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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 26, 2019 181   0   0   0   0   0
Amid a marked slowdown in nationwide activity recently, the Greater Toronto Area has actually experienced a considerable year-over-year increase in new home sales, according to the Building Industry and Land Development Association. Citing data from Altus Group, BILD announced earlier this week that GTA new home sales volume increased by 14% annually in January, reaching 1,362 transactions. A deviation from this trend was the single-family segment, which saw its sales settle at levels 53% lower than the 10-year average for this asset class.New condo apartments comprised a notable portion of last month’s activity, with sales being only 5% lower than the 10-year average. Despite the road bumps, BILD president and CEO David Wilkes deemed the January numbers as a welcome change. “It looks like the market is starting to return to typical levels after a particularly difficult year,” Wilkes said.“With the spring budget coming up, we are calling on the federal government to take steps to make it easier for first-time home buyers to get into the housing market.” Read more:Higher-density housing to dominate West GTA soon[1] “The improvement in new home sales over last January is consistent with our outlook for somewhat higher annual sales in the GTA this year, following the drop in 2018.” Altus Group
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 26, 2019 189   0   0   0   0   0
B.C.’s Ministry of Finance has announced the launch of the Condo and Strata Assignment Integrity Register, the latest thrust in its efforts to crack down on the speculation that has inflamed the province’s housing prices to unprecedented heights. Finance Minister Carol James said that the platform, which is the first of its kind in Canada, will ensure fairness and transparency in the industry. “For too long, speculators and tax evaders have been taking advantage of loopholes in our real estate market, driving up prices and shutting British Columbians out of the market,” James said, as quoted by The Canadian Press. One of the registry’s goals is a mandate upon condo developers to collect and report the identity and citizenship of any buyer assigning their purchase contract of a condo to another party (frequently at a higher price point) before the project that the unit is associated with reaches completion. Read more:Further cooling policies still needed – B.C.Finance Minister[1] The reports will be filed by developers every quarter, with the first (covering January 1 - March 31) due April 30. “The B.C.government will use this information to ensure that people who assign condos are paying the appropriate income tax, capital gains and property transfer tax,” the news release
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 24, 2019 194   0   0   0   0   0
Good news for luxury condominium owners in Toronto and Montreal. According to a luxury housing market report from Royal LePage, the condo markets in Canada’s two largest cities appreciated 10.2% and 8.4%, respectively, through the 12 months preceding January 31.The average price in Toronto reached $2,268,571, and in Montreal it rose to $1,295,401. The market for luxury detached houses in Toronto witnessed a 40% drop in sales activity and, consequently, average prices rose a paltry 3.1% to reach $3,575,702.Montreal’s luxury housing market appreciated 5.4% year-over-year, hitting $1,680,942. The luxury market in Vancouver, however, has seen better days.During the aforementioned period, luxury condominium sales in Greater Vancouver decreased 32.2%, as did prices by 0.6%, for an average of $2,680,064.Greater Vancouver’s luxury housing market also dropped 1.7%, but the cost is still Canada’s highest at $5,751,928.The report read: “Across Canada’s five largest cities, Greater Vancouver was the only city to post a decline in median luxury home prices.The number of luxury houses trading hands declined over the past two years, a trend that initially began with the introduction of measures to cool the city’s real estate market in 2016.Luxury home values have dipped but remain remarkably steady as many Vancouverites refuse to sell at what they perceive as a discount.Exasperating soft demand, Chinese nationals, an important luxury buyer
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 24, 2019 206   0   0   0   0   0
Policies that cultivate further housing slowdown are still needed to ensure greater affordability in B.C., Finance Minister Carole James said last week. The statement came amid official reports of considerable slowdown in the province’s home price growth and sales activity, after several changes were introduced last year. Among the most notable of these regulatory revisions were levies aimed at speculators and hiking the taxes on foreign buyers, which is part of the B.C.government’s aim to diversify the economy and “not simply relying, for example, on a speculative real estate market which doesn’t help grow a sustainable economy,” James said, as quoted by Bloomberg. “I think there’s more to go.I don’t think anyone in the Metro Vancouver-area would classify housing as affordable at this stage.” Read more:Red tape is a major influence in Vancouver’s housing scarcity[1] B.C.is not looking at possible housing risks as a major long-term threat, considering that it is projecting new borrowings to grow to $7.5 billion in the coming fiscal year, up from $6.3 billion in the current year. The province’s fiscal plan, as presented in documents last week, is estimating economic growth to hit 2.4% this year, outstripping the 2.2% in 2018. James noted that contrary to doomsayers’ fears of long-term lethargy, this trend
