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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing December 18, 2018 127   0   0   0   0   0
Toronto landlords with vacant units could enjoy as much as an 11% hike in rent next year. That’s according to Rentals.ca’s National Rent Report, which only studied empty units and also forecasted that rents nationwide would increase 6% in 2019. Ben Myers, president of Bullpen Research &Consulting Inc., notes that the breakdown in Toronto is pretty evenly split between purpose-built rental apartments, which skew older, and newer condominium rental units.He also says that Toronto chronically under-delivers the number of units needed every year, and it’s contributing to rising rents. “There’s probably demand for about 25,000 new rental units a year, and we’re delivering somewhere in the neighbourhood of 2,000 new purpose-built rentals and 18,000 to 22,000 condo rentals,” he said, “which means we’re under-delivering by 3-5,000 units every year.” The preference remains for newer, lavish units, which typify condo rentals. “Renters like a higher level of finish and newer amenities, and some of the older buildings might be larger but they’re not providing the lifestyle some of these renters are looking for,” added Myers. The preponderant reason for the double-digit market rental hike in Toronto has to do with the economics of purchasing a condo unit in the city.In downtown Toronto, investors are buying in at between $1,000 and $1,200 per square
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing December 18, 2018 139   0   0   0   0   0
New data from the Toronto Real Estate Board showed that the market’s sales volume fell by 14.7% year-over-year in November, while new listings declined by 26.1% during the same period. Coupled with average sales price growth of 3.5% annually (up to $788,345), the trend points to a vicious cycle in the very near future, TREB president Garry Bhaura wrote in a thought piece for Toronto.com. Don’t forget your CREW subscription this holiday season. Get your CREW with code HOLIDAYS2018.[1] “These numbers reflect a tighter marketplace, which will translate into increasing competition between buyers and also likely provide the foundation for renewed price growth,” Bhaura warned. He added that among the major contributing factors to this possible crunch would be the stricter mortgage qualification rules introduced earlier this year, which are steadily becoming more of a burden than a boon to the market. “We’re seeing strong rates of price growth on homes with lower average price points, such as condos and semi-detached homes.This is largely due to the impact of the OSFI-mandated mortgage stress test and higher borrowing costs, which have impacted affordability and pushed many consumers to consider a lower-priced home.” Read more:After a relatively sedate 2018, Toronto is heating up again[2]
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing December 18, 2018 134   0   0   0   0   0
Amid widespread accusations of corruption, a significant proportion of Vancouver’s locals are not inclined to have faith in the housing market any time soon. According to new research by Transparency International Canada, nearly 2 out of 5 (37%) of Metro Vancouverites described the real estate market as “extremely corrupt”.For perspective, only 15% of Western Canadians outside Vancouver view the industry with such suspicion Subscribe to CREW for the best in real estate news and insight – whatever the season. Use code HOLIDAYS2018 to claim your free festive gift.[1] The most pressing issue driving the perception of mistrust is the proliferation of unscrupulous foreigners and criminal organizations using the city’s homes as conduits of illicit funds. Lax regulations, along with what has been described by observers as a servile accommodation of foreign investors (especially Chinese) at the expense of domestic buyers, have been a consistent sore point among market players. “Within Vancouver [specifically] you just have a particular relationship of criminal elements working that have found the luxury market [and] who have found market overseas to bring that money in,” Transparency International Canada executive director James Cohen told CBC. Read more:B.C.gov’t has yet to make good on affordability commitments[2] B.C.Attorney General David Eby acknowledged the gravity of
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing Updated December 17, 2018 144   0   0   0   0   0
Investment activity in Alberta looks promising, but a closer look at the numbers tells a different story. An analysis by Altus Group of activity through the third quarter of 2018 revealed the provincial capital bore witness to $3.1 billion of investment, which is a 38% increase over the same quarter in 2017 and a whopping 86% spike over the first three quarters of 2016. Breaking down those numbers, the industrial sector’s investment by the end of Q3 was $638.7 million, and retail investment reached $609.8m, however, the $180.9m invested in the third quarter alone decreased 3% from Q3 2017.The office market’s contributions to overall investment through the third quarter cannot be overstated:Of the $517.4m invested through the first three quarters, $456.4m was invested in the third quarter alone. Give the gift of real estate success this year – grab a seasonal CREW subscription. Use code HOLIDAYS2018 to claim your free festive gift.[1] The apartment sector in Edmonton increased 35% through Q3 2017 compared to the same period last year. In Calgary, there was $2.55b invested through Q3 2018, which is an 11% improvement over the same period in 2017, but the industrial sector was down 6% from last year, albeit possibly because of a supply dearth.Year-over-year, retail transactions have been up 26% through the first three quarters of 2018, however, the office market has declined 2%. Calgary’s apartment sector declined 33%, reaching...
