Montreal’s luxury property sales are on fire

Montreal has become a favourite of luxury real estate purchasers, and given the city’s beautiful, and in places European, streetscapes, it’s not hard to understand why.

But according to Amy Assaad, a broker with Royal LePage Du Cartier, there’s a more pragmatic reason luxury buyers, whether local, national or international, are flocking to Montreal.

“Assets here keep going up in value, and the luxury areas in particular don’t see declines. In fact, the luxury areas are seeing 10% annual increases,” she said. “There’s a strong cultural aspect to the city that people really enjoy too, and the city is very affordable compared to Vancouver and Toronto, but it offers as much as those two cities, and in some cases more.”

Montreal is known for its restaurant culture and nightlife, but there’s a different dimension to the city these days, having emerged relatively unscathed from decades of cessation threats, including two failed referendums initiated by sovereignists. Quebec’s political stability has suffused Montreal’s economy with confidence—although the unemployment rate rose as a consequence of the pandemic, it was as low as 6.4% in February 2018—and that’s reflected in the city’s real estate sales. Assaad’s team has completed nearly $171 million in transactions just in 2021 alone.

“We’ve sold over 30 luxury properties this year,” said Assaad. “One important aspect to living in Montreal is most places are no more than 10 km away from the downtown core. Westmount is less than a six-minute drive, the Golden Square Mile is less than two minutes away, but Outremont and Westmount, where most of the important luxury properties are located, are each just a stone’s throw away from downtown.”

Montreal real estate is a propitious investment for savvy international buyers who have realized that properties in the city are following the same trajectories as Vancouver and Toronto, but they’re still comparatively affordable.

“International buyers come from major cities worldwide that have already seen huge increases in pricing over the last year. If you’re a buyer from London or Paris or another major European city, you know that Montreal real estate is going to appreciate,” said Patrice Groleau, owner of McGill Real Estate and owner of Engel & Völkers’ rights to the Quebec market. Engel & Völkers recently reported that international buyers of luxury real estate have a preference for the French Canadian metropolis. Groleau added that one reason Montreal is attractive to them is, unlike Vancouver and Toronto, which respectively have 20% and 15% foreign buyer taxes, they actually settle in the city.

“The problem with Vancouver is that almost all foreign buyers there are taking money out of their countries and putting it in the city’s real estate, and in Toronto it’s about a 50:50 ratio,” said Groleau. “But in Montreal, people are moving here, and even if they enforce a foreign buyer tax in the city, that won’t solve anything because as soon as you have your residency you won’t have to pay the tax. You don’t see empty homes in Montreal, but when you go to Vancouver, you see no lights on in the towers at night because those units are just being used to protect money.”

2021-07-30 14:31:11

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Here’s what big city of multiple property owners look like

More than a tenth of homeowners in Vancouver, Toronto and Montreal own multiple properties, according to a Royal LePage survey of 1,500 Canadians.

Greater Vancouver Area

The third-largest metropolitan area in Canada has the largest share of multiple property owners, according to the survey, at 14%, of whom 27% don’t collect rental income, 51% rent the properties full-time, 13% use them both personally and as rental properties, and 7% currently have vacancies.

“Real estate is an integral part of retirement planning for many Vancouver homeowners,” said Caroline Baile, real estate broker with Royal LePage Sussex. “While some are using their secondary properties, possibly a cottage or a ski chalet, many of those with multiple homes are looking to build future equity as a means of sustaining a desired lifestyle down the road. Investment properties are not likely being used to subsidize monthly income, but are seen as a long-term investment.”

Fourteen percent of homeowners between the ages of 18 and 35 in the Greater Vancouver Area own multiple properties, while another 14% over 35 do as well. Baile says that in demonstrating such market savviness, younger homeowners clearly have an eye on their futures, but considering Vancouver real estate is Canada’s most expensive, it’s likely they have received parental help.

“Young people today put a lot of emphasis on work-life balance. They want their money to work for them, and they recognize that investing in real estate has the potential for great returns,” said Baile. “While so many young Canadians struggle to enter the real estate market, those fortunate enough to do so, whether on their own or with financial support from their parents, will reap the benefits in the future.”

