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
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
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
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
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
“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
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."
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
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
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 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%
The median price of single-family homes rose by 3% to reach
Montreal supply under pressure
In the Montreal CMA, sales were up despite tighter supply of homes
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,
“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
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
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
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
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
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
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
“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 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
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
“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
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.