Justin da Rosa
Canadian Real Estate Wealth

 

This is how crazy Toronto real estate has gotten.

The average one bedroom apartment rental in Toronto costs $1,465 a month – pricing many young professionals and other Torontonians out of the rental market.

With that in mind, the CBC recently published an article focusing on sub-$1,000 rentals, entitled What kind of apartment can you get in Toronto for under $1,000?

Featured were three standards; a bachelor apartment in an aging building in the east-end costing $995 a month, a junior one bedroom in mid-town costing $925 per month, and a one bedroom basement apartment in the Beaches, a sought after, popular Toronto ‘hood costing $999 per month.

But a fourth option was perhaps the most intriguing.

“This unconventional Craigslist find is by far the cheapest listing in our round-up,” the CBC article says. “It’s a parked, 19-foot-long 1980s motorhome — ‘retro classic vintage self-contained,’ says the ad.

Wait, what? Parked?

You read that right.

Rents in Toronto have gotten so out-of-hand that our national news organization featured a $475 per month ramshackle motorhome parked in the Annex in a roundup of affordable rental apartments. (Admitedly, one would assume CBC wrote this with its tongue in its cheek).

“The listing says the motorhome sleeps two to three people and comes with three automotive batteries to plug in lights and charge your phone,” the article says. “But you’ll have to buy your own gasoline to run the generator.”

What a steal.

Still, one savvy investor likely purchased the home-on-wheels for no more than $3,000. Meaning if he or she rented it out for the desired $475 per month, the investment would be paid off in just over six months.

Copyright © 2017 Key Media Pty Ltd

Ephraim Vecina
Mortgage Broker News

Over the past few years, elevated activity and growth in Toronto’s residential real estate market has made it a powerhouse in the Ontario economy—ironically leading to the province being heavily dependent on the health of the city’s housing sector, according to an independent fiscal watchdog.

Ontario’s Financial Accountability Office recently warned that even a small downward correction in Toronto home prices will lead to the provincial budget suffering billions in losses, the Owen Sound Sun Times reported.

“In the first decade of the 2000s, that revenue ranged between about $1 billion and $1.5 billion a year; in the last few years, it’s risen to $2.5 billion,” markets observer David Reevely wrote in his February 20 analysis.

The FAO estimated that a 10 per cent decline in real estate prices would affect provincial revenues by $1.1 billion annually by 2020, and by as much as $2.2 billion every year in the worst-case scenario.

A corollary to this development is that the provincial government would now be reluctant to implement any affordability interventions that might disrupt the steady revenue.
 
“The mad rise in real-estate prices is terrible for young people and locks up a lot of wealth in hard-to-move assets,” Reevely explained, “but it has created a huge windfall for Premier Kathleen Wynne and Finance Minister Charles Sousa. Pursuing housing affordability is not in their, or any provincial politician’s, immediate political interests.”

“[Ontario] collects sales tax on new homes and on fees attached to buying property such as real-estate agents’ commissions. And it collects taxes on a lot of the things people buy when they move, from new furniture to truck rentals. Plus construction employs people who pay income taxes and supports companies that pay corporate taxes,” he added. “If those gushers dry up, that’s bad news.”

Last week, BMO Capital Markets chief economist Doug Porter issued a strong warning after the Canadian Real Estate Association revealed that average home resale prices in Toronto have grown by 22.6 per cent year-over-year in January, in turn inflating the national average by 15.0 per cent.

“Let’s drop the pretense. The Toronto housing market – and the many cities surrounding it – are in a housing bubble,” Porter said. “Toronto and any city that is remotely within commuting distance are overheating, and perhaps dangerously so.”

Copyright © 2017 Key Media

Ephraim Vecina
Mortgage Broker News

Fresh numbers on the Toronto real estate sector painted a picture of a market on overdrive, with the latest edition of the Teranet–National Bank Composite House Price Index showing that home prices in the city increased by 20.9 per cent year-over-year in January, and the Canadian Real Estate Association (CREA) stating that average home resale prices in Toronto saw a 22.6 per cent annual increase last month.

BMO Capital Markets chief economist Doug Porter issued a strong warning in the wake of these figures.

“Let’s drop the pretense. The Toronto housing market – and the many cities surrounding it – are in a housing bubble,” Porter wrote in a research note last week. “Toronto and any city that is remotely within commuting distance are overheating, and perhaps dangerously so.”

“A random sample of homes that sold this month alone shows a median selling price of 25 per cent over asking, with not one staying on the market longer than eight days. Even pigs are flying in this hurricane of a market,” the economist added recently, as quoted by The Globe and Mail.

