Montreal’s current industrial real estate availability of 3.2% is currently at less than half of what it was just two years ago, according to fresh data from commercial real estate services and investment firms CBRE.
And this is likely to be just the beginning:Near-zero industrial availability in Toronto and Vancouver will push tech, manufacturing, and online retail companies to go for other major metropolitan areas such as Montreal, CBRE Quebec managing director Avi Krispine predicted.
The direct result of this influx is accelerated growth in Montreal’s commercial rent levels and purchase values, with much of the demand coming from technology, manufacturing, transportation, and logistics firms.
“There is great momentum from the economy in Quebec.Businesses are expanding and more multinationals are coming to Montreal,” Krispine told the Montreal Gazette.
“In the next few months it will be extremely interesting to see the rates for lease and sale.How high are they going to go?”
A report by Devencore last month indicated that the robust growth of Montreal’s tech and manufacturing sectors is largely impelled by the city’s four top-rated universities and developed tech scene.
These attributes magnetize attract highly intelligent and skilled
Collingwood, Toronto’s retirement arcadia to the north, is reinventing itself as Tech Hub North.
“In Collinwood and the South Georgian Bay region, we launched the Tech Hub North campaign, and in the last six months and I’ve had meetings with folks who have done very well for themselves in Silicon Valley and Toronto and they all have places up here,” said Martin Rydlo, economic development officer for the Town of Collinwood.“So we’re going, ‘How do we become part of this and invest more into these companies setting up shop here and starting to grow?’”
The town has received a surge of young families in the last few years, many of whom work remotely, and as their numbers swell, Collingwood is reinventing itself from a tourist town into regional hub with a diverse economy.
“There’s no other place in the world that has the same collection of private ski clubs that we do,” continued Rydlo.“Those ski clubs attract people with tons and tons of money, and as they spend more time here they want to invest in the community.It’s only an hour and a half drive from Toronto.They want to invest in the community and they’re
Two-storey homes remain Vancouver’s most expensive residential asset class, with an aggregate price of over $1.5 million.
The latest edition of the Royal LePage House Price Survey reported that even with a 3.3% annual decline during the second quarter of the year, the asset class still commands a value of $1,509,711.
This far outstripped other strong performers in Vancouver.Bungalows declined by 7.6% to end up at $1,315,612.Condos dropped by 2.8% annually to reach $668,389.
The aggregate price of all residential property types was at $1,208,674 during Q2 2019.Considering these values and the fact that Vancouver is seeing elevated inventory, it is not surprising that many would-be buyers are adopting a wait-and-see strategy instead.
“A wider variety of available homes to choose from is giving home buyers extra time to plan and make decisions,” Royal LePage Sterling Realty general manager Randy Ryalls explained.
“A better understanding of the reality of the real estate market in the region is helping both home buyers and sellers to manage expectations and make better-informed transactions.”
Sustained decline is highly likely.Royal LePage predicted that by the end of this year, Greater Vancouver will experience a 5.5% annual drop
Toronto is seeing much stronger activity in its market for homes valued at $1 million and lower, especially in the condo segment, according to new data from Royal LePage.
Condo units in the GTA saw their average value increase by 7.2% annually during the second quarter of the year, ending up at $542,203.
This made the asset class the fastest appreciating housing type in the GTA – and this will likely intensify further.
“Recent economic announcements aiming to strengthen first-time home buyers’ purchase power including CMHC’s incentive, have the potential to impact the condominium market,” Royal LePage Signature Realty president Chris Slightham explained.
“Our team witnessed some buyers putting decisions on hold until the new mortgage incentives get fully established, waiting to see how they can benefit from the encouraging new measures.”
Condos markedly outstripped growth in two-storey homes (1.7% year-over-year to $970,772) and bungalows (1.6% to $809,648).
The region’s overall aggregate home price during Q2 2019 was $841,729.Royal LePage predicted this figure to remain relatively steady until year’s end, crawling up by only 1.4% annually.
On the rental side, a dearth of units driven by the intense popularity of condos
As the cost of homeownership and renting soar in Canada, co-living could soon burgeon across the country.
And a new project in Kitchener-Waterloo by Node, a global leader in the co-living space, could be a telltale sign of how quickly it catches on.
The move-in-ready units will be completely furnished with all-inclusive utilities, and interestingly, “Community Curators” will match roommates together.Because co-living is predicated on the concept of community, curators help residents connect with each other and the wider community.
Shafin Jadavji, a local partner of Node Living, noted that, in addition to a fervent social environment, “Nodies,” as they’re known, also benefit from bundled costs and, therefore, savings.
“If you’re good to live with a roommate, you cut monthly expenses into half;if you want to live alone, there are also one-bedroom units,” said Jadavji.“When you look at the cost of buying furniture, dealing with internet hook-ups, cable, utilities—all those things add up and become a significant cost.At Node Living, it comes in 25-30% lower when you factor in those other costs, so we’re making the system more efficient.”
Also paramount to co-living is separating the objective from the experience, added Jadavji.
