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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 14, 2019 114 0 0 0 0 0
Significant recovery in the national housing market has helped boost borrowing activity during the second quarter, Home Capital Group CEO Yousry Bissada said. The lenders Q2 2019 mortgage originations went up to $1.28 billion, from the $1.23 billion level during the same period last year.Vigor was especially apparent in single-family originations, which increased by more than 10% annually, “with particular strength in our alternative mortgage segment.” Total Q2 loans were at $16.84 billion, growing by 1% quarter-over-quarter and 9% annually. “We’re pleased with our results because they’re beginning to reflect the impact of some initiatives that we at Home Capital have been working very hard at for the past few quarters,” Bissada said, as quoted by the Financial Post. “Our focus on lending to the high-quality market segments we have targeted, primarily the business for self-borrower and the new Canadian, is producing good results.” The Greater Toronto Area has fed much of this recovery, Bissada told analysts last week. “Sales activity is picking up, with particular strength in the GTA,” he stated.“The latest data on economic growth, employment and interest rate expectations are consistent with our outlook for a stable and balanced
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 12, 2019 104 0 0 0 0 0
Jennifer Skingley and her partner—the former an erstwhile project manager and the latter an executive manager—are meticulous planners, so no detail was spared when they planned a home renovation.However, no amount of planning could have prepared them for the aggravations they would subsequently endure. “We got the keys to our home in February 2018 and before we even took possession of it we had teed up people to do the work.We really researched and organized our renovation,” said Skingley.“There were several false starts trying to get people who were available to commit to doing the work.We interviewed a ton of contractors, got multiple estimates and did as much of the leg work ourselves as humanly possible without actually being construction experts.We tried to hand everything over on a silver platter, but for the work to actually start was like pulling teeth.” And that was only the beginning, added Skingley. The basement level needed external waterproofing, upgraded plumbing and a new bathroom was fitted in, while the kitchen and upstairs bathroom also received significant work. However, because of last minute cancellations by contractors and a seeming deluge of errors, the home renovation took much longer
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 12, 2019 130 0 0 0 0 0
Offices and apartments were the major commercial asset investment drivers in the GTA during Q2 2019, according to Altus Group. In its latest market report, Altus stated that total investment during the quarter was at $5.8 billion.Much of the strength came from the 563 sales transactions valued at over $1 million. The Q2 figures represented the first increase after five straight quarters of declines, as well as the fourth highest quarterly investment total ever recorded for the region. Offices and residential each accounted for around 20% of the total Q2 volume.The largest single commercial transaction during the quarter was in the office sector, with the $640-million sale of the Atrium on Bay in downtown Toronto. “Pent up demand and low office vacancy rates (3.1% in downtown Toronto and 6.8% in the GTA for Q2 2019) have resulted in growing demand for office space in submarkets just outside the core,” Altus noted. The apartment sector also enjoyed a 266% increase in investment from the previous quarter, and a 52% increase compared to Q2 2018. Together, these heavy hitters are projected to fuel most of the market’s momentum through the remainder of 2019.
