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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 21, 2019 27 0 0 0 0 0
Montreal’s plexes and condos are seeing increased popularity, providing significant contributions to the market’s home sales volume last month. According to latest figures from the Quebec Professional Association of Real Estate Brokers, the city’s sales volume across all housing types was 3,698 transactions in July.This was 16% larger year-over-year, and represented a new high point for that month. Plex and condo sales respectively had 23% and 16% growth during the same time frame. “The sales growth that we’ve been witnessing since the start of the year reached a new peak in July with the largest increase in sales since May 2017,” QPAREB board of directors president Nathalie Bégin said. “What’s remarkable is that the resale market continues to be so strong after 53 consecutive months of increases.” The average price of plexes increased by 10% annually in July, ending up at $583,000.Meanwhile, condos had 5% growth in value, up to $278,600. Montreal’s active listings shrunk for the 43rd straight month, “thereby accelerating the tightening of market conditions in a context where sales are setting new records at the same time,” the QPAREB’s report added. The market’s Centris system recorded 16,898 active
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 21, 2019 25 0 0 0 0 0
Strong employment – especially in the high-technology sector – is a major driving force in the steady growth of Toronto’s rental segment. In turn, this trend is feeding the strength of the region’s investment property market, according to Marcus &Millichap’s Q3 2019 Multifamily Market Report covering the GTA. In the first half of this year alone, 81,600 new employees were added to the GTA’s workforce, with a sizeable contingent representing tech companies.Such organizations have gravitated towards the region’s supportive environment. “A less restrictive immigration policy in contrast to the U.S., coupled with a mature tech ecosystem backed by government incentives and world-class universities, has Microsoft, Amazon, Pinterest and many other global firms searching for talent in the metro,” Marcus &Millichap explained. Overall employment in the GTA grew by 3.4% annually in June, exceeding the 2.9% year-over-year upswing during the same month in 2018. The resultant stronger economy has led to the formation of more households, “a key driver of apartment demand.” The average price of an investment rental property has increased by 9% year-over-year, ending up at just above $277,000 per unit and as high as $300,000 in the downtown core. Over
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 21, 2019 30 0 0 0 0 0
While residential market activity in Vancouver is markedly slower than in years past, the commercial sector is on fire. “There’s a significant amount of commercial activity going on within Metro Vancouver, with 2.8 million square feet of office product under construction,” said Kirk Kuester, Colliers International’s executive managing director for British Columbia.“The development business, from a residential perspective, is either grinding to a halt or has ground to a halt.When projects finish, there’s not a lot to be introduced on the residential side that will pick up the slack, other than what’s happening on the commercial side with retail, industrial and office.” One such project is The Post by QuadReal Property Group, where Amazon has committed to occupy 35% of its 1.13 million square feet.Upon competition in 2023, The Post will host an estimated 7,000 workers. That isn’t to suggest heightened commercial real estate construction means space is aplenty.Kuester says vacancy continues to be an issue for would-be tenants, especially in the industrial sector. “The industrial market is going like gangbusters,” he said.“It’s a challenge today because of extremely low vacancy and extremely limited land, and lots of ongoing demand as a result of
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 19, 2019 36 0 0 0 0 0
Calgary and outskirts moved to sellers’ territory last month, with stability expected up to the end of 2019. Four of seven local markets in the region have seen markedly intensified competition as of July, according to a new analysis by Zoocasa. Calgary’s sales-to-new-listing ratio (SNLR) during the month was a strong 61%, along with an average residential sales price of $425,700. The city will most likely enjoy sustained housing performance for the rest of the year, CREB chief economist Ann-Marie Lurie said earlier this month.Continuous economic recovery will contribute to this trend significantly. “Supply continues to adjust in the resale market, but also in the new-home and rental markets.Reductions in housing supply are expected to move the resale market toward more balanced conditions and support price stability by the end of the year,” Lurie told the Calgary Sun. However, Lurie stressed that “while prices may stabilize, on an annual basis they are expected to remain below last year’s levels.” “With current economic conditions, we expect housing demand will remain similar to levels recorded last year,” she said.“Supply declines will help to better position the broader market for recovery moving into 2020.”
