Archive for July, 2019

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

Presence of birds may be a sign of significant problems

Thursday, July 25th, 2019

Beware: The presence of birds may be sign of significant problems

Tony Gioventu
The Province

Dear Tony:

Our building is 30 years old and we are under attack. The Flickers and woodpeckers have been boring holes into our stucco siding; we have blackbirds and swallows nesting in our eaves and within the siding, and we had a family of geese take up residence on our rooftop.

Our location is adjacent to a green belt, so we tend to be more exposed to critter invasions. Our owners would like to simply remove the nests and birds and close up the holes, but the council is refusing to do anything about this. Help! 

Cynthia F., Fraser Valley

Dear Cynthia:

Between the age of your property, the type of construction material and your location, I suspect your problems are much greater than bird invasions.

Flickers and woodpeckers are on the hunt for food. Boring into your stucco and siding is an indication of infestations. This is a common problem across the province and stucco siding is not immune. 

The starlings nesting in siding and eave crevices is a result of failed aging building cladding that has permitted their access. As for the geese, they just come with living in the Lower Mainland; however, large areas of rooftop ponding will attract more migratory birds to your rooftop.

Twenty percent of your owners may petition in writing for a special general meeting to address these issues and direct your council on next steps. A full building condition assessment would be a good starting place to plan for overdue upgrades and renewals.

Your strata corporation has an obligation to comply with the B.C. Wildlife Act as a private residential complex. Here is a quick summary of the B.C. Wildlife Protection act as it relates to birds and the possible implications.

Property in wildlife:  Ownership in all wildlife in British Columbia is vested in the government.

Endangered and threatened species: If the lieutenant-governor in council considers that a species of wildlife is threatened with imminent extinction throughout all or a significant portion of its range, or if the factors affecting its vulnerability are not reversed, in British Columbia the lieutenant-governor in council may, by regulation, designate the species as an endangered species.

Right of action: The government has a right of action against a person who, without authority, destroys or damages wildlife habitat in a wildlife management area or an area set apart for wildlife management and may recover damages from the person for any money that the government spends to restore the habitat and its wildlife to its original state, or the loss of the habitat and its wildlife if restoration of the wildlife habitat is impossible.

Birds, nests and eggs: A person commits an offence if the person, except as provided by regulation, possesses, takes, injures, molests or destroys (a) a bird or its egg, (b) the nest of an eagle, peregrine falcon, gyrfalcon, osprey, heron or burrowing owl, or (c) the nest of a bird not referred to in paragraph (b) when the nest is occupied by a bird or its egg. The above offences may result in fines or penalties and the recovery of cost for the restoration of habitat.

Dangerous wildlife protection order: “private dwelling” means a structure used solely as a private residence or a residential accommodation within any other structure. If a conservation officer believes on reasonable grounds that dangerous wildlife is or may be attracted to any land or premises other than a private dwelling, the conservation officer may, without a warrant, enter and search the land or premises. If a conservation officer believes on reasonable grounds that the existence or location of an attractant in, on or about any land or premises, other than in a private dwelling, poses a risk to the safety of any person because the attractant is attracting or could attract dangerous wildlife to the land or premises, the conservation officer may issue a dangerous wildlife protection order directing an owner, occupier or person in charge of that land or premises to contain, move or remove the attractant within a reasonable period of time specified in the order. Before you remove any species, go to: http://www.env.gov.bc.ca/lower-mainland/wildlife/management/wildlife_management.htm

© 2019 Postmedia Network Inc.

The News a six building 282 unit complex located at 34375 Gladys Avenue Abbotsford by Elevate Development Corp

Thursday, July 25th, 2019

The News is a project from Elevate Development Corp. in Abbotsford

Kathleen Freimond
The Province

Start spreading the news: units in Elevate Development Corp.’s Abbotsford project – The News – are now being marketed to homebuyers.

The News comprises 282 units in two six-storey buildings, plus a three-storey amenities block at the northwest corner of Sumas Highway and South Fraser Way. The site, currently occupied by The Abbotsford News, was sold in 2016 and the newspaper will move to another location prior to construction.

The first release of 206 homes includes one-, two- and three-bedroom units suitable for a range of buyers, says Elevate vice-president Tim Clark-Hollis.

