Archive for July, 2019

Fed announces interest rate decision

Wednesday, July 31st, 2019

The Federal Reserve reduced interest rates

REP

The Federal Reserve reduced interest rates for the first time since the financial crisis and hinted it may cut again this year to insulate the record-long U.S. economic expansion from slowing global growth.

Central bankers voted, with two officials dissenting, to lower the target range for the benchmark rate by a quarter-percentage point to 2%-2.25%. The shift was predicted by most investors and economists, yet will disappoint President Donald Trump, who tweeted on Tuesday he wanted a “large cut.’’

“In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the committee decided to lower’’ rates, the Federal Open Market Committee, led by Jerome Powell, said in a statement following a two-day meeting in Washington. It also noted that “uncertainties” about the economic outlook remain.

Officials also stopped shrinking the Fed’s balance sheet effective Aug. 1, ending a process that very modestly tightens monetary policy and was previously scheduled to come to a close at the end of September.

Policy makers appeared open to another cut as early as September when they next convene, while sticking with wording in their statement that preserves their options.

“As the committee contemplates the future path of the target range for the federal funds rate, it will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion,” they said.

Kansas City Fed President Esther George and Boston’s Eric Rosengren voted against the cut. The statement said they “preferred at this meeting to maintain the target range for the federal funds rate.” It was the first time since Powell took over as chairman in February 2018 that two policy makers dissented.

Investors had forecast the Fed to continue easing monetary policy this year, with futures pricing the key rate to fall about another half-point by January. U.S. stocks rose to a record last week in anticipation of easier money, while the yield on two-year Treasuries has undershot 2% since May.

While the domestic economy has performed relatively well, the Fed cut amid concern that softness abroad threatens the decade- long U.S. expansion. Trump’s trade war with China is hurting foreign demand. Data released earlier Wednesday showed the pace of quarter-over-quarter growth in the euro area slowed by half in the latest three months to 0.2%.

In the U.S., after growing 2.5% last year, fuelled by now-fading tax cuts and higher government spending, the economy expanded at a 2.1% annualized pace in the second quarter. The trade dispute was blamed for a manufacturing slowdown and the first drop in business investment since 2016.

In their assessment of the US economy, officials made only minor changes to their statement language.

Powell has repeatedly said the Fed’s “overarching goal’’ is to keep growth going. Acting now, when the central bank has less room to pare rates than in past downturns, is partly aimed at getting ahead of any potential slump.

Lacklustre inflation also offered the Fed space and reason to ease. Its preferred price gauge, excluding food and energy, rose 1.6% in June from a year earlier and hasn’t met the Fed’s 2% target this year.

Trump is unlikely to be satisfied as he puts the economy at the heart of his re-election bid. He has broken with convention and undermined the Fed’s political independence by lobbying it to loosen policy and publicly questioning his nomination of Powell as chairman.

At his press conference, Powell will almost certainly be asked if the Fed buckled to that pressure. He may also be quizzed on whether the Fed, if requested, would join the U.S. Treasury in any effort to weaken the dollar given Trump’s complaints about the currency’s value.

Limited Scope

While Trump and some investors wanted the Fed to be more aggressive, its scope for doing so is limited. Stocks are high, unemployment is around the lowest in a half-century and consumers continue to spend. At the same time, a measure of business in the Chicago region fell this month to the lowest since late 2015.

The rate reduction was the first since December 2008 when the Fed dropped its benchmark effectively to zero as it battled recession and financial crisis. It began raising borrowing costs in December 2015, doing so another eight times. Officials indicated as recently as December they intended to continue to hike this year.

They dumped that plan in January as financial markets fretted monetary policy had become too restrictive.

Fellow central banks are set to follow the Fed. Those in India, South Africa and Australia are among those to have cut this year. The European Central Bank has indicated it will do so in September.

A worry for policy makers is that a decade of easy money leaves them short of ammunition for fighting a serious downturn. That likely means governments will face demands to do more if economies keep struggling.

Copyright © 2019 Key Media Pty Ltd

Three Rs that struggling companies can use to put themselves on the comeback trail

Wednesday, July 31st, 2019

Three steps that can put struggling companies on the comeback trail

Martin Pelletier
The Vancouver Sun

Everyone loves a good comeback story, in which someone who was once mighty not only survives trials and tribulations but comes out stronger on the other side.

