Work underway on capital projects across Saskatchewan

Western Investor Staff
Western Investor

Province has pledged to spend $30 billion on infrastructure by 2030

Upgrades to Yorkton Regional High School are among $1.4 billion in capital spending Saskatchewan is funding this year.Good Spirit School Division

Crews across Saskatchewan are mobilizing as the province moves forward with $1.4 billion in capital projects this year.

The projects include $156.6 million for health care, $168.6 million for education, $31 million in post-secondary infrastructure, $479.5 million in transportation infrastructure and $291.8 in government services infrastructure.

The tally also includes $268.6 million for infrastructure projects by local governments.

“Communities throughout the province will see construction crews hard at work on projects funded through this year’s record capital plan investment,” SaskBuilds and Procurement Minister Jim Reiter said. “We are building, expanding and improving the schools, hospitals, long-term care centres, parks and transportation infrastructure that improve quality of life, support economic growth and job creation and make Saskatchewan attractive to private sector investment.”

In Lloydminster, crews from Saskatoon-based Quorex Construction have begun work on a $28.8 million expansion and renovation of Lloydminster Comprehensive High School and a $10 million expansion and upgrade project at Holy Rosary High School. Quorex crews are also at work in Regina, handling construction of a new joint-use facility that will replace Argyle Elementary and Ecole St. Pius X schools.

In Yorkton, crews from Regina-based Westridge Construction Ltd. are upgrading Yorkton Regional High School and replacing the roof.

Crews from Graham Construction are working at the site of Regina’s new urgent care centre, with full construction expected to start this spring and be largely completed early next year.

In Saskatoon, PCL Construction Management Inc., originally founded in Stoughton, is preparing to undertake preliminary site preparation work for an expansion of the remand facility at the Saskatoon Correctional Centre. 

Construction is nearing completion on several projects at parks around the province and will soon be open for the public, including the renovation and redevelopment of the former ski chalet at Buffalo Pound Provincial Park to create a new interpretive centre for visitors. Water system upgrades are nearing completion at Candle Lake Provincial Park.

The province said that two important health care projects are currently in the procurement stage. These include a new general hospital in Weyburn and the expansion and redevelopment of Victoria Hospital in Prince Albert.

More than a dozen projects public and institutional projects are at the planning, design or tendering stages, including a new urgent care centre in Saskatoon, long-term care projects in Grenfell, Estevan, Regina and Watson; replacement of the Yorkton Regional Health Centre; and water and wastewater upgrades at Rowan’s Ravine, Moose Mountain, Saskatchewan Landing, Meadow Lake, Echo Valley, Porcupine Hills Provincial Parks.

The province says its capital plan this year totals a record $3.2 billion, or more than a tenth of the $30 billion it has promised to spend on infrastructure by 2030.

 

© 2022 Western Investor

Kootenay manufactured home park sells $600,000 over assessment

Re/Max Penticton Realty
Western Investor

The 48-pad adult-oriented park, on city services in a prime location in Castlegar, B.C., sold $100K over list price and well above assessment, at $3.6 million

Re/Max Penticton Realty, Penticton, B.C., for Western Investor

Type pf property: Manufactured home park

Location: 1545 Columbia Street, Castlegar, B.C.

Number of pads: 48

Park size: 3,388,968 square feet

Land size in acres: 7.78 acres

Zoning: R-5 Manufactured Home Park

BC Assessed value: $2.98 million

List price: $3.5 million

Sale price: $3.6 million

Date of sale: April 29, 2022

Brokerage:  Re/Max Penticton Realty, Penticton, B.C.

Broker: Vadim Kobasew

 

© 2022 Western Investor

Cardero Street rental apartment building sells at $715,300 per door

CBRE National Apartment Group
Western Investor

The 26-unit multi-family building, concrete-built with ocean views in Vancouver’s West End, sold for $18.6 million.

