Archive for November, 2019

$12.7M land deal a crossroads for Shaughnessy

Wednesday, November 27th, 2019

Affordable rentals eyed for site in Vancouver’s most exclusive community

Western Investor

A 37,938-square-foot site in Vancouver?s prestigious Shaughnessy neighbourhood sold for $12.7 million

A near-one-acre site will be developed for affordable rental housing in Vancouver’s historic and prestigious Shaughnessy neighbourhood, where residents have rallied in the past to stop high-density rental development.

The 37,938-square-foot parcel, which currently hosts two single-detached houses, sold October 25 for $12.7 million.

“This deal marks a historic shift for Shaughnessy,” said Mark Goodman of Goodman Commercial Inc., Vancouver, who brokered the transaction. 

Goodman noted the site has qualified for the City of Vancouver’s Affordable Housing Choices Interim Rezoning Policy. The proposed development is a four-storey rental building with 85 rental suites.

The benchmark price of a detached house in Shaughnessy as of October was $4.8 million, according to the Real Estate Board of Greater Vancouver, making it the most expensive housing market in the city.

“The new owner is taking the property through the rezoning process in order to facilitate the construction of a purpose-built rental development,” Goodman confirmed.

It was not clear how a price of approximately $12 million per acre would relate to affordable rental apartments. The per-unit cost of the rental units, based just on land value, works out to $147,000 per apartment before demolition and construction begins.

Copyright © Western Investor

Toronto millennial realtor marketing on social media incl Instagram and Facebook

Wednesday, November 27th, 2019

Desiree Tomanelli understands her clients “because I live it”

Susan Doran
REM

Desiree Tomanelli

Desiree Tomanelli has her kick-ass Realtor image down.

Suit.

Heels.

Cell phone in hand.

Various mentors have advised her to change things up from time to time in order to stand out. “But I can’t seem to separate myself from ‘the look,’” says Tomanelli, who admits she gets her nails done every two weeks and is trying to figure out how to write that off as a business expense.

She’s pretty attached to the workaholic angle too. Setting boundaries and taking time off? “I rarely do either,” she admits. “I actually answered a call on my wedding day.”

A platinum agent (her business tripled last year, she says) with Royal LePage Your Community Realty in Richmond Hill, Ont., Tomanelli, 33, has been licensed for only four years but has a solid grasp on her game plan and identity.

So far it doesn’t appear that standing out is going to be a problem, suit and heels notwithstanding.

“I’ve concluded that this is me,” says Tomanelli. “I haven’t worn jeans in years. I’ll never miss a call, and I wear high heels every single day.”

A millennial specifically targeting a client base similar to herself in age and outlook, Tomanelli aims for a thorough understanding of her buyers and sellers, “because I live it.”

Downsizing baby boomers are not really in her wheelhouse. “I look like a kid to them,” she says. “I market to upsizing young families, millennials and a bit older, with one or two small kids.”

She refers to this demographic as her “client avatar,” a target marketing concept she came up with after struggling initially to find her niche as a rookie Realtor.

“When I was a newbie, nobody told me what type of marketing did and didn’t work. I was working blindly and using old-school technology and marketing, like cold calling and door knocking,” she says.

She found it “disheartening,” akin to calling people about duct cleaning. Her parents had both worked in real estate at one time, but the business had changed, she says. She wanted to be innovative and find new ways forward.

“I do everything online, including finding my husband,” she says. “I don’t even have a landline, and like everyone these days, if my doorbell rings I don’t answer. I started wondering why I was doing things that were done in the ’80s, and that I don’t respond to. I wouldn’t follow people on social media who do that. I wanted to work with clients who are like me…people who follow me on Instagram.”

These days, having narrowed her focus in order to target her specific “client avatar,” social media is the first place people reach out to her.

“It is where I build trust with my audience. I don’t have to start by selling myself. They have already seen my social media and know I’m the real deal…I’m always posting to offer value to people, instead of making myself look like a hero.”

She has found some group sites – including those for moms, dads, and daycares – to be a good source of clients.

Tomanelli says that her companionable online presence on Facebook and Instagram draws in followers and builds relationships through such means as personal stories, opinion pieces, tips and tricks, and real estate myth-busting. “Little nuggets,” she calls her posts. They run the gamut from the occasional cute dog or baby photo to her thoughts on when to consider trying for a bidding war.

