,

Canadian housing starts sharply pointed upward last month

After around a year of mostly weaker activity, housing starts accelerated in August, according to Canada Mortgage and Housing Corporation.

The trend measure stood at 218,998 units last month, markedly larger than the 208,931 units in July 2019.

“Higher trending single-detached starts in urban centres in July and August following roughly a year of declines combined with higher-trending multi-family units in August to push the total starts trend to its highest level since June 2018,” CMHC chief economist Bob Dugan said.

The standalone monthly seasonally adjusted annual rate (SAAR) of housing starts for all areas in Canada was 226,639 units in August, increasing by 1.9% from the July level.

Toronto was among the standout markets in terms of performance, with total housing starts trending higher across all asset classes except semi-detached housing.

“Multi-unit home starts are being led by condominium apartments breaking ground because of strong pre-construction sales over the past two-years,” CMHC stated. “Despite single-detached homes trending higher in August, demand for this housing type continues to wane due to rising home ownership costs.”

Meanwhile, Vancouver’s housing starts trend moved lower.

“Compared to the same month last year, both multi-unit and single-detached home starts declined by over 17% in the CMA. However, the year-to-date starts in the CMA remained fairly stable due to a decline in singles starts which was offset by an increase in the multi-units segment.”

Calgary also exhibited similar figures to that of Vancouver, as “an increase in multi-family construction was offset by a decline in single-detached units.”

“Construction activity continues to slow, as year-to-date housing starts remain lower than last year’s levels in both the single-detached and multi-family segments of the market. The relatively slow pace of economic recovery and elevated inventories have caused builders to slow down production.”

/by
,

The case for overhauling the Landlord and Tenant Board

Paul D’Abruzzo took a tenant to the Landlord and Tenant Board for three months of unpaid rent on an investment property he owned in Whitby, and through mediation—his best option—ended up coughing up a fourth month of rent-free living.

“My tenant sat there in mediation and said she can’t pay rent anymore, and after I asked her to leave she said she had nowhere to go,” said D’Abruzzo, who’s also a broker with Expert Investor Team at Rock Star Real Estate. “I was advised by the mediator that if I go before the board and ask for a standard eviction of 11 days, I’d most likely not get it because the adjudicator is going to sympathize with the tenant and give them 30 days to leave.

“I was footing the bill for someone who can’t afford to pay rent just so that I could get a proper eviction order. One of the risks is that during those 30 days, they could damage the place and once they leave I have no recourse. That was the best deal on the table and I had to take it. I was pushed into a corner and gave a lady 30 days of free rent on top of the three months she owed me from before.”

Bosley Real Estate sales representative Davelle Morrison, herself an investor, says every landlord in Toronto has a similar story to D’Abruzzo’s and the status quo is insufficient. She believes the Landlord and Tenant Board needs to be overhauled.

“It’s creating disincentives for landlords to be in the business and now you have fewer places to rent,” said Morrison, who added many landlords—herself included—rent their properties on Airbnb because the Landlord and Tenant Board have made long-term rentals risky propositions.

“The Landlord and Tenant Board is overweighted to the side of the tenant and that makes it hard for people to become landlords. You have to understand why landlords stopped renting long-term and decided on shorter terms in the first place. It isn’t all for money. If I didn’t have bad experiences with long-term tenants, I never would have turned to Airbnb.”

According to Urbanation, 33% of Toronto’s condo buyers are investor-landlords and Morrison says they need protection since they foot the bills. She recounts a client who sold their investment condo but had to give $7,000-worth of free rent to tenants who also negotiated staying an extra month—which derailed the buyer’s plan to move in.

“If your money is tied up, you have to take a HELOC out to make your mortgage payment,” said Morrison. “My client’s tenant wanted $15,000 to move out, then $10,000. They settled on three months of free rent through formal mediation at the Landlord and Tenant Board.”

/by
,

Pre-construction condo amenities sweeping Toronto’s fall market

50 Scollard

Autumn is the real estate industry’s second-busiest time of the year and the pre-construction condo market is replete with an interesting suite of amenities.

And according to Barry Fenton, president and CEO of Lanterra Developments in Toronto, the city’s shrinking condo units make dynamic amenities all the more essential.

