Monday, October 29, 2018

HSBC Canada says three things have helped grow its market share

HSBC Bank Canada has posted its latest quarterly financial results with strong results across its business.
For the quarter ending September 30, 2018, the bank’s total operating income was $588m, up $60m or 11.4% compared with the same period of 2017. Profit before tax was $271m, up $53m or 24.3% year-over-year.
“Revenues and asset growth remain strong across all of our business lines, and profit before tax is up 24.3% over the same period last year as we bring more of HSBC to Canadian customers. Our strategy is yielding results and we remain focused on our customer relationships and building business one customer at a time," said Sandra Stuart, President and Chief Executive Officer of HSBC Bank Canada.
Mortgage growth
For the mortgage business, HSBC says that it continued to see strong growth in total relationship balances and to grow market share primarily in deposits and mortgages.
It puts this growth down to “strong branding, innovation and strategic investments to make our bank simpler, faster and better for our clients.” This included the opening of a Mortgage Centre during the quarter.
Overall retail banking was up $19m or 10.9% to $193 million.
"We continue to build our business and Q3 was no exception. Our team has continued to help our retail, corporate and institutional customers make the most of opportunities as they pursue their domestic and global growth ambitions,” added Stuart.





Source: https://www.canadianrealestatemagazine.ca/market-update/hsbc-canada-says-three-things-have-helped-grow-its-market-share-249917.aspx

Friday, October 26, 2018

52% Of Canadians Less Likely To Buy Homes Where Legal Pot Was Grown: Zoocasa Study

It may be legal to smoke, grow, and possess marijuana come Oct. 17, but that doesn't mean Canadians looking to purchase real estate are suddenly going to be chill about it.
According to a new report on cannabis and real estate from real estate site Zoocasa, 52 percent of Canadians say they'd be less likely to consider specific houses for sale if they knew a legal amount of cannabis was grown in it.
Upon legalization, each Canadian household will be allowed to cultivate four marijuana plants.
Baby boomers (54 to 72 years old) and Gen Xers (38-53 years old) were more likely than millennials (22 to 37 years old) to think a legal amount of pot grown in a home would reduce their desire to buy it. Nearly six in 10 of boomers and Gen Xers (59 percent and 58 percent, respectively) agreed, compared to just over a third of millennials (38 percent).
Over half of current homeowners (57 percent) believe growing a legal amount of cannabis would harm a property's resale value, while 26 percent disagree and 18 percent are unsure.
Zoocasa managing editor Penelope Graham said Bill C-45 has created a lot of uncertainty for homeowners because "there isn't much clarity yet on whether there will be negative implications for home values and marketability."
"Prior to legalization, there were mortgage and insurance consequences for those who smoked or grew cannabis in their homes, and there has yet to be any concrete clarification as to how this will change once the legislation is in place," Graham said in a statement emailed to HuffPost Canada.
"For this reason, the question of whether or not homeowners, buyers, and sellers need protection and education continues to be a hot button topic for real estate associations, agents and appraisers."
Most landlords (70 percent) say landlords should be able to charge higher rents if tenants want to smoke cannabis inside their homes and just over half of Canadians overall (52 percent) say the same, though only 13 percent of renters say they'd be willing to actually pay it.
An overwhelming majority of landlords polled in the survey said that they want or plan to ban smoking within their rental properties.

Mixed feelings about dispensaries

Indoor cannabis consumption and cultivation aside, almost half (48 percent) of respondents said the presence of a dispensary would reduce their desire to purchase a property, and almost as many (42 percent) feel having one in the neighbourhood would harm the value of nearby homes.
Less than a third of respondents (31 percent) said they're comfortable with a dispensary opening in their area, compared to 59 percent saying the same thing about liquor stores.
Zoocasa conducted an online survey from Sept. 27-Oct. 3 among 1,380 respondents who live in Canada. The results have an estimated margin of error of +/- 2.6 percentage points, 19 times out of 20.




Source: https://www.huffingtonpost.ca/2018/10/15/canadians-cannabis-property-values_a_23561679/?utm_hp_ref=ca-real-estate&fbclid=IwAR1PPQV2dlppGnbFjV1hUd9MLzIrSu_vg-Qr5OHp4_szEoWMsakiKUGDWXg

Monday, October 22, 2018

Price, affordability remains top homebuyer issue says CMHC

Buying a home is still an important goal for most Canadians but high home prices and affordability remain the dominant issues for many potential buyers.
Almost twice as many first-time buyers reported price/affordability as being the most important factor when buying a home compared to other factors such as neighborhood, proximity to work, and condition of the home.
The findings from the newly-published Mortgage Consumer Survey from CMHC also reveal that 37% of buyers say they have concerns or uncertainty when buying a home.
Paying too much for their new home concerns around half of the respondents while around a third are worried about interest rates and mortgage qualification.
The majority (80%) homebuyers believing that homeownership remains a good long-term financial investment and 66% believe the value of their home will increase in the next 12 months.
Among first-time buyers, most said they wanted to buy their first home and felt financially ready to do so.
They said they had been planning their purchase for some time and were encouraged by low interest rates.
Despite 85% saying they spent as much as they could afford, 76% were confident in meeting future mortgage payments.




