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Steve Randall
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Construction in one property sector is about to surge, according to developer Luc Maurice.

The Quebec builder says that he expects the building of homes for seniors to see large increases in the coming years and to be valued at around $3 billion per year. 

Maurice’s comments come as the Canada Mortgage and Housing Corporation reveals that vacancy rates for seniors’ housing have fallen again in the last year; down from 8.7 per cent to 8.1 per cent.

When viewed in context of a growing population of Canadian retirees the need is clear. Most of the provinces have below average vacancy rates for ‘standard’ spaces, where residents pay market rate rents and receive limited daily care.

Manitoba is particularly tight, at 4.6 per cent, while Ontario has a healthier 12.1 per cent. Saskatchewan and British Columbia also have above-average rates.

Maurice is not alone in predicting that there will be an increase in construction for seniors housing; Ontario Retirement Communities Association CEO Laurie Johnston told The Huffington Post that it expects “a slow growing boom” and CMHC economist Bob Duggan says there will be more demand but “whether it will be a boom or not, it’s hard to say.”

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Jordan Maxwell
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Canadians investors looking to get into the Florida real estate market are finding it increasingly tough to locate properties in the Sunshine State as younger buyers fuel demand, pricing others out of the market.

“There are definitely younger buyers coming into the market,” Doris Salazar, a real estate agent with the Elite Sales Group in Miami, told CREW. “The older people are heading up to North Florida in places like Vero Beach while the younger people are looking at condos and other home-types in Miami. There’s a lot more action from foreign buyers these days, especially from Canada and in the luxury market.”

Florida has consistently been a hotspot for older Canadians looking for investment properties but things have slowed over the last year as interest from young buyers grow and a sinking loonie compounds things.

As a result, Florida is now lagging behind California and Texas – two of which are without state income tax requirements. However, some are finding it increasingly difficult to locate affordable properties.

“The problem that Canadians are having right now is not the fact that they don’t want to buy here; it’s that they are being priced out of the market like everybody else,” said real estate agent and investor Brent Leathwood in a recent article in the Globe and Mail.

The influx has resulted in a lack of inexpensive properties in quality locations, which is subsequently driving up prices for old homes, lessening the price gap for a new home. What’s more, more than 85 per cent of Canadian buyers paid cash and many aren’t affected by a low Canadian dollar.

According to the National Association of Realtors (NAR), Canadians make up 31.6 per cent of all foreign buyers, more than any other country in the world. What’s more in South Florida specifically, seven per cent of Canadians represent the buyers’ market.

The NAR did a study recently finding that half of Canadian buyers surveyed paid less than US $200,000 in 2014, with the mean price being $260,800, which is less than the $300,600 foreign buyers elsewhere shelled out.

Among those Canadian buyers surveyed, 53 per cent of their home purchases were for vacation homes, while 61 per cent and the majority of buyers planned to use the properties for three to six months out of the year.

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Jordan Maxwell
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A Chinese real estate agent in B.C. whose bus-stop bench ads were vandalized with anti-immigrant slurs and racist graffiti is drawing strong reactions from associations that called the vandalism ‘unacceptable.’

“We are appalled by the defacing of bus benches promoting the services of Asian agents in our community,” said Margo Hoffman, president-elect of the Vancouver Island Real Estate Board. “If they were targeted due to fears that foreign ownership is driving up house prices in our area, that isn’t the case. Numerous other factors are causing house prices to increase, including rock-bottom interest rates, high consumer confidence, declining inventory levels, and a strong provincial economy.”

The Nanaimo RCMP is actively looking for the culprits, and pamphlets were also reportedly distributed recently, blaming wealthy foreign investors for inflating real estate prices.

Mounties aren’t treating the incident as a hate crime, merely dismissing it as mischief; however, some came out in strong support for foreign agents who are being antagonized. Eight bus-stop bench ads were defaced, one with a swastika, others with ethnic slurs or offensive messages.

For months, talk of inflated prices in Vancouver have drawn a flurry of protests and speculation about the impact of foreign buyers from China and the Middle East. While some blame foreign buyers for the disappearance of housing affordability in B.C., others say that it’s much to do about nothing, adding that domestic investors are more active in driving prices.

“We don’t think it meets the definition of a hate crime, but having said that, it’s still very disturbing and we’re taking it very seriously,” said Nanaimo RCMP spokesman Const. Gary O’Brien. While police have not established whether the graffiti is linked to the flyers, police believe that is likely the case.

The flyers, published by a group calling itself “Putting Canada First,” were found in many mailboxes and featured images of ads by Chinese real estate agents to support the group’s claim that foreign buyers are influencing the housing market. The flyers also urged people not to sell to Chinese buyers. 

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Victoria and Vancouver rental vacancies are second and third lowest in the country, and rental prices keep climbing, says CMHC report

Joannah Connolly
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As real estate prices continue to hit record highs, increasing pressure is being put on the rental market, pushing vacancies ever lower, according to a new Canada Mortgage and Housing Corporation report.

Apartment rental vacancies in Victoria and Vancouver are second and third lowest in the country, at 1.2 per cent and 1.4 per cent respectively, according to the spring edition of the biannual market report.

The CMHC said the drop in Vancouver stems from a decline in the vacancy rate for one-bedroom units, which dropped to 1.2 per cent from 1.7 per cent a year ago, while other unit types remained relatively unchanged.

Across British Columbia the overall rental vacancy rate declined to 1.8 per cent in April 2015 from 2.4 per cent the previous April.

Don Campbell, senior analyst at Real Estate Investment Network and one of Canada’s leading real estate investment authors, identified several causal factors to REW.ca.

