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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 27, 2018 31   0   0   0   0   0
General Motors’ announcement that it’s slashing as many as 2,500 jobs in Oshawa will likely have a temporal chilling effect on the local market, and that presents an opportunity for seasoned investors. “I know of two deals that were conditional where people pulled out as a result of this, and I believe that for the next three to six months there’s going to be a lot of investors sitting on sidelines waiting to see what’s going to happen in marketplace,” said Michael Dominguez, a sales representative with REMAX Jazz in Oshawa, and owner of company name is Doors to Wealth Group. “My advice is to take advantage of this opportunity because many novice investors will sit and watch what happens.” News of the job cuts broke Sunday evening, and as of Monday, Dominguez had already fielded a number of phone calls from worried investor clients, whom he reassured. “The sly is not falling, doom is not setting in,” he said.“Stay calm is the message I’m delivering.” During its peak, GM employed over 20,000 people in the Oshawa area and today there aren’t even 3,000.Moreover, Oshawa has changed drastically since the plant’s heyday. “There have been changes over the last 10 to 15 years where plants have shut down
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 27, 2018 30   0   0   0   0   0
Statistics Canada reported that the national retail sector beat earlier predictions of flat growth with a 0.2% increase in activity last September, despite some evidence of sluggishness in the third quarter. Food and beverage retailers stood at the vanguard with a 0.9% increase, along with car and clothing outlets. During the same month, retail sales also increased in 6 of 11 subsectors tracked by StatsCan.These accounted for 75% of September’s retail trade, the agency told Bloomberg. These numbers dovetailed with a new Morguard Corporation report, which found that the powerhouse retail segment will have a vigorous 2019, defying risks such as mixed leasing performance. Read more:Record investment in this sector will continue in 2019[1] “While retail sales growth continues to moderate, properties with development or repositioning potential are expected to generate strong interest among the investment community looking ahead to 2019,” Morguard explained. “Sustained economic expansion over the next few years bodes well for the Canadian commercial real estate sector as a service provider to the economy.Canadian commercial property sales activity will remain robust over the near term, against a backdrop of positive overall sector performance.” Together, all of the gains along with the good prospects helped offset the 1.1% decline in gas station sales in September,
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 27, 2018 27   0   0   0   0   0
Data from Urbanation indicated that Toronto condo rent rates increased by 7.6% on an annual basis to reach an average of $2,385 in Q3 2018, and by 17% for newly available purpose-built units. Long considered a haven for the city’s affordability seekers, the rental market is becoming less friendly to all but the wealthiest families. “We’ve reached a point now where given the amount of people, industries we’re attracting, we are already becoming terribly unaffordable for everyone,” University of Toronto professor Richard Florida told Bloomberg.“We’re at a crisis and we don’t even realize it:Our transit, traffic problem and housing problem are urgent matters.” “Everyone’s getting priced out,” he added.“My students at the Rotman School of Management in the University of Toronto, who are going to be some of the most successful students in Canadian business, are now saying it’s doubtful they could ever afford a single-family home.” Read more:Renters deserve adequate protection from housing risk[1] A scarce supply of rental units is not helping matters, with Toronto’s apartment vacancy rate currently around 0.5%. “Homelessness is growing, couch-surfing is growing and this will have a lot of pressure on families and on the city itself,” according to Alejandra Ruiz Vargas of the low-and-moderate-income advocacy group Association of Community Organizations for
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 25, 2018 28   0   0   0   0   0
All too often, amenity spaces are banal.However, a New York-based company is looking to change that using the Greater Toronto and Hamilton Area as its Canadian springboard. hOM is a real estate technology vendor that teams up with landlords in both the residential and commercial sectors to develop holistic amenities that emphasize emotional and physical health.Established four years ago in New York, where it grew to 35 employees and manages 90 properties with 45 landlords, hOM believes Toronto is amenable to its concepts. “We work with property managers to provide a tenant experience that comes in the form of group fitness and wellness classes and then our community lifestyle events,” said Lilli Markle, director of business development at hOM.“We consider ourselves managers in that we have tech platforms that support the communication of our programming and data collection that positions the value to the landlord as an actual ROI.We’re able to translate the data from our tech platform and survey and interface directly with the users, then present the data to the landlords.It allows landlords to retain tenants, which over time saves operation costs and leasing costs” hOM has only officially partnered with Cadillac Fairview in Toronto, although it’s in discussions with other companies.In Toronto’s TD Centre, hOM is going to transform an underused section into