CBRE National Apartment Group, Vancouver, for Western Investor (Google street view)

 

Property type: Multi-family rental

Location: 1265 Cardero Street, Vancouver

Number of units: 26

Price: $18.6 million

Date of sale: May 18, 2022

Brokerage: CBRE National Apartment Group, Vancouver

Broker: Lance Coulson

 

© 2022 Western Investor

Inflation hits a new high in Canada

Fergal McAlinden
other

April marked another unwanted record for the country’s Consumer Price Index
The inflation rate in Canada hit its highest level for 31 years in April, with the Consumer Price Index rising by 6.8% compared with the same time last year.
New figures from Statistics Canada showed that rate has inched upwards from 6.7% in March as housing costs continued to soar across the country. Shelter costs surged by 7.4% on an annual basis, largely because of higher home heating costs, in the largest annual increase for almost 40 years.
Renters are also feeling the pinch of inflation. The cost of rent spiked in Ontario and British Columbia, spurring an overall increase of 4.5% over April 2021. The average hourly wage increased 3.3% on an annual basis last month, a figure that pales in comparison to price appreciation across the board.
Gasoline prices have increased 36% compared with April 2021, while an increase of nearly 10% in the cost of groceries represented the largest gain for over 40 years.
The news arrives two weeks before the Bank of Canada is due to make its next decision on its trendsetting policy rate, with the central bank having already indicated its intention to act “forcefully,” in the words of Governor Tiff Macklem, to get the inflation crisis under control.
The Bank has already raised its benchmark rate twice this year, following a 0.25% increase with a 50-basis-point hike in its last policy meeting.

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Is Canada’s housing market about to crash?

Fergal McAlinden
other

Some observers are sounding the alarm while others remain calm

 It’s a question on the mind of many mortgage and real estate professionals across the country as interest rates rise and sales activity moderates: Just how cool is Canada’s housing market going to get?

There’s been plenty of unease in recent times about a market that’s been on a sizzling run over the last two years as Canadians seized the opportunities presented by record-low borrowing rates to splurge on property the length and breadth of the country.

A cocktail of factors including rapid home price appreciation, overvaluation and stagnant labour incomes contributed to Canada Mortgage and Housing Corporation’s (CMHC’s) declaration last year that the housing market had been exposed to “high vulnerability” and was now overheated.

Now Oxford Economics has sounded the alarm on the potentially steep downward trajectory of the market, forecasting that home prices across the country will plummet 24% by the middle of 2024.

With home prices set to continue climbing even in the current rising-rate environment, Oxford’s director of Canada Economics Tony Stillo said the housing market would ultimately “reach a breaking point and crash under the weight of its own success before year end.”

Others are more sanguine about the housing market’s prospects in the current economic climate. Justin Havre (pictured top), real estate advisor and team leader of Justin Havre & Associates of RE/MAX First, RE/MAX Canada’s number-one team for closed transactions and productions last year, told Canadian Mortgage Professional that the recent slowdown was a positive development for the market.

Read next: BMO: Strong policy actions required to address inflation

“It’s fair to say that the Canadian housing market has been like a boiling pot of water on a stove for the last two years. It’s way too hot and… needed to put a little bit of calmness in it,” he said.

“With all the stimulus that…  governments have injected into their economies in the last two years during the pandemic, it’s bound to have an impact on the economy and on inflation. So, there’s no surprise to me that the interest rates are going up.”

Inflation has been the “elephant in the room” for well over a year, said Havre, with the Bank of Canada having resolutely stayed the course on keeping its benchmark rate low as the country navigated the COVID-19 pandemic.

Still, while rates are likely to rise substantially this year, he said predictions of a 1980s-style inflationary surge to the high teens were probably wide of the mark – and that higher rates could end up helping the market in the long run.

“I don’t think we can really expect anything like that, but we should expect that there are going to be some higher interest rates, which will settle the real estate market down a bit… not a bad thing, because buyers are sometimes having to make their biggest life decision or their biggest purchase in a matter of minutes while they’re inside a home,” he said.

A more balanced market could mean that buyers have better selection and, crucially, more time to make a decision on a home that best fits their needs and wants, according to Havre.

Read next: Canada’s housing market – what’s next?

On the home price issue, a recent RBC Economics report indicated that a “shift” appeared to be taking place as price growth began to moderate, although it stopped short of predicting a similar crash to that forecast by Oxford.

“With the Bank of Canada continuing to hike rates quickly and aggressively, we may have already reached peak prices in Toronto (and will soon be showing signs of prices trending down in other markets),” the report’s author Carrie Freestone noted.

