Report highlights next year’s real estate trends

Housing affordability continues to dominate the conversation in the Greater Toronto Area’s housing market. A new report released by the Urban Land Institute in conjunction with PwC, called Emerging Trends in Real Estate described governmental regulation as likely to exacerbate the affordability problem.

The laws of supply and demand lie at the heart of surging housing prices. Not only are single-family detached homes in high demand and low supply, but the condo market, too, is beginning to see signs of strain, as priced-out buyers realize they have no other choice to settle for skyward balconies over backyards.

The foreign buyer tax cooled the Vancouver and Toronto markets, where prices grew astronomically, but the report makes mention of suspicious players within the real estate industry, one of whom believes growth will continue with or without the tax because of natural growth. The report also noted that prices cooled temporally before rebounding and pushing condo prices upwards.

Those interviewed by the report parroted the need for government to stay out of the market, except to address the need for increased supply. It’s unanimously believed that the approvals process is one reason supply isn’t keeping up with demand.

Affordability will catalyze a growing trend: co-living. As the number of single people among the millennial cohort in expensive markets like, Toronto and Vancouver, continue rising, they’ll live with roommates out of necessity. While some may live alone, affordability will compel them forego ownership and rent. One in three young adults in Canada lives with at least one parent, and as others marry and look to start families during an inventory shortage, they’ll settle for living in condominiums. According to the most recent Census data, 6.3% of Canadians live in multigenerational households – a number that’s likely to rise.

The ’18-hour city’ is a burgeoning secondary market. Where NYC, London, Tokyo, and now Toronto, are 24-hour cities, the high cost has resulted in an exodus to smaller cities, like Austin, TX, Raleigh, N.C., Nashville, TN, which have grown in vibrancy. Montreal, Vancouver and Calgary are considered 18-hour cities and will continue staking their claim as emergent centres. Previous versions of Emerging Trends in Real Estate anointed Hamilton an emerging 18-hour city, and that’s likely to continue as affordability drives people further from the Toronto core.

Transit infrastructure is integral to attained 18-hour city status, and Hamilton is planning a downtown LRT.

The only condo growth associated with condos in recent years has been their popularity, but they have, in fact, been shrinking in square footage. The need for larger, family-sized condos will likely buck that trend.

Montreal’s rental market is as strong as ever, however, Ontario – already suffering from a shortage of rental units – has reintroduced rent control, much to the dismay of the report’s interviewees, who noted some planned purpose-built rentals rebranded as condos. Ontario’s rental vacancy rate is dangerously low, and it’s expected it could worsen.

Related stories:

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Read more

Real estate industry prepares for a battle

Seven years ago, an advertising executive wanted to experience the bright lights and excitement of competing in a boxing match. So he launched Agency Wars – an event specifically for ad execs who wanted to show off their pugilistic skills.

This year, that same man is bringing the sweet science to the real estate industry.

“Over the period of those years, we’ve perfected the methodology. We have two teams, red and blue; we train the boxers as a team. For a lot of these people it’s the first time they’ve ever been in a boxing ring or gym,” Michael Clancy, founder of Agency Wars and now Toronto Real Estate Rumble, told CREW. “It’s reality show stuff; it’s amazing the transformation and drama they go through. You get in a ring, people throw punches at you, and it’s a transformative experience. We want it to be a really rewarding experience.”

A total of 24 amateur boxers – all from the real estate industry – have been chosen, following a rigorous tryout period, to take part at the event, which takes place Wednesday, November 22 in Toronto.

Clancy, who got into boxing at the age of 50, founded the events as a way for industry professionals to experience the allure of a big ticket boxing event.

“We want you to have that feeling. It’s like the ultimate fantasy. It’s a fantasy camp for boxing – you are going to work and train like a boxer for 12 weeks. We’re going to give the whole experience of the fight as well; the entourage, the robes, 600 spectators, ring card girls, cameras,” he said. “When I first put the show on I wanted to feel how Floyd Mayweather feels. We carefully put together something that gives the full experience that you’ll want to tell your grandkids about.”

The chosen boxers are currently embarking on a 10-week training program, which includes numerous weekly training sessions, nutritional counselling, and world-class coaching from elite-level boxers and trainers.

