While B-20 substantially cooled Canada’s residential real estate
market, it’s proven a boon for the commercial sector.
“On the commercial front, we’re seeing a lot more activity on
buildings of more than 5 units,” said David Goncalves, a mortgage
broker and partner of Mortgage Alliance Vine Group.“We’re seeing
this upswing because people got squeezed out of buying residential
properties because of the lending rule change, and as a result
we’ve seen significant growth in the commercial sector.”
In Toronto, mixed-use developments have exploded in popularity
among investors, and Vine Group has capitalized on the growth by
securing financing for small and mid-sized real estate
developers.While residential lending practices have changed to
become more restrictive, commercial underwriting practices have
become more liberal.
“A lot of lenders on the residential side have door policies,”
Hugo Dos Reis, a partner at Vine Group, said of limits placed on
residential investment properties.“Lenders don’t want to loan to
holding companies, and if they do they charge a premium.Even the
big banks are getting away from that as well, but what we’ve found
is that a lot of people are looking at multi-residential commercial
properties instead of buying, say, a triplex.
“The lending now is on the asset and the most important part of
the deal:cash flow.The client’s exposure
Underscoring just how tight the Vancouver housing market is, the
British Columbia city was ranked the second least affordable city
in North America.
According to real estate site Zoocasa, Vancouver was second
among 30 major US and five Canadian cities.San Francisco was ranked
least affordable overall and Los Angeles was in third place.And on
the other end of the spectrum, Calgary was revealed to be the most
affordable housing market in North America.
Read more:RBC:Housing affordability has improved for the
first time in 3 years
The survey examined the median home prices for December 2018
calculated the minimum income required to purchase homes in each
city.That amount was then compared to the actual median income
earned, to determine whether the market presented buyers with an
income surplus or an income gap, which indicates incomes have not
kept pace with real estate price growth.
The survey found that Vancouver had an income gap of $99,517,
compared to a median income of $65,327.By comparison, Calgary had
an income surplus of $40,297, and a median household income of
$97,334.And another Canadian city, Ottawa, ranked sixth in
affordability, with an income surplus of $27,714 based on the
median income of $85,981.
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The last three months of 2018 finally brought some improvement
to housing affordability across Canada.
After more than three years of declining affordability, RBC
Economics says its measure shows widespread improvement;although
first-time buyers in the hottest markets are still facing a
In its Housing Trends and Economic Report, RBC’s aggregate
housing affordability measure reduced by 0.7 percentage points to
51.9% last quarter (measured as a share of household income).
But in the three most expensive markets there is still a crisis
with Toronto, Vancouver, and Victoria showing little improvement in
affordability for most buyers.
Vancouver’s affordability crisis endures despite being in
“full-blown correction mode.RBC says that even with the slump in
sales, high prices means homeownership still requires an
eyewatering 84.7% of household income.
Cooling market conditions in Toronto has taken a bite out of
sales but RBC expects prices to be flat over the next two
years;that won’t help the well-above-average affordability measure
Montreal’s housing market is heating up but prices are rising at
a steady pace.
The area’s affordability measure is some way below the two
hottest markets and below the national average, but at 44.5% it is
near a decade high.
Condos no longer the affordable alternative
The traditional option of
There could be a spike in mortgage applications in the third
quarter if a rate forecast from the British Columbia Real Estate
Association is realized.
The association’s economists are expecting interest rates to
ease during much of 2019 as weaker economic conditions force a
hold-steady from the Bank of Canada.
If 5-year bonds maintain their current level, there should be a
move for the 5-year qualifying mortgage rate, which has not moved
for almost a year.
Their forecast calls for 5-year qualifying mortgage rates to
fall from 5.34% in the first quarter of 2019, to 4.99% in the
second quarter, and reaching a year-low of 4.84% in the third
Rates are then predicted to climb to 5.15% in the last quarter
of 2019 and early 2020 before plateauing at 5.34% for the rest of
The 5-year average discounted rate is set for a drop to 3.44% in
Q2 2019 (from 3.60% in Q1), then a low of 3.30% in Q3 before
climbing back to 3.44% in Q4, 3.64% in Q1/2 2020, and 3.74% in Q3/4
BoC to cut rates?
