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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   February 19, 2019 74   0   0   0   0   0
A Ryerson City Building Institute report exploring ways to solve Toronto’s affordability crisis suggests micro living could catch on in the city. The report, called Rethinking the Tower, mused about the construction of micro units in a city dominated by condominiums.Micro units have become popular in New York City and Seattle because rental and sale prices correspond to unit size, and in a city like Toronto it could go a long way towards solving affordability issues. “Well-designed rental or ownership micro units offer an opportunity to deliver more affordable homes to the market, particularly in central locations where land costs can be a significant barrier to affordability,” read the report.“Analyses by the Urban Land Institute (ULI) and Colliers have found that micro units in American cities lease at monthly rents 20% to 30% lower than conventional apartments, although they cost more per square foot in rent than conventional rental units.” A micro unit is roughly 350 square feet in area and has an in-unit bathroom and kitchen, but designs is key to its marketability. “Many developments will boast flexible furniture systems, high ceilings, large windows, built-in storage and/or convertible furniture,” continued the report.“Some have also bundled micro units with shared amenities and services such as storage, lounge, areas and outdoor space.Micro units are often marketed
News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   February 19, 2019 72   0   0   0   0   0
Amid intensified construction activity, Vancouver’s industrial real estate market is steadily magnetizing foreign investors, a trend that might pose a major challenge for the domestic buyer segment. Numbers from Colliers International indicated that nearly 4.9 million square feet of industrial space was under development across Metro Vancouver as of the end of 2018.Almost half (45%) of this activity is in Surrey, Richmond, and Delta. According to Avison Young, Burnaby and Coquitlam were the region’s stand-outs, with transactions involving industrial property in these locales being rapidly snapped up in a frenzy of “insatiable” demand. “While Burnaby and Coquitlam remain highly sought after by owner-occupiers, tenants and investors, sales and leasing activity will likely slow in 2019 due to a lack of such opportunities in those markets,” Avison Young stated, as quoted by Business in Vancouver. Read more:Canadian commercial investment to intensify this year[1] “With very limited new supply in the development pipeline and ongoing strong demand, vacancy in both markets – already at or near record lows – is expected to remain extraordinarily tight for the next 18 months,” the brokerage added. This is also expected to feed into a virtuous cycle of rising rates and strong cash flow for owners, with net lease rates in Burnaby and Coquitlam hovering between
News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   February 19, 2019 83   0   0   0   0   0
With more than 10 months still remaining in the calendar year, one of the most valuable commercial real estate transactions in Canada so far in 2019 has already taken place in Richmond, B.C. Fiera Properties, an affiliate of a Montreal-based independent asset management firm with approximately $136.7 billion in assets under management, has announced last week the closing of a deal involving Richmond’s 13-building Airport Executive Park. The 707,809-square-foot property was purchased from Sun Life Financial for $208 million. The deal dovetailed with the predictions of Avison Young Canada Inc., which forecast last month that demand for the country’s commercial properties will keep surging for much of 2019 amid scarce supply and a 4-decade low in unemployment. Read more:B.C.’s industrial segment rushes headlong into 2019[1] Industrial buildings and parcels would especially benefit, as nationwide vacancies in the sector are projected to fall to a record low of 2.9%. The Airport Executive Park deal magnetized multiple interested parties including major domestic and international buyers, according to CBRE, which brokered the deal. “There has been a good job of attracting tenants to that market, it’s close to the city,” CBRE’s Tony Quattrin told CoStar News.“People do tell you, we would like to be in Vancouver but can’t
News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   February 18, 2019 95   0   0   0   0   0
