80% of Canadians Feel Low Interest Rates Harming Affordability

Penelope Graham
other

The COVID-19 pandemic, and the resulting provincial school and economic lockdowns, have been a unique time for the Canadian housing market. As people remained indoors amid mandated stay-at-home orders, the concept of home became more than just a roof over our heads, expanding to include the workplace, school, workout space, and entertainment centre.

This has driven unprecedented sales and price growth over the course of 2020 and 2021; according to the Canadian Real Estate Association (CREA), national sales spiked 235% between April 2020 and March 2021, pushing the average home price up by 44%. New buying trends that accounted for lockdown lifestyle needs emerged, such as the desire for at-home office space, green space, and accessibility to delivery services. As more people worked remotely, housing demand boomed in smaller cities and towns, fueling urban flight.

However, now that lockdown measures have largely lifted across Canada it’s apparent these pandemic-driven trends are starting to shift. Buyer urgency has clearly subsided as the July CREA data reveals sales are now dipping below year-ago levels, and the pace of price growth is starting to calm on a monthly basis. As the economy and society at large re-opens, how have real estate sentiments changed among Canadians?

To find out, Zoocasa surveyed over 1,400 respondents to get a pulse on their post-lockdown preferences regarding desirable home characteristics, housing affordability, and the ability to work from home. The findings were then compared to like-for-like responses collected in February 2021 – amid a record-breaking real estate market –  to gauge how feelings have changed from during to after lockdown measures.

Related read: 32% of Buyers Purchased Property Further than Previously Considered

Canadians Increasingly Feel Home Prices are Out of Control in Smaller Markets

According to the survey results, Canadians are considerably more likely to feel home prices in suburban areas and smaller towns have increased at unsustainable levels; a strong majority of 77.2% of respondents agreed, which is a 25.4% increase from when this question was asked in February 2021. 

Overall tight market conditions are top of mind – when asked about the main areas of concern when purchasing a home, respondents indicated affordability, engaging in a bidding war, and timing the market were the top three.

 Canadians Feel Low Mortgage Rates are Harming More Than Helping

To help stimulate the national economy during the jobs and spending downturn that occurred during the pandemic lockdown, the Bank of Canada – the central bank that establishes the country’s monetary policy via its trend-setting interest rate – has kept the cost of borrowing at a record low. The Overnight Lending Rate, which consumer banks use to set their own mortgage and lines of credit rates, has been 0.25% as of March 2020.

This has led to lenders offering record-low mortgage rates, and this cheap cost of borrowing has been a contributing factor to sales and price growth over the course of the pandemic. According to the survey findings, Canadians are increasingly in disagreement that today’s low cost of borrowing is making it easier to buy a home. While 47% agree that low mortgage rates have improved affordability for home buyers, that’s a slight decrease from February. Meanwhile, 34.4% of respondents disagreed with that statement – an increase of 12.1%.

Overwhelmingly, Canadians feel low mortgage rates are driving up the prices of homes; 80.5% indicated they agreed with that statement (up 32.8%), while 7.4% disagree (+4.1%). Overall, 38.1% of respondents agree that low mortgage rates have impacted their desire to buy a property.

 Nearly 25% of Canadians to Take a Hybrid Approach to the Workplace

As economic re-opening plans take effect across Canada, many employers are announcing what their post-lockdown strategies will entail. For those who moved away from city centres due to their ability to work remotely, this has raised the question of whether some will need to return, potentially fuelling a new buying trend.

According to the survey data, -7.1% fewer respondents reported they will continue to work from home following the end of COVID-19 lockdown measures, at a total of 29.7%. An additional 24.2% reported that they have a hybrid working arrangement, which is an increase of 6.4%. Meanwhile, the number of respondents currently working solely from the workspace remained unchanged from the February response.

 Home Offices and Green Space Still Highly Sought After, But Less Than in the Spring

As many Canadians continue to work remotely, homes with office space continue to be in high demand – though at a lesser rate than in February, perhaps indicating a renewed interest in urban living. A total of 43% of respondents stated that office space has become a more desirable home characteristic, a change of -15.9%.

A large majority (65.8%) said outdoor space remains at the top of their lists, indicating that a yard, deck, or balcony has become a more desirable characteristic, though this also marks a -10.5% decline from February.

