Archive for the ‘Real Estate Related’ Category

BC Home Sales on the Rise in May

Friday, June 14th, 2019

BC home sales increased 9 per cent in May compared to April

REBGV

The British Columbia Real Estate Association (BCREA) reports that a total of 8,221residential unit sales were recorded by the Multiple Listing Service® (MLS®) in May, a decline of 7per cent from the same month last year. The average MLS® residential price in the province was $707,829,adecline of 4.3per cent from May2018. Total sales dollar volume was $5.8 billion, an11per cent decline fromthe same month last year.

“BC home sales increased 9 per cent in May compared to April, on a seasonally adjusted basis,” said BCREA Chief Economist Cameron Muir. “However, consumers continue to struggle with the negative shock to affordability that stringent mortgage lending policies have created.

”Total MLS®residentialactive listings were up 23.2per cent to 41,519units compared to the same month last year. However, total active listings were down 2 per cent from April, on a seasonally adjusted basis, the first monthly decline since the B20 Stress test was introduced in January 2018.

 Year-to-date, BC residential sales dollar volume was down 25.1per cent to $19.8billion, compared with the same period in 2018. Residential unit sales decreased 20.2per cent to 28,711units, while the average MLS® residential price was down 6.2per cent to $688,339.

© BCREA

Chinese crime baron linked to major laundering operation in BC

Thursday, June 13th, 2019

Chinese cartel drug boss used law firm to launder money

Ephraim Vecina
Mortgage Broker News

An alleged Chinese cartel drug boss used Liberal MP Joe Peschisolido’s law firm to launder money through a Metro Vancouver project, according to an in-depth investigation by Global News.

The deal for the condo development was a “bare trust” joint venture with a company directed by Kwok Chung Tam, who reportedly holds a position of authority in the major cartel called Big Circle Boys, according to the Canada Border Services Agency.

Said venture gave Tam an instrument that masked his direct involvement in the acquisition of a 3.7-acre property in Coquitlam, BC. The purchase was valued at $7.75-million, and it was sold for $14.8 million in 2015.

Per court documents, Tam was still serving a conditional sentence for a 2010 drug trafficking conviction at the time of the transaction’s completion.

Tam has maintained that he is a legitimate businessman, but his source of wealth has been in question ever since his arrival in Vancouver over 30 years ago.

“I am not now nor have I ever been a member of a gang, triad or criminal organization,” Tam asserted in a July 2016 court affidavit. His Vancouver immigration lawyer also insisted to Global News that the allegations have never been proven in court or in an immigration hearing.

Law enforcement and immigration records from 1991 to 2014 indicated otherwise: accumulated evidence strongly suggested that Tam was most likely a casino loan shark, drug facility operator, and heroin importer who has repeatedly and “brazenly” flouted Canadian law.

Another damning piece of information is that the numbered company used by Tam in the aforementioned bare trust deal has been associated with several Richmond properties investigated by the RCMP for possible drug links back in 2006.

The situation also puts into the spotlight the verification procedures that law firms offering such services use, and whether Peschisolido’s firm did its part properly before undertaking a transaction with a notorious personality.

“Lawyers need to be asking their clients, how did you make your money?” RCMP International Organized Crime Investigation Unit former commander Kim Marsh stated.

“Anybody doing basic due diligence, even basic Google searches, would determine there is huge red flags, that these individuals are involved in illicit activities,” he added. “So anyone doing business with them is either doing nothing, or it’s a case of willful blindness.”

Copyright © 2019 Key Media

Millennials need a major home price drop or sharp wage increase

Thursday, June 13th, 2019

Generation Squeeze says that in many cities there would have to be a major drop in home prices

Steve Randall
REP

Despite some lower prices recently, many young Canadians are still far from able to afford to buy a home according to a new report.

Generation Squeeze says that in many cities there would have to be a major drop in home prices or a significant rise in wages to enable millennials to enter the housing market.

For example, Vancouverites would need their typical full-time wages to increase to $200,400 or four times their current level; or house prices would need to fall by three-quarters (a $795K drop) to make homes affordable (based on CMHC’s measure of households spending no more than 30% of their pre-tax earnings on housing.)

