CMHC reveals latest pace of housing starts

Fergal McAlinden
other

Find out how residential construction fared across Canada in July

Canada’s annual pace of housing starts ticked upwards in July and posted a 1.1% increase over the previous month, the country’s national housing agency has revealed.

The seasonally adjusted annual rate of July housing starts was 275,329 units, according to Canada Mortgage and Housing Corporation (CMHC), up from June despite a drop in urban starts.

The pace of urban starts came in at 254,371 units, a decline of 0.8%, with single-detached urban starts falling by 2.3% (to 58,384 units) and multi-unit urban starts also slipping by 0.3%, to 195,987 units.

Rural starts came in at an estimated seasonally adjusted annual rate of 20,958 units, while the six-month moving average of the monthly seasonally adjusted annual rates rose from June – from 257,862 units to 264,426 last month.

 

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Canada’s inflation rate slows in July

Fergal McAlinden
other

Is the country finally starting to turn the corner on price growth?

Year-over-year inflation in Canada recorded its first decline since June 2020 last month, with the national statistics agency revealing that the annual inflation rate was 7.6% in July.

That also represented the smallest monthly increase since December 2021, Statistics Canada said on Tuesday, as gas price growth finally began to slow – rising by 35.6% on a yearly basis in July compared with 54.6% the previous month.

That reflected a lower worldwide clamour for crude oil due to the slowing global economy, heightened COVID-19 restrictions in China, and smaller demand for gasoline in the United States, StatCan’s report said – although it also noted food prices surged at their fastest pace since August 1981.

Food prices at grocery stores spiked by nearly 10% on a yearly basis in July, spurred largely by higher prices for bakery goods (up 13.6% year over year), eggs (up 15.8%) and fresh fruit (up 11.7%).

While that overall inflation figure is still far above the Bank of Canada’s target of 2%, it marks a welcome decline for a measure that has continued to balloon throughout 2022.

In June, the inflation rate hit 8.1% – its highest level for nearly 40 years. That rising figure has been a major factor in a series of interest rate hikes announced by the Bank of Canada this year, with the central bank’s next announcement, on September 07, expected to include another large rate increase.

 

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Canada home sales feel impact of rate hikes

Ephraim Vecina
other

Sales numbers declined in three-quarters of all local markets last month, CREA says

 Canada’s home sales decelerated for the fifth straight month in July amid the central bank’s sharp interest rate hikes, according to the Canadian Real Estate Association (CREA).

The total number of transactions made over Canadian MLS systems dropped by 5.3% between June and July, with sales activity slowing down in fully three-quarters of all local markets. The largest declines were seen in the Greater Toronto Area, Greater Vancouver and the Fraser Valley, Calgary, and Edmonton, CREA said.

“July saw a continuation of the trends we’ve been watching unfold for a few months now: sales winding down and prices easing in some relatively more expensive parts of the country as well as places where prices rose most over the past two years,” said Jill Oudil, chair of CREA.

“That said, the demand that was so strong just a few months ago has not gone away, but some buyers will likely stay on the sidelines until they see what happens with borrowing costs and prices. As they re-enter the market, they’ll find a bit more selection, but not as much as might be expected.”

Read more: Canada house prices – could a 25% drop be coming?

The number of new listings decreased by a similar rate of 5.3% on a monthly basis in July, bringing the sales-to-new listings ratio to 51.7% – a level slightly below the long-term average of 55.1%.

Across Canada, an average of 3.4 months of housing inventory remained as of the end of July, a significant recovery from the all-time low of 1.7 months seen during the early months of 2022.

The actual non-seasonally adjusted national average home price fell by 5% annually to reach $629,971. This level was heavily influenced by Toronto and Vancouver, with CREA remarking that excluding these two regions from the calculation shaves off $104,000 from the national average price.

“It’s only one month of data at this point but it suggests that some sellers are also playing the waiting game, and that is with an overall inventory of homes for sale that is still historically low,” said Shaun Cathcart, senior economist at CREA.