Greater Toronto Area

In the GTA, 13% of survey respondents own more than one property, 27% of whom don’t collect rental income from their second properties. However, 49% own second properties for rental purposes, and 15% use their secondary properties themselves and for rental income purposes.

“Canadian homeowners believe in the value of real estate because they have seen their investments grow over time,” said Karen Millar, a sales representative with Royal LePage Signature Realty. “People feel confident investing in real estate because it is a physical entity that they can experience. Although the market may see peaks and valleys, homes have historically generated wealth in the long run.”

Eighteen percent of homeowners between the ages of 18 and 35 in the GTA own multiple properties, while 11% of homeowners over 35 do, indicating that young buyers are shrewd students of the market and want to capitalize on real estate appreciation, often looking outside Toronto in areas like Guelph and London, which have heavy student presences, where they can purchase for as little as $300,000, says Millar.

“Parents of students in Ontario’s university towns are also taking advantage of the local rental market, purchasing a property—oftentimes with multiple units—for their children to stay in while studying and also as a source of rental income from other students.”

Greater Montreal Area

Out of Canada’s three largest cities, Montreal area real estate is the cheapest and it’s allowed 12% of survey respondents to purchase more than one property. Of these multiple property homeowners, 37% don’t collect rental income from their second properties, while 25% use the properties specifically to collect rent. Nine percent reported a confluence of personal use and rental income, and 4% reported vacancies.

“Among secondary property owners in Montreal, the majority are using the properties for leisure, like recreational purposes, rather than as an investment,” said Roseline Guèvremont, a real estate broker with Royal LePage Tendance. “In Toronto and Vancouver, where prices have been soaring for several years, homeowners have been taking advantage of the significant equity in their primary residences in order to purchase a secondary property, and renting it out at least part of the time as an investment. In Montreal, although the real estate market has begun to catch up in recent years, prices remain considerably more affordable, so buyers can purchase without necessarily leveraging equity from a primary residence.”

Sixteen percent of homeowners 18-35 own more than one property, while only 11% over 35 do, suggesting that younger homeowners are already diligently planning for their futures by looking for other income streams and eventually capitalizing on their home equity.

Montreal has among North America’s highest number of students per capita and with post-secondary institutions opening their doors again this fall, landlords are hoping to make back the losses they incurred during the pandemic when students moved back in with their parents or returned to their home countries.

“With the return of in-person classes this fall and the opening of the border to U.S. visitors, demand is already being renewed in the rental market,” said Guèvremont. “Montreal’s real estate investors had a tough time generating profits from their units over the last year due to COVID-19.”

2021-07-30 14:38:33

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How do you tackle GTA’s rental crunch? Increase supply

It’s a great time to be young, as long as you don’t need a job or start a family or want to buy a house (or shake hands).

But buying a home is no easy task in the GTA.

In fact, a recent survey by Abacus Data stated that one-third of non-homeowners in Ontario have given up on ever owning property; another 26 per cent are pessimistic.

So, if millennials and Generation Zers can’t buy, they rent. Right?

However, vacancy rates are trending downward. The new condo market has had to fill in the gaps for thousands of Torontonians and GTAers over the years, leading to a hellish market for renters.

Housing market researchers Urbanation found that there have been 50,000 GTA condo leases over the past four quarters—if all of those downtown Torontonians headed for the hills during the COVID-19 pandemic, it looks like they’re on their way back.

Urbanation also reported that 1,242 new purpose-built rentals were completed and began occupancy during this year’s second quarter. The good news is that this is the second-highest quarterly total for new supply additions in more than 30 years.

However, rental demand is fierce (see above), and all of those new rentals are being built in high-rise-focused Toronto.

Meanwhile, Ben Myers of Bullpen Research & Consulting Inc. reported that “the gap between the average rent for a condo apartment in Toronto and the rest of the GTA steadily decreased during 2020.” But that was last year.

