West Vancouver zoning proposal encourages breweries, food processors

Brent Richter
Western Investor

Commercial zoning change will address the district’s lack of light industrial space

 New zoning policies are on tap in the District of West Vancouver that will see craft breweries, wineries, cideries and distilleries allowed on some commercially zoned lots.

The proposed changes will allow alcohol manufacturing in the C1, C2 , AC1 and AC2 zones, most of which are located along Marine Drive and in Horseshoe Bay. The zoning changes will also allow food manufacturing to take place in these areas engage if the company also offers retail or wholesale sales.

Most municipalities require breweries and distilleries to operate on lots with light industrial zoning. West Vancouver has no light industrial zones, however. Council is serving up the cocktail of changes in hopes of stimulating more economic activity and vibrancy in the district.

West Van is the only Lower Mainland municipality to have missed out on the decade-old craft beer revolution, despite having been home to the first micro-brewery in Canada. Horseshoe Bay Brewing opened in 1982 in the basement of the Troller Pub. It closed in 2000, but the founders went on to start other breweries that still exist today.

Mayor Mary-Ann Booth said she’s already received an enquiry from an entrepreneur hoping to open a craft brewery in what is today an auto repair garage on Marine Drive at 25th Street.

The changes proposed in West Van mirror those in other Lower Mainland municipalities that have allowed craft breweries and small-scale food processors to thrive in traditional industrial areas.

Vancouver updated its zoning bylaws for the Mount Pleasant neighbourhood in 2017 to create additional opportunities for craft breweries and other manufacturing businesses. The changes supported the revitalization of the area as a destination for tech companies.

Similar benefits have been seen in Burnaby, Port Moody and other municipalities over the past five years.

Other proposed changes to West Vancouver’s zoning bylaws include a rule that limits financial institutions (include currency exchanges), beauty salons and real estate offices to no more than 20 per cent of the ground-level commercial frontage in Ambleside and Dundarave and Royal Avenue in Horseshoe Bay. The rules will also be tweaked to allow businesses that manufacture products on-site, like bakeries, to wholesale to other businesses, which is not currently permitted.

Home-based artist studios will be given the district’s blessing to offer retail sales of their art from home. And the district will allow home-based daycares for up to eight children to operate on residential properties that also have a secondary suite – as long as the operator lives on site.

Changes to the zoning bylaw are subject to a public hearing, scheduled for March 29.

 

© 2022 Western Investor

Metro Vancouver sees huge jump in monthly sales

Michelle McNally
Livabl

 In Metro Vancouver, sales and home prices moved upward during February, including the number of listings hitting the MLS. But even with last month’s surge of new properties, the region is still chronically undersupplied.

According to the latest insights shared by the Real Estate Board of Greater Vancouver (REBGV), last month’s market reported “steady home sales activity,” as prices and the quantity of new listings climbed.

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“As we prepare to enter what’s traditionally the busiest season of the year, the Metro Vancouver housing market is seeing more historically typical home sale activity and a modest uptick in home listing activity compared to last year,” REBGV chair, Taylor Biggar, said in a news release.

Here’s what we know based on the latest from REBGV.

Sales up nearly 50 per cent from January

Last month, 3,424 residential home sales sold across the Vancouver region, a drastic 49.8 per cent increase compared to the 2,285 properties sold in January. However, February’s sales were down 8.1 per cent from the same period last year, when 3,727 residences traded hands.

By property type, 1,010 detached homes were sold last month, down 18 per cent year-over-year from 1,231 sales. Apartments reported the highest number of sales with 1,854 transactions, up 5.4 per cent from February 2021 when 1,759 units were sold. For townhomes, 560 properties were traded in February, a decrease of 24 per cent from when 737 townhomes were bought and sold during the same month last year.

When looking at the 10-year average, February 2022’s sales were 26.9 per cent higher.

New listings flood February market

Between detached, attached and apartment property types, 5,471 new homes were added to the MLS last month. This is a noticeable 31.2 per cent increase compared to January, when 4,170 residences came online. On a yearly basis, new February listings were up 8.4 per cent from 2021, a difference of 423 more homes this year.

The total number of residential properties available for sale in Metro Vancouver is 6,742, 19.1 per cent more month-over-month but down 19.3 per cent from February 2021.

The sales-to-active listings ratio for February is 50.8 per cent. Detached homes fell short of this benchmark at 34.9 per cent, while townhomes and apartments were closely aligned at 64.3 per cent and 62.2 per cent, respectively.

“Despite having a higher volume of people listing their homes for sale in February, the region’s housing market remains significantly undersupplied, which has been pushing home prices to new highs month after month,” said Biggar.