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 24, 2019 203   0   0   0   0   0
High-capacity multi-family housing will soon become the primary budget choice in the Greater Toronto Area, especially in the western part of the region. “Freehold properties remain the choice of most purchasers in Halton Region and Toronto West,” RE/MAX of Ontario-Atlantic Canada executive vice president Christopher Alexander said.“The same is true to a lesser extent in Toronto Central, but condominiums continue to gain ground.” “Just over one in three properties sold in the GTA was a condominium in 2018 and that figure is higher in the core.As prices climb in both the city and suburbs, the shift toward higher-density housing will continue, with fewer single-detached developments coming to pass.” Indeed, Halton Region – which includes Burlington, Halton Hills, Milton and Oakville – represented as much as 10.1% of the GTA’s residential property sales as of the end of 2018, growing by 2.3% in the 5 years prior.Toronto West also climbed by nearly 1% during the same period, to a 10.5% share. Read more:TREB offers positive outlook for sales, price growth in 2019[1] Much of Halton Region’s activity stemmed from popular clamour for affordable housing, which led to greater and faster construction in the area. “Product was coming on-stream at a time when the Greater Toronto Area (GTA) reported its lowest
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 21, 2019 202   0   0   0   0   0
Few real estate investors aren’t sweet on student housing, and for good reason, but which regions in Ontario have the most to offer? The owner of Strauss Investments says cities with satellite schools are a good net because of their small but concentrated markets. “Laurier and Nipissing universities have satellites in Brantford,” said Strauss, who’s also a sales representative with Rock Star Real Estate.“In Kitchener, there’s the McMaster University Waterloo Regional Campus, and it’s its own little pocket market.Satellite schools offer niches that let smaller investors get in there.All you have to do is provide good product and you get lots of action without much competition.” Waterloo, on the other hand, has a glut of inventory largely driven by foreign investment, but Strauss noted that the accommodations are superlative.Nevertheless, the closer the property is to the University of Waterloo, the fewer problems investors will have finding tenants. Strauss warns that some cities have certain stipulations, like the number of rooms permitted, that can hinder the investment’s potential.However, he’s bullish on London and Hamilton. “Purpose-built is obviously better than just taking an old house and converting it, but in Hamilton the areas near Mohawk College and McMaster University are very student-friendly.There are a lot of rental opportunities, and at the brokerage I work at
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 21, 2019 178   0   0   0   0   0
New data from the Canadian Real Estate Association indicated that Montreal’s housing market is benefiting from strong growth across all crucial metrics – and might even have enough of a boost to outstrip Vancouver’s pace soon. In January, Montreal’s median home sale price went up by 6.3% annually, reaching $349,300.While the price was still far below Vancouver’s $1.02 million average, the latter’s price levels actually fell by 4.5% during the same period. Fuelled by a robust economy and immense purchasing power in an environment of relatively low housing prices, the Montreal market’s sales volume also enjoyed a 7.1% increase from December 2018, which was the fastest month-over-month growth in a decade. In comparison, activity in Canada’s hottest cities during the same time frame was just around 1.2%, while the overall national increase was at 3.6%. Read more:Bidding wars now more frequent in Montreal[1] The total dollar value of property transactions (seasonally adjusted) in Montreal went up by 18% annually, up to $1.63 billion.Meanwhile, Vancouver’s fell by 42%, down to $1.7 billion. While this might be a warning sign to cautious would-be investors, the overall lower costs of living in the city – especially when compared to Canada’s most inflamed markets – considerably reduce the risk of Montreal suffering from
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 19, 2019 203   0   0   0   0   0
A Ryerson City Building Institute report exploring ways to solve Toronto’s affordability crisis suggests micro living could catch on in the city. The report, called Rethinking the Tower, mused about the construction of micro units in a city dominated by condominiums.Micro units have become popular in New York City and Seattle because rental and sale prices correspond to unit size, and in a city like Toronto it could go a long way towards solving affordability issues. “Well-designed rental or ownership micro units offer an opportunity to deliver more affordable homes to the market, particularly in central locations where land costs can be a significant barrier to affordability,” read the report.“Analyses by the Urban Land Institute (ULI) and Colliers have found that micro units in American cities lease at monthly rents 20% to 30% lower than conventional apartments, although they cost more per square foot in rent than conventional rental units.” A micro unit is roughly 350 square feet in area and has an in-unit bathroom and kitchen, but designs is key to its marketability. “Many developments will boast flexible furniture systems, high ceilings, large windows, built-in storage and/or convertible furniture,” continued the report.“Some have also bundled micro units with shared amenities and services such as storage, lounge, areas and outdoor space.Micro units are often marketed