In today’s highly disruptive world, there are plenty of companies that have gone from top of the food chain to becoming prey themselves, but not many that have clawed their way back.

Take Sears, for example.

Though it was the Amazon of its day, with its popular catalogues and mail-order delivery system, over time it morphed into a big box store company and became overly complacent. Meanwhile, competitors such as Walmart and Amazon embraced the shift online.

Like many companies, Sears reacted not by acknowledging the changing landscape, but by doubling down on an existing strategy. Instead of reducing its store count and building out and improving its online offerings, it spent more money on the “store-within-a-store” approach and merging with other broken companies, such as Kmart.

It is an important lesson not only for companies in trouble but also for investors wondering if the broken story they own will be able to return to former glory.

For companies looking to right the ship, the following three steps are key.

Refocus

The first step is a critical one because it acknowledges there is a serious problem that isn’t being dealt with. While it sounds simple, it can be a very difficult thing in practice as it means undertaking some honest self-reflection. It also helps to distinguish between root causes and secondary issues, ensuring that improvements won’t just be temporary.

In 2012, Best Buy was struggling to grow both revenue and profits, which was reflected in its struggling share price. The problem was that employee morale fell to new lows at the same time that their product and service offerings were unable to compete with lower-cost online competitors.  So the company decided to take radical steps and refocus itself via the rollout of its Renew Blue strategy, a well-defined five-stage plan to stabilize and then increase comparable same-store sales and operating margins. This included the introduction of a price-matching strategy; the conversion of stores into both warehouses and pickup locations, which greatly improved delivery times for online shoppers; an expansion of their product offerings within their store locations; and partnerships with electronics providers to exclusively showcase new technologies. Suddenly Best Buy became an innovative and exciting place to work and employee morale quickly recovered — as did its share price.

Restructuring

A restructuring gives the company the opportunity to replace those shareholders who are not willing to support the company’s refocus. It is an important process to go through as capital partners need to be aligned with management and the plan about to be implemented.

In the case of Best Buy, a new CEO was hired along with other senior management changes, stores were shut down, unproductive regions were exited and internal costs were cut.

Recruiting

Putting a plan into action also requires the right people in the right places. Who gets brought in depends on whether the culture of the organization needs to be completely gutted or if a few tweaks will suffice.

For example, in a situation of a complete reorganization, it may be better to change out entire teams under divisional leaders, especially if there is complacency and little buy-in with the new corporate direction among existing staff. To help with the process, change is better the sooner it happens and the more transparent it is.

Finally, the larger the company, the more difficult it will be to change its ways — but it’s never impossible.

For investors, be sure to own those businesses who have their ears to the ground and who are willing to adapt to the new competitive environment.

© 2019 Financial Post

2019 Mid-Year Commercial Real Estate Update

Wednesday, July 31st, 2019

How has Commercial Real Estate Performed in the First Half of 2019, and What to Expect in the Second Half and Beyond:

other

  • The trade war between China and the United States is slowing the global economy, creating global uncertainty, and impacting Canada directly in regards to trade with China. 
  • With the Canadian dollar on the rise, Canadian exports, including oil, will be under pressure. Ultimately, this will impact economic growth later this year. 
  • Although the Trans Mountain Pipeline has now been approved, it will take time to complete construction and to ultimately benefit the oil sector in Alberta. Until then, they will have to make do with efficiencies being achieved on existing pipelines.  
  • Interest rates and debt servicing costs are no longer on the rise, however, high debt will numb the impact of any Bank of Canada rate cut later this year as they try to get Canadian consumers to spend in order to keep the economy from slowing.

 

Read Full Report

Will B.C.’s commercial real estate prices follow residential decline?

Wednesday, July 31st, 2019

Price index trend lines have tended to mirror each other, but have recently diverged

Jim Costello
Western Investor

Home prices have been in a sharp retreat in Metro Vancouver, Canada’s second largest investment market, ever since the British Columbia government introduced a foreign buyer tax in mid-2016. The concern for some is that commercial property prices will be pulled down by the residential sector. Recent price history suggests that won’t necessarily be the case, however.

When I visited Vancouver earlier this year, market participants seemed to be waiting for the next shoe to drop. With single-family homes and commercial properties competing for land, the thinking is that the decline in residential prices will bring down land values, and in turn bring down commercial property prices to the same degree as residential assets.

