There was an increase in purpose-built rental apartment completions in the first three months of 2019. Urbanation says that completions hit a 25-year high of 1,849 units, nearly five times greater than the quarterly average since Q1-2016 and represented significant growth considering only 13,520 units have been built since 2005. But for owners and investors, the increased supply meant weaker rent growth despite strong demand and low vacancy rate. Purpose-built rents for units available for lease during Q1, 2019 grew by 5% year-over-year on a same-building basis, slowing from a 9% annual pace at the end of last year in Q4-2018. As of Q1-2019, purpose-built rents in buildings completed since 2005 averaged $2,398, or $3.25 per square foot (psf) based on an average size of 738 sf. On a same-building basis, condominium rents grew by 7.7% psf in Q1-2019, compared to a 9.2% annual increase in Q4-2018.Monthly condominium rents for units leased during the first quarter averaged $2,376 ($3.28 psf) across the GTA, 7.8% higher than a year ago. Demand lags supply The volume of condominiums leased through MLS grew by 13% year-over-year in Q1-2019 to 6,005 units, but supply grew faster than demand pushing down the ratio of leases-to-listings to 73% — the lowest level in four years.

The spring season is not expected to provide much relief for Canada’s challenged housing market. RBC Economics sees a continuation of the weakened demand resulting from a cocktail of negatives for homebuyers including the mortgage stress test, interest rates, economic uncertainty, and affordability. In a report this week, senior economist Robert Hogue says there was no break in March from the housing market slump. Sure, there were some positives, a slight pick-up in Toronto for example with sales up 1.8%.But this barely dented the effects of a 9% drop in the previous month.And tight supply accelerated price growth after a pause. Vancouver, Calgary, and Edmonton all saw a deepening of the slump and Vancouver sales were the weakest since the recession years. Hogue says the impact of poor weather earlier in the year may have been limited and he says it’s likely to be a quiet spring season, especially as measures to help first-time buyers announced in the budget will not be active until later in the year. 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

The impact of the mortgage stress test continues to be shown in home sales in British Columbia. British Columbia Real Estate Association says there were 5,707 sales through the MLS in March, down 23% year-over-year, while the average price was down 5.4% to $687,720. “BC home sales continue to be adversely impacted by federal mortgage policy,” said BCREA Chief Economist Cameron Muir.“The erosion of affordability caused by the B20 stress test has created near recession level housing demand despite the province boasting the lowest unemployment rates in a decade.” Total sales dollar volume was $3.9 billion, a 27.1% decline from the same month last year. Listings increased 36.2% to 34,295 units from a year earlier and the ratio of sales to active residential listings declined from 29.4% to 16.6%. “The sharp erosion of affordability caused by the B20 stress test is now creating pent-up demand, as many would-be home buyers are forced to wait on the sidelines,” added Muir.“Unfortunately, new home construction is slowing as well, which will likely lead to another housing supply crunch down the road.” 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

In an effort to curtail money laundering through real estate in British Columbia—a well-documented problem—a group of organizations are lobbying the provincial and federal governments with the appropriate steps to take. The British Columbia Real Estate Association, the Appraisal Institute of Canada-B.C.Association, B.C.Notaries Association, Canadian Mortgage Brokers Association-British Columbia and the Real Estate Board of Greater Vancouver collaborated on how to tackle the problem and also released their joint recommendations to the media. Given that multiple parties are involved in real estate transactions, the group says that it will require a coordinated effort to ensure that unscrupulous forces are kept at bay and prevented from washing dirty money through the province’s real estate. “A real estate transaction involves multiple professionals.It will take a coordinated effort by all involved, working in collaboration with government, to stop money laundering.The joint recommendations and best practices submitted by these organizations reflect their commitment to the professionals and consumers they serve,” read a media statement. A major barrier for would-be money launderers is insistence upon only accepting verified funds, and the group recommends all sectors of real estate align on that point. Additionally, mandatory anti-money laundering education is recommended for all real estate professionals so that they can identify suspicious activity and accordingly report it. “FINTRAC [Financial Transactions and

