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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 12, 2019 567 0 0 0 0 0
Millennials may be the best of hope of saving Vancouver’s languid housing market. They tend to dominate the condo market, where entry-units are aplenty, and fortunately for Vancouver there is no shortage of towers. “When I look at the overall market, the detached and condo markets are two totally different markets,” said Wayne Ryan, team lead at REMAX Crest Realty.“Millennials are active in the detached market, but in the lower end of the condo market they make up a big percentage.We’ve had a situation in the detached market where, in the last several years, it’s shifted downwards.The foreign buyer tax and general attitude towards Asian buyers hasn’t been as positive as it was, so the result is we’re seeing properties sitting on the market longer.” Ryan noted that Vancouver’s detached market correction actually began about three years ago while the condo market concurrently grew hotter and hotter, albeit with modest gains.But as the upper end of the market becomes prohibitive, the lower end brims with desperate buyers—many, if not most, of whom are millennials. “We’ve seen a 7-8% price adjustment with sales down in the detached market, but there’s firmness in the lower end
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 10, 2019 311 0 0 0 0 0
Aside from a surging office market, commercial asset investment in Vancouver has been weak so far this year, according to new research by Altus Group. A total of 322 commercial transactions were completed in the market during the first quarter, shrinking by 49% annually.Altus Group director of data solutions Paul Richter noted that this was the lowest commercial volume seen in Vancouver in several years. Only the city’s office segment experienced net gains in Q1 2019, with sales going up to 26 (from the 16 seen the quarter prior). The retail sector suffered its second consecutive decrease in overall investment during the quarter to end up at 35 transactions worth $136 million. Meanwhile, the industrial sector’s volume dramatically plunged by 54% year-over-year, ending up at $228 million.This was even more noteworthy considering that the sector enjoyed its all-time investment high during Q4 2018. Residential land investment was at $446 million during Q1 2019.This was the segment’s first sub-$1-billion level seen in 13 quarters, and its lowest dollar volume since Q2 2014. Altus warned that the Vancouver commercial segment’s condition over the past few years has been especially concerning. “The lowest transaction
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 10, 2019 268 0 0 0 0 0
Operators of short-term rental secondary units in Quebec will have to register with the Corporation de l’industrie touristique du Quebec—which also regulates the province’s hotels—or face fines in the thousands. The new piece of regulation, slated to come into effect this fall, targets properties being rented out for fewer than 31 days, and failure to comply will permit Revenu Quebec to dole out fines of up to $10,000 for individual operators and up to $25,000 for corporations. The proliferation of short-term rentals in the country’s second-largest city has all of a sudden dried up its rental inventory—the reason for which the regulation is garnering support in the real estate industry. “If you look at certain neighbourhoods—the Plateau-Mont-Royal and the city centre—about 3-5% of units are being used for Airbnb,” said Maxime Roy-Allard, a spokesperson for Regroupement des comites logement et associations des locataires du Quebec, a rental advocacy organization.“Thousands and thousands of apartments are being taken out of the rental housing market and that’s concerning because we hear about many families with the first of July approaching [when leases in the province begin and expire] are finding it difficult to find big enough places that
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 07, 2019 274 0 0 0 0 0
With multiple indicators hinting at robust performance for the rest of this year, Canada’s industrial properties have seen a record-low vacancy rate of 3% during Q1 2019, according to a recent analysis by Avison Young. Stability and growth prospects for the asset class are extremely positive, with supply scarcity being the dominant condition.The Avison Young survey found that 10 of the 11 markets studied had lower vacancy levels in the single digits, and that four of these had rates well below the national average. Indeed, three Canadian markets – namely, Vancouver (1.2%), Toronto (1.5%), and Ottawa (1.6%) – exhibited the lowest vacancy rates throughout North America during the first quarter. And this might be just the beginning, as logistics ventures’ need for wide open spaces is likely to inflame even greater competition. “E-commerce remains the industrial sector’s catalyst for success as retailers and developers strive to perfect the supply chain,” Avison Young COO (Canadian operations) Mark Fieder explained, pointing at these companies’ demand for distribution/fulfilment facilities located on or near major urban centres. “This situation is most apparent in Toronto – and in Vancouver, where strata units increasingly offer the only opportunities for