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 19, 2019 35 0 0 0 0 0
Real estate flipping in the Waterloo region is mostly committed by investors from the Greater Toronto Area, according to a new report by Canada Mortgage and Housing Corporation. As much as one in five buyers of flipped properties did not have addresses in any of the region’s markets.Of the non-local buyers, 72% came from the GTA, with most of the remainder identifying as residents of Guelph and Hamilton. In the period covering January 1, 2015 up to June 30, 2018, around 9% of all residential assets that were sold in Kitchener, Waterloo, and Cambridge were found to have been either flipped or rented out. The CMHC defined flipping as a resale that takes place after a short period (within 24 months). “Perhaps unsurprisingly, investment activity became more pronounced as the pace of average price growth increased, which makes intuitive sense since there is larger potential gains to be realized in a market where prices are growing rapidly,” CMHC explained in its report, as quoted by CBC News. Of the three cities involved, Kitchener posted the highest incidence of house flipping and investment, with activity steadily rising from 2012 to 2018.CMHC noted that this
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 19, 2019 46 0 0 0 0 0
In the throes of a housing correction, British Columbia’s Lower Mainland might be witnessing the beginnings of recovery. According to an economic outlook report from Central 1 Credit Union, the signs of recovery are there, however, its deputy chief economist still calls for tapered expectations. “We’ve started to see a bottoming in the Lower Mainland area;sales hit a bottom in the spring and summer months, but now we’re seeing a moderate bounce back,” said Bryan Yu.“The latest numbers from CREA [Canadian Real Estate Association] suggest there was a nice increase in July, but levels are still around 2014 levels.To keep it in context, sales are on the upswing and the labour market is helping with that.” Although there’s too little data to definitively state that the Metro Vancouver market correction is receding, Yu believes buyers have nevertheless adjusted to B-20’s rigidity. “The change in mortgage rates and what people are receiving in the market now are a big lift for affordability, provided they meet B-20’s restraints,” he said.“A 2.8% on a five-year fixed mortgage is a 50 basis point drop from late 2018, so the numbers favour buyers.When we combine those factors we’re seeing
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 16, 2019 42 0 0 0 0 0
Canadians’ relatively positive outlook on housing has been amplified by stronger market performance and starts activity. The end-of-July edition of the Bloomberg Nanos Canadian Confidence Index posted a 58.6 reading, up from the 58.3 seen at June’s end. This optimism was bolstered by surging home sales in Toronto and Vancouver, which both enjoyed 24% growth last month. Coupled with a steadily recovering national economy and a downward movement in borrowing costs, more and more Canadians are shedding their fears of a potential housing downturn. Of the Bloomberg-Nanos survey respondents, 43.2% are predicting local real estate prices to increase in the next six months.This was the highest month-end level since December 2017. In contrast, the share of those expecting lower prices was at 15.2%, markedly below the 2019 average of 16.4%. High levels of construction activity contributed further to the positive consumer outlook.Latest CMHC figures indicated that the national trend in housing starts was 208,970 in July, up from June’s 205,765 units. “The national trend in housing starts increased in July, despite a decrease in the level of SAAR activity from June,” CMHC chief economist Bob Dugan stated.“High levels of activity in
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 16, 2019 34 0 0 0 0 0
The number of delinquent mortgage payments in Alberta has reached its highest point since 2013, according to a new analysis by the Canadian Bankers Association. Collating residential loans data from the Big Six banks and other major institutions, the CBA reported that creeping unemployment was largely responsible for Alberta’s mortgage arrears rate touching 0.49% in February, the most recently recorded month. “The continued slowdown in Alberta’s oil and gas sector and its associated impact on employment is one of the main drivers behind the uptick in arrears,” the association told CBC News. Prior to February, gradual increases in the province’s arrears rate have been observed in the preceding 10 months, CBA added. To compare, the rate for the rest of Canada has been moving downward during the same time frame, yielding 0.24% in February. CMHC data indicated that mortgage arrears are considerably higher with products from non-traditional sources.Most notably, mortgage investment entities, which together have a delinquency rate of 1.93% across Canada – approximately eight times larger than that seen among traditional banks (0.24%) during Q3 2018. Mortgage finance companies posted 0.25% delinquency, while credit unions exhibited the lowest rate at 0.17%.
