delivers better returns than the stock market[1] does, but modeling returns requires critical thinking and a lot of due diligence. The better our due diligence, the better our models, the greater the access to capital. What makes commercial real estate such a unique asset class is that every investment is different and our due diligence needs to adjust accordingly. When it comes to due diligence, information costs money and therefore must have a return on investment. In this article, I discuss the decisions that real estate investors face when it comes to physical due diligence—think environmental site assessments[2], property condition reports, BOMA surveys, ALTA surveys, seismic risk assessments, and the like—and how to wring the most return on investment out of the process. Who should direct the due diligence? A questions I often get asked is: should the seller do pre-disposition due diligence? For most transactions, the buyer performs due diligence assessments at their own expense. However, on large transactions where the broker expects the buyer pool to be large and competitive, I believe that the seller is well-served to provide a full due diligence package at listing. In this case it pays to proactively reveal any issues and hold the asset out for auction “naked to the world.” Because in a competitive bidding process, buyers will discount any imperfections and focus on key economics. With a large data room it is difficult for...
High-end of market continues to show strength: Sotheby’s
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing July 08, 2014 4130   0   0   0   0   0
Luxury home owners worried about offloading their million-dollar properties can take heart from the figures in the new Sotheby’s report. The controversial removal of Canada’s immigrant investor class program may have frightened a lot of homeowners, but a new report is showing that appetite and interest in the high-end of the market has remained relatively strong. The Realtor says that sales of homes worth more than $1 million boomed in the first half of 2014 across all of the country’s major markets – Vancouver (up 34%), Toronto (up 34%), Calgary (up 17%) and Montreal (up 11%).  “Several factors are driving Canada's high-end real estate market in 2014: net migration into major urban markets, immigration of high net-worth individuals into cities like Toronto and Vancouver, significant transfer of wealth between generations and historically low interest rates,” said Ross McCredie, CEO of Sotheby's International Realty Canada. “Heading into the second half of the year we expect Canada's high-end housing market to remain strong, especially in the single-family home category where inventory remains tight. We're also expecting to see renewed confidence in Montreal's real estate market given the recent change in the political climate,” he added. Homeowners in Vancouver were particularly concerned about the impact of the cancellation of the program. However, according to the Sotheby’s report, the greatest sales gains were in the single-family home sector, posting a 38 per cent increase with a 37 per cent increase in condo sales. Authors: News Read more http://www.canadianrealestatemagazine.ca/news/item/2073-high-end-of-market-continues-to-show-strength-sotheby%E2%80%99s...
Investors need to be more ‘price realistic’
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing July 02, 2014 4423   0   0   0   0   0
Many home sellers are missing out on quick deals as they play the waiting game. And it’s a match plan that they will lose, says one investor and Realtor. Realtors are walking away from potential listings as they see more investors test the market in a bid to try and get an ‘unrealistic’ price. “You know when a seller is motivated or not,” says Richard Payne, real estate agent and investor in Halifax. “Sometimes, it is just easier to walk away from a listing as opposed to spending your time and efforts when the buyer has no interest in actually selling the property.” Speaking to CREW, he advises sellers to be more price realistic’ and embrace the cohort of buyers now in the market. “Sellers need to be more realistic. It’s not an easy to pill to swallow but it’s better to sell now when conditions are good,” he says. “We are finding that lending activity has picked up a lot here (Halifax) in recent months with many buyers able to get pre-approved quicker and easier. Some are saying not to worry about the ten per cent down and are eager to get deals through. It’s really helped the market.” Authors: News Read more http://www.canadianrealestatemagazine.ca/news/item/2062-investors-need-to-be-more-%E2%80%98price-realistic%E2%80%99
Homes become less affordable…..again
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing May 27, 2014 3951   0   0   0   0   0
Homebuyers wanting to get into Canada’s urban markets may be frustrated by rising prices with the investing landscape set to change again, according to RBC. Affordability is once again forcing potential home buyers out of Canada’s key markets but despite this, RBC is still expecting housing activity to pick up. Prices for single-family homes in Calgary, Toronto and Vancouver had “considerable upward momentum” during the first quarter of this year, and led to the strongest annual price gains nationally in nearly two year. The latest Housing Trends and Affordability Report by RBC it is not all bad news though. Ottawa, and some markets in Saskatchewan, Manitoba and Atlantic Canada, actually saw affordability improve for at least some types of houses. The investing landscape may change in the coming months. “We expect the Bank of Canada to gradually raise the overnight rate starting in the middle of 2015, which will cause bond yields to drift gently upward,” says Craig Wright, senior vice-president and chief economist with RBC. “This should mitigate the risk that higher rates will unhinge affordability levels.” This may further erode availability, adds Wright. “With prices levelling off, that will be neutral to maybe slightly negative for affordability, but as rates go higher, that will make affordability a bit more of a challenge.” Authors: News Read more http://www.canadianrealestatemagazine.ca/news/item/1990-homes-become-less-affordableagain
Is ‘compact’ living the way forward?
