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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 10, 2019 279   0   0   0   0   0
Montreal’s relative affordability is fuelling an unparalleled dynamism that has pushed the market towards its 48th straight month of sales growth in February, according to the latest figures from the Quebec Professional Association of Real Estate Brokers (QPAREB). The metropolitan market’s residential transactions increased by 8% annually last month, ending up at a total of 4,370 transactions. Average sales prices were cited as a major factor in this trend, with Montreal’s condos remaining flat at $250,000 in February.Single-family homes increased by a modest 3% year-over-year (reaching $320,000), while plexes saw 8% price growth (up to a still-affordable $522,000). Condos transactions enjoyed a 14% annual increase last month to reach 1,588 completed deals.The number of single-family homes sold in February was 4% greater than the activity during the same time last year (2,436 transactions), while that of plexes went up by 7% during this time frame (339 sales). Read more:Economy, employment boost purchasing power in Montreal[1] In a report earlier this year, the Canadian Real Estate Association stated that Montreal’s housing market growth will soon outpace that of Vancouver. The total dollar value of property transactions (seasonally adjusted) in Montreal expanded by 18% year-over-year in January, up to $1.63 billion.In contrast, Vancouver’s suffered a 42% decline to $1.7 billion. Are you
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 10, 2019 278   0   0   0   0   0
A newly licenced tech-funding specialist bank is just the latest in Toronto’s tech-impelled commercial surge. Silicon Valley Bank, which supports tech innovators and their investors, has been granted an OSFI license to operate in Canada.The U.S.-based company will be starting its operations in Toronto. The bank specializes in commercial financing solutions to technology and life science organizations. “Canada has a thriving innovation sector and we’re excited to be a catalyst for its continued growth,” bank CEO Greg Becker stated. “The Canadian banking licence is a significant milestone in our global expansion.The growing team there is well-positioned to execute on SVB’s mission to help innovative companies and their investors be even more successful.” Read more:Tech firms are the foundation of the commercial segment’s stability[1] Silicon Valley Bank is among the recent tech-related firms that have established themselves in Toronto – continuing a trend predicted by CBRE vice chairman Paul Morassutti, who stated that the tech industry will play a central role in ensuring commercial stability for the long haul. Approximately 10 million square feet of office property is under development in Toronto, with 58% of the space already pre-leased and tech firms accounting for 20% of the early birds. “In real estate, identifying areas of growth is fundamental.Increasingly, the
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 07, 2019 197   0   0   0   0   0
What if data could be harnessed to determine renters’ habits and predict their suitability as tenants? According to Jerome Werniuk, director of sales at Naborly Inc., that day is just around the corner.The real estate industry in Canada has been slower to adopt technology than it has south of the border, but things are beginning to change.Naborly, for instance, is in the business of running credit checks for landlords—up to 100 a day—and, in the process, has amassed an impressive database of information that it intends to parse for trends, habits, and ways to make both landlords’ and tenants’ lives easier. “Companies like Naborly that aggregate information about tenant migration will completely change how landlords look at their real estate investments,” said Werniuk.“A good way to look at this is through numbers for three categories:average house price, average rental price, and average income.” Studying those categories will reveal housing prices are increasing much faster than rental rates—although they’re going up, too—but, fortunately, Naborly’s in-house team of data scientists go much deeper.By combing through the information Naborly has captured from over 50,000 tenants within its system, most of whom are in the Greater Toronto Area, they will produce reports that reveal the average age of renters in a postal code, their average income, and their average
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 07, 2019 189   0   0   0   0   0
The Vancouver residential market’s prices, sales, and supply all suffered notable annual declines in February, according to the latest numbers from the Real Estate Board of Greater Vancouver. Benchmark prices across all housing types decreased by 6.1% year-over-year in February, down to $1,016,600. Single-detached properties experienced the greatest fall at 9.7%, reaching an average of $1,443,100.Condominium prices had a more modest 4% drop to $660,300, and townhomes by 3.3% to end up at $789,300. Housing sales volume had a massive 32.8% annual shrinkage last month, settling down at levels 42.5% lower than the 10-year sales average for February, BNN Bloomberg reported. Detached homes had 28% fewer sales in February compared to the same time last year, while apartment activity slowed down by almost 36% during that time frame.Meanwhile, the townhome sector had a nearly 31% decrease. The number of new homes that entered the market fell by 7.8% year-over-year, with the sales-to-active listings ratio ending up at 12.8%. Read more:Red tape is a major influence in Vancouver’s housing scarcity[1] The Conference Board of Canada warned in its recent market outlook that the Vancouver housing sector’s sluggishness will be a major factor in the province’s economy, although fortunately not to the pint of recession. B.C.’s real GDP