Canada should brace itself for a major recession in as little as a year and a half, according to economist Campbell Harvey’s previously successful economic model.
The U.S.Treasury yield curve model, which Harvey developed for his 1986 Ph.D., has shown an inverted reading thrice:in 1989, in 2000, and in 2006.
All of these were immediately before the three major recessions of 1990-1991, 2001, and 2008.Worryingly, as of July 2019, the curve has been on an inverted state for an entire fiscal quarter.
“The key thing is, that’s exactly what it looks like before all recessions a year or a year and a half in advance so this is not surprising at all.This signal delivers a nine- to 18-month advance warning, historically,” Harvey said in an interview with Global News.
He added that what the curve essentially shows is that short-term bonds are paying higher rates than long-term bonds.This is a dangerous combination, despite unemployment being at an all-time low and the stock market at a record high.
“The idea of the yield curve is that when you lock up your money for different periods of time, you expect a different [interest] rate.The
Mortgage investment has just become a whole lot easier—not to mention less convoluted.
Fundscraper is a Toronto-based government regulated online platform that conflates technology, expertise and stringent compliance measures to facilitate financing for a range of real estate projects from large commercial developments to first, second, or combination mortgages with terms between one and three years.What distinguishes Fundscraper is the use of technology to reduce costs and, most importantly, protect investors.
The automated process is a breeze—so much so that Fundscraper eschews traditional hard copy brick and mortar programs in favour of an easy-to-use digital platform.Accepting funds from everybody from individuals to major institutions, it has removed tedious obstacles and streamlined the real estate investment process, especially for property-backed securities in an effort to abet attractive returns.
To find out more about Fundscraper’s anchor investments, click here.
“What we do is provide not only a platform to make opportunities available, but we enable the acquisition of that investment. We do the heavy lifting for you!” said Gregory Colford, Fundscraper’s Executive Vice President and Chief Compliance Officer.“We essentially use tools recognized under Ontario securities laws and we do it all online.Throughout the
Investment-use condos are the most significant obstacles to housing affordability in Toronto, according to observers.
Latest Statistics Canada numbers indicated that fully 39.7% of the market’s condos are not owner-occupied, meaning they are either vacant, rented out, or used as second properties by their owners.
Andy Yan, the director of the City Program at Vancouver’s Simon Fraser University, stated that the data only proved that Canadian housing is no longer for Canadians, but rather for those who can command the highest prices.
Wealthy foreigners, especially those from mainland China, have been pinpointed by multiple analyses as major factors promoting out-of-control home price growth.
“It’s not about supply or demand anymore,” Yan said, as quoted by The Guardian.“It’s ‘who are we building for?’”
Aggravating these conditions is that the development of purpose-built rental units was never a high priority for any provincial government over the past four decades or so.
Moreover, any newly built units that do enter the market tend to be expensive condos that get rapidly snapped up by wealthy investors, Realosophy Realty president John Pasalis stated.
“Five years down the road, do we really need 50,000 micro-condominiums that are
Investors should take note—resale condominiums are driving Ottawa’s residential real estate market.
According to the Ottawa Real Estate Board (OREB), there were 2,105 June sales, up 2% over June 2018.Resale condos are, however, where the growth becomes noticeable.
“Increasing by 8.3%, condo resales are the driving force for the upturn in units sold in the first half of 2019,” Dwight Delahunt, president of the Ottawa Real Estate Board, said in a statement.“Combined residential and condo year-to-date sales of 9,876 show a 1.8% increase from June 2018.”
Over the last 10 years in Ottawa, condos have appreciated 34%, and as Delahunt notes, it isn’t a speculative market.Rather, economic fundamentals appear to be the main driver.
“This is not a speculation market.Going forward, we anticipate there will be high demand in the foreseeable future due to increasing population and strong employment in the area,” he said."We’re pleased to see all levels of government starting to address the supply-side issue, but we feel there is still work to be done.We will be watching the upcoming federal election closely to gain insight as to how the various parties intend on addressing attainable homeownership issues.”
According to OREB
Edmonton real estate investment volume grew for the third straight year in 2018, according to a new analysis by Altus Group.
Total investment in the city’s properties grew to $3.94 billion last year, “despite a national struggle to balance supply and demand in real estate,” Altus noted.“This level of investment lead to robust gains in the Industrial sector and the Apartment sector in 2018.”
Investment property sales also grew by 37% in 2018, with the industrial sector contributing the largest volume at $878 million across 220 transactions.
“Demand for new office and industrial space is expected to stay strong over the next year,” Altus stated.
The office and retail sectors had generous gains last year, with the office market enjoying a $149-million increase and the retail segment having a $141-million growth.
“However, the office vacancy rate increased slightly to above 15% in 2019, with continued demand for new modern spaces in the downtown region.”
Residential land investment also accelerated by 18%, while the apartment segment saw the largest annual increase in terms of dollar volume, growing by 69% to reach $849 million.