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing December 16, 2018 143   0   0   0   0   0
Amid the growing popularity of the rental market as the top choice of those with an eye towards affordability, a clear majority of Canadians still see home ownership as the ideal state of affairs. In a new survey, real estate information portal Zoocasa found that 74% of Canadians see ownership as a crucial milestone.Only 25% said that that they are already living in their preferred asset types. The results were remarkably similar to a recent analysis by Sotheby’s International Realty Canada, which indicated that 83% of the country’s young households would not hesitate to purchase and move to single-detached homes if costs are not an issue. “The popular perception is that people in modern families have typically preferred multi-unit and city centre locations, when in fact what the report shows is if price were no object, they would prefer single family homes,” Sotheby’s International Realty Canada president and CEO Brad Henderson told HuffPost Canada. Read more:In Canada’s top markets, neither rent nor ownership provides relief[1] The Sotheby’s report added that elevated single-family home prices are mainly responsible for pushing most people away from ownership.Indeed, 56% of the Zoocasa respondents admitted that if these market conditions continue, ideal housing would become well out of reach. Despite these economic realities, 41%
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing December 13, 2018 132   0   0   0   0   0
A new project jointly funded by the governments of Canada and Alberta will give senior citizens in Innisfail a new place to call home. The two governments jointly contributed $24.2 million for the development of the Autumn Glen Lodge, which will provide 60 new lodge units and 30 self-contained apartments for senior citizens in Innisfail. Give the gift of real estate success this year – grab a seasonal CREW subscription. Use code HOLIDAYS2018 to claim your free festive gift.[1] The lodge is expected to be ready for occupancy in the fall of 2020, and will replace Innisfail’s existing 57-year-old assisted living lodge. The Autumn Glen Lodge is part of Canada's National Housing Strategy (NHS), which aims to reduce chronic homelessness by building 100,000 new housing units and renovating more than 300,000 housing units. In a statement, Minister of Families, Children and Social Development Jean-Yves Duclos said the Autumn Glen Lodge will be able to provide homes to Innisfail seniors who are looking for safe and affordable homes. "This is one way we can give back to them—to help ensure they are able to age in place close to family and friends," he said. Minister of Alberta Seniors and Housing Lori Sigurdson said that the Autumn
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing December 13, 2018 170   0   0   0   0   0
Investors have started speaking out against Fortress Real Developments’ syndicated mortgages, primarily complaining that the risks associated with the investments were never verbally communicated. A couple of investors who requested anonymity detailed financial losses in what they were led to believe were bulletproof investments.The first investor is based in Halifax and worries about the fate of his wife and three children after having lost $175,000, their retirement savings. “This week, my wife was having chest pains worrying about this,” said the 50-year-old investor.“She’s a year older than me and thought she was having a heart attack.It’s not pretty.If we knew our money was safe and growing, we wouldn’t have these anxieties.” In 2014, the investor removed his money from Apple stocks and put it into a Fortress Real mortgage for a development in Regina called Capital Point.He initially received quarterly dividends amounting to $2,504, the last of which came in Nov.2016, but says a $12 monthly fee is still drawn from his bank account. “The early days were fine,” said the investor.“They were paying us interest and the money was growing for probably the first two years, and then I started seeing news releases about Fortress.I’d reach out to (the agent) and he said there’s nothing to worry about, everyone is getting their money
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing December 13, 2018 166   0   0   0   0   0
Investors looking for opportunities in Mexico have no shortage of choices, but an unconventionally located option on the country’s left coast is one of the most exciting to come along in some time. With Acapulco a ghost of its former self and Puerto Vallarta forever struggling to achieve something more than third- or fourth-option status from travellers, investors looking for upscale vacation rentals south of the Rio Grande can be forgiven for ignoring Mexico’s west coast.But the country’s Pacific seaboard is dotted with charming and culturally rich resort towns, many of which are a short flight from Mexico City. 400 km south of Acapulco lies Puerto Escondido, one of western Mexico’s most popular destinations for both surfers, who flock year-round to the hulking turquoise waves;foodies, who have come to regard the region as one of Mexico’s culinary holy grails;and families, who can locate some form of enjoyment around every corner. But Canadians, investors and travellers alike, have come to expect levels of service, class and comfort from their Mexican digs that most Puerto Escondido-based hotels and resorts simply can’t deliver.To find the amenities, style and attention to detail that are the hallmarks of a prime vacation rental opportunity, a short drive up the Emerald Coast to Vivo Resorts will most definitely be in order. Vivo