Student housing is known as a lucrative investment, but when a deficient heating system cut into veteran investor Lee Strauss’s North Bay property, where students’ rents fetched $500 a room, he was at wit’s end. “A student rental is going to be a bit higher on utilities because of usage, but there was no gas to the house;it was all hydro and it was costing me about $1,000 a month during the colder months,” said the owner of Strauss Investments.“The price of the home was $200,000 so cash flow worked out well during the warmer months, but winter was the killer.” Strauss ultimately sold the property and broke even, but not before looking into remedies.Ultimately, installing a gas furnace would have cost up to $12,000 over a decade, so Strauss cut his losses. Situations like Strauss’s are all too common, says Vahid Azari, a registered home inspector, certified energy advisor and owner of All Season.Worse still, poor insulation and excess energy use actually devalue a home by up to a tenth of its value. “It also decreases the value of the house by the extra money you pay for energy consumption,” said Azari.“If the heating system is poor in an old house is poor, it means you have 60% efficiency, whereas a
News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   February 14, 2019 74   0   0   0   0   0
As the cost of living soars, Canadians have begun to wonder whether the surest path to comfortable retirement is through a Registered Retirement Savings Plan or homeownership. A report from Sotheby’s International Realty Canada and Mustel Group determined that 20% of young urban family homeowners deferred RRSPs in favour of purchasing a home.Sotheby’s President and CEO Brad Henderson reckons that’s the sapient path to retirement. “Owning a home is one of the few tax-efficient purchases someone can make,” said Henderson.“When you buy a home as a principal residence and you sell it, it’s a tax-free event.With a Registered Retirement Savings Plans, the money goes in and you get the benefit of tax reduction up front;you get the benefit of money compounding on a tax-free basis all the way through, but you pay tax on the money when it comes out down the road.” The “Modern Family Home Ownership Trends PART 2:Financing the Canadian Dream” report surveyed 1,743 families in Toronto, Montreal, Vancouver and Calgary, 19% of whom secured more remunerative work to fund a down payment on their home purchase.Fourteen percent found auxiliary work, while 12% delayed parenthood and 9% moved in with family. In addition to 71% of “modern family” homeowners surveyed using personal savings to fund a down payment, just
News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   February 14, 2019 114   0   0   0   0   0
Corporations account for much of the non-individual owners of residential property in Canada, according to a new analysis by StatsCan and CMHC. “Corporation ownership [is] concentrated among real estate, rental, and leasing industry and construction industry sectors,” the study noted.“In both Ontario and British Columbia, the real estate, rental, and leasing industry sector makes up the largest proportion of corporations owning residential properties at 31.1% and 23.4%, respectively.” On the other hand, in Nova Scotia, the largest non-individual owner is the construction segment at 28.8%, followed by real estate, rental, and leasing at 25.2%. “In all three provinces, the combination of construction and real estate, rental, and leasing sectors represented approximately half of corporations that owned residential property,” the study added. Read more:Red tape is a major influence in Vancouver’s housing scarcity[1] All in all, B.C.has the largest proportion of non-individual ownership of residential property.Around 9.8% of the territory’s residential properties were owned by non-individuals, and this ratio is even higher in locales outside the census metropolitan areas (15.8%). The rates in the province’s CMA’s showed considerable variance, with Vancouver’s 5.6%, Victoria’s 5.2%, and Kelowna’s 7.6%. Meanwhile, Ontario and Nova Scotia’s non-individual ownership rates were at 7.4% and 7.9%, respectively.As for their largest cities, Toronto’s rate was 4.2%, and Halifax
News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   February 14, 2019 104   0   0   0   0   0
Amid accelerated price growth, many hopeful home buyers in Ottawa are either cooperating with friends or seeking help from the “Bank of Mom and Dad” for assistance on the payment, according to observers on the ground. The B-20 regulations that have introduced much stricter mortgage stress testing have been blamed for the province’s fevered price growth, with an average rate of nearly 15% from 2016 to 2018.These increases have placed the city’s average home price at $433,500 as of December 2018. Ottawa broker Chris Allard said that he has seen a “significant” increase in the number of cases involving would-be buyers who have received funds from relatives, or co-signed applications with friends. “If there’s an option at all for parents or family members to gift funds or to co-sign, they will take that option before choosing to pay a higher mortgage interest rate,” Allard told the Ottawa Business Journal. Read more:Ottawa’s pace of home price growth accelerates[1] B-20 inadvertently pushed a significant proportion of prospective buyers out of the market, despite some observable cooling down in Toronto and Vancouver prices. Traditional lenders have also ended up with a larger number of rejections, paving the way for alternative mortgage sources like the Ottawa-based firm Advanced Mortgage Investment Corp. “We