“The Bank of Canada is also expected to finish up their remaining rate hikes (100 basis points or so) over the next few months, which five-year fixed mortgage rates have mostly already priced in. We’ve already witnessed a sharp housing market adjustment this year, but it will hopefully be short-lived if conditions continue to show signs of stabilizing.”

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Canadian home sales fall for fifth month in a row, down 29% from last July: CREA

Canadian Press
The Vancouver Sun

The association says sales in July fell 5.3 per cent compared with June.

The Canadian Real Estate Association says home sales fell for the fifth consecutive month between June and July but this month’s drop was the smallest of the five. A new home is displayed for sale in a new housing development in Ottawa on Tuesday, July 14, 2020. Photo by Sean Kilpatrick /The Canadian Press

The Canadian Real Estate Association says home sales fell for the fifth consecutive month between June and July, but the latest drop was the smallest of the five.

On a seasonally adjusted basis, the association says sales in July fell 5.3 per cent compared with June. The actual number of sales last month was 37,975, down 29 per cent compared with July last year.

The average sales price was $629,971, down five per cent from $662,924 last July and on a seasonally adjusted basis amounted to $650,760, a three per cent drop from June.

Excluding the typically heated Greater Vancouver and Toronto Areas from the calculation cuts $104,000 from the national average price.

CREA chair Jill Oudil says such numbers are the continuation of trends that have been unfolding for several months and will result in sidelined buyers re-entering the market to find more selection but not as much as they may have expected.

She says new listings in July totalled 73,436, down six per cent from last July and on a seasonally adjusted basis, down five per cent from June.

 

© 2022 Vancouver Sun

Canadian home prices set to drop by almost 25% by end of 2023

Ephraim Vecina
other

Canadians are slowly but steadily returning to the city

Fergal McAlinden
other

Foot traffic across six major urban centres since April 2022 continues to tick upwards

 Things have never been quite the same in Canadian city centres since the outbreak of the COVID-19 pandemic in 2020, with widespread office closures, work-from-home orders and public health restrictions seeing foot traffic across the country’s major cities rapidly diminish.

Those measures have mostly eased across the country – and Canadians are slowly but surely making their return to downtown cores, according to commercial real estate giant Avison Young.

April 1, 2022, marked the lifting of most pandemic restrictions throughout much of Canada,  and a marked increase in downtown foot traffic has been registered in six major cities tracked by the company’s Office Vitality Index.

That’s a finding that Avison Young says indicates a clear desire among Canadians to return to downtown areas, businesses and office spaces.

The increase has been most noteworthy in Toronto, whose downtown foot traffic has spiked by 74% compared with its level at the beginning of April. Vancouver posted a 42% increase, with Montreal up 31%, Edmonton seeing a 24% rise, Calgary foot traffic growing by 20%, and Ottawa recording a 15% jump.

Foot traffic increases for Calgary and Edmonton since April 1 were more modest compared with other urban centres, according to Avison Young’s director of insights Marie-France Benoit (pictured top), because those cities started easing their public health measures earlier than that date – meaning they were already seeing higher numbers before the rest of the country lifted restrictions.

Read next: Hybrid work model likely to dominate: Avison Young executive

“They started seeing an increase in pedestrian traffic earlier in the year,” she told Canadian Mortgage Professional. “As of March 1 [when masking rules ended in Alberta], there was already an uptick there. So they show a little increase [since April 1], but in reality, it’s because they started earlier.”

Transit has also been a significant factor in differing foot traffic levels across major cities, said Avison Young’s president of professional services for the Americas, Sheila Botting (pictured below).

 

“In Edmonton, for example, you can get around by driving your car everywhere. In Toronto, if you’re on public transit, you [may be] fearful of your health and wellness by jumping on transit with other people,” she said.

“The second giant topic is around industry sectors. Some of the larger employers have moved to hybrid work environments before the pandemic, kind of fully acclimatized to what that would look like. And so therefore, [it’s] not as urgent, necessarily, to force people to return to the office.”

