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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 07, 2019 70   0   0   0   0   0
Weak demand continues to pull down the Vancouver housing market’s sales volume, according to new figures from the Real Estate Board of Greater Vancouver (REBGV). Overall transactions declined by 29.1% annually in April, down to 1,829 sales.This is despite a gain of 5.9% from the 1,727 deals in March. The region’s 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 was 14,357 homes for sale, around 46% greater than the supply seen on April 2018. “There are more homes for sale in our market today than we’ve seen since October 2014,” REBGV president Ashley Smith said, as quoted by BNN Bloomberg. “This trend is more about reduced demand than increased supply.” The REBGV pointed at B-20, especially the mandated stress testing, as the main factor behind the region’s feeble activity. “Suppressing housing activity through government policy not only reduces home sales, it harms the job market, economic growth and creates pent-up demand,” Smith noted. “The federal government’s mortgage stress test has reduced buyers’ purchasing power by about 20%, which is causing people at the entry-level side of the market to struggle to secure financing.” In its recent report, Zoocasa
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 05, 2019 79   0   0   0   0   0
With disastrous flooding becoming an annual event in parts of Canada, waterproofing properties is imperative. While some flood damage is well-nigh impossible to prevent—as residents in Montreal, Ottawa and Bracebridge have sadly learned—some precautions can avert minor flooding from metastasizing into an astronomical remediation bill. Lee Strauss, owner of Strauss Investments, had the basement of an unoccupied investment property flood years back while he was out of town.By the time he returned, water had been flooding into the basement for five days, and with his insurance company reticent to step in, he rented a dump truck and paid the cost of remediation to prevent any further damage lest more mould accumulate. He eventually received his claim but because the property wasn’t tenanted, the insurance didn’t cover lost rental income. “The whole remediation process took about six months, and with rent averaging about $1,800 a month, do the math,” said Strauss. A property can flood for different reasons, including because of water lines running below old homes. “The metals have had time to rot and decay, and one day they give in because they’re always under pressure and it can pool beneath the basement floor, then rise,” said Strauss.“One of the easiest ways to alleviate it before it even happens
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 05, 2019 78   0   0   0   0   0
Initially meant as a strong policy intervention against red-hot home price growth in Canada’s most in-demand markets, B-20 was responsible for around 40,000 fewer transactions across the country (on a year-over-year basis) during Q4 2018, according to Toronto-Dominion economists. In a client note last week, the bank said that the impact of the stress testing has been far more enduring and extensive than anticipated – echoing recent sentiments by Ontario Real Estate Association CEO Tim Hudak. Hudak stated that B-20 has had a market impact “beyond what many thought was the worst case,” with resale activity declining by 11% annually in 2018, the first year of the policy’s implementation. “Not only are many people unable to become home owners at all;others can’t upgrade as their families grow, which in turn means they aren’t selling their starter homes to people trying to buy for the first time,” Hudak wrote in a piece for Financial Post. TD Bank economists Rishi Sondhi, Ksenia Bushmeneva, and Derek Burleton argued that immediately rescinding B-20 would noticeably increase Canadian home prices by around 6%, which will be on top of the bank’s 4% growth forecast, by the end of next year. Considering the situation, the federal government should certainly begin looking at a more relaxed approach from
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 02, 2019 101   0   0   0   0   0
The Ontario provincial government introduced measures yesterday to reduce the cost of building housing in a bid to increase supply. In particular, it hopes to catalyze the development of missing middle housing. “The missing middle is critical,” said Richard Lyall, president of the Residential Construction Council of Ontario.“We’re building lots of towers, but not enough medium- and lower-density housing.If you go to other cities in the world, they have large towers but they also have missing middle housing.It’s difficult to do here because, as the government said in its announcement, it takes 10 years to get projects done, and carrying a project through that length of time is expensive, therefore, builders will choose to build 40 or 50 storeys instead of 10 or 20.” Additionally, development charges for secondary suites, like basements or laneway housing, is being scrapped, and development charges, parkland fees and Section 37 will be rolled into one formula so that there’s more predictability with final costs. The province will also defer charges on rental and not-for-profit housing for five years, although municipalities can still charge interest. “Our industry talks about needing certainty around costs to get personal rentals built, and if we can have greater certainty with a formula used to determine what the cost will be, that’s
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 02, 2019 140   0   0   0   0   0
B.C.’s home affordability crisis is forcing more and more of the province’s young women into starting their families later in life, according to a recent survey by the University of Calgary. “This is the province where hard work pays off the least for younger people in their prime childbearing years,” UBC professor and affordable housing advocate Paul Kershaw told CBC News. The study found that the total number of mothers age 35-39 in the province has increased by 60% between 2000 and 2017. B.C.’s mothers in the 40-44 age bracket have also doubled during the same time frame. The trend has had a tangible impact in B.C.’s average age of first birth, which is now at 31.6 according to Statistics Canada.This is markedly higher than the 29.2 average nationally. Kershaw added that compared to a generation ago, full-time incomes among B.C.’s working professionals fell the most nationwide.This drastic decline came as the province experienced the largest increase in housing prices during the same period. In a new analysis, Zoocasa said that an individual or household needs to earn at least $205,475 to be able to purchase a Vancouver home at the benchmark price ($1,441,000), assuming a 20% down payment at a 3.75% mortgage rate on a 30-year term.
