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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 30, 2017 630   0   0   0   0   0
Housing affordability continues to dominate the conversation in the Greater Toronto Area’s housing market.A new report released by the Urban Land Institute in conjunction with PwC, called Emerging Trends in Real Estate described governmental regulation as likely to exacerbate the affordability problem. The laws of supply and demand lie at the heart of surging housing prices.Not only are single-family detached homes in high demand and low supply, but the condo market, too, is beginning to see signs of strain, as priced-out buyers realize they have no other choice to settle for skyward balconies over backyards. The foreign buyer tax cooled the Vancouver and Toronto markets, where prices grew astronomically, but the report makes mention of suspicious players within the real estate industry, one of whom believes growth will continue with or without the tax because of natural growth.The report also noted that prices cooled temporally before rebounding and pushing condo prices upwards. Those interviewed by the report parroted the need for government to stay out of the market, except to address the need for increased supply.It’s unanimously believed that the approvals process is one reason supply isn’t keeping up with demand. Affordability will catalyze a growing trend:co-living.As the number of single people among the millennial cohort in expensive markets like, Toronto and Vancouver, continue rising,
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 27, 2017 679   0   0   0   0   0
As Canadian cities continue to crack down on online home-rental platforms, Airbnb maintains it’s open to regulation provided new rules don’t penalize casual users and recognize not every host runs a full-fledged business. “There are still a lot of misperceptions about what home-sharing is all about,” according to Alex Dagg, Airbnb’s director of Canadian public policy, who also warned about unintended consequences from rushed regulations. “That’s the concern – that you come up with something that you think makes sense.And without understanding really what your community is looking like and how they’re using the platform and how they’re benefiting from it, you can really design something that isn’t helpful,” Dagg explained, as quoted by The Canadian Press. Many homeowners or tenants use the platform to rent out a portion of or their entire home to earn some extra cash.Airbnb’s critics argue that it has created additional housing problems in cities with low vacancy rates and high home ownership costs. The Vancouver and Toronto governments have indicated that they are weighing the possibility of imposing a number of restrictions on users. Dagg is in Vancouver to argue the American company’s case in front of a city council holding public hearings into a proposed home-sharing bylaw.If approved, it would take effect in April and require hosts to
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 27, 2017 718   0   0   0   0   0
This week’s census data revealed Canadians’ changing living habits – and the trickle-down effect that’s affecting the rental market and its existing stock in Toronto. Only 50.2% of Millenials own their own homes, compared with 56% of boomers who owned when they were that age, according to the Census.However, Phil Soper, president and CEO of Royal LePage referred CREW to a summer study the organization commissioned on peak Millenials (aged 25 to 30) that found 87% believed homeownership was a positive thing and intended to someday own a home, and in which 69% said they intended to buy a home within five years. “If you compare that to Stats Can data, it shows people are leaving their parents’ homes later, staying in school later, and essentially growing up at a slower rate than their parents, which makes perfect sense,” said Soper.“With technology and increasing lifespans, the old standard of when we got married and left the house got stretched, so it makes perfect sense to me.” Housing affordability has also contributed to more millennial-aged Torontonians renting than their parents did at their ages.The city is experiencing inventory shortages on the ownership and rental fronts, and Soper says condo rentals will likely comprise a large part of the incoming supply. “I think one of the things
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 25, 2017 674   0   0   0   0   0
A new CENTURY 21 study of the country shed light on real estate prices as measured by their price per square foot, and Vancouver unsurprisingly topped the list.However, according to Brian Rushton, executive vice president of CENTURY 21 Canada, Vancouver’s east side is a little-known gem investors can take advantage of. While the Vancouver East Side is notorious for being one of the most impoverished, drug-addled areas in the country, it’s mostly contained within a few short blocks.Further east, however, Rushton says that enough redevelopment is occurring, and at investor-friendly prices, to yield healthy ROIs. “Some of the areas that have done very well from an investor’s point of view, at least in the Vancouver marketplace, are in the east side of Vancouver,” said Rushton.“A lot of the older communities have been revamped and their existing structures lifted with new foundation, but the character has been left.The developers, the builders, the renovators have been able to capitalize on that quite effectively the last five, six years, and maybe even a bit longer. “I wouldn’t say it’s the only place, but of the boroughs directly related to Vancouver, you’re better off east from a square footage basis.A lot of investors in the Vancouver condo market are in the presale market.The Investor might buy four or five units on presale,
