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Archive for May, 2022

Metro Vancouver multiple projects hit in the market place in the second half of 2022

Friday, May 27th, 2022

Metro Vancouver rental market sees higher rates, lower availability in Q1-2022

Michelle McNally
Livabl

As more renters return to Vancouver’s urban areas, purpose-built rental rates across the region continued to rise during the first months of 2022.

In its Vancouver Rental Take report for Q1-2022, Zonda Urban stated that the Metro Vancouver rental market kicked off the year with strong renter activity in Q1-2022. As most sub-markets experienced higher rental prices, availability rates fell in tandem. However, Metro Vancouver could see additional inventory hit the marketplace in the second-half of 2022 as multiple projects complete construction.

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“The lifting of Covid restrictions along with an increase in hybrid work options has allowed for the continuation of renters moving back into urban sub-markets and transit accessible neighbourhoods, which was a trend that emerged in 2021,” said the report. “The most notable observation over the first quarter of 2022 was the steep increase in average rental rates being achieved throughout the market.”

Available listings drop from quarter to quarter

In Q1-2022, one low-rise wood frame development and two concrete high-rise developments started to lease in Metro Vancouver. A total of 199 new rental units were released to the market, 72 per cent less than the 702 units that became available during Q4-2021.

During the first quarter of 2022, purpose-built rental availability dropped 3.4 per cent on a quarterly basis. Availability within fully-leased buildings — those projects that completed their initial leasing campaign and rented all of their units — declined 0.5 per cent quarter-over-quarter to 1.2 per cent during Q1-2022. Meanwhile, availability in active projects — buildings that are in their initial lease-up campaign — dropped to three per cent, down from five per cent in Q4-2021.

The North Shore sub-market had the most new rental inventory in the region during Q1-2022 with 228 available units, down slightly from the previous quarter.

“The decrease in overall availability in Metro Vancouver primarily resulted from the limited number of releases into a market combined with persistent demand,” the Zonda Urban report noted. “Of the 199 units released onto the market over the quarter, 149 were leased.”

Zonda Urban is currently tracking 20 projects with 1,792 units in the interior finishing stage of construction that are likely to be completed within the next six to nine months.

Price difference between most and least expensive sub-markets widen

As fewer purpose-built rental units became available for lease, rental rates in Metro Vancouver grew during Q1-2022.

The overall average per square foot for rents in Q1-2022 grew $0.39, or 11.8 per cent, compared to last quarter. When comparing recently turned-over units to initial lease-up rates, prices for junior one bedroom units have grown the most, rising 32 per cent.

The difference between the most and least expensive submarkets in Metro Vancouver — Downtown Vancouver and Abbotsford — was $2.53, a notable increase from $1.85 that was recorded in Q4-2021. In Downtown Vancouver specifically, rental rates increased $0.53 during Q1-2022 as a result of low inventory levels and new project launches. In the same quarter, ongoing absorption of actively leasing projects pushed rental rates up in Vancouver East and Surrey by $0.18 and $0.22 per square foot.

“Landlords are continuing to push rental rates as high demand for rental units is met with low levels of availability across Metro Vancouver,” said the report. “As prices continue to rise, it is possible that some renters may be pushed out of the more urban locations of Metro Vancouver or may need to consider sharing smaller accommodation with a partner or roommate.”

Zonda Urban explained that more renters have been moving back to urban centres as employees work from the office more frequently. Despite the fact that multiple rental projects will launch over the next six months, per square foot rental rates are expected to keep rising.

Fewer developers are offering new renters incentives these days, a trend Zonda Urban believes will continue throughout the year as “the growing level of demand for rental housing is not being met by the current supply levels.” Meanwhile, new rental developments are identifying and delivering various amenities that appeal to different demographics, such as study rooms, pet wash stations, rooftop gardens and entertainment rooms.

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Canadian home prices fall 6% in April, down for 2nd month in a row

Thursday, May 26th, 2022

Canada house prices: How far could they fall?

