Canada’s real estate market is booming-here’s how you can take advantage

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There’s a ton of cash to be made in real estate and with the Canadian market booming, there’s no better place to invest. Real estate has always been a tried and true way of diversifying an investment portfolio, but with such large sums of money involved, you shouldn’t go in blind. Consider the risks, the strategies and the benefits and learn how to best navigate them by first investing in some dedicated real estate investing training.

An investment-friendly tax system

One of the best things about buying real estate in Canada is taxation. Compared to other countries, the system here is pretty encouraging to property investors. Advantages of buying property in Canada include amortization of the purchase price of 4 per cent per year, light taxation of income made from investment properties, no residency or citizenship requirement for buying and owning property, a beneficial tax credit system, and others worth a closer look.

Accessibility and affordability 

In Canada, the real estate sector has been exhibiting consistent growth in most urban and sub-urban areas, but accessibility still exists in comparison to other major cities around the globe. For example, in Paris, the cost per square meter can be as high as 10,000 euros versus 2,000 to 3,000 euros in Canada. Living in a well-situated area is not only plausible in Canada, it is relatively affordable.

Short- and long-term growth

Determining which areas offer growth potential in the short-term versus the long-term can help guide your strategy. If you’re looking to invest short-term — perhaps with a renovation and flip — you need to find a hot location with some inventory in need of TLC. If a long-term investment is more your deal, then buying something at a lower cost to sell later at a better price requires strategic planning.

If you’ve got some cash kicking around, with planning and strategic thinking, you can make some serious money in real estate. Want to learn more about that planning and strategy? The eight-course Complete Real Estate Investing Bundle offers an education with well-reviewed classes taught by top-rated industry pros. It’s a pretty solid solution that can decrease your risk of a bad investment if you apply your newfound knowledge in a meaningful way.

This online training offers 14 hours of insight on how to flip houses, how to build a cash buyers list, understanding the barriers and breakthroughs of wholesale real estate, the ins and outs of master probate real estate, and much more across 224 lessons.

The Complete Real Estate Investing Bundle retails for over $2k and is on sale for $37.99, a discount of 98 per cent.

 

© 2021 Financial Post

In Burnaby, $1,660 a month for a one-bedroom: Rental rates reveal a big-city exodus

Shari Kulha
The Vancouver Sun

Rental rates in Toronto and Vancouver drop dramatically, while Windsor comes on strong. Photo by Ernest Doroszuk/Postmedia Network/File

It’s status quo on the country’s list of most expensive cities to rent. Despite seeing its rental prices drop, Vancouver still ranks No. 1, with Toronto a close second. The rental rates there and in many other cities have fallen, following from pandemic changes many residents made to their lifestyles.

According to rental search site PadMapper.com’s March rent report for Canada, prices in Toronto and Vancouver as of March 2021 have hit four-year lows. Vancouver’s one-bedroom rent was at $1,900, down 13.6 per cent year over year, a low it hasn’t been at since March 2017, while Toronto’s one-bedroom rent was at $1,750, off 21.5 per cent, a low it hasn’t touched since February 2017.

As people have left the denser urban areas for nearby suburbs and exurbs, the increased demand has  caused prices to rise in those markets. Burnaby, a populous suburb abutting Vancouver, saw prices for a one-bedroom unit fall, by 7.8 per cent from March 2020 and by 6.4 per cent for a two-bedroom, but Abbotsford, an hour farther east, had the country’s highest price increases. One-bedroom rental price rose 20.2 per cent from March 2020 and a two-bedroom rose 14 per cent. Abbotsford rates are approximately $600 and $900 lower, respectively, than Vancouver’s.

In Barrie, Ont., 90 minutes north of Toronto, one-bedroom rental rates rose 12.9 per cent over the year, but pulled back in March 2021 by 4.8 per cent for a one-bedroom, landing at $1,570 per month. Two-bedroom units there rose 1.2 per cent over the year to $1,690, with a 5.1 per cent pullback in March. Hamilton, 90 minutes west, registered rental increases of 6.2 per cent and 8.3 per cent respectively year over year. Oshawa, 90 minutes east, posted one-bedroom rents up 0.7 per cent to $1,390 and two-bedroom rates up 2.8 per cent to $1,490.