Elevate has given two acres of the five-acre site to the city of Abbotsford to be preserved as an environmentally protected area.

As part of its environmental focus, rooftop solar panels will collect enough energy to power all exterior building and landscape lighting and a rainwater collection system will save the water to be used for landscape irrigation.

The three buildings form a U-shape and while the landscaped area in the courtyard will be planted with trees and shrubs, the lawn will be a permeable synthetic grass.

Homebuyers can choose from two colour palettes: Sepia is the light, contemporary option, while Slate has darker hues.

There are two display units at the presentation centre. The junior one-bedroom apartment is finished in the Sepia colours – white porcelain tile backsplash, lighter wood accent cabinetry surrounds the refrigerator and a lighter laminate floor in the living areas – while the home with two bedrooms, two bathrooms and a den is finished in the Slate option with its dark stacked-tile backsplash. Both palettes have light quartz countertops.

In both display suites, a wood shelf runs below the high-gloss slab cabinet doors, providing useful open storage.

The major appliances are by Samsung and include a refrigerator with french doors and bottom-mount freezer, a five-burner gas range, a dishwasher and microwave. There is the option to upgrade the appliances to a Bosch package.

Design continuity is enhanced with the use of Kohler faucets throughout. In the kitchen, a faucet with a pull-down spout is a practical choice and in the bathrooms showerheads and faucets add some sparkle to the space that features oversized tiles on the floor and walls.

The amenity building will have more than 4,500 square feet of indoor space, plus a 1,900 square feet rooftop patio area. The first floor includes a gym and a sound-proof music room designed by Tom Lee Music.

The second floor includes a chef’s kitchen with Bosch appliances and dining space for 18 people.

A lounge and billiards table completes the second-floor features. On the roof deck residents will be able to take advantage of a barbecue and outdoor seating while enjoying views of Mount Baker.

The News

What: 282 units (two six-storey buildings and a three-storey amenity building)

Where: 34375 Gladys Avenue, Abbotsford

Developer: Elevate Development Corp.

Residence size and prices: one-bedroom: 437 — 609 square feet; two-bedroom: 781 — 967 square feet; two-bedroom + lock-off 1,310 square feet; three-bedroom: 1,109 — 1,246 square feet; from $219,900 (for a junior one-bedroom)

Sales centre: 34375 Gladys Avenue, Abbotsford

Hours: noon — 5 p.m., Sat — Thurs

Telephone: 604-746-2880

© 2019 Postmedia Network Inc.

Developer Ariva Resorts announces new 200 home gated community in Kelowna

Thursday, July 25th, 2019

Kelowna development to specifically focus on active boomers

Ephraim Vecina
Mortgage Broker News

Developer Ariva Resorts has announced its next project: a multi-million-dollar, high-end gated community situated on “prime land” just five minutes away from downtown Kelowna, BC.

The 200-home development will be specifically marketed towards “zoomers,” active boomers choosing to downsize from their traditional abodes.

Scheduled to break ground in 2020, the community will have an estimated build time of around four years. Unit sizes, each coming with large outdoor decks, will range from 1,250 to 1,760 sq. feet. Prices are expected to range from $500,000 to $1.9 million.

Ariva Resorts founder Barry Johnson said that the lifestyle needs of the zoomer demographic have not been an important consideration in the housing industry so far.

“We intend to change that thinking. This group is highly active. Health conscious and want to live life to its fullest. Kelowna is the perfect place to live with its excellent climate, wines and vineyards, outdoor activities and remains affordable,” Johnson explained.

Data from the Office of the Superintendent of Financial Institutions indicated that borrowing among older Canadians is not slowing down any time soon, with the outstanding balance of reverse mortgage debt nationwide reaching $3.66 billion in April.

The figure was a new all-time high, and represented a 28.15% year-over-year increase in the total. Said level was “very large growth at a time when other credit segments are much lower,” Better Dwelling stated in its analysis of the OSFI figures.

Copyright © 2019 Key Media

Metro Vancouver’s purpose-built rental building sales plummet from a year ago

Wednesday, July 24th, 2019

Multi-family building transactions follow downward trend set by market residential home sales

Peter Mitham
Western Investor

Release of June housing resale data last week by the Canadian Real Estate Association provoked mixed reactions.

