Condos most in-demand across Canada

Ephraim Vecina
Mortgage Broker News

Condos continue their reign as the most in-demand housing type across Canada, having shown the fastest appreciation over the last year.

In Royal LePage’s latest “Market Survey Forecast” released last month, condominiums saw their median price grow by 3.3% annually, up to $487,525.

As has been the trend over the past few years, the largest markets had an outsized influence on the asset class, Royal LePage noted.

“The median price of a condominium rose 7.8% year-over-year to $565,919 in the Greater Toronto Area and 4.4% year-over-year in the Greater Montreal Area to $338,148 during the fourth quarter,” the report added.

However, the property type’s national performance was counteracted by slight weakness in some markets, and by changing demographic preferences. In Greater Vancouver, condo prices fell by 3.4% to $645,607.

“Nationally, after significant price gains in recent years in the condominium segment, double digit gains have become more rare as the price of a detached home is now more attractive as the gap between the two segments tightens, especially for millennials looking for more space for their growing families,” Royal LePage added.

Overall, the aggregate national housing price is predicted to grow by 3.2% year-over-year in 2020, reaching as high as $669,800.

Royal LePage president and CEO Phil Soper attributed this to a fundamental market robustness that helped Canada weather the worst effects of the Great Recession.

“While the drop in the number of properties bought and sold during the 2018-19 downturn was large, the value of homes in Canada held up remarkably well, with only minor, single-digit declines in the areas of Ontario and BC that had experienced the most aggressive price inflation in recent years, and of course those regions still suffering from a downturn in the oil and gas sector,” Soper explained.

The executive added that these developments might pave the way for several changes to the B-20 rules this year.

“The federal government has signaled that changes could come to the mortgage stress test mechanism in 2020,” Soper noted. “The stress test pushed people out of real estate markets across Canada temporarily. For the most part, buyers have adjusted, yet it still represents a significant hurdle as families pursue the dream of owning their own home.”

Copyright © 2020 Key Media

Qualifying for a mortgage one of the barriers to home ownership

Kimberly Greene
Mortgage Broker News

Ninety-two percent of Canadians see at least one barrier to home ownership, and two of the top concerns are related to the mortgage process, according to a recent survey from Zillow and Ipsos.

Canadians report feeling pressured by stricter mortgage regulations that went into effect in 2018 and Zillow’s survey found that 56% of Canadians see qualifying for a mortgage as a barrier to home ownership—a six-point increase from 2018. This concern rises to 64% for consumers who recently purchased a home, likely linked to the impending mortgage regulation changes at the time of their home search.

New and stricter mortgage requirements took effect in January 2018 with the addition of a stress test, requiring borrowers to qualify under a higher rate. The rule only applies to newly originated mortgages and is designed to prevent borrowers from taking on more debt than they can handle if interest rates go up. Since its passing, buyers’ worries are growing according to the survey. Half of Canadians (51%) say they are specifically concerned that stricter rules will prevent them from qualifying for a mortgage, up five points since 2018.

Steve Garganis, lead mortgage planner with Mortgage Architects in Mississauga, said that the concerns have risen due to more information flowing to consumers. 

“Canadians are surprised to learn that even a large down payment won’t guarantee you a mortgage approval. Got 30%, 40%, 50%, 60% down payment and great credit? Guess what?  You still may not qualify for a mortgage. This is ridiculous, in my opinion,” Garganis said. “Those of us with years of experience in risk mitigation and credit adjudication know that if you have a large down payment, the chances of default are slim and none. Chances of any loss to the lender is nil.”

Younger home shoppers also feel the weight of the law. Sixty-nine percent of younger home shoppers, those between 18-34 years old, are concerned about qualifying for a mortgage under the stricter guidelines. This worry is also present for current renters who may be considering the purchase of their first home: 66% express concerns about mortgage qualification under stricter guidelines.  

This despite a recent CMHC survey that found homebuyers were overwhelmingly in favour of the stress test, agreeing that the measure would help prevent Canadians from shouldering mortgages that they couldn’t afford. 

