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What the new mortgage rules mean for the lending market | Financial Post
 
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Canadian Real Estate Street Smart REI   October 18, 2017   1   0   0   0   0   0
Borrowers who don’t meet the lending criteria of Canada’s big banks for home loans may turn to credit unions and private lenders under tougher mortgage rules released by the country’s banking regulator, according to RBC Capital Markets. While the final rules have a “very minor negative impact” to large Canadian banks, the changes are more negative for non-prime lenders such as Home Capital Group Inc. and Equitable Group Inc. due to the stress tests and ban on bundling of mortgages, RBS analysts Darko Mihelic and Geoffrey Kwan wrote in a note to clients. The Office of the Superintendent of Financial Institutions released final rules targeting borrowers in the uninsured mortgage market, making it more difficult for those with more than a 20 per cent downpayment to qualify for home loans. The measures, known as B-20 guidelines, require lenders to test a borrower’s ability to pay at the greater of the Bank of Canada’s five-year benchmark rate or 2 percentage points higher than the offered mortgage rate starting in January. “This is likely to lead to a significant number of non-prime borrowers to either defer purchasing a home or seek out a mortgage from lenders such as credit unions/caisse populaires” and, failing that, a mortgage investment corporation or private lender, the RBC analysts wrote. Alternative lenders fell in Toronto trading, with Equitable falling 1.6 per cent and Home Capital declining 2.3 per cent at 12:58 p.m. trading. Canada’s eight-company S&P/TSX Commercial Banks index rose 0.3 per cent. Dampen...
Private Equity Looks to Challenge Airbnb With Vacasa Deal | National Real Estate Investor
 
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Canadian Real Estate Street Smart REI   October 18, 2017   1   0   0   0   0   0
(Bloomberg)—Vacasa LLC, an online vacation rental company, raised $104 million from a group of private equity firms looking to build up a challenger to Airbnb. The Portland, Oregon-based startup said it received funding from Riverwood Capital, Level Equity, NewSpring Capital and other backers. The investment, led by Riverwood, nearly doubled the startup’s valuation from the previous round, said two people familiar with the deal. The company declined to disclose the valuation. Investors were eager to put money into a business that could become a stronger competitor to Airbnb and then perhaps one day be an acquisition target, said one of the people, who asked not to be identified because the process is private. Airbnb Inc., Expedia Inc. and Priceline Group Inc. have been buying up home-rental startups in the last year or so. The high-end rental business is a key growth area for the travel industry. Companies are seeking to boost profits by targeting wealthy travelers. In February, Airbnb purchased Luxury Retreats, which offers tools similar to Vacasa for managing vacation properties remotely. Vacasa’s website lets homeowners rent and promote their homes, and connects them with maintenance and cleaning services. Customers can book those properties through the site. The company was founded in 2009 but hadn’t sought capital from investors until recently. Vacasa secured its first round of funding last year, about $40 million. The company has grown quietly across the U.S. and abroad, and its smaller size helps the startup avoid much of the regulatory scrutiny that plagues...
How resilient is Canadian housing to a U.S.-style crash? Plunging oil prices? Here’s the CMHC stress test result Post
 