Fergal McAlinden
other

Sales and price growth have slowed in the housing market in recent weeks
It’s no secret that Canada is currently in the throes of a housing market cooldown, with the pace of home sales falling in April and national house prices also on the way down.
New figures released by the Canadian Real Estate Association (CREA) revealed that the country’s home price index fell 0.6% between March and April, its first decline for over two years, as home resales also dropped by 12.6%.
Unsurprisingly, CREA said that slowdown had been caused largely by recent interest rate hikes, with mortgage rates rising as the Bank of Canada and lenders across the country move away from the rock-bottom-rate environment that’s prevailed throughout the COVID-19 pandemic.
That’s not to say a crash is imminent. The actual national average home price has now declined for two months in a row after peaking in February, according to CREA – but prices are still about 7% higher than last April.
Meanwhile, the home price index is 23.8% up compared with the same time last year, although that represents a smaller yearly increase than the 29% it recorded in February.
While the market isn’t seeing the same number of transactions as last year, that’s mainly because 2021 was an “anomaly,” according to Kitchener, Ontario-based principal broker Tracy Valko (pictured top), founder of Valko Financial.
Read next: Canadian housing starts rose in April – CMHC
She told Canadian Mortgage Professional that activity remained robust, with agents and brokers now having explanatory discussions with their clients and focusing on the educational aspect of what’s happening in the current market.
“I feel we’re busy, but we’re busier educating people and having more economic conversations. I think people understand inflation probably more than they ever have historically, so maybe that’s a good thing,” she said. “I do think there’s a bit of a shift for sure in terms of transactions – we’re doing more second mortgages, more lines of credit.”
The current cooldown is also presenting opportunity for many homebuyers, Valko said, with lower demand and fewer bidding wars meaning a less stressful overall experience for those looking to buy.
“I have to say I find a lot of our clients are finding houses where before they weren’t – they were sitting because they weren’t able to find a house,” she said. “I wouldn’t say there’s more [inventory] on the market – I would say because there’s not as huge demand, they’ve slowed down. I think there’s buyer fatigue and there’s buyer concern.
“I think that people are having more of an opportunity now to get into these properties that they traditionally wouldn’t have been able to, because they would have been snatched up within a couple of hours. Now, they’re taking a couple of days.”
While home price appreciation has recently slowed from its lightning-quick pace of recent years, there’s little indication that a significant correction is on the cards.
Canada Mortgage and Housing Corporation (CMHC) said in its Housing Market Outlook that while the growth in prices is set to moderate this year along with sales levels and housing starts, all three would remain “elevated” in 2022 as GDP growth, high employment, and net migration fuel demand.

Read next: National home sales, prices fall in April
“The growth in prices will likely continue to be led by markets with already low listings, including Toronto, Vancouver, Montreal and Ottawa,” the corporation said.
Real estate giant Royal LePage also said aggregate home prices across the country would continue to rise, revealing in its full-year forecast that it expected that benchmark to increase by 15% this year and land at around $900,000 by the end of 2022.
That would include a 16.5% price hike in the Greater Toronto Area (GTA) to about $1.3 million, with the Greater Vancouver Area (GVA) – the other of the country’s two hottest markets – projected to see its aggregate sale price rise to $1.44 million, an increase of 15%.
Valko said continuing low levels of housing supply were also likely to play their part in keeping values high, even if the barnstorming price growth of recent years was likely to slow.
“I think that, naturally, values are going to stay up to some extent [although] they’re not going to go up [like the] 50% increases over the last two years,” she said. “That’s unrealistic to a sustainable economy, let alone [in terms of] affordability for Canadians when their incomes haven’t gone up.”

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B.C. implement a “modest” termination fee of 0.1 to 0.5% home price to be paid by buyers

Thursday, May 26th, 2022

3-day ‘cooling off’ period, transparent bidding recommended to transform B.C. real estate sector

The Canadian Press
CBC Radio

The B.C. government introduced amendments to property legislation in March and Finance Minister Selina Robinson tasked the independent regulator with consulting the real estate industry stakeholders on setting parameters for a cooling-off period. (Jonathan Hayward/Canadian Press)

The regulator for British Columbia’s real estate sector has recommended that the province adopt a so-called “cooling-off” period of three business days to protect people buying a home, through legislation tabled this spring.

