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Justin da Rosa
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Nova Scotia has released an investor cap proposal for Offering Memorandum (OM) investments that could sweep the nation, according to the Canadian Mortgage Brokers Association which is fighting back against the plan that it believes will negatively impact lenders.

“You may recall that in March of 2014 the securities regulatory authorities of Alberta, Saskatchewan, Ontario, New Brunswick and Quebec published for comment proposed amendments to National Instrument 45-106 Prospectus Exemptions regarding section 2.9 Offering Memorandum,” Samantha Gale of wrote in an email to MortgageBrokerNews.ca on behalf of CMBA. “The proposal included a cap of $30,000 for eligible investors relying on the offering memorandum exemption, so that they would not be able to invest any more than $30,000 in all offering memorandum investments combined.”

The CMBA submitted a letter to Nova Scotia Securities Commission on Monday urging it to reconsider its proposal, which could negatively impact mortgage investment corporations – lenders that rely on OM exemptions to raise mortgage funds.

CMBA wrote in the letter:

The impact of the loss of MICs of in Nova Scotia would be profound and would include:

• The loss of employment from mortgage industry members and support staff who would no longer be arranging and administrating mortgages – also the loss of construction related employment from developers and builders who would not be able to finance new projects;
• The loss of safe and reliable investment opportunities for investors;
• The removal of private mortgage lenders from the marketplace, which will make it more challenging for borrowers to find available mortgage capital but also push private lending underground where there is no regulation; and
• Higher borrowing costs and less access to mortgage capital will lead to an increase in foreclosure rates and borrower defaults.

In the letter, the CMBA urges the regulator to look to B.C. for guidance on how to handle OM exemptions.

“Has the NSSC explored the British Columbia OM model and its success in achieving consumer protection without the intrusive restrictions contained in the NSSC proposal?” CMBA wrote. “If the NSSC has not done so, we would urge them to review BC’s OM model prior to opting for a significantly more restrictive OM regime.”

Copyright © 2015 Key Media Pty Ltd

Jordan Maxwell
Other

Chinese investors could be looking to put more capital into the Canadian real estate market with the Chinese stock market on the verge of collapse, according to an industry vet.

“The Chinese people who may put more money in Vancouver market likely those already immigrated to here or in the process of immigrating,” Layla Yang, a real estate agent with ReMax in the Greater Vancouver area.

“Toward Chinese people in China, Vancouver (and other places in Canada) is not only the place they can invest also other countries such as Australia, United State and some European countries etc.  Of course, Canada has become always their top choice.”

Her comments come as the Shanghai Composite Index fell 32 per cent and the more volatile, tech-oriented Shenzhen Composite Index has dropped 40 per cent after peaking on June 12. When stock prices collapse, they prompt margin calls that require investors to either put up more money against the loans or sell the stocks, which only accelerates the selloff.

On Wednesday, China’s central bank vowed to provide liquidity to help a state-backed margin finance company try to stabilize the market, as a new $40 billion (250 billion yuan) plan was announced to foster growth in areas of the economy that need it most.

However, some are calling for investors to reassess their portfolios in the wake of a potential financial crash.

“With the Chinese stock market losing a third of its value since mid-June, which is about equivalent to the UK’s entire economic output last year, or in other terms the GDP of Greece every two days for the last 10 days, this has all the makings of morphing into a major financial crisis,” Nigel Green, the founder and CEO of deVere Group, said in a release to CREW.

“Investors with the most diversified portfolios stand to lose the least. Geopolitical events like this highlight once again the need for multi asset investing, across regions and asset classes, as a way of reducing the adverse consequences of such events.”

Copyright © 2015 Key Media Pty Ltd

 

Mike Howell
Van. Courier

I know this will blow your mind, but what the heck: There is politics involved in the redevelopment of the Little Mountain public housing site.

“No,” you say.

“Well yeah,” I say.

“What’s your proof?” you ask.

