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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 14, 2019 319   0   0   0   0   0
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.”
 
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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 14, 2019 308   0   0   0   0   0
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 Press. 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 markets[1] 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
 
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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 14, 2019 406   0   0   0   0   0
New Brunswick’s property tax has led to virtually zero growth in new apartment investment, according to market players and observers. “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%). Read more:Growing number of PEI, BC locals burdened by insolvency[1] 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
 
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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 12, 2019 338   0   0   0   0   0
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 long-term.” There are three major phases, the second of which is under construction to build
 
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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 12, 2019 305   0   0   0   0   0
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. Read more:Rental demand to boost further apartment construction – CMHC[1] 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
 
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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 12, 2019 339   0   0   0   0   0
The tech segment now serves as a vital bedrock of the Canadian commercial real estate sector, according to a new analysis by Marcus &Millichap. 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 report stated. 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 explained. Read more:Tech firms are the foundation of the commercial segment’s stability[1] Toronto, as a
 
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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 10, 2019 455   0   0   0   0   0
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, are thriving. “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 e-commerce resilient.” 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
 
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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 10, 2019 594   0   0   0   0   0
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 (QPAREB). The metropolitan market’s residential transactions increased by 8% annually last month, ending up at a total of 4,370 transactions. 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). Read more:Economy, employment boost purchasing power in Montreal[1] 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 $1.7 billion. Are you
 
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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 10, 2019 583   0   0   0   0   0
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 Toronto. 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 stated. “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.” Read more:Tech firms are the foundation of the commercial segment’s stability[1] 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 fundamental.Increasingly, the
 
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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 07, 2019 497   0   0   0   0   0
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 their average
 
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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 07, 2019 511   0   0   0   0   0
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 $789,300. 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 at 12.8%. Read more:Red tape is a major influence in Vancouver’s housing scarcity[1] 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
 
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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 07, 2019 571   0   0   0   0   0
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 months. “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.” Read more:Another Canadian city contemplates foreign buyer tax[1] 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
 
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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 05, 2019 160   0   0   0   0   0
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 through
 
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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 05, 2019 182   0   0   0   0   0
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. Read more:Montreal market’s surge continues unabated[1] Indeed, mortgage delinquency rates in the two markets showed considerable stability over the 12 months ending September 2018. 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
 
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News Jarek Bucholc ||Street Smart RE InvestingJarek Bucholc ||Street Smart RE Investing March 05, 2019 182   0   0   0   0   0
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 insolvency. “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 stated. 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 contributing factors.” Read more:Retail chain failures should give would-be investors pause[1] 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 basis. “The rise in
 
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