Intensified demand brought about by an influx of tech companies has pushed Toronto’s office market towards becoming one of Canada’s premier investment destinations, according to a CBRE Group report. The vacancy rate of the office sector fell to 2.7% during the fourth quarter of 2018, leading to commercial rental rates reaching an average of $35.37 per square foot. This far outstripped Montreal’s figures, which posted a median rental rate of $22.76/sf on a 9.4% vacancy rate during the same quarter.And Vancouver, while having a higher average at $37.20/sf, did not command the level of Toronto’s demand, with a 3.8% vacancy. Even intensified development offered only the most minimal of respites for the overheated market.As of the end of 2018, approximately 14.2 million square feet of new commercial space was under construction nationwide, with most of this situated in Toronto, Vancouver, and Montreal. This was the strongest development activity since the first quarter of 2016, the CBRE noted. Read more:Canadian commercial investment to intensify this year[1] CBRE added that despite the 7.3 million sf of space still under development in Toronto, “chronic shortage” will continue to characterize the market for the foreseeable future. For perspective, this greatly exceeds Vancouver’s 2.86 million sf and Montreal’s 954,510 sf.This also continues the

The real estate investing gurus behind Keyspire are coming to a city near you. Michael Sarracini and his partner Scott McGillivray—who’s also the star of Income Property on HGTV, a hit television show in 43 countries—are touring the country[1] to teach both seasoned and neophyte investors the ins and outs of the business with information sessions and workshops. According to Sarracini, Keyspire’s CEO, at the two-hour and three-day in-depth workshops, the tenets of Information Education Implementation—the same technique used on Income Property—will be imparted. The first tenet is about active and passive income.Instead of merely buying to flip, investors are encouraged to build a strategy and then a portfolio.Active income is the process whereby a property is flipped or used as a rent-to-own, but passive income is the turnkey rental property that’s buoyed by a plan to support the investor’s lifestyle. That’s supported by what Keyspire refers to as tools and techniques, one of which is called Flipping to Yourself—a staple strategy on Income Property that McGillivray and Sarracini implemented while the latter worked as a project manager during the show’s first two seasons. “We do rentals and we do them right,” said Sarracini.“When we realized that flipping wasn’t for us, and not the same in Canada as it is in

Much attention has been devoted to the feverish pace of housing construction nationwide, although whether this has successfully addressed the problem of supply remains an open question. However, a recent study published by the Housing Policy Debate journal argued that these inventory injections have in the past few years tended towards being valued at market prices, a fact that will still exclude a considerable number of would-be buyers. The report stressed that governments at all levels should “ensure that supply is added at prices affordable to a range of incomes.” “The challenge in housing affordability is to ensure that new housing is built to meet the shelter needs across the income spectrum and not just for high-income earners.It is true that even housing built to draw market prices and rents over time, through market filtering, will improve affordability for low-income earners.However, the filtering process takes time.” Read more:The waning of Vancouver and the waxing of Toronto[1] A recent heavy influx of asylum-seekers has only complicated matters.In late January, Canadian mayors urged the federal government to do its part in addressing the supply shortages brought about by this immigration volume, as the problem exceeds the capabilities of just the municipal or provincial levels. “[The federal government] makes the

Latest numbers from the Canadian Real Estate Association showed that home price growth in Ottawa stood at a robust 15% average from 2016 to 2018. This translated to a $56,300 increase in the average home price during the time frame, reaching $433,500 as of December 2018. The trend also represented a considerably accelerated pace from 2016, as the gain from December 2013 to December 2018 was around $82,000, the Ottawa Citizen reported. Much of this can be attributed to the market’s relatively high average income, which pushed the city towards becoming one of Canada’s most active sellers’ markets last year. Read more:Asset management firm closes $186-million transaction in Ottawa[1] “Homes that come on the market are quickly sold, with multiple offer situations often present,” according to John Rogan, broker of record and branch manager of Royal LePage Performance Realty. “Overall, healthy employment and wages are propelling higher housing demand in the region.This increasing demand, coupled with Baby Boomers remaining in their homes longer than previously expected, is putting pressure on all housing types and fueling price appreciation.” As of Q4 2018, Ottawa’s aggregate housing price in the city went up by 9.3% year-over-year to reach reached $475,831. CREA’s figures indicated that Ottawa’s pace was noticeably greater

