As cities around the world grow too expensive for young
families, they’re renting longer, and this new demographic could
provide landlords with stable tenancy for years.
But landlords need to be flexible.
Craig Watson, a landlord and sales agent with REMAX Escarpment
Realty Inc., says that by allowing tenants to baby-proof his rental
properties, he scarcely worries about vacancies.
“The last couple of years have been really challenging for young
families, whether first-timers or new buyers, because they have to
deal with the mortgage rules in place,” he said.“They’ve become
more prominent on the renting side.I’ve had many more young tenants
than I had many years ago.”
A good rule of thumb for any property investor is that they
should cater to their tenants, and as young families struggle to
become homeowners, Watson advises being accommodating.
“Be aware of their requirements so that you can best meet their
needs,” continued Watson.“When I have people requesting these
things from me, I don’t have any problem with it.You’re looking at
families coming in and you want them to feel safe and secure, and
as a landlord I’m trying to anchor in that tenant to a certain
point.It’s my property, but their home, and I want them to love
where they live.”
The rest of 2019 might bring with it major risks – including a
sluggish national economy and the knock-on effects of previous
mortgage hikes – that can lead to less new homes built in Canada’s
major markets, CIBC economist Royce Mendes warned.
“Residential investment was downright ugly in the fourth
quarter, and the latest reading on housing starts only added to the
bad news on Canadian homebuilding,” Mendes told The Canadian
Latest numbers from the Canada Mortgage and Housing Corporation
showed that the seasonally adjusted annual rate of housing starts
fell from 206,809 units in January to 173,153 units last month,
considerably lower than prior predictions of a pace of 205,000.
“Prior to this reading, starts had seen a bit of a renaissance,
rising back above 200,000 for four straight months.But the market
has been a contending with the effects of higher interest rates and
stricter lending standards, and a pace of 200,000 looked unlikely
for the year as a whole,” Mendes added.
Read more:Multi-family starts predominant in the hottest
These figures came after the weakest January of home sales since
2015, according to the Canadian Real Estate Association.
“As a leading indicator of economic activity, February’s steep
decline in housing starts may raise some
New Brunswick’s property tax has led to virtually zero growth in
new apartment investment, according to market players and
“It is stopping investors from coming here, it is stopping
people coming in and purchasing income properties, and it is also
hurting our economy,” according to Pamela Doak of the Fredericton
Real Estate Board, speaking to GlobalNews.ca.
These assertions were supported by Statistics Canada numbers,
which indicated that apartment investment has grown in Nova Scotia
between 1994 and 2018, while remaining flat in New Brunswick over
the same period.
Data from the Canadian Real Estate Association showed that the
market’s average sales prices make it a relatively affordable
option, with the single-family home benchmark as of 2018 at
$177,200 (vs.the national average of $488,600).
However, this is only part of the picture.Research by real
estate information portal Zoocasa has found that keeping a home in
New Brunswick is particularly costly, with Saint John having the
highest residential property tax rate in Canada (1.785%).
number of PEI, BC locals burdened by insolvency
The New Brunswick Real Estate Association has long pushed for
legislative changes, as the province is the only jurisdiction in
Canada that has a non-owner occupied levy
“We’ve been lobbying basically since 2010
Master-planned communities have the obvious advantage of
elaborate planning that standalone developments don’t, and that
makes them superior investments.
“Master-planned communities have the advantage in that you know
how the community will change over time,” said Brad Jones, VP of
development at Wesgroup in Vancouver.“You know how the community
will grow and which retailers are coming on board.There are also
parks, schools and a clear ability to understand how your
neighbourhood, and your investment, will change over time.”
Wesgroup is in the midst of developing River District, the
largest master-planned community in Vancouver, that has 54
development parcels over approximately 130 acres.In total, the
community expects about 15,000 residents will be spread across
7,000 units of housing.
“River District has the unique advantage of one company doing
all the buildings, doing all the master-planning work and owning
all the retail and commercial space,” said Jones.“Your investment
is going to be looked after by us because we’re looking after our
own investment, too.We’re buying into the future of the community,
like every buyer is, rather than just a few buildings.We’re the
landlord for the grocery store, the bank and the liquor store.We’re
looking after the community’s reputation by building and thinking
There are three major phases, the second of which is under
construction to build
In recent months, more multi-family buildings were constructed
than any other housing type in Canada’s hottest markets, according
to a new report by the Canada Mortgage and Housing Corporation.
