50-year-old Burnaby apartment snapped up after owner slashes price by $1.25M

Chris Campbella
Western Investor

Older real estate in Burnaby is seeing strong interest from buyers.

Seton Place is a 41-suite three-storey apartment building located in the heart of the established Burnaby Heights neighbourhood at 3940 Pender St.Goodman Commercial

A run on old apartment buildings continued as one iconic Burnaby rental building that is more than 50 years old was snapped up after the owner slash the price.

Seton Place just sold after being put on sale for $12 million, a price reduction of $1.25 million, according to Goodman Commercial Inc.

Seton Place is a 41-suite three-storey apartment building located in the heart of the established Burnaby Heights neighbourhood at 3940 Pender St., just one block south of Hastings Street and three blocks east of Boundary Road.

Built in 1970 and improved on a large 26,474 SF (217’ × 122’) RM3 zoned lot, the building’s suite mix comprises 8 bachelors, 30 one-bedrooms and 3 two-bedrooms. Other features include lane access at the rear, 40 secured underground parking stalls, and 32 residential storage lockers plus 9 others that have been converted into one large storage room.
Burnaby Heights is filled with three-storey rental apartment buildings built in the 1960s and ‘70s.

Sales activity in the Lower Mainland’s commercial real estate market reached the second-highest annual total on record in 2021, according to the Real Estate Board of Greater Vancouver (REBGV). 

In the fourth quarter of 2021, Burnaby saw $655 million in commercial properties – a $532M jump from the third quarter.

Burnaby saw 106 office and retail property sales, 44 industrial sites, one multi-family property and 11 commercial land sales. The commercial land sales along sold for nearly $500 million.

There were 2,659 commercial real estate sales in the Lower Mainland in 2021, a 65.3 per cent increase from the 1,609 sales in 2020, according to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV). 

Last year’s sales total is the second highest on record behind 2016 when 2,848 sales were recorded.

The total dollar value of commercial real estate sales in the Lower Mainland was $14.396 billion in 2021, a 66.7 per cent increase from $8.635 billion in 2020.

Follow Chris Campbell on Twitter @shinebox44.

 

 

© 2022 Western Investor

Metro Vancouver home sales fell in April, said real estate board

Cheryl Chan
The Vancouver Sun

The slowdown comes after the Bank of Canada increased interest rates in a bid to tamp down inflation.

 Despite the slowdown in sales in April, residential home prices remained steady. Photo by REUTERS/Carlo Allegri/File Photo

Greater Vancouver’s housing market appears to be slowing down, although prices remain steady.

According to the latest report from the Real Estate Board of Greater Vancouver, there were 3,232 residential home sales in April — a 25 per cent drop from March and a 34 per cent dip from the 4,908 sales recorded last April.

Despite this, April sales still remain 1.5 per cent above the 10-year sales average for the month.

Daniel John, chairman of the real estate board, said home sales have eased from last year’s “record-breaking pace.”

“While a small sample size, the return to a more traditional pace of home sales that we’ve experienced over the last two months provides hopeful homebuyers more time to make decisions, secure financing and perform other due diligence such as home inspections,” said John in a statement.

 

The slowdown comes after the Bank of Canada increased interest rates by a quarter point in March and by half a percentage point in April in a bid to slow inflation. Experts are anticipating another hike at the rate announcement in June.

The total number of homes for sale on the Multiple Listing Service in Metro Vancouver sits at nearly 8,800, up 15 per cent compared with March.

Home prices remained steady, inching up by about one per cent compared with March. The benchmark price for a detached home in the region is $2,139,200, $1,150,500 for a townhouse and $844,700 for a condo. The prices are about 16 to 25 per cent higher — depending on the type of home —— compared with April 2021.

The Real Estate Board of Greater Vancouver represents more than 14,000 real estate agents in Burnaby, Coquitlam, Maple Ridge, New Westminster, North Vancouver, Pitt Meadows and Port Coquitlam.

Other municipalities in the Lower Mainland like Surrey, Delta and Abbotsford are represented by the Fraser Valley Real Estate Board.