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 09, 2019 110 0 0 0 0 0
Canadian seniors are showing greater participation in the housing market, especially in the townhome segment, according to a report from the Canada Mortgage and Housing Corporation. The share of seniors aged 65 and over in Toronto’s metropolitan area who own homes grew 4.5% between 2006 and 2016, reaching 25%.Townhomes, however, grew the most, from 11.5% to 17%.The report attributes the growth in homeownership among the demographic to increased labour force participation. “The share of working seniors has increased between 2006 and 2016 censuses, which was evident among both owner and renter households,” said the report, entitled Seniors Housing Profile in the Toronto CMA.“In 2016, employment became the primary source of income (including self-employed) for close to one-third of homeowner households, compared to 20% among renters.With more seniors working, fewer have been reliant on income from government sources compared to a decade ago.Among homeowners, there has been a strong increase in the share of retirees for whom pensions (public and private) were their primary source of income.These trends have translated into faster income growth for seniors.” In 2016, the median income for a household headed by a senior surpassed $59,000, with homeowners driving the income growth,
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 09, 2019 121 0 0 0 0 0
As much as 1,500 affordable housing units will be built across British Columbia over the next five years, the provincial government announced. BC Housing, along with Canada Mortgage and Housing Corporation, will be investing $75 million in the construction of 1,000 new units planned under the province’s Supportive Housing Fund, and 500 new units planned under the Women’s Transition Housing Fund. The memorandum of intent signed by BC Housing and CMHC will “help us ensure that more British Columbians in need find safe and secure homes,” according to Spencer Chandra Herbert, MLA for Vancouver-West End. “This new funding will complement the significant investments our government has been rolling out under the 10-year Homes for BC plan, including building more homes to help people experiencing homelessness and women and children leaving violence.We will continue to work with all levels of government and community partners to build homes that people need.” The initiative represents a much-needed boost to the province’s low-cost residential supply. “Every Canadian deserves a safe and affordable place to call home.Today’s announcement is the next step in our historic investments in British Columbia housing.1,500 more families will be able to have a
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 09, 2019 110 0 0 0 0 0
Amid the far-reaching housing crisis, Iqaluit’s homeless are among the nation’s most burdened sectors. The federal government has previously estimated that Nunavut needs more than 3,000 affordable units to accommodate current housing demand. With over 4,900 individuals on the waiting list for low-cost housing, a significant proportion of the city’s homeless are Inuit forced to live in run-down homes.Many of these people are either elderly or stuck taking care of small children – and those who do have employment and incomes are not fortunate enough to be able to afford the market’s rental rates. The Nunavut capital’s average monthly rent for a two-bedroom apartment stood at $2,648 in 2017, the latest CMHC reading for the oft-neglected market. A recent announcement by Prime Minister Justin Trudeau might offer a semblance of hope:The federal government has vowed a $290-million, eight-year investment in developing and expanding Iqaluit’s social and community housing. “We recognize that this is a big step forward that is going to make a huge difference in creating thousands of homes and we know this is really going to make a tangible impact in the lives of people here in the North,” Trudeau stated,
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 09, 2019 153 0 0 0 0 0
Since the beginning of the century, new office construction has left Toronto’s suburbs for the downtown core, but that’s beginning to change. According to CoStar Group, a leading multinational commercial real estate data analytics firm, suburban office construction has kept pace with downtown Toronto construction in recent years, a trend it forecasts will continue for at least the next five years. “Over the last decade, we’ve been hearing about high-profile moves from the suburbs to downtown—and it is happening and it’s a distinct trend—but at the same time, there are still users who want to be out there,” said Roelof van Dijk, CoStar’s market economist for Canada.“A lot of employees just don’t want to deal with the commute.” While avoiding Toronto’s onerous suburb-bound commute is certainly a key reason, van Dijk says population growth provides the most insight into why the suburbs are still primed for growth in office space. “When you look at where the population is growing and where new supply by square footage is happening, it’s telling,” continued van Dijk.“It’s as close to 50-50 as you’ll get over a 10-year period.There’s also been a supply boom downtown during that same period.”