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 02, 2019 205   0   0   0   0   0
Immigrants, mostly young individuals and households, will account for a significant portion of renewed housing demand in Canada’s largest cities, according to RBC Economic Research. The millennial influx will be especially important in light of the increasingly important role that the tech industry is plating in Canadian real estate.Considering the nation’s status as a world leader in innovation, a significant portion of the demographic is expected to work in the technology sector. In 2018 alone, approximately 28,200 net non-permanent residents (mostly students and temporary workers) originated from overseas, and 3,800 net migrants moved from other parts of the country to Canada’s most active metropolitan markets. “In total, Canada’s three largest cities saw a net inflow of 108,400 millennials from other countries and provinces last year.So for every net millennial lost to other cities in the same province, Vancouver, Toronto and Montreal collectively gained roughly eight net millennials from abroad or other parts of the country,” RBC stated in a recent study. The analysis added that this inward movement more than offsets any market weakness, and even actually improves overall purchasing power due to the growing number of high-earning tech professionals. “In recent years, [the largest cities] welcomed approximately half of all new immigrants aged 20-34.We don’t see this share really weakening in the
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   April 30, 2019 218   0   0   0   0   0
Canadians exchanging their money into U.S.dollars are at a decided disadvantage, but an RBC Bank financing plan will alleviate that problem for Canadians looking for investment properties and second homes south of the border. At the current exchange rate, should a Canadian buy a $400,000 (USD) property in Florida’s white-hot, yet affordable, real estate market in cash, they will end up paying $528,000 (CAD).However, using RBC Bank’s real estate lending solution, they’d only need to put down $90,000 (USD), which is the 20% down payment, and have to pay $118,800 at closing.If it’s an investment property, they will put 25% down. Using a 30-year amortization on a five-year term at 3.75%, diligent investors can hedge their bets on the Canadian and American dollars returning to parity, and considering that the RBC Bank financing plan doesn’t have a prepayment penalty, they can easily repay the loan. “If they finance 80% of the U.S.mortgage, they don’t have to exchange the full amount and they can save $100,000 (CAD) on a $400,000 (USD) purchase,” said Alain Forget, RBC Bank’s director of business development in the U.S.“There’s no prepayment penalty during the term of the loan, so they can repay it at any time, and it gives them the full flexibility of using some leverage and financing for their
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   April 30, 2019 226   0   0   0   0   0
Canadians exchanging their money into U.S.dollars are at a decided disadvantage, but an RBC Bank financing plan will alleviate that problem for Canadians looking for investment properties and second homes south of the border. At the current exchange rate, should a Canadian buy a $400,000 (USD) property in Florida’s white-hot, yet affordable, real estate market in cash, they will end up paying $528,000 (CAD).However, using RBC Bank’s real estate lending solution, they’d only need to put down $90,000 (USD), which is the 20% down payment, and have to pay $118,800 at closing.If it’s an investment property, they will put 25% down. Using a 30-year amortization on a five-year term at 3.75%, diligent investors can hedge their bets on the Canadian and American dollars returning to parity, and considering that the RBC Bank financing plan doesn’t have a prepayment penalty, they can easily repay the loan. “If they finance 80% of the U.S.mortgage, they don’t have to exchange the full amount and they can save $100,000 (CAD) on a $400,000 (USD) purchase,” said Alain Forget, RBC Bank’s director of business development in the U.S.“There’s no prepayment penalty during the term of the loan, so they can repay it at any time, and it gives them the full flexibility of using some leverage and financing for their
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   April 30, 2019 236   0   0   0   0   0