Across Canada, a wage increase to $93,400 a year, almost double current levels; or a home price drop of around half ($223,000) would be required.

“Despite recent nominal declines in housing prices compared to previous years, the gap between the cost of owning a home and the ability of younger Canadians to afford it is at critical levels. If housing markets are levelling out, they remain untenably high,” said Dr. Paul Kershaw, lead author of ‘Straddling the Gap: A troubling portrait of home prices, earnings and affordability for younger Canadians’, and founder of Generation Squeeze.

The report says it now takes a typical young person 13 years to save a 20% down payment on an averaged priced home in Canada, compared to the five years it took when today’s aging population started out as young adults around 1976.

NHS needs extending

Generation Squeeze is calling on the federal government to expand the National Housing Strategy from the current pledge to support 530,000 of the most vulnerable Canadians, to an estimated 1.2 million who are in core housing need.

“A second phase of the National Housing Strategy must be launched to ensure all Canadians can afford a good home — whether renting or owning — by addressing failures in the broader housing market,” said Kershaw.

Generation Squeeze is also calling for the government to embrace “Homes First” as a guiding principle, with policy targets that would ensure that home prices don’t grow faster than local earnings.

Copyright © 2019 Key Media Pty Ltd

Feds announce $10M for RCMP to fight money laundering after ministers’ meeting

Thursday, June 13th, 2019

Ministers discussed the importance of prosecuting money launderers

Canadian Press
Canadian Real Estate Wealth

The federal government has announced $10 million to help the RCMP prosecute money laundering after a special meeting in Vancouver of Canada’s finance and justice ministers to discuss the pervasive problem.

Finance Minister Bill Morneau says the ministers discussed the importance of prosecuting money launderers and the new funds will help co-ordinate information and hold criminals accountable.

Morneau says the ministers discussed making corporate ownership of real estate more transparent through beneficial ownership registries, though there was no final commitment from provinces on the topic.

He says Ottawa cannot simply create a framework for such registries, because there are issues around privacy and regulation, but he heard around the table that everyone was willing to take the next steps.

The federal government promised $160 million to help fight money laundering in the federal budget and Organized Crime Minister Bill Blair says Canada is building a new capacity to respond, investigate and prosecute the problem.

Ontario has requested federal funding on par with British Columbia to fight money laundering, but Blair says they didn’t discuss specific allocations of resources at the meeting.

Copyright © 2019 Key Media Pty Ltd

Legions 13525 106th Avenue Surrey a 20 storey mixed use building and a 26 storey condo tower by Lark Group

Wednesday, June 12th, 2019

Surrey, Burnaby properties will combine veteran facilities with market housing

Frank O’Brien
Western Investor

As D-Day ceremonies captured attention June 6, veteran members at two of the 28 Royal Canadian Legion branches in Metro Vancouver were celebrating joint venture real estate deals that will improve facilities and provide a mix of affordable and market housing.

In Surrey, Whalley Legion Branch 229 and the Lark Group broke ground May 23 on the Legion Veterans Village, Canada’s first centre for excellence for veterans and first responders.

The two-phase, $312 million project includes a 20-storey mixed-use building inspired by the forms of the Canadian National Vimy Memorial in France honouring the lives and sacrifices Canadians made during the First World War.

The village will offer clinical rehabilitation services, research and delivery of health-care programs, services and trauma counselling, including for veterans and first responders suffering from post-traumatic stress disorder. It will also feature a new 10,500-square-foot, state-of-the-art facility for legion members, 148 market-housing units and more than 48 affordable-housing units. 

Transitional and crisis housing facilities available to veterans, their families and the community are also part of the project.

Its second phase is a new 26-storey building with 325 condominiums. The value generated by the condo sales is expected to help cover the cost of the new veterans housing and treatment facility.

The City of Surrey fast-tracked the project’s application process by deeming it a NEXUS project. Construction on the first phase is expected to reach completion within two years.