Finally, access to delivery service remains top of mind, with 55.4% of respondents saying it is more important, though also down -8.10% from February, perhaps reflecting expanded access to in-person shopping.

The Majority of Those Looking to Buy Have a Household Income of Over $100,000

As the national average home price has increased to above $600,000, prospective buyers need to have increasingly higher income levels in order to be competitive in the market. According to the survey, of those who indicated they’re looking to buy a home (56.55% of respondents), 50% have a household income of over $100,000. Of these, 20% are in an income bracket above $160,000, while 32% report an income below $100,000.

This was reflected even in the most affordable segments of the market:

• Of the respondents who indicated they wished to purchase a condo (14.46%), 49.15% reported an income over $100,000. A total of 27.97% are below the $100,000 range, while 22.8% prefer not to answer.
• Of the respondents who indicated they wished to purchase a detached house (62.38%), 50.4% have an income above $100,000, and 32.4% below (17% prefer not to answer).
• Of the respondents who indicated they wished to purchase a semi-detached house (7.23%) 52.5% have an income above $100,000, with 35.5% below (11.8% prefer not to answer).
• Of the respondents who indicated they wished to purchase a townhouse, (12.25%), 48% have an income above $100,000, with 36% below (16% prefer not to answer).

 Methodology

The findings are based on an online survey conducted by Zoocasa between August 2 and August 11, 2021 of 1,485 respondents in Canada. A margin of error cannot be assigned because it is an online survey, however, the margin of error for a comparable sample of the same size is plus or minus 2.0 percentage points, 19 times out of 20.

*Combination of 4 and 5 responses from range where 1 = not at all concerned, 3 = neutral, and 5 = extremely concerned.

**Combination of 1 and 2 responses from range where 1 = not at all concerned, 3 = neutral, and 5 = extremely concerned.

***Combination of 4 and 5 responses from a range where 1 = strongly disagree, 3 = neutral, and 5 = strongly agree.

****Combination of 1 and 2 responses from a range where 1 = strongly disagree, 3 = neutral, and 5 = strongly agree.

*****Combination of 4 and 5 responses from range where 1 = much less desirable, 3 – neutral, and 5 – much more desirable.

Contact

For more information about this report or to set up a media interview, please contact [email protected]

About Zoocasa

Zoocasa is an award winning brokerage that uses data and technology to deliver an intelligent, end-to-end real estate experience to buyers, sellers, and renters in Canada.

© 2015 – 2021 Zoocasa Realty Inc.

Trudeau vows ban on foreign buyers

Fergal McAlinden
other

The pledge comes as the debate over affordable housing heats up in the federal election campaign

Prime Minister Justin Trudeau has promised to introduce a two-year ban on foreign home buyers and make the home purchasing process more transparent if re-elected.
The Liberal Party leader told a crowd in Hamilton, Ontario that a Liberal-led government would “crack down on predatory speculators that stack the deck against you,” if returned to power in the September election, while also pledging to build more homes and introduce a rent-to-own scheme.
“You shouldn’t lose a bidding war on your home to speculators. It’s time for things to change,” he said. “No more foreign wealth being parked in homes that people should be living in… If you work hard, if you save, that dream of having your own place should be in reach.”
In its newly-published “Home Buyers’ Bill of Rights” the Liberals also promised to lower CMHC mortgage insurance rates by 25% and introduce a tax-free savings account for first-time buyers.
Trudeau’s comments were the prime minister’s latest bid to win over voters on the housing issue, one that has emerged as a potent topic in the federal election campaign with house prices having surged across Canada during the COVID-19 pandemic.
Read more: How new immigrants could help shape the Canadian mortgage market
Hamilton, the scene of Trudeau’s remarks, saw a 23.8% year-over-year increase in aggregate house prices in the second quarter of 2021, rising from $613,750 to $760,000.
Current policies around foreign buyers have faced particular criticism in Vancouver, with real estate purchases by non-residents becoming increasingly popular.
Conservative Party leader Erin O’Toole has vowed in his party’s own housing plan to introduce a two-year trial ban on foreign buyers who don’t intend to live in Canada, a measure he said was aimed at addressing the country’s housing “crisis.”
“The supply of homes – to own as well as to rent – is not keeping up with our growing population and too many foreign investors are sitting on properties as investments.”
New Democratic Party leader Jagmeet Singh said that he would implement a 20% foreign homebuyers’ tax on the sale of homes to individuals who are not Canadian permanent residents or citizens.
Canadians are set to go to the polls on September 20.