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 07, 2019 229   0   0   0   0   0
Real estate markets in Quebec, Alberta, and Nova Scotia are becoming increasingly popular among Chinese property buyers and investors, according to a new analysis by Juwai.com. “The Chinese buyer boom in Montreal began earlier and is larger than in other second-tier cities.However, some smaller markets saw bigger Chinese buyer booms on a relative basis during 2018,” Juwai.com CEO and Director Carrie Law said. All in all, Chinese-home buying intentions across Canada went up by 8% annually in 2018, with recovery in the second half of the year making up for a noticeable slowdown in the first six months. “Buyer demand was unevenly distributed throughout the year.The year began with buyer enquiries plummeting for two consecutive quarters.During the first quarter, enquiries fell 23.8% compared with the same quarter in 2017.In the second quarter, enquiries fell 20.2% compared with the second quarter of 2017,” Law explained. “In the second half, demand reversed as Chinese buyer enquiries returned to growth levels.Buyer enquiries climbed 43.6% during the third quarter and by 45.1% in the fourth quarter, compared with the same periods during the prior year.” Read more:Another Canadian city contemplates foreign buyer tax[1] Chinese inquiries for residential purchases in Montreal grew by 35.7% year-over-year.Calgary and Halifax had considerably greater increases of 234.4% and
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 05, 2019 119   0   0   0   0   0
Arguably the greatest risk to preconstruction condo purchases is show suites often don’t conceal the true state of delivered units.But a Vancouver developer has found a way around that. Aragon Developments builds its condomniums before opening sales to the public—a virtually unheard of way to market condos in a major Canadian market.Developers usually have to surpass 80% sales before they can secure financing to start building. “It also allows buyers to go in and see the amount of work we put into the finished quality,” said Luke Ramsay, development coordinator at Aragon.“They see what we do acoustically or to the finishes.They see where they’re going to live instead of a show suite that may or may not reflect the finished product three or four years down the line.” Perhaps Aragon’s most unique offering can be found at two of its condominium developments that go on sale this summer.Amber, a 31-unit building with three accompanying townhomes, and Shift, a 43-unit tower, are designed by the firm’s in-house interior design team and promise idiosyncratic design elements.But most importantly, they will be family-friendly. “The suites appeal more to young families who are looking for more bedrooms but don’t have the ability financially to afford a big house or apartment,” said Ramsay.“Most companies start by going through
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 05, 2019 137   0   0   0   0   0
A combination of a strong economy and a robust job market is elevating the purchasing power of working-age Canadians in Montreal and Québec City, according to a new analysis by the Canada Mortgage and Housing Corporation. This has become a crucial factor in keeping delinquency rates in the 25 to 64 employment age range low.Unpaid mortgages of 90 days or longer accounted for only 0.29% of mortgages in Montreal and 0.24% in Québec as of Q3 2018. “The Montreal and Québec areas have shown strong economic growth and particularly vibrant job markets in the last two years.This certainly contributed to the financial stability of households and supported their ability to make their mortgage payments on time (or less than 90 days late),” CMHC said. Read more:Montreal market’s surge continues unabated[1] Indeed, mortgage delinquency rates in the two markets showed considerable stability over the 12 months ending September 2018. In Montreal, the rate stood at 0.23% for mortgages with a value at origination of less than $100,000, and 0.30% for accounts involving $400,000 and greater. On the other hand, delinquency in the Québec CMA was at 0.13% for accounts with origination values of less than $100,000, and around 0.63% for mortgages at $400,000 and greater. Working-age Canadians also
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 05, 2019 140   0   0   0   0   0