The Whalley Legion has moved to temporary premises on King George Highway while the new facility is being built.

Meanwhile, North Burnaby Legion 148 and Beedie are proceeding with a redevelopment that will deliver a new 2,400-square-foot legion facility on the ground floor beneath 39 units of rental housing in a five-storey, mixed-use project.

Beedie is awaiting rezoning for the East Hastings site. Project manager Ali Sarpoushan said that if the rezoning is approved, Beedie plans to start construction later this year on the $30 million development.

Many of B.C.’s 147 Royal Canadian Legion branches are suffering from declining enrolment and falling revenue as the medical and housing needs of their members increase, noted Brian Lutz, a spokesman for the Royal Canadian Legion of BC/Yukon. Some of the legions, however, own land that could be used for development.

“Quite a few [in Metro Vancouver] are in talks with developers,” Lutz said.

Since 1956, the legion in B.C. has provided affordable housing to thousands of veterans and seniors. Today, it operates more than 4,500 units in 70 B.C. facilities with a community investment of approximately $94 million. 

© Copyright 2019 Western Investor

Beware of real estate investment schemes promising tax write-offs, warns CRA

Tuesday, June 11th, 2019

Fraudulent schemes lure investors with false promise of huge tax write-offs – and those who invest could face prosecution

Joannah Connolly
Western Investor

Canadians should beware of a spate of real estate investment schemes that falsely promise a significant tax write-off, according to a warning from the Canada Revenue Agency (CRA).

The federal taxation agency also warned that not only the promoters of such schemes, but also anybody who participates in them with the aim of reducing their tax burden, could face prosecution, fines and even jail time.

The schemes, which the CRA said are being promoted by some tax representatives and tax preparers, are claiming that those who invest in real estate through a limited partnership can get a tax write-off of more than double what was invested, with limited liability for the investor.

The CRA said, “Potential investors are advised that they can claim a significant tax write-off because of costs being expensed in the initial year of the project. For example, the investor has invested $5,500 and is advised that they can write it off on their taxes for $12,500 due to financial services, lease enhancement and tenant improvement costs expensed in the first year. This is not the case.”

It added, “Limited partnerships are unique arrangements that provide investors with certain benefits similar to partnerships and corporate entities. However, different than general partnerships, the investor’s liability is restricted to the amount they invested. Therefore, they cannot claim a higher tax write-off than invested.”

Promoters of such schemes are not the only people who could face fines and jail time. The CRA’s warning made it clear that investors’ actions in trying to avoid tax payments by investing in such schemes “may have serious consequences.”

The agency wrote, “Those who choose to participate in these schemes, as well as those who promote these schemes, face serious consequences, including penalties, court fines and even jail time.” 

The CRA said that any scheme that seems “too good to be true” should be reported to the agency. It also advised that anyone who thinks they may have unwittingly participated in such a scheme “should come to us to correct your tax affairs, before we come to you.”

Copyright © Western Investor

May housing starts cause for concern?

Monday, June 10th, 2019

CMHC says housing starts slowed in May

REP

Canada Mortgage and Housing Corp. says the pace of housing starts slowed in May.

The housing agency say the seasonally adjusted annual rate of housing starts slipped to 202,337 units in May, down 13.3 per cent from 233,410 units in April.

Economists on avearge had expected an annual rate of 205,000, according to Thomson Reuters Eikon.

The annualized pace of urban multiple-unit projects such as condominiums, apartments and townhouses fell 18.5 per cent to 141,851 in May while the pace of single-detached urban starts rose 1.8 per cent to 45,095.

Rural starts were estimated at a seasonally adjusted annual rate of 15,391 units.

The six-month moving average of the monthly seasonally adjusted annual rates was 201,983 in May compared with 205,717 in April.

Copyright © 2019 Key Media Pty Ltd

Market collapse appears less likely says RBC

Monday, June 10th, 2019

A market report from real estate boards recovery underway

Steve Randall
Canadian Real Estate Wealth

Last week’s market reports from real estate boards including those in Vancouver and Toronto show that there is recovery underway with even the tough market conditions in Vancouver suggesting a bottoming-out.

