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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 28, 2019 294 0 0 0 0 0
Salaries in Ottawa are turning the city into a veritably profitable real estate market for all involved. “We’re seeing a lot of the tech companies hiring and, for the most part, their employees are above-average income earners, or they’re people with average incomes but who also have a lot of stock benefits, which means they have money for larger down payments,” said DLC Smart Debt mortgage broker Chris Allard.“There are so many tech companies in Ottawa right now and they’re all making it so that people have lager down payments because of how they’re structured at work.” Tech isn’t the only game in town, as most Canadians know.The federal government is also one of Ottawa’s biggest employers and, unsurprisingly, the salaries are competitive.Allard noted that the average salary in Ottawa is in the neighbourhood of $70,000. “The government seems to be offering more permanent jobs than contract work like they had been, and that’s a huge plus if you’re trying to put a down payment down on a home,” he said.“Most government employees are in the range of $50,000 to $120,000—which is a big range—but most of them are above-average income earners.If you’re a government worker, you qualify for more than the average person in Ottawa.” Well-paying jobs aren’t the only things
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 28, 2019 336 0 0 0 0 0
A new Royal LePage study has found that travel distance is not a factor for many Canadians, considering the growing popularity of exurbs. These secondary municipalities, some of which are located as far as dozens and even hundreds of kilometres from the large urban markets, have become more viable purchase destinations amid high housing costs. “If they choose community and lifestyle over ‘urban excitement’ and access to certain jobs, many of them are skipping the suburbs right now and going farther afield,” Royal LePage CEO Phil Soper told The Canadian Press. A census analysis by Queens University supported these observations:As of 2016, fully three-quarters of Canadians are living in suburban communities.From 2006 to that year, exurbs saw 20% population growth, while auto-dependent suburbs had 17%. A vast majority (eight out of the top 10) of the fastest appreciating exurbs nationwide are in Ontario, specifically in areas surrounding Windsor, London, Kingston, Hamilton, Guelph, and the Tri-Cities, among others. In BC, secondary municipalities in the Hope Valley and Kamloops regions enjoyed greater traffic. A 2018 analysis by the Angus Reid Institute found that elevated prices weigh the most upon the minds of young and first-time buyers.A large proportion confessed that their experiences in the hottest housing markets were “uncomfortable” to “miserable”. “It
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 26, 2019 351 0 0 0 0 0
The impact of the Fair Housing Plan, introduced by the Ontario government in 2017, has been felt hardest in the areas north of Toronto. According to a Zoocasa study, York Region saw the most pronounced drop in prices.The Fair Housing Plan immediately cooled the housing market, albeit for psychological reasons, but that was enough to affect pricing in what’s been one of the more expensive parts of the Greater Toronto Area. Between April 2017 and 2019, sale prices in Newmarket—where homes often sold for over $1 million—fell 30%, hitting $725,710, as a result of sales volume falling 31%.In the time since the Fair Housing Plan was introduced in April 2017, the market has continued contracting and listings also declined 42%, putting the sales-to-new-listings ratio at 45%, representing a balanced market and considerable improvement over the 37% in 2017. Aurora followed suit, as prices decreased 30% but still averaged $888,387.Sales also disappeared by 35%, as did new listings by 34%, which put the sales-to-new-listings ratio at 42%.In Richmond Hill, prices fell 27%, however, at $1,016,216 home equity is still abundant.The 25% sales drop outpaced the 21% decline in new listings, suggesting that, at a 38% sales-to-new-listings ratio, it’s a buyers’ market. It wasn’t all bad news, though.Southern Ontario bore witness to sale price increases, although
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 26, 2019 315 0 0 0 0 0
Investors are gravitating towards large mixed-use developments situated near rapid transit lines in Metro Vancouver, according to a new analysis by Avison Young. The trend is being spurred on by the city’s political borders and geographic limitations – factors that have led to a consistently severe shortage of developable land. “As land prices have risen and the availability of development sites declined, investor interest has grown exponentially in the redevelopment of typical low-rise shopping centres and the adjacent surface parking lots that form a substantial part of most traditional car-centred regional malls,” Avison Young stated. The latest mixed-use complexes – which the commercial real estate services firm classified as “urban enclaves” – offer extensive opportunities across multiple asset classes along with various community amenities, all readily accessible via existing public transport routes. “Metro Vancouver and its constituent municipalities have encouraged developers to build along transit corridors and allowed higher densities at development sites that had long been established as commercial retail nodes such as regional malls,” Avison Young explained. Authorities on the municipal and provincial levels should take care not to scare off investors, however.A mid-April analysis by CBRE Ltd.noted that Vancouver’s successive introduction of several foreigner-aimed regulations is pushing capital away towards Toronto. The speculation tax and the Landowner Transparency Act, in particular,