Windsor, Ont. saw the country’s highest price rise year over year, at 21.1 per cent, reaching $1,380 for a two-bedroom unit. One bedrooms there are available at a median price of $1,100, up 10 per cent over the year.

The three markets with the highest month-over-month one-bedroom gains were Abbotsford, Oshawa and Kelowna. Aside from Toronto and Vancouver, the steepest drops were seen in Quebec, Montreal and St. John’s.

Across the rest of the country, rents essentially stabilized from the double-digit year-over-year declines experienced as a result of the pandemic.

Overall, rents rose in nine cities, six stayed flat and rates in nine markets fell.

Padmapper’s Canadian Rent Report analyzed rental data from hundreds of thousands of active listings across the country. Listings were aggregated on a monthly basis to calculate median asking rents for the Top 24 most populous metro areas.

 

© 2021 Vancouver Sun

Vancouver Island land assembly sells nearly $300K over assessment

Royal LePage Commercial
Western Investor

-Royal LePage Commercial, Vancouver Island, Victoria, for Western Investor

Property type: Land assembly

Location: 291 Island Highway and 280 Stewart Avenue, View Royal, B.C.

Number of assembled units: 3

Property size: 2,837 square feet

Land size: 20,908 square feet

Land size in acres: 0.48 acres

Zoning: Residential

BC Assessment value 2020: $1.87 million

List price: $1.99 million

Sale price: $2.1 million

Date of sale: March 3, 2021

Brokerage: Royal LePage Commercial, Vancouver Island, Victoria, B.C.

Broker: Colevin Crause

 

© Copyright 2020 Western Investor

Toronto and Vancouver rent prices sink to 4-year lows in March

Michelle McNally
Livabl

Rental markets in Toronto and Vancouver yet again posted double-digit price declines in a report published today by Padmapper, with both cities seeing one-bedroom rents continue to fall to their lowest levels recorded since 2017.

It was the second consecutive month that one-bedroom rents in the two high-priced cities sunk to levels unseen in four years.

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In its March 2021 market report, the rental search site reported that Vancouver one-bedroom rental prices fell by 2.1 percent monthly and 13.6 percent annually to $1,900, the lowest price recorded since March 2017. Two-bedroom prices in the city fared a little better, with prices dropping by 12 percent annually and holding steady month-to-month at $2,630. Despite these significant declines, Vancouver retained its title as Canada’s most expensive city for renters.

In Toronto, the price for a one-bedroom rental dropped by 1.1 percent monthly and 21.5 percent annually to $1,750, the lowest the city has seen since February 2017. Similar to Vancouver, two-bedroom prices performed slightly better in Toronto as rents inched up by 0.4 percent month-to-month, but were down 18.1 percent compared to the same period last year. Canada’s largest city remains the second most expensive rental market in the country.

While Padmapper did not provide an in-depth analysis in its report, renter migration away from urban centres and abundant rental supply in downtown cores are typically cited as the leading drivers of the sustained rent price declines.

“Meanwhile, rents in the rest of the country seem to have stabilized as the earlier pandemic months of nationwide double-digit year-over-year declines have passed and are now only concentrated in the top 2 most expensive markets,” explained the Padmapper report.

The Padmapper report analyzes rental data from Canada’s top 24 urban areas. This month, the report noted that prices grew in nine communities, stayed flat in six, and declined in the remaining nine. Abbotsford saw the highest levels of rental price growth for one-bedroom units in the country, with prices rising by 4.8 percent monthly and 20.2 percent yearly to $1,310. In Oshawa and Kelowna, one-bedroom rentals rose by 3 percent and 2.1 percent month-to-month to $1,390 and $1,480, respectively.

Since the pandemic began, renter movement outside of large communities has been attributed to price downturns in cities and the rise of rental costs in smaller, neighbouring communities.

 

© 2020 BuzzBuzzHome Corp.

 

Prices to keep soaring in Canada’s undersupplied housing market: Scotiabank

Sean MacKay
Livabl

 

Both Canadian home sales and prices continued their historic run in February, with a record number of properties changing hands while the average price of a home rose to an all-time high of $678,091 last month.

The February data, released yesterday by the Canadian Real Estate Association (CREA), is just another entry in a now eight-month streak of record-breaking sales activity and head-spinning price gains.

