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You’re doing a bad job on housing affordability BC tells government

Housing affordability is the most important issue in British Columbia, beating healthcare, energy & pipelines, and the economy.

A report from Insights West shows that BC residents are three times more likely to cite housing affordability as the hot issue (36%) than healthcare (11%) while the economy is the top concern of just 7%.

The scorecard for BC Premier John Horgan shows a decline in approval after just over a year in office.

Housing affordability is a significant concern for the province’s younger residents, with the majority of those aged 18-34 (51%) saying that it is the most important issue facing the province. This issue also resonates more highly for Metro Vancouverites (47%) than the rest of BC.

Asked if they thought the BC government had done a good or bad job of handling house prices and housing affordability, 54% said ‘bad’ including 21% who said ‘very bad’; 24% said ‘good’ with just 2% saying ‘very good’; 24% weren’t sure.

These were among the provincial government’s lowest rankings along with homelessness and poverty.

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Canadian consumer confidence remains weak

 

Ongoing talk of trade wars and tariffs is dampening sentiment among Canadian consumers.

The weekly Bloomberg Nanos Canadian Confidence Index has declined again in the latest reading (54.31) and although the pace of decline slowed, the index is at a 12-month low.

Just four week’s ago the index was at 55.28 and it started the year on 61.91.

Sub-indexes diverged with the one tracking job security and personal finances was higher (60.54 vs 59.69 four weeks ago) while expectation for the economy and real estate prices was down (48.08 vs 50.88 4 weeks ago).

“The proportion of Canadians who think the Canadian economy will get stronger has hit a low not seen since 2015,” said Nanos Research, Chief Data Scientist, Nik Nanos. “The fact that Canadians are almost four times more likely to believe the Canadian economy will get weaker than stronger in the next six months speaks to a noticeable level of economic anxiety.”

Overall confidence was unchanged among homeowners while renters were generally more confident.

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Vancouver approves laneway housing improvements

Vancouver will make changes to bylaws to make it easier to build laneway housing.

The City Council voted in favour of the changes this week which will help to achieve the Housing Vancouver target of 4,000 new laneway homes over the next 10 years.

“It’s great to see City Council support changes to get more laneway homes built in neighbourhoods across the city,” said Mayor Gregor Robertson. “We’ve heard loud and clear that Vancouver residents want more housing choices and laneway homes are a great option for middle-income households.”

The agreement on the changes means several benefits:

  • Streamlining approvals for one and a half storey laneway homes by introducing an outright review process similar to the current process for one storey laneway homes
  • Supporting more functional and flexible laneway home design by increasing allowable heights and updating the method of measuring height
  • Improving livability by introducing minimum room size requirements
  • Providing more flexibility for the location and design of one-storey laneway houses

Since 2009, the Laneway Housing Program has approved more than 3,900 laneway homes across the city.

“These changes are a result of consultation with the public through Housing Vancouver about housing needs, as well as focused engagement with owners and renters of laneway homes, industry engagement, and staff analysis,” says Paula Huber, Senior Planner. “By removing identified barriers to building a laneway home, we are making it easier and faster to build the type of housing we know people want and need.”

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Toronto is fastest-growing tech market in North America

The technology sector is continuing to view Toronto as a great place to be based, driving demand for offices and other CRE units, while also supporting employment in the city.

A report from CBRE shows that 28,900 technology jobs were added in 2017, a rise of 13.6% from the previous year.

“High-quality and well-educated tech talent, cost-efficiencies and welcoming immigration policies are competitive advantages for the Canadian tech markets. Toronto continues to outpace other North American markets, having added more tech jobs in 2017 than the San Francisco Bay Area, Seattle and Washington, D.C. combined,” commented Paul Morassutti, Executive Managing Director at CBRE Canada. “Canada’s tech markets are booming. In downtown Toronto alone, tech demand sits at 36% of all current office space demand.”

Toronto ranks fourth in the top 5 markets for tech talent in 2018, which also includes San Francisco Bay Area (1), Seattle (2), Washington DC (3), and New York (5).

Ottawa, Montreal increasingly appealing
While Toronto is a top 5 tech town, two other Canadian cities are climbing the ranks; Ottawa and Montreal are ranked 13th and 14th respectively in CBRE’s scorecard.

Ottawa beats North American peers for concentration of tech talent; while Toronto is third at 8.9%, Ottawa’s 11.2% means it has more than three times the US national average of 3.5%.

“Ottawa is shedding its government town image. It is home to over 1,700 technology companies and employs over 70,000 tech talent employees,” said Shawn Hamilton, Managing Director of CBRE Ottawa. “In the last five years, urban tech has grown to be the second largest user group in downtown Ottawa, bigger than the accounting and legal sectors combined. Shopify continues to be our homegrown success story and has the international appeal to encourage tech clustering.”

Toronto ranks as North America’s fourth largest tech talent market, with over 241,000 tech workers, representing an increase of 51.5% over the past five years. Tech industry growth has accelerated demand for downtown Toronto office space, pushing vacancy down to 2.9% in Q2 2018, the lowest on record for the city and across North America.

