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Canadian Millennials are more optimistic purchasing home despite of Pandemic

Scotiabank: Millennials hopeful about buying homes despite COVID-19

Ephraim Vecina
The Vancouver Sun

Compared to other demographics, Canadian millennials are more optimistic about purchasing a home during the COVID-19 pandemic, according to a new survey by the Bank of Nova Scotia.

The 2020 Scotiabank Housing Poll found that around 18% of young Canadians in the 18-34 age range have “accelerated their plans” to buy their next homes or investment properties. However, roughly 32% of them said that they will only make their purchases once property prices drop.

Scotiabank said that these intentions are mainly driven by lower interest rates. Approximately 68% of those planning to buy will be using their savings, while 42% will be using the equity from their primary homes.

Millennials were also more optimistic (36%) about home price declines within the next 12 months, compared to 24% of those in the 35-54 age cohort and 17% of those older than 55 years old.

Additionally, better purchasing power fed into a greater appetite for renovations, with around 26% of Canadians considering major reworks in their current homes.

“The pandemic has caused many Canadians to turn their living rooms into classrooms, their dining rooms into offices, and their basements into home gyms,” said John Webster, head of real estate secured lending at Scotiabank. “This is motivating many to consider investing more in their current homes or re-evaluating their living spaces altogether.”




Copyright © 2020 Key Media

Renters are facing the threat of eviction during Pandemic

East Vancouver tenants threatened with eviction by indebted developer

Ephraim Vecina
Mortgage Broker News

Tenants in East Vancouver are being pushed out to make way for a residential project, but the developer is allegedly saddled with hundreds of millions in unpaid loans.

Renters in the area’s Connacher House and The Carolina apartments are facing the threat of eviction, after developer PortLiving began purchasing properties in the vicinity starting 2018.

Among PortLiving’s plans for its upcoming six-storey Midtown Heritage residential building is to refurbish The Carolina and relocate the Conacher House to an area previously occupied by a soon to be demolished depot, News 1130 reported.

But the Vancouver Tenants Union said that PortLiving is adhering to just the “bare minimum” of the city’s tenant welfare policies.

“We’re in the middle of a pandemic. There’s no rush to get these tenants out,” said Vince Tao, a member of the union’s steering committee. “What we want, really, is PortLiving to come to the table and give these tenants extra time.”

PortLiving said that it has “worked very hard with these tenants on solutions,” and that it has offered tenants six months’ worth of free rent. The developer also said that it has provided referrals to help them relocate.

But doubts about the developer’s ability to follow through on its promises are strong: Less than half a year ago, PortLiving founder Macario Reyes said in a sworn affidavit that the company did not have the ability to pay more than $400 million in loans. The document also pointed to an estimated $46 million owed to CMLS Financial and Aviva Insurance.

Nelia and Wilfredo Guevarra, both residents of The Carolina for more than 24 years, said that they have received a letter to vacate the property by the end of September. They also said that the developer has threatened them with a court bailiff “to enforce the eviction if necessary” – a move that the couple called “inhuman” considering the prevailing COVID-19 pandemic.

Business tenants were not left unscathed. Andrew Lee, owner of the nearby Mt. Pleasant Return-It Depot, said that PortLiving has ignored his requests for a grace period while he’s setting up his new location.

“I’ve tried to really work with them and tried to be reasonable; I thought they were reasonable,” Lee said. “It’s just really heartbreaking, and they have no mercy.”


Copyright © 2020 Key Media

Mayor Kennedy Steward viable plan for affordable homes in Vancouver

A look at Mayor Kennedy Stewart’s plan for creating affordable homes in Vancouver

Clayton Jarvis
Mortgage Broker News

On Monday, Vancouver mayor Kennedy Stewart announced an ambitious plan intended to “make Vancouver affordable for the middle class.” The Making HOME (Home Options for Middle-income Earners) initiative would allow for a single-family home to be redeveloped into four smaller homes so long as one is reserved for households making $80,000 a year.

“The house would look like any other house, except it might have four front doors. Three for families that make around $150,000 a year (like two teachers, or an accountant and a tradesperson). And one door reserved for middle-income earners – forever,” reads the recently launched Making HOME website.

Stewart brought the plan to Vancouver city council on Wednesday. His proposed guidelines for rolling out Making HOME as a pilot project involving 100 lots in neighbourhoods zoned for single-family detached homes and duplexes are expected to be delivered to city council by the second quarter of 2021.