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 07, 2019 104 0 0 0 0 0
In an effort to ameliorate accommodations for migrant workers in Gulf Cooperation Council (GCC) states, a multinational company with Canadian roots is starting a fund to do just that. Heirloom Holdings is launching Baytna to acquire labour accommodations in the GCC with a focus on mitigating the isolation migrant workers feel from familial separation and not speaking native tongues—not to mention cultural chasms that often exist—and enhancing communal ties. According to Beth Hirshfeld, vice president of marketing and corporate development at Heirloom, there are an estimated 14.5 million migrant workers in the GCC and, despite existing regulations to augment their standards of living, countries like the United Arab Emirates endeavour to go a few steps further.She added that the Baytna—which means “our home” in Arabic—fund will purchase labour accommodations in UAE, Oman and Saudi Arabia to implement superior living standards. The Baytna fund is composed of investment monies, with minimums of $1,000, and projects net annualized IRRs of 15-17% total returns, including annual dividend payments of 8-9% beginning approximately a year after capital draws. “Heirloom will start by acquiring and enhancing labour accommodations in the UAE – both in Dubai and Abu Dhabi -
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 07, 2019 109 0 0 0 0 0
Majority of those who were penalized by BC’s speculation and vacancy tax in its first year were foreign home owners, according to the finance ministry. Of the 12,029 taxpayers who remitted by July 2, as much as 4,485 were foreign nationals.This was followed by satellite families (3,241 individuals), BC residents (2,410), and non-BC Canadians (1,555). The ministry’s final “other” category, which includes homes owned by corporations or trusts, had 238 taxpayers. The ministry added that taxed residences were approximately 46% more expensive than exempted assets located in the taxable areas. Overall, the levy had an estimated $115 million in revenue in just its first year, significantly outstripping the initial $87-million estimate cited in the 2019 provincial budget. High assessment values in BC’s housing market, which had a larger-than-expected average of $1.62 million, were a major factor in this revenue. Finance Minister Carole James hailed the tax as a major factor in improving rental supply, with empty properties being used as housing. She assured that the collected funds will be used to address the long-running affordability crisis by improving housing access and supply. “The speculation and vacancy tax was designed to
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 07, 2019 115 0 0 0 0 0
A Bloomberg study has found Canada to be one of the nations at greatest risk of a housing downturn, but Royal Bank of Canada CEO David McKay asserted that the market remains “as something in well-balanced territory.” “We continue to monitor all supply-and-demand signals coming out of the housing market,” McKay stated in an interview with Bloomberg. “We do expect housing stock investment to slow over the coming year, and there will be a little less creation in the condo and single-family home markets, responding to potentially slower demand,” the executive admitted, but quickly added that “the housing price and resale market corrections are generally healthy.” The statements came in the wake of a recent analysis by Bloomberg Economics, which deemed Canada and New Zealand as the economies most vulnerable to housing price corrections. In both nations, the potential danger was indicated by the price-income and price-rent ratios far exceeding their respective long-term averages. Fortunately, these trends would not automatically lead to crisis.“We’re going to see some markets cool a lot more than they have, but we needed to slow this down through policy.” The federal government, and especially fiscal watchdog OSFI,
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 05, 2019 147 0 0 0 0 0
Condominium sales in the Greater Toronto Area have rebounded, according to an Urbanation report. Surging 77% during the second quarter of 2019 over the period last year, there were 8,902 sales—the highest since Q2-2017 when there were 11,413 sales—and 10,848 presale units launched.As active as the market was in Q2, the same cannot be said for the first quarter of 2019, as total there were a total of 11,967 through the first two quarters of the year.It did, however, push the sales volume above the 10-year average of 11,205 units sold. The average index price on sold units in projects that are active got a 10% year-over-year boost in the second quarter as it hit $797 per square foot, however, newly launched units averaged $903 per square foot, and remaining inventory hit $1,000 for a 9% year-over-year rise. Unsold inventory grew 46% from last year to 14,587 units, but still 6% below the 10-year average and worth about 7.8 months of supply, which is up from 5.3 months during the second quarter of 2018.New condo sales were likely driven by record-low borrowing costs and record-high population gains, as well as a robust job market and
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   Updated September 03, 2019 121 0 0 0 0 0
