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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 07, 2019 97 0 0 0 0 0
Toronto’s residential property sector has recently been characterized by accelerating sales and tight inventory, according to TREB’s latest data. The market saw 9,989 home sale transactions close through the Board’s MLS System last month.This was 18.9% above the 15-year low for May, which was seen last year. “Sales activity continues to be below the longer-term norm, as potential home buyers come to terms with the OSFI mortgage stress test and the fact that listings continue to be constrained relative to sales,” TREB president Garry Bhaura said. “After a sluggish start to 2019, the second quarter appears to be reflecting a positive shift in consumer sentiment toward ownership housing.Households continue to see ownership housing in the GTA as a quality long-term investment as population growth from immigration remains strong and the regional economy continues to create jobs across diversity of sectors.” Bhaura warned, however, that the May numbers are still considerably lower than the long-term average of 10,300 for that month. The number of active home listings crept up by just 0.8%, for a total of 19,386 properties.Sales prices went up by 3.6% annually, reaching an average of $838,540.The cost increase was much larger
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 07, 2019 100 0 0 0 0 0
With multiple indicators hinting at robust performance for the rest of this year, Canada’s industrial properties have seen a record-low vacancy rate of 3% during Q1 2019, according to a recent analysis by Avison Young. Stability and growth prospects for the asset class are extremely positive, with supply scarcity being the dominant condition.The Avison Young survey found that 10 of the 11 markets studied had lower vacancy levels in the single digits, and that four of these had rates well below the national average. Indeed, three Canadian markets – namely, Vancouver (1.2%), Toronto (1.5%), and Ottawa (1.6%) – exhibited the lowest vacancy rates throughout North America during the first quarter. And this might be just the beginning, as logistics ventures’ need for wide open spaces is likely to inflame even greater competition. “E-commerce remains the industrial sector’s catalyst for success as retailers and developers strive to perfect the supply chain,” Avison Young COO (Canadian operations) Mark Fieder explained, pointing at these companies’ demand for distribution/fulfilment facilities located on or near major urban centres. “This situation is most apparent in Toronto – and in Vancouver, where strata units increasingly offer the only opportunities for
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 05, 2019 112 0 0 0 0 0
A novel, if risky, idea is slated for Vancouver’s real estate landscape. Aragon Properties will be building two condominiums before even opening sales—a move that almost never occurs in Canada because developments must hit about 80% sales before financing can be secured. “We’re going to bring to market two particular products in some of the most desirable areas of Vancouver’s West Side.One of the things here is the finished homes offer buyers clear advantages over buying off plans;it lets buyers see first-hand the special architectural detail included in each home,” said Aragon’s Vice President of Development Howard Steiss, who added that the projects are self-financed. “To get the kind of architectural detail we’re including has to be understood and appreciated.” One of the condos is called Amber, a 31-unit, four-storey brick, concrete and wood building, and the other is called Shift, a six-storey, 43-unit condo.Both projects have up to three bedrooms.Viewings will begin in July. An advantage to buying a brand new home that’s already constructed is, apart from its tangibility, the move-in date is much, much sooner and not subject to the same delays preconstruction condominiums are usually burdened by. “We
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 05, 2019 97 0 0 0 0 0
Canadians are taking significant risks when they go for alternative funding avenues in the current B-20 regulatory regime, a DLC mortgage professional claimed. “What’s happened is the new rules, particularly the stress testing, have begun excluding many responsible Canadian homeowners who had previously qualified for mortgages, so many are unfortunately trying their luck with alternative lenders;either to handle their entire mortgage (highly inadvisable), or to top up a down payment,” Quebec-based accredited mortgage professional Terry Kilakos wrote recently in his analysis. “By pushing people to the alternative lending market, [consumers] are being pushed away from the safe harbour of high-quality lenders and into a less regulated and higher-interest area of the market.” Numbers from CIBC bear out these observations:in terms of dollar volume, alternative mortgages now represent around 7% of the market, up from the 5% proportion in 2017. The activity represented by this growing share comes with risks innate to the alternative space itself, Kilakos warned. “Regulation is looser on the alternative market, so by letting debt-to-income ratios climb much higher, it makes it easier for people to qualify for a mortgage.The catch is that by letting those ratios go higher, the