“The national trend in housing starts resumed its downward
trajectory in February while still remaining above historical
average,” CMHC chief economist Bob Dugan said.
The Crown corporation said that despite the nationwide housing
starts trend falling to 203,554 units in February 2019 (from the
207,742 units exactly a year before), multi-family complexes
represented much of recent home construction activity.
“Both single-detached and multi-unit dwellings starts trended
lower.Higher mortgage rates combined with still-favourable, but
less stimulative economic conditions have contributed to softer
demand on new home markets in urban centres.”
Vancouver, in particular, saw the predominance of multi-unit
buildings in new projects.Condo starts significantly increased in
the 12 months ending February 2019, accounting for 77% of the
city’s new housing units last month.In contrast, single-detached
starts fell by 24% annually.
demand to boost further apartment construction – CMHC
Meanwhile, Toronto’s lower February numbers mainly stemmed from
low condo apartment starts, although demand for the asset class is
not stopping any time soon as “sales of new condominium apartment
starts have been strong in 2017 and 2018 and these units
The tech segment now serves as a vital bedrock of the Canadian
commercial real estate sector, according to a new analysis by
In its newly released 2019 Commercial Real Estate Canada
Investment Forecast study, Marcus &Millichap noted that
tech firms’ demand for usable space will foster greater investment
in the oft-ignored outskirts of major metropolitan markets.
“Elevated pricing expectations and fewer high-quality listings
in downtown areas motivate investors to broaden search parameters
to suburban locations near major metros.Higher yields beyond the
urban core will be a large driver to sales activity in 2019,” the
Moreover, tech giants such as Microsoft, Google, and Amazon –
which have already taken roost in Canada’s leading commercial
markets – have been predicted to hire new workers in the tens of
thousands over the next few years, as well as spend billions in
office expansions during that same period.
“Microsoft currently has 2,300 employees in the country and
14,000 partners, which could grow to 60,000 overall jobs between
employees and partners.Amazon will also grow substantially with
plans for 6,000 new jobs across corporate offices in Vancouver and
Toronto and multiple new fulﬁllment centres,” the report
firms are the foundation of the commercial segment’s
Toronto, as a
Despite the e-commerce disruption, the retail market in Canada’s
key markets is expected to remain strong through 2019.
In fact, according to Marcus &Millichap’s 2019 Retail North
American Investment Forecast, downtown storefronts are proving
impervious to the convenience proffered by online retail.The report
notes that service-oriented businesses, like fitness and dining,
“Visitor expenditures rose 2.4% in the third quarter of 2019,
carried higher by strong domestic demand,” read the report.“Tourism
spending has been a substantial driver to luxury brand expansion as
visitors comprise a large portion of all high-end sales, lifting
investor interest in high street assets as they are often more
While internet-based sales increased 20% over the past year,
they only comprise 4% of Canada’s retail activity.Still, retailers
are bracing for change by embracing omnichannel approaches to
remain afloat.Luxury retail is also expected to remain strong
through 2019 and compensate for weaknesses in the mid-market
category caused by Sears, Lowe’s, Gymboree and others.
Montreal, Canada’s second-most populous city, is replete with
international and discount retails, and as the it rides a wave of
newfound prosperity, brands are vying for to establish a presence
in the city.Tenant demand is so strong in the city that developers
are responding with sprawling mixed-use projects.
“Motivated by growing tenant demand, developers
Montreal’s relative affordability is fuelling an unparalleled
dynamism that has pushed the market towards its 48th straight month
of sales growth in February, according to the latest figures from
the Quebec Professional Association of Real Estate Brokers
The metropolitan market’s residential transactions increased by
8% annually last month, ending up at a total of 4,370
Average sales prices were cited as a major factor in this trend,
with Montreal’s condos remaining flat at $250,000 in
February.Single-family homes increased by a modest 3%
year-over-year (reaching $320,000), while plexes saw 8% price
growth (up to a still-affordable $522,000).