Several pressures have led Toronto’s condo market to a hotbed of volatility, if new data from the Altus Group is any indication. Transactions in the asset class fell by 38% year-over-year to reach 21,330 sales.Although the total number was only 4% below the 10-year average, another report by Urbanation pointed to more potential issues ahead, with supply-side problems taking center stage. “The slowdown in activity last year can partly be attributed to less demand from investors, who typically represent the largest component of new condominium purchasers [in Toronto],” Urbanation noted. The market insights firm emphasized that competition for condos will be intense, as 98% of new units are already pre-sold, and more than half of the new supply has been purchased for investment purposes. Urbanation stated that the total number of condos scheduled for completion this year is 21,991 units, representing a record high.This will also be 29% greater than 2018’s completions. Read more:Federal gov’t should do more to address shortages – mayors[1] Toronto’s single-family properties, on the other hand, experienced a significant 50% year-over-year fall in sales activity, down to 3,831 transactions – fully 74% lower than the 10-year average. “Real estate investment in general had a bit of a quieter year after an exceptional 2017,” Altus

As every landlord surely knows, running a credit check during the tenant selection process is paramount.However, not every landlord realizes what to do with the information the credit check reveals. “Every independent landlord knows that to screen a tenant, you have to look at their credit, but a lot of them have no idea how credit relates to a tenant’s ability to pay rent on time,” said Jerome Werniuk, director of sales at Naborly Inc[1]., which runs free credit and background checks.“Ninety-five percent of landlords have tenants show up with their own credit file, meaning they go to Credit Karma or Equifax, but when we hear professional tenant stories, these people come with doctored credit checks. Doctoring a credit check is as easy as finding a template online and filling it in as one wishes.It’s what Werniuk describes as a huge problem within the industry. While savvy landlords realize they can obtain credit checks from Equifax or TransUnion, many still don’t know, nor have time, to mine the information therein to decipher a tenant’s capacity for prompt rent payments. “To get a credit file from either of the credit bureaus, they have to pay for it and a set-up fee for the individual’s report, but there’s a heavy credentialing process

Rising interest rates and strict mortgage qualification resulted in fewer Canadians seeking homeownership than rental accommodations last year, and 2019 will bring more of the same. “It’s going to continue,” said Marcus &Millichap’s Vice President and Broker of Record Mark Paterson.“People will continue renting rather than dealing with residential mortgages.The rental market right now can barely keep up with the vacancy rate in Toronto, for example, being around 1%.” Competition for rentals will be even fiercer this year in urban centres and that will push rents upward, creating a spillover effect into satellite markets. “The rental market will see an increase of 8-10% because of demand,” said Paterson.“Unfortunately for people trying to find affordable housing, they’re looking elsewhere in secondary markets.They’re priced out of city centres, and that means the talent pool for jobs will end up in secondary markets.” The Marcus &Millichap’s 2019 Multifamily Investment Forecast Report notes that apartment projects have become more financially viable, as evidenced by 60,000 units in the pipeline countrywide.However, that’s little relief given how few vacancies there are. “The number of occupied units grew by 50,000 last year, outpacing supply growth nationally just as 37,000 new apartments came online,” read the report.“The national vacancy rate declined to 2.4%, the lowest reading since 2002.A shortage of construction workers,