Garganis added that more Canadians are being forced back to the six big banks, as smaller lenders now have more costs in raising funds to lend. This results in Canadians paying more than they should.

Most people have heard the buzz word “stress test” but don’t really know what it means or know the specifics of what it did, said Jeff Evans, mortgage broker with Canada Innovative Financial in Richmond, B.C. He thinks that the higher qualifying standard is “quite unreasonable,” and that the government has “taken a hatchet to anything to do with helping the average Canadian to own a home.”

Evans says that Canadians have a right to be concerned, although there’s no sign of their concerns hampering their desire to purchase a home.

“Life has gone on. They qualify for less, the market has gone down primarily because of the changes the government has made, so it’s starting to get more affordable again and people are gradually coming into the market as it becomes more affordable, “Evans said.

Other perceived barriers to home ownership include coming up with a down payment (66%), debt (56%), lack of job security (47%), property taxes (46%), not being in a position to settle down (15%), or not being enough homes for sale (13%). Only 8% of Canadians claim not to see any barriers to owning a home.

Copyright © 2020 Key Media

Combined site takes up a full city block and offers potential for mixed-use development

Cory Wright
Western Investor

An office building and neighbouring development site in New Westminster, comprising a full city block, was sold for $16 million, reports William Wright Commercial. The existing building plus parking spaces offers an income property, as well as the prospect of a future mixed use development of over 104,000 of buildable square feet. The sale also includes the rights to approximately 76 underground parking stalls revenue and expenses located in the neighbouring tower.

Breakdown:

Property type: Office building and development site 

Location: 625 Fifth Avenue and 513 Seventh Street, New Westminster, B.C.

Building size: Approx. 51,122 square feet

Land size: Approx. 34,696 square feet 

Zoning: C3/MH

List price: $18,900,000

Sale price: $16,000,000

Brokerage: William Wright Commercial, Vancouver 

Agents: Cory Wright, Will Hall 

Copyright © Western Investor

Private rooftop patios key to the appeal of 3535 Princeton Burke Mountain

Simon Briault
The Province

A highlight of the homes at 3535 Princeton may be the patio, but the developer has also not held back on the interior finishes.

Nordel Developments is building a collection of townhomes on Coquitlam’s Burke Mountain. Rod Byrnell and wife Debra bought one of the homes in the development — it’s called 3535 Princeton — and when he was asked what appealed to him about the project, said: “Probably everything.”

But top of the list for Byrnell, along with presumably many others, is the private rooftop patio, which every plan will have.

“These homes are unique in this area,” said Michelle DesRosiers, vice-president of projects at Fifth Avenue Real Estate Marketing Ltd., which is marketing the project. “They’re not your typical three-storey townhomes. They have beautiful, 180-degree views of the Lower Mainland.”

A highlight of the homes at 3535 Princeton may be the patio, but the developer has also not held back on the interior finishes.

 

 “They’ve really tried to build these homes to be anything but cookie cutter,” said DesRosiers. “So, they included things like forced-air heating, air conditioning, engineered hardwood, feature walls, electric fireplaces, built-in cabinetry for your entertainment system and natural gas barbecue hookups. These are the type of things you would normally only find in a custom, single-family home and they’re included in the price.”

Kitchens will have grey Shaker cabinetry with soft-close hardware, large pot drawers and pantry space. Wrapped in large-scale tile, kitchen islands are complemented by soft accent lighting and there are quartz countertops, large-scale tile backsplashes, and undermount sinks. The appliance packages are by Fisher & Paykel and include freestanding gas ranges with canopy hood fans, counter-depth french door refrigerators with water and ice, and double-draw dishwashers.

Most ensuite bathrooms will have double vanities. Other bathroom features include chrome faucets with black accents, five-foot walk-in showers with smoked, frameless glass and floor-to-ceiling textured tile. There are pedestal soaker tubs surrounded by floor-to-ceiling textured tile in larger homes and dual-flush, single-piece toilets.