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And, according to Scotiabank Economist Farah Omran, we can expect more of these strong performances in the coming months.

Despite the lockdown measures in place in many regions across the country, Omran wrote in a recent research note that the “stronger-than-expected trend” in the Canadian housing market carried over from 2020 and into 2021.

Exceptionally high buyer demand — driven by low mortgage rates, changing housing preferences and high household savings — was met with much lower levels of supply through the second half of 2020, leading to soaring home prices, especially in the single-family market segment. This dynamic has continued to impact the market in early 2021.

“With the Canadian housing market still showing signs of significant undersupply, we are likely to continue to see even further price gains in the months ahead,” wrote Omran.

But a shift could be coming later this year.

Omran believes that a strong economic recovery will keep buyer demand high, but these improved conditions will also motivate home sellers to list their properties while giving home construction a boost on the new construction side of the market. This, according to Omran, should ease “the present supply-demand tightness” that’s been driving rapid home price appreciation.

Recent commentary from TD Economist Ksenia Bushmeneva generally aligned with the Scotiabank outlook on home prices eventually moderating this year.

“Historically tight supply of houses on the market will continue to push prices higher in the near-term,” Bushmeneva wrote.

“However, home price growth is expected to moderate in the second half of this year, as prospective sellers become more comfortable listing amid accelerating vaccination pace and buyers shift their attention to more affordable options,” she continued.

 

© 2020 BuzzBuzzHome Corp.

Brand new office and retail investment opportunity in Metrotown

Slate Asset Management
Western Investor

 Capital Point, a new Class AAA strata office and retail complex in Burnaby’s central business district in Metrotown is arriving just in time.

A year of telecommuting is ending as Canada rolls out vaccines this spring and millions of Canadians gratefully prepare to ditch work-from-home and embrace the vitality and comradery of a contemporary office.

People are more productive and happier together. It is just human nature, and a year of remote connections is enough already. Fortunately, we should be back to the new normal within months, most likely in time to hold a seasonal staff party this December.

That is why leading analysts are confident that strata offices are the leading asset investment opportunity for 2021 and beyond.

AAA office ownership offers security of a long-term asset. | Capital Point

Capital Point, being developed by Slate Asset Management, a global real estate investor and developer, with offices in Frankfurt, Chicago and Toronto, is an obvious addition to Slate’s $6.5 billion global portfolio.

New strata offices present a dual investment stream, particularly in Burnaby’s Metrotown where the rent for Class AAA office space averages $35 per square foot. The first opportunity is for businesses who can gain from the value appreciation by owning their office space rather than renting it. The second opportunity is for passive investors who want hassle-free annual investment returns of up to 3.5% and the opportunity to benefit from Metrotown strata office price appreciation that averages 16.7% per year.

80-person Auditorium with divisible space allowing for two concurrent meetings. | Capital Point

Today, with commercial lending rates at all-time lows, the opportunity to buy strata space at Capital Point, a completely contemporary and equipped office and retail building in one of the fastest-growing centres of Metro Vancouver is a rare and historic opportunity.

A grand welcome awaits with  expansive double-height lobby. | Capital Point

Capital Point is set on a prime location at 4330 Kingsway in Metrotown and it is built to Slate’s demanding standards representing the pinnacle of premium strata offices in Metro Vancouver. The 222,000-square-foot office campus features a double-height atrium lobby with 24-hour concierge service to leave an impeccable first impression for your clients, plus 25,000 square feet of world-class client and employee amenities.

Capital Point, Metrotown’s foremost Class AAA office building, is also the city’s only pure strata office development. It is an unrivalled and rare opportunity in Greater Vancouver’s second largest – and continually expanding – business district that houses the largest shopping centre in British Columbia.

Locally connected, globally significant. | Capital Point

Burnaby’s Metrotown is the second busiest SkyTrain station in the Lower Mainland, with 50,000 passengers every day and annual volumes of more than eight million people. Capital Point is strategically and centrally located to serve one of Metro Vancouver’s most bustling business hubs.