A large percentage of her social media followers are other agents, checking her out in hopes of gaining insight into the reasons for her growing online success, which has resulted in some invitations to speak publicly or on podcasts.

Tomanelli’s advice? “Just do it. Put yourself out there. You don’t have to be perfect. Have a thick skin. It’s the Kardashian era. People want to see you ugly and see your pain.”

There’s also this:

“Stop posting shit about what you just sold or listed. That feels icky. It’s social media, not your own personal magazine. People are sick of being sold to everywhere they go. Offer value. Give people free things. But if you do post a listing, put a price on it! What, I have to call you just to get that? Let’s put real info. Be authentic. Everything stems from that.”

Her take on public access to real estate information is equally bold.

“Bring it on,” she says. “We can’t just be the keepers of information.”

She probes clients for details about their lives and desires, starting with a handful of formulated questions about everything from how they envision a baby or commute changing their life to what they would alter about their home given the opportunity.

“The more they tell me, the better I can get into their heads,” says Tomanelli. “I want to get at their heart strings, serve their interests. It’s the teacher in me.” (She previously worked as a full-time high school teacher and still supply teaches on occasion.)

Based in a brokerage within the Greater Toronto Area but not at its core, Tomanelli is mindful of the differences marketing to suburban versus city buyers.

“It’s completely different. In the city we’re still seeing multiple offers, while up here people have time to negotiate a deal the old-fashioned way,” she says. “You can sell anything in the city. Here listings have to be in better condition. You have to fix them up, put ‘lipstick’ on them.”

Tomanelli has built a small team and obtained her broker license. She was also recently married, true to form in all-out fashion in an ice-themed wedding featured in WedLuxe magazine.

“It was over the top,” she says, laughing.

The resulting surname change (to Allin) has unleashed a rebranding plan that is still in the works.

Whatever changes follow, Tomanelli is determined to bring real estate marketing into the modern age and has little patience for real estate professionals who resist.

“It’s a service industry,” she says. “We make big bucks. Don’t forget that. Work to service your clients, not yourself. You will find your way.”

© 1989-2020 REM Real Estate Magazine

Wealthier, more confident consumers to drive home price growth in 2020

Wednesday, November 27th, 2019

Canadian housing market to enjoy healthy growth in 2020

Ephraim Vecina
Mortgage Broker News

Bolstered by increased consumer confidence, the Canadian housing market will likely enjoy healthy growth in 2020, with RE/MAX predicting average residential prices to increase by 3.7% over the year.

As much as 51% of Canadians are planning to buy homes in the next five years, RE/MAX added. This was significantly above the 36% proportion seen during the same time last year.

Among the major drivers of this upward trend are specific Ontario regions enjoying greater-than-normal price increases – namely, London (up 10.7% from 2018 to 2019), Windsor (up 11%), Ottawa (up 11.7%), and Niagara (up 12.9%).

“Southern Ontario is witnessing some incredibly strong price appreciation, with many regions still seeing double-digit gains,” RE/MAX of Ontario-Atlantic Canada executive VP and regional director Christopher Alexander stated.

“Thanks to the region’s resilient economy, staggering population growth and relentless development, the 2020 market looks very optimistic.”

The Greater Toronto Area is also expected to contribute to 2020 gains, owing to sustained economic growth, declining unemployment rates, and improving affordability conditions. The projected average price increase in the region next year is 6%, amid a 12% upward surge in sales transactions from 2018 to 2019.

“While Toronto is experiencing its ‘busiest’ construction season ever, housing supply still falls short of the demands of the city’s rapidly growing population,” the RE/MAX report added.

An aging population will also swing market dynamics in favour of Canadian millennials, who are now expected to enter their “peak earning years.” This demographic “will drive the market in 2020, particularly single millennials and young couples.”

Copyright © 2020 Key Media

Vancouver council approves measures to encourage development of rental housing

Wednesday, November 27th, 2019

Council approves rental-only zoning and a housing pilot program

Naoibh O’Connor
Vancouver Courier

Vancouver council approved, at a Nov. 26 council meeting that ran well into the evening, a host of measures aimed at improving Vancouver’s rental housing market.