“I see a future where families are no longer pushed out of town because their only two options are a condo or a multi-million-dollar house,” Stewart said during a September 14 media briefing.

In his presentation to reporters, Stewart compared the scenario facing buyers in Vancouver today to that of a post-Making HOME environment. Whereas 2.5 percent of residents can currently afford to purchase a home in Vancouver (the average home price in East Van is about $1.4 million), he says Making HOME would make ownership attainable for 50 percent of local residents.

As Stewart explained, the owners of the three “market properties” would each need to earn $135,000 and provide a $110,000 down payment. The middle-income household, the one earning $80,000 a year, would need to provide a $65,000 down payment.

The homes in question won’t exactly be cheap. A case study by zoning-reform advocate Darrell Mussatto determined that three 924-square foot “market homes” on a four-home lot would sell for approximately $1.1 million each, with the remaining 900-square foot property selling for around $450,000.


Mixed reactions

Stewart’s plan has received somewhat mixed reviews. Canada Mortgage and Housing Corporation CEO Evan Siddall thanked Stewart for his “leadership on housing affordability” in a September 15 tweet.

“Densification is our most powerful tool to accelerate the supply of more affordable housing,” Siddall wrote. “This is exactly the kind of innovation our cities need.”

Abundant Housing Vancouver’s Jennifer Bradshaw told CBC that Stewart’s plan will help “some” Vancouverites, but she is concerned that it will ultimately fall short in its goal of providing affordable homes to half the city’s residents.

 “There just aren’t going to be enough available,” she said.

Pemberton Homes Oak Bay realtor Vanessa Roman applauds Stewart for his outside-the-box thinking, but she sees Making HOME as more of a “campaign ploy for the 2022 civic election, rather than a viable solution to increase housing affordability.”

Roman says the proposal’s primary shortcoming is not requiring a higher percentage of affordable homes per lot. In her eyes, the ratio of three market-value homes to one affordable unit (larger lots can house six homes so long as two are kept for middle-income earners) won’t inject enough affordable stock into the city’s housing supply.

“If Mayor Stewart actually wanted to help solve the problem, he would increase the minimum number of required affordable units from one to four, leaving only two units to be sold at market value,” she says. “This ratio means a majority of new units would be offered, and kept, at below market value, which helps to curb rapid increases in land value and increases housing affordability for middle-income earners in Vancouver.”


Copyright © 2020 Key Media

34-storey condo tower in downtown Kelowna

Kelowna condo tower looks like investor play

Frank O?Brien
Western Investor

Fed would keep near 0% rates for the foreseeable future

Fed could keep rates near zero through 2023

Ryan Smith

BC Real Estate investment decline to its lowest level since 2015

Avison Young: BC real estate investment at its lowest since 2015

Ephraim Vecina
Mortgage Broker News

Investment in British Columbia’s commercial real estate in the first half of 2020 declined to its lowest level since 2015, bringing an end to a strong four-year run, according to a new report by Avison Young.

A total of 84 deals valued at $1.5 billion were completed during the first six months of the year. This was far below the levels seen from 2016 to 2019, which saw first-half investment in office, retail, and industrial assets exceed $2.7 billion in each category.

Avison Young said that COVID-19, which was declared a global public health emergency in March, triggered this “partial pause” in the investment market, with private investors dominating the deals.

On a brighter note, however, “deal velocity in first-half 2020 remained comparable to previous years and actually marked the fourth highest number of completed deals on record,” Avison Young said in its study. “Only the first halves of 2019 (85), 2018 (102) and 2017 (109) recorded a greater number of transactions than 2020.”

By asset class, the largest dollar volume went to industrial investment ($644 million), followed by office ($629 million), multi-family ($620 million), and retail deals ($223 million).

The report said that this “marked the first time that industrial sales led all asset classes in terms of total dollar volume in a half since Avison Young started tracking the market in 1998.”

Industrial properties also represented the bulk of transactions completed (44 deals), amounting to 52% of total deal volume during the first half of 2020. Meanwhile, retail assets had their lowest first-half level (25 deals) since 2011.

“Investors and owner-occupiers remained focused on acquiring properties in what many consider as the most appealing and sought after commercial real estate asset class in 2020,” Avison Young said. “Industrial assets, particularly those related to logistics/distribution and last-mile warehousing, were already in high demand due to shoppers’ ongoing embrace of e-commerce, but the arrival of COVID-19 triggered an even more rapid shift in consumer shopping patterns in a matter of months (if not weeks), further driving demand for industrial assets.”


Copyright © 2020 Key Media