Burnaby’s investment into infrastructure to improve the business environment explains Metrotown’s low vacancy rate of only 3.5% — even lower than that of Downtown Vancouver. Metrotown is seeing an influx as businesses move to suburban locations to save costs and be closer to their employees. Major employers Telus, KPMG, SunLife Financial, the BC Housing Authority and the headquarters of Metro Vancouver are among Metrotown office tenants and owners.

 

© Copyright 2020 Western Investor

Canada’s mortgage rates are rising fast – here’s how to secure the lowest rate possible

Joseph Czikk
The Province

This article was created by MoneyWise. Postmedia and MoneyWise may earn an affiliate commission through links on this page.

Homebuyers and homeowners rushed to join the party when the COVID-19 crisis produced some of the cheapest mortgages Canadians had ever seen.

Dirt-cheap interest rates, fewer home listings and high demand fuelled sales. As a result, a record-breaking 551,000 homes changed hands in 2020, according to the Canadian Real Estate Association.

But now, five-year fixed mortgage rates are beginning to climb for the first time since before the pandemic hit. And, Canadians looking to capitalize on historically low rates may want to act now, before mortgage rates rise further.

 

Here are six steps to nail down an ultra-low rate while you still can.

1. Don’t dawdle

Ladanifer / Shutterstock

Mortgage rates started tumbling last year after the Bank of Canada slashed its key policy rate three times in March 2020 to a record-low 0.25 per cent, to help the economy weather the pandemic.

As home lending rates tanked, borrowers with strong credit found they could refinance a five-year fixed-rate home loan at rates below 1.5 per cent — the cheapest Canadians had ever seen.

Now, major banks including TD Bank and National Bank of Canada say they have raised rates on at least some mortgage products as growing optimism over the economy has sent the yield on the Canada five-year bond soaring.

Would-be borrowers who don’t act promptly run the risk of losing out on mortgage rates that are still very low by historical standards.

“The fixed rates have gone up about a quarter-point and people may be nervous about that, but you still have rates at or just under the 2 per cent range,” says Jason Zuckerman, a Montreal-based real estate mortgage broker.

For a first-time homebuyer, snaring one of today’s low mortgage rates could mean saving thousands of dollars over a fixed five-year term. And, homeowners who refinance a higher-rate mortgage can save on interest over the coming years, and reduce their monthly payment right now.

 

2. Look your best as a borrower 

sukiyaki / Shutterstock

Before you start the mortgage application process, you’ll want to make sure you have minimal debt, good credit and proof of adequate work income. Lenders also will want to see that you can produce a down payment.

“Banks want to make sure that you don’t have too much debt,” says Zuckerman. “They also want to make sure that you’re managing your debt and you know how to use credit responsibly.”

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Your credit score will need to be at least 660. Anyone with a score below 560 will struggle to get a decent interest rate and may not get a loan at all. Anything above 760 is excellent.

You can check your credit score for free online. If your score is low, you’ll want to improve it by reducing your credit balances and taking other damage control measures before you try to lock in a mortgage rate.

As for your income, it’s important to show banks you have steady employment.

“If you’re employed, they generally want to see full-time, salaried individuals,” Zuckerman says. “If you’re contractually or self-employed, lenders typically use the last two years of your income.”

You can usually qualify for a mortgage worth five times your gross (pre-tax) income if you can produce a down payment and don’t have large debt, he adds.

3. Shop, shop, shop around 

PaO_STUDIO / Shutterstock

The first go-to for many applicants looking for a mortgage is their own bank.

You’ll also want to shop around online and compare rates from multiple lenders to find the lowest mortgage rate available to you.

A low rate means a low monthly mortgage payment. On a fixed-rate mortgage, your rate and payment amount will not change during your mortgage term, typically five years.

As you look at loan offers side by side, pay attention to “points.”

Mortgage points are upfront fees you can pay in exchange for a lower mortgage rate. Each point you buy generally costs 1 per cent of your loan amount and reduces your interest rate one-quarter of 1 percentage point (0.25).

4. Get pre-approved 

Andrey_Popov / Shutterstock

Getting a mortgage pre-approval is smart, particularly if you’re a homebuyer who’s likely to want a fixed-rate mortgage, says Reza Sabour, a senior adviser and director with the Canadian Mortgage Brokers Association of B.C.

A pre-approval is a formal letter from a lender that lays out how much money you can borrow and at what interest rate.