Metro Vancouver benchmark price rises on yearly and monthly basis

Last month, the Home Price Index composite benchmark price for all residential homes in the region grew to $1,313,400. This marks a 20.7 per cent yearly price increase, and a 4.6 per cent growth in value from January.

Between January and February, the benchmark price for a detached home rose 4.7 per cent and 25 per cent from February 2021 to $2,044,800. Apartments reported similar monthly price growth, increasing 4.1 per cent month-over-month and 15.9 per cent from last year to $807,900. Townhomes experienced the highest monthly price growth in February, climbing 5.9 per cent to $1,090,000, an increase of 27.2 per cent from the same month in 2021.

 

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Bank of Canadas 0.25 percent rate hike means 13 monthly payment increase per 100000 mortgage broker

Carlito Pablo
The Georgia Straight

Interest rate hike won’t cool housing, say experts

Tara Deschamps
The Vancouver Sun

They believe pent-up demand for homes is so high and supply still so scarce that the Bank of Canada’s decision to hike the rate to 0.5% from 0.25% won’t take much of an edge off the real estate market.

 A for sale sign is displayed outside a home in Toronto December 13, 2021. Photo by Carlos Osorio /REUTERS

TORONTO — Housing experts say prospective homebuyers hoping today’s interest rate

Housing experts say prospective homebuyers hoping Wednesday’s interest rate hike will cool the country’s heated real estate market will likely be disappointed.

They believe pent-up demand for homes is so high and supply still so scarce that the Bank of Canada’s decision to hike the rate to 0.5% from 0.25% won’t take much of an edge off the real estate market.

“In the past, when there was an interest rate increase coming, people would be like ‘maybe it’s not the time to buy,’ but it’s the opposite,” said Michelle Gilbert, a Toronto broker with Sage Real Estate Ltd.

“I’ve got so many people that were like ‘I’m going to get my rate hold or my pre-approval finally done’ … They’re ready to go.”

Her clients aren’t letting the rate hike deter them from buying because interest rates are still lower than they were pre-pandemic and they’ve lived through years of home price increases.

Real estate boards have been reporting soaring prices and a flurry of sales for the bulk of the pandemic as buyers raced to take advantage of the 0.25% interest rate instituted under Bank of Canada governor Tiff Macklem’s predecessor Stephen Poloz about two years ago, as the country plunged into the COVID-19 health crisis.

In typically hot markets like Toronto and Vancouver, the average home price has surpassed $1 million and suburban and rural areas surrounding those cities have seen the cost of a home climb too.

But in recent months, new listings have dropped and realtors and buyers are bemoaning a lack of properties that has tipped the market even further in favour of sellers.

The lack of supply coupled with a sense that low interest rates won’t remain is making some even more keen to buy.

Gilbert said a property on a busy street unexpectedly got 20 offers last night.

“That’s a sign that people are willing to sacrifice on things that would have been not so great to the average buyer just to get in.”

Gilbert has noticed her clients want to get into the market while they can, and believes they won’t find better conditions until there’s a significant rise in supply or investors are required to cover higher down payments, deterring them from buying.

“Even if we had like double the inventory, demand is insane and it’s the demand that is the issue,” she said.

“We have so many people that want to buy.”

Gilbert’s views are bolstered by a Zoocasa analysis showing interest rate increases correlate with slower sales numbers, but trigger no major impact on prices.

The real estate listing site compared Toronto’s monthly average home price and sales volumes between the start of 2017 and end of 2019 — a period that covers the last five times the rate was increased — against the average discounted five-year fixed mortgage rate during that same period.

The analysis found 2018 saw 78,018 sales, the lowest level in recent years, but attributed that number to then-new mortgage stress test, which reduced purchasing power.

After the rate hikes there were “very small movements” in the average price. The largest month-over-month price drop after an interest rate announcement came in November 2018, when prices dropped 2.35%, and the largest was seen in February 2018, when prices climbed by more than 4%.

These monthly decreases and gains are “fairly similar” to pricing trends in 2017 and 2019, suggesting seasonality triggered the small swings.

While the interest rate’s impact on prices may be limited, the increase Wednesday will affect some mortgage holders immediately.

Interest rate hikes typically weigh on homeowners with variable-rate mortgages because many banks use the central bank’s key rate to dictate how they should change their prime interest rate. RBC Royal Bank said it is increasing its prime rate to 2.70% from 2.45%, effective Thursday.

Those with fixed-rate mortgages may see increases when they go to renew in the coming years.