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing December 12, 2018 135   0   0   0   0   0
A key measure of changes in Canadian home prices has posted a decline for November. The Teranet-National Bank National Home Price Index rarely posts a decline in November – it’s done so just 4 times in the 20 years – but it recorded a 0.3% decline from the previous month. Subscribe to CREW for the best in real estate news and insight – whatever the season. Use code HOLIDAYS2018 to claim your free festive gift.[1] Most markets declined with Quebec City, Halifax, and Victoria the exceptions. It was the second consecutive monthly decline with tighter mortgage lending rules and a rise in interest rates among the factors that have cooled demand significantly in some markets. In Vancouver, November was a fourth month in a row without a rise in home prices, for a cumulative drop of 1.8%;and in Toronto, prices declined over the last three months, for a total loss of 0.4%. There are also weak markets in Alberta, where prices did not rise for a fifth month in a row in Calgary, and for a third consecutive month in Edmonton, for cumulative declines of 1.4% and 1.3% respectively. The index for Victoria was flat while Halifax (0.1%) and Quebec City (1.2%) both gained.
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing December 12, 2018 150   0   0   0   0   0
Canada’s largest banks will be required to make extra provision to offset financial risks in 2019. Twice a year the Office of the Superintendent of Financial Institutions (OSFI) sets the limit for the Domestic Stability Buffer, a requirement to maintain a financial buffer for those banks designated as important to Canada’s financial system, essentially ‘too big to fail’. All the real estate news you’ll need, every single month – all in CREW. Use code HOLIDAYS2018 to get your festive subscription gift.[1] The level of the buffer was 1.5% in April but OFSI has announced this week that it will increase to 1.75% from April 2019. Why the increase? OSFI says that while Canada’s credit environment is currently favourable, there are risks from high levels of household debt relative to income, uncertainty in some housing markets, and increasing levels of corporate debt. While these elements do not pose an immediate risk, OSFI believes that Canada’s big banks should make extra provisions while the going is good. “In light of positive credit performance and generally stable economic conditions, now is a prudent time for banks to build resilience against future risks to the Canadian financial system,” said Jamey Hubbs, Assistant Superintendent, Deposit-Taking Supervision Sector. Are you looking to
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing December 12, 2018 147   0   0   0   0   0
Just a few months ago economists were predicting that the Bank of Canada would take a bullish stance on interest rates following its talk of ‘normalization’ of the interest rate environment. Since then several things have changed.Despite some positive economic data and employment stats, issues such as the discounting of Canadian oil, slowing housing market, and the planned closure of the GM Oshawa plant, are all weighing on forecasts. Give the gift of real estate success this year – grab a seasonal CREW subscription. Use code HOLIDAYS2018 to claim your free festive gift.[1] The economists at the British Columbia Real Estate Association have issued their latest outlook for interest rates and say that, all things considered, they don’t see more than two rate hikes in 2019 with a single rise being the most likely scenario. Specifically on mortgage rates, BCREA Economics says that lenders have been hesitant to raise their 5-year qualifying rate amid the slowest pace for mortgage book growth in 17 years, exacerbated by the tighter regulations. Its outlook is that the 5-year qualifying rate of 5.34% in Q4 2018 will rise to 5.54% by Q2 2019 and remain there for the rest of the year.The 5-year average discounted rate is forecast to
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing December 11, 2018 162   0   0   0   0   0