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 19, 2019 181   0   0   0   0   0
Amid intensified construction activity, Vancouver’s industrial real estate market is steadily magnetizing foreign investors, a trend that might pose a major challenge for the domestic buyer segment. Numbers from Colliers International indicated that nearly 4.9 million square feet of industrial space was under development across Metro Vancouver as of the end of 2018.Almost half (45%) of this activity is in Surrey, Richmond, and Delta. According to Avison Young, Burnaby and Coquitlam were the region’s stand-outs, with transactions involving industrial property in these locales being rapidly snapped up in a frenzy of “insatiable” demand. “While Burnaby and Coquitlam remain highly sought after by owner-occupiers, tenants and investors, sales and leasing activity will likely slow in 2019 due to a lack of such opportunities in those markets,” Avison Young stated, as quoted by Business in Vancouver. Read more:Canadian commercial investment to intensify this year[1] “With very limited new supply in the development pipeline and ongoing strong demand, vacancy in both markets – already at or near record lows – is expected to remain extraordinarily tight for the next 18 months,” the brokerage added. This is also expected to feed into a virtuous cycle of rising rates and strong cash flow for owners, with net lease rates in Burnaby and Coquitlam hovering between
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 19, 2019 187   0   0   0   0   0
With more than 10 months still remaining in the calendar year, one of the most valuable commercial real estate transactions in Canada so far in 2019 has already taken place in Richmond, B.C. Fiera Properties, an affiliate of a Montreal-based independent asset management firm with approximately $136.7 billion in assets under management, has announced last week the closing of a deal involving Richmond’s 13-building Airport Executive Park. The 707,809-square-foot property was purchased from Sun Life Financial for $208 million. The deal dovetailed with the predictions of Avison Young Canada Inc., which forecast last month that demand for the country’s commercial properties will keep surging for much of 2019 amid scarce supply and a 4-decade low in unemployment. Read more:B.C.’s industrial segment rushes headlong into 2019[1] Industrial buildings and parcels would especially benefit, as nationwide vacancies in the sector are projected to fall to a record low of 2.9%. The Airport Executive Park deal magnetized multiple interested parties including major domestic and international buyers, according to CBRE, which brokered the deal. “There has been a good job of attracting tenants to that market, it’s close to the city,” CBRE’s Tony Quattrin told CoStar News.“People do tell you, we would like to be in Vancouver but can’t
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 18, 2019 190   0   0   0   0   0
Student housing is known as a lucrative investment, but when a deficient heating system cut into veteran investor Lee Strauss’s North Bay property, where students’ rents fetched $500 a room, he was at wit’s end. “A student rental is going to be a bit higher on utilities because of usage, but there was no gas to the house;it was all hydro and it was costing me about $1,000 a month during the colder months,” said the owner of Strauss Investments.“The price of the home was $200,000 so cash flow worked out well during the warmer months, but winter was the killer.” Strauss ultimately sold the property and broke even, but not before looking into remedies.Ultimately, installing a gas furnace would have cost up to $12,000 over a decade, so Strauss cut his losses. Situations like Strauss’s are all too common, says Vahid Azari, a registered home inspector, certified energy advisor and owner of All Season.Worse still, poor insulation and excess energy use actually devalue a home by up to a tenth of its value. “It also decreases the value of the house by the extra money you pay for energy consumption,” said Azari.“If the heating system is poor in an old house is poor, it means you have 60% efficiency, whereas a
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 14, 2019 170   0   0   0   0   0
