Photo Credit: Ganapathy Kumar
In The News
October 28 - November 1, 2019
Toronto & GTA
In order to solve the housing woes of Toronto it has been recognized that the government should: recognize housing as a right, invest city resources in building new affordable housing, use resources efficiently, utilize regulatory and planning powers to make housing more affordable, such as zoning; keep the housing we have; tackle homelessness; and ensure that council is accountable for delivering on mandates.
Nobul has found that 75 per cent of millennial homeowners hire the first real estate sales representative or broker they meet; however, when it comes to understanding the process of buying and selling real estate, including commission structures, only 38 per cent of prospective millennial homebuyers know very little to nothing.
The provincial auditor has found that Tarion has not been placing the interests of puchers of new homes ahead of the building community. It was found that: licensed have been issued to builders with poor warranty records, senior management was awarded for minimizing payouts to homeowners, deadlines are quite restrictive, there are lengthy compensations periods that can be as high as eighteen months, and that Tarion typically only recovers thirty per cent of warranty payouts from builders.
Quebec is currently the sole province that continues to have an immigrant investor program that permits foreigners to apply for permanent residency after making a five-year loan of $1.2 million to Investissement Québec. A total of 1,900 spots were awarded by Quebec. This year it was found that between 2008 and 217, 16 per cent actually attended the province during the program. As of July 1, 2020, the immigrant investor program will end and eventually be adjusted.
The City of Vancouver has plans to charge a development fee along the Broadway corridor equal to $330-$425 per square foot of habitable space. To put this into context, a new 1,000-square-foot apartment on Broadway will have a $330,000 fee levied against it.
Highly expected to pass in Parliament is the one per cent tax on foreign real estate buyers. It is predicted that the tax will bring in revenues of $217 million in the first year.
Home equity lines of credit that Americans have used in order to finance home renovations and college tuition doubled in volume between 2003 and 2006 and has since continued to fizzle, lessening their influence on a bank’s bottom line.
New pending sales in Manhattan have continued to take a hit. It is the fourth time this year that said sales were in the single digits. Developers have responded by cutting prices.
Housing demand in the eastern provinces in Thailand due to the US-China trade relationship. While decreasing property transfer and mortgages fees to 0.01 per cent from 2 per cent and 1 per cent, respectively, may help bolster demand, it is predicted that rental properties will become more popular among locals.
In comparing the third quarter of 2019 with the same time period in 2018, rental prices have increased anywhere between 2.1 per cent and 26.5 per cent. A three-bedroom house in currently rents for slightly nder CAD$500 per month.
To attract homebuyers seeking apartments in prime locations on a budget, developers are moving towards smaller configurations for new build. “With rapid urbanisation and growing job prospects, there is a huge influx of working populace shifting to urban areas which is already space starved and congested. ‘These boutique compact apartments act as a solution for the working populace, helping them to buy their dream home at a relatively affordable price in a well-established location with basic socio-civic amenities and also offer a close proximity to their workplace.’”
Nearby infrastructure investment has had a positive influence on property values in neighbourhing towns, making some areas experience double-digit growth. Conversely, “The real estate sector … [is] challenged by the lack of liquidity as a result of the amendment of the Banking Act in 2016 that introduced interest rate caps. We have seen access to credit by developers and buyers become difficult as commercial banks have become conservative at lending but we expect this to change should interest rates become market driven.”