Meanwhile, Capital Economics senior Canada economist David Madani noted that contrary to the assumptions underlying recent federal-level changes to mortgage rules, Toronto Real Estate Board numbers revealed that younger buyers aren’t to blame for Toronto’s consistent price growth.

“[First-time] home buyers aren’t the ones driving the biggest gains in Toronto house prices, based on the simple logic that they simply don’t have high enough incomes to afford them, by any mortgage lenders’ standard,” Madani said.

“Existing homeowners, by leveraging their considerable housing equity to buy newer, bigger or more beautiful homes, are the primary driving force now boosting house prices in Toronto,” he added. “If that’s the case, then it also stands to reason that there cannot be a major shortage of houses for people to live in.”

Copyright © 2017 Key Media

Justin da Rosa
Mortgage Broker News

One market has reduced land transfer taxes for first-time homebuyers.

It’s been a whirlwind few months for real estate in British Columbia, but the latest news will likely be viewed as a small victory by local mortgage brokers.

Effective Wednesday, the threshold for BC’s Property Transfer Tax exemption for first-time homebuyers has been increased to include homes up to $500,000 from $475,000.

The news was lauded by one real estate association, which also had some feedback for the ongoing revolution of the exemption.

“BCREA appreciates this government’s attention to the needs of first-time homebuyers,” the British Columbia Real Estate Association said following the release of BC’s 2017 budget. “To keep pace with the dynamic real estate market and ensure that homebuyers aren’t left behind, the Association strongly believes that this threshold—and all others related to the Property Transfer Tax—should be indexed, with adjustments made annually.”

It was the lone housing-related announcement in the budget.

For its part, BCREA actually made recommendations to the government that the exemption be increased to include homes up to $750,000.

“That number would align with the exemption for newly-built homes and with the BC HOME Partnership program,” it said. This measure would have expanded consumer choices, because the First Time Home Buyers’ Program exemption applies to all homes, rather than only newly-built homes, which are often out of reach of first-time buyers.”

Indeed, with the average British Columbia home costing $621,093, many first-time buyers will still be required to front the extra tax.

Copyright © 2017 Key Media

Tri-Cities project a fit for first-time homeowners, ?upsizers? and investors alike

ROBIN BRUNET
The Province

In the Tri-Cities, which is home to the Parc East condominiums by Altas Global Developments, the big city thrives on the edge of wilderness: it’s just as easy to explore provincial wilderness parks in the vicinity as it is to take the new Evergreen Sky Train line into downtown Vancouver.

But that’s just the beginning of the region’s allure for Parc East residents. The Tri-Cities themselves are a unique niche of Metro Vancouver. Where else can one enjoy three distinct urban destinations, whether it’s the scenic seaside attraction of Port Moody, the sleek bustle of Coquitlam Centre or the funky vibe of Port Coquitlam?

In short, the Tri-Cities are for everyone, and that is the same philosophy interior designer Cristina Oberti has applied to Parc East, an exclusive development of just 57 condominiums. Parc East is ideal for first-time buyers entering the market or those looking to upsize, or even for an investment.

With studio, one-, two-, and two-bedroom-plus-den homes anticipated to be available from just $229,900 up to $509,900, Parc East lives up to Altas’s intent to make this the Tri-Cities’ best new value .“Buyers can enjoy city living at suburban prices, and you don’t have to cross any south-bound bridges to get this value,” says Jamie Squires, vicepresident, Fifth Avenue Real Estate Marketing Ltd.

Oberti, who famously creates a unified look and sophisticated appeal, has gone to great lengths to give all of P arc East’ s home san elegant ambience. A sense of spaciousness is key, most evident in the large (1,077 square foot) two-bedroom-plus-dens: the dens can easily be used as spare bedrooms, thanks to ample closet space and large windows.

With Parc East, Altas is providing prospective buyers with an affordable but central home at a time when one usually has to travel much farther to the outer regions of Metro Vancouver for comparable size and quality. Helping to bring Altas’s vision to life is Trillium Projects, an awardwinning construction-management firm whose team is experienced in building thousands of homes across Metro Vancouver, including in the Tri Cities. With a VIP event for Parc East coming soon, Squires urges people who want to experience the best of the Tr i-Cities to register immediately. “That way, you’re assured the best selection of homes at the best available price, along with the ability to select your designer colour palette. Those who wait will have less selection at a higher price.”

Register now at Parceast.ca

Getting creative with smaller spaces

Mary Frances Hill
The Province

Pinnacle on the Park

What: 140 homes in an 18-storey tower

Where: 1708 Ontario St.