Late last month, a study by Marcus &Millichap noted
Toronto’s detached home sales in June helped offset notably slower activity in the condo sector, according to the latest data collected by TREB.
The city’s detached housing segment enjoyed a 19% year-over-year increase in sales last month, which made up for the condo market’s 3.2% decline during the same time frame.
Lower condo sales stemmed from a weaker Toronto core, which suffered a 5.6% decline in activity last month.This negated a 2.7% increase in the GTA.
Overall Toronto sales went up by 10% annually in June, for a total of 8,860 homes changing hands.TREB noted that the market continued to labour under low supply and red-hot prices, however
New listings dropped minutely by just 0.4%, ending up at a mere 15,816 homes for sale in Toronto.The market’s benchmark housing price grew by 3.6% year-over-year to $798,500, and the average sales price increased by 3% to $832,703.
Condos remained among the most desirable property types, posting the largest annual price growth at 7.5%.The benchmark price of the asset class stood at $539,500 in June.
“Buyers started moving off the sidelines in the spring,” TREB chief market analyst Jason Mercer stated, as quoted by
It is more likely than not that the Bank of Canada holds the interest rate at 1.75% on Wednesday, but there’s a growing chorus that believes it will decrease the rate before the end of the year.
“If we were only looking at domestic factors, we might think that the Bank would soon start to consider further rate hikes,” said Capital Economics’ Stephen Brown.“Economic growth is on track to outperform the Bank’s forecasts in the second quarter and core inflation has risen in recent months.But outside of Canada, trade tensions have grown, there are signs that U.S.GDP growth is slowing, and the Fed has signalled that it will soon cut rates.We suspect that the next move will be a cut.”
Dalhousie University’s Lars Osberg believes an interest rate cut is coming sooner rather than later.
“Sudden global trade softness,” he said.
However, neither a rate hike nor decrease is likely Wednesday because of headwinds from abroad, according to the Conference Board of Canada’s Alicia Macdonald.
“While some data suggests that the Canadian economy is indeed emerging from its recent slump, there remains a significant risk to the global economic outlook due to global
Warning that the affordability situation has reached crisis levels, a new report by advocacy organization Generation Squeeze stated that Canadian millennials now need almost three decades to save enough money for home purchases.
“It’s an emergency… these are critical levels,” leading academic and Generation Squeeze founder Paul Kershaw told the Financial Post.“We’ve been sounding alarm bells in B.C.and across country.Affordability is a way bigger problem than we’ve been talking about.”
At current income levels, and assuming that 15% of pre-tax earnings are allocated to housing savings, today’s young adults and first-time buyers are estimated to take as much as 29 years to afford a home in Metro Vancouver.
This duration is fully eight years longer than the previous generation needed back in 1976, Generation Squeeze stated.
In the Greater Toronto Area, this demographic will need 21 years to save for a 20% down payment on an average-priced home.In Ottawa and Quebec, prospective buyers will have to run tight budget ships for 10 and 11 years, respectively.
Across Canada, millennials will need takes 13 years of full-time work to save for a home purchase.
These results dovetailed with the findings of
Despite stronger sales on an annual basis, Victoria’s real estate market performance last month remained muted in the greater scheme of things.
Overall sales volume in June was 4.5% higher year-over-year, but was 12.7% below May 2019 levels.
“June has trended lower than May for the past few years and tends to signal the end of the active spring market,” Victoria Real Estate Board president Cheryl Woolley explained.“The summer months of July and August generally see less activity than the spring, as people’s attention shifts to vacation and away from real estate.This year, we have seen slightly more sales compared to June of last year.
“We have also seen one hundred fewer new listings enter the market this year, which continues to make a challenging market for buyers who are hoping for more options.”
Single-family homes sold the most in BC’s capital city in June, with transactions increasing by 10.4% annually.On the other hand, the condo sub-sector had a 6.1% decline during the same period.
The benchmark price of single-family properties in Victoria’s core fell by 4.3% year-over-year, ending up at $859,600.Condos’ benchmark value edged up by 2.97% to settle at $524,100.
It will take a monumental market crash for home prices to come down—that isn’t likely to happen—so the time is nigh for Canadians to relinquish the stigma associated with renting.
“We do think of renters, too often, as a second-class neighbours and we use that second-class status to discourage having rental buildings in neighbourhoods that have typically been more oriented to single-family detached homes,” said Dr.Paul Kershaw, founder and lead researcher of Generation Squeeze, an advocacy organization for young Canadians.“We have to change that and recognize that renters are just as excellent neighbours as owners and recognize that many people’s kids are going to be renters for long periods of their lives, even if they’re lawyers, and recognize that things are changing.”
Among Generation Squeeze’s projects is We Rent, which endeavours to level the playing field between owners and renters.While most subsidies favour homeowners, renters have few, if any.
“We have policy goals and observe housing subsidies in place for homeowners—tax-free RRSP saves money to put into your down payment;you never have tax-sheltered money to put into your rent,” said Kershaw.“You have homeowners’ grants and the First-Time Home Buyer plan, not to mention the biggest