Archive for July, 2020

Q2 BC taxpayers biggest transactions were hotels, temporary shelter for homeless people

Friday, July 31st, 2020

B.C. taxpayers Canada?s biggest hotel buyers

Frank O?Brien
Western Investor

 The British Columbia government was the largest single buyer of hotel properties in Canada during the second quarter (Q2), accounting for four of the 12 transactions and more the half the dollar volume.

The  fact the B.C. transactions  – all of which are for supportive housing – are the biggest deals in the country is indicative of a troubled hotel industry reeling from the effects of COVID-19.

“The second quarter was perhaps the toughest on record for hotel owners and operators across the country,” noted Colliers International in its INNvestment Canada hotel report for Q2 2020.

Colliers noted that the “thin levels of transactions” in the second quarter totalled $200 million with the sale of 12 properties across the country. This compares with 36 sales and a total dollar volume of $666 million in the second quarter of 2019.

Four of the transactions in Q2 were hotels in Vancouver and Victoria, bought by BC Housing to temporarily shelter homeless people. The province paid a total of $107 million.

BC Housing was also responsible for the single largest deal this year, with its purchase of the 110-room Howard Johnson hotel on Granville Street for $55 million, a price that pencils to about $500,000 per room.

At the start of the third quarter, BC Housing also purchased the American Hotel on Main Street, Vancouver, for $17.9 million.

For the first half of this year, hotel sales volumes in Canada totaled $500 million, down from $830 million in the first six months of 2019.

The hotel industry is suffering from pandemic-related travel restrictions that has seen international overnight visitors plunge 92 percent in the second quarter compared to a year earlier.

All conferences booked into hotels have also been cancelled or gone online since the pandemic began.

Nationally, the revenue per available room in Canadian hotels, a key industry metric, is down 54.9 per cent this year compared to 2019, Colliers reports.

Hotel occupancy levels fell to a record low of 12 per cent in April before recovering to an average of 28.9 per cent in early July, still about half of the rate a year earlier.

In 2019, 16.75 million non-residents crossed into Canada by car from the U.S., representing 67 per cent of total travel to Canada by US citizens. For the month of April 2020, just 46,596 non-residents crossed into Canada by automobile, down 97 percent from the 1.1 million visitors during the same period last year, according to Statistics Canada.

For first time since Canada’s confederation in 1867, the Canada-U.S. border was close to all but essential travel on March 31. The closure currently remains in effect until August 21, but it could be extended.

 

 

© Copyright 2020 Western Investor

Greater Vancouver Condo Pre-Sales Cut In Half, New Inventory Delayed

Thursday, July 30th, 2020

Condo Pre-sales at the same as June last year

other

The pandemic drove Greater Vancouver new home sales off a cliff, but things have improved… a little. MLA Canada, a Vancouver-based real estate firm specializing in condo pre-sales, observed an increase in absorption for June. Despite unusual market conditions and a bump from lows, absorption is the same rate as last year. Although the current rate is likely being managed through inventory, and project delays.

Greater Vancouver Condo Pre-Sales Down 50%, But Off Pandemic Lows

Greater Vancouver condo pre-sales bounced from record lows, but still came short. There were just 36 units sold in June, up 51% from the month before. The number is a massive 50% lower than the same month last year. A bit of a surprise considering last year was one of the slowest Junes on record. This persistent slowdown is turning into a throttle for new project launches.

Greater Vancouver New Pre-Sale Real Estate Listings

The number of newly available pre-sale units of new homes across Greater Vancouver.

Over 57% of Pre-Sale Homes Expected Are Delayed

 

The extended slowdown in sales is leading to a lot less inventory than expected. Greater Vancouver saw 259 new pre-sales hit the market in June, up 8% from the month before. This works out to a drop of 50%, compared to the same month last year. It’s inline with the decline in sales, but it’s also 57% lower than the anticipated units for the month. That’s about 338 units delayed, that may pop up later, or be cancelled  – depending on future absorption.

Units are being absorbed at an incredibly low rate, but similar to last year. The sales to new listings ratio (SNLR) reached 14% in June, the same ratio as last year. Analysts generally believe prices will rise when the SNLR is above 60%, fall below 40%, and are priced correctly between those two.

Greater Vancouver New Home Pre-Sale Absorption

The ratio of sales to new listings of pre-sale homes across Greater Vancouver.