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing May 09, 2014 4636   0   0   0   0   0
Buyers have become accustomed to living in smaller condo units but is ‘compact’ housing spreading to other housing stock? Forget the micro condo, today’s new buzzword in housing is compact townhouses. That is the view of many developers as they launch new “fun” but smaller housing stocks in specific markets. This is the case in the bustling city of Barrie where a developer has made an application to rezone land to construct 60 “compact” townhouses. Developer Sean Mason said they are trying to do something differently with these units and that the market is ready for this offering. Referring to the units as simple and fun, he says they are suited to smaller families. The planned floor area for each unit is 1,110 square feet to 1,475 sq. ft. Micro-condos have become a common housing type in downtown cores, averaging at 300 sq. ft. According to research firm Urbanation, new condos in Toronto had an average price of $539 per square foot in the second quarter of 2013 Authors: News Read more http://www.canadianrealestatemagazine.ca/news/item/1958-is-%E2%80%98compact%E2%80%99-living-the-way-forward?
It’s not a family matter, agents argue
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing May 02, 2014 4354   0   0   0   0   0
The call for increasing levies on micro-condos and more incentives for larger spaces is not the solution, industry investors argue. Raising the development levies on small condo units and lowering the fees for larger dwellings will not solve the family condo crisis. Instead, this will punish a large pool of first-time buyers desperate to get on the property ladder. That is the word from industry experts who are playing down this suggestion by a number of developers and buyers. “Affordability is the biggest issue for buyers and by increasing the levy and therefore price of smaller condo, you are punishing a lot of buyers,” argues Matt Elkind from Connect Asset Management/The Condo Store Realty. With more people choosing to remain in the downtown core, the demand for family-sized condos has increased and especially for those who cannot afford to buy a single-family home. “Those who want to make the move from condo to home face bidding wars and so are discouraged by the market. They are now deciding to buy a bigger condo to meet their needs and price range,” says Elkind. One of the suggestions put forward is that the price of a larger unit (1,000 sq.ft.) would sell for $325 per sq. ft., compared to today’s average rate of $550. The extra charges on smaller units would make up the lost revenue in government coffers. “This situation involved more than just monetary incentives,” says Elkind. “We need to encourage more family developments with larger...
Don’t go into reverse to help children
 
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Navtaj ChandhokeNavtaj Chandhoke March 27, 2014 4892   0   0   0   0   0
Willing parents who want to help their children get on the property ladder are being warned not to follow the promise of quick and easy cash. With house prices out of reach and desperate to get their hands on hard cash quickly, many homeowners are expected to use reverse mortgages to help their off-springs buy their first property. While reverse mortgages have been available since the introduction of the Canadian Home Income Plan in the mid-1980s, very few financial lenders have openly offered the product. However, with an aging population and dependent children needing help with down payment, there has been a report of rising interest in this financial method. However, one real estate broker says this should only be used as “an option of last resort.” Speaking to CREW, mortgage Marc Abramovitz from Northwood Mortgage and founder of ilovemymortgage.ca, says he would advise his clients against this option. “I can understand why many homeowners would be attracted to this type of finance as it’s a fixed rate compared to a HELOC, and it’s a way of getting cash quickly if you are going through a financial patch, but it’s not ideal, especially if you want to sell in the future,” he says. “There are a lot of other options available and homeowners really need to do a lot of due diligence and get independent advice before signing up for this.” Lenders rarely give reverse mortgages to borrowers younger than 62 years-old while the loan-to-value ratio can be...
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 21, 2014 4169   0   0   0   0   0
Admit it. Deep inside you want to own your place in the sun. And if you really want to live it up, you may want to head down to the Ambergris Caye in Belize, the world’s number one island as voted by TripAdvisor. For the price of a mobile home and lot in western Canada, you could own a roomy studio condo on the beach at just A$165,000 (US$150,000), according to ambergriscaye.com. A one-bedroom condo will set you back anywhere between $181,000 and $275,000, while a two-bedder will cost you from $220,000, depending on the location. A free-standing villa home in a managed complex with access to pool piers and other amenities costs around $440,000, while villa homes cost from $907,000 up to $1.595m. Ambergris Caye is currently a hot tourist destination and was voted the world’s number one island by TripAdvisor for the second year running. It boasts excellent transport, healthcare, food and communication facilities throughout, making it more convenient for residents. Under Belize law, foreign nationals can own property on the island, enjoy low real estate taxes and pay no capital gains tax. Authors: News Read more http://www.canadianrealestatemagazine.ca/news/item/1878-how-much-does-a-property-cost-on-the-world%E2%80%99s-number-one-island?