They include rental-only zoning, allowing up to six storeys in commercial zones not already covered by community plans, a new housing pilot program to permit four to six-storey buildings close to schools, parks and shops, policies designed to address affordability, and a partnership with CleanBC to enable renovations to existing rental buildings while keeping tenants in place.

Council voted in favour of the measures after listening to a parade of speakers who spoke for and against recommendations outlined in a 236-page staff report, which stemmed from a review of the city’s rental incentive programs.

Speakers included Vancouver residents, representatives from the Urban Development Institute, several developers, LandlordBC and non-profit housing developers.

Few purpose-built rental apartments were built between 1980 and 2009.  Although 8,700 rental housing units were produced over the past decade, the city still isn’t meeting its targets. Citywide, the vacancy rate sits at close to zero — it’s at 0.8 per cent.

The City of Vancouver launched several rental incentive programs in recent years to encourage rental development, including STIR (Short-term Incentives for Rentals), Rental 100, and the Affordable Housing Choices Interim Rezoning Policy.

Most recently, the city initiated the Moderate Income Rental Housing Pilot Program.

The programs enabled developers to qualify for incentives such as increases to height and density, parking relaxations and development cost levy waivers.

Critics argued the programs aren’t creating units with rents that are affordable to average Vancouverites.

But studies from independent consultants hired by the city as part of the review concluded incentive programs were “absolutely necessary” to create new rental housing, they’ve already produced hundreds of units, and more incentives were likely needed to bolster supply.

Measures approved by council

Measures approved Tuesday were voted on as separate clauses in a larger overall motion.

Rental-only zoning will allow six-storey rental buildings in commercial zones not already covered by community plans. Rental projects in these areas won’t need to go through a rezoning process.

These commercial districts have also been added to the Rental Stock Official Development Plan, which is designed to protect existing rental housing units.

Rental-only zoning will be used as part of a pilot in areas 150 metres off main arterial roads near schools, parks and shops. Projects will still have to go through rezoning but will use a standardized template for buildings, which the city expects will cut six months off process times.

The program that will enable renovations of existing rental buildings is a partnership between the provincial CleanBC program, LandlordBC and the city. It aims to support major high-cost structural and green building upgrades, while keeping tenants in place. Council approved a $1.5 million grant to LandlordBC to implement the pilot, which will also get a $1.5 million matching grant from CleanBC.

Council will also continue on with its Moderate Income Rental Housing Pilot Program (MIRHPP), which is geared toward creating some units affordable to households earning between $30,000 and $80,000. The city is allowing 20 projects under the pilot. The timeline for consideration of the projects has been extended until January 2021.

Public hearings for the first three projects under the MIRHPP take place in December.

In a Nov. 27 press release, Mayor Kennedy Stewart praised all the approved measures.

“Vancouver residents told us loud and clear to take action on the housing crisis so that’s exactly what we’ve done,” Stewart said. “Together, these policies could help build upwards of 8,000 new rental homes over the next seven years, including nearly 5,000 homes geared to middle-income households, helping more of our friends and neighbours stay in Vancouver.”

Most, but not all, councillors were on board with the majority of the measures.

OneCity Coun. Christine Boyle said she was “excited” to support the report in full as housing and climate pieces were “woven together,” and it will create more rental homes across Vancouver.

“Rental housing is residential housing. It belongs in all of our neighbourhoods, so I’m excited about the low-density transition zones,” she said before voting on the measures. “I would have been happy to see them be twice as big as they’re being proposed but I know [those] will be conversations we have in the city-wide plan, so I will wait to have that there. But I think one block off our arterials is the way we need to go so renters also don’t have to live on our busiest streets.”

NPA Coun. Sarah Kirby-Yung said she liked that the report attempted to create more equity between housing types.

“I don’t think renters should be less than homeowners,” she said.

NPA Coun. Colleen Hardwick argued that opportunities for increasing rental housing should be dealt with through the city-wide plan.

She said there was not enough time, notice or public consultation given to consider the 236-page report, and that the current council was elected to do things differently than the previous council.

Hardwick added that she was concerned the measures would undermine the city-wide plan, that they fail to address the needs of people already here, that there’s a bias towards new construction, and that the incentives will put existing rentals and character homes at risk.

