Month: November 2020

The biggest reason to live in downtown Toronto is that it’s replete with big city amenities, but the equally biggest drawback is that it’s congested.

But what if you could live somewhere that both brims with activities and isn’t crowded?

As it turns out, North York is undergoing revitalization right now that’s importing the best of downtown Toronto, but without the bumper-to-bumper traffic and frantic sidewalk bustle. The area around Glencairn Ave., in particular, is home to new developments and restaurants, and according to the developer of The Dylan Condominiums—which, at Glencairn and Marlee Aves., is situated smack in the middle of what’s effectively going to look like a brand new neighbourhood when it’s occupied in 2024—the area is reminiscent of Toronto’s Ossington Ave.

“Using Ossington as an example, there are condos built on the street with interesting shopping options nearby, like small supermarkets, restaurants, cafes, and family-run businesses, many with a European flare,” said Ralph De Luca, president of Chestnut Hill Developments. “Similar things are happening where The Dylan is being developed and the values are shooting up: there are nice townhouses nearby for $1.8-2 million and detached houses for $3 million.

“A lot of young professionals are moving into the area because they’re away from the centre of the city, but close to a lot of things like Yorkdale Shopping Centre and all the restaurants on Dufferin St.”

De Luca knows what he’s talking about. Chestnut Hill developed Massey Square Condos near Trinity Bellwoods and helped catalyze the rapid appreciation that swept nearby properties, including those on Ossington Ave. Chestnut Hill’s Gardens at Queen Condos did the exact same thing to the Queen and Bathurst neighbourhood.

Additionally, The Dylan is a three-minute walk from Glencairn Station, the least utilized subway station in Toronto, well-nigh guaranteeing the turnstiles won’t dangerously overflow with people during rush hour, and a few short blocks north of the Eglinton Crosstown LRT, which will have 25 stations along a dedicated track.

“It’s going to appreciate rapidly around The Dylan because you’re in the city but you can go downtown by subway or by car,” said De Luca. “You have more livable space as opposed to being downtown, where prices are higher but the space is significantly smaller.”

With Yorkdale and the Trans-Canada Highway minutes away, condos in the neighbourhood are being developed for around $1,200 a square foot, although The Dylan, a boutique 118-unit mid-rise, is being built for about $200 less.

The value doesn’t stop there. According to Ryan Coyle, co-founder of Connect.ca Realty, The Dylan will yield investors high returns.

“Aside from the building’s beautiful masonry and dark metal panelling, the interior units are very roomy because this isn’t a downtown project, although you might not realize that at first when you’re standing at street level,” said Coyle. “This development will attract a lot of end users, but savvy investors will also flock to it because, with access to four-way transit, residents won’t need to drive anywhere. Whether they’re going to the University of Toronto or York University, the Rogers Centre or Pearson International Airport, they’ll be connected to every point of the city, and that kind of convenience will be reflected in the rents they pay.”

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Investment volumes in the Greater Toronto Area’s commercial real estate market decreased year-over-year in Q3-2020, but, along with Montreal, the region remains investors’ Canadian market of choice, according to report from Altus Group.

Through the first three quarters of the year, $11.9 billion was invested in the GTA, a 23% decrease from the same period in 2019; the $4 billion invested in the country’s most populous metropolitan region last quarter also marked a 23% decline from Q3-2019. The report noted that, at $1.1 billion, the land sector—comprised of the industrial, commercial and investment sector, as well as residential land and lots—was the only one to surpass the billion-dollar mark in the third quarter, with $665 million coming from the industrial space. This was followed by the apartments sector at $575 million.

Among the most significant transactions during the quarter, according to Altus Group’s report, were Signet Realty’s sale of seven multi-residential assets to Starlight Investments and Timbercreek Asset Management—the former acquired 386 units for $113 million and the latter received 289 units for $80 million.

Additionally, 277 Wellington St. W. was acquired by Reserve Properties and Westdale Properties through a joint venture, and at $78.5 million, the nine-storey 100,000 square foot building is considered by Altus to be the largest office transaction in the GTA during Q3-2020. The group also believes the site could be a lucrative infill site in the next few years.

The report mentioned that the retail and office sectors had difficult third quarters because of the COVID-19 pandemic, opening the door for greater sums of investment in the GTA’s industrial and multi-residential sectors, which have both withstood underwhelming market conditions rather well. Moreover, while the pandemic has catalysed a lot of turmoil in the market, it’s also the reason interest rates have fallen to all-time lows, which investors are leveraging with abandon.

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This year, no one could predict what would lie ahead for the housing market during the novel Coronavirus pandemic that spread across the globe like wildfire. For many, Canadians lost their jobs and were trying to live off government-assisted programs while trying to juggle their bills, but for others, they were presented with a great opportunity to dip their toes in the real estate market for the first time or upgrade to a house outside of the expensive city due to being able to work from home. Interest rates have also continued to stay at a historic-low in order to help stabilize the Canadian economy while COVID-19 rages on.