As the cost of living soars, Canadians have begun to wonder whether the surest path to comfortable retirement is through a Registered Retirement Savings Plan or homeownership. A report from Sotheby’s International Realty Canada and Mustel Group determined that 20% of young urban family homeowners deferred RRSPs in favour of purchasing a home.Sotheby’s President and CEO Brad Henderson reckons that’s the sapient path to retirement. “Owning a home is one of the few tax-efficient purchases someone can make,” said Henderson.“When you buy a home as a principal residence and you sell it, it’s a tax-free event.With a Registered Retirement Savings Plans, the money goes in and you get the benefit of tax reduction up front;you get the benefit of money compounding on a tax-free basis all the way through, but you pay tax on the money when it comes out down the road.” The “Modern Family Home Ownership Trends PART 2:Financing the Canadian Dream” report surveyed 1,743 families in Toronto, Montreal, Vancouver and Calgary, 19% of whom secured more remunerative work to fund a down payment on their home purchase.Fourteen percent found auxiliary work, while 12% delayed parenthood and 9% moved in with family. In addition to 71% of “modern family” homeowners surveyed using personal savings to fund a down payment, just
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 14, 2019 201   0   0   0   0   0
Corporations account for much of the non-individual owners of residential property in Canada, according to a new analysis by StatsCan and CMHC. “Corporation ownership [is] concentrated among real estate, rental, and leasing industry and construction industry sectors,” the study noted.“In both Ontario and British Columbia, the real estate, rental, and leasing industry sector makes up the largest proportion of corporations owning residential properties at 31.1% and 23.4%, respectively.” On the other hand, in Nova Scotia, the largest non-individual owner is the construction segment at 28.8%, followed by real estate, rental, and leasing at 25.2%. “In all three provinces, the combination of construction and real estate, rental, and leasing sectors represented approximately half of corporations that owned residential property,” the study added. Read more:Red tape is a major influence in Vancouver’s housing scarcity[1] All in all, B.C.has the largest proportion of non-individual ownership of residential property.Around 9.8% of the territory’s residential properties were owned by non-individuals, and this ratio is even higher in locales outside the census metropolitan areas (15.8%). The rates in the province’s CMA’s showed considerable variance, with Vancouver’s 5.6%, Victoria’s 5.2%, and Kelowna’s 7.6%. Meanwhile, Ontario and Nova Scotia’s non-individual ownership rates were at 7.4% and 7.9%, respectively.As for their largest cities, Toronto’s rate was 4.2%, and Halifax
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 14, 2019 195   0   0   0   0   0
Amid accelerated price growth, many hopeful home buyers in Ottawa are either cooperating with friends or seeking help from the “Bank of Mom and Dad” for assistance on the payment, according to observers on the ground. The B-20 regulations that have introduced much stricter mortgage stress testing have been blamed for the province’s fevered price growth, with an average rate of nearly 15% from 2016 to 2018.These increases have placed the city’s average home price at $433,500 as of December 2018. Ottawa broker Chris Allard said that he has seen a “significant” increase in the number of cases involving would-be buyers who have received funds from relatives, or co-signed applications with friends. “If there’s an option at all for parents or family members to gift funds or to co-sign, they will take that option before choosing to pay a higher mortgage interest rate,” Allard told the Ottawa Business Journal. Read more:Ottawa’s pace of home price growth accelerates[1] B-20 inadvertently pushed a significant proportion of prospective buyers out of the market, despite some observable cooling down in Toronto and Vancouver prices. Traditional lenders have also ended up with a larger number of rejections, paving the way for alternative mortgage sources like the Ottawa-based firm Advanced Mortgage Investment Corp. “We
 
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing February 12, 2019 183   0   0   0   0   0
According to a REMAX report, ski resort properties have strong cash flow potential, however, interest among western Canadians is low. “The ‘Airbnb phenomenon,’ for lack of a better description, provides the opportunity for some return when [owners] are not using the property themselves, and that’s where four-season amenities become important,” said Elton Ash, REMAX’s regional executive vice president.“The properties cash flow through winter and summer months.” But, according to a survey conducted by Leger Marketing on REMAX’s behalf, 67% of western Canadian respondents believe the price of a resort property is proscriptive.Ash, on the other hand, says that they’re relatively affordable. “We know a large proportion of Canadians want to buy properties,” he said.“Seventy-one percent of western Canadians interested in purchasing ski properties want four-season amenities, but that number drops down to 23% who believe they could afford it.It’s interesting because with recreation properties in general, Canadians love the outdoors.” In the last 20 years, resort properties have diversified and now boast year-round amenities like golf courses.The report also revealed that all-season resort capabilities trumped snow level, snow quality level, mountain elevation, and proximity to restaurants and retail as respondents’ interest in resort properties. “What we noticed with this report is more and more Canadians are looking at ski resorts as recreational properties, as opposed
 
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