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Canadian Real Estate Street Smart REI   October 18, 2017   1   0   0   0   0   0
The country’s largest mortgage default insurer, which backs almost $500 billion in loans, says anti-globalization threats are an increasing fear so it has added those concerns to its ongoing stress tests. Canada Mortgage and Housing Corp., which protects financial institutions in the case of consumer default and is 100 per cent backed by Ottawa, said in a release Wednesday that it looked at anti-globalization, earthquakes, a steep oil price fall and a U.S.-style housing correction to see how its insurance portfolio would hold up. It did not look at a combination of any of those scenarios. The verdict is a U.S.-style correction would be its worst scenario for its insurance program with a cumulative loss of $217 million from 2017 to 2022 which would come on top of a need for the Crown corporation to suspend its dividends to Ottawa. CMHC paid Ottawa a special dividend of $4 billion in June because of excess capital and issued a $240 million dividend in August. In all of its worst-case scenarios, CMHC would suspend dividend payments which would allow it to keep its capital levels above what is required by the Office of the Superintendent of Financial Institutions. “We seek out extreme almost unimaginable situations and ask ourselves ‘what if’. That is the goal of our stress testing,” said Romy Bowers, chief risk officer of CMHC, said in a conference call with journalists. “Stress testing is not a forecast or any form of prediction.” With trade wars a possibility,...
News Canadian Real Estate Magazine   October 18, 2017   2   0   0   0   0   0
The Montreal Census Metropolitan Area (CMA) saw a 9% year-over-year rise in total home sales during the third quarter of 2017 (up to 8,845), according to new data from the Greater Montreal Real Estate Board (GMREB). This represented the best Q3 sales result in Montreal since 2009 and the 14th straight quarter of increases, according to the Board, which derived the statistics from the Centris® provincial database. In terms of asset classes, condominiums posted the largest sales increase (+18%) at 3,043 units sold, establishing a new Q3 sales record for this property type.Sales of single-family homes and plexes (2 to 5 dwellings) also showed notable growth at 5% and 8%, respectively. As for median prices, single-family homes and plexes across the CMA both experienced an increase of 5%, up to $320,500 and $479,000, respectively.Condominium median values showed relative stability, growing by a modest 1% to $253,000. Active listings in the CMA declined for the 8th consecutive quarter, falling by 14% year-over-year (down to 24,640 properties available for purchase). “The real estate market is continuing its strong momentum.We are clearly in a seller’s market for single-family homes and plexes in most areas of the Montreal CMA, while the condo market is returning to balanced territory,” GMREB’s board of directors president Mathieu Cousineau said.“In one year, the
News Canadian Real Estate Magazine   October 18, 2017   2   0   0   0   0   0
In an announcement late last week, the British Columbia Real Estate Association indicated an increase in the province’s home sales numbers and market valuation in September. The BCREA figures showed that a total of 8,340 residential unit sales were recorded by the Multiple Listing Service last month, representing a 9.9% year-over-year increase.This is despite a 13% year-to-date decline in home sales, down to 81,608 units. Meanwhile, total sales value amounted to $5.8 billion, up by 30.2% from September 2016.The average MLS residential price stood at $693,774, having increased by 18.5% from the same time last year. On a seasonally adjusted basis, B.C.residential sales grew by almost 5% from August, according to BCREA chief economist Cameron Muir. “Total active listings on the market continue to trend at 10-year lows in most B.C.regions, limiting unit sales and pushing home prices higher,” Muir stated, as quoted by the Vancouver Sun. However, Muir cautioned that “while the economic fundamentals support elevated housing demand, rising home prices are eroding affordability, particularly for first-time buyers.” The results of a survey by Royal LePage came out on the same day as the release of the BCREA’s numbers.The study found the median price of a condominium rose by 17.6% from September 2016 to $622,392, while the cost of a two-storey
News Canadian Real Estate Magazine   October 18, 2017   2   0   0   0   0   0
The Scarborough subway extension doesn’t seem to generate much support outside of Toronto’s eastern suburbs and City Hall, but one Durham Region brokerage owner believes that Toronto’s most immediate eastern suburb is the right place for the city’s next below-grade transit project. Dan Plowman, owner of Dan Plowman Team Realty Inc., believes Scarborough is the right place to build a subway extension because it will service all of Durham Region – and, in the process, put property values on an upward trajectory. “Scarborough is already growing, but I know for a fact there’s already talk of people buying near where the subway is supposed to go simply because of the subway,” said Plowman.“There’s already a frenzy.When you bring something on this magnitude to an area, you will increase property values.” He added that Scarborough still has more developable land than Toronto does, and the result would homes sprouting en masse around a subway line. “You have to look at areas that came after subway stops,” he said.“You’d see the homes increased drastically after the infrastructure came into play.You already had massive growth in Scarborough, and there’s still a lot more land than downtown pockets and it will fill up.” Toronto is a world-class city with a world-class skyline – not to mention world-class gridlock
Institutional Investors Raise Their Targets for Real Estate Allocation
 