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 05, 2019 133 0 0 0 0 0
A major $15-million transaction for two multi-family properties just closed in Ottawa last week, attesting to the sub-sector’s continued strength. “Private and institutional clientele continue to show strong interest in Canadian multifamily assets and although opportunities are limited at times, our deep reach and strong client relationships give us the edge in completing transactions,” Institutional Property Advisors senior managing director Aik Aliferis said. IPA, which operates under Marcus &Millichap, announced the completion of the deal involving two mid-rise apartment buildings:the five-storey 50 Selkirk Street, which comes with 75 units in 52,635 square feet, and the four-storey 350 Mayfield Avenue, which offers 61 units in 37,730 sq.ft. “These two apartment assets are situated within a primarily residential neighborhood that has become increasingly popular with young families,” Aliferis noted. Ottawa’s economy has steadily boosted the value of the asset class over the past few quarters, according to an Engel &Völkers report. Much of the region’s economic robustness can attributed to population growth levels, which stood at 8.8% as of the last reading.For perspective, the national rate was far lower at 5.9%. “With the market absorbing condos at a faster rate, coupled with the market’s
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 02, 2019 77 0 0 0 0 0
Senior vacancy rates increased in British Columbia, Quebec and Alberta, but fell in Ontario According to the Canada Mortgage and Housing Corporation’s Seniors’ Housing Reports—which surveyed seniors in February and March—vacancy rates for standard spaces in seniors’ residences in B.C.rose for the first time in six years, hitting 4.2% in 2018 from 3%.Non-standard spaces, however, had a vacancy rate that fell 2.1% in 2018 to 1.3% this year.The largest decline came in Vancouver and the Central Coast region/ As one would imagine, rents $1,900 and below were in high demand and had the lowest vacancy rate of all rent ranges.Last year, the lowest vacancy rates were in rental accommodations priced between $2,900 and $4,900 a month.The average rent for standard space grew 5.4% to reach $3,275 this year, but the highest rent increase was a whopping 22% for bachelor and studio units. As in B.C., Quebec saw some breathing room with its rental spaces for sneiors.The vacancy rate for standard spaces in the province was 7.2%, which increased from 6.9% in 2018.The average rent for the spaces in 2019 was $1,788, and the capture rate was 18.4%d—vastly different than the 6.1% rate for the remaining
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 02, 2019 71 0 0 0 0 0
Existing policies and market conditions in BC prevent many buyers and sellers from fully participating in the market, according to Vancouver’s Central 1 Credit Union. The firm found that home sales in the province decreased by a massive 40% since the end of 2018.Currently, hopeful buyers are hesitating due to high price levels, while potential sellers would rather wait on the sidelines for a market recovery. Stricter federal and provincial regulations were cited to be major factors slowing down activity, the analysis noted.Among the most damaging of these policies were B-20 (which weakened purchasing power by 20%) and BC’s 20% foreign buyer tax (which forced capital holders to invest elsewhere). Even BC’s likely robust economic performance this year will not be able to offset these weaknesses, Central 1 deputy chief economist Bryan Yu said.Residential sales are estimated to further decrease by 11% in 2019. And the actual situation this year might even be worse:Yu cautioned that the analysis did not take into account the possible effects of money laundering. “These were model-driven numbers based on international numbers and I would say very little localized information,” Yu told The Canadian Press.“It seems to me
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   June 02, 2019 73 0 0 0 0 0
Investing in healthcare sector assets might be a potent, if unconventional, buffer against the worst effects of housing market weakness, according to The Motley Fool columnist Andrew Button. This is largely because of the industry’s evergreen nature, Button noted. “The healthcare sector is noted for its stability.In Canada, it is largely government funded, and what isn’t funded is usually covered by private insurance, which makes the healthcare industry very reliable in terms of income and, by extension, demand for office/clinic space,” the markets analyst said. Such alternative investment avenues have become more important in the wake of news pointing to a 17-year low in Canadian mortgage growth rates, Button added. A leading player in this investment space is Northwest Healthcare Properties REIT, which has a portfolio of 149 income-producing healthcare facilities.These include hospitals, offices, and medical clinics. “This highly specialized niche provides a kind of moat, as the company is one of the few in Canada that focuses specifically on healthcare,” Button explained.“The company’s high geographic diversification also provides a buffer against losses in any one market:it owns properties in Canada, Brazil, Germany, Australia and New Zealand.” Moreover, the avenue