Well, just give me a few paragraphs to give you some background on the Little Mountain saga before I present my case…

Many of you are probably aware that developer Holborn Group bought the big piece of property near Queen Elizabeth Park almost eight years ago with plans to redevelop the site.

You’re also probably aware more than 200 new homes will be built for social housing and be mixed in with a whole lot more private condos.

Last time I checked, I believe 50 or so of the new social housing units were built. So what the heck is happening with the rest of the project? What’s the delay? Will it ever be built?

Yes, many questions.

It’s a topic that was on Housing Minister Rich Coleman’s mind when I interviewed him Monday. I was asking him about the B.C. government’s commitment to build more housing for homeless people. I never brought up Little Mountain, but he did and sent this message to Vancouver city hall.

“I’d like to see them get the zoning of Little Mountain done,” he said. “We’ve already spent $300 million on Little Mountain in the city of Vancouver and I wouldn’t mind seeing that [project] start construction before the end of the year. There’s another 232 units there, or something like that, that would be available for people for affordable social housing. So those sort of things need to get done, too.”

Interesting, right.

The next day I was at city hall where city council was talking about homelessness and we heard Mayor Gregor Robertson — again — say the province and the feds have to do more to build more social housing.

But we also heard NPA Coun. Melissa De Genova ask what was going on with the Little Mountain project. She got into a bit of an exchange with city manager Penny Ballem.

De Genova: “It’s ironic that we’re standing here trying to find ways to house people but the Little Mountain site hasn’t been mentioned, it hasn’t come up. And I just drove by and it’s still sitting in its state eight years later. So I’m just wondering if you can give me an update on that?”

Ballem: “The Little Mountain site, as you know, took a long time to have the deal done with the provincial government. It has been a long time in the application for a rezoning, due to the fact there have been a lot of challenges with the developer understanding his obligations under the deal with the province. So it is now in process toward a rezoning process that will be coming to council, hopefully, by the early fall. But it has been a very, very difficult process and we totally share your frustration with that.”

DeGenova: “I understand that there’s at least [another] 181 units of non-market, or possibly social housing, that are planned on the Little Mountain site. And considering the [homeless] report, and what we’re hearing and the dire need, is there any way to move that forward faster?”

Ballem: “Well, that would be a good question to be put to minister Coleman because I think that the whole issue around Little Mountain has been the ability of the province and the developer to understand the construct, which is the developer must pay for replacement of all the social housing that was on that site.”

DeGenova: “Is it or is not correct that to build those units, we are waiting on the rezoning at the city level?”

Ballem: “The issue really is that the developer, in order to get a rezoning report coming forward to council, has to put forward their construct of how they’re going to replace that housing. That has been the issue. Because I’ve been part of that discussion for six years now and it’s extraordinarily frustrating.”

Round and round we go.

Meanwhile, this year’s homeless count statistics released Tuesday showed 1,746 people were without permanent housing in Vancouver, with 488 living on the street.

© Copyright ® Vancouver Courier

Canadian Housing Starts

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New home construction in Canada increased 3 per cent in June to 202,818 units at a seasonally adjusted annual rate (SAAR).  The six-month trend in Canadian housing starts of 184,000 units SAAR was up slightly and is in-line with Canadian household growth. 

Housing starts in BC rose from just over 24,000 units SAAR in May to 35,000 units SAAR in June.  On a year-over-year basis, housing starts jumped 30 per cent. Single-detached starts were 12 per cent higher year-over-year while multiple unit starts were up 38 per cent compared to this time last year. Year-to-date, housing starts in BC are up 15 per cent. 

Looking at census metropolitan areas (CMA) in BC, total starts in the Vancouver CMA were up 39 per cent year-over-year in June as both single and multiple unit starts posted double digit increases. In the Victoria CMA, a sharp decline in multiple units starts dragged new home construction down 29 per cent year-over-year. Total housing starts in the Kelowna CMA were up 7 per cent year-over-year in June as strength in multiple unit starts overcame a dip in construction of single units. Housing starts in the Abbotsford-Mission CMA spiked 37 per cent higher compared to June 2014, propelled by stronger single unit starts. 