“In a very competitive real estate market where you and potentially 10 other people are looking at putting an offer on the same property, that seller is more inclined to go with a buyer who can show proof that they’re pre-approved,” Sabour says.

And that’s especially true now during the COVID-19 situation, he adds.

“Realtors are sort of expecting that their clients will be pre-approved. In a pandemic situation, in a lot of cases, you have to make an appointment to view something,” he says. “They might not want to put the time into doing that if the client is not already pre-approved.”

5. Avoid big life changes after pre-approval 

Zoriana Zaitseva / Shutterstock

So you’re pre-approved. Now what? For starters, don’t make any new, large financial commitments prior to buying a home or refinancing an existing mortgage.

It may seem obvious, says Sabour, but people often don’t follow this sound advice.

“Someone gets pre-approved for a mortgage and it’s good for four months. Within that four-month window, they lease that BMW at $1,200 a month and they don’t tell us,” he says.

Then, here’s what happens: “They make an offer on a home with subject to financing. We pull their credit bureau and we see this gigantic lease payment that essentially kiboshes all the work we’ve done.”

Sabour says he sees this scenario played out with at least two out of every five mortgage applications.

6. Have your closing costs ready 

DD Images / Shutterstock

Closing costs are fees you’ll pay to finalize your loan. Lenders generally have flexibility in setting their own costs, so you may be able to negotiate some of the charges.

Typical closing costs include home inspection fees, various taxes, title insurance (to protect the lender against any ownership disputes that might crop up), legal costs and reimbursements of any utility charges that the seller has prepaid.

Closing costs generally come in at 2 per cent to 5 per cent of your loan amount. That means on a $500,000 home, the charges could add up to anywhere from $10,000 to $25,000. It can sometimes help to sell your current residence first — one handy service will even give you a free up-to-date valuation on your current home and even help you avoid some of the hassles of listing it for sale.

You’ll need to budget and make sure you can come up with that kind of money, because the fees must be paid upfront — in cash — on closing day, when you sign all of the paperwork for your new mortgage loan.

And, when you’re buying a home, the closing ends when you proudly receive the keys to your new place. Champagne, anyone?

This article was created by Wise Publishing, Inc., which provides clear, trustworthy information people can use to take control of their finances. Millions of readers throughout North America have come to count on the Toronto-based company to help them save money, find the best bank accounts, get the best mortgage rates and navigate many other financial matters.

 

© 2021 The Province

Dan Fumano: Beedie vs. Vancouver ? Developer takes city to B.C.’s top court

Dan Fumano
The Vancouver Sun

 

105 Keefer St. as it looks today. It was the site of the Beedie Group’s proposed condo tower. The developer is taking City of Vancouver to the B.C. Court of Appeal this week over the 2017 city rejection of the controversial Chinatown project. Photo by NICK PROCAYLO /PNG

A major real estate developer took the City of Vancouver to B.C.’s highest court this week, the latest chapter in a years-long fight over a prominent Chinatown corner.

Beedie (Keefer Street) Holdings v. Vancouver (City) made its way into the B.C. Court of Appeal , more than five years after the vacant corner lot at 105 Keefer St. in Chinatown became a flashpoint in heated debates about one of Vancouver’s most historic neighbourhoods and the future of the city at large.

Beedie Group launched the lawsuit in 2019, about 20 months after Vancouver’s development permit board took the very rare step of refusing a project that conformed with local zoning rules. Beedie’s petition filed in B.C. Supreme Court sought to have the permit board’s rejection set aside and the city ordered to allow the project to proceed.

Coincidentally, this week’s hearing happens to land in court on the heels of the development permit board handing out another rare refusal: Last month, the board turned down another developer’s application for the first time since the 2017 rejection of Beedie’s Keefer proposal.

The rejection of Beedie’s Keefer project in 2017 and the board’s refusal last month, for Bastion Development’s proposal for an 11-storey mixed-use building in Kitsilano, are the board’s only two refusals in about 15 years.

Board applications are different from rezonings. Through a rezoning, a developer seeks to build something other than what zoning allows — which often means taller — which requires council approval in what can be high-profile and contentious decisions.

