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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 24, 2019 159   0   0   0   0   0
Policies that cultivate further housing slowdown are still needed to ensure greater affordability in B.C., Finance Minister Carole James said last week. The statement came amid official reports of considerable slowdown in the province’s home price growth and sales activity, after several changes were introduced last year. Among the most notable of these regulatory revisions were levies aimed at speculators and hiking the taxes on foreign buyers, which is part of the B.C.government’s aim to diversify the economy and “not simply relying, for example, on a speculative real estate market which doesn’t help grow a sustainable economy,” James said, as quoted by Bloomberg. “I think there’s more to go.I don’t think anyone in the Metro Vancouver-area would classify housing as affordable at this stage.” Read more:Red tape is a major influence in Vancouver’s housing scarcity[1] B.C.is not looking at possible housing risks as a major long-term threat, considering that it is projecting new borrowings to grow to $7.5 billion in the coming fiscal year, up from $6.3 billion in the current year. The province’s fiscal plan, as presented in documents last week, is estimating economic growth to hit 2.4% this year, outstripping the 2.2% in 2018. James noted that contrary to doomsayers’ fears of long-term lethargy, this trend
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 24, 2019 156   0   0   0   0   0
High-capacity multi-family housing will soon become the primary budget choice in the Greater Toronto Area, especially in the western part of the region. “Freehold properties remain the choice of most purchasers in Halton Region and Toronto West,” RE/MAX of Ontario-Atlantic Canada executive vice president Christopher Alexander said.“The same is true to a lesser extent in Toronto Central, but condominiums continue to gain ground.” “Just over one in three properties sold in the GTA was a condominium in 2018 and that figure is higher in the core.As prices climb in both the city and suburbs, the shift toward higher-density housing will continue, with fewer single-detached developments coming to pass.” Indeed, Halton Region – which includes Burlington, Halton Hills, Milton and Oakville – represented as much as 10.1% of the GTA’s residential property sales as of the end of 2018, growing by 2.3% in the 5 years prior.Toronto West also climbed by nearly 1% during the same period, to a 10.5% share. Read more:TREB offers positive outlook for sales, price growth in 2019[1] Much of Halton Region’s activity stemmed from popular clamour for affordable housing, which led to greater and faster construction in the area. “Product was coming on-stream at a time when the Greater Toronto Area (GTA) reported its lowest
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 21, 2019 142   0   0   0   0   0
Few real estate investors aren’t sweet on student housing, and for good reason, but which regions in Ontario have the most to offer? The owner of Strauss Investments says cities with satellite schools are a good net because of their small but concentrated markets. “Laurier and Nipissing universities have satellites in Brantford,” said Strauss, who’s also a sales representative with Rock Star Real Estate.“In Kitchener, there’s the McMaster University Waterloo Regional Campus, and it’s its own little pocket market.Satellite schools offer niches that let smaller investors get in there.All you have to do is provide good product and you get lots of action without much competition.” Waterloo, on the other hand, has a glut of inventory largely driven by foreign investment, but Strauss noted that the accommodations are superlative.Nevertheless, the closer the property is to the University of Waterloo, the fewer problems investors will have finding tenants. Strauss warns that some cities have certain stipulations, like the number of rooms permitted, that can hinder the investment’s potential.However, he’s bullish on London and Hamilton. “Purpose-built is obviously better than just taking an old house and converting it, but in Hamilton the areas near Mohawk College and McMaster University are very student-friendly.There are a lot of rental opportunities, and at the brokerage I work at
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 21, 2019 127   0   0   0   0   0
New data from the Canadian Real Estate Association indicated that Montreal’s housing market is benefiting from strong growth across all crucial metrics – and might even have enough of a boost to outstrip Vancouver’s pace soon. In January, Montreal’s median home sale price went up by 6.3% annually, reaching $349,300.While the price was still far below Vancouver’s $1.02 million average, the latter’s price levels actually fell by 4.5% during the same period. Fuelled by a robust economy and immense purchasing power in an environment of relatively low housing prices, the Montreal market’s sales volume also enjoyed a 7.1% increase from December 2018, which was the fastest month-over-month growth in a decade. In comparison, activity in Canada’s hottest cities during the same time frame was just around 1.2%, while the overall national increase was at 3.6%. Read more:Bidding wars now more frequent in Montreal[1] The total dollar value of property transactions (seasonally adjusted) in Montreal went up by 18% annually, up to $1.63 billion.Meanwhile, Vancouver’s fell by 42%, down to $1.7 billion. While this might be a warning sign to cautious would-be investors, the overall lower costs of living in the city – especially when compared to Canada’s most inflamed markets – considerably reduce the risk of Montreal suffering from