Greater Vancouver condo pre-sale absorption is unchanged from last year, but with a few caveats. Sales are significantly lower this time around, and so is inventory. Even more inventory has been delayed and throttled to get to this level. The market may actually be softer than absorption implies. Whether that matters depends on if developers can effectively control inventory longer than buyers wait.

Copyright 2020 Better Dwelling

Bill 197 condo owners needs to know

Thursday, July 30th, 2020

Will Bill 197 make condos more expensive for Ontario home buyers?

Clayton Jarvis
Mortgage Broker News

Ontarians may still be wary of going back to the office, but the provincial legislature has had a very busy July. After passing the controversial Bill 184 on July 6, and the far less contentious Bill 159 eight days later, the Ontario government passed yet another bill last week that should be of interest to the province’s realtors, mortgage brokers, and home buyers.

While Bill 197 is unlikely to make headlines for its real estate components – it is an exceptionally broad piece of legislation – it could lead to increased costs for developers. Anyone who has dabbled in the new construction space will know what that means.

“At the end of the day, when they say ‘The developer has to pay this, and the developer has to pay that,’ there’s only one person who pays for that – that’s you and me who buy the house,” says Leor Margulies of Robins Appleby Barristers and Solicitors. “The developer doesn’t pay for anything. If the cost is too high, he doesn’t do the project. If the cost can be passed on in a purchase price, then the purchaser pays for that.”

Essentially a companion piece to the province’s much-touted Bill 108, aka the More Homes, More Choices Act, Bill 197 tweaks Bill 108 in three ways that could lead to higher prices in much of Ontario.

 

Increased development charges

In the mid-1990s, under Mike Harris’ Progressive Conservative government, developers were given a minor break on the development charges associated with new projects. While they were required to pay 100 percent of the expected hard costs – the infrastructure costs forced onto cities because of local population growth – developers were only asked to pay 90 percent of the expected soft costs – the money a municipality would require to provide services to that growing population, like social housing or libraries.

Bill 197 puts an end to that 10 percent discount.

“Now, developers pay 100 percent of the soft cost component of the development charge, which means that gets added to the cost, and that gets passed on to purchasers,” Margulies says. “That’s a big change.”

 

Section 37

Section 37 of Ontario’s Planning Act, which essentially allows cities to ask for benefits in exchange for density-increasing amendments to a development’s zoning, received a significant tweak.

Prior to Bill 197’s passing, Margulies says there was no formula in place to calculate what a developer owed a municipality under Section 37. The municipality may ask for money, day care facilities, art – whatever it wants, really, with no pre-set limits.

“There’s historical precedent, but it really is the wild west,” Margulies says, adding that the city of Toronto alone is currently sitting on around $600 million worth of unspent Section 37 collections.

Under Bill 197, 60 percent of the money collected must be spent or designated for spending every year. The bill also implements a formula for calculating what developers owe municipalities if their zoning needs change – a set percentage of the site’s total land value.

“What we don’t know is what that percentage is,” says Margulies. “We think it will be under 10. I think the industry feels two percent is correct.”

Either way, prices are likely to increase, particularly in municipalities where Section 37 funds were not previously being collected.

 

Parkland dedication fees

Once change contained in Bill 197 may actually benefit buyers.

Bill 197 contains significant changes to the province’s approach to calculating parkland dedication fees. In Ontario, developers are required to dedicate a certain percentage of the area they are developing to green space. For residential projects, it’s equivalent to five percent of the land in question. Because few developers in densely populated areas have the luxury of having that much extra space to play with, they have been given the option of paying cash instead.

But the cash option is by no means a lifeline for developers. Because of the formula used by the province to calculate the rate of parkland dedication fees, the equivalent of one hectare of land per 500 units, they tend to be brutally expensive. Margulies explains that in the 905 area code, parkland fees have ranged between $20,000 and $60,000 per unit.

“Developers have been fighting very hard with municipalities to cut them back,” he says.

Their calls for a more realistic formula for determining parkland fees are not reflected in Bill 197. But developers now have the option of appealing fees they find to be arbitrary and egregiously expensive – a definite win. Going forward, parkland development fees will need to be justified by a background study that explains a municipality’s future parkland needs.

But what form those studies take, and their eventual cost implications for developers and buyers, are anybody’s guess.

 

Copyright © 2020 Key Media

B.C.s economy will be benefitting from the construction of three energy megaprojects, workforce expected to peak.

Wednesday, July 29th, 2020

Energy project jobs underpinning B.C.?s economy

Nelson Bennett
Western Investor

While Canadian unemployment has soared due to COVID-19, British Columbia’s mega energy projects continue to generated thousands of jobs.

