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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 26, 2019 114 0 0 0 0 0
In Toronto, the neighbourhoods with markedly lower condo inventories are seeing faster growth in average unit price. Data from the Toronto Real Estate Board showed that the downtown core saw its average unit cost rise by 55% from July 2014 up to July 2019, ending up at $692,592 last month.Meanwhile, the City of Toronto’s overall average condo price increased by 66%, up to $627,927. A new analysis by real estate information portal Zoocasa stated that in those five years, condo price growth in the market was particularly observed in the city’s east and far northwest extremities. “While provincial and federal policies introduced to cool the market have had a pulldown effect on sales and price growth between late 2017 – mid 2018 … over a five-year time period, dramatic price increases have persisted in pockets across the city,” Zoocasa explained. The greatest growth was apparent in locales where condos sold for below the city’s average. “These neighbourhoods also have an overall lower inventory with sales that are significantly lower than in more central neighbourhoods, which can contribute to heating prices.” West Hill, Centennial Scarborough saw the most dramatic increase, with a massive
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 26, 2019 146 0 0 0 0 0
Greater Vancouver was a major contributor to the slowdown of Canadian housing price growth, Statistics Canada data indicated. The most recent Teranet – National Bank of Canada House Price Index (TNB HPI) showed that the year-over-year growth plummeted to its lowest level in a decade last month. In its analysis of the data, Better Dwelling deemed Greater Vancouver as having posted the weakest housing price performance across Canada.In July, the market saw a 6.23% annual price drop, along with a 1.04% month-over-month loss. “Since July 2018 was the peak, it’s also how much prices have fallen from peak.The market is now at the same price level experienced in September 2017.” Last month, the national Index was at 0.44% annual growth, along with a 0.72% uptick from June 2019.The monthly growth is also markedly lower than the 21-year average of 1%. “The 12 month growth has been trending lower, and is now at the lowest it has been since 2009,” Better Dwelling explained.“The growth is below normal, and due entirely to seasonal pressure.” The Greater Toronto Area fared much better, fortunately, with home prices increasing by 3.24% annually and
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 23, 2019 102 0 0 0 0 0
Toronto developers have long favoured building condominiums at the expense of purpose-built rental apartments, but that is beginning to change. Chronically low vacancy rates in Metro Toronto have caused rents to spike in a mere matter of years, thereby providing developers the economic panacea that has eluded the purpose-built rental market for decades. “More groups are looking at rentals simply because rents keep rising, and if you look back five or 10 years, condos were more lucrative and that’s because rents weren’t at a level that allowed rental apartments to compete with them,” said Keith Reading, director of research at Morguard.“If you look at Toronto especially, but most of the country’s major cities, rents have gotten to levels whereby rental apartments have become better propositions financially, and especially over longer terms, because the money coming in doesn’t stop, whereas with condos it does stop.” Condominiums still make sense for developers because of the expeditious exits, but tempests have emerged in the retail sector and REITs—which typically don’t have development experience—are starting to diversify their portfolios. “If you’re looking at the longer term and you’re a REIT, like RioCan, there’s a lot of change and
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 23, 2019 104 0 0 0 0 0
As of the end of June, more than 21 million square feet of office space is being built throughout Canada, according to Avison Young’s Mid-Year 2019 Global Office Market Report. This volume was fully 40% larger year-over-year, and came amid the positive absorption of 9 million square feet (msf) in the 12 months ending June 30, 2019. The rate far outpaced the nearly 6 msf absorption during the prior 12-month period (ending June 2018), and contributed to overall office vacancy settling at 10.3%. Toronto, Montreal, and Vancouver posted the strongest performances.Over the last few years, all three cities have seen the steady entry of tech sector giants. “The labour market remains the major catalyst for Canada’s economic expansion and thriving commercial real estate sector,” Avison Young principal and president (Canada) Mark Fieder explained. “Urban intensification boosted by immigration, a growing knowledge-based economy and the rising co-working industry have powered Canada’s office market,” he added.“The growing technology sector is taking a bigger slice of the leasing pie – especially in Vancouver, Toronto, Montreal and Ottawa – and, in many cases, driving innovation within traditional businesses.” In particular, the co-working set-up is forcing
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 23, 2019 104 0 0 0 0 0
Toronto developers have long favoured building condominiums at the expense of purpose-built rental apartments, but that is beginning to change. Chronically low vacancy rates in Metro Toronto have caused rents to spike in a mere matter of years, thereby providing developers the economic panacea that has eluded the purpose-built rental market for decades. “More groups are looking at rentals simply because rents keep rising, and if you look back five or 10 years, condos were more lucrative and that’s because rents weren’t at a level that allowed rental apartments to compete with them,” said Keith Reading, director of research at Morguard.“If you look at Toronto especially, but most of the country’s major cities, rents have gotten to levels whereby rental apartments have become better propositions financially, and especially over longer terms, because the money coming in doesn’t stop, whereas with condos it does stop.” Condominiums still make sense for developers because of the expeditious exits, but tempests have emerged in the retail sector and REITs—which typically don’t have development experience—are starting to diversify their portfolios. “If you’re looking at the longer term and you’re a REIT, like RioCan, there’s a lot of change and
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 21, 2019 110 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 21, 2019 127 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 114 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 19, 2019 160 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 19, 2019 106 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 119 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 16, 2019 106 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 16, 2019 106 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 116 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 14, 2019 107 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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