While Ottawa has been the slowest of those markets to pick up pace in terms of people returning downtown, the general trend is a “gradual but steady” increase in the number of people travelling into the city for work.

The return to a “vibrant downtown” has also been bolstered by rising numbers of people returning to the city for shopping or tourism, according to Benoit.

“When you go back to the office and the streets are busy and the restaurants are full, it excites you to go back to work,” she said. “We see this virtuous cycle gradually gaining momentum.”

While each city on the list is seeing higher foot traffic in downtown areas, the wide variance between the highest and lowest increases since April 1 indicates that a “one-size-fits-all” approach is ill-suited to judging return-to-office efforts across the country, Botting said.

Read next: Are in-person client meetings set for a resurgence?

Edmonton ranks among the top cities across North America for workers returning to the office, but Ottawa continues to lag near the bottom – highlighting the difference between those two markets and cities.

“Ottawa is still way down in return-to-office metrics, and even when we think about where we are today compared to earlier in the pandemic, the stats are much lower,” Botting said. “So that’s just really the type of market that they’re in.

“We have some clients in Ottawa who are not public sector, who are in another sector of the market, and they’re saying: ‘How do I manage my return to office? What does that look like? Do I require my employees to come back one day a month, two days a month?’ versus in Calgary and Edmonton [where] they’re saying, ‘We want you in three to four days a week.’”

Another interesting trend, Benoit said, is that pedestrian traffic in city centres is 20% lower on Mondays and 23% on Fridays – indicating that if Tuesday, Wednesday, and Thursday were isolated, a return to office that’s closer to pre-pandemic levels than the weekly average would be apparent.

That reflects a different type of return to the office compared with before the pandemic, and that a “diversity of hybrid models” are now the prevalent office arrangement compared with the five-day schedule prior to March 2020.

 

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Residential construction financing: Broker on the challenges

Fergal McAlinden
other

The sector has been impacted by rate increases – but some builders may see potential

 Rate increases throughout the year to date have impacted most sectors of Canada’s mortgage market – and the residential construction financing space is no different, according to a broker who deals in that segment.

Those hikes, coupled with higher costs of materials, have had a notable cooling effect on the clamour for residential construction, CLN Mortgages’ Ty Naemsch (pictured) told Canadian Mortgage Professional, even though he also noted that opportunity remained for builders in certain parts of the market.

“The residential construction financing space, up until the recent rate hikes, had been quite robust,” he said. “There has been a noticeable decline due to the rate hikes and rising construction costs – although recently, we have seen some of our builders entering the market to lower-priced lots and inventory that had to be sold.”

Where private mortgages for construction are concerned, rates have climbed in recent months, but not at the same pace as traditional mortgages, Naemsch said. Still, the new housing and mortgage climate, which has seen property values stall and in some cases atrophy, means that lenders are applying more caution in terms of the amounts they’re willing to part with.

“What has been impacted are the loan to values (LTVs) lenders are comfortable lending on, due to declining market prices,” he said. “The LTVs are now more conservative on the projects.”

Read next: Commercial sector: Veteran shares what brokers need to focus on

Statistics Canada recently revealed that the residential building construction price index rose by 5.3% on a quarterly basis in 2022’s second quarter – and on a yearly basis, that measure spiked by 22.6% in Q1.

Average annual growth in construction as a whole in the coming years is expected to be mild, ResearchAndMarkets.com has projected, with the years 2023-2026 set to see average growth of 2.2% per year.

That analyst’s report indicated that while the construction industry was expected to expand by 4% in real terms in 2022, other factors would weigh upon progress in the years ahead.

“The rise in construction material prices, labour shortages and the recent hike in interest rates could pose a downside risk to the industry’s outlook in the initial part of the forecast period,” the company said.

The uncertainty of what’s in store for interest rates in the remainder of the year makes forecasts on the future of the market difficult, Naemsch said. He said the likelihood of future rate hikes meant a slower pace was likely to prevail with fewer listings and sales ahead.

Again, that could provide an unexpected upside for builders who may see potential in a cooler market that may not have existed in busier times.