“Affordability for purchase in Vancouver and Victoria has slipped further, despite the lower mortgage interest rates‎ and this is keeping people in rental market longer than traditionally,” said Campbell.

“Population growth continues to remain relatively strong and, under a traditional economic model, new migrants to an area rent for the first two and a half years before deciding whether to stay and then whether to buy.”

He added, “With Gen X and Millennials, there is not as high of a priority placed on ownership, so renting is not as stigmatized as it previously was.”

The average rental price for all unit types in Vancouver increased 3.3 per cent year over year to $1,121 per month, which is the highest in BC, followed by Fort St John at $1,083.

Other areas including Nanaimo and Campbell River also reported drops in vacancy rates, with Kamloops and Abbotsford-Mission remaining flat year over year.

However, rental vacancy rates increased in some Interior and Northern BC regions, including Kelowna, Fort St John and Prince George, where they stand at 5.3 per cent compared with 4.2 per cent last April.

To read the full report, click here.

© 2015 Real Estate Weekly

Steve Randall
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The Canada Mortgage and Housing Corporation’s latest assessment of the rental apartment market shows that national vacancy rates are stable; 2.9 per cent across the 35 major centres, compared to 2.7 per cent a year earlier.

Regional variations reflect the impact of lower oil prices in Alberta (vacancy rate up to 3.4 per cent from 1.8 per cent a year earlier) and Saskatchewan (5.6 per cent from 3.3 per cent), while stronger economic conditions in B.C. and Ontario mean fewer properties are available. In Vancouver, the vacancy rate is 1.7 per cent.

CMHC chief economist Bob Dugan noted: “In Ontario, improving employment conditions for young adults aged 15 to 24, a key source of rental demand, and a stable supply of rental units placed downward pressure on vacancy rates, while increased immigration to British Columbia, another key source of rental demand, more-than-offset an increase in the province’s rental market supply.”

The demand means that rents have increased in those areas in particular.

Across Canada the average rent for a two-bedroom unit is $949, but in Vancouver it’s $1,345, followed by Calgary at $1,319 and Toronto at $1,269. The lowest average rent was in Trois-Rivières at $571 per month. 

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Jordan Maxwell
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Home sales were up 3.1 per cent in Canada as Western provinces continue to rebound, a sign that concerns of uncertainty may be easing, according to the latest stats from the Canadian Real Estate Association.

“Sales in and around the Greater Toronto Area played a starring role in the monthly increase in May sales,” said Gregory Klump, CREA’s chief economist, in a statement.

“At the same time, the rebound in sales over the past few months in Calgary and Edmonton suggests that heightened uncertainty among some homebuyers in these housing markets may be easing.”

Two-storey single-family homes continued to post the biggest year-over-year price gains at 7.18 per cent, while one-storey homes posted at 4.11 per cent and townhomes posted 4.09 per cent.

Vancouver and Toronto led in year-over-year increases at 9.41 per cent and 8.9 per cent, respectively.

Last month signalled the fourth consecutive month-over-month increases, while May also saw national activity at its highest level in more than five years.

Overall, sales were up more than 60 per cent in the Canadian market, led by growth in the GTA, Calgary, Edmonton, Ottawa and Montreal.

While the picture is improving, the CMHC recently announced that effective June 1, mortgage default insurance premiums would be hiked for homebuyers with less than a 10 per cent down payment.

As a result, CREA believes that many buyers plunged into the market to beat the increase.

“CMHC announced in April that effective June 1 it was hiking mortgage default insurance premiums for homebuyers with less than a 10 per cent down payment, so some buyers may have jumped off the fence and purchased in May to beat the increase,” said CREA president Pauline Aunger.

“It’s one of the factors that could have affected sales last month.”

Still, actual (not seasonally adjusted) activity in May 2015 stood 2.7 per cent above levels reported for the same month last year and 5.7 per cent above the 10 year average for the month.

Sales were also up on a year-over-year basis in about half of all local markets, led by activity in the Lower Mainland of British Columbia, Greater Toronto Area  and Montreal.

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Steve Randall
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First-time homebuyers in Canada believe that now is the right time to get on the property ladder, according to a new poll by mortgage lender RBC.

It showed that out of the one in four Canadians who plan to buy a home in the next two years, 44 per cent will be first-timers.

The survey also showed that 84 per cent of respondents believe that buying a home is a good investment.

The main concern is the state of personal finances; 50 per cent of respondents said they don’t have a large enough downpayment, while 48 per cent said they don’t have enough income. Nearly a third (29 per cent) cited low job security while 27 per cent cited high personal debt.

Nationally, 49 per cent of respondents said that it makes sense to buy now with 37 per cent believing that the market is balanced; however, 36 per cent said that it is now a buyers’ market.

That sentiment increased in Alberta (43 per cent, up from 22 per cent a year ago) and Quebec (50 per cent, up from 43 per cent). Across the country, 28 per cent said it’s a sellers’ market. 

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Steve Randal
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The Bank of Canada published its latest semi-annual review of the country’s financial system Thursday which concluded that risk is slightly higher than it was in December although the system is generally stable. Household debt continues to be a concern; the bank warned that in the event of job losses, many families would be unable to service debts and may default on loans and mortgages. That in turn could lead to a housing market crash.

Oil prices and long-term interest rates are also on the BoC radar as potential flash points. Governor Stephen Poloz tempered concern with an acknowledgment of the changes that have been made to financial systems globally since the crisis: “There is no question the global financial system is now more resilient, thanks to these reforms,” he said. “So, while risks may have edged higher, safeguards to protect the financial system are stronger than they were before.”

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