A drop in prices outright in Toronto between March and April marked the first decline for over 13 years, RBC indicated, with Vancouver recording a 1% rise in composite benchmark prices – half the average pace of the previous six months.

As Canada emerges from the pandemic and rates continue their upward journey, Havre anticipated an increasingly stable home price environment, albeit one that would continue to see modest appreciation.

“I do foresee that the real estate market will stabilize more with activity [and] prices may fluctuate a little bit monthly, but year over year I think we’ll continue to see price gains,” he said. “Maybe not to the tune of 40% plus, but I do think there will be moderate price gains.”

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More than 70% of GTA residents support building new homes and roads: BILD

Michelle McNally
Livabl

Creating more residences and infrastructure in the Greater Toronto Area has been a central theme of the affordable housing conversation. New research shows that the majority of people who live in the GTA agree that there is an underlying home shortage problem in the region and that more housing should be built.

According to new public opinion research released by the Building Industry and Land Development Association (BILD), 71 per cent of respondents agree with expanding municipal boundaries to facilitate the construction of more housing at the periphery of GTA municipalities. Seventy-eight per cent of those surveyed said that they agree with the construction of more roads and highways to support residents and growth in the Toronto region.

The research survey was conducted by IPSOS with 1,000 GTA residents in March.

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“It is not a question of choosing between building more homes to accommodate a growing population and protecting the environment,” said Dave Wilkes, president and CEO of BILD, in a press release. “While those opposed to taking the necessary steps to accommodate the GTA’s present and future growth like to present these as stark ‘either-or’ decisions, the reality is that with modern land development, building techniques and regulatory requirements, we know it is possible to balance both.”

The IPSOS survey found that 92 per cent of GTA residents agree that we are in the middle of a housing affordability crisis. Four out of five respondents — 81 per cent — acknowledged that we are also in a housing shortage crisis. An equal percentage of those surveyed agreed that there must be a balance between environmental regulation with the need to build more homes more quickly.

However, the survey results show that a significant portion of residents were still against new housing in some cases. Fifty-five per cent of residents said that they opposed the construction of a high-rise apartment within half a kilometre of their home, while 47 per cent of GTA residents were against the construction of a mid-rise apartment within the same half-kilometre distance of their residence.

“There is almost unanimous agreement that the GTA is suffering from a housing supply and affordability crisis and that adding supply is the solution,” said Wilkes. “This must be done by adding gentle density in existing communities and enabling new, denser, more land-efficient development at the peripheries of GTA municipalities.”

“This research demonstrates to our leaders that the public supports the idea that growth and environmental protection can be balanced,” he added.

Based on the survey results, 44 per cent of those who live in the GTA said that they were aware of the regulatory framework that governs the environmental aspects of building new homes. About a third of GTA respondents — 35 per cent — felt that building a new housing community is bad for the environment.

According to BILD, when these groups were made aware of the regulatory requirements and industry environmental practices for new home construction, more than a third “were less likely to believe building homes harms the environment.” This rose to over half when told about new home energy efficiency.

“There is a clear disconnect between perception and reality,” said Sean Simpson, senior vice president of IPSOS Public Affairs, in the press release. “The majority of GTA residents clearly favour the addition of more housing supply and transportation infrastructure.”

Simpson added that of those who believe that building homes harms the environment, 56 per cent are “not aware of the regulations and practices already in place to protect the environment.”

 

© 2020 BuzzBuzzHome Corp.

MTE takes record industrial lease in Edmonton spec build

Western Investor Staff
Western Investor

Developed on speculation, Apex Business Park was fully leased before construction completed

Avison Young has closed Edmonton’s largest industrial lease of 2022 thus far, at 548,000 square feet in APEX Business Park. The transaction is also one of Edmonton’s top five largest-ever industrial leases in a speculative build.

Avison Young’s Thomas Ashcroft and Rob Iwaschuk represented MTE Logistix as a tenant in the facility. They also collaborated with Panattoni Development Canada and Manulife Financial as the developer/landlord.

In an already tight industrial market, this lease was completed before the building was ready for occupancy, demonstrating not only strong appetite for space but also the appeal of APEX Business Park. Prominently located in northwest Edmonton, on major transportation routes, it is minutes from the CN Intermodal Yard.