Estee Zacks, the Toronto-based owner of Strategic Mortgage Solutions Inc., noticed a recent surge in requests for rate holds, which freeze mortgage rates for up to 130 days.

“They’re always stretching to get more house because the price of homes has been increasing more quickly than people’s income,” she said.

“People are more often asking me ‘if I can’t fit into this $1.1 million pre-approval metric at the top by banks, is there something else that can be done?’”

To cope, Gilbert is seeing people who already paid off a mortgage, taking on another one to help children get into the market.

She said, “We have a whole lot of people that are willing to sacrifice their future debt to just be able to enter now.”

 

© 2022 Vancouver Sun

Vancouver industrial land will soon average $7 million per acre: study

Frank O’Brien
Western Investor

 Sale of Toyota Canada industrial site in Delta closed March 2 at nearly $6 million per acre. | JLL Canada

Most recent Metro Vancouver sales saw developers paying $82.68 million for less than 14 acres and $60.5 million for an 8.9-acre industrial site

A shortage of industrial real estate and soaring demand will drive the average price of industrial land in Metro Vancouver to more than $7 million this year, according to a national study of the commercial real estate market by CBRE, released on March 1.

“The lack of industrial land across Vancouver has driven significant land price growth in recent years and this trend is expected to continue going forward. The market’s average land price figure is expected to increase by 17.5 per cent and reach a new record $7.05 million per acre in 2022,” the 2022 Canada Real Estate Market Outlook states.

Development will also be pushed further afield to submarkets such as Chilliwack, Abbotsford, Maple Ridge, and Mission, according to CBRE, a leading commercial real estate agency.

Metro Vancouver demand, driven largely by e-commerce and logistics requirements, will cause the industrial market to tighten further in 2022, CBRE forecasts.

 Development has ramped up considerably, but 79.2 per cent of the record 9.4 million square feet that is under construction in Metro Vancouver had already been pre-leased as of year-end 2021, the report notes.

The continued supply-demand imbalance is forecast to drive vacancy rates to new lows of 0.7 per cent, while lease rates are expected to increase upwards of 13.5 per cent in 2022.

 For strata industrial sales, the average price per square foot is forecast to reach $590 this year, up from $390 per square foot just two years ago.

The CBRE land price projections appear right on the money.

On January 12, CBRE’s Vancouver office sold an 8.9-acre industrial site ay 9800 Van Horne Way, Richmond, for $60.5 million, or $6.73 million per acre.

The most recent major sale of an industrial property, announced March 2, was the transaction of 13.9 acres at 7233 Progress Way, Delta, for $82.68 million, the equivalent of $5.94 million per acre.

Toyota Canada, the vendor, sold the site, which includes 267,000 square feet of manufacturing and warehouse space, to developer Beedie in an off-market, bid-process deal through JLL Canada, Vancouver. JLL brokers were executive vice-president Bruno Fiorvento and vice-president Baktash Kasraei.

Toyota will vacate the Tilbury Industrial Park site in the second quarter of this year, according to JLL.

 

© 2022 Western Investor

Will the Toronto housing market ever slow down?

Fergal McAlinden
other

The city is now home to Canada’s priciest market – but a slowdown of sorts could be in the cards

 What can slow the seemingly unstoppable rise in Toronto house prices? With the city having just surged past Vancouver to become Canada’s most expensive market, its stunning month-over-month price growth in recent times seems to indicate that there’s no end in sight to that upward climb.

January alone witnessed a monthly increase of over 4% in Toronto’s benchmark price, which now sits at an eyewatering $1.26 million, according to a new report from RBC Economics.

Still, with that growth likely “unsustainable,” one prominent member of the city’s mortgage industry told Canadian Mortgage Professional that some moderation in the market was to be expected in the coming months.

Drew Donaldson (pictured top), principal at Donaldson Capital, said that while inventory shortages had propelled much of that seismic price growth, the fact that more listings were likely to emerge around the springtime meant that a cooling-off would probably occur from the hectic pace of the past two years.

“As soon as more listings come on the market, which we think will be March, April and May, I think that’ll kind of even out the market a little bit,” he said. “Right now, you’re seeing some crazy price growth – 10%, 20%, even 30%. It’s really unsustainable.

“Usually when that happens and the weather warms up, people start listing to try to take advantage of those prices, and that’s when things start to soften a little bit.”

Read next: Canada’s affordability issues continue – even outside hottest markets

The likelihood of impending rate increases should also serve to take some of the sting out of the market, Donaldson said, with rock-bottom current low rates having pushed homebuyers into overdrive to avail of slashed borrowing costs.