Copyright © 1996-2021 Key Media, Inc.

A road through Vanier Park? Kits Point resident says people signing up to protest proposal

John Mackie
The Vancouver Sun

 Jeremy Braude in front of a sign for the proposed Senakw development beside the Burrard Bridge in Vancouver, which is projected to house 9,000 people. Photo by Francis Georgian /PNG

Looking through the website for the Senakw development beside the Burrard Bridge in Vancouver, Jeremy Braude noticed something unusual.

In an illustration of the giant project, which is projected to house 9,000 people, there is a road on the north side of the development.

The catch is, the road seems to be in Vanier Park.

Alarmed, Braude decided to inform the public. He made up pamphlets and signs that read “No Vanier Park Road,” and dropped them off around the nearby Kitsilano Point neighbourhood.

He also put together a website that shows where he thinks the road will go, in red, through a grassy area of Vanier Park.

“The signs are very effective,” he said. “I’m getting a lot of people who scanned the QR code on the signs, which takes them to my website, and they sign up for protests regularly. I’m getting five to 10 people every day, people who have just walked by.”

Braude said 141 people have signed on for the protest so far, in only a few weeks. But he said the city hasn’t been forthcoming about what is happening.

“We had a Zoom talk with the city, and I asked them, ‘Is the road a fait accompli?’” he said. “And they said, ‘No it’s not, it’s under negotiation, but we can’t say anything about it. It’s in camera, all the discussions.’”

Senakw is being developed by the Squamish First Nation in concert with Westbank, one of Vancouver’s biggest developers.

It is located on four hectares of land that was expropriated from what was once the Kitsilano Indian Reserve for railway land in 1906. The Squamish sued for the return of the land in 1986, and a court awarded them Senakw in 2000.

Because it is reserve land, the City of Vancouver has said it has no jurisdiction to regulate the development. So the Senakw plan is very dense, with 12 towers up to 59 stories high on either side of the Burrard Bridge.

Squamish First Nation councillor Khelsilem said he couldn’t comment on the proposed road. The Vancouver Park Board said in a message that it “leases this area of the park from the federal government. As such, the ultimate approver for the right to construct the proposed road is the federal government.”

A photo-illustration of where Kits Point resident James Braude thinks a road might go in what is now Vanier Park. 

According to the website areavibes.com, there are 1,641 people in Kits Point, which means Senakw could potentially have 5.5 times its population. Braude said Kits Point residents are worried about increased traffic, but the big issue is “being ignored by the city.”

“It’s a bit insulting when you have a huge development, (almost) 10,000 people, and you don’t consult the neighbours as to what’s going on,” he said. “You do it in secret, no transparency. It’s just not nice, you know?”

That said, the part of Vanier Park where the road would be located is rarely, if ever, used because it is a big open field and park users tend to head for the waterfront.

“Yes, it is the most under-utilized part of the park, but it’s overall a very utilized park,” said Braude. “There’s a lovely pathway there where brand-new trees have been planted, a sort of gravel path, and there’s plenty of people who use it on a daily basis — cyclists, visitors.

“But (the issue is) the incursion of a roadway through a park when it’s actually not necessary … the boundaries of the actual development abut Chestnut Street, which gives them access to their development. So an extra road just allows for a maximum densification of the site.”

Senakw was the Squamish name for a long-time First Nations settlement that became the Kitsilano Indian Reserve in 1868. The reserve was expanded to 80 acres in 1877.

It was more or less on the site of today’s Vanier Park, although it stretched as far south as First Avenue, which means it included the approaches to the Burrard Bridge, the former Molson’s Brewery, and Seaforth Armoury.

After Vancouver was established in 1886, however, the reserve was coveted by various interests. A scandal erupted in 1913 when the provincial government announced it had purchased the reserve from 20 males of the Squamish nation who lived on the site, for $225,000.