“In terms of construction, with costs expected to drop in the future, I can see more builders entering the market taking advantage of lower prices and construction costs,” he said.

The shifting market means it’s essential for brokers involved in residential construction to remain hands on with the builders they’re dealing with and involve themselves in the process from the beginning of the transaction to its end.

Read more: Residential construction cost growth spurring deterioration in affordability

“The real deal starts after you close the transaction,” Naemsch explained. “You need to make certain that builder clients get through the process by ensuring they have the right financing for their budget, draw structures, contingency, and, of course, an exit strategy.”

Despite complex and often difficult times in the current environment for brokers, those challenging conditions also present the opportunity for mortgage professionals to show their value to clients and potentially expand their book of business, according to Naemsch.

“[These are] tough times in the market and how you manage it can make the difference in developing your portfolio of builders,” he said. “With rate increases and market shifts, if you can ensure solid financing and assist your clients through these times, it will build significant loyalty and result in referrals.”

Also essential for brokers is knowing their lender and making sure they’re working with an organization that has the service, flexibility and loan features best fitted to the individual needs and preferences of each client.

“Work with lenders you know and trust,” Naemsch advised. “In construction, the best rate is not the be all and end all. Flexible draw structures, better loan to values, and lender capital are all major pieces to the business.”

 

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Britannia Beach townhomes to celebrate location’s history while welcoming future

Michele Marko
The Vancouver Sun

Seventy-three contemporary two-bedroom/den and three-bedroom townhomes situated in the historic enclave, which will be complemented with an adjacent commercial village overlooking Howe Sound.

 Many of the Britannia Beach Townhomes will have rooftop decks in addition to lower private outdoor spaces that all the units feature. Photo by Supplied /PNG

Nestled below majestic mountains, overlooking the expansive vista of Howe Sound, is the site of a new community that is steeped in British Columbia’s history. Long a location for First Nation residents and later an economic hotspot as the largest copper mine in the British Empire, Britannia Beach is experiencing a rebirth in the 21st century.

In a plan that combines the past with the present, developers Adera and Macdonald Communities have teamed up to create a residential and commercial project that will celebrate the location’s history while welcoming the future.

“Britannia Beach was an old mining town…it’s been a place that’s had inhabitants at one time or another,” says Eric Andreasen, senior vice-president of marketing and sales for Adera. “They came along with the copper mine. It used to be the largest copper mine in the world. Anyway, this area you could only get to by boat. So, they had to build a village to manage the copper mine.”

That village had everything needed to serve the miners and their families, from schools, shops, athletic fields, and entertainment venues. Many of the village buildings have survived and will be restored by Macdonald Communities and integrated with the commercial part of the project that will support the residents of the new development of 73 beachfront townhomes. 

Homebuyers can customize their new home in advance with Adera’s i.D by Me program that lets them see how the colour palettes will look in their chosen unit and select the one they prefer. Photo by Supplied /PNG

“We have a partnership with Macdonald Communities, and Macdonald Communities have been working on this project for some 20 odd years now trying to go through the remediation and the environmental aspects of restoring the site to natural,” Andreasen explains. “We’ve known Macdonald for a long, long time. Macdonald’s forte is more the large master-planned communities. They’re not real townhouse guys, which is why they partnered with Adera because that’s what we specialize in.”

Given the location, it’s not surprising that most of the homes have great views of either Howe Sound or the mountains. Andreasen estimates that about 70 per cent of the homes have Adera’s signature rooftop decks in addition to lower private outdoor spaces that all the units feature. He adds that there are open grassy areas for residents to use, including a children’s play area, a Creekside trail, a community garden, and, of course, the beach.

Kitchens will be open-plan with an airy vibe. Photo by  Supplied /PNG

“Your backyard is the wilderness. It’s everywhere,” Andreasen says.

From their alpine-inspired exteriors to their open-plan airy interiors, the townhomes offer every mod con for today’s families. They’re wired for connectivity, maximize storage in sleek kitchens and bathrooms, have capability for EV charging, a built-in vacuum system (an optional upgrade) and a rough-in for AC.