See which Toronto neighbourhood is the toniest in Canada
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing December 14, 2011 3576   0   1   0   0   0
If you’re in M4N, let’s just assume you’ve got it made. The postal code prefix of Lawrence Park in Toronto marks not only the richest neighbourhood in Ontario — but all of Canada. Canadian Business magazine published lists of the ten toniest neighbourhoods by province and in Canada (unless you’re Yukon or Northwest Territories, which only got three.) By their count, Lawrence Park-dwellers, in the Lawrence Ave. and Mount Pleasant Rd. area, had an average net worth of $3,824,165 last year. Number 2 on the Ontario list was Rosedale, at $3,642,533, followed by St. Andrew-Windfields East at $3,447,638 and St. Andrew-Windfields West at $2,740,232, in the Bayview Ave. and York Mills Rd. area. In Canada, Montreal neighbourhood Westmount was in second place at $3,693,644, followed by Rosedale at Bloor St. and Mount Pleasant Rd. But not everyone was safe from tough economic times: even Lawrence Park’s net worth was down 1.4 per cent between 2010 and 2009. Two years ago, it was $3,877,815. Ten Riches Postal Codes in Ontario Ontario 1 M4N Lawrence Park 2 M4W Rosedale $3,382,588 3 M2L St. Andrew-Windfields East 4 M2P St. Andrew-Windfields West 5 M5P Toronto 6 L0J Kleinburg 7 M4V Toronto 8 M3B Toronto 9 L7B King 10 M4T Toronto — From Canadian Business
Toronto tower builder eyes three Calgary projects
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 16, 2011 2999   0   1   0   0   0
CALGARY — A Toronto residential tower condominium developer is proposing three projects for Calgary, attracted by the city’s wealth and style. Brad Lamb, head of Lamb Development Corp., said Wednesday his company will partner with Fortress Real Capital on the first project, a 30-storey, 230-unit condo at 10th Avenue and 6th Street S.W. The project is expected to cost about $62 million to build and its residential units and ground level retail to sell for around $80 million, he said. “I’ve been looking at Calgary for five years trying to find the right opportunity,” he said. “And I believe now is right for Calgary.” Lamb said he believes Calgary is the most affluent city in Canada and, furthermore, that the downtown region between the Beltline and the river is ripe for high-density development. “You can feel the wealth in Calgary,” he said as he prepared for a meeting with potential investors on Wednesday evening. Lamb said his second project will be a hotel and condo combination and the third will be a highrise but its details can’t be revealed as yet. The downtown Calgary market for residential towers has come back from 2008 when the shrivelling economy dealt a death blow to the four-tower Arriva project by Torode Residential Ltd. In August, Vancouver-based Mike Bucci of Bucci Developments Ltd. said his company was shifting focus to Calgary, with two new projects, because the economy is more promising than in the company’s home town. Canada Mortgage and Housing Corp. reported Tuesday that multi-family starts in the city are up 70...
Strong rental demand to bolster confidence in Toronto condo market
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 16, 2011 2764   0   1   0   0   0
The relatively lower cost of building new apartments in Toronto, as opposed to buying and repurposing old ones, is behind the latest world-leading building surge in the city, according to a leading brokerage. ROCK Advisors Brokerage Inc. CEO Derek Lobo will moderate a panel in a few weeks in Toronto on the purpose-built, high-rise rental apartment industry. “Confidence is growing in the industry after the past five years when the performance of purpose-built rental apartment stock remained stable and consistent, especially when compared with other investment sectors,” Lobo said. His panel, set for the Metro Toronto Convention Centre on Thursday Dec. 1 at 9:30 a.m., will ask “Has the apartment market out-performed all other real estate classes? What is it likely to do next year?” At least for the first question, Lobo was already providing a clue to his answer. “With falling cap rates and low interest rates, it is now cheaper to build new apartments than it is to buy and repurpose old ones,” he said. Lobo will be joined by Killam Properties CEO and President Philip Fraser, Boardwalk REIT President Roberto Geremia, TransGlobe Apartment REIT CEO Kelly Hanczyk, and Alfred Henry, CEO of Homestead Land Holdings Ltd. Earlier this month, the Canada Mortgage and Housing Corporation noted Toronto will increasingly be home to more young adult renters between the ages of 25 to 34, as they choose to put off the purchase of their first home. Since rental apartments account for just 10% of all new apartments in the GTA, the CMHC predicts a growing number...