But while some buyers were able to get into a home, many others were left losing bidding wars and give up on their dream home. Some even had to sell their homes in order to stay afloat. So, the question remains: is it a good time to buy a house in Canada? What real estate trends are emerging and why should you take advantage of them?

We’ll break down everything you should know.

Are millennials the reason for the booming real estate market activity?

Last year, it was predicted that millennials would become the main reason for homes flying off the market before the COVID-19 pandemic urged people to stay at home and only go out when necessary to essential stores. In fact, millennial home ownership rates in Canada were higher than in other countries according to a report by RBC. As of March 2019, 40 per cent of homes in Canada were owned by buyers 35 years of age or younger whereas, in the United States, that percentage sat at 34.5. The cities with the youngest homeowners in Canada were Calgary, Toronto and Vancouver, even despite the high home prices. But did this trend continue into 2020 despite the global pandemic?

Well, maybe not. Scotiabank’s survey suggested that 38 per cent of Canadians believed that now is as good of a time as any to buy a new home, but only 18 per cent of Canadians between the ages of 18 and 34 agreed that the pandemic accelerated their plans to delve into the home ownership journey. This left one-third of those surveyed waiting for prices to drop before buying a home.

How has the Coronavirus affected the housing market in Canada?

Despite the novel Coronavirus putting everything on hold, there were still real estate records being broken in cities all across the country, particularly in the Greater Toronto Area, Greater Vancouver, and Montreal to name a few. As mentioned above, while many feared losing their jobs and steady income to support their family and keep their houses running, many others found the global pandemic a great opportunity to buy their first home or upgrade to homes located outside of the city they no longer needed to travel to for work because of the lower home prices, affordable mortgage rates, and being able to get much more for their money.

Here are some impressive records that were recorded this year due to the Coronavirus that threw us all for an unexpected loop.

Montreal

Many Montrealers are saying goodbye to city living and buying homes in cottage country. In both July and August of this year, Montreal saw a surge in home sales and broke records for two months in a row in a seller’s market. This means there has been way more demand for homes than what is even on the market. In a report from the Quebec Professional Association of Real Estate Brokers (QPAREB), residential sales increased by 39 per cent in August compared to the same time last year with a total of 4,878 sales (with single-family homes taking the lead with 2,601 sales). This was the highest number recorded in August in the last 20 years. Single-family home prices also increased by 24 per cent (with a median price of $427,500), but what was surprising was seeing $1 million-dollar homes on the market double compared to August 2019.

Greater Toronto Area (GTA)

The housing market in Toronto has reached new heights too after the global pandemic took its toll on office workers and real estate investors. As stated in a November report by the Toronto Regional Real Estate Board (TRREB), home sales in the GTA were up more than they ever have been for four consecutive months. In October alone, TRREB members reported 10,563 home sales compared to 8,445 in October 2019. The average price for all types of homes combined reached $968,318, an increase of 13.7 per cent from the same time last year. The demand for single-family housing in the GTA has drastically increased, so bidding wars are being taken to a whole new level. Supply is low and first-time buyers are getting outbid.

The condo market in Toronto has seen records being broken too. As the Toronto residential housing market has been doing really well, condos haven’t necessarily seen the same light, particularly in the downtown core. Sellers are even seeing their condo listings sit for months compared to just a few days this time last year. The reason? The demand for renting has drastically gone down because students haven’t physically been returning to school, immigration has come to a halt, and travel is a no-go for those offering an Airbnb. In fact, condo sales saw a year-over-year decrease of 8.5 per cent.

Greater Vancouver

The Real Estate Board of Greater Vancouver (REBGV) reported that in September of this year, 3,643 residential homes sold compared to 2,333 in September 2019. The benchmark price for all properties is currently $1,045,100; a six per cent increase since October 2019. In Fraser Valley, sales were the second-highest they’ve been in July for 10 years with an increase of 25.5 per cent despite the single-family home and townhome supply being low.

But the condo market?

Well, unlike the GTA, the Greater Vancouver area saw a 36.9 per cent increase in condo sales this year in September. Prices have remained high year-over-year because of the demand for buying condos in the busy, downtown hubs. The current median price of a condo in Vancouver is $683,500. However, those who own investment properties in Greater Vancouver have definitely noticed a drop in rent prices due to the lack of students, immigrants, and tenants losing their jobs or being laid off. In fact, in August, rent had dropped by 9.4 per cent compared to August 2019, according to Rentals.ca.