There are some economists predicting that the BoC may actually cut
rates in 2019 rather than just maintain their current level.
However, BCREA’s economists do
Alternative lender Cashco has launched an awareness campaign on
social media to raise the issue of those Albertans who cannot
The #needmilkmoney campaign has surveyed 3,000 Albertans and
says that across Canada it estimates more than 5 million people are
‘underbanked’ – they have a bank account but cannot access other
services due to high costs.
"We want politicians to know that there is a portion of our
population that is not being served by mainstream financial
institutions," says Courtney Johnston-Naumann, Vice President of
Marketing &Communications, Cashco Financial."The stories of
families in our communities who struggle between paycheques is
real.They are hardworking people who sometimes need a hand up, not
a hand out, to be able to pay regular or unexpected bills in
moments they need it the most.They should be able to access the
credit they need without the many constraints currently in place
that make it more difficult to pay back."
Cashco says that An Act to End Predatory Lending introduced by
the Alberta government in 2016 limits fair and equitable access to
credit and makes building a positive credit history harder.
“The language and limitations imposed in the Act were a surprise
to us," said Tim Latimer, CEO, Cashco Financial."It indicated that
there was very little understanding of
A new platform could make investing in Canada’s most expensive
real estate market less daunting.
Vancouver-based Fraction is an equity stake lending platform
that bills itself more secure than traditional home equity lines of
credit, and by taking a 40% equity stake in a property can reduce
mortgage payments by 35%.
If Fraction were enlisted at the transaction’s outset amd put up
40%, the purchaser would then only need to secure mortgage
financing for the remaining amount.
“If you own a home and want to take some equity out of it, your
existing option is you could sell, get a HELOC or reverse mortgage,
but we think our option is better because you can sell up to 40% of
the future value of your home to us.It’s almost like selling shares
in a home,” said Fraction’s Chief Technology Officer Josh
Baker also touts the platform as an easier way to invest in
additional real estate properties.
“If you want to invest in real estate in Vancouver, you could
buy securities from us, which will represent a pool of properties
in the city, and the value of those securities is debt-protected,”
he said.“Because we’re investing in residential real estate, we’re
using the fundamentals of a mortgage, meaning it’s a mortgage
New regulations may cool down rental prices in Kelowna, B.C.,
which rentals.ca ranked as the ninth most expensive rental market
On rental.ca, the average rental listing in Kelona for a
one-bedroom was $1,299 and $1,754 for a two-bedroom.Comparatively,
the average national rent for all bedroom types in February was
$1,800 – a 1.8% increase from the month prior.
prices exhibit significant Q1 growth
Reacting to a tightening rental market, the Kelowna City Council
voted in early March to add restrictions to short-term rentals on
platforms such as AirBNB by licensing owners $345 a year.According
to local news outlet Salmon Arm Observer, the move is expected to
open up a few more units for long-term rentals.
Kelowna Community Planning Manager Ryan Smith told Salmon Arm
Observer that he estimated 700 to 800 units could be added to
rental market after the new regulations are enforced.Smith added,
however, that “because of the seasonality” nature of tourism in
Kelowna, that number is hard to predict.
Additionally, Taylor Pardy, a senior analyst at the Canada
Mortgage Housing and Corporation (CMHC), told Salmon Arm Observer
that the vacancy rate will be higher in 2019 and 2020 than in the
past three years because of “the volume of apartment rental units
Property developer Cadillac Fairview (CF) and asset manager TD
Greystone Asset Management (TD Greystone) have announced plans to
revitalize major Toronto shopping centre CF Fairview Mall.
According to CF, an estimated $80 million will be dedicated to
revamping 230,000 square feet of existing department store and
other retail space to introduce more brands to the property;create
a new row of restaurants;and improve pedestrian access to the
nearby Don Mills subway station.
Construction is expected to begin this month with completion of
the revitalization project is slated for 2023.
remains a strong real estate investment magnet
CF and TD Greystone are also in discussions with city officials
about rezoning the CF Fairview Mall site to accommodate additional,
mixed-use density to meet the needs of the growing community.Future
development plans may include residential, hotel, and office space
along the periphery of the property.