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 30, 2019 140 0 0 0 0 0
Brick and mortar shopfronts have been e-commerce’s greatest casualty—there have already been more store closures in 2019 than all of 2018 combined—but an innovative technology company is reversing the trend and, in the process, taking North America by storm. FrontRunner Technologies installs content reels on vacant commercial unit windows as a way to generate interest in the property, but also to help landlords and brokerages determine who their target tenant should be.Nathan Elliot, founder of FrontRunner, says that by installing its WindowFront Matrix and sharing 5% of the advertising revenue with landlords or brokerages, his company in effect partners with them. “We arm brokers and landlords with new real time data where they can log into the storefront dashboard and they can see, in locomotion, outside of said space,” said Elliot.“We use Impression Data:About 85% of people walk around us with their WiFi enabled on their cell phones and we can use that to determine the number of people walking by that installation or empty space.Secondly, we use Computer Vision, which is a pinhole camera that remains anonymous and that allows us to do a demographic profile, traffic counts and an array of different variables that arm the real estate group with data they didn’t previously have.We augment our value proposition through the analytics and the creation
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 30, 2019 110 0 0 0 0 0
Minto Apartment REIT now offers more inroads in Montreal’s thriving multi-residential market. Earlier this month, the company announced its acquisition of a 50% interest in Rockhill, a six-building multi-residential property at 4850-4874 Côte-des-Neiges Road in Montreal. “It is with great enthusiasm and pride that we are entering the strong Montreal rental market for the first time with the purchase of Rockhill,” Minto Apartment REIT CEO Michael Waters said. Built in 1967-68, the 7.6-acre property brings with it 1,004 housing units.It is located near the University of Montreal and Mount Royal Park.It is also situated closely to several hospitals and the Côte-des-Neiges Metro Station. “Rockhill has the right foundation to become an even better place to live:an iconic property and a great community that we want to build on.” Altus Group stated recently that foreign investment in Montreal real estate went up by a massive 183% year-over-year in 2018. The market owes much of the acceleration to foreigner-targeted policies in other large markets like Toronto and Vancouver. “It’s not a coincidence that after the foreign investor taxes in Toronto and Vancouver, interest moved to the Montreal market,” Vincent Shirley of the Altus Group explained. “Foreign investors originally looked at the Vancouver and Toronto markets but they also
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 30, 2019 114 0 0 0 0 0
Real estate development and investment firm Brivia Group has revealed its initial concepts of a residential tower slated to become Montreal’s tallest. Designed for 61 storeys and 220 metres above sea level, the major project will be situated at the area surrounding Phillips Square in the downtown core.The tower will be comprised of over 500 units. Among its notable features is its nine-cornered architectural geometry, which will allow the tower to offer a significant number of highly-desired corner units. The announcement earlier this week marked the project’s first phase, which comes with an investment of about $400 million.Overall, the project is estimated to cost upwards of $1 billion. “Downtown Montreal is being transformed, with a focus on residential real estate development, and Brivia Group is pleased to be a part of this process.More than ever, Montrealers are keen to live in this district,” Brivia founder, president, and CEO Kheng Ly said. “We are targeting local, business and foreign buyers.We believe we can offer them a product that meets their expectations and specific needs.It’s a unique project, and we’ll go all out to ensure it is our best achievement so far.” The massive project is expected to be the shot in the arm that the downtown Montreal housing market needs, especially since Airbnb-style
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 28, 2019 117 0 0 0 0 0
Salaries in Ottawa are turning the city into a veritably profitable real estate market for all involved. “We’re seeing a lot of the tech companies hiring and, for the most part, their employees are above-average income earners, or they’re people with average incomes but who also have a lot of stock benefits, which means they have money for larger down payments,” said DLC Smart Debt mortgage broker Chris Allard.“There are so many tech companies in Ottawa right now and they’re all making it so that people have lager down payments because of how they’re structured at work.” Tech isn’t the only game in town, as most Canadians know.The federal government is also one of Ottawa’s biggest employers and, unsurprisingly, the salaries are competitive.Allard noted that the average salary in Ottawa is in the neighbourhood of $70,000. “The government seems to be offering more permanent jobs than contract work like they had been, and that’s a huge plus if you’re trying to put a down payment down on a home,” he said.“Most government employees are in the range of $50,000 to $120,000—which is a big range—but most of them are above-average income earners.If you’re a government worker, you qualify for more than the average person in Ottawa.” Well-paying jobs aren’t the only things