Vancouver’s affordability saga continues unimpeded as the city’s single-family homes are now priced considerably above the median household income, according to a recent study by the National Bank. The analysis uncovered that the average monthly mortgage payment for a median-price single-detached residence in the Vancouver CMA was around 101.5% of the region’s average household income. National Bank stated that this was an unprecedented high, representing increases of 2.7% quarterly and 6.4% annually, Business in Vancouver reported. Falling salary growth combined with recent increases in interest rates were cited by the study as the main contributors to the trend, despite the fact that the median price of Vancouver’s single-family homes during Q4 2018 went down by 0.7% quarter-over-quarter, and had only a modest 1.8% year-over-year uptick. Condos experienced a similar cooling, with the mortgage for an average-priced unit in the Vancouver CMA accounting for 49.2% of household income during the fourth quarter, increasing by 1.3% from Q3 2018 and 6.3% year-over-year. Read more:B.C.’s young professionals are packing up for greener pastures[1] A January report from Altus Group warned that there seems to be no relief in sight for would-be home buyers in Vancouver, as the market is “exhibiting the most potential for downside risk,” Altus stated. Aside from pricing issues,

The mayors of Canada’s largest and most in-demand housing markets called on the federal government to do its part in addressing the housing supply shortages brought about by the recent influx of asylum-seekers. Toronto mayor John Tory stressed that solving the issue goes beyond the reach of just the municipal or provincial levels, and argued that the Liberal administration should also “share the burden”. “[The federal government] makes the decisions about what happens at the border and Toronto is very supportive, for example, of admitting refugees,” Tory said, as quoted by CBC News. “We’ve had a historically compassionate approach in this country which we support.But the federal government, who admits refugees to the country, also has to take a hand in helping to house and settle them.” Ottawa mayor Jim Watson stated that in 2017 alone, his jurisdiction spent around $5.7 million in refugee housing costs, and noted that the city might have had a similar expense volume in 2018. “Toronto received $11 million in July to deal with refugee claimants.Our city has received nothing,” he admitted.“What often happens is a government will make a decision at a senior level and the consequences trickle down to us.” Read more:The waning of Vancouver and the waxing of Toronto[1]

Choosing the right property in which to invest is only half the battle—the other half is ensuring that it’s renovated to full potential. But what if there were somebody to do both for you? In 2013, Magellan Wealth Advisors was founded by Carlos Rodrigues, an erstwhile advisor for Freedom 55 Financial who realized that his personal real estate investments produced vastly superior yields to what he was contractually obligated to sell his clients.While still a fine wealth advisor, Rodrigues considers himself an even more astute real estate investor. Magellan buys single-family houses and converts them into multi-family homes, and in doing so pumps their values through the roof.Operating on either joint ventures, or accepting up to five investors at a time, Magellan finds properties, renovates and then manages them from start to finish. “The investor puts up capital and, typically, we’ll be on title of the mortgage to qualify for it,” said Rodrigues.“We take care of all the work but we take half the risk off of the investor’s shoulders.We find that people want to get into real estate but don’t have the time because when something is being renovated, you need to be present. “Right from the beginning, we have our own real estate agent who’s in-house and who can

Montreal has become a highly-desired seller’s market, mainly due to mounting home prices brought about by feverish competition and a depleting inventory. “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,” according to a fresh analysis by professional services firm Shupilov Real Estate. Earlier this month, the Quebec Federation of Real Estate Boards announced that 2018 sales volume reached 46,753 completed deals, representing a new high and marking the 4th straight year of growth. “Generally speaking, 2018 ended with market conditions clearly in favour of sellers for single-family homes, condominiums, and plexes.The scarcity of supply of single-family homes as compared to the demand is undeniable on the Island of Montreal, where the number of months of inventory is slightly less than five,” the QFREB stated. The 2018 numbers are expected to impart momentum that will last for much of this year, the Federation added. Read more:Montreal leads country’s metro areas in price growth[1] The Shupilov report found that some of the greatest sales-to-new-listings-ratios (SNLR) in Montreal were in communities hosting high-demand single-detached properties. Q4 2018 Centris data showed that Montreal’s top sellers’ markets for this property type are Pointe