This is unlikely to end calls for the mortgage stress tests to be altered or scrapped, says RBC Economics’ senior economist Robert Hogue, but it should “quiet down critics fearing a market collapse.”

In his latest assessment of the Canadian housing market, Hogue says the rebound for Toronto sales in May (resales up 19% year-over-year) says more about weakness a year ago than market momentum, with seasonally adjusted figures pointing to stabilization rather than a surge.

And ‘back-of-the-envelope’ calculations on the slowing of declining resales in Vancouver (-6.9% year-over-year in May compared to -30% in April) show that resales increased by more than 25% month-to-month in May on a seasonally-adjusted basis.

“This is the strongest sign yet that the market isn’t spiraling out of control. In fact, we believe it indicates that a bottom has been reached,” writes Hogue.

The report also notes several other Canadian housing markets as showing encouraging signs.

May resales increased year-over-year in Victoria, Calgary and Ottawa—all implying moderate increases between April and May. Despite Regina posting a sizable drop, this followed a strong pick-up in April.

Copyright © 2019 Key Media Pty Ltd

Vancouver commercial investment is not having a good 2019 so far

Monday, June 10th, 2019

Commercial asset investment in Vancouver is weak

Ephraim Vecina
Canadian Real Estate Wealth

Aside from a surging office market, commercial asset investment in Vancouver has been weak so far this year, according to new research by Altus Group.

A total of 322 commercial transactions were completed in the market during the first quarter, shrinking by 49% annually. Altus Group director of data solutions Paul Richter noted that this was the lowest commercial volume seen in Vancouver in several years.

Only the city’s office segment experienced net gains in Q1 2019, with sales going up to 26 (from the 16 seen the quarter prior).

The retail sector suffered its second consecutive decrease in overall investment during the quarter to end up at 35 transactions worth $136 million.

Meanwhile, the industrial sector’s volume dramatically plunged by 54% year-over-year, ending up at $228 million. This was even more noteworthy considering that the sector enjoyed its all-time investment high during Q4 2018.

Residential land investment was at $446 million during Q1 2019. This was the segment’s first sub-$1-billion level seen in 13 quarters, and its lowest dollar volume since Q2 2014.

Altus warned that the Vancouver commercial segment’s condition over the past few years has been especially concerning.

“The lowest transaction volume since Q1 2013 is reflective of the gap between vendor and purchaser price expectations, the lack of product and has resulted in decreased market activity,” Richter explained.

Copyright © 2019 Key Media Pty Ltd

Sotheby’s International Realty Canada franchise rights sold

Monday, June 10th, 2019

Peerage Realty partners acquire Sotheby’s international Realty Canada

Steve Randall
REP

The real estate-focused business of investment firm Peerage Capital is to acquire the franchise rights of Sotheby’s International Realty Canada.

Through a wholly owned subsidiary, Peerage Realty Partners will acquire the rights from a subsidiary of Dundee Corporation. The transaction is expected to close around May 17, 2019.

“With over $112 billion in global sales volume, 22,500 sales associates and 990 offices in 72 countries and territories worldwide, the Sotheby’s International Realty brand is the most talked about, written about, impactful residential real estate brokerage network in the world,” said Miles S. Nadal, Founder and Executive Chairman of the Peerage Capital Group.

The acquisition will boost Peerage’s footprint in the Canadian luxury real estate services market. It will add 540 agents and $5 billion in annual sales to Peerage’s total sales.

Change of leadership The deal means a change of leadership for Sotheby’s International Realty Canada with long-time Peerage executive Don Kottick becoming president and CEO.

Kottick is a director of the Canadian Real Estate Association.

“The Sotheby’s International Realty brand is the preeminent destination that attracts some of the best talent in the industry” he said. “Moving forward, our focus will be on enhancing agent productivity, client experience, operations and continuing to attract the elite of the industry. With Peerage’s support, we will uphold and strengthen our position as the leader in luxury residential real estate in Canada.”

Copyright © 2019 Key Media Pty Ltd