 

 

© 2022 Vancouver Sun

Personal loans platform sees popularity grow with brokers

Fergal McAlinden
other

Launched in 2020, the company seeks to connect everyday borrowers with individual investors

 Eighteen months after launching digital loans platform GoPeer, the company’s co-founders say it’s going from strength to strength – and that Canada’s mortgage broker community has emerged as a potent referral source.

The product went live in September 2020, aimed at allowing everyday borrowers to secure loans by connecting them with other Canadians who are seeking to invest. The latter gain access to a marketplace that lets them invest in a fraction of loans, while borrowers receive an amount that they repay each month.

For borrowers, unsecured loan terms of either three or five years are available from a low of $1,000 as high as $25,000, with rates starting from 7.5%.

The company’s progress since its inception has seen it receive over $150 million in loan applications to date, according to co-founder and CEO Marc-Antoine Caya (pictured top left). It’s also carved out a niche as a popular option for mortgage brokers whose clients are in need of a specific solution to improve their mortgage prospects.

“One of the things we realized is that there’s a lot of traction with mortgage brokers,” Caya said. “Many of our clients come from referral from brokers to consolidate their loans or refinance their lines of credit or credit card – essentially to qualify for a better mortgage.”

Significant work has gone into developing the platform’s technological capabilities, Caya said, making it as easy as possible for users to take a loan application through the system (sometimes in as little as two minutes).

Read next: goPeer to launch Canada’s first peer-to-peer lending platform

“You don’t need to submit any documents. You don’t need to submit proof of ID, you don’t need to submit a T4, income paystubs or anything,” he said. “We’re fully integrated with various partners in the ecosystem. We get rich data sets from various sources that our system uses to automatically underwrite loans.”

GoPeer’s team is “small and lean,” Caya said, with an average interest rate of around 16% on loans offered. For borrowers with better credit, meanwhile, the company is “highly competitive with banks” where unsecured term loans are concerned.

At present, the company does not directly offer mortgages, even if those offered rates make it an appealing choice for brokers to send their clients to where more mainstream or institutional lending is not available.

“The primary use case that we’re seeing is those mortgage brokers [that] refer us their clients that typically didn’t have the line of credit [options] a lot of people would have,” said Caya.

Rates that are competitive with or lower than those offered by many non-bank lenders mean brokers can provide alternative solutions – ultimately allowing them to close and obtain better deals for their clients.

“We’re sort of in that sweet spot for that use case,” Caya said. “That’s where we see a lot of traction from those channels like mortgage broker referrals.”

It might be assumed that launching a company amid the COVID-19 pandemic would come with its own complications, particularly with the lending and borrowing landscapes shifting drastically in 2020.

Read next: Mortgage technology – how it will impact the space in 2022

However, the pandemic provided an unexpected tailwind for the fintech, according to co-founder and chief technology officer Joseph Buaron (pictured top right), who told CMP it opened the eyes of many Canadians to the opportunities presented by digital borrowing and lending

“It kind of pushed more people online and helped people adapt to this new model. At the time, people were still more comfortable going in person,” he said. “Even though they typically didn’t like doing things and waiting weeks for it to happen, they weren’t as familiar with the online lending approach. That’s changed significantly with COVID.

“The other thing was that one of the concerns was defaults increasing with people losing their jobs. It seems like there was the opposite effect because of the government aid – fewer people [were] defaulting, so it helped us on both sides there.”

The lack of delinquencies means the company is seeing better performance on its loans than it had originally envisaged, said Caya, to the ultimate benefit of its investors (GoPeer itself does not take any profit from its interest rates charged).

Central to its next steps will be leveraging technology to advance analytics and constantly improve underwriting, as well as identifying key segments to help grow the company’s business: not just mortgage brokers, but also those borrowers that “fall through the cracks” of the normal banking system, according to Caya.

“Think of self-employed [individuals] or newcomers,” he said. “Those are areas that we want to continue to improve and offer additional services to, for these less well-served customers.”

 

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What’s been happening in Canada’s MIC space?

Fergal McAlinden
other

A prominent executive in the sector talks CMP through recent developments

As Canada’s mortgage and housing landscapes continue to shift in the midst of rising interest rates, how are the country’s mortgage investment corporations (MICs) faring?

