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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 02, 2017 689   0   0   0   0   0
Commercial real estate in Canada’s six major markets is, by and large, healthy, but Alberta continues reeling from the aftershocks of the oil sector’s plummet a few years ago, according to the National Dashboard Report by Colliers. Robust office space absorption in Vancouver is being largely driven by the technology, advertising, media and information industries, accounting for 40%, while education institutions are expanding throughout the metropolitan area and comprises 12% of the absorption.Colliers reported the vacancy rate dropped from 6.3% in Q2 to 6% in Q3.Education tenants, which figure transit access into location planning, rose from 35,000 square feet in 2016 to 300,000 Q3 of 2017.The National Dashboard Report also noted that Vancouver’s Broadway Corridor/Mount Pleasant area is flourishing with over half a million square feet of office space under construction or pre-leasing. Vancouver’s industrial demand is in strong demand, and the third-quarter vacancy rate in Metro Vancouver is 1.8%, down slightly from Q2’s 1.9%, and remains below the five-year average of 3.1%.Between the third quarters of 2015 to 2017, the vacancy rate has been under 2.5%, in part, because of restricted new supply. The Greater Toronto Area’s vacancy rate during Q3 was 5.3%, while the availability rate was 7.7%, both of which decreased from the second quarter.The average asking net and gross rates also decreased from the previous
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 01, 2017 548   0   0   0   0   0
An Urbanation report predicts a balanced condo market moving into next year – and with it a moderation of investor activity. “We’re coming off unsustainable rates of growth,” said Shaun Hildebrand, Urbanation’s senior vice president.“It’s not healthy for a market to see these rates of appreciation.If we did, the ramifications would be more severe than expected, so expect the market to transition more quickly away from rapid rate of growth and record level of sales as we move into 2018. “That will come as there will be less aggressive investor demand, who have been the largest buyers of new condominiums.” Hildebrand says that while investors have cashed in on high condo rents – prices hit $2.98 per square foot during the third quarter of 2017 – and capital appreciation, there are sobering risks they won’t be able to ignore going into next year. “You have to take into consideration that rents have been growing strongly, but not growing anywhere near as quickly as prices, so that puts at risk holding costs for investors being higher than achievable rent levels when the units come into completion,” said Hildebrand. The report forecasts a possible injection of supply somewhere in the neighbourhood of 12,000 units during the fourth quarter, and that should boost annual sales
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 01, 2017 761   0   0   0   0   0
The latest census data revealed that condominium units are fast becoming the residence type of choice among Canadians, with fully one in five households in the Toronto Census Metropolitan Area (CMA) residing in condos. This development is especially pronounced among first-time millennial buyers, the census results showed.Among members of this demographic, condos have become a popular ownership choice amid ever-rising prices, a trend that doesn’t appear to be waning any time soon. “The proportion of households living in condominium units is likely to rise,” City Planning’s Michael Wright told the Toronto Star. “The bulk of the city’s potential housing supply includes condominium units.For the five-year period ending June 30, 51% of the proposed development projects in the city’s pipeline involve at least one condominium application, and these projects represent 85% of the residential units proposed, under construction or recently built,” he added. According to Royal LePage CEO Phil Soper, condos stand as solid evidence of Toronto’s world-class status. “One third of housing stock we’ve added since 2011 is condominium.When I was a kid (in 1980) it was 6%.That’s a dramatic change.Clearly we’re adjusting the product people buy into.It’s clear we’ve joined other global cities in a changing social norm where many people don’t expect the white picket fence,” Soper said. But condos can only go
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 01, 2017 759   0   0   0   0   0
Cranes crowd the Montreal skyline these days as a strong economy and political stability are fuelling a construction frenzy throughout the downtown core and beyond. Although tame by Toronto and Vancouver standards, developers in Canada’s second-largest city are investing billions of dollars in new condominium and office complexes, along with retrofitting older buildings. “Since 1976, this is one of the greatest times,” Mayor Denis Coderre told The Canadian Press.The mayor was alluding to the year when the election of the separatist Parti Quebecois prompted an exodus of residents and businesses. “There [are] right now 150 cranes representing $25 billion of investment in Montreal,” he said at the official launch of the second phase of the YUL twin tower and townhouse project that is sponsored by Chinese investors. Project developer Kheng Ly of Brivia Group Real Estate, who has partnered with China’s Tianco Group, said relatively low condo prices and the lack of a foreign buyers tax make Montreal an attractive place to invest. Ly, who arrived in Canada 29 years ago, said the downtown landscape has changed significantly in the past five years.The recent addition of direct flights between China and Montreal have attracted Asian investors who comprise 35% to 40% of condo owners at the project’s first phase, he said. Further evidence
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 30, 2017 669   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 30, 2017 627   0   0   0   0   0
A massive residential complex in Hamilton will be opening its units for sale on November 4, 2017, its developer announced. The $360-million Television City project, which was the brainchild of Lamb Development partnership with Movengo Developments, is the first phase of the company’s investment in Hamilton, with several more projects worth over $1 billion scheduled further down the line. Two connected 40-storey and 30-storey towers will house approximately 618 units.Upon completion, Television City will offer 474,080 sq.ft.for residential units and 11,344 sq.ft.for retail space. The complex is designed with a wide variety of luxury amenities, including an outdoor infinity pool, fitness centre, and skyclub, along with a co-op tech workspace, a children’s play centre, a private dog walk, and a pet-washing station. Units ranging from studios to penthouses start at $220,000.Move-ins are slated for 2021. “As a developer, my main interest lies in building communities.Hamilton is a vibrant, evolving city, made even greater by its people,” Lamb Development Corp.CEO Brad Lamb said in a news release. “From homeowners to councillors to entrepreneurs, we have had the opportunity to sit down with Hamilton citizens who are excited to see the city’s potential come to life.We are happy to be a part of this stage in its history.” Interested parties can learn more
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing October 27, 2017 756   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 27, 2017 740   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 25, 2017 708   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 474   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 530   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 23, 2017 552   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 836   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 20, 2017 382   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 20, 2017 366   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]
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