The deal was so controversial the federal government wouldn’t let the province take over the land. But Ottawa didn’t give the land back to the Squamish, buying it from the province in 1928 for $350,000.

It was used as a military base during the Second World War, and in 1947 the federal government gave the Squamish an additional $250,000 for the land. Ottawa also finally gave the province the $350,000 it had agreed to but never paid in 1928. The federal government leased the land for Vanier Park to the city in 1967.

In 1977, the Squamish Nation launched a suit to get back some of the land it had lost, and in 2000 the federal government gave the First Nation $92.5 million for the loss of the Kitsilano Reserve and parts of North Vancouver and the town of Squamish.

[email protected]

 The plan for the Senakw development in Kitsilano calls for a road at the top of the site, beside or perhaps in Vanier Park. Illustration from the Senakw website. The road would be located north of Parkview Towers, the Y shaped building at 1450 Chestnut. 

A front page Vancouver Sun story about the sale of the Kitsilano Reserve on the March 13, 1913 alleged “trickery” was used by the provincial government to buy the 77 acre parcel for a fraction of its true value.

Story in the March 5, 1947 Vancouver Sun on the federal government’s purchase of the Kitsilano Indian Reserve. The feds gave $350,000 to the province, which they had agreed to in 1928 but never handed over. It also gave $250,000 to the Squamish First Nation “for the rights they claim still to have in the  reserve.” Most of rthe 77 acre parcel is now Vanier Park.

Sign in Kitsilano Point opposing a proposed road along the edge of Vanier Park. PNG

 A closeup from a Tourist Guide Map of Vancouver City and Park, 1898, showing the location of the Kitsilano Indian Reserve. Note there is no Burrard Bridge (which wasn’t built until 1932), and that Burrard was called Cedar south of False Creek. Granville street south of False Creek was known as Centre Street, and Cambie was Bridge Street. The map was compiled by Garden, Herman and Burwell, Engineers and Surveyors, and published by Thomson stationary. Vancouver Archives AM1594-: MAP 35. Photo by Herman and Burwell Engineers and /PNG

The western end of the Senakw development ends at Creelman Street. Photo by Arlen Redekop /PNG

 A sign for the Senakw development in Kitsilano Point in Vancouver. The building in the background is Parkview Towers at 1450 Creelman Street, the last building before the Burrard Bridge on the south side of False Creek. Senakw will be on both sides of the bridge; on the this, the Vanier Park (north) side, the Senakw land is currently trees. Photo by John Mackie /PNG

Immediately north of the Senawk project is a big empty field that is part of Vanier Park. The field is rarely used. A proposed road to Senawk might be located along the southern tip of the field. PNG

 The proposed road along the edge of Vanier Park might be located about here, beside the row of trees that have been recently planted. PNG 

© 2021 Vancouver Sun

Ex-student aims for near-record Vancouver mansion deal

Graeme Wood
other

Hanying Chen runs a boutique theatre production company and could set a record sale for a single residential lot sale in Vancouver should negotiations exceed expectations

4868 Drummond Drive, Vancouver | submitted

A Vancouver mansion listed for a near-record price is not being sold by a student, according to the listing’s realtor.

The $39.9 million listing for 4868 Drummond Drive raised eyebrows on social media this month not just because of the price but because the owner’s stated occupation is a “student.”

However, Hanying Chen was only a student in 2012, when she paid $14.68 million cash for the seven-bedroom home in West Point Grey. While she continued to be a student in 2015, according to the most recent land title record, Chen is no longer in school, says her realtor Vivian Li of Sutton Group-West Coast Realty. 

Rather, the title was never updated and Chen now works as the founder and director of Circle Bright Productions, a live theatre and arts company that launched in 2018. 

Glacier Media had reached out to Chen via her company and she had Li speak to the sale on her behalf. Li said Chen is dedicated to building the production company, which has no address online but is registered in a Trump Tower condo unit owned by Chen.

Circle Bright states it develops “accessible theatre and youth program for English and Chinese-speaking communities in Canada.”

It also translates English acts into Mandarin. In 2018 it had an inaugural production at Gateway Theatre in Richmond. Last March Chen organized a charity concert titled “One World One Love – China and Canada” for Unicef Canada’s COVID-19 response, and raised close to $3,000.