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 25, 2018 29   0   0   0   0   0
With ever-growing prices pushing more and more Canadians out of the single-family home segment, renting has become an increasingly popular choice in the hottest markets, a development that the government should begin responding to in earnest. Vancouver-based advocacy group Generation Squeeze is calling for regulatory changes that would grant tenants as much long-term security as home owners. Among the most important issues is supply, thus the need to develop more purpose-built, affordable rental housing. In its analysis of September data from Statistics Canada, real estate information portal Point2 Homes reported that the home ownership ratio nationwide fell for the first time in nearly 50 years, shrinking by 1.2% between 2011 and 2016 to reach 67.8%. Read more:Rental demand to boost further apartment construction – CMHC[1] A boosted rental inventory would give more Canadians the opportunity to enjoy the unique benefits of renting, according to Housing Matters founder Chris Spoke. “When you think about things like labour mobility, being flexible enough to move to where the opportunity is, you’re less tied down.That’s something that you see as we extoll the virtues and benefits of home ownership — you do see less labour mobility and less flexibility on these fronts than societies that have higher rental rates,” he told the
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 25, 2018 28   0   0   0   0   0
Devimco Immobilier, in cooperation with the Fonds immobilier de solidarité FTQ and Fiera Properties, has announced the development of the MAESTRIA mixed-use project, which will be the largest of its kind so far in Montreal’s Quartier des spectacles. Construction of the 2 towers (51 and 53 storeys tall) will commence by the end of next year.The entire complex will offer 1,000 condo units and 500 rental spaces. Marketing of units will start on February 2019, with the spaces offered ranging from 300 up to 2,500 square feet.MAESTRIA will also have 512 interior parking spaces, along with a diverse selection of high-class amenities. Read more:Montreal to grow increasingly unfriendly to first-time buyers[1] The $700-million development will be accessible to Jeanne-Mance, De Bleury, and Sainte-Catherine streets. “We are proud to be building a distinctive, avant-garde property that will help enhance the urban fabric of this booming arts and culture district,” Devimco Immobilier president Serge Goulet said. “With this landmark project, we intend to maintain the Devimco tradition of creating a living environment with mixed uses that will serve project residents as well as visitors to this highly popular part of Montreal.” Are you looking to invest in property?If you like, we can get one of our mortgage experts to
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 22, 2018 32   0   0   0   0   0
Investment in Canada’s commercial real estate sector has been strong all year and—especially in the cases of Toronto and Vancouver—should continue well through 2019. According to a report by Morguard, titled The 2019 Canadian Economic Outlook and Market Fundamental Report, 2018 is shaping up to be a record year for investment in the sector. “It’s a real struggle both in Vancouver and Toronto to find office space,” said Keith Reading, Morguard’s director of research and the author of the report.“Choices are very limited for 10,000-plus square feet and rents are at peak for this cycle.There’s no shortage of capital, which is just a function of supply, and 2018 being a record year for investment will continue into 2019.” Toronto and Vancouver have buoyant economies and the technology sector in both cities is firmly rooted.According to CBRE, Toronto ranks fourth in North America for growth and employment in the tech sector. While Vancouver is experiencing growth in that sector too, the exorbitant cost of living coupled with parsimonious salaries could pose a problem. “Vancouver has always had a unique situation in that the cost of living of living here is extremely high, higher than anywhere else in Canada,” said Rene Palsenbarg, Marcus &Millichap’s regional manager and managing broker.“When you look at salaries in
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 22, 2018 32   0   0   0   0   0