The real estate combatants will become legitimate amateur boxers, and the event is properly sanctioned by the Boxing Canada to ensure the utmost safety.

Boxers wear headgear and oversized gloves and, according to Clancy, the worst injuries that have occurred over seven years of running Agency Wars were bloody noses.

As for the real estate industry’s own iteration of the event, Clancy says those particular professionals will make perfect boxers.

“It’s very metaphorical for real estate guys: It’s a hard, competitive business and you don’t win every day,” he said.

The event is also raising money for two good causes: The We Foundation and imagine1day. It’s supported by a number of industry partners, incuding Garrison Hill Developments, Foundry Mortgage Capital, Concrete Mortgage Capital.

To find out more about the event, to purchase tickets, or to become a sponsor, check out the website here.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Read more

Qualifying rate to increase?

This is when one association is predicting the qualifying rate might jump.

A potential Bank of Canada benchmark rate increase has been the talk of the industry for the past few weeks, with many invested parties speculating on when the government will make the move.

For its part, the British Columbia Real Estate Association is predicting the Bank will hold off until 2018.

“While the likelihood of the Bank raising its target rate by the end of 2017 has certainly increased, we still expect the Bank to hold off until early 2018, particularly if oil prices remain low and inflation fails to pick up,” Cameron Muir, BCREA chief economist, wrote in his latest Mortgage Rate Forecast Report.

As a result, the association is also predicting the five-year qualifying rate will jump from 4.64%, as it stands today, to 4.74% in Q1 2018.

The average five-year mortgage rate, meanwhile — which sits around 2.61% — will jump to 2.79% by the end of Q3 2017, and then to 2.9% in Q4 and 3.05% in Q1 2018.

The qualifying rate is expected to hit 4.84% by Q4 2018 and the average five-year mortgage rate is predicted to reach 3.35%.

That’s the not-so-good news for those who plan to delaying buying a home until then. However, the rate increases will be the result of overall economic recovery.

“The Canadian economy has finally returned to good health following the rapid and dramatic decline of oil prices in late 2014 and the consequences of wildfires in Alberta last year. Since the third quarter of 2016, the Canadian economy has expanded at an average rate of 3.5 per cent, well above the Bank of Canada’s estimate of 1.7 per cent sustainable long-run growth,” Muir wrote. “After posting nearly 4 per cent growth in the first quarter of this year, we expect that real GDP growth will slow slightly to around 2.4 per cent in the second quarter with the economy ultimately growing 2.5 per cent this year and 2 per cent in 2018.

“If the economy continues to accelerate, and growth in real GDP is higher than currently expected by the Bank, slack in the economy could be eliminated by as early as the end of this year, which could push up the timetable for monetary tightening.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Read more

Veteran estimates foreign investment as much as 70%, argues for regulation

One Toronto brokerage owner is calling for foreign buyer regulation, despite some blowback from his own brokers.

Carl Langschmidt, president of Condos.ca, recently penned a blog entitled Foreign Investor Tax and Regulation Please! – a polite, yet assertive call to action.

In the piece, Langschmidt argues foreign ownership stats are much higher than the CMHC’s estimate of 2.3% of sales in Toronto. He went so far as to call that figure “laughable.”

“Our talks with sales reps in the trenches indicate it is much higher; some reported as high as 70% foreign ownership at developments like CityPlace,” Langschmidt wrote.

Anecdotal evidence, to be sure. But how about this other piece of sobering hearsay?

“Personally, this week alone, one of the agents in my brokerage who was meant to be listing a 50 unit condo building was just informed today the developer sold the entire building to a Chinese consortium and that we’re not getting any of the listings,” Langschmidt told Canadian Real Estate Wealth. “That’s how hot the market is.”

Vancouver had success with its own foreign real estate regulation when it implemented a 15% sales tax. That helped contribute to double-digit cooling in what was once Canada’s hottest market.

And Toronto may soon have its own measures introduced, with Ontario’s budget expected in the coming weeks. Ontario Finance Minister Charles Sousa said the budget will contain policy aimed at addressing housing affordability.