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 19, 2019 151   0   0   0   0   0
A Ryerson City Building Institute report exploring ways to solve Toronto’s affordability crisis suggests micro living could catch on in the city. The report, called Rethinking the Tower, mused about the construction of micro units in a city dominated by condominiums.Micro units have become popular in New York City and Seattle because rental and sale prices correspond to unit size, and in a city like Toronto it could go a long way towards solving affordability issues. “Well-designed rental or ownership micro units offer an opportunity to deliver more affordable homes to the market, particularly in central locations where land costs can be a significant barrier to affordability,” read the report.“Analyses by the Urban Land Institute (ULI) and Colliers have found that micro units in American cities lease at monthly rents 20% to 30% lower than conventional apartments, although they cost more per square foot in rent than conventional rental units.” A micro unit is roughly 350 square feet in area and has an in-unit bathroom and kitchen, but designs is key to its marketability. “Many developments will boast flexible furniture systems, high ceilings, large windows, built-in storage and/or convertible furniture,” continued the report.“Some have also bundled micro units with shared amenities and services such as storage, lounge, areas and outdoor space.Micro units are often marketed
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 19, 2019 137   0   0   0   0   0
Amid intensified construction activity, Vancouver’s industrial real estate market is steadily magnetizing foreign investors, a trend that might pose a major challenge for the domestic buyer segment. Numbers from Colliers International indicated that nearly 4.9 million square feet of industrial space was under development across Metro Vancouver as of the end of 2018.Almost half (45%) of this activity is in Surrey, Richmond, and Delta. According to Avison Young, Burnaby and Coquitlam were the region’s stand-outs, with transactions involving industrial property in these locales being rapidly snapped up in a frenzy of “insatiable” demand. “While Burnaby and Coquitlam remain highly sought after by owner-occupiers, tenants and investors, sales and leasing activity will likely slow in 2019 due to a lack of such opportunities in those markets,” Avison Young stated, as quoted by Business in Vancouver. Read more:Canadian commercial investment to intensify this year[1] “With very limited new supply in the development pipeline and ongoing strong demand, vacancy in both markets – already at or near record lows – is expected to remain extraordinarily tight for the next 18 months,” the brokerage added. This is also expected to feed into a virtuous cycle of rising rates and strong cash flow for owners, with net lease rates in Burnaby and Coquitlam hovering between
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 19, 2019 147   0   0   0   0   0
With more than 10 months still remaining in the calendar year, one of the most valuable commercial real estate transactions in Canada so far in 2019 has already taken place in Richmond, B.C. Fiera Properties, an affiliate of a Montreal-based independent asset management firm with approximately $136.7 billion in assets under management, has announced last week the closing of a deal involving Richmond’s 13-building Airport Executive Park. The 707,809-square-foot property was purchased from Sun Life Financial for $208 million. The deal dovetailed with the predictions of Avison Young Canada Inc., which forecast last month that demand for the country’s commercial properties will keep surging for much of 2019 amid scarce supply and a 4-decade low in unemployment. Read more:B.C.’s industrial segment rushes headlong into 2019[1] Industrial buildings and parcels would especially benefit, as nationwide vacancies in the sector are projected to fall to a record low of 2.9%. The Airport Executive Park deal magnetized multiple interested parties including major domestic and international buyers, according to CBRE, which brokered the deal. “There has been a good job of attracting tenants to that market, it’s close to the city,” CBRE’s Tony Quattrin told CoStar News.“People do tell you, we would like to be in Vancouver but can’t
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 18, 2019 150   0   0   0   0   0
Student housing is known as a lucrative investment, but when a deficient heating system cut into veteran investor Lee Strauss’s North Bay property, where students’ rents fetched $500 a room, he was at wit’s end. “A student rental is going to be a bit higher on utilities because of usage, but there was no gas to the house;it was all hydro and it was costing me about $1,000 a month during the colder months,” said the owner of Strauss Investments.“The price of the home was $200,000 so cash flow worked out well during the warmer months, but winter was the killer.” Strauss ultimately sold the property and broke even, but not before looking into remedies.Ultimately, installing a gas furnace would have cost up to $12,000 over a decade, so Strauss cut his losses. Situations like Strauss’s are all too common, says Vahid Azari, a registered home inspector, certified energy advisor and owner of All Season.Worse still, poor insulation and excess energy use actually devalue a home by up to a tenth of its value. “It also decreases the value of the house by the extra money you pay for energy consumption,” said Azari.“If the heating system is poor in an old house is poor, it means you have 60% efficiency, whereas a