Stable outlook for Canada’s housing market in 2012
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 04, 2011 5340   0   1   0   0   0
House prices and sales will remain stable through 2012, according to the latest forecast by the Canada Mortgage and Housing Corporation (CMHC). In its fourth quarter outlook, CMHC predicts the average price will increase 1.2% from $363,900 in 2011 to $368,200 in 2012. Sales will rise from 450,100 units in 2011 to 458,500 in 2012, up 1.9%. Housing starts, however, will drop 2.2% from 191,000 in 2011 to 186,750 in 2012, according to the CMHC outlook. Global economic concerns have resulted in growing fears about how that might impact Canada’s market, but CMHC Deputy Chief Economist Mathieu Laberge said the country’s real estate market will remain strong. “Despite continued uncertainty in the global economy, Canada’s economic fundamentals remain positive, particularly with respect to interest rates, employment and immigration,” said Laberge. “These factors will continue to support Canada’s housing sector in 2012.” In Vancouver and Abbotsford, where average-price growth has topped any other Canadian city, the average will gain 3.2% in 2012, on top of 5.3% gains forecasted for this year. Unemployment there will drop from 7.9% to 7.5%, said the CMHC report. Sales activity, however, will start to tail off from the 7.3% growth in 2011 to 3.3% growth in 2012. The market will likely continue to attract builders, with housing starts expected to rise 9.4% in 2012 and building on 5.1% gains in 2011 over 2010. In the Greater Toronto Area, apartment starts are expected to be 37.5% higher in 2011 over 2010, totalling 18,200 stats in 2011. Those numbers won’t slow in 2012, as apartment...
Zoocasa offers home appraisals online
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 02, 2011 3104   0   1   0   0   1
Home appraisal values are no longer restricted to Canadians working through a real estate agent – they are now available to all online. Zoocasa.com has partnered with property valuation company Centract Settlement Services, to offer local market information available to anyone, anywhere, with a web connection. The website has dubbed the service as Zoopraisal, which says it offers an estimated market value for a home. The website said the price estimation it offers is a starting point to determine value, but it also encouraged buyers, sellers, and homeowners to supplement the estimate by contacting a real estate professional as well. The model is similar to that already offered by American counterpart Zillow.com. Often valuations are significantly different than what properties are being offered for sale for. Zoocasa was already sued by Century 21 in a case decided last month for using “spiders” to copy text and images for display on its own website, called “scraping.” Century 21 was only able to win $1,000 in damages, but claimed victory in halting the process. Rogers Communications, which owns Zoocasa, said the “scraping” had ceased in 2010. The increasing pressure of websites taking privileged real estate information has also played out with the Competition Bureau suing the Toronto Real Estate Board for “denying consumer choice.” TREB has countered by setting up virtual offices, with password protected sites to access MLS. The TREB has warned that if the Competition Bureau wins its suit, homeowner contact information will be accessible on the Internet, as well as details about the property ownership and contract. But...
B.C. home sales, prices rise
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 21, 2011 2676   0   2   0   0   0
Low mortgage rates and improving employment numbers continued to bolster the already hot B.C. real estate market last month, putting home sales and prices back on an upward trend after experiencing some slight softening, on a month-to-month basis, during the summer. B.C. home sales processed through the Multiple Listings System rose 8.8% to 5,995 transactions in September compared to the same month last year, while the average residential price rose 6% to $523,568 on a year-over-year basis. On a seasonally adjusted basis, however, sales were up just 3%, said Cameron Muir, BCREA chief economist. "Despite a modest gain in unit sales, total active residential listings in the province remained elevated in September,” Muir said. More than 55,600 home were listed in the province at the end of September. On a year-to-date basis, the total value of residential sales in the province increased 17.5% to $34.8 billion, compared to the same period last year, while the volume of residential sales increased 3.2% to 61,127 units. The average residential price continued to outpace the national average, rising 13.9% $569,922 over the same period source: canadianrealestatemagazine.ca
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 19, 2011 2802   0   0   0   0   0
Despite a national economy that has doubled since 1976, Canadian families are poorer than those of the Baby Boomer generation, according to a study released by the University of British Columbia, which is located in the province that's worst off. Part of the reason is that housing prices have increased so much, beyond what rising incomes can cover, said Paul Kershaw, the report’s author and an associate professor at UBC’s Human Early Learning Partnership (HELP). “What we’re seeing is something that I call ‘Generation Squeeze,’” he said. “The generation raising young kids today is squeezed for time at home, squeezed for income because of the high cost of housing, and squeezed for services like child care that would help them balance earning a living with raising a family.” Nationally, the inflation-adjusted median income from 1976 to 1980 was $65,360, compared to $68,580 in 2005 to 2009. Yet the average housing cost was $192,390 in 1976, and was $339,045 in 2010, a rise of 76%, said the report. A similar projection was made for each province. Since 1976, despite an increased share in income from young women in households, total household income has dropped 6% in British Columbia since 1976, when adjusting for inflation. Yet at the same time, the average B.C. cost of housing went from $202,635 in 1976 to $505,178, up 149%. No other province saw such a disparity. “No other province in Canada reports a decrease in the average young couples’ household income,” said the report. “Nor does any other province report as large an increase in...
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