Major developer Cortel Group is spearheading multiple high-rise condo projects in Ontario. The Towers 3 and 4 luxury condo buildings, representing the final phase in the much-anticipated Oak &Co.luxury condominium complex, are scheduled to officially launch on April 27, 2019. Towers 1 and 2 are already being build, while Towers 3 and 4 will be entering the Toronto market starting at the $300s, Cortel Group said in its announcement. “Located at Trafalgar and Dundas East in the Uptown Core, Oak &Co.will be pivotal in shaping the area’s visual landscape while providing countless amenities and creating its own identity,” the developer added. “Situated right in between Morrison Creek Natural Heritage Park and the Uptown Core community, Oak &Co.is a wonderful synthesis of the natural and urban setting that defines all of Oakville as a whole.Most units overlook the leafy landscape by means of generous balconies and large glazed openings.” Meanwhile, the newly announced 60-storey CG Tower is expected to become the tallest building in Vaughan, as well as the tallest structure in Cortel Group’s Expo City development. “Making its mark on the City of Vaughan was Cortel Group’s intention and overall aim.The tower will emerge as a landmark to the Vaughan skyline - anchoring an active urban community complemented by Edgeley

Vancouver’s tenants are in a mad scramble for usable office space amid a tight and competitive environment, according to Avison Young’s Tenant Profile Report Q1 2019. Supply scarcity and record-low vacancies are driving a steady increase in the city’s rental rates, which will go on to fuel future office price growth. “Rising rental rates and highly limited availability may start forcing tenants to consider locating outside of Downtown Vancouver in order to fulfill their office requirements.With limited relief until at least 2021 in terms of new development and vacancy expected to remain historically low through 2019 and 2020, upward pressure on rents is likely to continue for all tenant sizes,” Avison Young explained. Tight availability rates are forcing large-scale tenants (those with size requirements exceeding 30,000 square feet) to “plan much farther ahead than typical and explore future opportunities through preleasing or backfilling space that may become available in the future,” the report noted.“They will need to be proactive and flexible well in advance of their lease expiry simply to find an option that suits their existing needs, let alone improve on their current office space.” Meanwhile, tenants looking for space sizes of 10,000 - 15,000 sf are faced with punishing scarcity.From Q3 2018, the availability of such spaces declined by more than

The spring season is a mixed one for Canada’s housing markets with some showing gains while others remain under pressure. More than a year on from the introduction of mortgage stress tests, the impacts are still being felt and new measures to help buyers have not yet taken effect. Despite some positive economic conditions, the Canadian Real Estate Association reports that activity remains at some of the lowest levels in years. Home sales via Canadian MLS® Systems edged up 0.9% in March 2019 following a sharp drop in February while actual (not seasonally adjusted) sales activity fell 4.6% year-over-year to the weakest level for the month since 2013;and was also almost 12% below the 10-year average for March. "March results suggest local market trends are largely in a holding pattern," said Gregory Klump, CREA's Chief Economist."While the mortgage stress test has made access to home financing more challenging, the good news is that continuing job growth remains supportive for housing demand and should eventually translate into stronger home sales activity pending a reduction in household indebtedness.” Mixed markets There are some areas where things are improving. While sales in British Columbia, Alberta and Saskatchewan were more than 20% below their 10-year average for March, activity is running well above-average in

A digital challenger to Canadian banks has announced a merger than will help it accelerate its growth. Vancouver-based Mogo Finance Technology will combine with Difference Capital Financial with the combined entity expected to be named Mogo Inc. It will focus on its aim to become the leading fintech platform in Canada, offering a range of banking and financial products including a digital mortgage experience. "This transaction enables Mogo to continue to invest in new products and innovation, building on our leadership position in the Canadian fintech space," said David Feller, Mogo's Founder and CEO."We are excited by the opportunity that the Transaction presents for shareholders of Mogo and Difference and are very pleased to have the support of the Difference board.We look forward to working closely with the leadership team at Difference to complete the Transaction." Additional resources The combination will give Mogo immediate access to approximately $9 - $10 million in cash, which reflects proceeds from Difference's two recently announced monetizations. "The merger with Difference strengthens our financial position and represents a significant opportunity to create value for shareholders of the combined entity," added Greg Feller, Mogo's President."Difference has invested in many of Canada's leading technology companies and Mogo has built a valuable distribution platform.Shareholders of both companies will benefit from improved financial