Expecting a large rise in activity this fall, Myers added that, “Bullpen is forecasting rent growth of 12 per cent to 14 per cent next year when the borders open, tourism ramps up, students return to campus, and many office towers are back to full capacity.”

Lower supply, higher prices—that’s the basic supply and demand principle that we all learned in high school economics.

I’m not the only industry observer beating the supply drum. Urbanation president Shaun Hildebrand told a Toronto Storeys reporter: “While new construction activity is also on the rise, the level of supply underway is expected to lag behind demand, creating conditions for rents to continue rising towards pre-COVID levels and beyond in the months to come.”

Let the bidding wars begin: They are no longer reserved for buyers—even renters have had to up the ante to get the home they want, especially in the 905 area.

A GTA real estate agent told that she commonly sees tenants offer more than the rental’s list price plus offer months of advance payments. She added that one rental homeowner recently rented out a house for $700 more per month than what the home was listed for.

One GTA renter told the media website she lost more than 12 bidding wars before finding a new home and paying six months of advance rent—despite having a strong credit rating and steady income.

There is clearly a huge need to build more rentals—more shelter, in general, as we’re seeing people drive their way to affordability, taking a highway north, west or east out of Toronto and the GTA to the next nearest community within commuting distance of the office and working remotely whenever possible when they decide they want to buy instead of rent.

Cue the brain drain: How are we going to keep our young bright minds in this province if they can’t afford to live in Ontario’s capital and surrounding region, the economic engine of the province and arguably the country? And how are we going to convince new talent from anywhere else that Ontario is the place to live, work and build a life?

We need to come up with incentives for builders to create a proper balance between new builds and purpose-built rentals, depending on the needs of each municipality.

The best solution to satisfy demand is to increase supply. With more supply, we’ll see rental prices flatten and, if not an end, a decrease in the number of bidding wars that continue to push up prices.

It’s time for Ontario and its municipalities to open up housing supply – streamline the approvals process, incentivize builders to build purpose-built rentals and create programs for density bonuses. More units, more housed Ontarians.

Richard Lyall, president of RESCON, has represented the building industry in Ontario since 1991. Contact him at [email protected]

2021-07-30 15:08:55

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Condo demand slated to explode

Canadian home sales have tapered off their Q1 peak but that doesn’t mean every segment of the market has softened.

“Home sales are unwinding from their stratospheric first-quarter levels,” said a report from TD economist Rishi Sondhi. “While we had anticipated a correction, it began a few months earlier than projected in our previous forecast in March. As the buying frenzy subsides, the more affordable condo segment is once again consuming an increasing share of the market.”

TD anticipated that condo sales would comprise the lion’s share of market activity since low-rise housing has reached astronomical price points. Any time the spread between low- and high-rise housing grows this wide, homebuyers flock to the latter for its relative affordability. Sondhi’s report says that condos will remain popular as the economy continues reopening and people begin spending more time in urban cores.

“A rising condo share will also be supported by ample available supply. Higher sales of these relatively inexpensive units should help restrain average home price growth. Note that this is the reverse of what happened earlier in the pandemic, when sales of relatively expensive detached units dominated, upwardly pressuring average home prices.”

In the second quarter of 2021, Greater Toronto Area condo sales reached 8,793 from 3,448 in Q2-2020, said the Toronto Regional Real Estate Board (TRREB), with the average price also increasing to $686,312 from $619,312. Although Q2-2020 was an aberration, the real estate board expects demand to become even more pronounced in 2022 for a couple of reasons: consumer polling conducted by Ipsos on TRREB’s behalf indicated that 40% of buyers this year will be first-timers, the majority of whom will need entry-point housing; the other reason is Canada will receive a record number of immigrants next year.

“The second quarter marked a turnaround for the condo market in terms of price growth. Whereas other market segments experienced a resurgence in price growth in the latter half of 2020, the condo market took longer to recover. Looking forward to 2022, condo demand could very well strengthen as immigration picks up and younger people, more impacted by COVID-19, look to purchase a home,” said Jason Mercer, TRREB’s chief market analyst.