© 2020 Vancouver Courier

Telus, Polygon sue each other over collapsed $175M Burnaby land deal

Tuesday, November 26th, 2019

Telecoms giant and major Vancouver developer file duelling lawsuits, blaming each other for Polygon backing out of deal

Cornelia Naylor
Western Investor

Telecoms giant Telus and a major Lower Mainland developer have launched duelling lawsuits over a $175.5 million Burnaby real estate deal that fell apart last month.

The property involved is a 14-acre piece of land at 7000 Lougheed Hwy. beside the Saputo Dairy plant. (The Saputo site was sold in 2018 for more than $200 million and the dairy plant is moving to Port Coquitlam.)

It’s the site of an old Telus industrial complex demolished in 2015 to allow for an environmental assessment of the soil and groundwater below the building slabs as a step towards future redevelopment, according to a city report. 

The land is located inside the proposed “Bainbridge Urban Village” identified in the City of Burnaby‘s official community plan.

Polygon Homes Ltd., a Vancouver-based developer, signed a $175.5 million deal with Telus in September 2017 to buy the property.

The deal was subject to both Polygon and Telus being satisfied with the city’s response to Polygon’s development plan proposals – including responsibility for “all remediation for all on-site and off-site pre-closing environmental conditions,” which Telus had agreed to take on and pay for.

Polygon backed out of the deal early last month.

In a pair of lawsuits filed seconds apart in B.C. Supreme Court on Oct. 24, Telus and Polygon blame each other for the deal falling apart and both lay claim to a $5 million deposit Polygon paid Telus in 2017.

Property value decline

In its suit, Telus claims it was ready, willing and able to complete the sale last month in accordance with the terms and that the city supported Polygon’s intended development.

Telus claims Polygon broke the deal because a decline in the Lower Mainland real estate market had rendered the property worth less than the price in the agreement and would make the planned development less profitable.

“For that reason, as well as others that are unknown to (Telus) at this time, (Polygon) resolved to find a way out of the (agreement) or force (Telus) to lower the purchase price and make other concessions,” states the notice of civil claim.

Polygon could have limited its liability by forfeiting the $5 million deposit when it walked away from the deal, according to Telus’s suit.

Since it didn’t, Telus is arguing the developer is now liable for all of the telecom company’s losses from the deal, including the difference between the $175.5 million in the agreement and the price the property eventually sells for, the cost to market and resell the property and legal costs.

Missed deadline

Polygon, meanwhile, claims the conditions of the sales agreement had not been satisfied by the Oct. 8 deadline and that the developer had already extended that deadline 11 times since September 2017.

As of Oct. 8, Telus had not completed its environmental testing, according to Polygon, nor had Telus provided the results of a required “detailed site investigation” or a required remediation closure plan to the city.

Polygon claims Telus had not delivered the “minimum requirements necessary to enable the city to move forward with its full deliberations of the potential project to a level sufficient to satisfy” the developer.

City policy ‘not satisfactory’

Polygon also had other concerns that hadn’t been resolved by the deadline, according to the notice of civil claim, including a policy city council adopted in May to address the housing affordability crisis.

The city now requires all new housing developments have at least 20 per cent rental units.

The policy was “not satisfactory to Polygon,” according to the company’s court filings, because it would have necessitated substantial changes to its development plan and “substantially” reduced its economic return if the purchase price remained unchanged.

Polygon said it made “reasonable efforts in good faith” between May 2019 and September to resolve its concerns with Telus to see if the sales agreement could be changed, but no agreement was reached.

Polygon seeks the return of the $5 million deposit with interest, damages against Telus for breaching the sales agreement and legal costs.

None of the allegations in the two lawsuits has been tested in court.

Copyright © Western Investor

What Ontario’s Bill 108 means for developers

Tuesday, November 26th, 2019

Bill 108 Ontario’s housing policy

Kasi Johnston
Mortgage Broker News

Changes to Ontario’s housing policy through Bill 108, More Homes, More Choice Act are not going unnoticed.

The bill, which Ontario Real Estate Association (OREA) CEO Tim Hudak calls “the most pro-homeownership legislation in a decade”, was passed in June, and some key amendments came into force in September. The province introduced the bill with sweeping changes across 13 statutes with hopes of cutting red tape, reducing costs and increasing the housing supply in Ontario.