In a new analysis, the Canadian Association of Insolvency and Restructuring Professionals warned that the commercial property segment will labour under the burden of growing consumer insolvency. “Businesses will also feel the effects of a slowdown in consumer spending as Canadians react to the softening housing market and adjust their household budgets to account for larger interest payments in order to service debt,” CAIRP board member David Lewis stated. Construction, real estate, and rental and leasing are also likely to disproportionately suffer from this impact.The proportion of Canadian businesses that filed for bankruptcy in January rose by 10.1% year-over-year in January, and 2.1% from December 2018. “After 17 consecutive years of steady decline, business insolvencies in Canada have reached a plateau and will likely rise in 2019,” Lewis said. “Weaker exports, slowing job growth, tightening lending conditions, rising interest rates and consumer debt are all contributing factors.” Read more:Retail chain failures should give would-be investors pause[1] Crucially, the CAIRP has forecast that the number of consumer insolvencies nationwide will continue growing over the next two years, mainly propelled by larger, more onerous household debts.The share of Canadians who filed for insolvency in January was 7.1% larger than a year ago, and 11.6% greater on a month-over-month basis. “The rise in
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 03, 2019 125   0   0   0   0   0
Demand for industrial space in Vancouver is so voracious that CBRE believes it could run out of land in a few years. According to commercial real estate firm CBRE, a confluence of e-commerce as well as Vancouver being situated between the Pacific Ocean and mountains is resulting in surging real estate prices and demand for warehouse space.In fact, industrial rents increased 16% last year, to a record of $11.86 per square foot. “There is a critical shortage of industrial land in Vancouver,” CBRE Canada’s Vice Chairman Paul Morassutti told Bloomberg.“It was our estimation that they could potentially, literally run out of industrial land by the early 2020s.” Meanwhile, in Canada’s largest city the industrial market had a robust showing in 2018.While rents did not rise as much as they did in Vancouver, the $7 per square foot increase, supply is well behind demand.To finish the year, Toronto’s downtown has North America’s lowest office vacancy rate (2.7%), and rents in the most popular towers surged a 14%, reaching $35.37 per square foot.To catch up to demand, a more flurry of new supply is expected, however, the timing might be precarious as it should align with the next recession. Commercial real estate investment kept inclining, setting a record in 2018 when it hit $49.3 billion—68% above
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 03, 2019 140   0   0   0   0   0
British Columbia’s moderating housing market will have a domino effect of overall weakness in the provincial economy, the Conference Board of Canada predicted in its study released last week. Some ongoing energy megaprojects might help alleviate some of the pain, according to the analysis.Among the most promising of these is a $40-billion project based in Kitimat, B.C.by LNG Canada and five investment partners. “With the housing market slowing, investor approval of LNG Canada’s liquefied natural gas terminal and pipeline in late 2018 came at an opportune time for the province.The first phase of the development will provide a substantial boost to the province’s real GDP between now and the middle of the next decade,” the Board stated in its report, as quoted by Business in Vancouver. Nevertheless, the market should still brace for considerable real GDP growth slowdown, with housing likely to drag down the economy well into next year. Read more:Further cooling policies still needed – B.C.Finance Minister[1] The Board warned that the province’s economy will shrink from 2.6% in 2018 to 2.5% this year, and then down to 2.4% in 2020.These would be noticeably lower than the 2014-17 period, which enjoyed an average of 3.2% growth. Said slowdown will make itself especially felt in the largest cities,
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 03, 2019 154   0   0   0   0   0
The growing number of tech companies taking roost in large offices situated at major cities nationwide will ensure the commercial market’s resiliency in the event of a recession, according to CBRE’s Paul Morassutti. “Tech has become so ubiquitous across Canadian industries [that] the true impact the tech sector has on Canada’s economy has been understated,” Morassutti said, as quoted by Real Estate News Exchange. This is quite apparent in Toronto, which is considered one of the global leaders in high-technology innovation, particularly research in artificial intelligence. At present, around 10 million square feet of office space is under construction in in the city, but around 58% of that volume has already been pre-leased.Tech firms represented fully one-fifth of these pre-leases, CBRE noted. Industry movers like Microsoft are now betting on the city’s long-term prospects, if its move into a 132,000-square-foot lease at the new CIBC Square in downtown Toronto is any indication. Read more:Toronto is a top commercial investment destination right now[1] “Tech companies anchoring new buildings is something we have virtually never seen before,” Morassutti stated. “Over the past 10 years, tech has grown at more than 2.5 times the pace of the energy sector and three times the overall economy,” he added.“In real estate,
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 28, 2019 135   0   0   0   0   0