“I think as rates slowly start to rise here, you’re going to see people maybe slip back into more of a conservative approach where they’re taking out only what they need [because] they’re starting to worry about rates going up, costs going up, prices going up,” he said.

Much speculation has surrounded the future of the Bank of Canada’s benchmark rate, with some observers suggesting that the central bank might find itself under pressure to introduce more rate hikes than initially planned – or more dramatic increases – because it chose to leave that rate untouched in its January announcement.

Still, Donaldson said those scenarios seemed highly improbable, with the Bank likely to stay its hand and maintain the same steady course it’s taken for much of the pandemic – meaning that a total of around three rate hikes in 2022 is the most logical outcome.

“I think rates are not going to go up, but they’re not going to suddenly have an experiment of raising it seven times in 2022 and seeing what happens,” he said. “I think it’s going to be slow and steady on the rate hikes as we go, and it’ll gradually get higher over time.”

As those Toronto house prices have continued to shoot through the roof, movement to the suburbs and other parts of the Greater Toronto Area (GTA) has been a noted trend in recent years – one that’s only accelerated because of the COVID-19 pandemic and the work-at-home restrictions that have followed.

Read next: Is the urban exodus about to slow down?

Donaldson said that 2022 might see something of a reversal on that front, particularly if a possible post-pandemic landscape emerges this year and restrictions begin to ease. That could see Toronto residents pull the plug or change course on a move away from the city – a development that could have a significant impact on suburban housing markets in the coming years.

“[In} some of these small towns outside of Toronto where the price of a home maybe was $700,000 and now it’s selling for $1.1 million, we might be in for 10-15 years of either no growth or maybe even a small 5-10% correct in the short term,” he said. “I’m not bullish at all on the suburbs surrounding Toronto. I think they’ve gone too hard, too fast.”

Another notable trend of late has seen clients who may own a second property such as a condo in Toronto begin to sell those assets, Donaldson said.

That’s a marked change from a quiet condo market at the beginning of the pandemic that slowly began to gather pace in 2021, resulting in what the Toronto Regional Real Estate Board (TRREB) called a “record fourth quarter” for condo sales at the end of the year.

“The condo market was really subdued in Toronto in 2020, and even 2021 in the first half,” Donaldson said. “In the last two or three months that’s really changed, and we’re seeing a lot of our investor clients that maybe couldn’t sell their condos starting to offload them.”

 

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Bank of Canada hikes rate

Fergal McAlinden
other

The central bank has changed its benchmark rate for the first time in almost two years

 The Bank of Canada has announced an increase in its benchmark interest rate, marking its first change for nearly two years and signalling the end of the rock-bottom low rates that have persisted throughout the COVID-19 pandemic.

The country’s central bank said in its March rate announcement that it was hiking the policy rate by a quarter point to 0.50%, a move that was widely anticipated after the Bank indicated in January that rate increases were on the way.

The Bank had maintained its policy interest rate at 0.25% since the end of March 2020, having slashed the rate three times in that month as the likely impact of the pandemic on Canada’s economy became apparent.

The move will come as little surprise to Canada’s mortgage community, with 10 of 12 brokers surveyed by Canadian Mortgage Professional last week having said that they expected the Bank rate to rise by 0.25% in today’s announcement.

Surging inflation was cited by many brokers as the main reason they expected an interest rate hike, with Canada’s annual inflation rate having surpassed the 5% mark for the first time in over 30 years, according to Statistics Canada figures.

Read more: Bank of Canada announcement – what do brokers think will happen?

The Bank of Canada has acknowledged in the past that inflation remains a significant concern, while also maintaining that it expects a return to more normal levels of annual price growth by the end of the year – although it indicated an increased risk today of longer-run inflation expectations.

The Canadian economy surpassed the Bank’s growth expectations in 2021’s fourth quarter, coming in at 6.7% compared with the Bank’s estimate of 5.8% in a development that will have eased the central bank’s concerns somewhat over a rate hike.

That said, the Bank noted that with housing market activity remaining elevated, further pressure has been added on house prices in Canada.

It also described Russia’s invasion of Ukraine as a “major new source of uncertainty” with prices for oil and other commodities rising, a development that it said could contribute to further inflation and have negative impacts on confidence and possibly global growth.

Pandemic-related worries appear to be waning slightly, with the Bank saying that economies were recovering from the impact of the Omicron variant “more quickly than expected” although it added that the possible emergence of new variants remained a cause for concern.

With that first rate increase in the bag, much attention will now turn to the Bank’s plans for the remainder of 2022 and 2023 in terms of the speed and frequency of future hikes.