With unpredictability characterizing much of the asset class this year, potential investors would do well to reconsider investing in Canada’s retail property segment, according to Avison Young’s 2019 North America, Europe and Asia Commercial Real Estate Forecast. In the mid-January report, Avison Young cautioned that vacancy in retail “remains in flux.” The chaotic conditions mainly arose from major failures among some large-scale retail chains, with a considerable proportion of the closures stemming from the ever-growing influence of e-commerce. “The focus on creating memorable consumer experiences will endure across the Canadian retail landscape in 2019.Significant investment in technology to track millennial behaviour is being made by retailers developing and enhancing their physical locations and online market shares while seeking the correct balance in the symbiotic relationship between bricks and clicks,” Avison Young principal and practice leader of research (Canada) Bill Argeropoulos explained. Read more:Canadian commercial investment to intensify this year[1] In a study released late last year, Morguard Corporation noted that leasing performance in retail has indeed become erratic recently, but added that the sector would still enjoy good performance despite these risks. A large contributor of this predicted strength will stem from the increased purchasing power inherent in a steadily recovering economy. “Sustained economic expansion over the next few years bodes

If you’re torn between investing in either RRSPs or real estate, don’t be. Calum Ross, a leverage wealth expert and VERICO broker with Mortgage Management Group—and author of The Real Estate Retirement Plan:An Investment and Lifestyle Solution for Canadians—says Canadians should invest in both.Ross will be discussing that and more at this year’s Investor Forum[1] on March 2 at the International Centre in Mississauga. “People have a tendency to think of either RRSPs or real estate investing for their retirement plan,” Ross told CREW.“The reality is that consumers need both.” The reason is that, in addition to diminishing rates of return, a growing number of Canadians these days don’t have defined contribution plans, which still don’t even give guaranteed payouts.Consequently, they need higher amounts of forced savings. “When you consider the vast majority of Canadians’ wealth is tied up in their homes, the only solution to RRSP, TFSA, RESP, or investment savings catch-ups is essentially in the home equity of their property,” continued Ross.“When you consider the fact that life expectancies now are moving towards 90 years old, the probability that your registered savings account lasts a lot longer than your mortgage is very high.What we’ve been doing is engineering investment products to ensure that the rate of return exceeds the cost of

With a $26-million federal investment, 14-storey Arts District will soon arise in Winnipeg. The project, announced last week by the federal government and local officials, will help relieve some of the pressure for more space that caters to the city’s affordable housing needs. Arts District is designed to provide 119 units for struggling middle-class families.Approximately 10% of the units will also be designed as barrier-free layouts. “This investment is wonderful news for the Winnipeg middle-income families that will move into these new affordable rental housing units.It will contribute to build a foundation for their social and economic success as well as help create new jobs and stimulate our local economy,” according to Robert-Falcon Ouellette, Member of Parliament for Winnipeg Centre. Read more:Majority of Canadians still hold on to dreams of home ownership[1] In Q3 2018, the median price of a condo unit in Winnipeg fell by 2.1% on an annual basis (down to $240,933).Despite this, affordability has been impaired by a considerable increase in condo fees, stemming from regulations mandating reserve fund studies for condo projects. “Demand hasn’t been strong enough to keep up as those units come onto the market, and this has caused some downward pressure on condo prices,” Royal LePage Prime Real Estate managing partner Michael

Multiple analyses have indicated that Canadian seniors are among the most active borrowing demographics, but a considerable number of them have in recent months expressed worry for the eventual fate of their home equity. This is despite the national reverse mortgage load reaching an unprecedented $3.48 billion outstanding in November 2018, roughly 31.68% annually and 1.85% higher on a month-over-month basis. The latest MNP Consumer Debt Index conducted by Ipsos found that 41% of Canadians are anxious about their current debt levels, and 43% are regretful over the amount of debt that they have taken on in their lives. “Seniors are usually on a fixed income, meaning a big loan isn’t likely to be paid quickly.At that age, they also aren’t likely to find new additional income streams either.That adds up to borrowers that will rack up interest for a very long time,” Better Dwelling stated in its analysis of the data. Read more:Growing number of PEI, BC locals burdened by insolvency[1] The OSFI noted that if the borrowing trend among seniors sustains itself, reverse mortgages will only become more popular over the next few years. A study by TransUnion in Q3 2018 reported that during the first quarter of that year, approximately 63% more