But the development board, which is made up of three senior city staffers, looks at significant projects that generally comply with existing zoning. Their meetings and decisions aren’t usually widely watched.

A rejection like Bastion’s last month — or Beedie’s one in 2017 — is uncommon because by the time a project reaches that stage, the developer has generally been working for years with different city departments and committees, said Michael Geller, a development consultant who served three terms on the board’s advisory committee. In Bastion’s case, the urban design panel and city staff recommended approval of the 11-storey building.

Sometimes the board might recommend changes to the project, but to simply refuse it — against the recommendations of the city’s own staff — is “highly unusual,” Geller said.

In the years leading up to Beedie’s rejection in November 2017, the developer had brought a series of reworked proposals for 105 Keefer to city hall, and the project’s various iterations had been the subject of raucous protests, marathon council debates, and widespread news coverage.

Nathaniel Lowe leads a cheer as residents react to the City of Vancouver rejecting a proposed Chinatown condo at 105 Keefer Street Nov. 6. Photo by Arlen Redekop /PNG

That 2017 decision was going to be controversial with different segments of the city whichever way it went. Some Vancouverites hailed the rejection as a win for the city, but figures in the development industry warned the decision undermined the city’s own planning and integrity. Gil Kelley — Vancouver’s chief planner until his abrupt departure was announced this week — cast the deciding vote against the Keefer project in 2017.

The ensuing litigation led lawyers for Beedie and the City of Vancouver to appear before a trio of B.C. Court of Appeal judges Tuesday, after Beedie appealed the B.C. Supreme Court’s earlier procedural ruling on the case. In that September judgment, a B.C. Supreme Court judge dismissed Beedie’s application to have the matter referred to trial, instead of being handled through the usual judicial review process.

The city had taken the position that Beedie was looking to “complicate an otherwise straightforward judicial review of the city’s decision,” the B.C. Supreme Court ruling says, seeking to “embark on a fishing expedition to locate documents in support of its baseless allegations of bad faith and procedural unfairness.”

Supreme Court Justice Shelley Fitzpatrick agreed with the city on that point, writing in September: “Beedie has not pointed to any evidence to support allegations of bad faith against the city which should be more fully investigated through full-blown pretrial procedures.”

But Beedie’s lawyers argued Tuesday in the higher court that the judge had erred and the matter should be referred to trial. One of Beedie’s lawyers, Howard Shapray, referred to the raucous nature of the 2017 board meetings, and the “great deal of hostility” from community members opposing the Keefer project.

A group of protesters outside of Vancouver’s City Hall to show their concerns over a large development at 105 Keefer St. Photo by Mark van Manen /PNG

There were “noisy protests demanding social housing rather than market housing,” Shapray said, “chanting ‘Beedie is greedy’ … no doubt intended to sway the … board.” But, he said, public opposition is not a factor the board is allowed to consider.

The City of Vancouver was not represented in Tuesday’s hearing by staff lawyers, but by a pair from the Vancouver office of Norton Rose Fulbright, a global firm with more than 3,700 lawyers and legal staff around the world.

Asked why city hall retained outside counsel, city spokeswoman Kirsten Langan said: “Unfortunately, the city does not comment on why it retains particular counsel.”

Langan also said the city could not provide any estimate of the cost to the city of this litigation so far, saying the “expenses related to any particular lawsuit are subject to solicitor-client privilege, and therefore cannot be shared.”

The Court of Appeal reserved judgment.

Neither Beedie nor Bastion replied to Postmedia’s requests for comment.

Unlike the massive controversy surrounding Beedie’s board rejection in 2017, last month’s rejection of the Bastion proposal largely flew under the public’s radar. But it has generated confusion and concern in some corners.

 

© 2021 Vancouver Sun

Surprising surge seen in retail property sales

Wl Staff
Western Investor

— London Plaza, Richmond, sold in December 2020 for $57 million. | Londonplaza.ca

A surprising surge in sales of shopping centres and other retail assets late last year helped drive total commercial sales volume in Metro Vancouver to $7.9 billion in 2020, according to a new study from Altus Group.

The sales volume was down 15 per cent from 2019 and the total number of transactions dipped 8 per cent, to 1,421, in the pandemic-plagued year, the report found.