The home’s sale price inches toward what is believed to be a record sale for one single residential property in Vancouver — a cash sale of $42 million for 4743 Belmont Avenue, just a stone’s throw away from Chen’s listing.

Sotheby’s International Real Estate told CTV News in July the “Belmont Estate” was the highest price ever paid in the Lower Mainland for a single residential lot. CTV reported a numbered company directed by Peter Chung, a doctor who is CEO of Primacorp Ventures, bought the property. Primacorp claims online to be “Canada’s largest independent provider of private post-secondary education.”

The top residential deal in Vancouver continues to be the $51.8 million sale of 4787 Drummond Drive in 2015 to Chinese tycoon Mailin Chen, a developer and hotelier who is also a member of a member of the Chinese People’s Political Consultative Conference (CPPCC), which directs the United Front Work Department, a foreign propaganda and influence network of the Chinese Communist Party.

However, Mailin Chen’s property on Drummond (In 2015 he owned 13 Vancouver-area properties) is situated on three lots, so realtors do not consider it a record price for one single lot, as is the case for the one on Belmont.

Mailin Chen’s home is kitty corner to Chen’s home, which Li said is a “family holding.”

Asked if the two Chens are related, Li said she could not disclose personal information.

Li said she does not expect a bidding war on the property but rather negotiations among those interested.

The 58,632 square-foot lot comes with an annual tax bill of $101,897.

A realtor’s commission on a $40 million sale would be $653,255.

[email protected]

Copyright © Business in Vancouver

Ex-student aims for near-record Vancouver mansion deal

Graeme Wood
other

Metro industrial supply bogs down in red tape

Chuck Chiang
Western Investor

A staff shortage at municipal counters and rigid provincial rules on building near water slow approval for scarce redevelopment sites

There is high demand for brownfield sites, such as this 2.5-acre Chilliwack parcel that sold for in April for $5.4 million. | Klein Group

A staff shortage at municipal counters and rigid provincial rules on building near water slow approval for scarce redevelopment sites

Demand for Metro Vancouver industrial space has skyrocketed, and regulators need to find ways to streamline the application process for more space to be built, one industry official said.

Josh Gaglardi, principal at Surrey-based industrial/commercial construction firm Orion Construction, said the space shortage is so acute that industrial space developers and owner-users are looking well beyond their usual potential sites to secure what they need.

“We’ve seen major industrial business parks being proposed today that would not be considered feasibly even five, 10 years ago,” said Gaglardi, whose company’s major projects include the 428,000-square-foot Coastal Heights Distribution Centre and the 443,000-square-foot Pacific Corporate Centre.

“Being on the forefront of working on new greenfield and brownfield projects in the Lower Mainland, we see that there’s very little industrial land remaining, and it’s increasingly shrinking in both Metro Vancouver and the Fraser Valley,” Gaglardi said. “We’ve got mountains to the north, the border to the south and water to the west, so we continue to push east. But we are running out of industrial land opportunities, and the remaining sites are challenged by a myriad of limitations.”

Industrial land prices are rising quickly in the eastern Fraser Valley, however. Recently, a 2.5-acre Chilliwack brownfield site zoned industrial sold for $5.4 million, considered a record price for the community.

An Avison Young report from May showed Metro Vancouver’s industrial vacancy rate at 0.9 per cent, and the increased pace in development meant that 82 per cent of available land in 2015 is now being developed. Gaglardi added that while demand has been steadily increasing for years, that demand has spiked sharply in the last six to nine months. He attributed the demand surge to the meteoric rise of e-commerce and the increasing need for companies to have logistics space for storing goods and products.

Given the public’s adoption of e-commerce as the preferred way to do business post-COVID, Gaglardi noted the demand for Lower Mainland industrial space will continue to grow. That gives the province an opportunity to expand the economy coming out of the pandemic – or to let that economic benefit evaporate through inaction.

“Through the pandemic, people were forced to adopt new technology that maybe they wouldn’t have been so eager to learn otherwise,” Gaglardi said. “It has expedited what we see in light-industrial growth … and I think we will continue to see our industrial land demand driven by these e-commerce companies across multiple sectors.”