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 16, 2019 35 0 0 0 0 0
Exceptional job growth in the Greater Toronto Area, along with consistently high immigration, has spurred strong rental demand through the first half of 2019. According to a report from Marcus &Millichap, the region is brimming with tech sector talent and it played a crucial role in the 81,600 jobs created in the GTA through the first two quarters of the year. “Employment grew at a rate of 3.4% year-over-year in June, a substantial rise from the 2.9% pace posted one year earlier,” read the Marcus &Millichap Multifamily Market Report.“A less restrictive immigration policy in contrast to the U.S., coupled with a mature tech ecosystem backed by government incentives and world-class universities, has Microsoft, Amazon, Pinterest, and many other global firms searching for talent in the metro.A healthy economy and labour market have been a boon for household formation, a key driver of apartment demand, contributing to a strong rental market over the last few years.” The ripple effects of B-20 continue being felt in the GTA, where the benchmark price of a single-family home in June was more than $875,000, serving as another major driver of rental demand.The report makes note of the fact that,
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 14, 2019 42 0 0 0 0 0
Significant recovery in the national housing market has helped boost borrowing activity during the second quarter, Home Capital Group CEO Yousry Bissada said. The lenders Q2 2019 mortgage originations went up to $1.28 billion, from the $1.23 billion level during the same period last year.Vigor was especially apparent in single-family originations, which increased by more than 10% annually, “with particular strength in our alternative mortgage segment.” Total Q2 loans were at $16.84 billion, growing by 1% quarter-over-quarter and 9% annually. “We’re pleased with our results because they’re beginning to reflect the impact of some initiatives that we at Home Capital have been working very hard at for the past few quarters,” Bissada said, as quoted by the Financial Post. “Our focus on lending to the high-quality market segments we have targeted, primarily the business for self-borrower and the new Canadian, is producing good results.” The Greater Toronto Area has fed much of this recovery, Bissada told analysts last week. “Sales activity is picking up, with particular strength in the GTA,” he stated.“The latest data on economic growth, employment and interest rate expectations are consistent with our outlook for a stable and balanced
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 14, 2019 39 0 0 0 0 0
The Greater Toronto Area’s detached housing market is back on track. According to REMAX and Toronto Real Estate Board data, the area comprising North and South Riverdale, Blake-Jones and Greenwood-Coxwell, valuations rose 15.2% in 2019, reaching $1,378,987 from $1,197,133 in 2018. The area beginning at Kensington-Chinatown and moving westward to Dufferin Grove and Little Portugal rose to $1,953,511 in 2019 from $1,732,193 a year earlier, for a 12.8% increase. Leaside and Thorncliffe Park rose 11.2% in 2019, hitting $2,193,747 from $1,972,450 a year earlier. Christopher Alexander executive vice president and regional director of REMAX Ontario-Atlantic Canada noted that from January through July, sales were 17% ahead of where they were through the first six months of 2018. “Market share is also climbing, with detached homes now representing 45.7% of all home sales in the Greater Toronto Area, up from 43.1% one year ago,” he said. Of course, there are parts of the GTA where detached houses are still languid.Alexander says 51% of GTA neighbourhoods saw double-digit increases in sales volume, 75% of which are south of Highway 401. “The other 49% are flat or just below last year’s figures, so in
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 12, 2019 57 0 0 0 0 0
Offices and apartments were the major commercial asset investment drivers in the GTA during Q2 2019, according to Altus Group. In its latest market report, Altus stated that total investment during the quarter was at $5.8 billion.Much of the strength came from the 563 sales transactions valued at over $1 million. The Q2 figures represented the first increase after five straight quarters of declines, as well as the fourth highest quarterly investment total ever recorded for the region. Offices and residential each accounted for around 20% of the total Q2 volume.The largest single commercial transaction during the quarter was in the office sector, with the $640-million sale of the Atrium on Bay in downtown Toronto. “Pent up demand and low office vacancy rates (3.1% in downtown Toronto and 6.8% in the GTA for Q2 2019) have resulted in growing demand for office space in submarkets just outside the core,” Altus noted. The apartment sector also enjoyed a 266% increase in investment from the previous quarter, and a 52% increase compared to Q2 2018. Together, these heavy hitters are projected to fuel most of the market’s momentum through the remainder of 2019.