The annual decline resulted from a significant drop in sales of office buildings and residential land, while retail, industrial and apartment all saw an increase in activity over 2019.

The retail sector had a surprisingly strong finish to the year, up 18 per cent in total investment volume for 2020 compared to 2019.

Two large sales of multi-tenanted retail plazas pushed the total amount invested in the fourth quarter (Q4) to $276 million, a 50 per cent increase from Q4 of 2019.

The December 2020 sale of London Plaza in Richmond represented the second-largest retail sale of the fourth quarter, closing for a total of $57 million, Altus reported. The plaza was sold by the Investors Group to a private investor and was reported to be 96 per cent occupied at the time, with a capitalization rate of 5.28 per cent. The 107,000-square foot centre sold for $538 per square foot.

Despite COVID-19 restrictions in place across the country, many B.C. retailers have remained open for business, Altus noted.

Cushman & Wakefield noted in its Q4 retail snapshot that there is strong demand for Metro Vancouver retail assets, despite the pandemic, partly because the region has the highest lease rates in Canada.

As well as London Plaza, the 139,000-square-feet Trenant Park Square in Delta sold in the fourth quarter of last year, with a $64.5 million purchase by Keltic Canada Development, the commercial real estate agency noted.

According to results from Altus Group’s Investment Trends Survey for Q4 2020, Vancouver has maintained its spot as the top preferred market by investors, alongside Toronto.

 

 

© Copyright 2020 Western Investor

Vancouver a piker in home price hikes during COVID-19

Graeme Wood
Western Investor

 — Vancouver home prices up 2 per cent, while Canadian average is 17 per cent higher. | WI files

Vancouver home price hikes during the year-old pandemic may seem high, but the increase is  a piker compared to metropolitan centres like Medicine Hat and Saskatoon.

In fact, Vancouver’s price gains over the past year have lagged behind most other Canadian jurisdictions as well as those in the United States.

Canada’s home prices have jumped 17.3 per cent, whereas Greater Vancouver’s have risen just 6.8 per cent between February 2020 and February 2021, according to the Canadian Real Estate Association. U.S. house prices rose 10.8 per cent from December 2019 to December 2020, according to the Federal Housing Finance Agency (FHFA) House Price Index.

The City of Vancouver composite benchmark home price is 2 per cent higher now than a year ago, but Saskatoon’s composite home price is up 9 per cent from February 2020. Home prices  increased 20 per cent in Medicine Hat, Alberta. In Powell River, B.C. the composite home price is 27 per cent higher now than a year ago.

It could be a lack of foreign buyers – driven away by a high foreign- homebuyer tax and COVID-19 – that has kept Vancouver price hikes modest.

Foreign purchases are down significantly in B.C. since the tax on foreign home buyers increased to 20 per cent in  February 2018, and immigration has virtually vanished during the pandemic.

But local buyers have more ability to pay because Bank of Canada (BOC) interest rates are at an all-time low of 0.25 per cent. Furthermore, BOC is buying government bonds (debt) from financial institutions, allowing them to lend more freely and at historically low interest rates. 

On March 15, HSBC was offering a 0.99 per cent 5-year variable rate on mortgages up to $300,000, good until July 12, as one example.

The BOC has indicated low rates are here for the near term, at least until 2023.

Urban planner Andy Yan says outrage over high housing  prices still exists but “it’s a different type of outrage if you’re totally locked out of ownership, as opposed to moving on up.”

Yan, director of Simon Fraser University’s City Program, suggests people are leaving their Vancouver condos and to buy in the suburbs. Data bears this out.

While City of Vancouver condo prices have fallen 0.2 per cent price, the Fraser Valley Real Estate Board reports 12.3 per cent price gains in all housing forms since February 2020. 

“I think there is outrage. But it just depends on who you are,” said Yan, who had been criticized for his 2015 report suggesting overseas Chinese buyers fuelled the remarkable 2014-17 gains, when housing prices rose 48.5 per cent.

“My point wasn’t only just foreign money. But it was foreign money with cheap money, right? Now we have a scenario where cheap money completely takes over the environment,” said Yan.

“If you look at the core of unaffordability [in Metro Vancouver], it’s both very high housing prices with relatively low, very, very low paying jobs,” he said.

 

 

© Copyright 2020 Western Investor