The flow of new homes into Ontario’s bustling housing sector is hampered by extremely lengthy development approval timelines, according to the Ontario Building Officials Association. Strong funding and construction activity are seemingly having negligible impact in ensuring new supply.Per OBOA estimates, it takes as long as 10 years to complete the required planning to get new building permits in the province. “We have the best building codes in the world, which is why Ontarians feel safe in the places they live, work and play,” OBOA president Matt Farrell said. “We need to be cutting the red tape throughout the approvals processes to bring this housing to the market as quickly as possible.” A significant portion of funding is slated to come from the federal and provincial governments, which will make the implementation of a streamlined approvals process even more important. “Premier Ford announced $1-billion in funding for affordable housing last month, and the prime minister committed another $1.3-billion before that, but cumbersome processes are going to delay making that housing available to the people who so desperately need it,” Farrell emphasized. Any new supply will most likely be on the higher end, as shown by developer Cortel Group’s latest projects across the province. The Towers 3 and 4 luxury condo
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   April 30, 2019 254   0   0   0   0   0
RBC Ventures has announced the launch of a highly customizable, AI-based property search platform covering the Greater Toronto Area. The OJO Home virtual assistant combines image recognition software, mobile messaging, and web-based insights to provide comprehensive results tailored towards each user’s particular preferences. Its creators stated that the platform is ultimately aimed at making property searches easier and more intuitive for GTA’s hopeful home buyers. “OJO analyzes information about a customer’s lifestyle, neighbourhood and home preferences including commute, kitchen style, and parking to find listings that meet a buyer’s needs.This deeper level of customization allows home buyers to zero in on what they really want before engaging a real estate agent,” RBC Ventures said in an email to Canadian Real Estate Wealth. According to RBC’s recent Home Ownership Poll, fully 83% of first-time home buyers agreed that online resources are critical in ensuring a successful home search.Nearly two-thirds (62%) of Canadian home owners also indicated the same belief. Most importantly, OJO offers a powerful option in cases where a user might prefer to interact with an expert reference. “Once a customer is ready to take the next step in their home buying journey, OJO can connect them to an RBC financial professional or a real estate agent to help
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   April 28, 2019 332   0   0   0   0   0
Downtown Toronto’s extremely low office vacancy rate could climb to “just south of 6%” within four years and curb rapid rent escalation. “Rental rate growth has been quite high and that’s why you’re getting the construction activity, but the question, then, becomes how does it continue performing once you get further down the timeline?” said to Roelof van Dijk, market economist for Canada at CoStar Group, a multinational commercial real estate research and technology firm. “With all the new supply, it won’t be enough to fill everything, but you can anticipate vacancy to rise in the next three to five years as all these new builds come to fruition.In downtown Toronto, you’ll see vacancy go from just north of 3% to just south of 6% by 2022-23.As a result, you’ll see rental growth come down.” Although there’s about 11 million square feet of commercial construction in Toronto, chartered banks are expected to occupy much of it as they house expansive anti-money laundering operations.Much of the old stock presently housing banks will likely be renovated and modernized. Keith Reading, director of research at Morguard, added that units slated for completion in the near future are already taken. “Outside of a couple of little pockets, there are virtually no new speculative developments,” he said.“Buildings
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   April 28, 2019 228   0   0   0   0   0
The growing importance of tech companies has pushed Toronto’s office segment towards having the largest investment volume of any commercial property type last year, according to Avison Young’s Commercial Real Estate Investment Review:Greater Toronto Area analysis. “Sellers are taking advantage of the extremely tight market and fierce competition among buyers,” the Avison Young study noted. The sector represented a significant chunk of the city’s overall commercial investment, which ended up at a record-high $15.6 billion in 2018. Toronto’s office market was also the only commercial asset class that enjoyed quarter-over-quarter growth during Q1 2019, increasing by 8% annually to reach a total of $767 million.This also represented 28% of the regional commercial market’s overall volume for the quarter. However, Avison Young warned that “despite buyers’ enthusiasm, a bid-ask gap is impacting deal velocity and some anticipated sales (such as those of Bloor Islington Place and AeroCentre) have yet to materialize.” Earlier this year, CBRE’s Paul Morassutti said that the tech industry will serve as the Canadian commercial real estate market’s pillar of stability in the event of a recession. “Over the past 10 years, tech has grown at more than 2.5 times the pace of the energy sector and three times the overall economy,” Morassutti said in late February.“Tech