Condos transactions enjoyed a 14% annual increase last month to
reach 1,588 completed deals.The number of single-family homes sold
in February was 4% greater than the activity during the same time
last year (2,436 transactions), while that of plexes went up by 7%
during this time frame (339 sales).
employment boost purchasing power in Montreal
In a report earlier this year, the Canadian Real Estate
Association stated that Montreal’s housing market growth will soon
outpace that of Vancouver.
The total dollar value of property transactions (seasonally
adjusted) in Montreal expanded by 18% year-over-year in January, up
to $1.63 billion.In contrast, Vancouver’s suffered a 42% decline to
A newly licenced tech-funding specialist bank is just the latest
in Toronto’s tech-impelled commercial surge.
Silicon Valley Bank, which supports tech innovators and their
investors, has been granted an OSFI license to operate in
Canada.The U.S.-based company will be starting its operations in
The bank specializes in commercial financing solutions to
technology and life science organizations.
“Canada has a thriving innovation sector and we’re excited to be
a catalyst for its continued growth,” bank CEO Greg Becker
“The Canadian banking licence is a significant milestone in our
global expansion.The growing team there is well-positioned to
execute on SVB’s mission to help innovative companies and their
investors be even more successful.”
firms are the foundation of the commercial segment’s
Silicon Valley Bank is among the recent tech-related firms that
have established themselves in Toronto – continuing a trend
predicted by CBRE vice chairman Paul Morassutti, who stated that
the tech industry will play a central role in ensuring commercial
stability for the long haul.
Approximately 10 million square feet of office property is under
development in Toronto, with 58% of the space already pre-leased
and tech firms accounting for 20% of the early birds.
“In real estate, identifying areas of growth is
What if data could be harnessed to determine renters’ habits and
predict their suitability as tenants?
According to Jerome Werniuk, director of sales at Naborly Inc.,
that day is just around the corner.The real estate industry in
Canada has been slower to adopt technology than it has south of the
border, but things are beginning to change.Naborly, for instance,
is in the business of running credit checks for landlords—up to 100
a day—and, in the process, has amassed an impressive database of
information that it intends to parse for trends, habits, and ways
to make both landlords’ and tenants’ lives easier.
“Companies like Naborly that aggregate information about tenant
migration will completely change how landlords look at their real
estate investments,” said Werniuk.“A good way to look at this is
through numbers for three categories:average house price, average
rental price, and average income.”
Studying those categories will reveal housing prices are
increasing much faster than rental rates—although they’re going up,
too—but, fortunately, Naborly’s in-house team of data scientists go
much deeper.By combing through the information Naborly has captured
from over 50,000 tenants within its system, most of whom are in the
Greater Toronto Area, they will produce reports that reveal the
average age of renters in a postal code, their average income, and
The Vancouver residential market’s prices, sales, and supply all
suffered notable annual declines in February, according to the
latest numbers from the Real Estate Board of Greater Vancouver.
Benchmark prices across all housing types decreased by 6.1%
year-over-year in February, down to $1,016,600.
Single-detached properties experienced the greatest fall at
9.7%, reaching an average of $1,443,100.Condominium prices had a
more modest 4% drop to $660,300, and townhomes by 3.3% to end up at
Housing sales volume had a massive 32.8% annual shrinkage last
month, settling down at levels 42.5% lower than the 10-year sales
average for February, BNN Bloomberg reported.
Detached homes had 28% fewer sales in February compared to the
same time last year, while apartment activity slowed down by almost
36% during that time frame.Meanwhile, the townhome sector had a
nearly 31% decrease.
The number of new homes that entered the market fell by 7.8%
year-over-year, with the sales-to-active listings ratio ending up
Read more:Red tape
is a major influence in Vancouver’s housing scarcity
The Conference Board of Canada warned in its recent market
outlook that the Vancouver housing sector’s sluggishness will be a
major factor in the province’s economy, although fortunately not to
the pint of recession.
B.C.’s real GDP
Real estate markets in Quebec, Alberta, and Nova Scotia are
becoming increasingly popular among Chinese property buyers and
investors, according to a new analysis by Juwai.com.
“The Chinese buyer boom in Montreal began earlier and is larger
than in other second-tier cities.However, some smaller markets saw
bigger Chinese buyer booms on a relative basis during 2018,”
Juwai.com CEO and Director Carrie Law said.