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 26, 2019 271 0 0 0 0 0
Amid an overall trend of moderation nationwide, condo sales continue to exhibit significant regional variances, according to the latest Altus Group Housing Report. Throughout Canada, a little over 48,500 condo apartment sales took place last year, with the volume significantly falling by 21% from the nearly 62,000 deals completed in 2017. Much of this slowdown stemmed from significant weakening in the GTA market, which suffered a 38% year-over-year decline to approximately 21,400 transactions. Despite this flaw, GTA still accounted for almost half of all sales in the areas covered by Altus.These locales include other major Ontario markets in the Greater Golden Horseshoe region. In Vancouver, declines in condo market sales performance have eased, from a massive 31% year-over-year drop in 2017 to just a 7% shrinkage in 2018. According to the Real Estate Board of Greater Vancouver, overall residential sales fell by 29.1% year-over-year in April, down to 1,829 homes sold. Inventory saw the addition of 5,742 new for-sale listings last month, up by 16% from the 4,949 new listings in March.Overall supply in Greater Vancouver stood at 14,357 homes for sale, around 46% larger than the availability on April 2018. Meanwhile, Montreal enjoyed its third straight year of growth in condo deals, having seen a 19% annual
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 23, 2019 277 0 0 0 0 0
Wood frame buildings are not only bringing dynamism to Ontario’s landscape, they’re being touted as a way to develop “missing middle” housing in Toronto. “Wood frame is a gentle-density option,” said Joe Vaccaro, CEO of the Ontario’s Home Builders’ Association.“It’s that missing middle piece that you can bring into the right location to help people find a home where they can work, live and play.In our mind, it’s a great option as a new supply chain.There are also lots of transit areas with constraints on putting up 15-storey buildings, so this product is somewhere in between and it works for everyone.” The building code was amended a few years ago to allow wood frame buildings as high as six storeys, and they fit the bill for so-called missing middle housing—mid-density abodes that fall between the high-rises that keep dotting the Toronto skyline and ground-related housing. However, the reason Torontonians aren’t likely to see too many of these developments is because of the city’s exorbitant land costs.While wood frame buildings are produced in factories, then assembled on site in the half the time it takes to construct a concrete building—thus saving money—developers seldom regard mid-rise buildings as a way to optimize their investments. But there are some sites in Toronto, ones that require infill, upon
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 23, 2019 306 0 0 0 0 0
The overall value of real estate in Metro Vancouver has seen a significant nosedive with the advent of extremely tight policies such as school and speculation taxes, according to a recent analysis by non-partisan group STEPUP Now. The study estimated that on average, each home in Vancouver suffered a loss of $153,873 in value.Said declines have led to as much as $90 billion in losses throughout the region. Paul Sullivan, senior partner with Burgess, Cawley, Sullivan and Associates Ltd., stated that of the Metro area’s markets, the worst hit by this trend were West Vancouver (with 14.68% loss in value) and Vancouver (13%). Sullivan, who collated the data for STEPUP Now, said that these trends should be a wake-up call for provincial authorities to begin reconsidering the misguided legislation governing real estate in B.C. “While the government’s goal may indeed be to bottom out the housing market in an attempt to somehow address the complex issue of affordability, they are simply removing billions of dollars from the B.C.economy, to everyone’s detriment,” he told CTV News Vancouver. Feeble activity continued to characterize the regional market, according to the Real Estate Board of Greater Vancouver. Overall sales fell by 29.1% annually in April, down to 1,829 transactions.This is despite a gain
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 23, 2019 306 0 0 0 0 0