Business has been brisk throughout the year to date, according to an executive at a prominent British Columbia-based MIC, with a healthy pace likely to continue even as the full impact of that new rate environment becomes clear.

“The flow of business we saw in 2021 has continued into this year and even with the recent rate bumps, there really hasn’t been a slow down,” Loren Hawkins (pictured top), national manager, broker relations at ThreePoint Capital, told Canadian Mortgage Professional.

“We’ll see how the additional rate bump adjusts people’s thinking, but in the MIC space so far we’re still seeing business come in the door.”

A noted trend in recent times has been small, newer players in the MIC space extending their reach and moving into different markets, Hawkins said – for instance, eastern-based MICs moving into the west, and vice versa, for diversification purposes.

It’s no surprise, either, that MICs have had to grapple with the same challenges faced by many lenders in the red-hot mortgage market of recent years: sky-high volumes and an expectation among mortgage agents and brokers for files to be turned around in rapid time.

That means it’s doubly important for agents and brokers to ensure that they’re submitting complete files and as comprehensive an application as possible so that it can be turned around in the manageable timeframe they expect, according to Hawkins.

Read next: How private lending carved up its niche in the Canadian mortgage space

“There’s a demand for quick turnaround, but at the same time we’ve also experienced a lot of incomplete applications: lack of information or the previous lenders information still in the application, and we’re left to try to figure out what’s going on,” he said.

“That’s a detriment to brokers trying to get a response, whether it’s with us or anybody else, during a busy time. We need that clear communication on what you’re expecting or looking for in the file because otherwise, we don’t have time to chase people down.”

ThreePoint’s document stipulations are comparatively light on the submission side, according to Hawkins. On a refinance, for instance, the company requires an application submitted via Expert, Lendesk or Velocity with supporting documents of a satisfactory appraisal, confirmation the borrower is current with CRA, and an overall confidence that they can afford the mortgage.

In some recent applications, he said that although the borrowers have shown income, they’ve been unable to support themselves in reality on what’s left over – meaning that the company has ultimately passed on the file.

Still, he said that brokers who expect or require a quick turnaround should make sure they’re sending as detailed a file as possible.

“The notes are key to explaining why, when and what their exit strategy looks like. Any documentation they may have up front should be sent in, then obviously that turnaround time can be quite quick,” he said. “It’s important for brokers and agents to reach out to us prior, should they require a short funding to see if we’re in a position to assist.”

Read next: What’s in store for private lending in 2022?

Hawkins emphasized the value of contacting lenders through the appropriate channel – whether the head of broker relations, business development manager (BDM) or national sales manager – to help determine in advance whether a positive decision on a file is feasible.

“We’ve had a lot of files come in over the last six months where a broker we may not have an existing relationship with expects a 48-hour turnaround in funding,” he said. “If they had simply contacted our office, we could have easily advised them that that may not have been reasonable.

“If they’ve got a challenging file or a quick turnaround, those are the times when the best thing to do is reach out. That’s what the BDM or national sales manager is there for, to help bridge that gap between underwriting and the submission. When everybody’s busy, time is the precious factor.”

As an MIC that lends in four provinces – BC, Alberta, Manitoba, and Ontario – ThreePoint also strives to ensure that at least one of its team members starts earlier, Hawkins said, in order to field calls from eastern-based brokers so that their turnaround time isn’t negatively impacted by the time difference.

On his own priorities in 2022, Hawkins said he’s been working on establishing connections with existing partners whose acquaintance he may not have already made, particularly in smaller or more remote areas that the company serves.

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Is Canada’s urban exodus on the wane?

Fergal McAlinden
other

Some signs indicate that Canadians’ interest in a home away from the city could be declining

 As offices and downtown businesses shut their doors at the onset of the COVID-19 pandemic, record numbers of Canadians began to set their sights on a move to a smaller city or more remote location.

The figures were striking. Statistics Canada revealed in January that over 64,000 Toronto residents moved to another part of Ontario between mid-2020 and mid-2021, with Montreal losing almost 40,000 residents to other parts of Quebec during the same period.

That marked a 14% spike in the number of people who moved away from Toronto within Ontario compared with the previous 12-month period, while the number leaving Montreal for another part of Quebec skyrocketed by 60%.