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 24, 2017 430   0   0   0   0   0
Greater Vancouver has seen a major drop in commercial sales over the last year, but not for lack of demand, as the supply is seriously constrained compared to last year’s available inventory, according to a report released by REMAX Commercial. There were 875 sales during Q2 last year, but only 595 this year. Last year’s $4.62bln fell 37.5% in 2017, as commercial sales in Q2 only totalled $2.89bln.Land sales also decreased year-over-year in Q2, from $2.12bln in 2016 to $1.51bln this year – a 29% drop. The report noted that local investors are Greater Vancouver’s greatest market drivers, but that there’s also strong interest originating from south of the border, as well as Europe and Asia. The GVA is absorbing office space quickly – the vacancy rate for A-class offices is 6.7% -- and, in Q2, over 700,000 square feet of industrial space was absorbed, 50,000 more than the same time last year.Helping pad those numbers was Amazon, which leased 76,000 square feet of office space earlier this month.Post-secondary institutions are feeling the squeeze for more infrastructure space, and the 30-storey Bosa Waterfront Centre near B.C.Place could help, as it will have 355,000 square feet of office space.West Pender is also slated for development in the near future. The REMAX report stated Bank of Canada interest rate hikes haven’t
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 23, 2017 795   0   0   0   0   0
Latest numbers from the Canadian Real Estate Association revealed that national home sales in September remained lower compared to levels recorded one year ago, although slight growth was observed on a month-over-month basis. Actual (not seasonally adjusted) sales activity nationwide was at 11% below the levels back in September 2016.Meanwhile, residential property sales grew by 2.1% from August to September, and the number of newly listed homes rebounded by 4.9% in the same time frame. “National sales appear to be stabilizing,” CREA president Andrew Peck said. However, he quickly added that “While encouraging, it’s too early to tell if this is the beginning of a longer-term trend.The national result continues to be influenced heavily by trends in Toronto and Vancouver but housing market conditions vary widely across Canada.All real estate is local, and REALTORS® remain your best source for information about sales and listings where you live or might like to.” “Further tightening of federal regulations aimed at cooling housing markets in Toronto and Vancouver risks creating collateral damage in markets elsewhere in Canada,” CREA chief economist Gregory Klump.“It also jeopardizes Canadian economic growth, which is already showing signs of fading.” The entirety of CREA’s data release covering September 2017 can be accessed here[1]. Related stories: Activity in Toronto, Vancouver continues
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 23, 2017 506   0   0   0   0   0
In the latest edition of its seasonal Metropolitan Outlook, The Conference Board of Canada stated that as a whole, the Prairies can look forward to net positives in terms of economic growth and real estate this year. “The worst appears to be over for Saskatoon and Regina.Both cities are benefiting from a modest firming in oil, potash, and crop prices,” according to Alan Arcand, associate director of the Board’s Centre for Municipal Studies.“Winnipeg’s economy is also enjoying robust growth this year.” Winnipeg and Saskatoon have been forecast to experience economic growth of 3.6% each this year, while Regina’s real GDP is expected to increase by 2.9% in 2017. Saskatoon “Saskatoon’s construction sector will start levelling off this year after contracting in the last two years.Despite a weak local commercial real estate market, two major office towers are planned for the city’s downtown core and residential permit values are starting to pick up.In all, construction output is set to rise by nearly 1% this year and a further 1.8% in 2018.” Regina “The CMA’s construction output is forecast to rise 0.9% in 2017, following two straight annual contractions.This year’s expansion is largely fuelled by ongoing work on a $1.9-billion bypass for the Trans-Canada Highway.On the residential side, a modest housing starts recovery is forecast this year,
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 23, 2017 494   0   0   0   0   0