“Demand is high for a number of factors,” he said, per the Canadian Press. “Could be speculators, could be people from outside the country, it could very well be the many who are now moving into Ontario creating that demand.”

While many have argued in favour of a similar approach in Toronto, Langschmidt suggests a multipronged strategy that could also include special regulations for prebuild home sales.

“Preconstruction sales has morphed into a totally separate specialization in real estate; it’s almost as if agents who specialize in that are so different from traditional real estate where you’re showing properties,” he said. “Preconstruction sales is all about pitching investors and often agents and groups go overseas to pitch. I’ve seen their presentations. I cringe at their presentations. It induces the speculation; half of them use numbers are (off). A lot of them don’t calculate ROIs correctly. This is where I think some regulation is required.

“Anyone selling a stock or investment vehicle, there’s regulations in the securities business about what you can say. Whereas with (real estate sales) it’s the wild west.”

Many believe foreign ownership is having a major impact on Toronto home prices and will likely applaud Langschmidt’s comments. However, that may not include a portion of real estate agents, his own included.

“The reason why I’m saying it is I don’t mind saying what I think is true,” Langschmidt said. “It will upset people who deal with foreign investors; even in my own brokerage I had someone call me up and say ‘we have a lot of foreign investors and they’re not going to be happy with our opinion on us.’”

Related stories:
Ontario hints at measures to cool real estate market in the budget
Don’t tax foreign buyers says real estate board

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Read more

CREA spotlights challenges

The Canadian Real Estate Association has released its first report of 2017, highlighting the challenges homebuyers are poised to face this year.

“Canadian homebuyers face some challenges this year, including new mortgage rules that make it harder to qualify for a mortgage and regulatory changes that will push up mortgage financing costs,” CREA President Cliff Iverson said. “It will take some time to gauge the extent to which these challenges will weigh on home buyers in different housing markets across Canada.”

Home sales fell 1.3% in January from December’s total. Sales activity was down in half of all local markets, led by the GTA, Greater Vancouver and Montreal markets.

Inventory continues to be an issue.

“The shortage of homes available for sale has become more severe in some cities, particularly in and around Toronto and in parts of BC,” said Gregory Klump, CREA’s Chief Economist. “Unless sales activity drops dramatically, the outlook for home prices remains strong in places that face a continuing supply shortage.”

The number of newly listed homes fell 6.7% in January – that’s the second consecutive monthly decline. New listings, meanwhile, were down in two-thirds of all markets.

“With the monthly decline in new listings surpassing the decline in sales, the national sales-to-new listings ratio jumped to 67.7% in January compared to 64.0% in December and 60.2% in November,” CREA said in a release. “A sales-to-new listings ratio between 40 and 60 is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
North Port, Saint-Philippe-de-Néri, Casey, Blewett, Fenwick

Read more

Industry weighs in on foreign buyer stats

Ontario-based associations discuss the recent released foreign buyer stats and whether or not any action is needed to control its influence.

Should Toronto implement a similar foreign buyer tax?

The Ontario Real Estate Association (OREA) doesn’t think so.

“A foreign buyer tax penalizes the international MBA student who will one day start her own business in our province, or the pediatric nurse aspiring to work at Sick Kids,” Tim Hudak, OREA CEO said in a release. “The lesson here is that we need sustainable, long-term solutions that get to the root of the affordability problem, and it starts with increasing housing supply.”

OREA referenced a study by the Toronto Real Estate Board, released Tuesday, that found a mere 4.9% of GTA transactions in 2016 involved foreign purchasers.

“As the foreign buyer conversation unfolded, TREB held steadfast to the view that the provincial and municipal governments should comprehensively and patiently review the issue of foreign purchasers of real estate in Ontario before making any policy decisions and should seek out actual empirical evidence on the level of foreign buying activity in the GTA,” the board said in its Market Year in Review. “In this regard, TREB decided to take the lead on data collection and commission its own study.”

TREB commissioned Ipsos, a third party research firm, to survey agents about the level of foreign purchasing activity throughout the GTA.

The survey collected over 3,500 responses.