A report from the B.C. Financial Services Authority released Thursday advises that sellers be required to provide reasonable access for a property inspection during the three-day homebuyer protection period, which would start the day after an offer is accepted.

It also advises that B.C. implement a “modest” termination fee of 0.1 to 0.5 per cent of the price of a home to be paid by buyers who pull out of a deal.

The fee “strikes a balance between discouraging frivolous offers and recognizing the disruption in the selling process,” the report said.

Additional recommendations include a five-day “pre-offer” period after a property is listed, when a seller may not accept any offers, along with suggestions aimed at enhancing transparency in the transaction process.

For example, the report advises that key strata documents should be made available when a strata property is listed. The province could also require buyers to disclose to sellers any other active offers they’ve made, it suggests.

The report also recommends ending blind bidding and exploring an open bidding process used in many Scandinavian countries.

Homebuyers pressured to take ‘unreasonable risks’

The B.C. government introduced amendments to property legislation in March. Finance Minister Selina Robinson tasked the independent regulator with consulting the real estate industry on the parameters of a cooling-off period and other potential measures.

Robinson says the province is reviewing the report, and her aim is to move “relatively quickly” with the bill that passed its third reading last month, but the real estate industry also needs time to adjust and adapt to the changes.

The province has heard in recent years about homebuyers feeling pressured to take “unreasonable risks,” such as waiving home inspections, which has led to “horror stories,” Robinson said at a news conference on Thursday.

“I’m eager to move on these elements. I do need to have more discussion with [the B.C. Financial Services Authority] and others around what time frame is needed to act, certainly around the buyer protection period,” Robinson said, noting there’s a “whole range” of other recommendations.

Aims to increase transparency, consumer protections

Blair Morrison, CEO of the B.C. Financial Services Authority, said at a news conference there would be “adjustments” to the current real estate transaction process to bring the homebuyer protection period into force.

In developing the report, Morrison said the authority hosted 20 consultation sessions with more than 140 people from across B.C.’s real estate sector.

“We think this is core, basic, good consumer protection that should apply throughout British Columbia,” he said.

“We want to make sure this works for the sector, for the real estate [agents], for the lawyers and other parts of that process,” he added.

He said the review was not intended to address housing affordability in B.C.

The report also considers “blind bidding,” a common practice in which sellers are not compelled to tell prospective buyers about competing offers.

That lack of transparency can “skew the perception of market fairness and potentially lead to distrust in the real estate transaction process,” it said, pointing to concerns about inflated valuations or buyers overpaying for a home by offering a price that significantly exceeds the next highest offer.

The regulator looked at open-bidding alternatives, advising B.C. to consider options such as live auctions and anonymous disclosure of other offers.

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Parkland to spend $600 million to upgrade Burnaby refinery

Thursday, May 26th, 2022

B.C. funds giant bio-diesel project at Burnaby refinery

Sean Pratt
Western Investor

Two-plant refinery could generate 720 million litres of low-carbon gasoline and diesel fuel each year by 2026

Parkland Corporation has received a commitment from B.C. to cover more than 40 percent of the cost of its proposed $600 million renewable fuels investment at its Burnaby Refinery. | Submitted photo

Calgary-based Parkland Corp. has received a commitment from the British Columbia government to cover more than 40 percent of the cost of its proposed $600 million renewable fuels investment at its Burnaby, B.C. refinery.

The money is coming from the province’s Low-Carbon Fuel Standard compliance credits.

Ryan Krogmeier, senior vice-president of supply, trading and refining at Parkland, said there is no federal money in the venture at this point.

The first phase of the project is an expansion of its existing co-processing facility, where bio-feedstocks are mixed with conventional hydrocarbons to create low carbon gasoline and diesel.

The plan is to increase plant capacity to 5,500 barrels per day by 2026 from today’s volumes of 2,500 barrels per day. That is an annual capacity of 320 million litres per year of low carbon gasoline and diesel fuel.

The second piece of the project is to build a new renewable diesel facility on the same property capable of producing 6,300 barrels per day. That is an annual capacity of 400 million litres of renewable diesel.

Parkland’s co-processing plant uses from five to 20 percent bio-feedstock, while the renewable diesel facility will be 100 percent bio-feedstock.

