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After a relatively sedate 2018, Toronto is heating up again

After exhibiting relatively modest performance for most of 2018 with the advent of stricter mortgage qualification rules, Toronto is seeing a resurgence in market competition once again.

The latest numbers from the city’s real estate professionals’ association indicated that the total number of active for-sale listings in the GTA saw a 9.8% year-over-year decrease in November, down to 16,420 units.

During the same time frame, the volume of new for-sale listings in the region shrank by 26.1%.

“New listings were actually down more than sales on a year-over-year basis in November,” TREB President Garry Bhaura said, as quoted by Bloomberg.

Read more: Toronto apartment inventory having trouble catching up with demand

“This suggests that, in many neighbourhoods, competition between buyers may have increased. Relatively tight market conditions over the past few months have provided the foundation for renewed price growth,” Bhaura added.

Average home sales price last month was $788,345, growing by 3.5% from the same time last year.

Meanwhile, total sales in November stood at at 6,251 completed deals, representing a 14.5% annual decline.

TREB stressed, however, that any year-over-year comparison should take into account that November 2017’s performance is “distorted” due to a large number of buyers rushing to beat the implementation of B-20 in January 2018.

www.canadianrealestatemagazine.ca
by Ephraim Vecina07 Dec 2018

Mortgage stress test could become election issue

The Conservative Party of Canada plans to make the mortgage stress test a hot button issue in time for next year’s election, but explaining such a convoluted issue to Canadians could pose a challenge.

The party’s Deputy Shadow Minister for Finance tabled two motions this year to study the impact of the stress test, known as B-20, but they were both rejected by the Liberals. Nevertheless, MP Tom Kmiec has vowed to put the mortgage stress test on the agenda in time for the Oct. 2019 federal election.

“It will be an election issue, absolutely,” said Kmiec. “I’m willing to use procedural tools to get this study done. I’m not necessarily saying to get rid of B-20 completely; I’m saying take a look at the data and then make a decision on it. I’m asking the Liberals to provide any internal documents they have showing why the mortgage rules were introduced in the first place.”

Kmiec has started a website to pressure the Liberals into studying B-20’s effects. He claims that he was initially told B-20 wouldn’t be examined in the absence of more data, however, much has since come to light about Canadians being shut out of the housing market.

Kmiec is dogged, to be sure. He participated in the electoral reform committee’s filibuster.

“If it comes down to it, I’m happy to use up every two-hour time limit on every single committee until we agree to do a mortgage study,” said Kmiec. “I’m not asking for the moon, either. All I want are a few meetings in Ottawa where we can invite people with data who can then tell us what’s happening with the market.”

But communicating the message will doubtless be challenging for the Conservatives. Ron Butler of Butler Mortgage can attest to how difficult buying homes has become this year, but too few Canadians have born that brunt for the impact to truly be understood.

However, given that mortgage renewals are subject to the same stringent B-20 qualification rules, Butler believes it is still possible to make Canadians understand how detrimental the stress test is.

“It won’t be hot button, but if it’s messaged right, it could be,” he said. “If it’s presented properly as a group of themes about the incompetence, in terms of the ability to handle the file—why has Mexico settled NAFTA already and Canada hasn’t? Why did we buy a pipeline that got shut down? It’s a good thing to add to the general list of incompetence. On its own, it isn’t a hot button issue, but if you want to weave it into a tapestry of every day, practical fiscal management, it could work.”

 

by Neil Sharma01 Oct 2018, www.canadianrealestatemagazine.ca

Unlikely Canadian city attracting foreign buyers

Ottawa is experiencing a rental shortage, and savvy foreign investors are swooping in.

“There’s a shortage of inventory in the rental market here, so there’s a need for rental properties,” said Chris Lacharity, a sales representative with Marilyn Wilson Dream Properties, which deals in the luxury market. “An astute buyer knows that. There are a lot of foreign buyers who buy for personal use, but there’s a lot of investment, too.”

 

The nation’s capital is situated between Toronto and Montreal—two cities with significant foreign buyer activity—so the presence of non-resident investors shouldn’t come as much of a surprise.

“Ottawa is growing faster than it ever has, but there’s still growth potential,” said Lacharity. “It has a ways to go, in terms of growth, but it’s also a capital city, a government city. It has rivers and lakes, and it’s aesthetically pleasing. If you have a family, it’s safe and hasn’t experienced all the issues that come with large metropolises. It’s also close to Montreal and Toronto.”

Montreal has arguably the hottest real estate market in Canada right now. Government initiatives brought in to cool skyrocketing housing prices in Vancouver and Toronto are believed to be responsible for that. But Ottawa is another city in the midst of a renaissance. In addition to an LRT project, it has a thriving tech sector, robust student population, and well-paying government jobs.

It is also very stable—and given investors’ distaste for volatility, that’s perfect.

“Real estate doesn’t just shoot up, it conservatively rises here 3-5% on average,” said Lacharity, adding foreign buyers park money in the city’s real estate. “It’s a pretty safe bet for that.”

Bernadette Deschenes of Your Choice Realty notes overheating in Toronto and Vancouver are catalysts for foreign buyer activity in Canada’s capital city. But the city’s two universities have also impelled foreign buyers into action.