The big energy story of 2022 will likely be the completion of the $12.6-billion Trans Mountain pipeline expansion, but B.C.’s economy will also be benefitting from the construction of three other energy megaprojects – the $17-billion LNG Canada plant in Kitimat, the associated $6.6-billion Coastal GasLink pipeline, and the $10.7-billion Site C dam.

By 2022, BC Hydro also hopes to have completed the $280/-million Peace River Electricity Supply project – construction of which is underway – that will link the LNG Canada and Site C dam projects by providing clean power to natural gas producers supplying the new liquefied natural gas plant in Kitimat. The idea there is to lower the greenhouse gas emissions intensity of LNG produced in B.C. by electrifying the upstream.

These big energy projects are already employing thousands of workers. There are about 1,600 people employed right now in Kitimat at the LNG Canada project. The workforce is expected to peak at about 4,500 throughout 2022 and 2023.

LNG Canada and its main contractors have already awarded about $2 billion in contracts to B.C. businesses and contractors, many of them First Nation businesses, said Susannah Pierce, director of corporate affairs for LNG Canada.

Close to 600 workers are employed on the associated Coastal GasLink pipeline, which is expected to have peak employment of 2,500, with completion slated for 2023.

Meanwhile, Site C dam employs just over 3,200 workers, but typical pre-pandemic workforce numbers for the project were around 4,000. It is slated for commissioning in 2024. The Site C dam project’s contribution to B.C.’s GDP has been estimated at $3.2 billion.

The $17 billion LNG Canada project’s economic impact in B.C. has been estimated by Central 1 Credit Union at 0.3 per cent to 0.5 per cent of B.C.’s total GDP. Once in operation, it is expected to increase revenues of natural gas producers by $5.8 billion, compared to what they earn through domestic sales and exports to the U.S.

To date, the LNG Canada site in Kitimat has been cleared and prepared, a workers’ village called Cedar Valley Lodge is being built to accommodate 1,500 workers and a major reconfiguration of marine terminals is underway.

By 2022, the Cedar Valley Lodge will be expanded to accommodate up to 4,500 workers, and the company expects the large LNG modules being built in Asia will start arriving around the same time.

The next two years will see the site become a beehive of activity, with the building of the LNG plant itself. The biggest challenge in 2022 may be finding enough qualified workers for all the big projects being built.

LNG Canada, Coastal GasLink and Site C dam alone will employ roughly 11,500 workers at peak construction. BuildForce Canada estimated that 13,000 new jobs would be added in B.C. in 2021, with LNG Canada and Site C dam being major drivers, although it also included projects like the Pattullo Bridge replacement project.

“Right now there’s competition for B.C. labour, and I can imagine into the future there will continue to be that competition for B.C. labour, and that’s something we’re very mindful of,” Pierce said. “It’s not necessarily a bad problem to have, if you’re looking at [making] sure that folks who are in the trades are employed in B.C., because there’s going to be lots of demand.

“We’re pulling people from all over the province to work on this project, as are the other ones, I’m sure. As we start to look at the onsite construction, there’s also going to be opportunity for workers as well as potential suppliers from all across the province.”

 

© Copyright 2020 Western Investor

COVID-19 pandemic reduced the number of M&A deals

Tuesday, July 28th, 2020

COVID-19 took a bite out of Canada’s startup M&A, but deals may be coming soon

James McLeod
other

High End building consider monthly rental, aside from prefer long term lease

Sunday, July 26th, 2020

Luxury Vancouver building prefers long-term lease buyers, but would consider monthly rental

Joanne Lee-Young
The Vancouver Sun

Developer Stanley Dee is marketing a visibly empty, super-high-end property in Vancouver’s West End.

Acting on behalf of the owners, he had been trying to figure out how to adapt to the cooling of the city’s once hot luxury real estate market, and now, with the pandemic, might shift gears again.

Recently, Dee says, he has been getting a burst of interest in the building for short-term, monthly rentals. Wealthy Canadians accustomed to going abroad by private jet are attracted to B.C.’s relative success in managing the pandemic and are considering the units as the ultimate vacation-in-Canada rental, said Dee.

The building’s dramatic, floor-to-ceiling windows face Beach Avenue at 1460 Bute St. Passersby along the part of the seawall that connects the Burrard Bridge to English Bay can peer up at the handful of units in the four-storey building. Two of them are 1,400 square feet each and there is a 3,000-square-foot, two-level penthouse with a 1,100-square-foot rooftop.