Tom Storey, a real estate broker with Royal LePage Signature Realty in Toronto, added that incoming immigration will drive condo rental prices before spilling over into sales. Moreover, he says that while the price of condominiums is holding at the moment, another reason it’s due to surge is because the spread between detached homes and condos has never been this wide.

“What we saw from January through April was extreme price growth and on average three to five offers on condominiums. As we’ve headed into Q3, the prices are holding but they’ve stagnated for three months in a row,” he said. “However, something very interesting, from a value gap perspective, is in February of 2020 just before COVID, the gap between a 416 condo and detached property was about $700,000, and today the gap is $1 million—the largest gap there’s ever been. The last time there was a gap almost this large, condos went up about 20% in the next 12 months, so based on the price gap, it could be argued that condos are undervalued compared to other asset classes.”

2021-07-30 15:12:46

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Softer real estate activity won’t hurt the economy: CIBC

The Canadian economy isn’t as reliant on the real estate market as you might think.

So says a report from Royce Mendes, executive director and senior economist at CIBC Capital Markets, who reminded that residential real estate investment comprises construction and renovations in addition to “ownership transfer costs,” the latter of which still accounted for the bulk of economic activity. And while softening market activity will cause “this component of GDP to come back down to earth,” other sectors of the economy are awakening from their long pandemic-induced slumbers.

“The reopening that is underway also seems to be coinciding with a slowdown in other components of residential investment, such as construction. But, by that same token, companies not doing business in the housing market are also feeling more confident about making investments rather than stockpiling cash, given that vaccinations have reduced the likelihood of another round of harsh shutdowns,” said the report.

“If so, it would see the abnormal negative correlation between housing and business investment continue for a little while longer. But, keep in mind, that a fall in residential investment will not cause a rise in business investment, it’s still that other variable driving both: the pandemic.”

For its part, the Bank of Canada stated earlier this month that the country’s economy will grow at a slower-than-expected pace this year—it forecasts 6% growth, down from its previous estimate of 6.5%—and anticipates 4.6% growth in 2022, up from its initial projection of 3.7%.

The central bank added that with the easing, even rescission, of COVID-19-related health restrictions, consumer spending would increase. With travel prohibited, restaurants shut and major sporting events closed to spectators, Canadians’ non-essential outlays decreased during the pandemic, resulting in households saving an estimated $200 billion of cash, which is just waiting to be unleashed into the economy.

The Bank of Canada does not believe the end of federal aid programs will adversely impact consumer spending since more people will be returning to work with the end of the pandemic in sight.

“The reopening of the economy and the strong progress on vaccinations have given us reason to be more optimistic about the direction of the economy,” said Bank of Canada Governor Tiff Macklem during a July 14 press conference. “But we are not there yet, and we are mindful that the process is likely to be bumpy, and some scars will remain.”

2021-07-29 13:52:49

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Demand for retirement residences on the rise

To be clear, there’s a paramount difference between a retirement residence and a long-term care home.

“I would say the major difference is that living in a retirement residence is a lifestyle choice and long-term care homes are care needs-based,” said Karen Kotanko, national director of sales and marketing at Verve Senior Living.

“Retirement residences offer a greater level of independence but can provide care services if a resident’s health changes over time. Also, each resident has their own private accommodation, exceptional dining experiences and many opportunities to join in with activities or just socialize with friends in the bistro/bar over a cocktail.”

Verve Senior Living operates 30 retirement residences across Canada with many under construction, and while its residents are independent, Verve offers medication management and mobility support, as well as assistant living and memory care for residents with dementia and Alzheimer’s. The residents’ living quarters are a mix of studios, one-bedrooms, one-bedroom-plus-dens, and two-bedrooms.

Said the daughter of a Verve resident: “My mother has lived with Verve for almost nine years. She has only good things to say about the staff, the food, the building, and the atmosphere. I have appreciated everything about her experience right from the beginning, especially the quality of staff. As I write this today, with COVID-19 a huge concern in Canada, my appreciation for the team has deepened. The management has created an environment that has resulted in a high retention rate of caring, skilled staff. Now that I cannot be there, I am even more thankful to know the staff who are with my mom each day.”