According to the REMAX 2019 Housing Market Outlook, the country’s average sale prices will get a 1.7% boost, an indication that the balance has finally returned to Canada. The report notes that markets throughout the country stabilized this year after the 2017 aberration that saw prices in markets like Toronto’s surge beyond reasonable levels.Stabilization is expected to continue through 2019, a likely consequence of interest rate hikes that are believed will increase as the year goes on. Don’t forget your CREW subscription this holiday season. Get your CREW with code HOLIDAYS2018.[1] Thirty-one percent of REMAX survey respondents don’t believe interest rates have hitherto affected their ability to afford a mortgage, but that optimism doesn’t extend beyond December.Another REMAX survey of its brokers and agents revealed 83% expect interest rates to make Canadians’ home purchases cumbersome next year. The report also expects sale prices in Vancouver to decline 3% in 2019 because obtaining a mortgage in the Metro region is becoming well-nigh impossible. "The drop in sales in key markets across British Columbia can be partially attributed to Canadians' increasing difficulty in getting an affordable mortgage in the region," says Elton Ash, REMAX of Western Canada’s regional executive vice president."The situation created by the introduction of the
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing December 11, 2018 148   0   0   0   0   0
If you want to keep your real estate assets, you better think twice about dodging your taxes.The Canadian Revenue Agency (CRA) recently started freezing assets of tax evaders – and yes, that includes property. According to CBC News, CRA has used proceeds-of-crime provisions under the Criminal Code to seize the rental properties of a tax-evading couple in Ottawa.The couple are accused of under-reporting their income between January 2008 and December 2013. Subscribe to CREW for the best in real estate news and insight – whatever the season. Use code HOLIDAYS2018 to claim your free festive gift.[1] "The schemes included appropriating funds from multiple corporations under their control for personal purposes, appropriating corporate rental income and manipulation of supplier invoices,” CRA told CBC News. This is the first time that CRA has used proceeds-of-crime provisions on tax evaders.The provisions are normally applied on terrorist financing or money laundering. However, you can be sure that CRA are more than willing to use the provisions on tax evaders again. "That is a tool that we have not used in the past," Stéphane Bonin of CRA's criminal investigations division told CBC News. "I can say that this is indeed the first time, but I can promise you
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing December 09, 2018 133   0   0   0   0   0
In response to a Canada Mortgage and Housing Corporation report assessing cash flow in Montreal’s new high-rise condo towers—specifically concluding that up to 75% of investor-landlords are in the red—it’s being posited that the report paints an incomplete picture. “What we tend to see, the smaller the unit the higher the chances of it being an investment,” Sacha Brosseau, chief brokerage officer at Sotheby’s International Realty Canada, is quoted as saying in the Montreal Gazette.“When we sell smaller sized units, more often than not, our agents that represent them see questions asked like, ‘How much do you think we can rent this for?’” All the real estate news you’ll need, every single month – all in CREW. Use code HOLIDAYS2018 to get your festive subscription gift. Jennifer Walker, a broker with Sutton Group Centre Ouest and founder of the Montreal Real Estate Investor’s Group, notes that finding a new rental condo with positive cash flow isn’t without its challenges if the down payment is only 20%.However, cash flow is far from investors’ only goal. “A lot of people buy on the potential, meaning appreciation, that the value will be going up,” Walker told the Gazette. To be fair to the CMHC report’s author, Francis Cortellino, an economist, intended
Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing December 09, 2018 135   0   0   0   0   0
Overall residential property sales in Montreal went up by 6% in November to reach 3,630 transactions, a number that the Greater Montreal Real Estate Board acknowledged as a new record high for that month. The GMREB also stated that November represented the 45th consecutive monthly increase in sales volume. All the real estate news you’ll need, every single month – all in CREW. Use code HOLIDAYS2018 to get your festive subscription gift.[1] Not only a greater number of homes are selling, but they are also getting snapped up from the market even faster, the Board added. “Homes are selling faster and faster in the Montreal area, as the average selling time, for all property categories combined, was 80 days in November, which is 7 days less than one year ago,” GMREB board of directors Nathalie Bégin explained. “Single-family homes and plexes sold the fastest – in an average of 72 days – while it took an average of 94 days for a condominium to sell.” Read more:Montreal in no danger of overheating any time soon[2] And unlike in other popular markets, every asset class in Montreal enjoyed sales growth last month.Condo transactions still led the way with a 10% annual increase (1,256 sales), while
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