“Most of our buyers are from the immediate area, but we have also seen some coming in from North Vancouver,” DesRosiers said. “I think they probably identify with the natural setting here – you’ve got Burke Mountain with trails and creeks nearby and we back right on to protected green space.”

“It’s a step away from the urban centre, but the nice thing is that they are going to be building Burke Mountain Village, which will give residents opportunities to do some everyday shopping within a five-minute walk of our site.”

According to the City of Coquitlam’s website, the village is expected to include up to 120,000 square feet of commercial space, a recreation complex with community centre, public plaza, integrated multi-use trail network and a park. All of this is music to the ears of Rod and Debra Byrnell, who will take possession of their new home early next year.

“Our children and grandchildren are in that area so that was important to us,” Byrnell said. “The other thing is that we both grew up in Coquitlam and we had to move out to Maple Ridge many years ago because we couldn’t get into the market in that area. Now we’re moving back and it’s kind of like coming home.”

3535 Princeton

What: 27 three- and four-bedroom townhomes, 1,314 — 2,405 square feet

Where: 3535 Princeton Avenue, Coquitlam

Residence size and prices: 1,314 — 2,405 square feet; remaining homes from $999,900

Developer: Nordel Developments

Sales centre: Home 2 — 3535 Princeton Avenue, Coquitlam

Sales centre hours: noon — 5 p.m., Sat — Wed

Sales phone: 604-468-8298

© 2020 Postmedia Network Inc

North Vancouver biggest migration destination

Steve Randall
Canadian Real Estate Wealth

A new report reveals the cities that are seeing the strongest immigration currently; and those that are seeing the most exits.

U-Haul’s migration trends report for 2019 shows that North Vancouver, BC, is the No.1 U-Haul Canadian Growth City, posting the largest net gain of one-way U-Haul trucks entering the city versus leaving it during the past calendar year.

Along with Vancouver, BC has a further three cities on the list: Salmon Arm, Merritt and Victoria.

“Every community in Metro Vancouver feels the pressures associated with regional growth,” stated Michelle Benson, U-Haul Company of Vancouver & Vancouver Island president. “Vancouver is booming, but many people are priced out of the city. That gives North Vancouver the opportunity to attract new residents.”

The number of one-way U-Haul truck rentals arriving in North Vancouver jumped almost 30% from 2018 levels with departures up almost 20%. Arrivals accounted for 55% of all one-way U-Haul traffic through North Vancouver in 2019.

“Vancouver is rated as one of the top cities to live in, so every nearby city is growing,” added Jennifer Anstett, U-Haul Area District Vice President. “North Vancouver is enjoying the trend of people moving toward the West Coast and all it has to offer.”

The rest of the top five are all in Ontario – Trenton, Saint Thomas, Brockville and North Bay – and the province boasts 19 of the top 25 cities.

Copyright © 2020 Key Media Pty Ltd

Canadian Housing Starts (Dec) – January 9, 2020

BCREA

Canadian housing starts decreased by 3.4% in December to 197,329 units at a seasonally adjusted annual rate (SAAR). The trend in national housing starts fell, averaging about 212,000 units SAAR over the past six months.

In BC, housing starts fell by 10% on a monthly basis to 42,791 units SAAR, largely due to contractions in the volatile multi-unit segment in regions outside of Vancouver. Compared to the same time last year, provincial starts were down by 16%. The province ended 2019 with the highest level of housing starts since 1955, the year when data collection began. 

Looking at census metropolitan areas in BC: 

Housing starts in Vancouver were flat in December, following last month’s 78% increase. Compared to last year in December, housing starts were up by 12%. In 2019, Vancouver reported record-level housing starts. 

In Victoria, housing starts were down by 23% on a monthly basis to 3,263 units SAAR. Compared to a year ago in December, housing starts were down by 66%. Overall, housing starts in Victoria slowed by 18% in 2019 when compared to last year. 