“They buy more student residences, like condos or townhomes,” said Deschenes. “Most of our foreign buyers are buying for their children who are attending university. We have a huge student population in this city. There’s a fair bit of older brownstone that’s near Ottawa U in the Sandy Hill region.”

by Neil Sharma09 May 2018 | www.canadianrealestatemagazine.ca

Abbotsford, Mission emerge as commercial power centres

Cities to the east of the Lower Mainland are easing the growing pressure for commercial and residential demand in Metro Vancouver

The latest residential data underlines the strength of the economy of the far east of the Lower Mainland as Abbotsford and Mission report 1,777 new homes under construction in March.

Abbotsford reported record-breaking building permits in 2017, representing a 92 per cent increase over the previous year to a total value of $480 million.

Mission tallied $52 million in 2017 permits, up from $43.5 million a year earlier.

“Abbotsford Mission will post a real GDP gain of 2.5 per cent in 2018, led by strong gains in industrial production, as well as solid domestic demand, as it continues to attract families living in the Vancouver region who are seeking out more affordable housing,” the Conference Board of Canada stated in its recent Metropolitan Outlook 2018 report.

The region’s goods-producing sector will lead the way over the next two years, thanks to growing business opportunities, a lower Canadian dollar and a solid U.S. economy, the report noted.

Manufacturing activity is expected to remain healthy, especially in the key wood products industry.  

“The outlook for the construction sector is also bright, with housing starts and non-residential investment both poised to be strong,” said Alan Arcand, associate director with the centre for municipal studies at the Conference Board of Canada. 

While many think of Abbotsford as an agriculture community,  aviation and aerospace is the No. 1 sector driving the city’s economy. The Industry Training Authority predicts the sector will need 4,000 new staff in the next five years alone. Abbotsford International Airport, the  fourth busiest airport in B.C. and No. 20 in Canada, handles 114,528 aircraft movements per year and more than 677,000 passengers.

Abbotsford is also, of course, the agriculture capital of Canada, with gross farm receipts three times those of Ontario’s Niagara region, which is Canada’s second most productive agricultural area. 

“A growing and diverse community, Abbotsford is affordable, conveniently located with access to vital transportation networks, and boasts a skilled and educated labour force,” said Mayor Henry Braun. 

The availability of relatively affordable land and a welcoming approach to investment have made Abbotsford a darling of the real estate development community.

Last year, Abbotsford was named “Most Business Friendly Municipality” under the NAIOP Awards for Municipal Excellence, The award is given annually by NAIOP, the commercial real estate development association. The award was in recognition of the city’s increase in building permit issuances from 2015 to 2017, as evidence of it attracting businesses, encouraging the growth of existing businesses and promoting industrial development. 

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In addition to recognizing the increase in building permits, NAIOP highlighted Abbotsford’s extensive effort to increase the amount of industrial land available by requesting the conversion of 600 acres from the Agricultural Land Reserve (ALR). Abbotsford launched a comprehensive four-stage industrial land supply planning process to identify opportunities for future industrial growth in the city last year.  Currently, the city  is in Stage 3 of the industrial land study. The background research and analysis conducted in stages 1 and 2 looked at the city’s optimal role in serving both the local and regional industrial markets, and the suitability and potential to accommodate future industrial development and to meet the community’s employment needs.

Part of the vision for preparing the community to grow to 200,000 people from the current tally of approximately 141,400 was the recognition that more land would be needed. 

Braun said the municipality decided to limit residential growth and seek extra land for jobs space only.

“[We] are not going to be looking for exclusions in the ALR for residential growth,” the mayor said. “We need to densify, and go up, and that’s welcome news for lots of people.”

Braun said the city is focusing on infill opportunities, not just to limit sprawl but also to limit the expense on civic infrastructure.

Mission  

The district of Mission is also becoming a destination for industrial real estate due to a lack of supply and higher prices in Metro Vancouver. With easy freeway access and just 15 minutes from the U.S. border, Mission is seen as ideal for distribution facilities. 

There are two main industrial parks in the Mission area: Mission Industrial Park that allows light industry, warehouse, office use and even accessory retail; and Silver Creek Industrial Park, which has direct railway and Fraser River frontage. 

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The 39-acre Silver Creek Industrial Park has bays for sale or lease ranging from 3,060 square feet to 6,370 square feet.  

Mission Industrial Park has lease opportunities for much larger spaces, from 10,000 square feet to 80,000 square feet, according to a District of Mission report.

Mission industrial space leases for an average of $8 to $9 per square foot. 

Last year, industrial building permits in Mission reached $1.85 million, up about $500,000 from a year earlier. 

Downtown Mission has a mix of historic buildings and modern architecture and amenities to support a city of nearly 40,000. Downtown street-front retail lease rates average $8 to $13 per square foot. 

At Heritage Park Marketplace, close to the University of the Fraser Valley’s Mission campus, lease rates range from  $22 to $26 per square foot, triple net. Rents are even higher at the Junction Shopping Centre, a 250,000-square-foot power centre, where lease rates average $32 per square foot,  triple net. 

 

Mission’s commercial building permits were $1.9 million in 2017, with 27 permits.

Residential is the dominant construction factor in Mission, though, confirms Stacey Crawford, the district’s economic development officer.

He notes that Mission residential building permits hit $39.1 million last year, up from $31.9 million a year earlier and far outstripping all other sectors. 

In all, about 90 new detached houses have started this year in Abbotsford and Mission and, while less expensive than in Metro Vancouver, they are not cheap.  The average price for a new detached house in Abbotsford-Mission is now $978,530, up from $956,000 a year ago.