All in all, Chinese-home buying intentions across Canada went up
by 8% annually in 2018, with recovery in the second half of the
year making up for a noticeable slowdown in the first six
“Buyer demand was unevenly distributed throughout the year.The
year began with buyer enquiries plummeting for two consecutive
quarters.During the first quarter, enquiries fell 23.8% compared
with the same quarter in 2017.In the second quarter, enquiries fell
20.2% compared with the second quarter of 2017,” Law explained.
“In the second half, demand reversed as Chinese buyer enquiries
returned to growth levels.Buyer enquiries climbed 43.6% during the
third quarter and by 45.1% in the fourth quarter, compared with the
same periods during the prior year.”
Canadian city contemplates foreign buyer tax
Chinese inquiries for residential purchases in Montreal grew by
35.7% year-over-year.Calgary and Halifax had considerably greater
increases of 234.4% and
Arguably the greatest risk to preconstruction condo purchases is
show suites often don’t conceal the true state of delivered
units.But a Vancouver developer has found a way around that.
Aragon Developments builds its condomniums before opening sales
to the public—a virtually unheard of way to market condos in a
major Canadian market.Developers usually have to surpass 80% sales
before they can secure financing to start building.
“It also allows buyers to go in and see the amount of work we
put into the finished quality,” said Luke Ramsay, development
coordinator at Aragon.“They see what we do acoustically or to the
finishes.They see where they’re going to live instead of a show
suite that may or may not reflect the finished product three or
four years down the line.”
Perhaps Aragon’s most unique offering can be found at two of its
condominium developments that go on sale this summer.Amber, a
31-unit building with three accompanying townhomes, and Shift, a
43-unit tower, are designed by the firm’s in-house interior design
team and promise idiosyncratic design elements.But most
importantly, they will be family-friendly.
“The suites appeal more to young families who are looking for
more bedrooms but don’t have the ability financially to afford a
big house or apartment,” said Ramsay.“Most companies start by going
A combination of a strong economy and a robust job market is
elevating the purchasing power of working-age Canadians in Montreal
and Québec City, according to a new analysis by the Canada Mortgage
and Housing Corporation.
This has become a crucial factor in keeping delinquency rates in
the 25 to 64 employment age range low.Unpaid mortgages of 90 days
or longer accounted for only 0.29% of mortgages in Montreal and
0.24% in Québec as of Q3 2018.
“The Montreal and Québec areas have shown strong economic growth
and particularly vibrant job markets in the last two years.This
certainly contributed to the financial stability of households and
supported their ability to make their mortgage payments on time (or
less than 90 days late),” CMHC said.
market’s surge continues unabated
Indeed, mortgage delinquency rates in the two markets showed
considerable stability over the 12 months ending September
In Montreal, the rate stood at 0.23% for mortgages with a value
at origination of less than $100,000, and 0.30% for accounts
involving $400,000 and greater.
On the other hand, delinquency in the Québec CMA was at 0.13%
for accounts with origination values of less than $100,000, and
around 0.63% for mortgages at $400,000 and greater.
Working-age Canadians also
In a new analysis, the Canadian Association of Insolvency and
Restructuring Professionals warned that the commercial property
segment will labour under the burden of growing consumer
“Businesses will also feel the effects of a slowdown in consumer
spending as Canadians react to the softening housing market and
adjust their household budgets to account for larger interest
payments in order to service debt,” CAIRP board member David Lewis
Construction, real estate, and rental and leasing are also
likely to disproportionately suffer from this impact.The proportion
of Canadian businesses that filed for bankruptcy in January rose by
10.1% year-over-year in January, and 2.1% from December 2018.
“After 17 consecutive years of steady decline, business
insolvencies in Canada have reached a plateau and will likely rise
in 2019,” Lewis said.
“Weaker exports, slowing job growth, tightening lending
conditions, rising interest rates and consumer debt are all
chain failures should give would-be investors pause
Crucially, the CAIRP has forecast that the number of consumer
insolvencies nationwide will continue growing over the next two
years, mainly propelled by larger, more onerous household debts.The
share of Canadians who filed for insolvency in January was 7.1%
larger than a year ago, and 11.6% greater on a month-over-month
“The rise in