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 14, 2019 123   0   0   0   0   0
As the cost of living soars, Canadians have begun to wonder whether the surest path to comfortable retirement is through a Registered Retirement Savings Plan or homeownership. A report from Sotheby’s International Realty Canada and Mustel Group determined that 20% of young urban family homeowners deferred RRSPs in favour of purchasing a home.Sotheby’s President and CEO Brad Henderson reckons that’s the sapient path to retirement. “Owning a home is one of the few tax-efficient purchases someone can make,” said Henderson.“When you buy a home as a principal residence and you sell it, it’s a tax-free event.With a Registered Retirement Savings Plans, the money goes in and you get the benefit of tax reduction up front;you get the benefit of money compounding on a tax-free basis all the way through, but you pay tax on the money when it comes out down the road.” The “Modern Family Home Ownership Trends PART 2:Financing the Canadian Dream” report surveyed 1,743 families in Toronto, Montreal, Vancouver and Calgary, 19% of whom secured more remunerative work to fund a down payment on their home purchase.Fourteen percent found auxiliary work, while 12% delayed parenthood and 9% moved in with family. In addition to 71% of “modern family” homeowners surveyed using personal savings to fund a down payment, just
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 14, 2019 160   0   0   0   0   0
Corporations account for much of the non-individual owners of residential property in Canada, according to a new analysis by StatsCan and CMHC. “Corporation ownership [is] concentrated among real estate, rental, and leasing industry and construction industry sectors,” the study noted.“In both Ontario and British Columbia, the real estate, rental, and leasing industry sector makes up the largest proportion of corporations owning residential properties at 31.1% and 23.4%, respectively.” On the other hand, in Nova Scotia, the largest non-individual owner is the construction segment at 28.8%, followed by real estate, rental, and leasing at 25.2%. “In all three provinces, the combination of construction and real estate, rental, and leasing sectors represented approximately half of corporations that owned residential property,” the study added. Read more:Red tape is a major influence in Vancouver’s housing scarcity[1] All in all, B.C.has the largest proportion of non-individual ownership of residential property.Around 9.8% of the territory’s residential properties were owned by non-individuals, and this ratio is even higher in locales outside the census metropolitan areas (15.8%). The rates in the province’s CMA’s showed considerable variance, with Vancouver’s 5.6%, Victoria’s 5.2%, and Kelowna’s 7.6%. Meanwhile, Ontario and Nova Scotia’s non-individual ownership rates were at 7.4% and 7.9%, respectively.As for their largest cities, Toronto’s rate was 4.2%, and Halifax
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 14, 2019 149   0   0   0   0   0
Amid accelerated price growth, many hopeful home buyers in Ottawa are either cooperating with friends or seeking help from the “Bank of Mom and Dad” for assistance on the payment, according to observers on the ground. The B-20 regulations that have introduced much stricter mortgage stress testing have been blamed for the province’s fevered price growth, with an average rate of nearly 15% from 2016 to 2018.These increases have placed the city’s average home price at $433,500 as of December 2018. Ottawa broker Chris Allard said that he has seen a “significant” increase in the number of cases involving would-be buyers who have received funds from relatives, or co-signed applications with friends. “If there’s an option at all for parents or family members to gift funds or to co-sign, they will take that option before choosing to pay a higher mortgage interest rate,” Allard told the Ottawa Business Journal. Read more:Ottawa’s pace of home price growth accelerates[1] B-20 inadvertently pushed a significant proportion of prospective buyers out of the market, despite some observable cooling down in Toronto and Vancouver prices. Traditional lenders have also ended up with a larger number of rejections, paving the way for alternative mortgage sources like the Ottawa-based firm Advanced Mortgage Investment Corp. “We
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 12, 2019 142   0   0   0   0   0