"This area is undergoing many changes which reflect peoples'
desire to work, live, shop and dine in a dynamic, transit-connected
mixed-use community," said Wayne Barwise, executive vice president
of development at Cadillac Fairview."Our redevelopment plan is
about diversifying CF Fairview Mall and the surrounding land so we
can continue to offer a vibrant destination for people to come
together and enjoy."
"We are excited to be
Ascertaining exact valuations for commercial real estate
holdings is as daunting as it is convoluted, but an American
platform is simplifying the process.
VAL, a cloud-based software that integrates internal and
external applications, is a game-changing model for the commercial
sector of the real estate industry.In essence, VAL predicts
valuations through the duration of the asset hold, be it a decade
or 15 years, by drawing upon myriad sources of data, and in the
process it’s become one of the most efficient cash flow modeling
tools on the market.
“In its bare bones, it tells you the value of your asset today
based on the way it will perform over however long your time
horizon is,” said Stu Sleppin, managing director of Rockport
VAL.“It will allow owners to make better informed decisions.Just as
someone underwrites a loan to buy a house, they will look at your
financials and make a decision;VAL does the same thing with a
commercial real estate asset.”
In fact, even banks use VAL to determine a commercial property’s
Sourcing building, tenant and construction data compiled over
years, VAL is, simply put, disrupting the commercial real estate
industry like few things before it.VAL’s calculation engine is its
key, says Rockport VAL’s Timothy Benz, director of sales.
Bridgemarq Real Estate Services has announced that it filed its
annual information form, management information circular, and
related annual meeting materials on SEDAR.
In the filings, Bridgemarq set its annual meeting for May 7,
2019 in Toronto.The term of Simon Dean as director at Bridgemarq
will also expire on that day, and he has announced that he will not
be seeking re-election to the board. Brookfield’s board
extended thanks Dean for his contributions and wished him well his
Read more:The new
investment vehicles that’s driving up returns
To replace Dean, Bridgemarq’s board has proposed Colum Bastable
as a director-nominee to be considered for election at the annual
meeting.Bastable has over 40 years of experience in the real estate
services industry, including his recent role as chairman of Cushman
and Wakefield Canada, a leading provider of commercial property
brokerage services.Further details about Bastable can be found in
the management information circular, which is available for
download on SEDAR.
Bridgemarq is a leading provider of services to residential real
estate brokers and has a network of over 18,000 realtors.The
company operates in Canada under the Royal LePage, Via Capitale,
and Johnston &Daniel brands.
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one of our mortgage experts to tell
Constellation HomeBuilder Systems, a provider of home building
software and services, announced the acquisition of online listing
With the common goal of connecting buyers, builders and real
estate agents, the NewHomeListingService.com team will be joining
Constellation HomeBuilder Systems to further expand the most
comprehensive homebuilding and land development platform in the
Read more:Technology disrupts commercial real
NewHomeListingService.com will be integrated with the NEWSTAR,
FAST, and BuildTopia enterprise resource planning platforms of
Constellation HomeBuilder Systems.The integration will allow data
to sync in real-time so that prospective buyers have access to the
accurate and updated information.
"This acquisition provides a growth opportunity for both
businesses and supports our strategy to help builders manage their
business more successfully,” said Chris Graham, vice president of
Constallation HomeBuilder Systems.“Promoting new homes and condos
is easier than ever before.As builders look for more effective ways
to connect with homebuyers, we will be well-positioned to support
them on that journey."
"Constellation HomeBuilder Systems offers a tremendous
opportunity for NewHomeListingService.com to further expand its
service offering in Canada and the United States," said Milo
Anderson, founder of NewHomeListingService.com."Joining
Constellation creates the perfect synergy allowing builders to get
the most exposure for their new homes and condos in the most
Are you looking to invest in property?If
Air-tight compliance is the key ingredient to syndicating
mortgages and a nascent Toronto firm is paving the way forward that
sector of the real estate industry.
“We’re a community of investors and partners who only underwrite
deals we feel are good for our investor base, and how we do that is
to make sure we only get compensated when the investor can generate
a principal return from their investments,” said Luan Ha, founder
and CEO of Fundscraper.