The units aren’t technically empty since they have caretakers who live in the units while paying a small amount of rent.

But since last summer, Dee been seeking high-paying residents befitting the combined $12.3 million assessed value of the units

A promotional email said all the units in the building are available together starting at $60,000 a month, with a single, smaller unit starting at $8,500. But Dee didn’t confirm these, only willing to say it would depend on the terms, whether someone wanted single or multiple units and the length of the rental period.

For him, there’s an opportunity cost in taking on short-term tenants because he might miss the original goal of finding someone willing to lease all three units for 30 years. Dee prefers to lease the entire building to a single group, such as a film studio, tech company, professional sports team or an international billionaire, for between 20 and 30 years.

But he knows prospects are less likely in an era of COVID-19 travel restrictions and less certain budgets.

Filling the building has been a challenge from the start, since the units have never been offered for conventional freehold strata sale. Instead, they are available as  leasehold properties where the owners keep ownership, but are essentially paid the rent upfront.

“There has always been a high propensity for investment money or secured money to be in Vancouver,” said Dee.

He founded Deecorp to develop the property for the owners, a family that bought the land in 2011 for its location and wants to hold it for future generations rather than sell it.

“The (object) is just to get an income stream, as much as possible, and to re-address things in about 30 years.”

Dee and the owners also thought a 30-year lease arrangement would appeal to wealthy foreign buyers turned off from making purchases by the various property transfer taxes, empty homes taxes and other anti-speculation measures that significantly slowed Vancouver’s luxury market, just as the building was completed in 2018.

Property leases under 30 years are exempt from the province’s property transfer tax of 20 per cent for foreign buyers.

Dee has not been willing to make public an asking price for those leases, except to say leasehold properties are generally about half the market value of a freehold strata property, and he would likely ask for above that because of the building’s unobstructed views of English Bay, its limited number of units and expensive furnishings.

 

© 2020 The Province

1 out of 10 Canadians thinking to move back home

Thursday, July 23rd, 2020

One million adults plan to move back home

Western Investor
Western Investor

At least 1.5 million adult Canadians have already or plan to move back home with their parents, according to a national survey by Finder.com released July 24.

B.C is among the provinces seeing the biggest  boomerang back home.

The findings could have ramifications for the multi-family rental sector, since the vast majority of those seeking shelter at home are renters.

Survey results reveal an estimated 2.8 million, or nearly 1 in every 10 Canadians, have seen their living situation change due to the COVID-19 crisis.

Approximately one million Canadians (4 per cent) said they are thinking of moving in with family. 

Of those moving, by far the biggest trend are grown adults moving back in with their parents. About 1.5 million Canadians have said they have moved home due to the COVID-19 crisis, and 860,917 parents have said their kids have already moved back in. 

Canada’s youngest generation (aged 18-24) are most likely to have already moved home (13 per cent), with men more likely to move in with their parents as compared to women.

Men are also 141 per cent more likely to be contemplating moving home, compared with women,

The provinces hit hardest by COVID-19, and with higher costs of living, saw the most moves with Ontario, Quebec and B.C. in the top spots. Ontario is the epicentre of Canada’s ‘Generation Boomerang’ with 10 per cent of people in the province saying they’d moved back in with their parents or had adult children move home with them. 

In British Columbia 10 per cent of those surveyed said they are experiencing a change in their living situation and another 5per cent are thinking about it.

Just 11per cent of those in the prairies are in a new living situation or thinking about it. Just 5 per cent of those in the Atlantic provinces are living in a changed living situation, with another 5 per cent thinking about moving back with family.

While young people moving back home with parents make up the bulk of this trend, it also works in reverse, just on a smaller scale, with 278,532 Canadians who have already moved in with their adult children and another 455,780 seriously considering it. 

Scott Birke, Publisher at Finder.com, a Toronto-based data research platform, said that Canada’s young adults are facing an uphill battle when it comes to establishing themselves during an uncertain recession.

“Between the high cost of rent in Canada’s big cities and a recession with record levels of unemployment, young people trying to launch or grow careers while paying the bills are now faced with challenges that may seem insurmountable, making returning home to their parents the most attractive option for many of Canada’s young adults.”  

“Our data reveals about a million Canadians who haven’t yet moved home with their parents are still seriously considering it, which tells us this trend is not just confined to the pandemic and could be a longer-term setback when it comes to young Canadian adults building wealth and establishing their careers”, said Birke.