The pandemic ravaged long-term care homes, but retirement residences were spared lethal outbreaks because of diligent planning. While COVID-19 was spreading through Europe, and before mandated lockdowns in March 2020, Verve Senior Living began implementing protocols to ensure it wasn’t caught flatfooted, including temperature checks and sending nurses to check on residents twice daily, and stringently cleaning its buildings. However, because social contact was proscribed, Kotanko says keeping residents’ spirits high became a priority.

“The pandemic has taken a toll on residents, in terms of socialization, but the life enrichment and other team members would go to the residents’ suites to do activities or exercises with them,” she said. “Now that we’re coming out of the pandemic, residents are dining together and can join up for activities again. Our teams continue to keep everyone safe by cleaning constantly, wearing masks and other PPE as required.”

Verve has wellness programs that, as Kotanko says, focus on residents’ minds, bodies, and souls. In addition to fitness rooms, Verve Senior Living runs walking clubs, swimming programs, brings in musical entertainment, and for residents who crave more independent activities, there’s an on-site bistro where they can go for meals or happy hour drinks.

“It’s like going on a cruise ship, where you have your suite, but outside is where all the action is happening,” said Kotanko.

Verve Senior Living also offers real estate agents referrals, which it recently raised to $2,000 per qualified move-in, if they refer a permanent resident who is new to the database. And with Canada’s population rapidly aging, there’s going to be growing demand for retirement residences in the years ahead.

“That’s why there are so many seniors’ residences going up all over Canada—we’re anticipating a high volume of seniors moving into retirement residences within the next 10-15 years, and we’re planning for that. We’re noticing right now there’s an increase in inquiries coming in across Canada, because while COVID slowed down the inquiries a bit, now that we’re all vaccinated and opening up for tours, we’re getting a high number of people wanting to move in again.”

2021-07-28 13:02:34

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No relief in sight for condo insurance premiums

Condo insurance rates in Alberta, British Columbia and Ontario, which have already risen substantially, are expected to keep rising, according to a report from

In the first quarter of 2021, condo insurance premiums shot up 27% in B.C., 16% in Alberta and 9% in Ontario compared to the same quarter in 2020, but in the former’s case, the problem appears tied to the dearth of insurance providers in the province. Although the B.C. government has introduced policies designed to bring more competition into the space, the insurance industry moves in 12-18 month cycles, so there appears to be little relief on the immediate horizon. In Toronto, which called “condo-centric,” mounting condo insurance rates are a growing problem.

Additionally, the report noted that home insurance premiums declined in Q1-2021 from the same period last year—rates fell by 12% year-over-year in B.C., 6% in Alberta and 1% in Ontario—because, with more people working from home, there were fewer incidents of home damage. However, that could change in the near future as weather becomes increasingly unpredictable.

“A lot of losses happen when people aren’t home,” said Justin Thouin, co-founder of “Fire or water damage happens when people aren’t home, or the damage is more extensive when they aren’t there. There are fewer of those losses.

“A large part of property insurance is catastrophic events,” continued Thouin. “When we see fewer of those, you should see a downward pressure on rates. However, climate experts are predicting that climate change will increasingly make weather even more extreme or unpredictable in parts of the country. In the coming decades you might see areas that may have been relatively safe from disasters, such as flooding, now are prone to flooding.”

Another reason those savings could erode in the near future has to do with material and labour cost inflation.

“The biggest factor behind insurance rates is replacement costs, and those costs are factored into your insurance policy,” said Thouin. “If the cost of lumber or labour goes up, theoretically, the cost of repairing or replacing your house will go up in some proportion.”

The report went on to explain that, according to the Property and Casualty Insurance Compensation Corporation, 2020 was the insurance industry’s lowest level of profitability since 2001, but profits rose by 87.5% in the first quarter of this year.