Saskatoon’s downtown office vacancy rate might see a sustained upward trend over the next few years, despite the construction of a high-end riverside tower designed to attract choice clientele, according to ICR Commercial. A major factor working in the market is the fact that there’s just not enough new blood. “The demand for new Class A inventory is coming from users already present,” ICR Commercial managing partner Barry Stuart explained, as quoted by CBC News.“There are not enough new tenants entering the market and the flight to quality is projected to continue.” In its latest analysis, ICR said that this would mark the latest in the path set almost two years ago, when the area’s vacancy rate stood at 15.6%.Currently, it sits at 16.7%, translating to more than 400,000 square feet of unoccupied downtown office space. However, the current rate has yet to include the 120,000 sq.ft.in the River Landing North Tower, which is still in the earliest stages of construction. “Once that additional vacancy is accounted for, we will be reporting core area vacancy in excess of 20%,” Stuart noted. Excess supply is a similar problem that Toronto and Vancouver will likely encounter in the near future, according to CoStar Group Inc. Office vacancy levels
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 21, 2019 226 0 0 0 0 0
The 10-year fixed mortgage offered by HSBC—which goes as low as 2.99%—could prove to be just what investors need in markets, like Toronto, that provide diminishing returns. “As an investor, I would strongly consider this,” said Tom Storey, who’s also a Royal LePage Signature Realty team leader.“The penalties aren’t so bad, either.If this catches on, every lender will have a 10-year fixed mortgage product because I believe this is the lowest one ever.” It is, indeed, the lowest rate on a decade-long fixed rate mortgage that a lender has ever offered in Canada, and the penalty for breaking the it in the first half is whichever of 90 days interest or the rate differential is greater.If it is broken during the latter half, a prepayment charge of 90 days interest will be attached. Barry Gollom, HSBC’s senior vice president of products and propositions with retail banking and wealth management, is confident offering this product to a real estate investor because the yield curve between five- and 10-year fixed mortgage money is short, but he does note that everyone has different appetites for risk. “It depends on upon the particular investor’s situation and what they’re trying to achieve,” he said.“The same rate for a long period of time makes great sense for them, but
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 21, 2019 242 0 0 0 0 0
The 10-year fixed mortgage offered by HSBC—which goes as low as 2.94%—could prove to be just what investors need in markets, like Toronto, that provide diminishing returns. “As an investor, I would strongly consider this,” said Tom Storey, who’s also a Royal LePage Signature Realty team leader.“The penalties aren’t so bad, either.If this catches on, every lender will have a 10-year fixed mortgage product because I believe this is the lowest one ever.” It is, indeed, the lowest rate on a decade-long fixed rate mortgage that a lender has ever offered in Canada, and the penalty for breaking the it in the first half is whichever of 90 days interest or the rate differential is greater.If it is broken during the latter half, a prepayment charge of 90 days interest will be attached. Barry Gollom, HSBC’s senior vice president of products and propositions with retail banking and wealth management, is confident offering this product to a real estate investor because the yield curve between five- and 10-year fixed mortgage money is short, but he does note that everyone has different appetites for risk. “It depends on upon the particular investor’s situation and what they’re trying to achieve,” he said.“The same rate for a long period of time makes great sense for them, but
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 21, 2019 240 0 0 0 0 0
Recent sales activity might indicate that the national market has already acclimated to the largest impacts of B-20, according to Bank of Montreal chief economist Doug Porter. “Canadian housing activity appears to be broadly stabilizing, as there are signs that the market has largely digested the many policy changes,” Porter wrote in a report, as quoted by The Canadian Press. “And while the regional divide is wide, fundamentals look to be a bit more supportive in the year ahead, with the policy tightening likely having run its course, job growth surprisingly solid and borrowing costs ebbing.” This is despite the policy regime’s dampening effect, which was most visible in the country’s most in-demand markets.Earlier this month, Toronto-Dominion economists estimated that B-20 led to around 40,000 fewer transactions nationwide (on a year-over-year basis) during Q4 2018. The BMO analysis came in the wake of the latest numbers from the Canadian Real Estate Association, which indicated that overall sales activity increased by 3.6% month-over-month in April. Canada’s residential sales volume also enjoyed its first annual increase (at 4.2%) since December 2017.During the same time last year, activity declined to a seven-year low for the month. The CREA report added that Toronto and Montreal numbers compensated for somewhat lacklustre activity in B.C.last month.