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 07, 2019 295 0 0 0 0 0
Toronto’s residential property sector has recently been characterized by accelerating sales and tight inventory, according to TREB’s latest data. The market saw 9,989 home sale transactions close through the Board’s MLS System last month.This was 18.9% above the 15-year low for May, which was seen last year. “Sales activity continues to be below the longer-term norm, as potential home buyers come to terms with the OSFI mortgage stress test and the fact that listings continue to be constrained relative to sales,” TREB president Garry Bhaura said. “After a sluggish start to 2019, the second quarter appears to be reflecting a positive shift in consumer sentiment toward ownership housing.Households continue to see ownership housing in the GTA as a quality long-term investment as population growth from immigration remains strong and the regional economy continues to create jobs across diversity of sectors.” Bhaura warned, however, that the May numbers are still considerably lower than the long-term average of 10,300 for that month. The number of active home listings crept up by just 0.8%, for a total of 19,386 properties.Sales prices went up by 3.6% annually, reaching an average of $838,540.The cost increase was much larger
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 07, 2019 264 0 0 0 0 0
Scant inventory is propelling demand for recreational properties in Quebec and Ontario—and in the latter’s case, not even flooding proved a deterrent. “During the spring market, the demand has been so strong that even with the flooding we’ve seen, some people are viewing and purchasing properties that are underwater,” Phil Soper Royal LePage’s CEO, told CREW.“It’s an anecdotal tale, but demand has been so high that people are still paying market value, even though they can’t access part of the property.They’re looking at the land for its potential and moving ahead anyway.” Royal LePage’s Canadian Recreational Property Prices Forecast details a market with inventory so constricted that prices in Ontario rose 7.2%—despite sales being down 7.9%—and 5.6% in Quebec—two provinces that saw considerable flooding this year.According to the report, stiff competition between retirees and millennials with young families explains the appreciation, especially in Ontario. Soper says the national price surged because of the two most populous provinces in Canada. “The national price is being driven by Quebec and Ontario, where the urban markets are either very strong, as in the case of Quebec, or rapidly recovering, as is the case in Ontario, and you
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 05, 2019 309 0 0 0 0 0
A major $15-million transaction for two multi-family properties just closed in Ottawa last week, attesting to the sub-sector’s continued strength. “Private and institutional clientele continue to show strong interest in Canadian multifamily assets and although opportunities are limited at times, our deep reach and strong client relationships give us the edge in completing transactions,” Institutional Property Advisors senior managing director Aik Aliferis said. IPA, which operates under Marcus &Millichap, announced the completion of the deal involving two mid-rise apartment buildings:the five-storey 50 Selkirk Street, which comes with 75 units in 52,635 square feet, and the four-storey 350 Mayfield Avenue, which offers 61 units in 37,730 sq.ft. “These two apartment assets are situated within a primarily residential neighborhood that has become increasingly popular with young families,” Aliferis noted. Ottawa’s economy has steadily boosted the value of the asset class over the past few quarters, according to an Engel &Völkers report. Much of the region’s economic robustness can attributed to population growth levels, which stood at 8.8% as of the last reading.For perspective, the national rate was far lower at 5.9%. “With the market absorbing condos at a faster rate, coupled with the market’s
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 05, 2019 272 0 0 0 0 0
Canadians are taking significant risks when they go for alternative funding avenues in the current B-20 regulatory regime, a DLC mortgage professional claimed. “What’s happened is the new rules, particularly the stress testing, have begun excluding many responsible Canadian homeowners who had previously qualified for mortgages, so many are unfortunately trying their luck with alternative lenders;either to handle their entire mortgage (highly inadvisable), or to top up a down payment,” Quebec-based accredited mortgage professional Terry Kilakos wrote recently in his analysis. “By pushing people to the alternative lending market, [consumers] are being pushed away from the safe harbour of high-quality lenders and into a less regulated and higher-interest area of the market.” Numbers from CIBC bear out these observations:in terms of dollar volume, alternative mortgages now represent around 7% of the market, up from the 5% proportion in 2017. The activity represented by this growing share comes with risks innate to the alternative space itself, Kilakos warned. “Regulation is looser on the alternative market, so by letting debt-to-income ratios climb much higher, it makes it easier for people to qualify for a mortgage.The catch is that by letting those ratios go higher, the