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Canadian Real Estate Street Smart REI   October 18, 2017   2   0   0   0   0   0
A new report[1] put together by Cornell University’s Baker Program in Real Estate and Hodes Weill & Associates, a global real estate advisory firm, found that institutional investors continue to increase their targets for real estate investments, in spite of facing some challenges. Institutions’ target allocations to real estate averaged 10.1 percent this year, up from 9.9 percent in 2016, the report’s authors found. In 2018, target allocations will likely rise to 10.3 percent, survey respondents indicated. Thirty percent of survey participants increased their target allocations to real estate in 2017[2], while 18 percent decreased their allocations.   Most of the decreases could be attributed to the endowments and foundations space, perhaps due to the difficulty of achieving the necessary yields, which average 9.5 percent, the report’s authors speculate. Public pension plans have kept their target allocations largely flat with last year’s levels, while private pension plans, insurance companies and sovereign wealth funds have increased allocations[3]. Public and private pensions and insurance companies target real estate returns of under 8.00 percent.   However, actual allocations have trailed set targets by about 100 basis points, with 60 percent of surveyed institutions reporting they were underinvested compared to targets. Last year, the figure was 50 percent. Overall view of the opportunities present in the real estate sector has reached a five-year low in 2017, according to the survey’s “conviction index.” The index measures investors’ view of opportunities from a risk/return perspective on a one-to-10 scale. In this...
Value-Add Investors Weigh Capital Options Estate Investor
 
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Canadian Real Estate Street Smart REI   October 18, 2017   2   0   0   0   0   0
The search for yield in a slowing market has investors shifting their focus to more lucrative value-add and opportunistic projects. And, so far, there appears to be plenty of capital to back those strategies. Buying stabilized assets at this stage of the market is a bit like buying a bond, notes Joe Franzetti, a senior vice president at Berkadia Commercial Mortgage. “So for buyers that are looking for out-sized returns, they are going to look at value-add situations where there is an opportunity to increase cash flow and increase value,” he says. Projects run the gamut from assets that need a facelift or expansion to a complete redevelopment or adaptive reuse. Debt funds are often taking the lead on providing capital for these value-add deals[1]. “There is a tremendous amount of debt funds and mortgage REITs who are really focused on value-add situations,” notes Franzetti. He estimates that there are nearly 80 different entities that are willing to lend on this type of product, and many are aggressively trying to find deals that work or fit their specific business model. Multifamily investors have the advantage[2] of being able to access capital through Fannie Mae and Freddie Mac. Both agencies have value-add programs with fixed-rate and floating-rate debt that provide pretty attractive financing, notes Jeff Erxleben, an executive vice president and regional managing director at debt and equity provider NorthMarq in Dallas. Commercial value-add projects are a slightly different story, because they don’t have Fannie and Freddie as a backstop providing additional...
What Sets Seattle’s Apartment Market Apart? Estate Investor
 
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Canadian Real Estate Street Smart REI   October 18, 2017   2   0   0   0   0   0
Multifamily developers have been very busy in Seattle, especially in the core sub-markets around downtown. But thanks to affordability and strong job growth—including in the city’s core—few new apartments are sitting vacant and rents continue to rise. “Performance remains terrific, despite all the new product that has been added to the stock,” says Greg Willett, chief economist with RealPage, which provides property management software and solutions for commercial and multifamily properties. “Lots of places register very solid expansion of downtown jobs, but Seattle’s urban core growth rate is in a whole different category.” Vacancies shrink in Seattle Despite all the new construction, the percentage of vacant apartments has fallen on average. Currently, vacancy is at 4.6 percent, down from 4.9 percent at the end of 2016, according to New York City-based research firm Reis Inc. “Seattle has seen a lot of construction, but demand has stayed even with construction, so Seattle has not seen any vacancy rate increase,” says Barbara Byrne Denham, senior economist with Reis. Seattle’s economy is strong—but not strong enough to account for how well the apartment sector is doing there. The number of jobs in the Seattle area has grown steadily, increasing by 2.5 percent since last year. That puts Seattle at number 20 out of the 82 metro areas tracked by Reis. Seattle is doing better than the U.S. overall, where the number of jobs is now just 1.6 percent higher than it was the year before. Seattle is also...
Wanda Partner Exits $1.2 Billion Beverly Hills Condo Project | National Real Estate Investor
 