News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   February 12, 2019 103   0   0   0   0   0
According to a REMAX report, ski resort properties have strong cash flow potential, however, interest among western Canadians is low. “The ‘Airbnb phenomenon,’ for lack of a better description, provides the opportunity for some return when [owners] are not using the property themselves, and that’s where four-season amenities become important,” said Elton Ash, REMAX’s regional executive vice president.“The properties cash flow through winter and summer months.” But, according to a survey conducted by Leger Marketing on REMAX’s behalf, 67% of western Canadian respondents believe the price of a resort property is proscriptive.Ash, on the other hand, says that they’re relatively affordable. “We know a large proportion of Canadians want to buy properties,” he said.“Seventy-one percent of western Canadians interested in purchasing ski properties want four-season amenities, but that number drops down to 23% who believe they could afford it.It’s interesting because with recreation properties in general, Canadians love the outdoors.” In the last 20 years, resort properties have diversified and now boast year-round amenities like golf courses.The report also revealed that all-season resort capabilities trumped snow level, snow quality level, mountain elevation, and proximity to restaurants and retail as respondents’ interest in resort properties. “What we noticed with this report is more and more Canadians are looking at ski resorts as recreational properties, as opposed
News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   February 12, 2019 62   0   0   0   0   0
Bureaucratic roadblocks continue to have a major influence on Metro Vancouver’s housing supply, as these intricacies have led to massively overdue project approvals, according to the recently released Market Intel real estate report by MLA Canada. Burnaby, Vancouver, and the District of North Vancouver are the areas hit the hardest by these delays, with development approval timelines being among the longest (at nearly 2 years) in the region. In addition, construction costs have increased by almost 50% on average over the past 5 years.This burden is almost always absorbed by the end consumer, the MLA study noted. “2019 is expected to be highly competitive, but an overall balanced market with nominal price escalation will provide purchasers with choice and value,” MLA Canada chief advisory officer and partner Suzana Goncalves said. Read more:Vancouver’s empty homes tax visibly improved vacancy rates, supply[1] One bit of good news is an increased volume of new stock incoming.MLA Intel is expecting 13,975 pre-sale units to be released this year, considerably above the 11,584 in 2018. However, the study quickly added that B.C.’s population will experience consistent growth for the next several years, with roughly 50,000 new residents in 2019 alone. “With job opportunities remaining high compared to other provinces, interprovincial migration will
News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   February 12, 2019 103   0   0   0   0   0
A modest pace of sales characterized Regina as of the beginning of 2019, although the city remains predominantly a buyers’ market. New numbers from the Association of Regina Realtors indicated that during the first month of the year, sales grew by 1.2% annually.The total volume actually ended noticeably above the 5-year average, however. “The number of sales that took place in January exceeded our expectations,” Association CEO Gord Archibald said, as quoted by CTV News. The Canada Mortgage and Housing Corporation’s latest report categorized Regina as a buyers’ market, with a moderate level of vulnerability. “In Regina we’ve continued to see slower demand for housing units whether it in the resale or new home market,” according to CMHC senior market analyst Goodson Mwale. Read more:Saskatchewan affordable housing gets multi-million-dollar tranche[1] “We’ve continued to see elevated supply and that has continued to put downward pressure on prices.Both in Regina and in Saskatoon we’re seeing a buyers’ market conditions persist over the past several quarters.” As of the fourth quarter of 2018, Regina’s supply exhibited considerable abundance, which the CMHC attributed to overbuilding during the past few years.This has also led to vacancy levels seeing a marked increase, from 7% in 2017 up to the 7.7% rate in 2018.  