Residence sizes and prices: 590 — 1,600 square feet; $629,900 — $1,399,900 (prices for the sub-penthouses and penthouses available upon request)

Developer and builder: Pinnacle International

Sales centre address: 1738 Ontario St.

Sales centre hours: noon — 5 p.m., Sat — Thurs

With its presence well established in the popular and vibrant Olympic Village in False Creek, Pinnacle International has made a name for itself as a developer that appeals to young families and downsizers — those looking for spacious homes in a neighbourhood with retail, restaurants and leisure a walk away.

Residents of Pinnacle on the Park, the developer’s new Olympic village condo community, will be neighbours to those in Pinnacle’s sold-out residential tower The One, which stands on West First Avenue.

Grace Kwok of Anson Realty, Pinnacle on the Park’s sales organizers, is seeing interest from downsizers — or mature couples who’ve sold their single-family homes or three-bedroom suites — and  “upgraders” moving from smaller one-bedroom units to more spacious homes, and who want spacious, efficient and functional units.
It took the insight of interior designer Rene Chang to make the most of the two show homes with the use of adaptable furnishings and her creativity with colour and shade against neutrals.

In an open-concept dining and living room Chang has decorated in mostly light neutrals with touches of orange and grey.

“This [neutral look] also gives this open-concept layout a sense of unity, giving off a feeling of spaciousness,” Chang says. The neutral colour widens the space, while warm greys, yellows and orange creates a welcoming and homey atmosphere.”

Downsizing is about making a choice to live in a desired neighbourhood, even if it means the homeowner must use some creativity to adapt to a smaller space. Chang suggests that downsizers do some creative editing of their belongings.
“One can choose a couple of beloved smaller items and build their design around them. Also there are many multi-functional pieces of furniture these days that double as storage units.”

Kwok and Chang managed to source a retractable oval-shaped glass dinner table, which can extend and still look “perfectly in place” in the 600-square-foot unit, among the smallest in the building.

The walk-through closet is a Pinnacle feature, according to Kwok, with the developer including it in residences in Richmond and North Vancouver.

Chang says the walk-through is a function of good flow: making a smooth connection from one functional space to the next.

“Using furniture layout, design and colour palette continuity, the whole suite comes [to seem] more spacious, while encompassing all the practical necessities of a home,” Chang adds.

The two display suites show different configurations of solariums, or enclosed balconies — one of Chang’s favourite spots, since they can be used as conventional balconies or as an extension of the bedroom, she says.

“By placing some potted plants on the balcony, which I have in the show suite, one can actually create a small garden of greenery to look out to while in the comfort of one’s bedroom; it is a nice feature,” says Chang.

© 2017 Postmedia Network Inc.

The rare ruling could open the ?floodgates? for the pursuit of illicit Chinese funds in Canada

Ian Young
other

China’s Citic Bank has won a landmark ruling in a Canadian court, which ordered a mainland national to comply with a Chinese judgment and repay the bank RMB50 million (US$ 7.3 million), plus interest, that the bank says was spent in part on real estate in Vancouver.

The rare ruling could open the “floodgates” for the pursuit of illicit Chinese funds in Canada on the basis on mainland rulings, according to a money-laundering expert involved in the case on Citic’s behalf.

But the defendant, Yan Shibiao, could still profit even if he complies with the judgment, since the interest component of the ruling could be exceeded by the increased value of his property in Vancouver, where prices have soared in recent years.

Yan, a Shijiazhuang businessman who the bank said fled to Canada with his family after taking out a RMB50 million loan in 2014, was ordered on Tuesday by the Supreme Court of British Columbia to comply with a ruling by the Shijiazhuang Arbitration Committee in the bank’s favour.

No one attended the BC hearing on behalf of Yan, who could not immediately be reached for comment.

Yan has purchased luxury properties in the Vancouver satellite city of Surrey and lives in a C$3 million Vancouver home owned by his wife, according to court documents lodged by Citic. The couple spent more than C$8 million on the homes in 2014, soon before and soon after the loan went through, the bank claims. The value of the properties has since soared.

One home the bank says was bought by Yan in 2014, on Surrey’s 28th Avenue, was purchased for C$3.18 million, according to BC Assessment. In November 2016, a few months after Citic lodged its claim against Yan in BC, the property was sold for C$4 million, a healthy 25 per cent profit, compared to about 4 per cent interest Citic is now demanding from Yan. The home is currently valued at C$4.72million.

When repayment of the loan fell due in 2015, Citic said Yan could not be found in China, having gone to Canada without informing his creditor. Yan’s Canadian assets have now been frozen.