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Canadian Real Estate Street Smart REI   October 18, 2017   2   0   0   0   0   0
(Bloomberg)—Dalian Wanda Group Co. plans to proceed with a $1.2 billion luxury condominium and hotel complex in Beverly Hills, California, after its development partner, Athens Group, said it exited the project early. Neither Wanda nor Athens would comment on the reasons for the separation, which happened earlier this year and leaves Wanda without a development partner just as condo sales are about to begin. “We are taking this project forward ourselves,” Rohan a’Beckett, deputy general manager of Wanda Beverly Hills Properties LLC, said in a telephone interview. “I can confirm that Athens is not involved in the project anymore.” Athens Group, based in Phoenix, specializes in luxury resorts, urban hotels and related residential properties. Its previous developments include Montage resorts and condos in Southern California and the Four Seasons Resort Hualalai in Hawaii. Jay Newman, chief operating officer of Athens, said the firm provided services to Wanda through May and originally planned to work on the project through its opening, scheduled for 2020. “We brought the One Beverly Hills project to Wanda as their development partner,” Newman said in a phone interview. The firm’s work was intended to include “the modification of the entitlements to include a Wanda hotel, its development and construction, its opening and the sale and marketing of the condos,” Newman said. Wanda got city permission on Sept. 14 to open a condo-sales showroom. Questions about investments by Beijing-based Wanda have arisen as China has cracked down on overseas acquisitions. The company, which was...
Workspace Property Trust Files for IPO to Raise $100 Million | National Real Estate Investor
 
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Canadian Real Estate Street Smart REI   October 18, 2017   2   0   0   0   0   0
A year after acquiring a nearly $1 billion portfolio of suburban office properties, Horsham, PA-based Workspace Property Trust on Monday filed to raise up to $100 million through an initial public offering. Workspace Property, which first filed a confidential S-11 registration statement on June 30, plans to list on the New York Stock Exchange under the symbol WSPT, selling an undisclosed number of common shares in the IPO. View Original Article[1] References ^ View Original Article (www.costar.com)
Forever 21 Looks to the Beauty Segment with New Concept | National Real Estate Investor
 
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Canadian Real Estate Street Smart REI   October 17, 2017   6   0   0   0   0   0
Take a quick scroll through the Instagram account of Riley Rose—the new beauty and lifestyle chain created by apparel retailer Forever 21—and you will be inundated by pink color, glitter and aesthetically pleasing photos of products to try and purchase. The account reflects what visitors will experience when they enter a Riley Rose store. The first of 13 to open in General Growth Properties’ (GGP) shopping centers around the country appeared recently at Glendale Galleria in Glendale, Calif.—which, from the looks of it, is as Instagram-ready as many of its products. In an age where apparel retailers are taking a hit from the rise of e-commerce shopping, it’s this connection to social media and experience that some experts are saying is a smart move for the retailer, which generally caters to young women. In fact, the chain already has a social following[1] and one physical store open, but it has yet to launch an online web shop. “As far as a growth vehicle, [Forever 21] needed something different,” says Michael Lushing, principal at Beverly Hills, Calif.-based Lushing Realty Advisors, which helps retailers figure out expansion strategies. The stores are opening at a time when mall developers are looking for alternative uses for their properties[2], amid higher mall vacancies. In the second quarter of this year, the vacancy rate for regional malls was 8.1 percent, up from 7.9 percent in the second quarter of 2016, according to real estate research firm Reis[3]. However, the peak vacancy rate for regional malls...
China shuts down billionaire Wang Jianlin's golf courses - Oct. 17, 2017
 
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Canadian Real Estate Street Smart REI   October 17, 2017   7   0   0   0   0   0
It's a double bogey for Chinese real-estate tycoon Wang Jianlin. Authorities have shut down two high-end golf courses at a resort in northeastern China operated by Wang's company, Dalian Wanda Group. The closures are the latest case of Chinese government officials cracking down[1] on golf, which has become a symbol of the political corruption[2] against which President Xi Jinping has been waging a massive, high-profile campaign. They also represent a fresh setback for Wanda, which has found parts of its businesses under pressure from authorities this year. The Fusong County government ordered Wanda to stop golf operations at a resort in Changbaishan last month, according to a brief notice posted on the government's website on Friday. It didn't give a reason for the closures or say if they're permanent. Wanda declined to comment on the matter. Its website says the Changbaishan resort has two "world-class" golf courses, an 18-hole course designed by Jack Nicklaus and a 36-hole course designed by Robert Jones. Related: Chinese billionaire battles talk of trouble at real estate empire[3] Golf has long suffered under China's ruling Communist Party, which banned the sport after taking power in 1949, describing it as a "game for millionaires." It later emerged from the shadows in the mid-1980s as China's economy opened up to the outside world, but remained at the mercy of politics. A new crackdown began in 2004 and intensified under Xi. Since 2011, the government...
Commercial real estate execs are wary of a possible bust | New York Post
 