Copyright ©2015 BCREA

 

Winning and losing luxury markets released

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Sales of homes in excess of $1 million were concentrated in two of Canada’s most popular housing markets, which saw trajectories pointing upward for top-tier real estate.

“It really comes down to the two biggest markets, which are obviously Toronto and Vancouver. We’re seeing a lack of supply and huge demand,” Ross McCredie, president and CEO of Sotheby’s International Realty told MortgageBrokerNews.ca. “Most of it is coming for foreign buyers, especially for homes above $4-million while well-to-do baby boomers are buying up homes in the $1-million to $2-million range.”

Toronto saw an increase of 56 per cent in sales of houses in excess of $1 million year-over-year while Vancouver enjoyed its own 48 per cent increase.

“Tightening inventory combined with heightened demand in both markets contributed to a greater proportion of properties sold above list price in both markets,” Sotheby’s wrote in its Top-tier Real Estate Report, released Thursday morning. The report focuses on sales made between January 1 and June 30 of this year.

However, not all market fared as well as Toronto and Vancouver when it comes to luxury real estate. The sheer shortage of supply in comparison with two of Canada’s most dominant markets has also to do with it, but recent events in the political scene has also shaped activity in the market.

“In Calgary many people are taking a wait and see approach due to the NDP government,” McCredie said. “We had the same government for more than 60 years and I think it’s dawned on people that things have changed so they’re waiting to see what’s going to happen before diving in.”

In total, only 289 properties were sold for over $1 million in Q1 of this year, a 36 per cent decrease year-over-year.

“Sales volume dropped across all price categories, with the $1–2 million, $2–4 million, and $4 million-plus categories decreasing 35 per cent, 43 per cent, and 50 per cent respectively,” Sotheby’s wrote.

For its part, Montreal reported fairly stable sales.

Copyright © 2015 Key Media Pty Ltd “Overall, sales above $1 million increased 20 per cent with a total of 274 properties (condominiums, attached homes and single family homes) sold from January 1 to June 30, 2015, compared to the 228 units sold during the same period in 2014,” Sotheby’s wrote.

Copyright © 2015 Key Media Pty Ltd

Steve Randall
Other

Although the conversation may prove difficult for many, a new survey shows that 51 per cent of Canadians expect to leave wealth for their children and other family when they die. A new survey from mortgage lender CIBC shows that transferring the family cottage to children while the parents are still alive can be a cause of tension as the two generations may have differing views on how the property should be used. Other areas that spark disagreement include the use of trusts for inheritance, with children taking their use as their parents believing they won’t use the money wisely; giving to charity; and measures taken to avoid probate. Despite the potential issues the poll shows that 79 per cent of Canadians have not discussed the implications of inheritance with a professional advisor.   

Copyright © 2015 Key Media Pty Ltd

Homes above $4 million see 71 per cent rise over previous year and $1m-plus townhome sales more than double as high-end market continues to rise

Joannah Connolly
Other

Sales of $1 million-plus homes in the city of Vancouver continued their upward trajectory in the first half of 2015 compared with last year’s first half, according to a Sotheby’s International Realty report released July 9.

A total of 2,465 properties (including condominiums, attached properties and single-family homes) sold over $1 million across Vancouver, a rise of 48 per cent compared with the same period of 2014.

Sales in the $1–2 million range increased 43 per cent year-over-year, with 1,442 transactions between January 1 and June 30, 2015. Properties in the $2–4 million category also rose 52 per cent to 804 transactions, and the $4 million-plus category saw a 71 per cent year-over-year increase to 219 units sold.

The report said, “High consumer confidence, heightened foreign demand, economic growth, low interest rates and the highest sales-to-active listing ratio that Vancouver has seen since 2007 fuelled an already strong market. In prime detached single family home neighbourhoods, this led to an increase in bidding wars and sales over asking price.”