In Kelowna, housing starts decreased by 74% in December to 908 units SAAR. Year-over-year starts were down by 73% in the region. In 2019, housing starts were 12% lower than in 2018.

Monthly housing starts in Abbotsford-Mission were up by 54% at 2,517 units SAAR. Compared to the same time last year, new home construction was down by 28%. Abbotsford-Mission ended 2019 on a strong note with housing starts up by 61% compared to 2018. 

95 year old Hudson Bay in Winnipeg valued at $0

Western Investor

The most iconic and recognizable retail building in Winnipeg has been appraised for less than the change in your couch.

According to an appraisal report on 79 buildings owned by the Hudson’s Bay Co., the Bay’s downtown Portage Avenue store, a six-storey building built in 1925, has been valued at a cash value of $0.

The appraisal, which was done by Cushman & Wakefield, generated that number from a formula that compares the value of the land and structure, the potential revenue that they can generate and their costs and liabilities.

The 650,000-square-foot building has been underutilized for the last 20 years as the Bay has completely closed down four floors, using just two others for its wares. The Zellers store that used to occupy the basement went out of business in 2013, the real estate agency noted.

According to the appraisal, if the site were vacant, it would likely be developed with retail and other commercial uses, such as offices or multi-residential development.

“It is our opinion that redevelopment, including office, retail, services, restaurants, entertainment, public institutions, multiple-family residential and mixed-used parking facilities, would be the highest and best use,” the report said.

The biggest problem is it’s not suited to anything but being a department store and the renovation costs would be massive if anybody came up with a plan that could actually work.

Potential developers have shied away because the massive floor plate means only a fraction of the space receives sunlight. It would also cost more than $100 million to bring the building up to code.

The City of Winnipeg is in the process of seeking a historic  designation for the building so it will never be torn down.

Copyright © Western Investor

The property value threshold is now $1.525M

Gerv Tacadena
REP

The British Columbia government has decided to lower the property-value threshold for the province’s tax grant, allowing more homeowners to qualify for a full claim.

The property-value threshold for 2020 is now set at $1.525m, down from $1.65m last year. The provincial government said this decision was due to the decline in house prices, according to The Canadian Press.

Prices of single-family homes in Vancouver declined by 11% as of July last year, according to the BC Assessment Authority.

With the change, 92% of homeowners will be eligible for the full $570 grant this year.

Owners of properties with values exceeding the threshold can still claim partial grants. The grant is reduced by $5 for every $1,000 of assessed value above the limit.

The change also allows senior homeowners in northern and rural areas to claim as much as $1,045 off their annual tax bill. Furthermore, property owners who are 55 years old or older may be eligible for tax deferment if they are financially supporting a dependent child.

Copyright © 2020 Key Media Pty Ltd

Timing is crucial when selling a home

Gerv Tacadena
REP

Timing is a crucial consideration when selling a home. A study by RE/MAX said it is ideal to put properties on sale during the months of February, March, and April.

RE/MAX said while the weather is not ideal during February, the month allows home sellers to gain exposure before the spring rush.

“The normally low inventory in February means less competition. The timing of February is also good in terms of people beginning to either start (or) resume their house hunt after the busy holiday season,” RE/MAX said.

Listing in March also gives the same advantage. During this month, Canadians typically start to settle down after the winter vacations as the weather improves. RE/MAX said the weather transition helps boost the mood of potential buyers.

“Listing your home in March also lines up with a late spring/early summer possession date, which is attractive to many buyers as it means they can be settled into their new home before the summer months hit.,” RE/MAX said.

April marks the beginning of the spring rush. This month gives sellers the best exposure, with the good weather helping make the exterior of homes look more attractive to potential buyers.

Furthermore, April falls nicely to a 90-day possession timeline, allowing buyers to move at the end of June when the school term is over.

“Typically as the year progresses more into spring, buyers start seriously searching for their next home and there are often more buyers in the market than there were in the early months of the year,” RE/MAX said.

Copyright © 2020 Key Media Pty Ltd