He noted the reverse trend of Canadians parents moving in with their grown children could prove to be a silver lining to a stressful situation.

“It is safe to assume that many of the parents who moved in with their adult children are also grandparents who are helping to provide childcare for exhausted working parents of young children, who have limited or no childcare options until school begins.”

 

© Copyright 2020 Western Investor

1 out of 10 Canadians thinking to move back home

Thursday, July 23rd, 2020

One million adults plan to move back home

Western Investor
Western Investor

Vancouver Approves 28-storey rental building at the corner of Broadway and Birch ? The Old Denys Location

Wednesday, July 22nd, 2020

Vancouver approves 28-storey rental building in tightest of votes

Dan Fumano
The Province

Opinion: The question, basically, was whether it’s a worthwhile trade-off for the city to an increase from 17 to 28 storeys, despite strong neighbourhood resistance, for an extra 50 market rental units and about 50 below-market homes.

Vancouver city council narrowly approved Tuesday a 28-storey rental tower for West Broadway.

It was one of the most controversial and closely watched decisions of this council and could have gone the other way if not for an unusual turn of events last week.

The tower, proposed for the former Denny’s site at West Broadway and Birch streets, will provide 258 rental homes, 58 of which will be at below-market rents. The project had attracted neighbourhood opposition since late 2018, right around the same time this mayor and council were sworn in. It had long been flagged by detractors, supporters and senior city staff alike as a particularly important decision.

Mayor Kennedy Stewart, who voted in support of the proposal, told council Tuesday that the decision would be a watershed moment at the mid-point of their term. Many councillors said it wasn’t a decision they reached lightly. Nor was it one they reached quickly.

Tuesday’s decision came after council received almost 1,000 written comments and spent more than 15 hours during four days spread over four weeks, debating, asking questions of staff, and hearing from opponents and supporters.

A decision on the Birch proposal had been expected last week. But NPA Coun. Sarah Kirby-Yung indicated she hadn’t caught up on the portions of the public hearing she had missed, which would have meant she wouldn’t be allowed to vote. So council decided at that meeting — against Kirby-Yung’s wishes — to delay the decision until this week, when all 11 members could vote.

In the end, every vote counted and Kirby-Yung’s participation proved crucial.

Before casting their vote, each councillor had a chance to explain why they opposed or supported the project. Kirby-Yung happened to speak last, before the final vote came down to six votes in favour and five opposed.

Kirby-Yung said she was “conflicted,” but after weighing many factors, voted in favour.

If the vote had gone ahead last week without Kirby-Yung, it might have been a tie, which means the rezoning would have failed.

Before this week, this council had approved all eight proposals that had reached them under the city’s moderate-income rental housing program. But none was as big as the Birch one in building height or profile. A senior Vancouver planner had described the Birch project as “the big one,” and “the test case” for the city’s rental housing pilot.

 

A rendering showing a 28-storey rental tower proposed for the corner of West Broadway and Birch Street in Vancouver. PNG

 

 

Under the program, the city considers granting developers extra density and height on projects in exchange for keeping 20 per cent of residential floor space affordable for households earning between $30,000 and $80,000. The policy was approved in 2017 by Vancouver’s previous Vision-majority council, but decisions on projects then fell to the city’s current mixed council.

Seven of the first eight projects under the rental program were east of Main Street — a fact noted by many people who wrote the city calling for more rentals, including below-market homes, on the west side. The only project previously approved for the west side was a five-storey building OK’d last year in Kitsilano, the most controversial proposal under the program before the Birch tower.

Stewart, who campaigned in 2018 on a platform of boosting rental construction, told council before voting in favour: “I was elected because the status quo wasn’t working.”

The Birch proposal was also supported by NPA councillors Melissa De Genova and Lisa Dominato, Green Coun. Michael Wiebe and OneCity Coun. Christine Boyle.

Opposed were COPE Coun. Jean Swanson, NPA Coun. Colleen Hardwick, independent Coun. Rebecca Bligh, and Green councillors Adriane Carr and Pete Fry.

The developer behind the project, Jameson Development, had indicated that if the 28-storey tower was rejected, it would proceed with a 17-storey project on that site, already approved in 2018 by the previous council. The 17-storey building, which many neighbours supported, would have provided about 153 homes, all at market rents.

The question Tuesday was whether the tradeoff was worthwhile — to allow 11 extra storeys on the site despite strong neighbourhood resistance, for an extra 50 or so market rental units plus about 58 below-market homes, built by the private sector with no direct funding from government.