“Companies looking to house operations are putting serious thought to locating in Canada. Compared to cities such as New York, Washington, D.C., Newark and Los Angeles, Toronto is among the best value for quality options for tech firms thanks to less expensive access to labour and real estate, but also high educational attainment levels. In short, Canada provides access to very high quality labour at a fraction of the cost,” said Paul Morassutti, Executive Managing Director at CBRE Canada.

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It’s not just condos — Toronto is also running out of commercial real estate

Canada is not just running out of residential real estate in its key markets — the country’s commercial and industrial real estate is also filling up fast.

Availability of industrial property across the country fell to a historically low level of 3.9 per cent in 2018, while supply tightened in eight of the 10 major commercial real estate markets, according to CBRE Group, Inc., the real estate services and investment firm.

Though Canada has 70.6 million square feet of available industrial space left across the country, leading to the highest net rent the country has ever seen, at $7.21 per sq ft in the second quarter.

“Availability in Canada’s major industrial markets continue to plummet, which is putting pressure on tenants,”  Werner Dietl, executive vice-president and GTA regional managing director at CBRE Canada, said in a report published Tuesday.

However, strong demand for industrial space in Canada has led to a 47.1 per cent increase in construction activity, CBRE said.

The new facilities should ideally be located close to city highways and near population centres, which has compelled some markets such as Montreal to increase its transit capacity in a bid to attract more commercial operations.

Demand for e-commerce, food distribution and warehousing were leading factors driving demand for industrial real estate in the country.

“It’s no secret that e-commerce is driving a lot of activity globally. With the change in of how people are shopping, we’re seeing a shift in how retailers are running. We also see it in the food sector, which is showing investments in more effective distribution.” Dietl said.

Toronto is currently the most constrained industrial market in North America, sitting at a 2.2 per cent availability, thanks to its ideal location and demographics that appeal to both foreign and local companies.

Vancouver is North America’s second tightest market, with 2.4 per cent of industrial availability left. The average net asking lease rates on the West Coast city stood at $11.59 per square feet, a 33 per cent increase rate since the start of 2017.

While Vancouver and Toronto markets were tight, Calgary marked its sixth consecutive quarter of rising vacancy rates, due to low unemployment rates and lower economic activity. However, the rise of e-commerce and cannabis facilities across the province has led to new construction, to offset the oil-led downturn. As much as 3.5 million sq ft. of industrial space is at the construction stage to meet rising demand in those sectors, CBRE estimates.

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Construction applications for GTA rental buildings tripled last quarter: Urbanation

Toronto’s low rental vacancy rate has been pushing rents upwards for months, and last quarter was no exception.

The average rent for a 732 square-foot Toronto apartment rose 11.2 per cent year-over-year to $2,302 last quarter, according to a new report from Urbanation.

Meanwhile, condo lease transactions fell 8 per cent to just 7,754 as the rental market hit what Urbanation senior VP Shaun Hildebrand calls a “critically low level” of supply.

But there is some good news: The number of applications for new purpose-built rentals was 3.5 times greater than Q2 2017, with 5,920 new units proposed last quarter.

The reason for the uptick in applications? Developers are looking to capitalize on sky-high rents, says Hildebrand.

“[The rise in applications] is a direct response to the growth in rents,” Hildebrand tells Livabl. “It offsets a lot of the negative impacts of rent control [on purpose-built rental construction.]”

While Hildebrand says that he believes the level of construction is still too low, he believes that last quarter’s increase signals a move in the right direction.

“If we continue along this path, we eventually will get to the point where we get to a balanced market,” he says. “Not anytime soon, but if we continue this trajectory, then yes.”

Hildebrand says it is critical not to rely on condo investors to supply the city with rental stock, especially since there are some signs that investors may be selling their units instead of placing them on the rental market.

“When we look at the percentage of condo units that were added into the rental pool last quarter, that percentage has been declining,” he says. “Fewer investors are holding onto their units after they get built.”

As for the much-decried rent control legislation — which came into effect last April, as part of the province’s Fair Housing Plan — Hildebrand says that, while rental construction does seem to be on the rise, the policy is still negatively impacting the market in other ways.

“Rent control is still an issue because tenant turnover has been declining,” he says. “Reasonable rate of rent growth has been jeopardized because tenants aren’t moving as often.”

Hildebrand says that with fewer units being rented out, and fewer being turned over, the city becomes caught in what he calls a “supply trap,” with less activity across the board, placing an upward pressure on rent prices.

Still, he is hopeful that the market could be in what he calls the “early stages of an upward trajectory.”

“We’re still going to be undersupplied for a long, long time,” he says. “It’s going to take awhile to see supply reach a level that will satisfy the amount of demand.”