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Canadian Real Estate Street Smart REI   October 17, 2017   6   0   0   0   0   0
Slow but steady commercial sales have been dragged down by affordable housing regulations and an ongoing lack of trophy-building offerings. Building owners are reluctant to sell as they worry about reinvestment opportunities. The lack of specifics about President Donald Trump’s tax cut proposal, coupled with a long economic uptick and a booming stock market, has also made real estate executives wary of a possible bust ahead. In one of the year’s notable deals, the Vanbarton Group is in contract to buy Midtown South rental building 990 Sixth Ave. for $318.5 million.Cushman & Wakefield “People are mindful of the fact that we are late in the [boom-bust] cycle,” says Woody Heller, executive vice president and co-head of capital markets at Savills Studley. Multifamily properties are still selling at low capitalization rates — which translates into low returns for buyers compared to their purchase prices. Thankfully, there is still financing available. It’s also a tough time for such building owners as the rental housing market has been subjected to two years of rent freezes on stabilized apartments and the city has passed numerous laws to prevent tenant buyouts and harassment. The market for rental buildings “hasn’t been affected despite [Mayor Bill] de Blasio’s attempt to kill it,” says Peter Hauspurg, chairman of Eastern Consolidated. And there are completed transactions to prove it — as well as ones in the works. The Vanbarton Group is in contract to buy residential apartment tower The Vogue at 990...
New app aims to thwart crimes against real estate agents | New York Post
 
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Canadian Real Estate Street Smart REI   October 17, 2017   6   0   0   0   0   0
Crimes against real estate agents are a growing problem, and mobile apps are cropping up to help them stay safe. The latest is called Forewarn, launching Monday, which allows an agent to enter a prospective client’s phone number ahead of a blind meeting and get an instant background check that looks a lot like a police report. Forewarn says its app can provide information on 80 percent of callers, ferreting out any criminal history, plus verifying car and home ownership, mortgage liens and whether a person has filed for bankruptcy. It can also pull up address histories and other phone numbers. The app is available only to licensed real estate agents, who increasingly are getting calls from clients who have found properties on open listing sites without a broker. “An unfortunate aspect of the profession requires members to meet strangers,” said Sara Wiskerchen, a spokeswoman for the National Association of Realtors. Forewarn, developed by data-analytics firm Cogint, estimates that agents are now scheduling 40 to 50 percent of their showings with people who have not been pre-vetted by another agent. Sitting in apartments and homes at publicly advertised open houses, agents can feel like sitting ducks, as they often wear expensive jewelry and drive luxury cars to meetings in secluded neighborhoods. Over the past few years, several real estate agents across the country have been murdered, raped and robbed. In September 2014, Arkansas real estate broker Beverly Carter was kidnapped and...
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Category: News
The Victoria Real Estate Board saw fewer properties sold...
Category: News
Don’t be concerned if you haven’t heard about real...
Moncton market to become a bastion of reliability this year
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Sales volume in Moncton and the surrounding region broke...
SUPPORT GROWING FOR CALGARY MAYOR’S PLAN TO LEGALIZE SECONDARY SUITES
Calgary’s mayor is calling on council to approve a...
 
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New agent review site to shake up market
Home buyers and sellers have been offered a...
 
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Canadian Home Affordability Continues To Worsen, RBC Says
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OTTAWA - It's becoming increasingly difficult for...
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The latest figures from a realtors’ association showed healthy...
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The Scarborough subway extension doesn’t seem to generate much...
Canadian Housing ‘Close To Peak Crazy,' B.C. Faces Long Reports
Vancouver sees sharpest drop in...
 
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Blackstone’s Motel 6 Locations Left the Light on for ICE | National Real Estate Investor
(Bloomberg)—Motel 6’s parent company, G6 Hospitality LLC,...
 
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