The bio-feedstocks used in the production processes will be canola oil, tallow and used cooking oil.

“Canola oil will play a significant role for us,” said Krogmeier.

He anticipates it will comprise 60 percent or more of the company’s annual bio-feedstock requirements. That will amount to 7,000 to 8,500 barrels per day of canola oil.

“We are in discussions with several of the crushers in the Prairies,” he said.

“The good news is, for us we don’t need to consume food grade canola oil.”

Parkland intends to make its final investment decision on the projects in the second half of 2023 after it has the final engineering designs and blueprints for construction.

Most of the $600 million in capital will be deployed in 2024 and 2025.

“The plan is to have these plants up and running by the end of 2026,” said Krogmeier.

Parkland’s retail brands include more than 200 Fas Gas stations, 580 Esso stations in Canada, Chevron stations in Alberta and B.C. and Bluewave, which sells diesel fuel and propane to farmers in the Prairies. It also operates more than 630 retail fuel stations in Eastern Canada under the Ultramar Brand.

Krogmeier said most of the fuel produced by the proposed new projects will be sold in B.C.

Once complete, the project will remove two megatonnes of greenhouse gas emissions out of the atmosphere annually, the equivalent of taking 25 percent of B.C.’s passenger vehicles off the roads.

Parkland’s two plants will meet more than 30 percent of B.C.’s provincial greenhouse gas reduction targets, according to the company.

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Province to purchase $53.5M worth of Laurentian U. assets

Wednesday, May 25th, 2022

Provincial government offers to buy $53.5 M of Laurentian University real estate

CBC Staff
CBC Radio

Laurentian University says the provincial government has offered to purchase $53.5 million worth of its real estate to help the troubled school settle with its creditors. (Erik White/CBC)

Laurentian University is receiving more financial help from the Ontario government.

In its latest motion as part of insolvency proceedings, the university’s administration says the Ministry of Colleges and Universities has offered to purchase $53.5 million worth of Laurentian-owned land or buildings.

The university is conducting a real estate review and there have been fears that it could sell off the popular trail network surrounding the campus or the historic Bell Mansion, the current home of the Art Gallery of Sudbury.

Laurentian says this arrangement with the province would allow it to continue to use and occupy the land, or buildings purchased by the province, which would not be the case if the assets were sold to third parties.

Laurentian has asked the province to put the buildings of the newly independent NOSM University at the top of the list, but has not specified any other priorities.

In his affidavit, President Robert Haché says the NOSM University occupies two buildings owned by Laurentian on the Sudbury campus.

“NOSM University occupies approximately 60 per cent of the Health Sciences Education Resource Centre (“HSERC”) and the entirety of the Medical School Building (the “NOSM Building”),” Haché said in his affidavit.

” LU (Laurentian University) has requested that MCU (Ministry of Colleges and Universities) consider the HSERC and the NOSM Building on a priority basis as part of the discussions and as conversations advance with respect to the province’s purchase of identified real estate assets from LU.”

All of the money will go to help the university settle with its creditors.

In addition, the province is replacing the $35 million dollar debtor-in-possession loan it gave to Laurentian with a longer term loan, the terms for which are still being discussed.

Dr. Sarita Verma is the president and CEO of NOSM University. (Markus Schwabe/CBC)

Dr. Sarita Verma, NOSM University’s president and CEO, said she has not been privy to any discussions around the province’s proposed purchase of Laurentian real estate.

“One of the awkward issues here is that there is an election underway and the decision makers are in election mode,” Verma said. “It’s likely that we won’t know much until after June 2.”

NOSM leases two buildings located on the Laurentian campus. In March the institution announced it would add 30 medical degree and 41 residency spots over the next five years.

To accommodate that growth, Verma said it would be ideal if NOSM University gained access to the land next to the two buildings it currently leases from Laurentian.

“I mean, we would love to be able to, with the expansion, expand our classroom size, because right now it can only accommodate a certain number of students,” Verma said. “I mean there’s no doubt we’re going to further grow.”

Verma added she remains optimistic that NOSM will be able to recover around $15 million in endowments that are tied up by Laurentian’s insolvency proceedings.

