Penticton 5.2-acre commercial-industrial assembly sells for $12.6M

Western Investor Staff
Western Investor

Three-lot assembly includes a 244-unit mini-storage facility, three additional commercial retail units totalling 12,500 square feet, plus additional secure vehicle storage.

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

 

Property type: Commercial-industrial

Location: 270-290-360 Waterloo Ave Penticton, B.C.

Number of properties: 3

Property size: 5.2 acres (total)

Sale price: $12.6 million

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

Brokers: John Green and Keith Jakes

 

© 2022 Western Investor

Gastown Heritage street-front loft commercial sells for $3.34 million

Western Investor Staff
Western Investor

Two showpiece retail/office strata sites at Koret Lofts, East Cordova Street, Vancouver total 2,807 square feet.

Corbel Commercial Inc., Vancouver, for Western Investor

 

Property type: Strata commercial

Location: 57 and 63 East Cordova Street, Vancouver

Property size: 2,807 square feet (total approx.)

Number of units: 2

Zoning: HA-2 (Gastown Historic Area)

Sale price: $3.34 million

Brokerage: Corbel Commercial Inc., Vancouver

Brokers: Marc Saul and Robert Tham

 

© 2022 Western Investor

Canada’s recession risk running too high, says Desjardins economist

Ephraim Vecina
other

Rate jumps point to the bank’s awareness of the need to pull inflation back to sub-3% levels

With its latest outsized rate hike, the Bank of Canada must “stop sugar-coating things” and respond accordingly to Canada’s higher risk of recession compared to other developed economies, said Jimmy Jean, chief economist and strategist at Desjardins.

“I’m going to be looking to how honest the central bank is with Canadians as to what they can expect,” Jean said in an interview with BNN Bloomberg. “We have the second highest private sector debt to GDP in the world so certainly our economy is more sensitive than many others to those interest rate increases.

“I think it’s time for the Bank of Canada to stop sugar coating things and admit that we’re at elevated risk for a recession – and we do expect a recession, although a mild one, early in 2023.”

Read more: How high could the Bank of Canada’s interest rates get?

Jean added that the rate hikes are further evidence that the bank is already highly aware of the need to pull inflation back to sub-3% levels. The economist is anticipating the high-rate environment to persist through 2023 at least.

The BoC’s rate hikes this year “by any historical standard is a very aggressive tightening cycle, but what the bank is saying today is that this is not over,” Jean told CBC News.

“We’re already having the highest interest rates we’ve had since 2007 and it’s going to be very difficult to think that this won’t have a high impact on consumer budgets and even possibly on things like insolvencies.”

 

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Montreal housing market – continuous market slowdown underway

Ephraim Vecina
other

The region also saw its largest volume of listings year-to-date

The Montreal housing market is showing signs of continuous slowdown, building on trends seen during the past few months, according to the Quebec Professional Association of Real Estate Brokers.

The market saw a total of 2,681 home sales in August, representing a sharp 20% annual decrease. The market also continues to slow down, and more consistently than in the previous months of 2022 (except for January), QPAREB said in its latest report.

“For several months now, the markets in the major sectors of the Montreal CMA have been moving at different rates, even though all sectors have seen their number of residential transactions drop for the month of August 2022,” QPAREB added.

The North Shore experienced the smallest deceleration (down by 3%), followed by the South Shore (down by 10%). Double-digit decreases were the norm in August, with the sharpest drops seen in Saint-Jean-sur-Richelieu (down by 34%), the Island of Montreal (down by 31%), Laval (down by 28%), and Vaudreuil-Soulanges (down by 23%).

Read more: Canada housing market – what direction is it headed in?

Montreal saw its largest volume of listings year-to-date in August, with a 37% increase in active listings compared to the same period last year.

“August is usually characterized by a lower volume of properties coming on the market than most other months of the year,” said Charles Brant, director of the QPAREB’s market analysis department. “This is a situation that clearly characterizes and confirms a drastic change in the market’s direction.

“The magnitude of the increase in mortgage interest rates is beginning to be reflected in a more incisive way, with transactional activity slowing down further and the inventory of properties put up for sale building up. The market’s rebalancing process is therefore underway, albeit in a much more gradual manner than in the other Canadian metropolises.”