Top six things you should know before buying a house in these record-breaking housing market times

This may seem obvious, but buying a home is one of the biggest purchases you’ll ever make in your life. It may also be one of the most stressful times of your life, especially if you’re a first-time buyer and new to the world of real estate. But that shouldn’t scare you away. Buying a home is exciting, exhilarating, and something to be incredibly proud of. That being said, there are still some things you should make yourself aware of before buying.

1. Mortgage rates are at an all-time low

The main factor driving Canadians to accelerate their plans to buy a house? The historic-low interest rates.

Obviously, 2020 has been an uncertain time for all of us and the unemployment rates have drastically increased. In order to stimulate the economy and make it easy for people to borrow money, low-interest rates became the new normal and they may continue to stay this low for the next three years according to the Bank of Canada. There are a few reasons why people want to take advantage of this:

• This could mean substantial savings for monthly mortgage payments
• Those refinancing their mortgage will notice a huge difference
• May be easier for people to recover their debts
• Buyers can make larger purchases
• Banks are able to lend to even more borrowers

However, if you have a fixed-rate mortgage, you won’t be affected by the rate change. With an adjustable-rate mortgage, your interest rate and mortgage payments can change.

2. You need to become familiar with local real estate trends

If you’re interested in buying a house or an investment property, your best bet is getting familiar with local housing trends and, of course, relying on professional help from a real estate agent who knows the market better than anyone. Not only can they tell you what you’ll expect to pay in certain neighbourhoods, but they can keep you up to date on all information and facts you need to know so you’re as comfortable as possible with your purchase with it be for personal use or investment purposes. If you’re looking for an investment property, it’s also a good idea to rely on a real estate agent who knows what the rental market is like in the area, what you can expect to charge for rent, and what type of renters you should attract. Becoming familiar with the local housing market will also help you set your expectations seeing as bidding wars are becoming quite the fuss. Which brings us to our next point.

3. Prepare for a bidding war (even if it doesn’t end up happening)

Bidding wars and getting worse for buyers amid the global pandemic, leaving buyers feeling devastated they didn’t land their dream home. Why is this becoming such a popular (and hated) trend? Because of the inventory problem. There are more buyers looking for homes than there actually are on the market, leaving buyers’ agents having to pull every trick they know from their hats.

Bidding wars can be frustrating for everyone involved. Ultimately, when it comes to winning a bidding war, knowing how much you can actually afford to spend is crucial because you may need to increase your original offer. You may also want to consider having fewer conditions on your offer to stand out from the others.

4. Ensure that your income is steady before rushing into the housing market

As mentioned above, many Canadians across the country have lost their jobs due to COVID-19, or they’ve had to endure a pay-cut. If you’re someone who has been handed down this financial burden, it may not be the best time for you to buy a home for personal or investment purposes. Plus, when you apply for a mortgage loan, banks will favour those who can prove they have a steady source of income so they can make their monthly mortgage payments on time. You’ll also need funds for a down payment and closing costs, otherwise, if you need to borrow a down payment on top of a mortgage, it will need to come from a different lender than that of your mortgage loan in Canada.

5. Shop around for the right mortgage for you

Shopping around for a mortgage online is more easily accessible than ever before since pretty much everything is moving to the digital world due to the Coronavirus affecting in-person transactions. But finding the right mortgage for your specific needs can be tough to do on your own which is why many buyers lean on a mortgage broker for help. A mortgage broker’s role is a bit different than your agents. Rather than connecting you with the right house, a mortgage broker connects you with the right mortgage term and lender. They’re not just connected to one lender, but various lenders who offer different rates that are better suited for you.

6. Determine if your goals are short-term or long-term

There are many good reasons why people want to get into the real estate market, but when to actually buy a house depending on your goals can vary. So, what are your real estate goals? Do you want to buy your dream home for your family? Do you want to buy a house for investment purposes?

Signs it may be a good time to buy a house for short-term investment purposes to maximize revenue can be:

• You’re financially stable/comfortable enough to put a down payment on a second home (plus you have a good credit score)
• You’re able to access a good interest rate and mortgage rate
• If you don’t have enough for a down payment upfront, you have enough equity to tap into in your first home
• You’ve done your research to determine when it’s a buyer’s market or a seller’s market – a buyer’s market will mean that there are more properties for sale than there are buyers’ interested, so bidding wars may not be as common, but lower prices will!
• The investment property you’re interested in is in prime rental spots for positive cashflow

Signs it may be a good time to buy a home for long-term living purposes may be:

• You have enough saved for a down payment and closing costs
• You were able to sell your current home
• Your credit score is good
• The interest rates are low
• You’re ready to commit for the long-run and are financially stable to do so
• The housing market is in good condition and your home will actually appreciate
• Again, you’ve done your research – the neighborhood is what you’re looking for, the price is right, and the housing market is stable

So … is it a good time for you to buy a house?