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 05, 2019 306 0 0 0 0 0
A novel, if risky, idea is slated for Vancouver’s real estate landscape. Aragon Properties will be building two condominiums before even opening sales—a move that almost never occurs in Canada because developments must hit about 80% sales before financing can be secured. “We’re going to bring to market two particular products in some of the most desirable areas of Vancouver’s West Side.One of the things here is the finished homes offer buyers clear advantages over buying off plans;it lets buyers see first-hand the special architectural detail included in each home,” said Aragon’s Vice President of Development Howard Steiss, who added that the projects are self-financed. “To get the kind of architectural detail we’re including has to be understood and appreciated.” One of the condos is called Amber, a 31-unit, four-storey brick, concrete and wood building, and the other is called Shift, a six-storey, 43-unit condo.Both projects have up to three bedrooms.Viewings will begin in July. An advantage to buying a brand new home that’s already constructed is, apart from its tangibility, the move-in date is much, much sooner and not subject to the same delays preconstruction condominiums are usually burdened by. “We
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 02, 2019 230 0 0 0 0 0
Senior vacancy rates increased in British Columbia, Quebec and Alberta, but fell in Ontario According to the Canada Mortgage and Housing Corporation’s Seniors’ Housing Reports—which surveyed seniors in February and March—vacancy rates for standard spaces in seniors’ residences in B.C.rose for the first time in six years, hitting 4.2% in 2018 from 3%.Non-standard spaces, however, had a vacancy rate that fell 2.1% in 2018 to 1.3% this year.The largest decline came in Vancouver and the Central Coast region/ As one would imagine, rents $1,900 and below were in high demand and had the lowest vacancy rate of all rent ranges.Last year, the lowest vacancy rates were in rental accommodations priced between $2,900 and $4,900 a month.The average rent for standard space grew 5.4% to reach $3,275 this year, but the highest rent increase was a whopping 22% for bachelor and studio units. As in B.C., Quebec saw some breathing room with its rental spaces for sneiors.The vacancy rate for standard spaces in the province was 7.2%, which increased from 6.9% in 2018.The average rent for the spaces in 2019 was $1,788, and the capture rate was 18.4%d—vastly different than the 6.1% rate for the remaining
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 02, 2019 234 0 0 0 0 0
Existing policies and market conditions in BC prevent many buyers and sellers from fully participating in the market, according to Vancouver’s Central 1 Credit Union. The firm found that home sales in the province decreased by a massive 40% since the end of 2018.Currently, hopeful buyers are hesitating due to high price levels, while potential sellers would rather wait on the sidelines for a market recovery. Stricter federal and provincial regulations were cited to be major factors slowing down activity, the analysis noted.Among the most damaging of these policies were B-20 (which weakened purchasing power by 20%) and BC’s 20% foreign buyer tax (which forced capital holders to invest elsewhere). Even BC’s likely robust economic performance this year will not be able to offset these weaknesses, Central 1 deputy chief economist Bryan Yu said.Residential sales are estimated to further decrease by 11% in 2019. And the actual situation this year might even be worse:Yu cautioned that the analysis did not take into account the possible effects of money laundering. “These were model-driven numbers based on international numbers and I would say very little localized information,” Yu told The Canadian Press.“It seems to me
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 02, 2019 219 0 0 0 0 0