Median prices stood at $525,000 for single-family homes, at $385,000 for condo units, and at $697,000 for plexes.

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Bank of Canada announces another big rate hike

Fergal McAlinden
other

The central bank continues to take aggressive action on inflation

 The Bank of Canada has increased its benchmark rate by 0.75%, marking a fifth consecutive hike in its latest effort to get surging price growth under control.

The central bank’s move is its first three-quarter-basis-point jump of 2022, bringing its trendsetting policy rate to 3.25% – a full three percentage points above the rock-bottom level it occupied from the beginning of the COVID-19 pandemic to March of this year.

Still, the increase was also a smaller hike than that contained in the Bank’s previous announcement, with that July 13 decision seeing an unexpected 1% jump to combat inflation that has been spiking ever upwards in recent months.

The Bank’s announcement means that the benchmark rate is now above the so-called neutral rate, the level at which economic growth is neither boosted nor constrained, which is currently between 2% and 3%.

Read next: Canada housing market – what direction is it headed in?

Such a move had been widely anticipated, with Canadian Imperial Bank of Commerce (CIBC) executive director and senior economist Karyne Charbonneau indicating to Canadian Mortgage Professional in the wake of the Bank’s last announcement that the policy rate was likely to peak at 3.25%.

“We don’t think there’s space for this type of hike [one percentage point] anymore,” Charbonneau said in July. “So probably 0.75%, maybe in September, and then take a break… We think that by then, the economy will be slowing significantly on these higher interest rates and still-high inflation.”

The banking giant’s managing director and head of fixed income Ian Pollick reinforced that view in a late-August note to clients, indicating that a “narrative shift” was on the way after the Bank of Canada’s planned September hike.

The Canadian economy saw its growth stumble in the second quarter of the year, moving upwards at an annualized rate of 3.3% in Q2 – a figure that was lower than the Bank of Canada’s 4% expectation and analysts’ forecasts of 4.4%.

The Bank of Canada is scheduled to make its next announcement on its benchmark policy rate on October 26.

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Bank of Canada announces another big rate hike

Fergal McAlinden
other

Canada stress test – Real estate board says it’s the right time to re-examine it

Ephraim Vecina
other

Major markets are seeing stronger housing market activity recently The Toronto Regional Real Estate Board has called on the federal government to re-evaluate the stress test in light of a resurgence in housing market activity, seemingly undeterred by price spikes.
John DiMichele, CEO of the TRREB, said that the Office of the Superintendent of Financial Institutions should deliberate on whether the current stress test remains applicable, considering the prevailing environment of economic and fiscal volatility.
“Is it reasonable to test home buyers at two percentage points above the current elevated rates, or should a more flexible test be applied that follows the interest rate cycle?” DiMichele said.
“In addition, OSFI should consider removing the stress test for existing mortgage holders who want to shop for the best possible rate at renewal rather than forcing them to stay with their existing lender to avoid the stress test. This is especially the case when no additional funds are being requested.”
Read more: Mortgage lenders’ results show concern in Canada
Kevin Crigger, president of the TRREB, argued that the Liberal government is perfectly placed to address the potential crisis.
“While higher borrowing costs have impacted home purchase decisions, existing homeowners nearing mortgage renewal are also facing higher costs,” Crigger said. “There is room for the federal government to provide for greater housing affordability for existing homeowners by removing the stress test when existing mortgages are switched to a new lender, allowing for greater competition in the mortgage market.
“Further, allowing for longer amortization periods on mortgage renewals would assist current homeowners in an inflationary environment where everyday costs have risen dramatically.”

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Bank of Canada Announces Fifth but Not Final Interest Rate Increase for 2022

Patti Cosgarea
other

 The Bank of Canada (BoC) announced its fifth interest rate increase of the year, raising rates by another 75 basis points. This follows its July announcement where the Bank announced an interest rate hike of 1 percentage point, the largest interest rate increase since August 1998. BoC also cautioned that interest rates will continue to rise in its most recent announcement stating: “Given the outlook for inflation, the Governing Council still judges that the policy interest rate will need to rise further. Quantitative tightening is complementing increases in the policy rate.”