Historically, these price series had moved together. From 2005 to 2014 each exhibited a six per cent compound annual growth rate (CAGR) with only a few bumps and differences between the series over time.

This link lends credence to the argument that a transmission vehicle such as land prices might translate the decline in single family prices over to the commercial sector, forcing these price series to converge once again.

The convergence evident over the longer history is not true of recent trends, however:

  • Commercial property prices did not participate in the run-up of prices to the same degree as the residential sector. Given the intense interest by cross-border buyers for residential assets in Vancouver, single family home prices grew at a faster pace than commercial properties from 2014 to 2017. The Canadian Real Estate Association MLS® HPI for Vancouver single family assets grew at a 17 per cent CAGR from 2014 to 2017. A custom Real Capital Analytics (RCA) commercial property price indicator for British Columbia grew at only an 11 per cent CAGR over the same time period. This CAGR was sizeable and put B.C. in the same league as other global technology hubs like San Francisco, but prices for the residential sector moved far ahead of commercial properties.
  • When the B.C. government introduced the foreign buyers tax, residential property prices slid as a pool of buyers left the market, deterred by the tax on purchase prices (introduced at 15 per cent and since raised to 20 per cent). From January 2018 to May 2019, the Vancouver single family price index has fallen a cumulative 14 per cent. (Growth in single family home prices across Canada have been stalling too, in part because of costs related to risk management for residential mortgages.) Over the same time frame, commercial property prices for B.C. have climbed a cumulative seven per cent.

Commercial property prices in B.C. have fallen slightly in 2019 – down a cumulative one per cent into May from the end of 2018. This decline came at a time when the yield on the 10-year benchmark bond in Canada fell from 2.5 per cent to 1.5 per cent which, when combined with record low commercial property vacancy in Vancouver, should shore up the value of the income streams from these commercial assets.

Yes, prices are down slightly, but a one per cent decline is indicative of flat prices. Unless an owner is forced to sell assets in a distressed situation, there just is not the incentive to cut sale prices the same way for commercial assets as there is in the residential sector. (It should be noted that the sale of the Bentall Centre portfolio in 2016 did not enter into the construction of the RCA B.C. commercial property price indicator, nor will its announced sale in Q2 2019 enter the data set.)

If owners of commercial assets are unwilling to sell, commercial property prices can remain flat or even grow in line with the favorable income trends for assets in the region. Such positive trends could happen even as residential prices slowly recover from the introduction of the foreign buyer tax. Convergence in price trends might not mean commercial prices falling off a cliff, but instead residential prices facing a steady climb in the years ahead.

Copyright © Western Investor

Victoria maintains healthy sales pace

Monday, July 29th, 2019

June sales in Victoria 4.5% more than in June 2018

Neil Sharma
REP

If British Columbia’s housing market is in a slump, nobody told buyers and sellers in Victoria.

While only 740 properties sold in June, it was a 4.5% boost over June 2018, according to the Victoria Real Estate Board. However, while there was a marked drop in June sales compared to the previous month—12.7% to be exact—especially in the condo market where sales were down 6.1%, single-family homes sales surged 10.4% with 394 houses sold.

According to Polly Cordwell, managing broker for Sotheby’s International Realty Canada, there is a lot of construction in Victoria right now, from infrastructure projects to residential real estate development.

“In a lot of areas here, it’s definitely increased quite significantly, even versus last year. There are a lot of different municipalities that make up Greater Victoria, and there are some with big increases,” she said. Certainly helping matters, Mayor Lisa Helps is pro-development and it’s writ-large all over Langford, added Cordwell.

“Victoria is doing very well. We’re seeing that home sales over $1 million have definitely dropped off, but there are a lot of properties under $1m here in Victoria—the benchmark price is under $1m—and this year the market is performing similarly to last year, which was a good year for us.”

Of course, booming markets become expensive and Victoria is no exception, but compared to Vancouver, from which there’s been an influx of residents in Victoria, it’s still a bargain.

“Condo development and a lot of rental construction here are helping meet the marketplace’s needs,” said Cordwell. “The population is growing and the community needs to build more housing because it’s difficult for people to find housing here right now.”

Like bigger cities, Victoria is slow to approve developments for rezoning and it’s causing a supply lag in the market. As demand continues escalating in tandem with Victoria’s desirability, that will be problematic, says Cordwell.