“A lot of amenity spaces include mental wellbeing by having yoga studios and state-of-the-art gyms, but also massage rooms, saunas, wet and dry steams,” he said. “Whether someone buys a 500, 800, 1,500 or 3,000 square foot unit, they want to feel good and that’s why it’s important to include such amenities.”

Lanterra, like most developers, hires consultants to conceptualize what its buildings’ wellbeing spaces should look and feel like, the finer points of which Fenton likens to nature’s placidity.

“In some condos, we have planned exercise communities that come down and use the facilities, but it’s also about how the spaces are designed: it’s like being in a forest; it’s tranquil and peaceful,” explained Fenton. “A lot of facilities think a 10×15 room will work, but it doesn’t. People want to stay healthy in body and mind today, and we believe that these extra amenities help achieve that.”

Amenities also extend beyond the walls of the building itself. In Toronto, not only has public art become as intrinsic to condo developments as their fitness rooms, so have lavish lobbies, libraries, wine rooms and capacious pools.

“You’re living in a vertical space with balconies and lots of windows, and the truth of it is it becomes about the surrounding space, so we spend a lot of money on public art. At one of our condos, Ice, we have an area called The Bird House, for which we commissioned someone from London, UK, and spent $1.5 million to build it. It’s like being in New York and looking at one of the city’s marvelous sculptures,” said Fenton.

“People who live in condos want less space in their actual units because of the pricing and that forces them to be minimalistic in their own ways, so when you walk into a building it’s important to have a grand lobby with beautiful presence and, just as in when you enter a place of business, someone to greet you at the reception desk and wish you goodbye on your way out. It’s about having a great start and great finish.”

/by
,

Toronto home sales jump 13% and prices climb 5% as demand outstrips supply

A double-digit percentage increase in the number of Greater Toronto Area houses sold last month shows the region’s property market is “quite fine,” according to analysts, as it rebounds from mortgage controls introduced last year that sidelined some buyers.

Housing sales in the GTA rose 13.4 per cent in August compared with the same month a year ago, the Toronto Real Estate Board said in its monthly report. There were 7,711 homes sold versus 6,797 in August 2018, it said.

“The level of activity is almost bang on the 10-year average,” Robert Kavcic, senior economist at BMO Capital Markets, wrote in a research note on Thursday. “The sales-to-new listings ratio looks to be right around 60 per cent (seasonally adjusted), consistent with a very well balanced market.”

Toronto vies with Vancouver as Canada’s most expensive property market nearly a year after federal mortgage regulations were introduced to curtail speculation and rein in prices. The cost of property initially fell in both cities but began to creep up again in Toronto this year as supply hasn’t kept pace with demand while Vancouver’s average prices are still down.

The MLS Home Price Index Composite Benchmark for August 2019 rose by 4.9 per cent on a year-over-year basis, the Toronto board reported. Last month’s average selling price of $792,611 showed a 3.6 per cent increase year-over-year, it said. Condominiums, up 8 per cent from a year ago, jumped the most in price followed by higher density low-rise homes, then detached houses with a 3.1 per cent gain from a year ago, the statement showed.

“The GTA’s strong economy, cultural diversity and internationally recognized quality of life continues to attract newcomers to the region each year,” TREB CEO John DiMichele said in the statement. “However, our housing supply has not kept up with population growth, which has led to pent-up housing demand.”

BMO’s Kavcic said that Toronto prices were firming “in another strong month” and that the country’s central bank didn’t seem concerned about higher prices when it kept the benchmark interest rate at 1.75 per cent for the second consecutive meeting after raising them five times from 2017 to last October.

So far, this is a near-perfect landing from a policymaker’s perspective,” Kavcic said. “And the Bank of Canada didn’t seem too worried yesterday about stoking another positive run.”

However, the Toronto board noted market conditions have become tighter than a year ago because there are fewer new listings – down 3 per cent from August, 2018 – while sales have increased. The board called on government levels to help increase the area’s housing supply and for politicians ahead of next month’s federal vote to state their policies.

“The overall pace of price growth is moderate,” Jason Mercer, the board’s chief market analyst said. “However, if demand for ownership housing continues to increase relative to the supply of listings, the annual rate of price growth will accelerate further. This underpins the importance of solving this region’s housing supply issues.”

/by