2021-07-28 13:11:18

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How TCS Marketing Systems differentiated itself from the competition

TCS Marketing Systems has a leg up on other preconstruction sales teams in the Greater Toronto Area: its entire roster has experience working in-house for developers and, therefore, understands the finer points of marketing some of the region’s leading projects.

“What my team has is experience in spending developers’ money and there’s certainly no other agency that has that extensive experience with developers on its staff,” Mark Cohen, managing partner of TCS Marketing Systems, told CREW. “We might be exclusive in that regard. I was in-house with a few developers, and our senior people have in excess of 50 years between us working in-house for developers as opposed to just being contracted sales people. That’s unique in our business.”

TCS Marketing Systems has rebranded from The Condo Store Marketing Systems, and according to Cohen, a major reason is his team has a wealth of experience marketing and selling low-rise projects, including detached subdivisions and townhomes, in addition to condominiums. Additionally, Cohen’s team has worked closely with leading architects and market research firms.

“Previously, I headed up all low-rise sales at Tribute Communities and low-rise at Menkes. I have a lot of low-rise experience and didn’t want to be pigeonholed. We’re picking and choosing our projects very carefully and I think I can do that because I’ve assembled a very strong, unique team compared to other sales agencies,” he said.

“As much as developers want to sell, what you spend to achieve sales is as important as the sales themselves, and when you work in-house for developers, it’s not solely about sales, it’s about revenue. It’s about what you do to sell and what you spend money on. COVID has made it more expensive to market, but the issue is developers want to be COVID-friendly, meaning they spend more on social media and digital marketing, but they were trying to figure out if they still needed to spend on scale models and sales offices. They wanted to know if they needed to keep doing things like they used to.”

The solution, in short, is a confluence of the two. Cohen says that while the pandemic forced TCS Marketing Systems to recalibrate its sales approach, it’s taken a savvy sales team like his to walk that tight rope.

“The strategy was to maintain a sales office to make it consumer-friendly. We didn’t necessarily expect them to come, so we ramped up mechanisms in order to see people and sell real estate. From a promotional standpoint, we put more into social media and digital marketing because we knew people had a lot more time to search projects on their computers, and they ended up going video crazy. Our hunch was correct.”

Through the pandemic, purchasers have enjoyed a measure of clout they previously lacked visiting chaotic, pressure-cooker sales offices. Cohen says that, because prospective buyers received one-on-one videoconference meetings with TCS sales reps, they likely made better purchasing decisions—and look, the market is hotter than ever.

“It’s been better for the customers in many ways because the industry was forced to work with them on their own terms, not the industry’s terms. People could dictate to the sales office what time they were available rather than being told what time to show up—and they would because they didn’t want to risk losing out on their new home—but now they have their own personal appointments where they can ask all kinds of questions they don’t usually have the chance to ask. COVID has been opportune for buyers because they have really gotten to learn the ins and outs of what they’re buying into.”

2021-07-27 14:53:18

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Hourly pool rentals are exploding in popularity

Why go to a public swimming pool when you can rent someone’s backyard pool by the hour?

Whether they’re motivated by a fear of contracting COVID-19 or they simply want to have a more intimate party than a public pool would allow, people have swarmed to Swimply, an app that lets them rent a host’s backyard swimming pool by the hour.

Swimply provides liability insurance for up to $1 million and $10,000 property damage insurance, however, Rob Golfi, owner and team leader of RE/MAX Escarpment’s Golfi Team, says that might not be enough.

“A regular insurance company wouldn’t insure for liability if they ever found out,” he said. “Even with Swimply’s insurance, you are still putting yourself at an enormous risk. You will need to update your homeowner’s insurance policy because in the case of a lawsuit, a lawyer will go after any name attached to the property”.

However, Sonny Mayugba, VP of growth at Swimply, doesn’t buy that argument.

“You could say the same thing for things like airlines, taxi cabs and hotels,” Mayugba told CREW. “You’re talking about citizens meeting in a space where there’s little personal responsibility and some house responsibility. It’s always good to take precautions and make sure you’ve got safety nets. We discovered our guests like to go have an experience just like they would in a hotel and then leave after having a really good time, but that’s not enough for us. We take every precaution to ensure safety.”