“We have a lot of people wanting to move here from Vancouver, and even with prices in Vancouver dropping, for a lot of people it’s not affordable enough over there,” she said. “In the higher end of the market, we’ll see it slower, but in homes under $1m that are more affordable for people, it will continue on at a steady pace.”

Copyright © 2019 Key Media Pty Ltd

Vancouver commits to green building with ambitious action plan

Monday, July 29th, 2019

Greenest City 2020 Action Plan initiated

Neil Sharma
Canadian Real Estate Wealth

Vancouver’s green building sector is getting a major boost, thanks to an initiative from the municipal government that intends to reduce greenhouse gas emissions in existing buildings 20% below 2007 levels and require buildings constructed from 2020 henceforward to be carbon neutral in operations.

The “Greenest City 2020 Action Plan” will catapult a city with one of the cleanest building codes in North America to the summit and create an abundance of jobs in its green building sector.

“Vancouver’s next challenge is to improve the environmental performance of existing building stock by focusing on retrofits such as insulation, heating and lighting system upgrades and energy-efficient appliances, as well as on how people operate buildings,” read the city’s Action Plan. “In British Columbia, we continue to have access to relatively inexpensive energy sources. In addition, the landlords and developers who make decisions about new designs or retrofits don’t often pay the utility bills and don’t immediately benefit from efficiency savings that can take time to show return on initial investments.”

Lane Theriault, president of Subterra Renewables, commends the City of Vancouver for both its lofty ambitions and being proactive, but noted that the last mile is always the most difficult to traverse. Where Vancouver’s building regulations are about three years ahead of Toronto’s, with respect to mitigating environmental impact, it could hit a snag unless certain green building principles are adhered to.

“The city has a progressive building code, which is admirable, but the last mile of GHG reductions is always hard to do,” he said. “Personally, I’d like to see a ban on natural gas, or at least make it a premium and use it for things like cooking, but it shouldn’t be used for hot water. Without eliminating on-site GHG production, you won’t get that last piece done.”

However, the onus cannot solely be on developers, added Theriault. The faster consumers adopt an eco-conscious mindset, the quicker the cost reduction.

“Developers constantly face a trade-off where they have to spend more money or reduce the marketability of their developments by having smaller windows to make buildings more energy-efficient. Consumers have to choose to live in places that are green, or buy developments from builders who build green. Ask questions about whether this building uses renewable energy or burns gas. It’s a great way to let developers know the customer cares and they will have more of a desire to green their buildings.”

Vancouver has Canada’s most expensive residential real estate prices, so buying green isn’t likely to top buyers’ lists of priorities. But the Action Plan makes mentions of financing tools and incentives as ways to offset exorbitant pricing schemes.

“Financing tools and incentives provide ways to address concerns of affordability and fairness, and increase the pace of change towards green developments and retrofits,” continued the Action Plan. “One example of this strategy is the development of the Home Energy Loan Program, which provides homeowners with affordable financing for energy efficiency upgrades. The money saved on energy bills can significantly offset the loan payments. Capacity building The City is in a unique position to bring together different groups and build partnerships that ensure there are enough skilled workers to meet the needs of a rapidly growing green building sector. This will make a significant contribution to new green jobs in Vancouver.”

Copyright © 2019 Key Media Pty Ltd

The Westerly in Nanoose Bay 39 one and two bedroom homes by Seacliff Properties

Saturday, July 27th, 2019

The Westerly, an upscale 39-unit oceanfront project from Vancouver-based Seacliff Properties.

Barbara Gunn
The Vancouver Sun

In terms of established master-planned communities, Vancouver Island’s Fairwinds is more than a little noteworthy.

Created more than 30 years ago, the 750-acre community in Nanoose Bay — about a 20-minute drive up island from Nanaimo and its ferry crossing to the mainland — is now home to some 1,000 people. In the years ahead, however, that number is expected to grow considerably, given plans to add more than 2,000 residences, including townhomes, condos, single-family homes and waterfront rental units.

Call it a master, master plan.

The newest addition to Fairwinds, home to a 350-berth marina and the award-winning Fairwinds Golf Club — it hosted the B.C. Junior Boys Golf Championship earlier this month — is The Westerly, an upscale 39-unit oceanfront project from Vancouver-based Seacliff Properties.

The six-storey building, with one- and two-bedroom homes ranging up to 1,800 square feet, will be a standout compared to anything constructed in the earlier phases at Fairwinds, says Julie Jaworski, marketing and communications manager at Fairwinds.