Steady price growth along with the possibility of further rate hikes will affect hopeful home buyers in Montreal much more acutely, according to market observers. In a recent analysis, Desjardins senior economist Hélène Bégin reported that the Bank of Canada might hike its benchmark rates two more times next year, leading to higher mortgage rates that would definitely represent a considerable chunk of buyers’ funds. While healthy in terms of magnetizing better investment, the trend will put first-time buyers at a severe disadvantage, according to Quebec Federation of Real Estate Boards manager of market analysis Paul Cardinal. “It’s going to limit the amount they can borrow, so it’s going to limit the increase in prices, they will have to make a compromise, sometimes it means a smaller dwelling, sometimes it means going further from downtown but I think they will still be on the market,” Cardinal told the Montreal Gazette. Read more:Montreal housing market continues hot streak to 2020[1] “All the areas of the Montreal metropolitan area will be hot and remain hot in 2019, including the island of Montreal, but there is a little more supply in the suburbs and we will see a lot of first-time buyers want to get into the market now because
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 22, 2018 29   0   0   0   0   0
In its announcement earlier this week, the CMHC introduced the latest project to benefit from its Rental Construction Financing initiative:Conrad by Cressey Development in Vancouver. The $40.2-million investment will ensure a prolonged haven of affordability for the city’s struggling middle-class families. “Over 60% of the units will have rents at or lower than 30% of median household income in the area and, under an agreement with the City of Vancouver, this affordability will be maintained for 60 years,” the Crown corporation stated. The rental housing project will consist of several buildings offering a total of 115 units. Read more:Vancouver’s tenants and their single-family home dreams[1] Earlier this month, Andy Yan of the City Program at Simon Fraser University said that while price declines in B.C.have become evident recently, a more tangible intervention from the provincial leadership’s part is still needed to ensure better affordability. This is especially important since the government has yet to truly act on earlier promises like a $7-billion, 10-year housing affordability strategy. “They are not actual shovels in the ground yet,” Yan told The Canadian Press “It will take a combination of supply and demand policies to really get us out of the housing crisis mess.” Are you looking to invest
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 20, 2018 33   0   0   0   0   0
Vancouver’s multifamily housing sector is experiencing a glut of inventory, but with low yields and high buy-ins, investors have taken a step back. A report from Marcus &Millichap showed the average cap rate compressed 40 basis points over the last year to 2-4%, but investors chasing yield turned to Coquitlam and Chilliwack where they enjoyed as much as 5%. While Vancouver yields could be described as in the doldrums, vacancy rates are persistently low. “In terms of multifamily income-producing properties, the Vancouver market has been one of the strongest in North America with vacancy rates hovering around, or below, 1%,” said Rene Palsenbarg, Marcus &Millichap’s regional manager and managing broker.“Because of that, the average rent per square foot is pretty significant.” Multifamily sales have hit a three-year low, but Palsbarg attributes that to an inventory surplus. “It’s more of a by-product of inventory because there’s a glut of product coming onto the market, so it’s just stabilizing itself,” he said. But the overall market in Vancouver has born witness to a significant downturn that began around July, which marked an 18-year low in sales.By last month, the year-over-year decline stood at about 35%. “That equates to a 27% decline on the 10-year average because we had a very robust 2016
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 20, 2018 35   0   0   0   0   0
While B.C.’s home prices have shown signs of going down in recent months, a market observer has argued that firmer action from the government is still needed to fully address the city’s affordability crunch. Andy Yan, the director of the City Program at Simon Fraser University, said that the leadership has yet to fulfill crucial announcements like its much-touted $7-billion housing affordability strategy, a project expected to take 10 years. “They are not actual shovels in the ground yet,” Yan told The Canadian Press “It will take a combination of supply and demand policies to really get us out of the housing crisis mess.” Such intervention is especially important now, as the aforementioned price declines – attributed by many to taxes aimed at foreign buyers and empty residences – are not apparent in the middle and lower price ranges. According to a recent analysis by Knight Frank LLP, Vancouver saw the largest drop in average sale prices in the luxury segment (11%) worldwide during Q3 2018. Read more:New tax may stifle investment in B.C., fears industry[1] Data from the Real Estate Board of Greater Vancouver showed that the benchmark price of a non-luxury home in the region was at $1.062 million in October, just a tiny bit
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 20, 2018 32   0   0   0   0   0