Asked how many homeowners have had to use the liability and property damage insurance provided to them by Swimply, Mayugba said, “It’s rare to non-existent. We’re the largest private swimming platform in the world, and beyond that we’re providing A-rated insurance on our experiences, which is something nobody else does. At the end of the day, like the other examples I gave, people use this service to have a good time and then respectfully take off.”

The fact that Swimply, which technically launched in 2018 but was fully operational a year later, has grown as quickly as it has could be indicative that its formula does in fact work—it’s hard to imagine Swimply would still be around if homeowners were frequently getting sued by guests. In any case, a few simple steps go a long way towards avoiding major problems, say Mayugba.

“To me, it’s about the fundamentals: It’s your pool and your rules, so make sure your Swimply profile is complete and accurate—the title of your pool, your photo, your amenities, and chat with the guests on our chat feature to compare everything you have with their expectations,” he said. “Make sure access to the pool is clear and that your pool is clean, make your backyard is clean and that there are a lot of photos, and you can even have the pool safety certified—you can get a safety certification check from any pool check service.”

The company had a coming-out party in 2020 during, or because of, the pandemic, added Mayugba.

“2020 wasn’t a rough year for us with COVID, it was actually a breakout year. 2019 saw little growth but 2020, with the advent of the stay-at-home order mixed with the CDC saying backyard swimming pools were safe, saw Swimply explode. Revenue grew 4000% in 2020 over 2019.”

The California-based company is operational in all 50 U.S. states, Australia and Canada, which has one of the company’s top-10 markets.

“Toronto is interesting because we had a small flywheel spinning there, and this year CTV did a story on Swimply and ever since then, Toronto has become a real hotbed,” said Mayugba. “It used to be ranked in our top-50 markets and now it’s in our top-10.”

2021-07-27 15:02:28

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Canadian mortgage debt almost $2 trillion in May

Canadian mortgage debt and home equity lines of credit reached $1.98 trillion in May, comprising the lion’s share of total household borrowing, which rose by 0.8% month-over-month to $2.5 trillion, says Statistics Canada.

Mortgage debt grew by $16.3 billion in May, up by 1% from April and 8.3% from May 2020.

“Over the first five months of 2021, households added $57.5 billion in mortgage debt, compared with $34.3 billion over the same period in 2020,” said StatCan.

Dustan Woodhouse, president of Mortgage Architects, noted that mortgage debt growth is an auspicious sign for any country because it is indicative of both a growing population and healthy economy.

“Canadians are not actually taking on more mortgage debt themselves—median household debt is shrinking—but our country is because the population and housing stock are growing, therefore, the overall mortgage market is growing and it’s a good thing, it’s a good sign,” he said. “You wouldn’t want to buy a house in a country that has a shrinking population.”

According to the Canada Mortgage and Housing Corporation, the seasonally adjusted annual rate of housing starts was 282,070 last month, a decrease of 1.5% from 286,296 in May.

“Over a 10-year period, immigration to Canada has been about 4 million people, and where are they going to live? So it’s healthy mortgage debt growth,” said Woodhouse.

Canadians are deleveraging their credit debt in tandem with the increasingly buoyant economy. Last month, Matt Fabian, director of research and consulting at TransUnion Canada, told CREW that lenders will have to cognizant of potentially risky balances—if they’re not, the delinquency rate could rise—but he still noted that, excluding mortgage debt, consumers’ liquidity declined by 2.9% year-over-year in Q1-2021 to an average of $28,900 in large part because their savings rate surged by 28% of disposable income, which Fabian said was an all-time high. He also said the risk of defaulting had not grown.

“There’s been a shift in buyer preferences, and there are a whole lot of options for people who have decided to move because they work from home, and they’re making different choices and redirecting their cash and assets towards a different home. People are redirecting their spending because they aren’t travelling, so they’re upgrading and improving their homes,” he said.

2021-07-27 14:46:01

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