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   April 28, 2019 374   0   0   0   0   0
Steady consumer confidence will fuel strong housing performance across Atlantic Canada this year, according to an analysis by RE/MAX of Ontario-Atlantic Canada Region. “Consumer confidence is on the upswing in Atlantic Canada and that is translating into stronger home-buying activity in residential real estate markets,” RE/MAX of Ontario-Atlantic Canada Region executive VP and regional director Christopher Alexander said. “Greater economic prosperity (the Maritimes are expected to lead the country in GDP growth in 2019), combined with interest rate stability and first-time buyer incentives are tipping the scales in favour of home ownership yet again.” Much of the renewed confidence will arise from robust economies and falling unemployment, especially considering the strong fundamentals in larger urban centres “as well as spillover in several smaller markets.” “The Atlantic Region traditionally has the highest rates of home ownership in the country and we don't expect that to change anytime soon,” Alexander added. Immigration will play a central role, as 60% (9 out of 15) of the region’s markets are enjoying increasing activity among buyers from other parts of Canada.Newfoundland/Labrador and New Brunswick are also seeing growing traffic from returnees, after having worked in Alberta’s oil and gas industry. First-time buyers were also found to have a major influence in nearly 70% (10 out of 15)
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   April 25, 2019 331   0   0   0   0   0
A new development in Scarborough is a gem of an opportunity for Toronto investors. The Kennedy Central residential complex, KSquare Condos, is a Kingdom Developments project and promises quick connection to downtown Toronto.The project is just one of many edifices and infrastructure projects changing the face of the neighbourhood, and Eric Jensen, Kingdom Developments’ VP of projects, says the firm’s experience, which spans over two decades, will ensure KSquare is a seamless fit. “We are thrilled to enter the Toronto condominium market with KSquare Condos,” he said, “and recognize the significance of being one of the first developments part of this already thriving area’s future transformation.” The 34- and 31-storey towers mark the Chinese company’s first Toronto development, which is replete with a unique amenity package that includes the largest private library and study area in any of the region’s condominiums. Additionally, KSquare features a music rehearsal room, pet grooming centre, sports lounge and a playroom for children. Kingdom Developments has partnered with Sunray Group, and the latter is redeveloping the nearby Sheraton Hotel and opening its amenities to KSquare residents. According to the developer, KSquare will be the heart of the Kennedy Rd.and Sheppard Ave.E.neighbourhood, which is also slated to receive some subway stops, as announced earlier this month by the Ontario government.In all,
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   April 25, 2019 370   0   0   0   0   0
The power of the multi-residential asset class has waned in Toronto, ending up as the least traded commercial property type during the first quarter of the year, according to Avison Young’s latest Commercial Real Estate Investment Review: Greater Toronto Area study. Avison Young cited extreme scarcity, rather than thinning interest among investors, as the main driver of the trend. GTA’s multi-residential property had $236 million in sales during Q1 2019 (with a 9% market share), considerably lower than the $288 million seen during the same time last year. “The top transaction was the $30-million sale of 15 Walmer Rd.in Toronto’s Annex neighbourhood, representing nearly $385,000 per unit and a cap rate of 2.2%,” the report noted. “Starlight Investments, among the sector’s most active players in 2018, also made the top five with its purchase of a 79-unit Mississauga townhouse complex for almost $27 million.” A significant drop was observed from Q4 2018 (activity representing a total of $602 million), which itself already suffered an even more massive decline from Q3 2018 (activity reaching a peak of $1.2 billion). GTA’s overall commercial sales – covering industrial, retail, office, multi-residential, and ICI properties – fell by 18% quarter-over-quarter to end up at $2.7 billion.Q1 2019 was the second consecutive quarter
 
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