The logistics sector’s specific needs will considerably impact the valuation of commercial and industrial land in Toronto, according to Bill Argeropoulos of Avison Young. “In the past, industrial space was predominantly used for manufacturing activities, and many buildings were serviced by direct rail-spur connections,” Argeropoulos noted.“Today, logistics, distribution and warehousing are the main industrial-space uses;as a result, many of these rail spurs have been removed, giving way to greater use of container shipments via intermodal facilities.” Data released by Morguard Corporation in late October indicated that this versatility, along with strong leasing volume and economic stability, has granted the Canadian industrial real estate segment a “very positive near-term outlook.” Industrial investment across the country reached a record-high $6.1 billion as of Q2 2018, Morguard reported. “With quality space at a premium across much of the country and a solid fundamental outlook for the sector, we expect to continue seeing strong activity to finish the year,” Morguard’s Keith Reading said. Read more:This industry hungers for Toronto’s commercial spaces[1] Proximity to transport nodes will have an especially notable impact on the investment potential of a property, Argeropoulos explained. “As a result of the need for increased last-mile efficiencies, demand for industrial real estate more connected to the masses is outpacing supply, reducing
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 18, 2018 38   0   0   0   0   0
The government of Ontario is exempting new builds from rent control. In doing so, the Doug Ford-led Progressive Conservatives are partially rescinding one of the more controversial components of the Fair Housing Plan, introduced in 2017 by the governing Ontario Liberal Party.Existing tenancies are still subject to rent control. “Many people in Ontario face challenges in finding suitable, affordable rental accommodations, in part due to an extended period of under-building of rental units,” read an official release from the government.“Since 1992, rental unit construction has not matched household formation.Approximately 20 per cent of Ontario households live in purpose-built rental housing.In 2017, the level of new rental construction would accommodate only 10 per cent of new Ontario households.If construction of rental units had kept pace with underlying demand, construction would have started on an additional 6,100 units in 2017.” Additionally, as part of its Housing Supply Action Plan, the PC government is putting an end to the Development Charges Rebate Program, which subsidized units earmarked for affordable housing. While Ontario grapples with a 1.6% vacancy rate, the situation is even direr in Toronto where only 1% of total units aren’t occupied and the average rent on a one-bedroom condo is more than $2,000.Kathleen Wynne’s Liberal government imposed rent control on all units, capping annual increases at 2.5%.
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 18, 2018 40   0   0   0   0   0
The affordability crunch in Vancouver has pushed rental apartments and condo units to the fore as the budget choice for young families – but if it were up to the renters, they’d rather settle down on a single-family home elsewhere. Indeed, almost 30% of the respondents of a new study published by Altus Group last week admitted that if price was not an issue, they would choose to live in a single-family home in the suburbs instead of staying in a rental unit in the downtown area. The only thing still preventing 32% of Vancouver’s young tenants from moving is the fact that they are still saving for their down payments, the survey noted. Another 11% stated that they don’t feel that they will qualify for the tighter mortgage stress tests, while a similar proportion of young renters said that they are waiting for their opportunity until home prices go down. A similar analysis by Sotheby’s International Realty Canada found that 83% of young households nationwide would prefer to raise their families in detached homes over any other housing type, everything else (including prices) being equal. Read more:Downtown Vancouver has highest average price per square foot[1] “The popular perception is that people in modern families have typically
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing November 18, 2018 39   0   0   0   0   0
A month after the federal Cannabis Act came into effect, a significant number of Canadians still harbor negative views about the provision that allows home owners to cultivate up to 4 plants indoors, according to a recent analysis by real estate information portal Zoocasa. In the study, 57% of respondents believed that growing marijuana in a home would considerably devalue that property.Another 52% said that they would have definite second thoughts about buying a residence if the former owner grew the plant privately. “A lot of the negative sentiment in our findings is stemming from this uncertainty among homeowners,” Zoocasa managing editor Penelope Graham stated, as quoted by the Financial Post. Only 15% of those surveyed said that the factor does not affect their purchase decisions one way or the other, and that they are open to growing the plant themselves. Read more:Pot industry investors should take heed of this fact[1] Smoking cannabis is seen to have a more serious effect, with 64% of respondents saying that the consumption of pot inside a residence will severely impact a home’s market value. Another major factor would be the presence of a dispensary in the vicinity of a prospective home purchase.Around 48% of the Zoocasa survey’s participants admitted that
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