The changes that have come into play include amendments to the Planning Act, which gives municipalities less time to review and approve development applications and changes to zoning. The bill also allows additional residential units for detached, semi-detached, and row houses in both the primary building and an ancillary structure.      

Richard Lyall, president of the Residential Construction Council of Ontario (RESCON) says Bill 108 is a small step in the right direction.

“The bill was a brave move by the current government. It reflects the complexity of the problem, but it’s very broad in scope. A lot of the details have not been worked out, and that needs to get done as quickly as possible,” he said.

Bill 108 also makes it easier to build more homes around public transit by focusing the use of inclusionary zoning to high-growth areas and major transit station areas.

“It’s a no-brainer. In Toronto, we’ve got transit stations that have low-rise housing around them and that just doesn’t make sense. We can’t build a great city doing that,” Lyall said. He says major zoning issues are yet to be addressed and more needs to be done to ease redevelopment and allow for higher density development.

Reflecting on the past couple months, Lyall said he’s noticed an uptick in applications for rental developments and a positive change in mood within the industry.

“The low-rise housing industry has recovered somewhat because it really took a beating in 2018. Even though that’s not necessarily a direct result of the bill, I think investors and developers are seeing a government that gets the complexity of the issue and is doing something complex to try and fix it,” he said. 

Other amendments introduced through Bill 108 include changes to section 37, although it’s yet to come into force. Previously, if a developer was seeking additional height or density, a municipality could ask for benefits through a bonus regime. Lyall called it a scheme to encourage under zoning. Under the new rules, section 37 is being replaced with a “community benefit charge.” Charges will no longer be tied to height or density but will instead be capped at a percentage of the value of the property being developed, with that percentage to be set by regulation. 

Another notable change, yet to come into force, is in the Development Charges Act which allows municipalities to charge developers for services like water, roads and public works. Under the new legislation, these charges will be calculated at the time of filing, which would make costs much more predictable. The payment schedule for these charges will also be overhauled with extra allowances for affordable housing, in hopes of providing certainty to builders. With these changes, the government hopes that savings from lower development charges will be passed on to new homebuyers.

Everyone is being affected by the housing crisis, according to Lyall.

“Millennials are being penalized unfairly, kids are growing up in substandard occupancies, new Canadians are living in unsafe, third-world conditions and it’s unnecessary. The goal is not the policy, the goal is market equilibrium.”

Copyright © 2020 Key Media

BC housing market recovering faster than expected says Central 1 Credit Union

Tuesday, November 26th, 2019

Lower mortgage rates, the first-time homebuyer incentive, and international immigration give the market a helping hand

Steve Randall
The Vancouver Sun

The housing market in British Columbia is benefitting from a cocktail of positive influences which are aiding its recovery.

The deputy chief economist of Central 1 Credit Union says that the rebound is happening faster than expected as lower mortgage rates, the first-time homebuyer incentive, and international immigration give the market a helping hand.

In his latest outlook, Bryan Yu says that these factors are driving buyer demand and affordability for the province’s housing market, with sales higher than last year in 7 of the 8 months since February.

Lower prices in urban centres, coupled with more favourable mortgage rates have been supported by the strong labour market.

However, despite improvement, homes are still out of reach for many would-be homebuyers, due to government policy that constrains supply says Yu.

This may be temporary, but for now he sees increased rental demand, with low vacancy rates boosting rental rates.

And the lower buyer demand seen in the past two years is likely to lead to constraint of affordable homes as Central 1 anticipates and undersupply of construction in response to the previous weakness.

Copyright © 2019 Key Media Pty Ltd

Vancouver condos continue to impel demand, despite muted annual growth

Tuesday, November 26th, 2019

The year-over-year price trend is declining, demand for Vancouver?s condos is still driving growth

Ephraim Vecina
Mortgage Broker News

While the year-over-year price trend is declining, demand for Vancouver’s condos is still driving growth.

Fresh Statistics Canada data covering the third quarter showed that the market’s average condo prices are down by 3.49% annually, but up by 17.9% from Q1 2017. New build condos were up 1.05% year-over-year and up 15.63% from Q1 2017.