There are few things more Canadian than a weekend at the cottage, but given the leisure property’s appreciation potential, shielding it from capital gains taxes is imperative. According to John Natale, head of tax, retirement and estate planning services at Manulife, a cottage could be taxed on its appreciation in the event of the owner’s death.If unplanned for, the estate could then be forced to sell it. “Hopefully the cottage appreciates in value, but, unfortunately, that means 50% of that gain will be taxable just like any other capital gain,” said Natale.“To get around it, assuming you qualify—and most people would, because renting is only ancillary to the real purpose of enjoying the cottage—you could qualify under the principal residence exemption if you designate the cottage as a principal residence.” If the capital gains tax is unavoidable, there are ways to mitigate the cost.Cottage owners should keep record of their cost bases, which are to be maximized much as possible, added Natale.For example, if a renovation is made—for example, adding a dock or building a deck—those upgrades increase the cost base, thereby reducing the capital gains. Still, planning ahead is always advisable.Should the cottage’s
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 02, 2019 122 0 0 0 0 0
During Q2 2019, the province of Quebec saw its 20th straight quarter-over-quarter increase in residential sales activity. Figures from the Quebec Professional Association of Real Estate Brokers indicated that the province saw 29,212 sales during the second quarter of the year, representing 8% annual growth. This was the largest quarter-over-quarter growth since Q3 2005. Condos had the largest gain with a 14% year-over-year upward surge, but with a total of just 7,253 sales across the province. Plexes also posted a strong 13% increase (2,400 transactions), while single-family home activity went up by 6% (19,410 deals). Quebec’s strongest markets during Q2 2019 were Trois-Rivières (19% increase), Saguenay (17%), and Quebec City (15%). Montreal fared relatively poorly with an 8% annual sales growth, along with its worst condo sales volume in the last two years, Altus Group reported. A significant contributor to the trend is consistent unit scarcity brought about by robust demand.Over the last few years, the city has experienced a steady, strong stream of visitors and immigrants. “The new condo supply in the Greater Montreal Area was too small to accommodate growing demand” during the first quarter of the year,
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   August 02, 2019 122 0 0 0 0 0
Amid a burgeoning economy, Prince Edward Island is seeing greater need for residential units geared towards low- and mid-income households. This is especially because over the last three years, residential property prices in the Island’s capital of Charlottetown grew much faster compared to even the nation’s hottest markets, according to the Canadian Real Estate Association. The city’s home price growth of 38.5% during that period considerably outpaced other high-volume cities like Victoria (33.3%), Toronto (25.3%), Montreal (17.7%), and Vancouver (10.93%). PEI Real Estate Association Greg Lipton cited the provincial nominee program as a major contributor to the trend. The steady arrival of immigrants looking for homes of their own has grossly inflamed demand.From 2010 to 2018, the PEI has seen the entry of over 12,000 immigrants. “They came with a lot of money and they wanted something new, and we didn’t really have a lot of new stuff at that time,” Lipton told CBC News.“New construction is very expensive.We’re up to close to $200 per square foot nowadays to get anything built.” Compounding the issue is that PEI’s immigrant retention rate is so far the worst in Canada.This has a significant knock-on
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   July 31, 2019 125 0 0 0 0 0
In tandem with an institutional partner, Kevric Real Estate Corporation yesterday closed its purchase of a major downtown Montreal office tower located at 600 de la Gauchetière W., and in doing so hopes to capitalize on the city’s low commercial vacancy rate. “The relaunch of Montreal’s economy has been very much dominated by the tech sector, multimedia sector, special FX sector and AI, so those are all key areas for us,” said Kevric’s President Richard Hylands.“Those potential tenants are located in suburban locations and are heading back downtown because their millennial workforce doesn’t want to move into the suburbs.” The 28-storey tower, which has 710,000 square feet of leasable space, currently houses Raymond Chabot Grant Thornton, Investissement Quebec and National Bank, but the latter will be vacating for another location.In the interim, Kevric has an institutional lender on board until 2023, by which point its refurbishments—a new lobby facing Square Victoria and external building work—are slated to conclude. Downtown Montreal is already a hub for the aforementioned sectors, as Hylands noted that south of 600 de la Gauchetière W.is Multimedia City, owned by Allied REIT, where many of businesses in those industries are housed.Kevric also
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