Home inspections are one of the most important facets of buying and selling homes, but, unfortunately, they’re often overlooked. Such has been the case during Toronto’s bidding war frenzy over the last few years, during which prospective buyers forfeited their right to a home inspection for fear of their bid being rejected.Soon noticed an uptick in calls from people who’d foregone their right to inspection, and got stuck with thousands of dollars in repairs.She says that’s a mistake that can be easily avoided. According to Alice Soon, marketing manager of national programs at Pillar to Post, whether you’re an end-user in the market for a new home, a seller, or an investor, home inspections are integral to saving money down the road. Just imagine buying a rental property only to find out the roof need replacing, warns Soon. “If you’re buying an investment property, when you have a certified home inspector they should be giving you a thorough report of every part of the house, all the major systems,” she said.“A person buying a property as an investment is different than a person buying to live, though that’s important too, because it’s supposed to make you money, not lose money, so you need to know the condition of the home.If you buy something and you don’t
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 20, 2017 407   0   0   0   0   0
A new report from commercial real estate firm CBRE stated that Edmonton’s office vacancy rates fell for the first time ever in half a decade, down to 19.7% in summer 2017 from 19.9% in the previous quarter. The last decline prior to this was in summer 2012, when the rate decreased to 9.3% from 9.9%. CBRE noted that the development stemmed from activity in the downtown core, where the summer vacancy rate fell to 20.3% from 20.6%, the first in the area since spring 2015. However, while the region is expected to enjoy the second-fastest economic growth in Canada this year, the CBRE report cautioned that this state might not last. “Though economic conditions continue to improve, in August the Alberta government announced its intent to adjust future spending plans, as revenues in the first quarter were less than what was forecasted in the 2017/2018 budget,” the report stated, as quoted by Postmedia. “Uncertainty in government spending has the potential to alter leasing activity in the short term.” Earlier this week, The Conference Board of Canada also projected a 3.9% increase in Edmonton’s GDP this year as a result of higher oil valuation along with increased investment and drilling plans.Growth has been forecast to be slower (2.2%) in 2018 because of impending
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 20, 2017 329   0   0   0   0   0
The newest set of mortgage restrictions announced by the Office of the Superintendent of Financial Institutions (OSFI) will hit home buyers looking to upgrade to new properties the hardest, according to BMO financial group chief economist Doug Porter. OSFI’s latest rules state that even home buyers who don’t require mortgage insurance because they have a 20% down payment will have to prove they can make meet their commitment if interest rates rise above the five-year benchmark rate published by the Bank of Canada or 2% higher than their contracted mortgage rate, whichever is higher. Move-up buyers would be disproportionately impacted because they would be most likely to have home equity and qualify for an uninsured mortgage, Porter explained. The economist noted that last year’s restrictions took 5% to 10% out of the housing market’s buying power, and that OSFI’s latest changes will have a comparable effect. The guidelines, similar to OSFI’s draft release in July, are scheduled to take effect on January 1, 2018. “This is potentially more wide ranging and it will dampen the housing market in 2018, probably more significantly than we saw (with) the earlier federal measures,” Porter told the Toronto Star. However, he emphasized that the changes are “another reason to believe the [Bank of Canada]
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 20, 2017 337   0   0   0   0   0
While rent-to-own purchases are becoming more popular, it’s important to know who you’re dealing with, and to balance the risks and rewards. According to Bob Aaron, a real estate lawyer with Aaron &Aaron, rent-to-owns typically surge in popularity during market downturns, and they’re also one of the few options people with bad credit have available to them.However, Aaron also says that it’s his preference to advise clients against entering such arrangements. One way in which buyers get short-shrifted is by paying above-market rental prices than they would for a similar house, which, if the buyer chooses not to purchase the home, cannot be recovered. “Rent-to-own helps when the seller can’t sell and when buyers can’t get approved for mortgages, but the way it often works is the seller gets the lump sum from the buyer/tenant which is used to underwrite the down payment,” said Aaron.“So if the buyer decides not to close, or can’t close, or can’t get a mortgage, all that money they paid up front and along the way is down the drain.” He also says another problem with rent-to-owns is there aren’t any industry standard forms. The buyer/tenant isn’t the only party at risk, though. “A defaulting owner can stick the landlord-/investor with all kinds of arrears, mortgage taxes, utilities,
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 18, 2017 493   0   0   0   0   0