A major driver of the phenomenon is the particularly volatile resale apartment segment, Better Dwelling explained in its analysis of the StatsCan figures.

Resale condo prices fell 5.87% annually, but still 18.87% higher than the levels seen in Q1 2017.

For perspective, single-family home price growth has been considerably muted. During Q3 2019, the average price of this housing type fell by 5.95% from a year before.

Compared to Q1 2017, single-detached prices are 5.74% higher, roughly just one-third of the growth exhibited by the condo market during the same time frame.

Earlier this year, a RE/MAX survey conducted by Leger pointed to the fact that Vancouver, along with Toronto and Calgary, boasts of multiple positive attributes that consistently draw in housing demand.

RE/MAX cited particularly strong public transit options, including the Skytrain and bus system, as factors that make Vancouver among the most liveable in the world. The city also ranked high in RE/MAX measures of walkability, especially in Yaletown.

Copyright © 2019 Key Media

Top-class office complex in GTA to be sold for nearly $118M next month

Monday, November 25th, 2019

Trillium Executive Centre a Class ?AAA? office building acquired by True North

Ephraim Vecina
Mortgage Broker News

A $117.8-million transaction for a top-class office complex in the GTA will take place next month, True North Commercial Real Estate Investment Trust reported.

Situated at 675 Cochrane Drive in Markham, Trillium Executive Centre is a 368,800-square-foot Class “AAA” office building which will be acquired by True North through proceeds from the REIT’s public unit offering this month, and through first mortgage financing equivalent to $76.57 million.

The property features 7.7 acres of land, optimally located to ensure “superior north-south and east-west highway accessibility and visibility.”

“The Cochrane Property benefits from access to the regional transit network including vivaNEXT Rapidway and GO Transit, and also benefits from easy access to three airports including, Toronto Pearson International Airport, Billy Bishop Airport and Buttonville Airport,” True North explained.

“The surrounding neighbourhoods offer premier services such as retail, hotel, restaurant, shopping and entertainment amenities. In addition, the Cochrane Property offers superior amenities including a state of the art fitness centre, physiotherapist and café.”

The transaction is expected to close on or about December 18, 2019.

Earlier this month, True North cemented an equity offering deal with a syndicate of underwriters led by CIBC Capital Markets and Raymond James Ltd. The transaction is valued at approximately $70 million.

Copyright © 2020 Key Media

Christies International chief expects global downturn in 2021

Monday, November 25th, 2019

Once the next US president is sworn in, things are likely to take a turn

Steve Randall
Mortgage Broker News

A global recession would bring challenges for the global real estate market but it is unlikely next year according to one major firm’s leader.

Dann Conn is chief executive officer of Christies International Real Estate and he is not expecting a recession in 2020; but once the next US president is sworn in, things are likely to take a turn.

“If you looked at it in the ordinary course, my guess would be 2021 at the earliest, but probably not much later either,” he told Bloomberg.

Conn believes that lower interest rates would be a good thing to protect real estate from current challenges including the US-China trade dispute, Brexit, and tax factors that are impacting real estate investors.

On geopolitics, he says two of the biggest world real estate markets are seeing different outcomes.

For London, UK, where Brexit uncertainty has been a factor for three and a half years, Conn says that the battering that home prices have taken in recent years could result in a strong rebound for investors.

“If you’re a buyer now, you can take advantage of the last four or five years that have been not so great,” he said.

But there was a note of caution with current prime minister Boris Johnson considering a Canada-style tax on foreign investors to cool the market which is overinflated even after the recent declines. The tax is expected to be 3% on top of the usual land tax known as stamp duty.

“Evidence shows that by adding significant amounts of demand to limited housing supply, purchases by non-residents inflate house prices,” Chief Secretary to the UK Treasury Rishi Sunak said in the statement. “That is why we are introducing a higher rate of stamp duty for non-UK residents that will help to address this issue.”

Buying in Asia
Meanwhile, in Hong Kong, the civil unrest means that the economy – and home prices – are weak. Conn suggests those investors looking at real estate in Asia should consider Taiwan as “a perceived relatively safe place to deploy capital because it has great infrastructure, and there’s a good concentration of wealth.”

Copyright © 2019 Key Media