However, as pandemic-era restrictions continue to ease across the country and downtown office spaces gradually reopen, there are some signs that Canadians’ interest in a home away from the city may be cooling.

Bank of Montreal’s (BMO’s) latest housing survey, published on April 25, revealed a 5% increase in interest in purchasing a home in major city centres across the country, with a preference for moving further away from the city witnessing a decline.

That could be an indication that Canada’s housing market is set to return to some degree of normality during the remainder of the year, according to BMO Capital Markets senior economist Robert Kavcic.

“We could see much more balanced conditions very soon, as the Bank of Canada is expected to raise interest rates further throughout the remainder of the year,” he said. “That will bite into affordability and possibly temper market psychology.”

Still, the market’s underlying fundamentals remain strong, he said, as a robust job market and demographic support bode well for its long-term future.

Avison Young’s Office Vitality Index, which measures foot traffic in major urban centres across North America, revealed that Vancouver had recorded its highest volume for 2022 so far in the week ending April 17.

Read next: Will the Toronto housing market ever slow down?

Meanwhile, across North American cities, average weekday visitor volume was at its highest peak since the week of March 02, 2020 – before nationwide lockdowns were announced – although foot traffic remains well below its pre-pandemic levels, the company emphasized.

Three western Canadian cities ranked among the top 10 North American cities with the highest downtown foot traffic in the week ending April 17: Edmonton in second place, Calgary in fifth, and Vancouver in sixth.

Despite that trend back towards the city, other indicators suggest that smaller and more remote areas could continue as attractive post-pandemic options for many Canadians.

In its 2022 Small Markets Report, real estate franchise RE/MAX said that high liveability in those markets outstripped affordability as the main factor drawing Canadians toward quieter areas.

“It’s no secret that people have been moving all over the country to achieve their homeownership dreams – and the story of the pandemic is [that] everybody wanted a bigger house and a bigger yard,” RE/MAX Canada’s president Christopher Alexander (pictured top) told Canadian Mortgage Professional.

“But this really shines a light on [the fact that] it was more than just moving out of the city to get that. They wanted the lifestyle of smalltown charm, being close to parks and amenities and things like that, that make life a lot more enjoyable.”  

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

While Alexander emphasized that trends of migration to and from big cities were nothing particularly new, he said that the prevalence of smaller markets during the pandemic had ultimately proven a positive development for Canada’s housing market.

“I think parts of the country are almost being rediscovered,” he said. “I think that’s really encouraging because there’s so much pressure on Southern Ontario, lower mainland British Columbia. That’s where you see property values [at] just astronomical levels.

“It’s encouraging that people are looking elsewhere now, finally, because I think it presents a great opportunity for different parts of Canada to really thrive and offer quality of life to a whole other demographic of people.”

The RE/MAX report sounded a note of concern on Canada’s smaller markets, indicating that prices were likely to rise in some regions by up to 20% throughout the rest of 2022 as a result of low inventory and continuing high demand.

While liveability in those areas remains a key consideration for out-of-market buyers, 57% of survey respondents in smaller markets said they feared their town’s liveability could decline because of growing demand – with 43% saying rising prices could have a negative impact.

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Owners of empty homes will pay more in Vancouver

Kendra Mangione
other

It will soon cost more to be the owner of an empty residential property in Vancouver, as a motion for another tax hike is approved.

The city’s Empty Homes Tax – charged to owners who don’t live in or rent out their properties – is going up to five per cent next year.

Previously these owners had to pay an extra three per cent in taxes as part of the measure meant to encourage the long-term rental of empty homes.

The measure, put in place years ago, was in response to a near-zero vacancy rate in Vancouver that led to sky-high rents for the limited housing supply. Since imposed, the available supply has improved, though landlords continue to ask for more rent each year.

The move was also to discourage homeowners from using their properties solely for the arguably more profitable short-term rental system, through sites like Airbnb. Those who do want to rent on those sites can still do so, but need a business licence and can only rent their space if it’s the owner’s principal residence, or a secondary suite in which the operator lives most of the time.

The motion to increase the tax again was put forward by Mayor Kennedy Stewart, and included too that the number of audits be more than doubled – to 20,000 for 2023, up from 9,000.