Investing in healthcare sector assets might be a potent, if unconventional, buffer against the worst effects of housing market weakness, according to The Motley Fool columnist Andrew Button. This is largely because of the industry’s evergreen nature, Button noted. “The healthcare sector is noted for its stability.In Canada, it is largely government funded, and what isn’t funded is usually covered by private insurance, which makes the healthcare industry very reliable in terms of income and, by extension, demand for office/clinic space,” the markets analyst said. Such alternative investment avenues have become more important in the wake of news pointing to a 17-year low in Canadian mortgage growth rates, Button added. A leading player in this investment space is Northwest Healthcare Properties REIT, which has a portfolio of 149 income-producing healthcare facilities.These include hospitals, offices, and medical clinics. “This highly specialized niche provides a kind of moat, as the company is one of the few in Canada that focuses specifically on healthcare,” Button explained.“The company’s high geographic diversification also provides a buffer against losses in any one market:it owns properties in Canada, Brazil, Germany, Australia and New Zealand.” Moreover, the avenue
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 30, 2019 336 0 0 0 0 0
Brick and mortar shopfronts have been e-commerce’s greatest casualty—there have already been more store closures in 2019 than all of 2018 combined—but an innovative technology company is reversing the trend and, in the process, taking North America by storm. FrontRunner Technologies installs content reels on vacant commercial unit windows as a way to generate interest in the property, but also to help landlords and brokerages determine who their target tenant should be.Nathan Elliot, founder of FrontRunner, says that by installing its WindowFront Matrix and sharing 5% of the advertising revenue with landlords or brokerages, his company in effect partners with them. “We arm brokers and landlords with new real time data where they can log into the storefront dashboard and they can see, in locomotion, outside of said space,” said Elliot.“We use Impression Data:About 85% of people walk around us with their WiFi enabled on their cell phones and we can use that to determine the number of people walking by that installation or empty space.Secondly, we use Computer Vision, which is a pinhole camera that remains anonymous and that allows us to do a demographic profile, traffic counts and an array of different variables that arm the real estate group with data they didn’t previously have.We augment our value proposition through the analytics and the creation
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 30, 2019 313 0 0 0 0 0
Minto Apartment REIT now offers more inroads in Montreal’s thriving multi-residential market. Earlier this month, the company announced its acquisition of a 50% interest in Rockhill, a six-building multi-residential property at 4850-4874 Côte-des-Neiges Road in Montreal. “It is with great enthusiasm and pride that we are entering the strong Montreal rental market for the first time with the purchase of Rockhill,” Minto Apartment REIT CEO Michael Waters said. Built in 1967-68, the 7.6-acre property brings with it 1,004 housing units.It is located near the University of Montreal and Mount Royal Park.It is also situated closely to several hospitals and the Côte-des-Neiges Metro Station. “Rockhill has the right foundation to become an even better place to live:an iconic property and a great community that we want to build on.” Altus Group stated recently that foreign investment in Montreal real estate went up by a massive 183% year-over-year in 2018. The market owes much of the acceleration to foreigner-targeted policies in other large markets like Toronto and Vancouver. “It’s not a coincidence that after the foreign investor taxes in Toronto and Vancouver, interest moved to the Montreal market,” Vincent Shirley of the Altus Group explained. “Foreign investors originally looked at the Vancouver and Toronto markets but they also
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 30, 2019 283 0 0 0 0 0
Real estate development and investment firm Brivia Group has revealed its initial concepts of a residential tower slated to become Montreal’s tallest. Designed for 61 storeys and 220 metres above sea level, the major project will be situated at the area surrounding Phillips Square in the downtown core.The tower will be comprised of over 500 units. Among its notable features is its nine-cornered architectural geometry, which will allow the tower to offer a significant number of highly-desired corner units. The announcement earlier this week marked the project’s first phase, which comes with an investment of about $400 million.Overall, the project is estimated to cost upwards of $1 billion. “Downtown Montreal is being transformed, with a focus on residential real estate development, and Brivia Group is pleased to be a part of this process.More than ever, Montrealers are keen to live in this district,” Brivia founder, president, and CEO Kheng Ly said. “We are targeting local, business and foreign buyers.We believe we can offer them a product that meets their expectations and specific needs.It’s a unique project, and we’ll go all out to ensure it is our best achievement so far.” The massive project is expected to be the shot in the arm that the downtown Montreal housing market needs, especially since Airbnb-style
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