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
“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
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.
cooling policies still needed – B.C.Finance Minister
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
Good news for luxury condominium owners in Toronto and
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
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
Read more:Red tape
is a major influence in Vancouver’s housing scarcity
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
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.
offers positive outlook for sales, price growth in 2019
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
Few real estate investors aren’t sweet on student housing, and
for good reason, but which regions in Ontario have the most to
The owner of Strauss Investments says cities with satellite
schools are a good net because of their small but concentrated
“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
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%.
wars now more frequent in Montreal
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
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
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
“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
“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
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
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
“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
commercial investment to intensify this year
“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
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.
industrial segment rushes headlong into 2019
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
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
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,
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
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
Read more:Red tape
is a major influence in Vancouver’s housing scarcity
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
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
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
“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.
pace of home price growth accelerates
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.
According to a REMAX report, ski resort properties have strong
cash flow potential, however, interest among western Canadians is
“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
“What we noticed with this report is more and more Canadians are
looking at ski resorts as recreational properties, as opposed