The approved proposal also directed city staff to report back to council early next year on how the tax can be used to reduce the “large number of short-term rental properties,” how exemptions can be altered to ensure fairness, and how it will be impacted by recently approved federal measures.

Additionally, the mayor asked staff to look at how a doubled rate of 10 per cent might impact the city’s rental market. As for whether that tax hike is actually a possibility, 2022 is a municipal election year, so it may depend as much on who is leading the city after the vote as the results of the research by staffers.

 

© 2022  All rights reserved.

3.2-acre ALR exclusion in Abbotsford sells for $6.5 million

Frontline Real Estate Services
Western Investor

Recently removed from the Agricultural Land Reserve in West Abbotsford, B.C., the land is now designated for industrial development.

Property type: Industrial land

Location: 30189 Old Yale Road, Abbotsford, B.C.

Size of property: 3.2 acres

Sale price: $6.5 million

Date of sale: February 24, 2022

Brokerage: Frontline Real Estate Services, Surrey, B.C.

Brokers: Todd Bohn and Braydon Hobbs

© 2022 Western Investor

Vancouver empty homes tax to jump to 5% starting in 2023

Michelle McNally
Livabl

 Vancouver homes that are sitting unoccupied will face higher taxes next year.

This week, Vancouver’s City Council unanimously approved Mayor Kennedy Stewart’s motion to hike the city’s Empty Homes Tax (EHT) from three to five per cent starting in 2023. The motion also includes doubling the number of audits under the program from 9,000 to 20,000 for the 2023 vacancy tax reference year.

Since its introduction in 2017, Vancouver’s EHT has been hiked more than once. The EHT was first implemented as a one per cent tax, and was later increased to 1.25 per cent in 2019 and boosted to three per cent in 2021.

In a tweet posted on Wednesday evening, Mayor Stewart called the EHT increase a “big blow to housing speculators.”

Vancouver’s EHT — otherwise known as the Vacancy Tax — was created for properties unoccupied for at least six months of the year. The tax is designed to encourage homeowners to put empty and under-utilized properties on the market as long-term rental homes, therefore boosting housing supply and helping the city’s low vacancy rate.

Research published by the City of Vancouver shows that the number of vacant properties decreased 26 per cent between 2017 and 2020 as a result of the EHT. Thirty-six per cent of properties declared to be vacant in 2019 were later converted to occupied homes in 2020, and $86.6 million in tax revenue has been collected to support affordable housing initiatives under the program as of November 2021.

Information from City of Vancouver staff, who performed 8,000 audits in 2019 and over 9,000 audits in 2020, report that an average of 6.4 per cent of those who were audited were found to be in non-compliance.

According to the City of Vancouver, homeowners are required to submit a declaration each year to determine if their property is subject to the EHT or not. Homes that are found to be empty are subject to the EHT, which is currently three per cent of the property’s 2021 assessed taxable value.

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Exemptions to the EHT can be made in specific circumstances, such as the death of the registered owner or major renovations. This also includes homes that are principal residences or are rented out for at least six months of the year.

Vancouver isn’t the only Canadian city to consider a vacancy tax. Peel Region in Ontario recently launched an online survey to gather public input on a potential Vacant Home Tax (VHT) program. Ottawa will implement its one per cent EHT in the 2023 taxation year, while Toronto City Council approved the implementation of its own VHT program starting in January 2022.

In Q1-2023, Vancouver City Council will review additional EHT policies, including altering EHT exemptions to improve fairness, exploring ways to reduce the large number of short-term rental properties and examining how the federal government’s anti-flipping measures may affect the EHT. Members will also consider how increasing the rate to 10 per cent might further increase rental stock.

 

© 2020 BuzzBuzzHome Corp.

GTA home prices cool from February highs heading into spring

Michelle McNally
Livabl

Homebuyers looking in the Greater Toronto Area are no stranger to high prices. Since the COVID-19 pandemic started more than two years ago, prices in Toronto alone have increased over 20 per cent.

Yet, as the market hits peak springtime, communities across the Toronto region are actually noticing that home prices are trending downward.

New data released by HouseSigma shows that GTA home prices have been cooling from their record February numbers over the past several weeks.