As previously mentioned, the survey found an estimated 4.9% of foreign transactions in the GTA – with levels as high as 6% in York and Halton regions and as low as 1% in Durham.

In Toronto, the share of foreign buyers was 5%.

According to the survey responses, 40% of foreign buyers purchased a home as a principal residence; 15% purchased for a family member; 25% purchased as a rental investment; 4% purchased as a non-primary residence; and 3% purchased with the intent of keeping it vacant.

“These results were in line with recent CMHC findings related to the condominium apartment market. In the fall of 2016, CMHC estimated that 2.3 per cent of condominium apartments in the GTA were foreign-owned. In newer condominium apartment buildings, the share of foreign ownership was slightly higher at 3.9 per cent,” TREB said.

The results suggest the influence of foreign buyers on the GTA market is minimal and that a similar foreign buyer tax to Vancouver’s is not necessary.

Click here to read the entire study.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Beaconia, Medonte, Notre-Dame-de-la-Merci, Country Harbour Mines, East Walton

Read more

Major investor hotspot no longer seller’s market

Real estate association tries to find the positive in a downward trending market.

“BC home sales trend toward ten-year average,” the British Columbia Real Estate Association proclaimed in its latest sales report.

“Moderating consumer demand in the province’s largest population centres continues to trend home sales toward the ten-year average,” Cameron Muir, BCREA Chief Economist, said. “The seasonally adjusted annual rate of MLS® residential sales was approximately 89,000 units last month.
The ten-year average is 83,000 unit sales, while the 15-year average is 85,300 unit sales.”

But is that the big story?

For investors with interests in the province, not likely.

Sales were down 20.1% year-over-year in November, coming in at 6,419 total residential sales.

Prices also took a dip, falling 6.4% year-over-year to $625,871.

Vancouver, specifically, had a tough month. Unit sales fell 37.4% to 2,225 and the average price dropped 3.8% to $895,084.

According to the Canadian Real Estate Association, Vancouver is no longer a seller’s market

“A sales-to-new listings ratio between 40 and 60 percent is generally consistent with balanced housing market conditions, with readings below and above this range indicating buyers’ and sellers’ markets respectively,” CREA said in its monthly stats release. “The ratio was above 60 percent in almost half of all local housing markets in November, the vast majority of which are located in British Columbia, in and around the Greater Toronto Area and across Southwestern Ontario.

“In Greater Vancouver, the ratio has moved out of sellers’ market territory and into the mid-50 percent range.”

Still, it’s not all bad news.

“Year-to-date, BC residential sales dollar volume increased 22.8 per cent to $74.5 billion, when compared with the same period in 2015,” BCREA said, again focusing on the positive. “Residential unit sales climbed by 12.1 per cent to 107,488 units, while the average MLS residential price was up 9.6 per cent to $692,745.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Lakeburn, Saint-Pascal-Baylon, Fairhaven, Pownal, Franktown

Read more

Trends in three major markets

As real estate market data trickles in ahead of CREA’s official release, we have a good sense of how three major markets have performed.

Toronto
The country’s largest city continues to be its hottest one in terms of real estate.

Sales increased 16.5% year-over-year in November, according to the Toronto Real Estate Board.

This despite inventory challenges.

“Home buying activity remained strong across all market segments in November. However, many would-be home buyers continued to be frustrated by the lack of listings, as annual sales growth once again outstripped growth in new listings,” Toronto Real Estate Board President Larry Cerqua said. “Seller’s market conditions translated into robust rates of price growth.”

Edmonton
Prices increased in the Big E by an average of 3.95% for single-family homes and 6.39% for duplexes and rowhouses.

“There is continued strength and price stability in Edmonton’s real estate market. Most average selling prices increased this month, partially due to sales of the several high-priced listings,” Steve Sedgwick, chair of the Realtors Association of Edmonton, said. “The all residential median selling price is down 2% and condominiums median selling prices was down over 8%.”

Calgary
Following a solid October, Calgary’s market returned to previously weak performance.

Year-over-year sales fell 3% and were 17% below long-term averages.