The Montreal Census Metropolitan Area (CMA) saw a 9% year-over-year rise in total home sales during the third quarter of 2017 (up to 8,845), according to new data from the Greater Montreal Real Estate Board (GMREB). This represented the best Q3 sales result in Montreal since 2009 and the 14th straight quarter of increases, according to the Board, which derived the statistics from the Centris® provincial database. In terms of asset classes, condominiums posted the largest sales increase (+18%) at 3,043 units sold, establishing a new Q3 sales record for this property type.Sales of single-family homes and plexes (2 to 5 dwellings) also showed notable growth at 5% and 8%, respectively. As for median prices, single-family homes and plexes across the CMA both experienced an increase of 5%, up to $320,500 and $479,000, respectively.Condominium median values showed relative stability, growing by a modest 1% to $253,000. Active listings in the CMA declined for the 8th consecutive quarter, falling by 14% year-over-year (down to 24,640 properties available for purchase). “The real estate market is continuing its strong momentum.We are clearly in a seller’s market for single-family homes and plexes in most areas of the Montreal CMA, while the condo market is returning to balanced territory,” GMREB’s board of directors president Mathieu Cousineau said.“In one year, the
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 18, 2017 482   0   0   0   0   0
In an announcement late last week, the British Columbia Real Estate Association indicated an increase in the province’s home sales numbers and market valuation in September. The BCREA figures showed that a total of 8,340 residential unit sales were recorded by the Multiple Listing Service last month, representing a 9.9% year-over-year increase.This is despite a 13% year-to-date decline in home sales, down to 81,608 units. Meanwhile, total sales value amounted to $5.8 billion, up by 30.2% from September 2016.The average MLS residential price stood at $693,774, having increased by 18.5% from the same time last year. On a seasonally adjusted basis, B.C.residential sales grew by almost 5% from August, according to BCREA chief economist Cameron Muir. “Total active listings on the market continue to trend at 10-year lows in most B.C.regions, limiting unit sales and pushing home prices higher,” Muir stated, as quoted by the Vancouver Sun. However, Muir cautioned that “while the economic fundamentals support elevated housing demand, rising home prices are eroding affordability, particularly for first-time buyers.” The results of a survey by Royal LePage came out on the same day as the release of the BCREA’s numbers.The study found the median price of a condominium rose by 17.6% from September 2016 to $622,392, while the cost of a two-storey
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 18, 2017 471   0   0   0   0   0
The Scarborough subway extension doesn’t seem to generate much support outside of Toronto’s eastern suburbs and City Hall, but one Durham Region brokerage owner believes that Toronto’s most immediate eastern suburb is the right place for the city’s next below-grade transit project. Dan Plowman, owner of Dan Plowman Team Realty Inc., believes Scarborough is the right place to build a subway extension because it will service all of Durham Region – and, in the process, put property values on an upward trajectory. “Scarborough is already growing, but I know for a fact there’s already talk of people buying near where the subway is supposed to go simply because of the subway,” said Plowman.“There’s already a frenzy.When you bring something on this magnitude to an area, you will increase property values.” He added that Scarborough still has more developable land than Toronto does, and the result would homes sprouting en masse around a subway line. “You have to look at areas that came after subway stops,” he said.“You’d see the homes increased drastically after the infrastructure came into play.You already had massive growth in Scarborough, and there’s still a lot more land than downtown pockets and it will fill up.” Toronto is a world-class city with a world-class skyline – not to mention world-class gridlock
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 16, 2017 310   0   0   0   0   0
Credit unions have been chomping at the bit to offer alternatives to Ontario’s payday loan stores, but the current regulatory regime is hindering their ability to exhibit new products, according to a top official of a public policy think-tank. In a contribution piece for the Financial Post, Cardus program director Brian Dijkema stated that payday loan providers fulfill a valuable role as they address the needs of the consumer segment called ALICE—Asset-Limited, Income-Constrained, and Employed. “More than two-thirds of ALICEs earn less than $50,000 per year.And while payday lenders’ reputation for being the somewhat shifty cousins of banks is not entirely undeserved, they nonetheless provide a real and needed service to people who, for a variety of reasons, can’t or don’t have the cash to meet their needs,” Dijkema wrote. These shops offer extremely-short-term loans (less than 62 days) for amounts less than $1,500 at grossly elevated interest rates (currently at 657% on an annualized basis on the average 10-day term). “And that has consequences.Payday loans can lead customers to develop a habit — an addiction even — of using high-cost loans to meet their needs,” Dijkema said.“We’ve known about the challenge for a while, and the typical response has been to tighten already strict regulations.The problem with this approach, however, is that it simply raises
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