From February to April 19th, the median sold price of a freehold townhouse fell the most compared to other property types, decreasing 22.6 per cent from $1.24 million to $960,000.

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Median sold prices for GTA detached and semi-detached properties dropped at a similar pace from February to April, decreasing 12.1 per cent and 13.5 per cent over the near two-month period down to $1.45 million and $1.15 million, respectively. Between February and April, median sold prices for GTA condos reported the smallest decrease, falling 6.8 per cent from $740,000 to $690,000.

By community, some of the most notable price declines were noted in municipalities surrounding the City of Toronto. Located at the top of the GTA, Brock saw the median price of a detached home fall 29.25 per cent between February and April, an approximately $310,000 difference as prices dropped from $1.06 million to $750,000.

Similarly, median prices were down 20.98 per cent, 19.44 per cent and 15.9 per cent in Georgina, East Gwillimbury and King. In the GTA’s larger communities — Toronto, Mississauga and Markham — median prices dropped 9.08 per cent, 11.1 per cent and 11 per cent over the almost two-month timeline.

In all of the 25 communities HouseSigma analyzed in its report, prices grew in only one municipality. From February to April 19th, the median price of a detached house in Burlington increased from $1.56 million to $1.59 million, a 1.92 per cent jump.

While the selling price of homes have dropped, GTA properties are now spending double the amount of time on the market. When aggregated, the median number of days a Toronto home stays available for sale has increased from six days in February to 12 days in April.

Hungry home buyers might also be happy to have more selection now compared to a couple of months ago. The number of properties available for sale on the market rose from 6,886 homes in February to 12,120 properties in April.

In a recent RBC Economics report, Robert Hogue, RBC’s assistant chief economist, said that deteriorating affordability and higher interest rates would help to curve home prices, predicting that prices will peak this spring before weakening throughout the year. That said, stronger-than-expected gains made in 2022 so far will hike the annual average price for 2022 higher than predicted, up 8.1 per cent compared to 6.2 per cent. However, the 2023 annual average will likely fall 2.2 per cent instead of rising 0.8 per cent like initially predicted.

Compared to other markets, Canada’s most expensive communities — like Toronto — will feel the pain of rising rates the most.

“This will translate into larger annual price declines in 2023 in British Columbia and Ontario,” said Hogue. “By comparison, we expect activity and prices to be more resilient in Alberta, where local markets have more catching up to do following a prolonged slump before the pandemic.”

 

© 2020 BuzzBuzzHome Corp.

Poll: FHSA impact on first-time buyers’ purchases will likely be muted

Ephraim Vecina
Western Investor

Many Canadians say they will not be able to muster enough funds for the federal government’s tax-free savings program

 More than seven out of 10 Canadians (72.07%) who do not yet own a home, but want to eventually, think that the federal government’s First Home Savings Account (FHSA) will have little to no positive impact on their ability to buy their first home, according to a poll by fintech Hardbacon.

The FHSA was announced as part of Budget 2022’s commitments to improving the housing situation. Through this tax-free program, Canadians 18 to 40 years old are allowed to deposit $8,000 annually with a lifetime contribution of $40,000, helping them save for the down payment on their first home.

Of the 88.6% of respondents who said that they want to enter into homeownership, 70% want to use the FHSA. However, of the 30% who do not plan to use the FHSA, 54% said that this is because they do not understand the advantages of the program, while the other 46% said that they won’t have sufficient funds to save to contribute.

Read more: NDP leader pledges aid for first-time buyers and boost for housing supply

“The FHSA is a tax-free savings account, but it doesn’t mean that it actually makes saving for a down payment any easier, especially in hotter real estate markets. What the survey found is that the most effective source of a down payment is the Bank of Mom and Dad. Still, not everyone is that fortunate,” said Hardbacon’s Stefani Balinsky.

Nearly 83% of respondents do not expect any financial assistance from family when it comes to their first home purchase. Of this segment, 32.8% will be cutting down on their expenses so that they can put money into their FHSA in 2023, while 16.8% will reduce their RRSP contributions, 12.8% will reduce their TFSA deposit, and 9.6% will draw funds from their TFSA.

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