Source: https://www.canadianrealestatemagazine.ca/market-update/price-affordability-remains-top-homebuyer-issue-says-cmhc-249562.aspx

Thursday, October 18, 2018

An alternative take on foreign home ownership

The influence of foreign homebuyers on housing markets is a much-debated one but a new report suggests a new take on the correlation between foreign ownership and high prices.
A study of US Census Bureau data by mortgage lending platform LendingTree suggests that a market’s high home prices may attract foreign homebuyers rather than them being the cause.
The study looked at where foreign homeowners are most prolific and found that, generally, cities with the largest share have higher home prices.
Prices in the top 10 cities for foreign-born owners average U$491,750 compared to $167,560 for the bottom 10.
Miami is a key exception, topping the list with foreign residents making up 26% of all homeowners although the median price in Miami is well below the average for the top 10 at $278,700.
Foreign buyers attracted to dynamic economies
LendingTree’s chief economist Tendayi Kapfidze says that the greater share of foreign owners in high-price markets may be down to opportunity.
"It's likely that immigrants gravitate towards these cities which have higher home prices, as they also have more dynamic economies and thus more employment opportunities,” he explains. "The proportion of highly-skilled immigrants is also higher in these cities which puts some upward pressure on home prices as a secondary effect.”
He added that homeowners in cities with high foreign-born populations benefit from faster home price appreciation, creating opportunities for them to access this wealth via refinancing or home equity extraction.
This extra spending can in turn boost the economy or provide capital to fund new businesses.




Source: https://www.canadianrealestatemagazine.ca/market-update/an-alternative-take-on-foreign-home-ownership-249325.aspx

Monday, October 15, 2018

Real estate industry urges Ford to deliver housing promises

Ontario’s premier needs to push ahead with the assistance promised to the province’s potential home buyers.
The Ontario Real Estate Association (OREA), Ontario Home Builders Association (OHBA) and the Federation of Rental-Housing Providers of Ontario (FRPO) met this week to discuss housing policy and are calling on the Ford government to implement solutions to increase housing supply and assist first-time buyers.
“Keeping the dream of home ownership alive in Ontario requires bold policies and action from the provincial government,” said Tim Hudak, Chief Executive Officer, OREA. “First and foremost, to get more new homes in the marketplace, the building approvals process must be streamlined and zoning updated to allow for more homes in the right places. The best and fastest way to give Ontario’s first-time home buyers a break is to eliminate the punishing land transfer tax for first-time buyers.”
Along with increased supply and less red tape, the organizations are calling for the government to eliminate the land transfer tax for first-time home buyers or dramatically increase the current rebate offered to first-time buyers.
They also want a return of the Ontario Municipal Board which they say has traditionally taken the NIMBY out of housing decisions. They say bringing back the OMB will mean evidence-based planning decisions, which will create more housing supply and choice.



Source: https://www.canadianrealestatemagazine.ca/market-update/real-estate-industry-urges-ford-to-deliver-housing-promises-249256.aspx

Thursday, October 11, 2018

This is the number 1 concern for real estate pros

Several challenges continue to concern real estate professionals but there is still optimism for the sector in the year ahead.
A new report from PwC Canada and the Urban Land Institute shows that the industry’s concerns include tariffs and interest rates which could further weaken affordability.
For those developers, investors, lenders and other leading experts involved in the residential real estate sector, land supply is the top concern heading into 2019.
"Dealing with the affordability issue is a shared responsibility between government and developers. While government addressed demand by introducing measures like tighter mortgage rules and foreign taxes, they neglected the supply side," says Frank Magliocco, National Real Estate Leader, PwC Canada. "Reducing regulation and making more land available for development in a timely manner will help address the affordability issue."
With the proportion of household income needed to service the costs of a single-family home rising to 53.5% in the first quarter of 2018 (and as much as 119.3% in Vancouver), the impact of rising interest rates and tariffs on steel are also large concerns.
Commercial sector
For the commercial real estate sector, multi-family remains strong along with industrial, which should benefit from demand for growing facilities for Canada’s burgeoning cannabis sector.
The struggles for retail continue as the sector faces more competition from e-commerce. This sector is being forced to reinvent itself.
Coworking space is driving demand in the office sector and is projected to make up 30% of corporate real estate portfolios by 2030.
There is also growth expected in the senior's sector with the aging population driving demand for this housing type.
Technology continues growth
Despite growth in the PropTech sector, including new lending platforms and digital real estate brokerages, just 10% of executives said they were concerned about the speed of technological change.
According to the report, PropTech is forecasted to add US$5.2 billion in new investment globally across 454 equity deals in 2018, after reaching a record US$3.4 billion in 2017 across 367 deals.
Drones are considered the top tech disruptor for the real estate sector, the poll found, followed by autonomous vehicles, cybersecurity and construction technology.