“Closing such a sizeable deal before a facility is even built sends a strong signal that growth is coming from within the Edmonton market as well as from groups outside,” said Rob Iwaschuk, principal, Avison Young. “As one of the last remaining large blocks of available space in the entire market, this puts added pressure on the greater Edmonton industrial sector and points to a need for further speculative developments.”

Avison Young, Panattoni and Manulife will soon launch the Fulton Creek Business Park in South Edmonton, with site work, site servicing and construction commencing this summer.

© 2022 Western Investor

Innisfail to sell 46 acres for industrial development

Johnnie Bachusky
Western Investor

Subdivision will create lots with prices starting at $160,000 per acre
Innisfail town council has approved a plan to put 46 acres of new industrial land south of 37th Street out to market, with an introductory price tag of $160,000 per acre. Photo courtesy of Elevate UAV
Continuing its unprecedented aggressive push for major industrial development, the Town of Innisfail has set the price for new parcels of industrial land totalling 46 acres at the new provincially approved industrial area south of 37th Street.
Council approved pricing and a marketing plan at its regular meeting on May 9 after considering a staff plan that proposed an introductory price of $160,000 per acre for potential purchasers.
The price would remain in effect until July 29. The rate will then increase later in the year, with servicing of the lands taking place in fall 2022 and purchasers taking possession in spring 2023.
A report by town administration to council said the proposed pricing also reflects the projected cost of servicing the property, which include water, wastewater, storm, FortisAlberta electricity, ATCO gas, paved roads, applicable offsite levies ($9,711 per acre) and remediation costs.
Council approved a motion to move ahead with the plan, along with a second motion for administration to submit a subdivision application for the creation of industrial parcels.
“I am expecting interest,” said mayor Jean Barclay. “It’s priced very well, comparable to other land in the Central Alberta region, and we also have very competitive non-residential tax rates in Innisfail. I am looking forward to seeing what comes from this.”
Innisfail hasn’t had any serious volume of industrial development since at least the 1990s.
“We haven’t had this type of development available for quite a long time,” she said.
However, Barclay still had questions about administration’s plan to put the new industrial land out to market.
The mayor wanted to know if July 29 would give potential purchasers enough time to consider the town’s offer, noting that discussions with potential land purchasers can be lengthy when significant sums of money are involved.
“It is a large investment,” said Barclay. “Are we committed to sticking to July 29? If we don’t and we say we’re extending it, that gives a little bit of an indication that maybe things are not going as well as we hoped potentially, so I worry about that.”
Barclay also wanted to know whether the town able to accept deposits on purchase agreements if it secures a contract with a purchaser before the subdivision application receives approval. She also questioned whether a lawyer would hold deposits in a trust account.
Meghan Jenkins, Innisfail’s director of community services, said land sales in the summer will create more certainty for the town this fall when it proceeds with servicing, “knowing that we have half a dozen lots that are already sold.”
She said all deposits received will be held in trust with the town lawyer until purchasers take possession of their property in spring 2023.
In the meantime, town administration will seek approval from the town’s planning commission for the creation of industrial parcels in the new industrial area. Tentative concept plans show eight lots between three and 13 acres in size, but this could change in the final subdivision application. The area currently consists of two titled parcels totalling 123.3 acres.
Council was told the proposed subdivision of the lands will result in 46.1 acres of saleable industrial land. Proceeds from land sales will help recover the cost of site servicing.
On April 25, council directed administration to tender the development of the southwest industrial park at a budgeted amount of $5.5 million, funded largely through the town’s new Borrowing Bylaw.
The majority of the lands, 77.2 acres, will accommodate public utility lots, the town yard and snow storage, a municipal/environmental reserve and almost six acres for roads.
Jenkins said the subdivision process takes about 60 days, with referrals sent out to adjacent property owners, as well as other stakeholders such as FortisAlberta, Telus and Alberta Transportation.
It would then go to the planning commission for approval, which is typically conditional upon various criteria being met prior to registration of the new, subdivided parcels at land titles.

© 2022 Western Investor

Private mortgages – what’s next for Ontario agents?