According to a REMAX report, ski resort properties have strong cash flow potential, however, interest among western Canadians is low. “The ‘Airbnb phenomenon,’ for lack of a better description, provides the opportunity for some return when [owners] are not using the property themselves, and that’s where four-season amenities become important,” said Elton Ash, REMAX’s regional executive vice president.“The properties cash flow through winter and summer months.” But, according to a survey conducted by Leger Marketing on REMAX’s behalf, 67% of western Canadian respondents believe the price of a resort property is proscriptive.Ash, on the other hand, says that they’re relatively affordable. “We know a large proportion of Canadians want to buy properties,” he said.“Seventy-one percent of western Canadians interested in purchasing ski properties want four-season amenities, but that number drops down to 23% who believe they could afford it.It’s interesting because with recreation properties in general, Canadians love the outdoors.” In the last 20 years, resort properties have diversified and now boast year-round amenities like golf courses.The report also revealed that all-season resort capabilities trumped snow level, snow quality level, mountain elevation, and proximity to restaurants and retail as respondents’ interest in resort properties. “What we noticed with this report is more and more Canadians are looking at ski resorts as recreational properties, as opposed
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 12, 2019 98   0   0   0   0   0
Bureaucratic roadblocks continue to have a major influence on Metro Vancouver’s housing supply, as these intricacies have led to massively overdue project approvals, according to the recently released Market Intel real estate report by MLA Canada. Burnaby, Vancouver, and the District of North Vancouver are the areas hit the hardest by these delays, with development approval timelines being among the longest (at nearly 2 years) in the region. In addition, construction costs have increased by almost 50% on average over the past 5 years.This burden is almost always absorbed by the end consumer, the MLA study noted. “2019 is expected to be highly competitive, but an overall balanced market with nominal price escalation will provide purchasers with choice and value,” MLA Canada chief advisory officer and partner Suzana Goncalves said. Read more:Vancouver’s empty homes tax visibly improved vacancy rates, supply[1] One bit of good news is an increased volume of new stock incoming.MLA Intel is expecting 13,975 pre-sale units to be released this year, considerably above the 11,584 in 2018. However, the study quickly added that B.C.’s population will experience consistent growth for the next several years, with roughly 50,000 new residents in 2019 alone. “With job opportunities remaining high compared to other provinces, interprovincial migration will
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 12, 2019 139   0   0   0   0   0
A modest pace of sales characterized Regina as of the beginning of 2019, although the city remains predominantly a buyers’ market. New numbers from the Association of Regina Realtors indicated that during the first month of the year, sales grew by 1.2% annually.The total volume actually ended noticeably above the 5-year average, however. “The number of sales that took place in January exceeded our expectations,” Association CEO Gord Archibald said, as quoted by CTV News. The Canada Mortgage and Housing Corporation’s latest report categorized Regina as a buyers’ market, with a moderate level of vulnerability. “In Regina we’ve continued to see slower demand for housing units whether it in the resale or new home market,” according to CMHC senior market analyst Goodson Mwale. Read more:Saskatchewan affordable housing gets multi-million-dollar tranche[1] “We’ve continued to see elevated supply and that has continued to put downward pressure on prices.Both in Regina and in Saskatoon we’re seeing a buyers’ market conditions persist over the past several quarters.” As of the fourth quarter of 2018, Regina’s supply exhibited considerable abundance, which the CMHC attributed to overbuilding during the past few years.This has also led to vacancy levels seeing a marked increase, from 7% in 2017 up to the 7.7% rate in 2018.  
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 10, 2019 171   0   0   0   0   0
Homeownership is becoming increasingly difficult to attain in Calgary, but the city’s rental market is on fire. In fact, the vacancy rate in the Calgary rental market decreased from 6.3% in 2017 to 3.9% last year. “The way this is connected to the rental market is a function of these affordability challenges we’re seeing in the market, and given the pressures put on an individual’s affordability—and we know interest rates are higher—they are renting longer,” said James Cuddy, a senior analyst with the Canada Mortgage and Housing Corporation. Another reason for the buoyant rental market is that interprovincial migration was positive through the first three quarters of 2018—a stark contrast to the previous 2.5 years of negative growth—and that has also done its part to push the vacancy rate down. “We’ve also seen some steady growth in terms of international migration, so it’s contributing to higher demand for rentals in Calgary,” added Cuddy. The outlook for ownership, according to CMHC, isn’t as rosy.Inventory levels are high in the city and builders have started scaling back production.One reason for languid sales is high unemployment and low disposable income. “The general economic recovery we’ve seen since the last recession has been relatively slow;unemployment rates remain elevated and a lack of personal growth in
 
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