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 28, 2019 132 0 0 0 0 0
A new Royal LePage study has found that travel distance is not a factor for many Canadians, considering the growing popularity of exurbs. These secondary municipalities, some of which are located as far as dozens and even hundreds of kilometres from the large urban markets, have become more viable purchase destinations amid high housing costs. “If they choose community and lifestyle over ‘urban excitement’ and access to certain jobs, many of them are skipping the suburbs right now and going farther afield,” Royal LePage CEO Phil Soper told The Canadian Press. A census analysis by Queens University supported these observations:As of 2016, fully three-quarters of Canadians are living in suburban communities.From 2006 to that year, exurbs saw 20% population growth, while auto-dependent suburbs had 17%. A vast majority (eight out of the top 10) of the fastest appreciating exurbs nationwide are in Ontario, specifically in areas surrounding Windsor, London, Kingston, Hamilton, Guelph, and the Tri-Cities, among others. In BC, secondary municipalities in the Hope Valley and Kamloops regions enjoyed greater traffic. A 2018 analysis by the Angus Reid Institute found that elevated prices weigh the most upon the minds of young and first-time buyers.A large proportion confessed that their experiences in the hottest housing markets were “uncomfortable” to “miserable”. “It
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 26, 2019 186 0 0 0 0 0
The impact of the Fair Housing Plan, introduced by the Ontario government in 2017, has been felt hardest in the areas north of Toronto. According to a Zoocasa study, York Region saw the most pronounced drop in prices.The Fair Housing Plan immediately cooled the housing market, albeit for psychological reasons, but that was enough to affect pricing in what’s been one of the more expensive parts of the Greater Toronto Area. Between April 2017 and 2019, sale prices in Newmarket—where homes often sold for over $1 million—fell 30%, hitting $725,710, as a result of sales volume falling 31%.In the time since the Fair Housing Plan was introduced in April 2017, the market has continued contracting and listings also declined 42%, putting the sales-to-new-listings ratio at 45%, representing a balanced market and considerable improvement over the 37% in 2017. Aurora followed suit, as prices decreased 30% but still averaged $888,387.Sales also disappeared by 35%, as did new listings by 34%, which put the sales-to-new-listings ratio at 42%.In Richmond Hill, prices fell 27%, however, at $1,016,216 home equity is still abundant.The 25% sales drop outpaced the 21% decline in new listings, suggesting that, at a 38% sales-to-new-listings ratio, it’s a buyers’ market. It wasn’t all bad news, though.Southern Ontario bore witness to sale price increases, although
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Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   May 26, 2019 121 0 0 0 0 0
Investors are gravitating towards large mixed-use developments situated near rapid transit lines in Metro Vancouver, according to a new analysis by Avison Young. The trend is being spurred on by the city’s political borders and geographic limitations – factors that have led to a consistently severe shortage of developable land. “As land prices have risen and the availability of development sites declined, investor interest has grown exponentially in the redevelopment of typical low-rise shopping centres and the adjacent surface parking lots that form a substantial part of most traditional car-centred regional malls,” Avison Young stated. The latest mixed-use complexes – which the commercial real estate services firm classified as “urban enclaves” – offer extensive opportunities across multiple asset classes along with various community amenities, all readily accessible via existing public transport routes. “Metro Vancouver and its constituent municipalities have encouraged developers to build along transit corridors and allowed higher densities at development sites that had long been established as commercial retail nodes such as regional malls,” Avison Young explained. Authorities on the municipal and provincial levels should take care not to scare off investors, however.A mid-April analysis by CBRE Ltd.noted that Vancouver’s successive introduction of several foreigner-aimed regulations is pushing capital away towards Toronto. The speculation tax and the Landowner Transparency Act, in particular,
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