What to Expect When Qualifying for a Mortgage

The rate hike means that the prime lending rate at all financial institutions will increase by 75 basis points. Following the previous interest rate announcement, most prospective fixed-rate borrowers faced stress tests with rates around 7% and 6% for variable-rate borrowers. 

• Read: How to Quickly Build Your Credit Score Before Applying for a Mortgage in Canada

This interest rate announcement further impacts the rate borrowers will be tested against. Financial experts suggest that Canadians shopping for a mortgage should weigh all their options and remember that borrowers will often qualify for more if they choose a variable rate instead of a fixed rate. 

 

The Impact on Canadian Real Estate

BoC’s policy rate is now at 3.25% and experts are predicting that future increases will be smaller. Throughout this year, we’ve seen the market shift from what was primarily a seller’s market throughout the peak of the pandemic to many cities being in more balanced or buyers-market territory. “Rising interest rates put downward pressure on real estate markets. Following this rate increase announcement, we may see more cities transition to buyer’s markets” explains Lauren Haw, CEO and Broker of Record of Zoocasa. This means that buyers may have more negotiating power during their home search. If you’re planning to enter the market this fall, work with a local real estate agent to understand which markets will favour you in your home-buying journey.

• Read: Variable or Fixed-Rate Mortgage? 4 Tips to Help You Decide Which to Choose While Interest Rates are Rising

A Reminder to Homeowners with Existing Variable-Rate Mortgages

Canadians with existing variable-rate mortgages will see their rate rise in line with this announcement and should work with their mortgage specialist to plan for further rate increases. If you’re a homeowner with a variable-rate mortgage, you can use our free mortgage calculator to determine what your new monthly payments will be. Some lenders offer fixed payments with variable-rate mortgages which can be a great option to help homeowners budget as interest rates continue to rise. If you already have a variable-rate mortgage, speak to your mortgage broker to learn if you can switch to fixed payments mid-term.

 

© 2015 – 2022 Zoocasa Realty Inc.

Metro Vancouvers housing market sees fewer home buyers and sellers in August

REBGV Staff
REBGV

 Metro Vancouver’s housing market is experiencing a quieter summer season marked by reduced sale and listing activity.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,870 in August 2022, a 40.7 per cent decrease from the 3,152 sales recorded in August 2021, and a 0.9 per cent decrease from the 1,887 homes sold in July 2022.

Last month’s sales were 29.2 per cent below the 10-year August sales average.

“With inflationary pressure and interest rates on the rise, home buyer and seller activity shifted below our long-term seasonal averages this summer. This shift in market conditions caused prices to edge down over the past four months.”

Andrew Lis, REBGV Director, economics and data analytics

There were 3,328 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in August 2022. This represents a 17.5 per cent decrease compared to the 4,032 homes listed in August 2021 and a 16 per cent decrease compared to July 2022 when 3,960 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,662, a 7.3 per cent increase compared to August 2021 (9,005) and a 6.1 per cent decrease compared to July 2022 (10,288).

“Home buyers and sellers are taking more time to assess what this changing landscape means for their housing needs,” Lis said. “Preparation is critical in today’s market. Work with your Realtor to assess what today’s home prices, financing options, and other considerations mean for you.”

For all property types, the sales-to-active listings ratio for August 2022 is 19.4 per cent. By property type, the ratio is 12.2 per cent for detached homes, 25.3 per cent for townhomes, and 24.8 per cent for apartments.

Sales-to-active listings ratio – August 2022

Detached homes

12.2%

Townhomes

25.3%

Condominiums

24.8%

Total 19.4%

Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,180,500. This represents a 7.4 per cent increase over August 2021 and a 2.2 per cent decrease compared to July 2022.

Sales of detached homes in August 2022 reached 517, a 45.3 per cent decrease from the 945 detached sales recorded in August 2021. The benchmark price for a detached home is $1,954,100. This represents a 7.9 per cent increase from August 2021 and a 2.3 per cent decrease compared to July 2022.

Sales of apartment homes reached 998 in August 2022, a 38.8 per cent decrease compared to the 1,631 sales in August 2021. The benchmark price of an apartment home is $740,100. This represents an 8.7 per cent increase from August 2021 and a two per cent decrease compared to July 2022.