The design for both the two-bedroom/den and three-bedroom floorplans, Andreasen says, optimizes an efficient use of space and that the only way they’re not so on trend is that “they’re marginally larger than your modern townhome these days.”

The designers at Portico Design Group took inspiration from nature to curate the homes’ colour palettes of Fjord and Forest to create a calm and neutral backdrop for the homeowners’ personal style. Homebuyers can customize their new home in advance with Adera’s i.D by Me program that lets them see how the colour palettes will look in their chosen unit and select the one they prefer. 

Frameless showers in the sleek ensuite bathrooms. Photo by Supplied /PNG

Other ways to customize the homes are with the upgrades that Adera offers, including frameless showers in ensuite bathrooms, closet organizers, garage organizers, roller blinds and a curated audio visual and home automation package.

Though Britannia Beach’s location has a get-away-from-it-all vibe, it’s well positioned right by the Sea-to-Sky highway to commute into Vancouver either by car or public transit. Andreasen says, barring bridge traffic, he can drive from the Bentall Centre downtown to Britannia in 35 minutes. He also imagines that the commercial village will itself be an attraction for visitors on their way to Whistler when the grocery store, cafes, restaurants, and other amenities are in place, much like the Whistler Village.

He adds that in all his 30-plus years of working in development, Britannia Beach is the single most special project he’s worked on for numerous reasons, including the history, the location, and the existing  community.

Artist rendering of Britannia Beach Townhomes. Photo by Supplied /PNG

“This is the new doorstep to the wide-open wilderness,” he states. “It’s just a very unique opportunity. Something that is very special for everyone one of us that is participating in it. It’s as much of a community effort for the whole area of Britannia as it is for the opportunity to have something that you just can’t get anywhere else. I always liken it to Hawaii. There’s only so much waterfront property in the world, and these townhomes are basically on Howe Sound.”

Britannia Beach Townhomes

Project Address: 60 Copper Drive, Britannia Beach

Project Scope: Seventy-three contemporary two-bedroom/den and three-bedroom townhomes situated in the historic enclave of Britannia Beach which will be complemented with an adjacent commercial village overlooking Howe Sound. The project includes eight work-live units.

Developers: Joint Venture by Adera Development and Macdonald Communities

Architects: RLA Architects Inc.

Prices: Starting at $1.1 million

Sales centre: 101 Copper Drive, Britannia Beach

Sales centre hours: Open daily from noon to 5 p.m.

Sales phone: 604-980-0016

Website: britanniabeachliving.com

Occupancy date: Estimated completion of Phase 1 is July 2023

© 2022 Vancouver Sun

Chilliwack 4,152-square-foot retail site sells for $1.35 million

HomeLife Advantage Realty Ltd.
Western Investor

Downtown restaurant has OCP potential for up-zoning to include high-density housing.

Property type: Retail

Location: 46090 Yale Road, Chilliwack, B.C.

Number of units: 1 (restaurant)

Size of property:3,762 square feet

Size of land: 4,151 square feet

Size of land in acres: 0.1 acre

Zoning: C3

Potential: OCP is Urban Quarter (mixed use with high density residential use above with retail)

List price: $1.5 million

Sale price: $1.35 million

Brokerage: HomeLife Advantage Realty Ltd., Chilliwack

Broker: Rick Toor
 

© 2022 Western Investor

Lake Country 17.6-acre greenhouse operation sells for $3.4 million

MLC Real Estate Group
Western Investor

Agricultural land has 42 greenhouses on flat acreage on Kelowna city boundary.

Property type: Land

Location: 9719 McCarthy Road, Lake Country, B.C.

Size of land:766,656 square feet

Size of land in acres: 17.6 acres

Zoning: A1

BC Assessment value: $3.59 million

List price: $3.5 million

Sale price: $3.4 million

Date of sale: August 11, 2022

Brokerage: MCL Real Estate Group – Re/Max Kelowna, Kelowna, B.C.

Broker: Kris McLauglin

© 2022 Western Investor