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 21, 2019 230 0 0 0 0 0
Shopify Inc.has announced that it will be opening its latest 3.2-hectare mixed-use development in Toronto’s downtown area by 2022. The expansion will come together with the e-commerce firm’s upsizing of its workforce in the city, doubling it to 1,500 within three years. “Shopify has been present in Toronto for seven years and what we’ve found is this is a great place to build a really wonderful tech company,” Shopify director of user experience Amy Thibodeau told BNN Bloomberg. Thibodeau added that Shopify is not backing out from the heated competition among companies in Toronto, especially tech firms vying for the attention of skilled industry professionals. “We’re not a satellite office ...and that makes Shopify unique and compelling in this city,” she said.“And I think more competition is good for Toronto.” The development will be situated in the King and Portland Centre.At present, Shopify has around 700 employees spread across two locations and seven offices in Toronto, Ottawa, Montreal, and Waterloo.The company has a total of around 4,000 employees worldwide. Warehouses, retail locations, and other similar commercial installations remain the investment assets of choice in Toronto’s commercial property market, according to a Q1 2019 analysis by Avison Young. Industrial property saw $817 million in sales during the first quarter alone, impelled by
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 16, 2019 282 0 0 0 0 0
The commercial real estate sector sometimes gets short-shrifted when it comes to accessing data—unlike the residential sector which enjoys copious quantities from all corners—but one technology and analytics company is changing that. CoStar Group, founded in the United States over three decades ago, has grown into a multinational company with several Canadian branches, including in Toronto, Vancouver, Calgary, Edmonton, Ottawa and, soon, Montreal. “You could look at it from two different sides,” said Roelof Van Djk, CoStar’s market economist for Canada.“We’re a data analytics company, and with our data we’re trying to be the go-to source for data in the commercial real estate industry.When you look at where the industry has gotten data in the past, it’s usually been one source, but we want to answer all the different questions our pertinent clients have—whether they’re brokerages, landlords, investors, even tenants and vendors.It’s not just data on the ground floor but the analytics behind that, and that’s what my team brings to the table:analytics forecasting.” Co-Star entered the Canadian market via Toronto in 2014, but not without years of due diligence so that it could hit the ground running with myriad offerings for its clients, which also include some of the REITs in the world. “First and foremost, you have to look at where CoStar
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 16, 2019 248 0 0 0 0 0
As the bank of mom and dad’s popularity shows nary a sign of abating, there are crucial things for parents helping their children become homeowners to consider. Chief among them, says Jason Davenport, branch manager of Meridian Credit Union Greektown location in Toronto, is the legal obligation—specifically whether or not parents are gifting or loaning their child money. “If it’s a gift, most financial institutions require a gift letter,” he said.“That’s important if things break down before the house gets sold.If it’s a loan, the money can be secured against the house often in second position, if mom and dad are worried about that. “If it’s a matrimonial home and the excited parents give them a gift, but the marriage breaks down, then the gift becomes part of the home’s equity and there’s no way to recover it.You’re going to lose half of those funds to the other party.But if you want to guard against that, you could create a loan and put a lean against the house.If the marriage breaks down and the house is sold, after the bank takes its share from the remaining equity, you can recoup those funds.But, without anything like that, for all intents and purposes, that money is gone for the parents.” Mom and dad also
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 16, 2019 248 0 0 0 0 0
The rate of rent growth in Toronto and Vancouver offices will noticeably slow down over the next few years, continuing the easing already visible this quarter, according to an analysis by CoStar Group Inc. This deceleration will become more evident with the influx of new offices to be completed in the near future.Within five years, work on as many as 25 new office or mixed-use buildings is projected to be finished in downtown Toronto, along with 15 new towers in Vancouver. In downtown Toronto, the 6% annual rent growth during Q2 2019 was noticeably lower than the peak of approximately 8% seen at the end of 2017. In downtown Vancouver, the similarly 6% rent growth during this quarter was nearly half the 11% peak in Q3 2018.CoStar further predicted that this would improve to 1.5% by 2022. “Vacancies are incredibly low in those two markets, rental rate growth has peaked, we’re seeing it come down in the data points were collecting,” CoStar director of market analytics (Canada) Roelof van Dijk told Bloomberg. “Our forecasts show it’ll continue to come down as the new supply comes online in both of those markets, specifically in the downtown.” In four years, Toronto’s vacancy level is expected to go up to around 6%, from
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