Fundscraper arranges bridge financing for large developments on
first, second, or combination, mortgages between one and three
years, and it’s setting a new standard by using technology to both
reduce costs and protect investors.Using a complex technological
algorithm to assess potential investors’ suitability for syndicated
mortgages, Fundscraper is also in the business of advising various
mortgage investment entities.
The key, says Ha, is through harnessing technology.
“We use technology to enhance our ability to drive data out of
our suitability assessments and, therefore, produce more holistic
and accurate suitability assessments,” he said.“We use our data
models to figure out whether a project fits within the time horizon
or risk tolerance or investment concentration threshold of this one
particular investor.We make it a point that our KYC [Know Your
Customer] are done through what we call our
A 10-year agreement cemented between the governments of Canada
and Alberta will give rise to more affordable housing units in the
province over the next decade.
The deal involves the investment of $678 million in the renewal
and expansion of Alberta’s low-cost housing, with both governments
contributing $339 million each for the long-term funding.
The agreement – which will greatly support Alberta’s initiatives
concerning housing repair, construction, and affordability – comes
in addition to the more than $638 million in existing 10-year
federal housing investments in Alberta, coursed through the Social
The Liberal administration has invested almost $510 million in
Alberta’s housing since November 2015.The oil industry crashes of
recent years have hit the province’s home buyers and consumers
sector recovery propelling Western Canada’s rental homes
“The new agreement marks the beginning of a partnership that
will be supported by long-term and predictable funding starting
April 1, 2019,” the governments stated in the announcement.
“Alberta’s first Affordable Housing Strategy was launched in
2017 with the goal of building and renewing 4,100 units, and that
goal is about to be achieved and exceeded.This new agreement means
Alberta can continue our bold approach to address the housing needs
of Albertans,” Alberta Minister of Seniors and
Major high-rise office projects accommodating more tech tenants
and greater commercial investment volume are scheduled to commence
soon in Toronto and Vancouver.
Leading developers Allied Properties REIT and Westbank have
announced that the construction of the office towers – which are
predicted to “reshape” these markets’ downtown areas – will pave
the way for greater tech industry presence in Canada’s largest
Tech companies have been cited by observers like Marcus
&Millichap as a major pillar of stability form the office
In Toronto, the 264-metre, 1.7-million-square-foot Union Centre
building will be built near Union Station.
“[Union Centre] is a sign of what Toronto is becoming,” Westbank
chief executive Ian Gillespie told The Globe and Mail.“The
city isn’t just about finance any more.It’s about everything:tech,
culture and a variety of other pursuits.”
Read more:Commercial property market heavily leans upon
In Vancouver, Allied Properties REIT and Westbank will be
erecting a 500,000 sq.ft.tower beside BC Place.This project is
expected to become one of the city’s largest office buildings so
Tech’s influence in Canadian commercial real estate has been
predicted to grow even stronger in the near future, with major
players like Microsoft, Google, and Amazon likely spending billions
in office expansions and hire tens
Montreal’s luxury housing market is expected to be the strongest
of the spring season.
According to a new report from Sotheby’s International
Realty Canada, the city’s hot real
estate market shows nary a sign of regressing.On the heels of a 20%
year-over-year increase in sales over $1 million in 2018, Sotheby’s
expects a sales record this spring.
“With strong economic and political fundamentals driving local
confidence and demand, top-tier sales escalated in the first two
months of 2019,” read the luxury housing report.“Overall, $1m-plus
residential real estate sales (condominiums, attached and
single-family homes) were up 6% year-over-year to 111 units sold in
January and February.Two luxury properties sold over $4m during
this time, up from zero the same months in 2018.”
Of particular significance, luxury condos in Montreal surged 53%
year-over-year through January and February 2019.During January
alone, transactions in Montreal totalled $1.63 billion, which is an
18% lift over the same month in 2018.
“We expect the Montreal market to continue with its very healthy
year-over-year increase in activity,” Sotheby’s President and CEO Brad
Henderson told CREW.“It will add somewhat to the upper pressure to
price, particularly in the central region.We don’t see risk to that
forecast, with the possible notable exception of a foreign buyer