He added that companies have been looking at sites even with provincial or municipal requirements on stream-site setbacks, as well as those with challenging topography. That’s why, Gaglardi said, it’s crucial that municipalities and other government organizations free up the supply that is available in the market. Industry officials noted that projects often get bogged down at municipal levels, where staff shortages mean significant delays – even before the provincial regulators get involved.

Gaglardi said the biggest increases in application delays have been in Langley City, Langley Township and Abbotsford – places where most of the available industrial land is. These municipalities are therefore facing a double-whammy of higher volumes of applications and a dearth of staff to process those applications.

“That’s where the growth is happening,” Gaglardi said. “And some of these sites are increasingly moving closer to provincial water bodies, and a referral to the province can mean as much as a 12-month delay on these projects.

“We always try to push the municipalities and the provincial government to prioritize employment lands,” he added. “Our projects provide jobs and benefits to the economy, so we try to push those as high priority, even though it’s tough because housing supply is also so restricted. But we do provide a lot of benefits to local communities.… It’s just that industrial warehousing is, for the lack of a better term, not as sexy as residential. So we don’t see the priority we think we should see being placed on employment lands.”

© 2021 Western Investor

Active listings in Greater Vancouver continue to drop sharply in August

Michelle McNally
Livabl

Canada’s housing market is currently dealing with a shortage of available properties for sale, including in the Greater Vancouver Area, one of the country’s most active real estate regions.
In an August mid-month market report published by Dexter Realty this week, Broker and Chief Economist Kevin Skipworth explained that the decline of active listings during the summer market in Greater Vancouver has been intense, and a trend that is expected to continue into the following month.
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“It’s not about the sales but the number of listings and the lack thereof that are keeping the market at bay this summer,” stated Skipworth in the monthly email update report. “By mid-month the number of active listings in Greater Vancouver plummeted to just over 10,000 and will be less than this by the time we roll into September.”
Based on Skipworth’s latest insights, here’s how home sales and new inventory is holding up in Greater Vancouver.
Active home listings continue to drop
So far this month, there were 1,967 new listings in Greater Vancouver, lower than the 2,491 properties onboarded in July. Year-over-year, there have been about 800 fewer new listings compared to August 2020, when 2,758 homes were added.
There are 10,028 total active listings across the Vancouver region, which is quite a difference from July, which recorded 10,958 listings mid-month. In August 2020, there were 13,227 listings available.
The number of active detached homes entering the market dropped by 10 per cent since mid-month July, a trend that has been ongoing for the past few months. Attached properties, which includes condos and townhomes, experienced a more moderate drop of eight per cent over the last 31 days. Skipworth pointed out that the quantity of new listings has steeply declined in recent months.
“[This is] not a great recipe for a sudden influx of workers and immigration coming to Canada in the years ahead – and make no mistake, these workers are very much needed to keep our economy going,” he stated. August could see 3,000 sales by end of month
Although the number of sales is down mid-month compared to July, Skipworth expects that Greater Vancouver will see a little over 3,000 homes sold in August, well above the 10-year average for the month. Up until the mid-month point of August, 1,393 properties have sold in Greater Vancouver, a decrease from the 1,692 homes sold mid-month in July 2021, but up from the 1,304 transactions in August 2020.
Had new listings not been so low, more sales would have likely taken place this month, Skipworth noted in his report. He explained that while it would be easy to assume that the number of sales are falling, they are actually high when seasonally adjusted with the record-low roster of available home supply.

Townhomes remain popular among buyers
When compared to other housing types, Skipworth noted that townhomes continue to be bought at the quickest pace, with the current sales-to-listings ratio for townhomes set at 87 per cent. Detached and apartment homes recorded similar ratios of 67 per cent and 64 per cent.
A sales-to-listings ratio compares the percentage of units listed in a month to those sold in the same timeline.
In Richmond, townhome sales were especially high with the sales-to-listings ratio reaching 116 per cent. Up to mid-month, there have been 44 new townhomes listed in Richmond and 51 units sold, with an active listing count of 197. As of August 14th, the average price of a Richmond townhome is $965,464, up from $949,898 in July, and an increase of more than $100,000 from August 2020, when the average was $860,052.
Sales-to-listing ratios rises in several communities
Prices for all property types in Greater Vancouver have ticked upward from last month, when the average price was recorded at $1,153,804 in July. Until August 14th, the average value of a home in Greater Vancouver was $1,154,204, a noticeable annual increase from August 2020, when the average price was $1,077,729.
Falling inventory levels in many communities across the Vancouver region has caused sales-to-listings ratios to rise. Compared to July 15th, the sales-to-listing Greater Vancouver jumped from 68 per cent to 71 per cent. Areas like North Vancouver, New Westminster and Port Coquitlam saw their sales-to-listings ratio increase to 82 per cent, 94 per cent and 107 per cent, respectively.