Attached home sales in August 2022 totalled 355, a 38.4 per cent decrease compared to the 576 sales in August 2021. The benchmark price of an attached home is $1,069,100. This represents a 12.7 per cent increase from August 2021 and a 2.5 per cent decrease compared to July 2022.

 

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Feds announce $1.4 billion loan for Squamish Nation’s Senakw project

Dan Fumano
The Vancouver Sun

The Sen̓áḵw project will provide rental homes for both Squamish Nation members as well as non-Indigenous residents.
Sḵwx̱wú7mesh Úxwumixw Council Chairperson Khelsilem chats with Prime Minister Justin Trudeau at an announcement for Squamish Nation’s Sen̓áḵw development in Kitsilano on Tuesday, Sept. 6. The federal government announced a $1.4 billion low-interest construction loan for the project. Photo by NICK PROCAYLO /PNG
The government of Canada will help finance the Squamish First Nation’s Sen̓áḵw development in Kitsilano by providing a $1.4 billion low-interest construction loan.
Prime Minister Justin Trudeau announced the loan Tuesday morning at a news conference hosted by Squamish Nation on the site of the planned project.
“This project is the largest First Nations economic partnership in Canadian history. Initiatives like these are reconciliation in action,” Trudeau said. “It’s part of our vision for a better future for everyone.”

Prime Minister Justin Trudeau announces a $1.4 billion low-interest construction loan for Squamish Nation’s Sen̓áḵw project on Tuesday, Sept. 6. Photo by NICK PROCAYLO /PNG
The Sen̓áḵw project is slated to be a high-density development with 6,000 homes in 11 towers, built on a four-hectare patch — equivalent to about four city blocks — of reserve land around the south end of the Burrard Bridge. The loan announced Tuesday will finance the construction of the first two of four planned phases of the project, about 3,000 homes.
The low-interest loan will be the largest loan so far provided through the Canada Mortgage and Housing Corporation’s rental construction financing program, which was launched in 2017 to support rental construction across Canada with a target of more than 71,000 new rental homes.

The Squamish Nation reclaimed the property, a small piece of what was a longtime First Nations community in the area, in 2003 after a long legal battle. Sen̓áḵw is being developed by the Squamish First Nation in partnership with Westbank, one of Vancouver’s biggest real-estate development firms, and initial work on clearing the site began last month.
The Sen̓áḵw project has been publicly praised by municipal, provincial and now federal leaders, as well as many Vancouverites who welcome the large number of transit-oriented rental homes close to downtown. But some residents, including in the low-density Kits Point neighbourhood next to Sen̓áḵw, have raised concerns about the size and scale of the development, which will include towers of up to 59 storeys.

Asked how he would respond to those concerns and whether residents of Canada’s big urban centres should expect more similar high-density developments in the future, Trudeau said he has heard from many Vancouverites affected by housing unaffordability.
“This investment, this creation of thousands upon thousands of new affordable rental units — a number of them low-income rental units — is going to make a huge difference in the lives of thousands of families.
“That will be a big step forward for Vancouver,” Trudeau said. “And I know that this is a good thing for the city, the province, and for the country.”

Sḵwx̱wú7mesh Úxwumixw Council Chairperson Khelsilem speaks during a press conference for Squamish Nation’s Sen̓áḵw project. Photo by NICK PROCAYLO /PNG
The affordability criteria for the CMHC’s rental construction financing initiative states that 20 per cent of a development’s units must have below-market rents. Of the 6,000 rental homes at Sen̓áḵw, the Squamish Nation is planning for 1,200 units — or 20 per cent — to have below-market rents.

Khelsilem, chair of the Squamish Nation council, began his remarks by acknowledging the Squamish families who lived on the site and were forcibly evicted in the early 20th century when the village was burnt down.
Khelsilem said that when the entity today known as the Squamish Nation formed in 1923 out of the amalgamation of 16 different bands, they combined their financial accounts together, and “all their financial wealth that had been gathered up to that point, today it would have been worth approximately $1.2 million.”
The Sen̓áḵw project is expected to generate more than $10 billion for future generations of the Squamish Nation, Khelsilem said. “Wealth that we will generate from our lands to support the aspirations, the dreams, the hopes of Squamish people … The hope that I think every culture has, that the next generation will have a better life than the one we did.”

© 2022 Vancouver Sun