“November was the first full month with CMHC’s new lending rules in effect,” said CREB® chief economist Ann-Marie Lurie. “As suspected, the gains in last month’s sales were temporary. Stringent conditions for borrowers are converging with the current economic climate and weighing on demand.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Fox River, Beaver Dam, Ladysmith, Point La Haye, Lower New Cornwall

Read more

Revitalizing a neighbourhood

Meet the investors that are currently creating Toronto’s next hot spot.

For the past 20 years, the intersection of Yonge and St. Clair has acted almost exclusively as a transit hub for the affluent neighbourhoods surrounding it, including Forest Hill and Rosedale.

That’s about to change.

“For the last 30 years it’s kind of gone sideways whereas surrounding neighbourhoods have improved. Our goal is to bring it back to some form of former glory,” Lucas Manuel, managing director of Slate Advisors, told Canadian Real Estate Wealth. “To do that first we bought everything there, which helps. We own all four corners and eight office buildings in total. Effectively that allows us … to make changes fast and not rely on our neighbours to come along for the ride.”

Slate, itself, currently has an occupancy rate of 95% within its buildings, and those that aren’t currently occupied are being kept vacant to allow for flexibility as the vision evolves, according to Manuel.

That vision is one that will transform the area into a go-to neighbourhood as opposed to a strict thoroughfare.

“They’re dying to have a good restaurant that they can go to, so that’s a huge focus of ours. On one of the corners, the northwest corner, we’re looking to put a big restaurant. Other locations as well,” Manuel said. “One doesn’t do it but once you get critical mass and give people a choice people will start coming back to Yonge and St. Clair.”

Slate has a master plan for the entire neighbourhood, and it is actively working with developers and other property owners to revitalize the area.

They are currently in talks to develop a business improvement area (BIA) to address some of the area’s needs.

The entire overhaul is being done in phases, with the northeast corner expected to be completed by Christmas. The rest has a target of 2018.

And once those are completed, and other developers hop on board, there is nothing stopping the area from experiencing a retail and, indeed, further residential development.

“Nothing has interfered with the upward mobility of pricing in Rosedale and Forest Hill. It would be nice to think all the things we do kind of support that,” Manuel said. “What we’ve heard from residents in those neighbourhoods is a lot of excitement.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Pointe-du-Lac, Erieau, Rossway, Arcadia, St. Mary’s

Read more

Community trust bullish on Kamloops

One community trust is establishing a neighbourhood in British Columbia it believes offers great value and the potential for major growth.

“We’re attracting the development community to partner with us on the build, but our pre-approved zoning for up to 7500-8000 residents, 3500 units, and just under 200,000 square feet of commercial,” Finlay Sinclair, president and CEO of TRU Community Trust, told Canadian Real Estate Wealth. “We’re attracting both developers to come and partner with us but also the community to come live here. We think there’s a good local, regional, and provincial opportunity for people to make this the place they want to live.”

TRU Community Trust is trying to establish Kamloops’ newest neighbourhood around Thompson Rivers University.
We asked Sinclair why investing in Kamloops is an attractive option for investors.

“It’s a stable economy, it’s a growing economy, and it’s an affordable real estate opportunity for anybody in this country at any income level,” he said. “We are right on the leading edge of all the service, commercialized land that anybody living in the future on the property is ever going to need.”

And the area is attracting investors from across the country. Many of whom have been priced out of province’s expensive lower mainland markets.

“Absolutely, we’re the affordable alternative. I think it’s pretty clear to people across the country that Vancouver has exceeded any normal, reasonable threshold of affordability for younger families that don’t have an equity position in the market already,” Sinclair said. “You can get in and have a wonderful lifestyle either in our development … but Kamloops as a whole has very affordable housing comparable to Vancouver, Victoria, Kelowna, Calgary. We have weather that unmatched in Canada. We have hot, hot dry summers and short, short winters.”

And the market is expected to experience continued growth.

“We see the real market opportunity is the fact that Kamloops is constantly increasingly land value and an increasing real estate market,” Sinclair said. “It doesn’t spike and go up and down irrationally in ways the larger market does. It’s constantly going up and is a stable environment.”

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Investment Hot Spots:
Flin Flon, Huron East, Bulyea, Saint-Casimir, West Quoddy

Read more
Page 1 of 3123