News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   February 10, 2019 130   0   0   0   0   0
Homeownership is becoming increasingly difficult to attain in Calgary, but the city’s rental market is on fire. In fact, the vacancy rate in the Calgary rental market decreased from 6.3% in 2017 to 3.9% last year. “The way this is connected to the rental market is a function of these affordability challenges we’re seeing in the market, and given the pressures put on an individual’s affordability—and we know interest rates are higher—they are renting longer,” said James Cuddy, a senior analyst with the Canada Mortgage and Housing Corporation. Another reason for the buoyant rental market is that interprovincial migration was positive through the first three quarters of 2018—a stark contrast to the previous 2.5 years of negative growth—and that has also done its part to push the vacancy rate down. “We’ve also seen some steady growth in terms of international migration, so it’s contributing to higher demand for rentals in Calgary,” added Cuddy. The outlook for ownership, according to CMHC, isn’t as rosy.Inventory levels are high in the city and builders have started scaling back production.One reason for languid sales is high unemployment and low disposable income. “The general economic recovery we’ve seen since the last recession has been relatively slow;unemployment rates remain elevated and a lack of personal growth in
News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   February 10, 2019 74   0   0   0   0   0
The value of Montreal’s residential property is seeing sustained growth thanks to a booming economy attracting hopeful home buyers from all over Canada, according to the latest figures from the Quebec Professional Association of Real Estate Brokers (QPAREB) The market’s benchmark price for single-family homes increased by 3% year-over-year in January, reaching $316,000.Meanwhile, condos had 2% growth to arrive at $248,271.Plexes had a 4% rise during the same period, settling at $515,000. The numbers supported the observations of professional services firm Shupilov Real Estate, which reported recently that Montreal has become a highly sought after sellers’ market.Aside from the price growth, galvanized competition was a significant factor that drove sales. Read more:Montreal leads country’s metro areas in price growth[1] “This is especially true in the single family home segment, where bidding wars are increasingly common and offers are more likely to be accepted above the original asking price,” Shupilov’s analysis explained. This level of demand has steadily eaten up the market’s inventory, with the number of active residential listings in the CMA falling by 16% year-over-year last month (down to 20,873 properties for sale). Montreal’s sales enjoyed its 47th straight month of sales growth in January, with activity increasing by 15% annually, the QPAREB added. This is despite plexes
News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   February 10, 2019 74   0   0   0   0   0
The ratio of unoccupied residential properties in Vancouver noticeably fell by 15% in just one year, and half of previously empty homes have been moved to the rental market, according to the initial returns of the city’s 2018 empty homes tax. The Vancouver government stated that these figures point to the effectiveness of the levy, with a tangible impact on both vacancy rates and rental supply. Overall, the number of the city’s vacant homes went down from 1,085 homes in 2017, to just 922 in 2018. However, a markets observer warned that it might be too early to celebrate the empty homes tax as a victory, since Vancouver is not yet seeing an equitable distribution of relief. Andy Yan, the director of the City Program at Simon Fraser University, cautioned late last year that price declines have taken place only in the top tier of the market, while the middle and lower price brackets remained all but unchanged. Read more:Federal gov’t should do more to address shortages – mayors[1] “The softening of the market and cooling of the market is something that is definitely happening,” Yan admitted, but quickly added that it’s “a little bit premature to know whether the policies are a success or failure.”
News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   February 07, 2019 130   0   0   0   0   0
What if condo investing were as easy as owning a mutual fund?Well, it can be. Connect Asset Management will be at the Investor Forum on March 2[1] to explain how it helps its clients turn one property into several and build portfolios that cash flow millions of dollars.One of the ways in which Connect Asset Management does that is by helping investor clients access to some of the most exclusive real estate developments in Ontario. “We help investors plan, invest and retire wealthy with cash flow in condos,” said real estate broker and founder of Connect Asset Management Ryan Coyle.“It’s completely hands-off for our clients;we make investing in real estate as easy as owning a mutual fund.” Connect Asset Management builds a strategy for its clients predicated on timing—that is, strategically choosing when to purchase a property. “From acquisition to completion, there’s a tremendous amount of growth on capital appreciation and rental appreciation, so when the condo is built they have all this appreciation that gives them the ability to refinance, pull out the equity and buy more property,” said Coyle.“We help our clients identify the optimal time to flow that capital into more properties.” The strategy, which Connect Asset Management will decode at the Investor Forum, is called
News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing   February 07, 2019 79   0   0   0   0   0
After a tumultuous 2018, the Toronto residential market is expected to encounter notable improvements in activity and housing value this year, according to the Toronto Real Estate Board’s 4th annual Market Year in Review and Outlook report. “Although we won’t experience record levels, we do expect to see a better year in 2019 for sales and selling prices,” TREB president Garry Bhaura stated. A large part of the predicted upticks will stem from the increased number of consumers intending to buy homes in Toronto. “Many buyers who moved to the sidelines over the past year due to various government policies, including the OSFI-mandated mortgage stress test, have re-evaluated their positioning in the marketplace vis-à-vis home type, location and price point,” Bhaura noted. Total sales volume is forecast to increase from last year’s 77,375 transactions to 83,000 deals completed in 2019.Aside from increased home-buying intentions, the growth will also be impelled by healthy employment numbers, lower average fixed-rate borrowing costs, and sustained population growth. Read more:Toronto’s condo market can expect much volatility this year[1] Prices are predicted to continue the moderate growth trend established in the second half of 2018, the TREB said.The median sales price in the GTA will reach $820,000, up from the average of $787,195 in 2018 and
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