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Robert De Niro Breaks Ground on Nobu Toronto


Watch Video: https://youtu.be/UcYKhWs6ip8

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PUBLIC EXHIBITION: July 4 to July 17 Ten Design Proposals for Two New Waterfront Parks Unveiled at Toronto City Hall

Waterfront Toronto and the City of Toronto Parks, Forestry and Recreation have unveilled ten creative design proposals as part of the international design competition for York Street Park and Rees Street Park.  Five design proposals will be on display for each park in the Rotunda at Toronto City Hall, so that members of the public will have the opportunity to provide their feedback. The exhibition will be open to the public for during regular hours, beginningWednesday, July 4 at 9:00 a.m. and closing at 5:00 p.m. on Tuesday, July 17.

A new website for the design competition will allow Torontonians to explore the design proposals and provide their feedback online.  Visit http://yorkreesparkdesign.ca/ to see the proposals on exhibition.  

York Street Park and Rees Street Park will be the two newest additions to the Toronto’s growing collection of beautiful and sustainable public spaces along the city’s main waterfront boulevard, Queens Quay. The design competition challenged international design teams to strike a balance between the needs of local residents, a growing daytime population of office workers and the bustling crowds that visit the waterfront for recreation and leisure.

The design proposals on exhibition have been created by:

York Street Park
• Agency Landscape + Planning (Massachusetts) + DAVID RUBIN Land Collective (Philadelphia)
• Claude Cormier et Associés (Montréal)
• Hapa Collaborative (Vancouver)
• PLANT Architects (Toronto) + Mandaworks (Stolkholm)
• Stephen Stimson Associates Landscape Architects (Massachusetts) + MJMA (Toronto)

Rees Street Park
• PUBLIC CITY Architecture (Toronto)
• SCAPE Landscape Architecture (New York) + BSN Architects (Toronto)
• Snøhetta (New York) + PMA Landscape Architects (Toronto)
• Stoss Landscape Urbanism (Boston) + DTAH (Toronto)
• wHY Architecture (New York) + Brook Mcllroy (Toronto)

Following the public exhibition of the design proposals and the public comment period, the competition jury will be convened in the early fall to recommend a preferred design proposal for each park. The jury consists of leaders in design and art: Jane Hutton, Assistant Professor, University of Waterloo; Janna Levitt, Principal, LGA Architectural Partners; Michael Van Valkenburgh, Principal, Michael Van Valkenburgh Associates; Neil Hrushowy, Principal Urban Designer, City and County of San Francisco, and Matthew Hyland, Director/Curator of Oakville Galleries.

Following the jury’s recommendation, Waterfront Toronto will award design contracts to the two winning design teams and begin design development of the parks. Construction of the York Street Park is expected to commence first in 2019, with Rees Street Park following in 2020.

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Real estate brokers see GDP gain for first time this year

Canada’s economy saw some slight growth in April as real GDP gained 0.1%, the third month of growth following a decline in January.

Statistics Canada reports that 12 of 20 industrial sectors gained, driven by a 0.2% rise for goods producing industries despite a decline for construction.

Services industries were broadly unchanged but real estate brokers and agents posted their first gains of 2018 with a 0.5% rise in output. The industry posted three monthly declines at the start of the year following the introduction of the new mortgage rules in January.

The colder-than-usual weather in April impacted many industries including retail and motor dealers and parts; energy firms gained.

For construction, there was a 0.5% decline with residential construction falling 1% as building activity declined in most types of structures. The monthly decline for the sector overall was the largest since the strike-influenced decline of May 2017.

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Household lending conditions eased in Q2

The latest Senior Loan Officer Survey from the Bank of Canada shows how lending conditions have changed in the second quarter of 2018.

The new mortgage rules introduced at the start of the year continue to impact mortgage approval rates for low-ratio mortgages while the changes to regulations introduced at the end of 2016 are still impacting high-ratio loans.

The report shows that for the remaining pool of qualifying borrowers, lenders eased pricing conditions for both low and high ratio mortgages while non-price lending conditions remained unchanged.

The survey points to a tightening of mortgage lending conditions in the third quarter.

There were few changes for conditions in non-mortgage lending and demand for non-mortgage borrowing was unchanged.

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Rate hike likely this month but then a pause?

The Bank of Canada will meet to decide on its latest move on interest rates next week and many are expecting an increase.

But once July’s hike is done, things become less clear as the economy is showing some mixed signals.

Two economists from Canada’s big banks have given their assessment of the likelihood of rate rises and both are confident that homeowners are facing higher mortgage costs from this month.

CIBC’s Avery Shenfeld says that the recent GDP and outlook survey were positive and a strong labour force survey for June is also expected.

“That will be the last piece of the puzzle for a Bank of Canada rate hike in July, but we’re also of the view that economic growth will moderate enough after Q2 to force another extended pause on rates,” he says.

Meanwhile, TD Economic’s James Marple is also expecting June’s labour figures to support a July interest rate rise; and concurs with Shenfeld’s call for a pause afterwards.

“Given a more cautious outlook and ongoing threat of escalating trade wars, we suspect it will be some time before we see another hike,” he says.

Marple notes that the housing market has shown some signs of stabilization with  some markets, Ottawa and Montreal for example, showing “decent positive momentum.”

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