toronto

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

B.C. commercial real estate investment up 83% year-over-year

Real estate sales over $5 million hit a new dollar volume high in 2017, led by institutional buyer demand

 

B.C.’s commercial investment value set a new record-high of $7.5 billion in 2017 – up nearly 83 per cent over 2016’s $4.1-billion value. 

A new year-end investment review from Avison Young Commercial Real Estate notes commercial real estate deals and dollar volumes have continued to rise astronomically since 2015. Avison Young cites a number of reasons behind this acceleration – primarily a divergence of market opinion between vendors and purchasers that has led to more assets for sale by owners and more demand for purchase among investors. 

The report tracks B.C. office, industrial, retail and multi-family property transactions greater than $5 million. Two hundred and thirty property sales were recording in 2017, versus 147 in 2016.

 2017 property sales continued to be led by redevelopment potential, regardless of asset class. 

"Ongoing price appreciation in all asset classes is being driven almost exclusively by land value and redevelopment potential," says Bob Levine, principal for Avison Young. "The acquisition of retail assets has morphed in many cases into land deals with lesser consideration or interest for the income in place or the retail asset itself.” 

Private investors accounted for 87 per cent of transactions in 2017 but only 46 per cent of dollar volume. Institutional buyers accounted for the other 47 per cent of dollar volume recorded in 2017. Institutional buyers were involved in most high-profile transactions of the year, including Cadillac Fairview’s downtown Vancouver office portfolio, Pacific Centre shopping mall, Oakridge Centre and Solo District office sales in Burnaby. 

Retail sales in B.C. claimed the largest portion of sales dollar volume, claiming 48 per cent or $3.6 billion of 2017’s 7.5 billion investment total. 

The year’s single biggest transaction was the $1.9-billion sale of Pacific Centre and surrounding office towers. It was B.C.’s second commercial real estate deal to surpass $1 billion, following the $1.05-billion sale of Bentall Centre in 2016. 

Avison Young do not anticipate a billion-dollar transaction in 2018 and believes institutional buyer demand will slow, leading to an annual dollar volume decrease. 
 

Tanya Commisso Western InvestorMarch 22, 2018

The real 'Manhattanization' of Toronto’s housing market

When people talk about the Manhattanization of Toronto, they usually mean the myriad new skyscrapers and exorbitant price points. But the term might actually have more to do with how people live than how much they pay.

New York has a relatively equal measure of renters to homeowners, but in Toronto the number skews heavily in favour of the latter. Yet with escalating pricing, there’s an emergent cohort of renters that’s only expected to grow.

Heidi Schweichler, a broker with REMAX West Realty, can attest to the trend: She sold her High Park house and started renting a condo downtown. While that works for her, she says tenants could be asked to move out of their rentals at any time, and that other options are needed, especially for empty-nesters who crave stability in retirement.

“If you build it, they will come,” said Schweichler. “One reason they’re not flocking to rentals is because the product isn’t there yet. The problem with renting condos is we need more stability than renting for one or two years. Investors can sell their condos quickly, especially as their market value increases. Condos are too small and they target young professionals.”

The Livmore, a purpose-built high-rise apartment building at Bay and Gerrard Sts. is one of the few developments actively addressing the dearth of rental accommodations. According to Vertica Resident Services, the property management company owned by Livmore’s developer, GWL Realty Advisors, the 595-unit tower will be built with everything condos typically have, including amenities, but with higher quality materials. And while it won’t solve the rental scarcity in the city, the hope is that it will get the ball rolling.

“We’re definitely satisfying a need,” said Todd Nishimura, Vertica’s director of marketing and leasing. “There’s very little supply in the city and demand is very high. We’re meeting a need in this city for more inventory of any kind, and we decided to expand that supply on the higher end of the market. Supply is supply, and despite it being higher-end, there’s a trickle down—or trickle up—effect.”

Dunpar is building The Ossington, a luxury townhome project, just south of Davenport Rd., and like Livmore, it will be solely composed of rentals. However, that had more to do with fortuitous delays in the development’s early stages than intent, but it nevertheless provided Dunpar the time it needed to reevaluate its plans and change course.

According to Michael DiPasquale, Dunpar’s COO, there’s been a noticeable trend in the local market lately to cash out and use the equity for both retirement and to rent. 

“There’s a growing trend of selling and renting over the last few years, but especially the last number of months,” said DiPasquale. “There’s a mindset now where people want to rent and realize the flexibility that you can have with it, and now they can do that from the outset. Because of housing prices they might not necessarily have the deposits to go into a home, especially on top of rising interest rates and everything else.”

The reintroduction of rent control in the Fair Housing Plan may put a spanner in the works of more purpose-built rental apartment buildings, but there’s nary a doubt that developers have started tapping into a need—a need that existed in Manhattan, and one that’s growing in Toronto.

by Neil Sharma13 Feb 2018 | www.canadianrealestatemagazine.ca