Well, ultimately, it depends on a few factors. Whether you’re a first-time buyer, downsizing, or an experienced real estate investor, some of the most important things you will want to consider are:

• The current interest rates being offered by various lenders
• What your mortgage rate will be
• Where you’re looking to buy
• The current home prices (and if you are in good financial standing with your bank)
• The current state of the housing market
• If it’s a buyer or seller’s market

Because of the Coronavirus, many sellers have been nervous to sell, but even while the pandemic has put everything on hold, it seems like many people have been eager to get into the market. This has made some Canadian cities see record-breaking sales, particularly from July to October 2020. Some cities haven’t seen such high sales in years, but even more impressive has been the interest rate prices which have actually hit historic lows.

So, if you are financially set and ready to move into your new dream home or look for your first home, now may be the right time, but just remember that you may come across bidding wars due to the demand for homes being greater than what is actually available.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Home sales in Canada’s three largest cities surged last month, but RBC anticipates softening in the next few months.

“Aside from some bumps in downtown condo markets, this summer’s broad market rally remained largely intact so far this fall,” said the bank’s report, Canada’s Housing Market was Exceptionally Strong in October. “Still, with earlier pent-up demand now entirely exhausted and tight supply poised to become more of a constraint on activity, we expect things to slow down in the coming months.”

Year-over-year, home sales in Toronto, Montreal and Vancouver increased by 24.4%, 35.9% and 30.9%, respectively, in October, but with new listings rising by 16% during the same period, driven mainly by downtown condo markets, the flurry of activity could wind down.

“The downtown condo market is currently the weak spot in Canada’s housing picture,” said the report. “Many condo investors have been hit hard by the downturn in the rental market (both long-term and short-term) in Canada’s largest markets and are offloading their units. Soaring supply is tipping the scale in favour of buyers.”

The report added that condo prices have plateaued in Greater Toronto and Vancouver, and so has rental demand.

“We expect condo prices to decline further in the near term,” continued the report. “With immigration largely stalled and unemployment remaining high among lower-income Canadians, we see little that will boost rental demand in short order.”

Problems pertaining to affordability could reemerge in the housing market, as well, because constricted supply inevitably drives prices higher.

“We expect the covid-induced market churn to fade over the coming year. As it does, supply will become even more of a constraint on overall activity. The persistence of tight overall demand-supply conditions will maintain strong upward pressure on prices—bringing affordability issues back into the fore. These factors, in our view, will slow down the pace of home resales across Canada.”

The RBC report concedes that virtually nobody could have predicted that the worst recession in generations would result in housing price acceleration, and it suggests the market could go in either direction depending on: how the burgeoning work-from-home trend continues, near-term interest rate movement, when immigration to Canada will resume, how the pandemic’s second wave and fallout from mortgage deferrals play out.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

Canada’s industrial real estate sector is thriving, according to a new report from Morguard, however, the same cannot be said of the country’s office space submarket.

According to the company’s Canadian Economic Outlook and Market Fundamentals Third Quarter Update, the country’s average downtown vacancy rate in the office sector rose by 1.5% from Q2 to 11.5% because subleases increased as a means to recover revenue deficits caused by the COVID-19-induced lockdown. By the end of last quarter, there was 6.3 million square feet of available sublease space in the downtowns of Canada’s major urban centres—the equivalent of 21.1% of total vacancy. Moreover, vacancies in the aforementioned areas offered directly through landlords also increased to 23.6 million in Q3, a trend that began in the second quarter of this year.

Conversely, the industrial leasing market enjoyed a strong third quarter, with demand outpacing supply in most of Canada’s major markets, thanks to sustained growth in the e-commerce branch of the retail sector, said the report. Demand for space was so torrid, in fact, that some warehouse and distribution users were incapable of securing enough space to relieve issues pertaining to their supply chains. By the end of Q3-2020, the vacancy rate remained sideways at 3.5%, with rents climbing over the preceding 12 months.

Not every major market reported low industrial space vacancies, though—Calgary, Edmonton and Halifax had vacancies north of 5%.

Unfortunately, the e-commerce sector’s fledging came at the expense of the retail leasing market, where softening persisted last quarter. Only 59% of retail tenants paid rent in full in August; 27% were on rent deferral programs, and 14% didn’t pay any rent at all during the month. Retail sales also slowed in Q3 after an exceptional May-June period, increasing by a marginal 0.6% in July and 1.1% in August. But the Morguard report warns that Canada’s unemployment rate, which spiked upon the pandemic’s onset, will inhibit consumer spending.

The job market in the country at least improved in the third quarter, with 419,000 new jobs in July, 267,000 in August, and 378,000 in September, which brought the unemployment rate down to 9%, as two-thirds of the jobs that were lost in March and April were recovered.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate