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West Vancouver

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Mortgage insurance premiums hiked once again


Canadian Real Estate Wealth

CMHC announced early Tuesday it is increasing its loan insurance premiums effective March 17.

“We do not expect the higher premiums to have a significant impact on the ability of Canadians to buy a home,” said Steven Mennill, Senior Vice-President, Insurance. “Overall, the changes will preserve competition in the mortgage loan insurance industry and contribute to financial stability.”

According to the Crown Corporation, the average homebuyer will see a $5 increase to their monthly mortgage payment as a result. That $5 certainly adds up, however, to a total of $1,500 over the course of a 25 year mortgage.

The increase is the result of last year’s mortgage rule changes, CMHC claims.

“Capital requirements are an important factor in determining mortgage insurance premiums. The changes reflect OSFI’s new capital requirements that came into effect on January 1st of this year that require mortgage insurers to hold additional capital,” it said in a release.

“Capital holdings create a buffer against potential losses, helping to ensure the long term stability of the financial system.”

CMHC announced early Tuesday it is increasing its loan insurance premiums effective March 17.

“We do not expect the higher premiums to have a significant impact on the ability of Canadians to buy a home,” said Steven Mennill, Senior Vice-President, Insurance. “Overall, the changes will preserve competition in the mortgage loan insurance industry and contribute to financial stability.”

According to the Crown Corporation, the average homebuyer will see a $5 increase to their monthly mortgage payment as a result. That $5 certainly adds up, however, to a total of $1,500 over the course of a 25 year mortgage.

The increase is the result of last year’s mortgage rule changes, CMHC claims.

“Capital requirements are an important factor in determining mortgage insurance premiums. The changes reflect OSFI’s new capital requirements that came into effect on January 1st of this year that require mortgage insurers to hold additional capital,” it said in a release.

“Capital holdings create a buffer against potential losses, helping to ensure the long term stability of the financial system.”

 Copyright © 2017 Key Media Pty Ltd



Pressure on GTA renters intensifies


Canadian Real Estate Wealth

 

Those hoping to become first-time buyers in the Greater Toronto Area are under increasing pressure as soaring rents make saving for a downpayment tougher.

Urbanation says that the average condo rents in the last three months of 2016 rose 11.7 per cent compared to a year earlier with renters paying almost $2,000. The pace of rent increases was a sharp contrast to the 4.2 per cent annual rise recorded a year earlier.

“The undersupply of rentals in the GTA continued to worsen throughout the year, causing rents to surge alongside home prices and further deteriorating housing affordability across the region” said Shaun Hildebrand, Urbanation’s Senior Vice President. 

Supply of rental condos in the GTA has declined as owners have chosen to sell properties due to higher prices. It means that total rental listings fell 8 per cent with lease volumes down 4 per cent in the fourth quarter from a year earlier.

For the whole of 2016 there were 26,602 condo units rented through the MLS, down 2 per cent from a year earlier.

Applications for new purpose-built rental units increased by more than 7,500 in the fourth quarter but Hildebrand is concerned about the future.

“While less pressure on rent growth may arrive in 2017 due to a temporary rise in new apartment completions, it’s become clear that more attention needs to be paid to building rentals over the longer-term,” he added. 

Copyright © 2017 Key Media Pty Ltd



Vancouver malls a potent commercial real estate investment


Ephraim Vecina
REP

In its latest report, the Retail Council of Canada announced that Vancouver plays host to some of the country’s best performing malls in terms of sales revenue.
 
As of the year ending August 31, 2016, Vancouver’s Oakridge Centre was the second most productive mall in Canada, earning $1,537 per square foot. Meanwhile, the CF Pacific Centre ranked third nationwide with $1,523 per square foot.
 
Four other malls in British Columbia qualified for the Council’s list of 30 most profitable malls in the country, Business in Vancouver reported. Coming in at number 8 is Metropolis at Metrotown ($1,035 per square foot), while the 13th slot was occupied by CF Richmond Centre ($928 per square foot).
 
Guildford Town Centre ranked number 21 ($844 per square foot), and Coquitlam Centre came in at number 27 ($785 per square foot).
 
The Council’s study found that the Yorkdale Shopping Centre in Toronto had the greatest sales per square foot last year at $1,650.85. The overall revenue-to-space ratio in Canada’s malls stood at an average of $744, up from $733 in 2015.
 
A leading driver for this strong performance in Canadian commercial real estate is the far lower per-capita mall space compared to other major economies like the United States. Also, higher product costs due to taxes and duties help Canadian malls earn more, the Council explained.
 
Supermarket-anchored malls “are an incredibly defensive industry, and if there’s a recession looming around the corner, then you can bet that people will still be heading to their local supermarket to get a week’s supply of groceries,” The Motley Fool Canada explained in a recent analysis. “People still have to eat, and this will never change, even during the harshest of recessions.”

Copyright © 2017 Key Media Pty Ltd



Vancouver malls a potent commercial real estate investment


Ephraim Vecina
REP

In its latest report, the Retail Council of Canada announced that Vancouver plays host to some of the country’s best performing malls in terms of sales revenue.
 
As of the year ending August 31, 2016, Vancouver’s Oakridge Centre was the second most productive mall in Canada, earning $1,537 per square foot. Meanwhile, the CF Pacific Centre ranked third nationwide with $1,523 per square foot.
 
Four other malls in British Columbia qualified for the Council’s list of 30 most profitable malls in the country, Business in Vancouver reported. Coming in at number 8 is Metropolis at Metrotown ($1,035 per square foot), while the 13th slot was occupied by CF Richmond Centre ($928 per square foot).
 
Guildford Town Centre ranked number 21 ($844 per square foot), and Coquitlam Centre came in at number 27 ($785 per square foot).
 
The Council’s study found that the Yorkdale Shopping Centre in Toronto had the greatest sales per square foot last year at $1,650.85. The overall revenue-to-space ratio in Canada’s malls stood at an average of $744, up from $733 in 2015.
 
A leading driver for this strong performance in Canadian commercial real estate is the far lower per-capita mall space compared to other major economies like the United States. Also, higher product costs due to taxes and duties help Canadian malls earn more, the Council explained.
 
Supermarket-anchored malls “are an incredibly defensive industry, and if there’s a recession looming around the corner, then you can bet that people will still be heading to their local supermarket to get a week’s supply of groceries,” The Motley Fool Canada explained in a recent analysis. “People still have to eat, and this will never change, even during the harshest of recessions.”

Copyright © 2017 Key Media Pty Ltd



Toronto home prices on the rise and Vancouver dropping


A tale of two cities

Justin da Rosa
REP

Agents in Toronto should prepare for unprecedented home price growth, while those in Vancouver will have to adjust to a new reality.

Toronto’s lack of inventory is expected to contribute to double-digit home price hikes, according to Royal LePage’s recently released home price survey.

“Since pulling ahead as Canada’s hottest market this quarter, speculators and prospective homeowners have increasingly begun to look to the Greater Toronto Area in search of real estate,” Dianne Usher, senior vice president, Johnston and Daniel, a division of Royal LePage, said. “The region’s strong economy has attracted interest from many Canadians and Americans in search of stability and employment, imposing further demand on stretched inventory levels in suburban areas across the GTA and intensifying an already incredibly high priced, competitive environment.”

Royal LePage is forecasting the aggregate home price in the GTA will increase 10% to $793,000.

Vancouver, meanwhile, is expected to see a market correction in 2017.

“After appreciating at an unsustainable rate for the better part of the year, prices across Greater Vancouver have begun to correct as a result of deteriorating affordability, a lack of quality inventory and heightened market uncertainty stemming from conflicting governmental intervention,” Randy Ryalls, General Manager, Royal LePage Sterling Realty, said. “This has led to a decrease in competition for listings across Greater Vancouver, giving rise to new market conditions where prospective homeowners have more power at the bargaining table, causing prices to soften.”

Looking forward, the brokerage expects the aggregate home price in the Greater Vancouver area to depcreciate by 8.5% year-over-year.

Foreign investment, meanwhile, is expected to have less of an impact on the city’s real estate market than it has previously.

Copyright © 2017 Key Media Pty Ltd



Home sales rebounded in December following large drop in November: CREA


Canadian Real Estate Wealth

On a year-over-year basis, CREA says home sales were down five per cent last month compared to December 2015.

Annually, the number of homes that changed hands was up 6.3 per cent last year compared with 2015 as sales started out strong before softening in the latter part of the year.

The real estate association says the MLS home price index in December was up 14.3 per cent compared with a year ago.

Meanwhile, the national average sale price climbed 3.5 per cent in December compared with a year ago.

The number of homes newly listed for sale slipped three per cent from November to December.

“Home sales are unlikely to benefit the Canadian economy as much in 2017 as they did in 2016,” CREA’s chief economist Gregory Klump said in a statement.

“New regulations mean that in order to qualify for a mortgage, home buyers will either have to save longer for a bigger down payment or purchase a lower priced home. In urban centres where the latter are in short supply, that’s likely to translate into fewer sales.”

Copyright © 2017 Key Media Pty Ltd