While home sales in Canada’s two largest markets continue to lag their year-ago levels, Quebec is gathering strength. The province saw 23,667 sales in the first three months of 2019, a rise of 8% year-over-year;with the Montreal CMA gaining 6% to 13,028. The Québec Federation of Real Estate Boards (QFREB) says that 16,010 single-family homes (+7%), 5,866 condominiums (+12%) and 1,694 plexes (+1%) changed hands in Québec in the first quarter of the year. "The demand for properties remains very strong, as we can see by the widespread increase in sales across the province," said Yanick Desnoyers, Manager of the QFREB's Market Analysis Department."The solid performance of Québec's real estate market is all the more impressive because it comes at a time when markets in Canada's other provinces are declining.” Trois-Rivières registered the largest increase in sales at 24%, followed by Saguenay at 17% and the Gatineau CMA at 16%. Transactions in the Québec City, Montréal and Sherbrooke CMAs also held their ground with respective sales increases of 8%, 6% and 5%. The median price of single-family homes rose by 3% to reach $255,000. Montreal supply under pressure In the Montreal CMA, sales were up despite tighter supply of homes for sale. Active listings fell for a

According to Statistics Canada’s New Housing Price Index for February, Vancouver tumbled backwards. Year-over-year, prices fell 0.6% in Canada’s third-largest city, while Toronto fell considerably harder, down 1%.Montreal, however, rose 2.4%. “Vancouver saw a massive run up in prices and they brought in some significant change,” said Chris Slightham, president of Royal LePage Signature Realty.“With the foreign buyer tax and vacant property tax, the B.C.’s provincial government has tried to make some changes to make housing more accessible in their marketplace and I guess you could say it’s slowed down further investment, but I don’t know if it’s the desired effect.” In particular, the slew of regulatory changes brought in by the government to curb rapid price escalation in Vancouver’s housing market has created slower construction cycles, and Slightham says that comes with its own set of problems. “There will be less building, and with no new product coming in you end up constricting your supply,” he said.“But this story hasn’t finished;ultimately, people will become comfortable with the changes that have been made—and that will take time because we’re all human—but activity will restart and we’ll find a new level where people start buying houses again.” Toronto might be down between February 2018 and 2019, however, the city’s market fundamentals are so

Halifax home prices enjoyed modest growth during Q1 2019, according to the latest Royal LePage House Price Survey released earlier this month. The aggregate price of a home in the market went up by a respectable 1.6% year-over-year during the first quarter of the year, reaching $318,733.Going into the second quarter, this aggregate price is expected to expand by a further 1.2% to end up at $322,667. Much of this could be attributed to the multi-family sector.The value of Halifax bungalows increased by 2.6% annually to $266,078, while condos enjoyed an even greater 2.9% growth to $362,397. Meanwhile, two-storey homes in the market had a 1.2% year-over-year rise to reach $333,307. “Activity remains steady with modest price increases,” Royal LePage Atlantic broker of record Marc Doucet said.“Our excellent selection of affordable properties continues to attract the attention of both interprovincial and foreign buyers.” “Halifax is still very much a seller’s market.We expect a busy spring with more showings and a decrease in inventory.Though a number of apartment-style units are scheduled to be built, most are poised to be rentals.” The city’s home sales might get propelled by the federal government’s recently announced incentives for first-time buyers, according to Doucet. “Unlike cities in Canada where the shared mortgage plan won’t enable