“Nothing like this exists at Fairwinds,” she says, noting that The Westerly is expected to draw buyers from the Lower Mainland and well beyond.

“We’re looking at affluent 50-year-plus individuals, white-collar professionals likely moving from Calgary, Vancouver and other metropolitan areas to the island permanently or part-time,” she says. “They’re generally lifestyle-oriented people who enjoy the outdoors and are often looking to slow down, but not necessarily retire.”

At Fairwinds, the outdoor pursuits those residents can enjoy are myriad, with endless opportunities for hiking, fishing, boating, biking, bird-watching and beachcombing.

“The master design leaves plenty of wild and green space, ensuring that this community will never feel crowded, just welcoming,” Jaworski says.

But the recreational offerings extend far beyond those related to Fairwinds’ natural, oceanside setting.

The community’s 20,000-square-foot Fairness Wellness Club includes an indoor pool, hot tub, sauna, tennis court, weight rooms and multi-purpose room for badminton, pickleball and fitness classes.

As well, the soon-to-be completed Fairwinds Landing will be “the new heart of Fairwinds,” Jaworski says, “with plenty of amenities and residential and commercial space in a desirable waterside location adjacent to the marina.”

Should residents — Jaworksi calls them “Fairwinders” — wish to relax with their neighbours in the comfort of their homes, they will be able to do so in units with large covered balconies, many with ocean outlooks.

The contemporary residences will also have large windows with roller shade coverings, nine-foot-high ceilings and gas fireplaces.

Floors in the main living areas will be topped with engineered wood, while bedrooms will have plush carpeting underfoot. Most homes will also have walk-in closets.

Kitchens will be fitted with soft-close drawers and doors, under-cabinet lighting, quartz countertops and tile backsplashes.

Bathrooms will have undermount sinks, quartz counters and tile flooring and shower and tub surrounds. Master ensuites will be fitted with heated floors.

Common spaces at The Westerly include a multi-purpose amenity room and landscaped grounds with walking paths. The building will also include underground parking and a storage area for bicycles.

Meantime, Jaworski says, next up at Fairwinds will be a 35-unit townhome project called Timber Ridge, situated on some 11 acres overlooking the Strait of Georgia.

The Westerly

Project location: Fairwinds, Nanoose Bay, B.C.

Developer: Seacliff Properties

Project size: 39 one- and two-bedroom homes

Residence size: Approx. 1,500 — 1,800 square feet

Prices: $450,000 — $1,190,000

Sales centre: 3455 Fairwinds Drive, Nanoose Bay

Telephone: 250-387-4162

Website: fairwinds.ca

© 2019 Postmedia Network Inc.

Vancouver developers are pivoting from condos to rentals as deep freeze sets in

Saturday, July 27th, 2019

Sluggish condo sales causing developers turning to rentals

Josh Sherman
Livabl

As the Vancouver housing market suffers from falling prices and sluggish sales, developers are increasingly turning to the rentals.

“Given the uncertainty in the Canadian housing market, inflated home prices, elevated levels of household debt, and mortgage stress tests, it seems more and more buyers are opting for the sidelines, choosing to rent instead,” writes Vancouver-based realtor Steve Saretsky in a blog post.

“It appears real estate investors and developers are taking note, funnelling money into purpose built rental units,” he adds.

Saretsky points to the elevated level of rental starts in Greater Vancouver as a sign of this playing out on the west coast.

At least one developer in Metro Vancouver is planning to relaunch a condo project as rentals.

Porte Communities had originally intended to construct a mid-rise condo project called Alden in South Surrey but has since shifted gears and plans to build rental apartments, Livabl has learned.

Vancouver’s drum-tight vacancy rate can make rentals an attractive option even at a time when home prices are falling and demand from buyers has dissipated.

Although some developers who had original envisioned condos may pivot to rental housing, there are challenges with switching approaches mid-stream.

Cameron McNeill, executive director and partner at MLA Canada, a firm that markets and researches Lower Mainland condo developments, notes that many developers are simply standing on the sidelines instead.

“There’s this real waiting and watching the market situation,” he tells Livabl.

MLA estimated earlier this year that 17 concrete condo projects accounting for a total of 5,000 units had delayed coming to market in the Lower Mainland.

“They weren’t designed as rental,” he says of the projects on hold.