Fergal McAlinden
other

Recent weeks have seen new measures aimed at raising standards for Ontario agents in the private space
The brokering of private mortgages by Ontario agents has been in the spotlight of late, with the province’s regulatory body overseeing broker conduct having recently introduced new educational requirements for agents dealing in the private space.
Those regulations, set to take effect next April, will see the introduction of a new licensing class for mortgage professionals, with agents who have not reached that level designated as Level 1-classified agents and permitted only to arrange mortgages with “financial institution type lenders.”
Level 2 agents, meanwhile, will be allowed to arrange mortgages for lenders, including private individuals.
Speaking with Canadian Mortgage Professional last month, Financial Services Regulatory Authority of Ontario (FSRA) executive vice president Huston Loke pointed to the heightened risk factor for mortgage customers in the private space as the main reason behind the changes.
Having witnessed growth in private lending markets across the province, Loke said the body believed “private lending arrangements entail additional risks and the requirement for more information” to give consumers peace of mind when dealing in that arena.
Among agents and brokers operating in the private space, the issue of a product’s suitability for their client is one they should be bearing in mind above all, according to an Ontario-based mortgage veteran.
Read next: FSRA on new education requirements for Ontario agents
Graeme Moss (pictured top), founder and partner at Fair Mortgage Solutions, told CMP that the private market featured a number of “exceptionally good” lenders – but that agents and brokers should always be cognizant of whether a private mortgage is in a client’s best interest.
“I think the suitability factor is a really major thing. I would say everyone goes through life shocks – a person can have health issues, unemployment, divorce and more,” he said. “When they have those events, I think getting something suitable for them is reasonable for them and the lender. If both sides mitigate risk, you make it a win-win.
“The key question has got to be: Does it work well for both the lender and the client? The consequences from the mortgage agent or broker’s actions can have a massive impact on their client, either positive or negative.”
That view was also expressed by Loke, who said that while “private mortgages are not always problematic… they’ve got to be right for the borrower, and so we’re changing the regulations to match the need.”
Where agents do not take that suitability factor into consideration, the consequences for borrowers can be potentially seismic, Moss said – for instance, in a recent case that saw a mortgage agent allegedly arrange a large prepaid private second mortgage with liens on top for a pensioner that left that individual significantly indebted.
Read next: Private lending – Ontario brokers set to face higher education requirements
In that case, the individual signed papers but subsequently stated they did not understand the implications of what they were getting themselves in for. While they may have a case, the problem with litigating against the individuals behind the deal is likely to be a lengthy – and expensive – process, according to Moss.
“Often, borrowers don’t understand the legal and financial aspects that intimidate a lot of people, and they rely on the trust of the agent, broker or branch,” he said. “A lot of people don’t realize the implications – they won’t know so much about the loan to value or when it comes to financial and legal matters. That combination scares a lot of the public.”
A positive step might be for the Ontario government to change disclosure rules on liens, he said, with the current arrangement meaning that a client could theoretically agree to a monthly amount without realizing that they’ve actually signed up to pay that over a long period – such as 15 years.
While many lenders in the private space provide a “really unbelievable” level of service for their clients, Moss emphasized the importance of agents and brokers being particularly attentive to whether their clients’ interests are best served by specific private mortgages and keeping that suitability factor firmly in mind.
“You can keep busy and ensure that the lender and the client both do well – it’s a win-in,” he said. “Or you can say, ‘To hell with the client,’ and they’re at risk all the time – and it will be a nightmare. And it will be a nightmare for [the broker’s] reputation, too.”

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Canadian housing starts rose in April CMHC

Fergal McAlinden
other

The annual pace of new home construction in April surpassed analysts’ expectations

The annual pace of new home construction in Canada was up 8% in April compared with the previous month, the country’s national housing agency has revealed.
Canada Mortgage and Housing Corporation (CMHC) said the seasonally adjusted annual rate of April housing starts was 267,330 units, up from 248,389 in March, with the annual rate of urban starts increasing by 10% to 245,324 units.
Multi-unit urban starts registered a 14% annual rate increase to 178,092, and the pace of single-detached urban starts was also up – rising 1% to 67,232.
The six-month moving average of the monthly seasonally adjusted annual rate of housing starts, which came in at 253,226 units in March, rose to 257,846 units last month, while rural starts saw a seasonally adjusted annual rate of 22,006 units.
The overall seasonally adjusted annualized rate of housing starts surpassed analyst expectations, with forecasts having come in at 246,000 units ahead of the CMHC announcement.

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