© 2020 BuzzBuzzHome Corp.

Home insurance and wildfire season: What you need to know

REBGV Staff
REBGV

BC’s wildfire season is devastating communities across our province this year with nearly 270 fires burning right now.

During this crisis, it’s important to understand what you should expect from your insurance.

Trying to obtain fire insurance can be difficult in areas under the threat of wildfires.

While insurance underwriters follow their own companies’ guidelines, expect that where evacuation orders or alerts exist, it’s unlikely insurance providers will approve new policies until the threat eases.

Some companies may also restrict new policies based on proximity to fires, even when no evacuation orders or alerts have been declared. Providers may also decline changes to existing insurance policies, such as requested increases to coverage limits.

As well, insurance for properties in unprotected fire districts is more expensive than in protected fire districts. An unprotected fire district is an area without fire hydrants and a fire department.

How to manage risk around insurance

Insurance doesn’t just affect your piece of mind—it can also affect your mortgage. For example, if your insurance company withdraws their approval for a property, your lender may also withdraw their mortgage approval.

Here’s what you can do to mitigate this risk around insurance:

• Contact your insurance broker and discuss whether your upcoming purchase will be affected by wildfires, and if so, what your options are.
• Contact several insurance providers if you’re having trouble getting insurance. Different providers may have different approaches and criteria.
• Get legal advice in areas where you’re unable to obtain insurance.
• BC Wildfire Service’s FireSmart recommendations
• FireSmart Canada’s FireSmart Begins at Home manual
• Tips and information about fire safety from Insurance Bureau of Canada
• BCFSA’s Information Regarding BC Wildfires

© 2021 REBGV

Industrial sector picks up pace across the Prairies

WI Staff
Western Investor

 Speculative development and private investors are back as vacancy rates fall and demand for distribution space increases

Hardware giant Lowes has just completed a 1.2-million-square-foot distribution centre in north Calgary. | Lowes rendering

Speculative development and private investors are back as vacancy rates fall and demand for distribution space increases

The purchase of a five-building industrial portfolio in Edmonton and the $67 million purchase of a single Calgary building underlines the strength of the industrial real estate sector across the Prairies this year.

Meanwhile, industrial vacancy rates are falling and demand is rising in both Saskatoon and in Regina.

A total of $43 million in industrial real estate sold in the second quarter of this year in Saskatchewan’s capital. Regina’s industrial vacancy rates has dropped to 4.2 per cent, down from 5.1 per cent at mid-year 2020.

Saskatoon saw its industrial vacancy rate drop to 4.1 per cent in the second quarter, down from 6.3 per cent a year earlier, while average lease rates increased 7.2 per cent to $10.55 per square foot. Over the past year, Saskatoon has seen positive absorption of 535,000 square feet of industrial space, and there is only 86,000 square feet currently under construction.

In Winnipeg the industrial vacancy rate has fallen to 3.4 per cent and more than 448,000 square feet of new industrial space is under construction, according to Colliers Canada.

But big-city Alberta is where the recent action is the wildest.

Early in August, local investors paid $18 million for a five-building industrial portfolio in Edmonton The Southside Industrial portfolio was bought from Manulife in a transaction brokered by CBRE Edmonton.

David Young, executive vice-president and managing director of CBRE in Edmonton, said there is plenty of deal activity in the industrial pipeline.

“I think the third and fourth quarter and into 2022 the industrial business will be quite buoyant in Edmonton and region,” he told the Real Estate News Exchange.

JLL Canada noted that speculative development has returned to Edmonton, including a 550,000-square foot project that is part of 4.9 million square feet of new space either planned or underway.