Vancouver lawyer Christine Duhaime is an anti-money-laundering expert who represents Citic and originally petitioned the BC court on the bank’s behalf last year, although another firm represented Citic at the latest hearing.

She said the case “shows China and their banks that [Canadian asset] recovery is possible in the civil context”.

“There are so many more cases with similar facts of foreign nationals from China who owe vast amounts of debt in unpaid loans that are parked in other countries, that I suspect the floodgates will open to pursuing recovery of those debts. Much of that money is in Canada,” said Duhaime in an interview.

“In our case, the Citic bank is owned by the government of China and so it seems to me that there is greater significance in a successful outcome.”

She said the ruling could “put a bit of a damper on outflows to Canada from China in cases where there are questions hanging over the way the person acquired their wealth”.

China has been working with Canada for years to finalise a deal on the return of ill-gotten assets seized from those suspected of economic crimes. The agreement was originally announced in July 2013 and has not yet been ratified.

But it is rare for Chinese banks to use Canadian courts to pursue those who have left the country.

“By law, our courts have to enforce a foreign arbitration award provided there are no issues with the way it was obtained,” said Duhaime.

She added: “It’s a good case outcome for Canada-China relations, and helps Canada’s reputation in financial crime globally. Finally, Canada has a successful outcome on a financial crime file from China.”

Duhaime said that Yan was in Canada on a visitor’s visa, making it likely he would return to China.

Vancouver has long been the most popular destination city in the world for Chinese millionaire migration. Some have questioned the legitimacy of Chinese cash flowing into Vancouver, which has helped make the city one of the most unaffordable in the world.

Copyright © Business In Vancouver.

Mayor lays out several ways he envisions increasing supply and lowering cost

Matt Robinson
The Vancouver Sun

Gregor Robertson faces two particularly tough tasks over the next year-and-a-half.

First, in the middle of a housing affordability crisis, the Vancouver mayor will have to sell residents on the wisdom of a reset, rather than an overhaul, of the city’s housing and homelessness strategy.

Second — and this assumes he runs for a fourth term — Robertson will need to ask voters to re-elect him in the belief that he is the right leader to pull the city out of that housing crisis.

Robertson took an early stab at that first task Wednesday during a keynote speech at the Urban Land Institute B.C., which offered an advance look at parts of the now-past-due strategy. Included in his comments was a list of five places where the city wants to see more density, including single-family neighbourhoods.

The mayor’s speech to developers, officials, investors, bankers, planners and other audience members started with a pair of anecdotes. One was of a young family that searched for months for suitable housing. When they found an apartment at last, they discovered it was infested with rodents and insects.

The other was about two seniors facing renoviction from the community where they had lived for three decades. They were “feeling betrayed and let down, really by every level of government in the situation, including ours.”

It was a frank acknowledgement of discontent, even for Robertson, who has never been one to downplay the severity of the crisis and the need for strong government action.

“We need some big moves and we need them now,” Robertson said before listing the types of land his government is considering for more homes. 

One is municipal lots. The city estimates private developers could build as many as 3,000 homes on six lots around False Creek.

Another is land surrounding future rapid transit nodes, which is seen as particularly appropriate for rental homes. 

Arterial streets and multi-family neighbourhoods are also being considered as sites that could take more density.

And last (or possibly “at last”), the city wants to see “significant new housing” in single-family neighbourhoods through “density without assembly.” More duplexes, infills, townhouses and row houses is what the city has in mind.

Robertson’s keynote address was based on a prepared speech. He strayed at times from what had been written and skipped the odd word or sentence here and there. The following comes directly from the written version:

“The time is right to advance a conversation about how we bring in more affordability and still preserve the essence of those neighbourhoods.

“The choice isn’t between change and no change: Our single-family neighbourhoods are changing now. We’re seeing character homes being razed and replaced with much larger single-family homes. 

“And in places like Kerrisdale and Dunbar, as we see from the census, they’re changing simply because less and less people live there at a time when prices are going higher and higher.

“So the question isn’t if our neighbourhoods will change. It’s who they change for. And it’s how we guide that change.

“And we need to stop fixating on density, because that’s not what this is about.”

Robertson is correct. The time is right to open single-family neighbourhoods to more residents. The time has been right for a while, as most tenants living in small, substandard, overpriced and insecure homes in this city will attest.

Yet to be seen is whether enough residents will believe in the government’s reset strategy, or in Robertson as the best-equipped leader to end this crisis.

© 2017 Postmedia Network Inc.