Although Sotheby’s defines homes over $1 million as “luxury” properties for the purposes of its nationwide report, the international brokerage pointed out that, with the benchmark price for a detached home in Metro Vancouver exceeding $1.1 million in June 2015, the price-point for luxury real estate has also increased.

“While entry pricing for luxury housing varies widely by neighbourhood, industry experts estimate that the approximate starting price range for a luxury detached single-family home in the city of Vancouver is $3.5–$4 million for a 4,000-square-foot, three- to four-bedroom property,” said the report.

Broken down by property type, sales of townhomes and other attached properties over $1 million in Vancouver more than doubled in January 1 to June 30, 2015 with 118 per cent growth compared with the same period in 2014, clearly indicating the increasing trend for high-end townhomes in the city.

Single-family detached homes continued to see the highest total sales of any property type above the $1 million mark in Vancouver, with 1,921 units sold over $1 million in the first half of 2015, an increase of 46 per cent compared with the same period last year.

Condo sales over $1 million increased by 30 per cent compared with 2014’s first six months, representing the lowest year-over-year percentage gain of all residential home types over $1 million.

Greater Toronto also saw strong “luxury” home sales in the first half, with $1 million-plus sales increasing 38 per cent year over year.

“Luxury real estate in both the GTA and Vancouver had benchmark-setting starts to 2015,” said Ross McCredie, Sotheby’s president and CEO. “Both cities face growing domestic and international demand for top-tier housing, along with inventory shortages in prime neighbourhoods, particularly for single family homes.”

However, Calgary’s $1 million-plus home sales fell 36 per cent, with energy price declines leading to the first drop in luxury home sales after several years of growth.

To download the full report, click here.

© 2015 Real Estate Weekly

Justin da Rosa
Other

Sales of homes in excess of $1 million were concentrated in two of Canada’s most popular housing markets, which saw trajectories pointing upward for top-tier real estate.

“It really comes down to the two biggest markets, which are obviously Toronto and Vancouver. We’re seeing a lack of supply and huge demand,” Ross McCredie, president and CEO of Sotheby’s International Realty told CREW‘s sister publication, MortgageBrokerNews.ca.

“Most of it is coming for foreign buyers, especially for homes above $4-million while well-to-do baby boomers are buying up homes in the $1-million to $2-million range.”

Toronto saw an increase of 56 per cent in sales of houses in excess of $1 million year-over-year while Vancouver enjoyed its own 48 per cent increase.

“Tightening inventory combined with heightened demand in both markets contributed to a greater proportion of properties sold above list price in both markets,” Sotheby’s wrote in its Top-tier Real Estate Report, released Thursday morning. The report focuses on sales made between January 1 and June 30 of this year.

However, not all market fared as well as Toronto and Vancouver when it comes to luxury real estate. The sheer shortage of supply in comparison with two of Canada’s most dominant markets has also to do with it, but recent events in the political scene has also shaped activity in the market.

“In Calgary many people are taking a wait and see approach due to the NDP government,” McCredie said. “We had the same government for more than 60 years and I think it’s dawned on people that things have changed so they’re waiting to see what’s going to happen before diving in.”

In total, only 289 properties were sold for over $1 million in Q1 of this year, a 36 per cent decrease year-over-year.

“Sales volume dropped across all price categories, with the $1–2 million, $2–4 million, and $4 million-plus categories decreasing 35 per cent, 43 per cent, and 50 per cent respectively,” Sotheby’s wrote.

For its part, Montreal reported fairly stable sales.

“Overall, sales above $1 million increased 20 per cent with a total of 274 properties (condominiums, attached homes and single family homes) sold from January 1 to June 30, 2015, compared to the 228 units sold during the same period in 2014,” Sotheby’s wrote.

Copyright © 2015 Key Media Pty Ltd