The cement sector is the second-largest industrial emitter of carbon dioxide, according to the International Energy Agency, and given the building boom that’s gripped the country’s largest cities, it is unlikely Canada will reduce emissions below 2030 targets. However, there could be a solution. Mass Timber technology is being touted as a solution that will reduce carbon emissions and save consumers money.According to Erik Andreasen, vice president of Adera Development, which has been building exclusively with wood for 50 years in Metro Vancouver, there are several benefits to constructing buildings with wood instead of concrete. “The homes are quieter than concrete and the homes are as solid as concrete homes, but they have better performance,” he said.“Even when it comes down to fire, our wood doesn’t burn.We perceive smart wood to be the building technology of the future and we can compete with concrete pound for pound, dollar for dollar, and there are a number of benefits for customers.” Last year, Adera finished Virtuoso, a condo project at the University of British Columbia that uses 1,120 cubic metres of lumber for its cross-laminated timber portion.Every cubic metre sequesters 220 kilos of carbon, which is the equivalent of 245 tonnes of carbon dioxide.For context, the average automobile produces 4.5 tonnes of carbon annually. “We have
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 28, 2019 133   0   0   0   0   0
Condo supply in the country’s largest markets might see significant increases in the near future, but on the whole, young professionals and starting families will still prefer single-detached homes, a Globe and Mail politics/business columnist has argued. While well-intentioned, a federal policy focused on boosting the availability of low-cost condo units in downtown areas “may have unwittingly encouraged urban sprawl by forcing more Canadians to look further to the exurbs to realize their dream of a owning a detached, single-family home with a yard,” Konrad Yakabuski wrote in his latest column. “Extending the amortization period on insured mortgages, easing the stress test introduced last year or increasing the $750 tax credit for first-time buyers might encourage more millennials to purchase a condo, the only type of property within financial reach,” he added.“But since most millennials ultimately aspire to purchase of a single-family home, it’s worthwhile asking whether Canada needs any more condos right now.” Read more:Could ‘micro living’ catch on in Toronto?[1] One should look no further than Greater Montreal to witness evidence of the phenomenon.Updated numbers provided by the Quebec statistics agency showed that nearly 24,000 residents – a significant proportion of which were young households – moved from Montreal to the suburbs and exurbs in 2018.This was
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 28, 2019 125   0   0   0   0   0
Of Canada’s largest sectors, it was e-commerce that accounted for much of the demand for Vancouver’s commercial and industrial space, according to CBRE Ltd. Specifically, the market’s warehouse spaces attracted a majority of the e-commerce firms and ventures taking roost in the city. Industrial rent rates have consequently grown by 16% annually to reach a record-high $11.86 per square foot last year – the highest among Canada’s urban commercial property markets in 2018. In contrast, Vancouver’s 1.5% industrial vacancy near the end of 2018 was among the lowest in North America. Read more:Canadian commercial investment to intensify this year[1] Tight supply and historically low unemployment rates will foster sustained demand for much of 2019, according to Avison Young Canada Inc.in its report released in January. Nearly 4.9 million square feet of industrial space was under development across Metro Vancouver as of the end of last year, the analysis added. CBRE warned that Vancouver is in danger of running out of industrial land soon, if these trends hold. “There is a critical shortage of industrial land in Vancouver,” CBRE Canada vice chairman Paul Morassutti told Bloomberg. “It was our estimation that they could potentially, literally run out of industrial land by the
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 26, 2019 147   0   0   0   0   0
With housing deceleration nationwide becoming especially apparent in January, observers warned that the strict lending rules introduced last year might have had a more drastic impact than anticipated. “The decline in last month above and beyond what was observed a year ago is indicative of the fact that the markets are not merely reacting to new regulations, but the markets have embraced a more systematic response that is characterized by fewer transactions and lower prices,” Ryerson University associate professor Murtaza Haider and real estate industry veteran Stephen Moranis wrote in a recent analysis for the Financial Post. January sales activity shrank by 4% annually, following an already noticeable 2.4% decline during the same month last year. “The January 2019 statistics offer the first opportunity to compare the annual change in housing market dynamics after the stress test came into effect,” Haider and Moranis stated, adding that “the housing market slowdown is deeper rooted than a direct and immediate reaction to policy interventions.” Read more:Toronto and Montreal luxury condos surge in value[1] More importantly, a possible domino effect stemming from the largest banks’ mortgage operations should not be ignored. “The weakness in housing markets also affects mortgage lending, a business The Big Five banks continue to dominate in Canada.The continued
 
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