The Governing Council “expects interest rates will need to rise further,” the Bank said in its latest statement, with the body also considering when to end the reinvestment phase and allow holdings of government bonds to shrink.

The Bank’s next announcement is scheduled for April 13, with its quarterly Monetary Policy Report also due to be published on that date

 

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Major banks raise prime rates

Fergal McAlinden
other

The news marks the first time Canada’s banking giants have raised prime rates since 2018

Toronto-Dominion Bank, Royal Bank of Canada and Bank of Montreal have indicated that they will increase prime lending rates, following hot on the heels of the Bank of Canada’s benchmark policy rate increase earlier today.

The lenders said that they would raise the higher prime rate to 2.7%, with that change set to take place on Thursday – marking the first prime hike since October 2018.

The higher prime rate typically fluctuates in line with the Bank of Canada’s policy interest rate and has direct implications for whether variable mortgage rates rise or fall.

Other major Canadian banking institutions are expected to introduce prime increases following the Bank’s decision, which saw its trendsetting interest rate rise to 0.50% after nearly two years at a rock-bottom 0.25%.

Lenders slashed their prime rates in March 2020 following the Bank of Canada’s move in the same month to cut its policy rate as the likely impact of the COVID-19 pandemic on the Canadian economy became clear.

The central bank set the stage for further rate increases in 2022 in its March rate announcement, indicating that “the Governing Council expects interest rates will need to rise further.”

It cited Russia’s recent invasion of Ukraine as a significant cause for concern and noted that longer-run inflation expectations “could drift upwards,” with near-term inflation also expected to be higher than envisaged.

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Scotiabank posts first-quarter results

Fergal McAlinden
other

A significant trend has emerged in the Big Six’s Q1 earnings announcements to date

 Scotiabank is the latest Canadian banking giant to reveal strong earnings in 2022’s first quarter, with the bank reporting Q1 net income of $2.74 billion – up 14% over the same time last year.

Diluted earnings per share of $2.14 saw the company become the fifth major Canadian bank to beat analysts’ earnings estimates this quarter, with CIBC, RBC, National Bank and BMO having already surpassed expectations in their statements during the past week.  

Strong mortgage and commercial loan growth drove a 38% increase in Scotiabank’s International Banking adjusted earnings, which clocked in at $552 million.

Its Canadian Banking division also posted a headline-grabbing performance, with adjusted earnings in that sector totalling $1.2 billion – up 32% over the same quarter in 2021.

Read next: RBC reveals Q1 results

On the Global Wealth Management side, adjusted earnings came in at $419 million, with Global Banking and Markets posting earnings of $561 million in total.

The earnings announcement arrives hot on the heels of Scotiabank’s $1.3-billion deal to purchase Chilean holding firm Grupo Said’s 16.8% stake in Scotiabank Chile, a stock and cash acquisition that’s projected to increase the bank’s share in the company to 99.8%.

That agreement will add around $35 million to its per-quarter earnings moving forward, Scotiabank estimates, with the purchase still subject to approval by regulatory bodies at this time.

Commenting on its first-quarter earnings performance, Scotiabank president and CEO Brian Porter praised “very strong” operating results across its four business lines and highlighted its loan and fee income growth.

“I am exceedingly proud of the ways in which our winning team has gone above and beyond to provide our clients with exceptional advice and a great banking experience, while delivering for our shareholder and community stakeholders,” he said.

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Canadian Mortgage Awards 2022 – Excellence Awardees revealed

Fergal McAlinden
other

Find out if you or your company could be celebrating at the in-person awards show on April 28

It promises to be one of the most memorable occasions in the Canadian mortgage industry this calendar year: the return of the Canadian Mortgage Awards (CMAs) as a fully live, in-person event at Toronto’s Liberty Grand on April 28.

Hosted in collaboration with event sponsor Coalition of Independent Mortgage Brokers of Canada (CIMBC), the evening will represent the perfect opportunity for mortgage professionals across the country to gather and toast the achievements of the industry’s standout performers from the last 12 months.

Have you secured a table for you and your colleagues to enjoy what promises to be an unforgettable event? Table reservations for the in-person gala are now open and can be made here. 

Without further ado, Canadian Mortgage Professional is proud to exclusively present this year’s list of Excellence Awardees ahead of the big night, with the full list available to view here.

We extend special thanks to our event partner CIMBC and our award sponsors Avison Young, Canadian Mortgages Inc., Centum Financial Group, Citadel Mortgages, Community Trust, CWB Optimum Mortgage, Equitable Bank, Home Trust, HomeEquity Bank, Matrix Mortgage Global, MCAN Mortgage, and RFA.

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