That math added up for six council members. But the final result came down to that single vote.

 

© 2020 Postmedia Network Inc.

Teranet-National Bank data report that housing market will slowdown

Tuesday, July 21st, 2020

Despite recent sales activity, fresh Teranet-National Bank data points to decline in home prices

David Kitai
Mortgage Broker News

Despite prices swelling in a number of Canadian markets, the most recent Teranet-National Bank National Composite House Price Index, released yesterday, claims Canada’s housing market has hit a slowdown.

The Index says that nationwide, house prices in June were up 0.7% from May – half the average increase posted in June for the past decade. The report’s correction for seasonal pressures turns that 0.7% rise into a 0.1% drop. Halifax (2.7%), Winnipeg (1.8%), Hamilton (1.7%), and Ottawa-Gatineau (1.5%) led the price increases. Calgary and Edmonton both saw drops in real numbers, at minus-0.1% and minus-0.7% respectively. Montreal was up 1.4% and Toronto was up 0.8%, while Vancouver prices only grew by 0.2% in June.

“Last month’s advance in the Composite index was the lowest for a month of June since 2004,” wrote Teranet in a press release accompanying the data. “This adds to other signs already witnessed in May of a slowing of activity on the housing market due to COVID-19,” including two consecutive months of decline in the seasonally adjusted raw Composite index, which fell in June in six of the 11 metropolitan areas studied.

Conflicting views

John Lusink, president of Right at Home Realty, told MBN that the Teranet-National Bank report runs counter to some more positive reports he’s seen from the Canadian Real Estate Association and Toronto Real Estate Board. While he doesn’t dispute the numbers in the Teranet-National Bank report, he says that a nationwide sampling, and even a single-market summary of Canada’s largest urban real estate markets, makes Canada’s housing market appear more languid than it is. As well, he says the unprecedented circumstances of 2020 make comparisons less meaningful.

“I think part of the challenge is that too many of these organizations are still also comparing year-over-year, and I don’t think you can do that,” Lusink says. “I think you have to compare today compared with yesterday compared with last week compared with last month. Looking at internal numbers, if I were to compare incoming and closed numbers with last year, we’re down 33% and 38% respectively. But if I compare week-over-week, we’re up 10% on incoming deals and we’re up on closed deals by 56%. It’s about how you balance the information.”

Lusink says the pause that was hit on virtually all market activity through March and April has augmented the typical yearly real estate cycle: Late summer would usually be a time for closings, but many markets are still in the showings/offers stage of the process. He says that represents an ongoing pent up demand, especially in the GTA and Ottawa, where he’s seen strong growth. While numbers pointing to a drop are inevitable, he says, there remains a base resilience in Canada’s key housing markets.

Teranet addressed the optimism shown in other reporting data. The organization remained cautious, however, about the state of Canada’s housing market.

“According to CREA, overall Canadian home sales returned to a more normal level, and this should be soon reflected in land registries,” the release reads. “But question marks still lie ahead. We expect the Canadian unemployment rate to remain elevated for a while. In this context, demand for housing may decrease due to a reduction in immigration and would-be first-time homebuyers not being able to qualify for a mortgage loan.”

Regional and sub-regional numbers are key in understanding the state of Canada’s markets, Lusink says. He points to his own internal numbers, which show strong performance in Ottawa and parts of the GTA. Those markets, he says, along with Montreal and Metro Vancouver, are the “engines” of Canada’s real estate market. While the Teranet National Bank report does display numbers for those metro areas, Lusink notes that they don’t give a picture of market subsets which can pose issues.

“I think the challenge with reports that come out from the likes of CMHC and Teranet is, while they’re good information, they need to treat certain markets separately, so that people don’t get a misguided view of what’s going on,” he says.

Opportunity for brokers to prove their value

While Lusink says that things remain busy and active for Right at Home realty, transactions come with a host of challenges that did not exist before the COVID-19 pandemic. Reports like these and broad indices of stagnating or downward-trending prices can raise red flags for buyers and cause new issues as realtors try to close deals. He says that in the wake of this report, mortgage brokers can prove their value as they shepherd clients through closing deals.

“In the wake of this report, brokers should know they are absolutely an invaluable resource,” Lusink says. “They can help realtors and their clients manoeuvre through what is a much more challenging qualification process. They should know, too, that there very much is an active market, but it’s that much harder. It takes that much more effort to get the deal closed. Brokers really are a resource that people should be leaning on even more so now.”

 

 

Copyright © 2020 Key Media