On the one hand, RBC Economics headlined its analysis of the figures: “A stable market isn’t a bad thing.” While downward pressure on prices was evident in Greater Vancouver, RBC said sales volumes were largely flat compared with a month earlier and confirmed its stance that the national housing market had “passed its cyclical bottom.”

Over at Scotiabank Economics, the mood was more dour: Greater Vancouver sales had not matched the robust figures May delivered, its analysis said, and regional price changes drove down the national benchmark price, “with weakness present across unit types but heightened for higher-priced single-family homes.”

(A look at data for the latest 12 months indicates that the dollar value of sales and the actual number of sales are both down, by 38 per cent and 32 per cent, respectively. Since February, the decline in sales has accelerated, outpacing the drop in aggregate value.)

Somewhere in the midst of the turmoil is that other class of residential property – purpose-built rentals.

The latest numbers from Goodman Commercial Inc. are even darker for this class than they are for detached, townhome and apartment properties. Dollar volume of rental building sales in Metro Vancouver plummeted 62 per cent in the first half of this year versus the same period of 2018, from $1.4 billion to $529 million. The number of transactions fell by 50 per cent, from 84 to 42.

Similar to the standard home market, the rental market was severely impacted by government policies.

“Massive provincial and municipal government intervention was the main driver, with the rental apartment sector taking hits left and right,” says Goodman’s analysis of the downturn in sales and values.

Yet with vacancies at or below one per cent in Metro Vancouver, investors have assets that can’t help but perform. The question is whether the environment will let owners, investors and developers do so, too.

Better elsewhere

According to the Goodman report, the environment for investors who want to build apartments is better almost anywhere than in Vancouver proper, judging by recent approval statistics.

While a public engagement program by Mayor Kennedy Stewart invites ideas to create a Vancouver that can house everyone, and measures have been put in place to strengthen the hand of renters, developers appear to be heading to the suburbs at what Goodman calls a “crushing rate.”

Goodman’s numbers indicate a total of 7,587 units under construction, approved or proposed for Vancouver, with the latter down 29 per cent from two years ago. Meanwhile, proposals in surrounding municipalities have increased 147 per cent for a total of 11,377 units underway, approved or proposed. Dreaming of units isn’t the same thing as building them, but developers’ hopes are clear.

Of course, there are plenty of variables affecting where developers put their hopes: site availability, land costs, approval policies and timelines, and construction costs. But all signs point to growing suburban interest, in part growing suburbs themselves.

Valley opportunities

A recent Colliers International report underscored the trend Goodman noted in its report on multi-family sales, and how regional growth is drawing in new development regardless of the push by factors elsewhere.

An analysis of data from BC Stats and Statistics Canada indicates that the population of the Fraser Valley in 2041 will total more than 1.7 million people. This is a 37 per cent increase from 2016 and will require an additional 165,400 dwelling units.

“Growth of this rate implies an average annual expansion of an estimated 7,200 new dwelling units per year,” the report states.

It then goes deeper: drawing on the B.C. Major Projects Inventory, Colliers indicates that 42 projects are either under development or planned, promising 7,444 dwelling units at an average cost of $394,000 per unit. “Based on an average household size for these projects, housing for approximately 21,300 people will be provided,” it says, but adds: “This will leave a significant shortfall of housing for almost 158,000 new households.” •

Copyright © Western Investor

Recreational homes prices are rising across most regions

Wednesday, July 24th, 2019

The price of recreational homes across most Canadian regions are rising

Steve Randall
Canadian Real Estate Wealth

The price of recreational homes across most Canadian regions are rising according to a survey of RE/MAX brokers and agents.

The Leger poll reveals that 74% of regions surveyed posted healthy year-over-year price gains; with a national gain of 7%.   

“In the mainstream urban housing market, we’re seeing a marked contrast between Eastern and Western Canada, with the former showing promising gains while the latter is flat to negative. Meanwhile, the recreational market is strong across much of the country except in the Prairies, where the region’s softer economy has kept demand low,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada.

He added that activity is being driven by strong employment and economic conditions, but also by Millennial buyers who find themselves squeezed out of the less affordable urban market; 51% of Millennials are in the market to buy a recreational property, up 14% from a year ago.