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 12, 2019 41 0 0 0 0 0
Jennifer Skingley and her partner—the former an erstwhile project manager and the latter an executive manager—are meticulous planners, so no detail was spared when they planned a home renovation.However, no amount of planning could have prepared them for the aggravations they would subsequently endure. “We got the keys to our home in February 2018 and before we even took possession of it we had teed up people to do the work.We really researched and organized our renovation,” said Skingley.“There were several false starts trying to get people who were available to commit to doing the work.We interviewed a ton of contractors, got multiple estimates and did as much of the leg work ourselves as humanly possible without actually being construction experts.We tried to hand everything over on a silver platter, but for the work to actually start was like pulling teeth.” And that was only the beginning, added Skingley. The basement level needed external waterproofing, upgraded plumbing and a new bathroom was fitted in, while the kitchen and upstairs bathroom also received significant work. However, because of last minute cancellations by contractors and a seeming deluge of errors, the home renovation took much longer
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 09, 2019 47 0 0 0 0 0
Since the beginning of the century, new office construction has left Toronto’s suburbs for the downtown core, but that’s beginning to change. According to CoStar Group, a leading multinational commercial real estate data analytics firm, suburban office construction has kept pace with downtown Toronto construction in recent years, a trend it forecasts will continue for at least the next five years. “Over the last decade, we’ve been hearing about high-profile moves from the suburbs to downtown—and it is happening and it’s a distinct trend—but at the same time, there are still users who want to be out there,” said Roelof van Dijk, CoStar’s market economist for Canada.“A lot of employees just don’t want to deal with the commute.” While avoiding Toronto’s onerous suburb-bound commute is certainly a key reason, van Dijk says population growth provides the most insight into why the suburbs are still primed for growth in office space. “When you look at where the population is growing and where new supply by square footage is happening, it’s telling,” continued van Dijk.“It’s as close to 50-50 as you’ll get over a 10-year period.There’s also been a supply boom downtown during that same period.”
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 09, 2019 40 0 0 0 0 0
Amid the far-reaching housing crisis, Iqaluit’s homeless are among the nation’s most burdened sectors. The federal government has previously estimated that Nunavut needs more than 3,000 affordable units to accommodate current housing demand. With over 4,900 individuals on the waiting list for low-cost housing, a significant proportion of the city’s homeless are Inuit forced to live in run-down homes.Many of these people are either elderly or stuck taking care of small children – and those who do have employment and incomes are not fortunate enough to be able to afford the market’s rental rates. The Nunavut capital’s average monthly rent for a two-bedroom apartment stood at $2,648 in 2017, the latest CMHC reading for the oft-neglected market. A recent announcement by Prime Minister Justin Trudeau might offer a semblance of hope:The federal government has vowed a $290-million, eight-year investment in developing and expanding Iqaluit’s social and community housing. “We recognize that this is a big step forward that is going to make a huge difference in creating thousands of homes and we know this is really going to make a tangible impact in the lives of people here in the North,” Trudeau stated,
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