The announcement of Toronto’s new subway line should perk up real estate investors. The “Ontario” subway line, which is a more comprehensive version of the downtown relief line, will run 15 kilometres from Ontario Place to the Ontario Science Centre and cost $10.9 billion.The government says it will be completed by 2027. Overall, the Progressive Conservative government is committing $28.5b to a transit plan that will also include additional stations on the Scarborough subway extension, extend the Yonge line into Richmond Hill, and add more Eglinton LRT stops. “It will open up opportunity to have housing built around those lines, hopefully affordable housing too, that will be of benefit to future homebuyers,” said Tim Syrianos, principal broker of record and owner of REMAX Ultimate Realty Inc.in Toronto.“It’s a very positive step for the real estate market.It gets more cars off the road but it also promotes development around new transit lines.” Last week, the Real Estate Intelligence Network released the Toronto Transportation Effect Report in which investors are apprised of how to capitalize on transit infrastructure projects, and which also elucidates how impactful transit is on real estate as an asset. “Transportation infrastructure delivers 10-20% of the value within 800 metres of access to rail or highway,” said Jennifer Hunt, REIN’s vice president

The number of new homes in Canada last month helped offset the major slowdown experienced by markets nationwide in February. Latest numbers from the Canada Mortgage and Housing Corporation showed that on a seasonally adjusted basis, national starts went up to 192,527 units in March, far outstripping the 166,290 units the month prior. Although the March data did not reach the 196,500 annual pace earlier predicted by economists, as polled by Thomson Reuters Eikon, the six-month moving average was at 202,279 (compared to February’s 202,039). Multi-residential buildings like apartments, condominiums, and townhouses gave massive boosts to new construction volume, with urban multiple-unit starts increasing by 18.6% in March to reach 135,894 units. Meanwhile, single-detached urban starts grew by 12.1% to 42,139 units.Rural starts were measured at a seasonally adjusted annual rate of 14,494 units. “There’s no doubt the Canadian housing market has slowed in the past year, but the latest data on construction suggests the downward trend is stabilizing,” BMO Capital Markers senior economist Sal Guatieri stated earlier this week, as quoted by The Canadian Press. “We still see starts hovering around, or even just above, 200,000 this year, marking a small step back from last year while remaining historically high.” Are you looking to invest in property?If you like,

Toronto, with its myriad condominiums, is short on a very particular kind of layout that could yield incredible returns for investors—that is, if they’re lucky enough to find one of these units. Units with two master bedrooms could reap premium rents for investors because no longer will the tenant with the larger bedroom carry the larger share of the monthly rent. “These units have tremendous potential because, very often, if you’re an investor and your unit has a typical layout, one of the tenants has to get the master bedroom and probably pay more, but here you have two master bedrooms, so the two people sharing the apartment are treated equally with two master suites,” said Baker Real Estate President and CEO Barbara Lawlor.“You’ll get more money because of it, so these units are terrific investments.” M2M, a master-planned community in North York features two master bedroom units, and while it’s largely targeting ethnic communities that prize multigenerational living, Lawlor noted that investors, too, could get in on the action.The units with two master bedrooms also have flex space and dens, meaning that a third tenant could live in the unit, albeit at a cheaper monthly rate than the occupants of the larger bedrooms. In the T1 building of M2M, both master

Montreal’s overall price growth during the first quarter of the year significantly outstrips that of Toronto and Vancouver, according to the Royal LePage House Price Survey released last week. The median home value in Montreal Centre enjoyed an 8.1% year-over-year increase to reach $406,332.This is far above the movements observed in the Greater Toronto Area (3.4% growth to $836,425) and Greater Vancouver (1.5% shrinkage to end up at $1,239,306). “Greater Montreal kept up its momentum with the eleventh consecutive year-over-year price increase, rising above four per cent in the first quarter of the year,” Royal LePage for the Quebec Region president and director Dominic St.Pierre said. “Unlike many other Canadian markets, which saw a slowdown in activity and prices, the Greater Montreal Area market remained tireless this quarter, despite the harsh winter weather.In the fourth quarter of 2018, we believed that price and sales growth would decline by the start of 2019, but the area once again defied the odds.As a result, 2019 began with a very successful quarter, gradually shrinking the gap between the Montreal and Toronto markets.” A robust economy – especially apparent in low residual unemployment rates of 5.3% in Quebec as a whole and 7.3% in the city – proved to be a major boost for the Montreal market.