Source: https://www.canadianrealestatemagazine.ca/market-update/survey-this-is-the-number-1-concern-for-real-estate-pros-249121.aspx

Thursday, October 4, 2018

Investors remain confident in Canadian CRE market

nvestment in commercial real estate remains strong across Canada as economic fundamentals continue to support the market.
That’s despite rising interest rates, tight supply, and the lateness of the investment cycle, according to a new report from Avison Young.
The Toronto-based real estate firm’s Fall 2018 North America and Europe Commercial Real Estate Investment Review highlights the attractive yields that are still available to investors – and that Canada’s CRE is regarded a safe haven.
"Canadian and international investors continue to view the country in a favourable light," notes Bill Argeropoulos, Principal and Practice Leader, Research (Canada) for Avison Young. "Toronto and Vancouver remain the primary destinations for investor capital, but investment was relatively evenly distributed among the asset classes nationwide in first-half 2018. In fact, Toronto is in good company among North America's major markets – the only Canadian market to crack the top 10."
Offices are hot right now
The Canadian office market is strong with tech and co-working firms demanding space.
"Among the top five transactions by dollar volume in each of the six major Canadian markets, office building sales outnumbered all other asset types as investors paid top dollar for these prized properties, including a 50% interest in Toronto's Bay Adelaide Centre, which was sold to a foreign investor for $850 million," says Argeropoulos.
But there is also interest in other CRE asset types with increased urban density driving demand for industrial and retail; while tight supply of homes is boosting investor interest in multifamily assets.
Robin White, Avison Young Principal and Chair of the firm's capital markets group, adds: "Despite the challenges being faced in many parts of the world, Canada's economy has maintained its resilience with low unemployment and moderate growth. This situation has translated into continuing demand for real estate as an asset class from domestic and international investors, both private and institutional. They have been attracted to the strong fundamentals of the asset class, and there is no sign of this interest dissipating in the near term." 






Source: https://www.canadianrealestatemagazine.ca/market-update/investors-remain-confident-in-canadian-cre-market-248900.aspx

Monday, October 1, 2018

Canadian housing affordability at 30-year-low says RBC

Canada’s housing affordability is at its worst level since 1990 and its going to get worse.
A newly report from RBC Economic Research shows that its aggregate housing affordability measure was 53.9 in the second quarter of 2018, based on the share of household income required for ownership costs including taxes and mortgage payments.
The figure is up from 43.2% just 3 years ago and although house prices are responsible for the initial rise, interest rates are the bigger influence of the past year.
Since Q2 2017, the index has increased 2.6 percentage points and there was a 1.1 percentage point rise quarter-over-quarter. The impact of the mortgage stress test has added to the burden for first-time buyers.
"The grim outlook for prospective home-buyers will likely continue in the near term," said Craig Wright, Senior Vice-President and Chief Economist at RBC. "We anticipate the Bank of Canada will proceed with further interest rate hikes well into 2019. This will keep mortgage rates under upward pressure and boost ownership costs even more across Canada."
Condo affordability worsened more than single-family detached homes, especially in Toronto.
Vancouver, Toronto off-the-scale
Affordability in Toronto and Vancouver remains at staggering levels with an average GTA buyer facing a burden of 75.9% of their income to cover costs, up 1.8pp in the quarter.
In Vancouver, the situation is even worse having risen 8.2pp over the year and 1.6pp in the quarter to 88.4%.
"The prospect of further rate hikes doesn't bode well for Toronto or Vancouver buyers, whether they're on the look-out for a condo or a single detached home," said Wright. "Affordability pressures are likely to become an even bigger issue for them, which we believe will limit how much home resale activity will rebound from its recent cyclical low."
Victoria is also showing strained affordability with RBC's aggregate measure up 2.4pp points to 65% in the second quarter.
Only St John’s saw a slight improvement with other markets generally manageable.
Outlook isn’t great
For first-time buyers the ability to afford a home is not going to get any easier any time soon.
RBC Economics expects intensifying affordability pressures to hold back homebuyer demand in the coming year.





Source: https://www.canadianrealestatemagazine.ca/market-update/canadian-housing-affordability-at-30yearlow-says-rbc-248723.aspx