Regional gains

British Columbia posted an 8% year-over-year rise in recreational home prices.

Those with homes in the Tofino market have seen a 35% increase in median price, unless they have a waterfront property with an eyewatering 80% increase in median price.

Ontario also posted an 8% gain with water-access showing a 35% gain while Atlantic Canada gained 7% over 2018 figures and well above the 0.13% price increase between 2017 and 2018.

The Prairies though, saw a 3% year-over-year decline in median price.

“There is little doubt that economic factors in the Prairies have affected demand in the recreational market,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “At the same time, BC’s economy is still going strong and has experienced an increased interest in its recreational market in recent times.”

Brokers are expecting conditions to remain strong into 2020 as Millennials use their spending power.

Other key findings

  1. 40% of all Canadians, and 56% of Millennials, are in the market for a recreational property;
  2. Canadians cite the following reasons to own or want to own a recreational property:
    • It is where I can go and relax and spend time with friends and family = 64%
    • It is a getaway home = 58%
    • I can do activities I can’t do at my permanent residence (hiking, fishing, etc.) = 43%
    • It is an investment property = 30%
    • It is a retirement home = 20%
    • Other = 2%
    • 30% of all Canadians say they use or would use a recreational property as an investment opportunity with Millennials ranking highest among this group, at 33%, compared to Boomers at 28%
  3. More than half (54%) of Canadians who own or are considering owning a recreational property are willing to travel up to two hours, and 24% saying they would travel two hours. Slightly less (22% cent) are willing to travel three or more hours.
  4. Canadians identify the following features as important when considering their current recreational property or a future purchase of a recreational property:
    • Affordable purchase price = 61%
    • Reasonable maintenance costs = 46%
    • Waterfront access = 45%
    • Proximity to town = 44%
    • Reasonable distance from primary residence = 35%
    • Relative seclusion = 28%
    • Land access = 24%
    • Proximity to sports/recreation = 24%
    • Nearby neighbouring properties = 12%
    • Island property = 7%
    • Other = 1%
    • None, don’t mind which features my recreational property has = 7%
    • Don’t know/prefer not to answer = 7%

Copyright © 2019 Key Media Pty Ltd

Vancouver outskirts seeing the vast majority of new rental development

Wednesday, July 24th, 2019

Purpose built rentals in Vancouver declining

Ephraim Vecina
Canadian Real Estate Wealth

The number of rental construction proposals in Vancouver’s periphery currently far exceeds that seen in the city itself, according to the Goodman Report’s 2019 Mid-Year Metro Vancouver Rental Apartment Review.

Since 2016, new proposals for rental-purpose buildings in the city have declined by 29%. Much of the new volume has manifested on the suburbs, which have enjoyed a sharp 147% increase in proposals.

“This telling difference reveals Vancouver’s failure to ramp up new supply opportunities,” the Goodman Report noted. “Also, don’t forget that four long years will go by before all these suites are available (even assuming they’re all actually built). Based on the 7,587 currently in the pipeline, that’s an average of only 1,896 suites per year.”

Significant government intervention has pulled the city’s rental transactions down by 50%, and overall value by around 27%, the study added.

Dollar volume has shrunk by as much as 62%, from $1.383 billion last year to $529 million this year. At the same time, cap rates in the City of Vancouver have gone up 50%.

“In the last two years, the City of Vancouver has gone from being the new rental supply sweetheart … to being absolutely outpaced by the suburban market. As of 2016, the suburbs were so far behind that the Urban Development Institute asked us to serve on a panel in a seminar called ‘Building Rental in the Suburbs’ to demonstrate how rental was possible outside of Vancouver,” Goodman stated.

“Yet fast-forward two and a half years to today, and you’ll see the crushing rate at which developers are applying to build rental in other municipalities.”

Copyright © 2019 Key Media Pty Ltd

Amazon moves deeper into real estate space with Realogy

Wednesday, July 24th, 2019

TurnKey is a beginning-to-end homebuying program

Kimberly Greene
other

Sometimes it seems as if Amazon is in the business of making waves, and that’s just what it’s done by partnering with Realogy, the leading provider of residential real estate services in the United States.