“They (developers) don’t have any government initiatives or incentives in order to build rental, they were planned… and designed as a condominium project, and now that the market has changed, these projects don’t make any sense in these market conditions — so they’re on hold,” he says.

The longer the market slowdown continues, the more likely it is developers will look for alternatives.

“The development community is watching the market carefully, and they are evaluating their options, and some of those may include rental,” says McNeill.

“But very few [developments] are yet verified to be switched over to rental,” he continues, adding, “I’m going to guess that very few of them make sense to do rental either.”

© 2019 BuzzBuzzHome Corp

Is a fresh wave of overseas real estate investors coming from Hong Kong (again)?

Friday, July 26th, 2019

Metro Vancouver’s reduced residential property prices must look pretty tempting to those looking to get their money out of troubled Hong Kong

Joannah Connolly
Western Investor

Since the foreign buyer tax was first introduced in Metro Vancouver in 2016, and then extended in 2018, the percentage of overseas buyers has plummeted, according to B.C. government figures. And since further market-cooling measures have been introduced, at both federal and provincial levels, there has been a decline in the benchmark detached home price of about 11 per cent.

So measures to cool the market have arguably “worked” – if slowing sales and reducing home prices was the goal. But has it now presented an opportunity for a fresh wave of overseas buyers to come in? Perhaps, if those buyers are really motivated. Recent political unrest in Hong

It seems that potential property buyers from Hong Kong (once again, for those who remember the early 1990s – are showing considerable interest in Canadian property. With widespread protests over the erosion of its autonomy by the Chinese government, and the resulting global trade tensions, it’s not surprising that Hong Kong residents are considering the safest harbours in which to extract and park their money.

According to a recent Bloomberg article, Metro Vancouver real estate agents are seeing a significant uptick in interest from Hong Kong buyers, with more Hong Kong than Chinese people at open houses. That’s quite the reversal from a few years ago.

The foreign buyer tax of 20 per cent is unlikely to be a major deterrent to a motivated overseas buyer. The 11 per cent price decline for a typical detached house – which is likely to be a steeper decrease for higher-priced luxury homes – takes care of much of that tax burden.

What’s more, the Hong Kong dollar is stronger against the Canadian dollar than it was a year ago, despite the political unrest. A $3 million home in Vancouver today would cost a Hong Kong buyer just under 18 million Hong Kong dollars, compared with 19.5 million a year ago. That’s a discount of 7.6 per cent. Not to mention the fact that the same $3 million home might have cost $3.8 million a year ago, which at currency rates of the time would be 24.5 million Hong Kong dollars. So the reduction to 18 million HK dollars is actually a 26 per cent discount – more than outweighing the foreign buyer tax.

All of which means that our region could seem a veritable bargain, especially for someone truly motivated to get their money out of Hong Kong.

Bloomberg’s article reads, “Vancouver, where housing prices have been in a slump for the past year, may be the first city to benefit from the upheaval in Hong Kong.”

Whether you see a fresh influx of overseas money into our property market as a “benefit” or not, I can’t help but suspect they might be right.

Copyright © Western Investor

GTA condo apartment sales up 3.2% in the second quarter

Thursday, July 25th, 2019

Q2 condo sales remains strong in Toronto

Steve Randall
Canadian Real Estate Wealth

The market for condo apartments remained strong in the Greater Toronto Area in the second quarter.

Greater Toronto Realtors reported 7,038 sales of condo apartments through the Toronto Real Estate Board’s MLS in the three months, up 3.2% compared to a year earlier.

New listings for the sector were down 3.5% year-over-year to 11,110; and the average price gained 5.1% to $589,887, although in the City of Toronto (70% of transactions) the gain was  5.9% to $639,316.

“As has generally been the case in the region since the implementation of the Ontario Government’s Fair Housing Plan in 2017, the condo market segment has remained tight in comparison to other major housing types. However, from a price point perspective, condo apartments continue to offer prospective buyers a relatively affordable housing option when looking across the GTA,” said TREB president Michael Collins.

Rental market also tight

In the rental market, average rents for one-bedroom and two-bedroom apartments increased above the rate of inflation on a year-over-year basis in Q2 2019 as the market remained tight.

“However, we have seen an acceleration in the number of units listed for rent, which has provided renters with more choice in the market place and has coincided with a slower pace of average rent growth over the past year,” said Jason Mercer, TREB’s Chief Market Analyst.

Copyright © 2019 Key Media Pty Ltd