JLL said Edmonton’s industrial market posted 473,267 square feet of positive absorption in the second quarter.

“While most space under construction is built-to-suit, speculative activity has been increasing on optimism in the strength of Edmonton’s industrial sector,” JLL noted.

Calgary

On July 12, Toronto-based Skyline Real Estate Investment Trust (REIT) announced it had paid $67 million for a near-500,0000-square-foot distribution centre in southeast Calgary.

It is not alone piling into the city’s hot industrial sector this year.

“Investment sale transactions picked up dramatically in [second quarter] Q2 2021 with a significant volume of sales across all size ranges on track to close in the Q3 and Q4 2021,” noted Colliers International in its Q2 2021 report on Calgary’s industrial market.

Colliers suggests that investors are turning to Calgary from Vancouver, because of both lower land prices and higher yields in the Alberta city.

Of the three largest industrial sales in Q2, two were to owner-occupiers and the third the $7 million investor acquisition of 95,000 square feet in the Foothills area by VPC Group.

More than 2.3 million square feet of industrial space was absorbed in the first half of this year, 1.45 million square feet of that taken up in the second quarter.

Much of the action is in large-scale distribution centres.

Significant recent transactions include Walmart leasing 157,648 square feet in StoneGate Industrial from One Properties and X-Treme Packaging leasing 145,841 square feet in Foothills from Summit Real Estate Investment Trust.

This June, hardware giant Lowes completed a 1.23-million-square-foot distribution centre in Balzac in north Calgary, which opens this fall.

Calgary’s overall industrial vacancy rate continues to drop, falling from 5.35 per cent in Q1 2021 to 5.08 per cent in the second quarter, which has put upward pressure on market rents and decreased tenant inducements.

There is currently 1.86 million square feet of new industrial space under construction across Calgary, according to Colliers, which believes the increased demand could kick off a new cycle of construction.

Industrial properties were also the most popular asset class for Calgary investors at mid-year 2021, in terms of total dollar volume. Owner/users accounted for 44 of the 54 transactions completed during this period, spending $202.8 million of the total $249 million.

© 2021 Western Investor

Metro Vancouver condo developers pivot to rentals

WI Staff
Western Investor

 Wesbank and QuadReal plan Vancouver’s tallest rental tower at the Oakridge Centre redevelopment. | Chung Chow

The hot multi-family rental sector has attracted the attention of some of the region’s largest residential developers

While purpose-built market rental construction has been slow in recent years, Metro Vancouver condominium developers have started to pivot towards rental construction, according to Mark Goodman of Goodman Commercial, who publishes the Goodman Report on the multi-family market with partner Cynthia Jagger.

The movement to rentals should not be surprising: sales of multi-family rental buildings are on a frantic pace this year, notching $1.64 billion worth of transactions through the first six months of 2021.

First-half sales were 45 per cent higher than the entire 2020 annual total and appear on pace to hit the third-highest annual sales volume ever recorded, according to Goodman.

The latest Goodman Report for mid-2021 provided the following list of new rental builds and condominium conversions:

• Westbank and QuadReal have revised plans at the Oakridge redevelopment in Vancouver to include a 100 per cent 52-storey rental building, which, if completed, would be Metro Vancouver’s tallest rental tower.

• Westbank and Crombie Real Estate Investment Trust have revised plans for the Safeway site redevelopment at Broadway and Commercial, increasing the rental units from 160 to 452 units while reducing its strata units

• Bosa revised a West End, Vancouver, condo application, announcing two 34-storey towers containing 575 new rental units.

• Rize Alliance revised its City Centre site in Surrey from a 30-storey strata tower to a 38-storey, 392-unit secured market rental building. Bosa has also announced a new 375-unit rental building for Surrey.

• Toronto-based Starlight Developments announced an all-rental rezoning of Lougheed Village on the Burnaby-Coquitlam border, comprising three additional concrete tower buildings with 1,200 new rental apartments.

 • Marcon, in partnership with QuadReal, have submitted a rezoning application for a 11.6-acre property in Coquitlam Town Centre. A purpose-built rental complex with 126 rental units is included in the first phase.

© 2021 Western Investor