As part of the partnership, the companies are launching TurnKey, a program that promises to be a beginning-to-end homebuying program that aims to elevate consumer expectations when it comes to purchasing a home and personalizing it.

“When we designed TurnKey, we recognized that ‘closing’ on a home is really just the beginning of the homebuying journey,” said Eric Chesin, senior vice president and head of strategy for Realogy. “We are proud to team up with Amazon to extend the value we bring to buying a home beyond the moment you first unlock your new front door.”

TurnKey matches consumers in 15 U.S. cities—Seattle, Sacramento, San Francisco, Los Angeles, Phoenix, Denver, Minneapolis, Chicago, Dallas, Houston, Tampa, Orlando, Atlanta, Charlotte, and Washington, D.C.—with participating agents from Realogy’s family of real estate brands, including Century 21, Coldwell Banker, Sotheby’s International Realty, ERA, and Better Homes and Gardens Real Estate. The agents and homebuyers will be matched according to the homebuyer’s profile and their city or neighborhood of choice, and the agents selected have been vetted based on their referrals, high customer service ratings, and short closing times.

The second part of the TurnKey program is the Amazon Move-in Benefit, which provides complimentary Amazon Home Services and fully-installed Smart Home products courtesy of Realogy to TurnKey participants after closing on their home. Services include unpacking, cleaning, handy work around the house, and a “curated suite of smart home products.” The value of the services depends on the value of the home: if the home purchase price is between $150,000 and $399,000, the package value is worth $1,000; if the home purchase price is between $400,000 and $699,000, the package value is worth $2,500; and if the home purchase price is more than $700,000, the package value is worth $5,000.

The idea behind the partnership is not only to help simplify the process of finding a home, but of settling into the home once it’s been purchased.

 “Customers can be overwhelmed when moving, and we’re excited to be working with Realogy to offer homebuyers a simplified way to settle into a new home,” said Pat Bigatel, director Amazon Home Services. “The Amazon Move-In Benefit will enable homebuyers to adapt the offering to their needs – from help assembling furniture, to assisting with smart home device set up, to a deep clean, and more.”

Rumors and speculation of Amazon entering the mortgage space have been growing for quite a while now, to the point where it’s really no longer a question of “if,” but one of “when” and, more importantly, “how”. The easier entry point seems to be real estate. The company offers prefabricated kids on their website, but this partnership allows it to move into a more traditional real estate model, with the added benefit of pushing its smart-home products to homeowners who may have never considered using them before.

“Realogy and our brands are always looking for ways to give consumers an awesome homebuying experience with a terrific real estate agent, and today’s launch of TurnKey is a big part of that continued strategy,” said Ryan M. Schneider, Realogy’s chief executive officer and president, in a statement. “Realogy’s great affiliated agents serve their clients during one of the most important moments in their lives, and Amazon’s services and products can transform that moment to make it rewarding in a way no one ever has before.”

While some people may think this is cause for companies like Zillow and iBuying companies to be nervous, others don’t think it’s that big of a deal. After all, people aren’t really going to start their home search on Amazon, are they? In an industry note, Wedbush analysts write that the partnership is a way for Realogy to stay relevant in the increasingly competitive real estate space. Although no one is sure yet how much smart-home products are an incentive to homebuyers, the program should be a great lead generation source for Realogy, and it opens the door for further Amazon partnerships.

What’s more, analysts add, the partnership ultimately poses a greater risk to Zillow than to Redfin. Because of Realogy’s vast network of agents across the country, they may encounter a lot of competition for online led generation dollars. Redfin, on the other hand, isn’t reliant on lead generation dollars, but the brokerage does compete for an online audience. Its largest benefit, according to analysts, are its innovative offerings and its low fee, which are more attractive to consumers.

“While Redfin’s discount and TurnKey’s promotion are on different transaction sides, we see Redfin’s discounts as compelling enough to keep sellers/ buyers in its ecosystem. However, if Amazon does move further into services like iBuying, creating a portal, or offering mortgages, this could be a larger risk to Redfin,” analysts wrote.

Realogy shares have fallen 65% in 2019. In premarket trade the morning of the Amazon partnership announcement, Realogy shares went up by 31%.

Copyright © 2019 Key Media Pty Ltd