Laurentian and its advisors have continued to negotiate with former federated partners, the University of Sudbury and Thorneloe University regarding the terms of their continued participation in the pension plan.

They have reached an agreement with the University of Sudbury but not Thorneloe.

Meantime, the court documents show there have been claims totalling $360 million made against the institution.

A judge has approved Laurentian’s request to continue to operate under creditor protection, which began on Feb. 1, 2021, until Sept. 30.

It expects to return to court at the end of June to seek a meeting order with creditors, which would include the Companies’ Creditors Arrangement Act (CCAA) plan of arrangement in response to claims.

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16 real estate terms you should know before you buy

Wednesday, May 25th, 2022

Top Real Estate Terms You Need to Know

Daniel Crook
other

Buying a home can be a challenging prospect, particularly for people looking to get into the market for the first time. There is a lot to be aware of throughout the process, so we have put together a convenient list of the top real estate terms that you need to know when buying a home.

Comparative market analysis (CMA) – An in-depth analysis which is provided by a real estate agent that determines the estimated value of a home based on homes that have been sold recently that are a similar size, condition, age or have similar features and are located in the same area.

Buyers/balanced/sellers market – A buyers market occurs when the number of homes for sale outnumber buyers. A seller’s market occurs when conditions favour sellers, and there are less homes available than there are people looking to buy a home. A balanced market sits between those and is an optimal time to buy and/or sell.

Read: Entering a Balanced Market Spells Relief for Many Buyers: CREA

Housing ratio – This is one of two debt-to-income ratios that a lender analyzes to determine a borrower’s eligibility for a home loan. This ratio compares the total housing cost (principal, homeowners insurance, taxes and private mortgage insurance) to your gross income.

Debt-to-income ratio (DTI) – A ratio that compares a home buyer’s expenses to their gross income.

Adjustable-rate mortgage (ARM) – An ARM has an introductory interest rate that lasts a set period of time and adjusts every six months thereafter for the remainder of the loan term. Once the time period has ended, your interest rate will change, as will your monthly payment.

Fixed-rate mortgage – A mortgage with principal and interest payments that remain the same throughout the duration of the loan, because the interest rate does not change.

Private mortgage insurance (PMI) – This is a fee charged to borrowers who make a down payment that is less than 20% of the home’s value. Typically 0.3% to 1.5% of the yearly loan amount., this fee can be canceled in certain circumstances when the borrower reaches 20% equity.

Pre-qualification – This is a basic assessment of your income, assets and credit score which determines what loan programs you might qualify for, if any. An agent may request this or a pre-approval letter before showing a potential buyer a home.

Pre-approval – This is a thorough assessment of a borrower’s income, assets and other data to help determine a loan amount they would be able to qualify for. An agent may request one of these or a pre-qualification letter before showing a buyer a home.

Read: Reality Check: Interest Rates are Rising, Securing a Mortgage Now is Best for Buyers

Approved for short sale – This indicates that a homeowner’s bank has received an offer from a buyer and has determined the reduced listing price on a home meets their short sale criteria, based on the seller’s circumstances and how much is owed.

Origination fee – This is a fee charged by either a broker or lender to underwrite and process a home loan application. This is not a single fee, but a set of lender-specific fees that are part of your costs when closing a mortgage loan.

Amortisation – This is the process of paying off a loan through a series of periodic payments to a lender. This includes two items – interest and principal, which is the amount of money you borrowed.

Closing costs – Costs outside a property’s sale price that need to be paid to cover the cost of the transaction. This could include discount points, insurance fees or survey fees, among others. These can vary from location to location but must be described to you when you submit your mortgage loan application.

Debt-to-income ratio (DTI) – A ratio that compares a home buyer’s expenses to their gross income.

Contingencies – These are conditions that are written into a home purchase contract that protect the buyer, should issues arise with financing, the home inspection, etc.

Equity – The percentage of a home’s value owned by the homeowner.

If you’re considering buying a home in the coming months, contact us to talk to an agent and receive a free consultation.

Considering Getting Into The Market This Spring?

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Get into the market for the first time? List of the terms you need to know when buying a home

Wednesday, May 25th, 2022

Top Real Estate Terms You Need to Know as a Home Buyer or Seller