Q1 net income increase compare to previous quarter


RBC reveals Q1 financial results

Ephraim Vecina
Mortgage Broker News

 Sustained strength is the running theme in Royal Bank of Canada’s (RBC’s) fiscal first quarter results, which show that net income grew by 10% annually to $3.847 billion.

The quarter ending January 31 saw net income increase by $601 million over the previous quarter, boosted by strong performances in the bank’s personal and commercial banking, capital markets, wealth management, and investor and treasury services.

“Results across our businesses benefited from strong volume growth, increased client activity and constructive markets, partially offset by the impact of low interest rates and higher expenses largely due to variable and stock-based compensation commensurate with strong results,” RBC announced.

The bank’s capital position remained “robust”, with a CET1 ratio of 12.5% “supporting strong volume growth and $1.5 billion in common share dividends paid.” RBC also boasted of a strong average Liquidity Coverage Ratio (LCR) of 141%.

RBC’s fiscal Q1 readings also exhibited lower provisions for credit losses, “largely resulting from releases of provisions on performing loans,” the bank said. “Lower provisions on impaired loans also contributed to the decrease.”

Dave McKay, president and CEO of RBC, said that the bank’s enviable momentum persisted amid the uncertain macroeconomic backdrop brought about by the COVID-19 pandemic.

“This is a reflection of the resiliency of our diversified business model, prudent approach to risk management, significant technology investments, and our colleagues’ dedication to our clients and communities,” McKay said.

 

Copyright © 2021 Key Media



BMO has reported as a higher trading revenue in 2021


BMO reports strong fiscal Q1

Ephraim Vecina
Mortgage Broker News

Bank of Montreal has reported its financial results for the first quarter of 2021. BMO saw earnings of $3.06 per share, or net income of $2.04 billion significantly outstripping the $2.15 average projection of analysts in a Bloomberg survey. Higher trading revenue also drove a 36% annual growth in profit at BMO’s capital-markets division.

Overall earnings were boosted by the bank’s shrinking loan-loss reserves. BMO set aside less capital than expected to cover bad loans during the fiscal first quarter. The bank’s provisions for credit losses fell by 64% quarterly, ending up at $156 million. This was just one-third of what analysts previously estimated.

Additionally, BMO saw a $59 million recovery of provisions on performing loans, due to positive borrowing trends and “an improving economic outlook,” Bloomberg reported.

This recovery “materialized earlier than we had expected,” said Mike Rizvanovic, analyst at Credit Suisse Group AG. “Results were better pretty much across the board.”

Further forward momentum is extremely likely as the Canadian economy “is expected to rebound strongly in subsequent quarters as vaccines become more widely available and restrictions are relaxed,” BMO said in a shareholder report.

 

Copyright © 2021 Key Media



Canada export terminal located at Kitimat salvaged B.C construction pace in 2020


Major projects salvaged B.C. construction in 2020

WI Staff
Western Investor

— Metro Vancouver home building has rallied after falling nearly 19 per cent in 2020. – Adera

Major resource projects, such as the LNG Canada export terminal at Kitimat, salvaged British Columbia’s construction pace in 2020, as home building plunged 18.9 per cent and commercial construction fell nearly 8 per cent from a year earlier.

B.C.’s inventory of major projects, those valued at more than $15,000,000, increased to $369.8 billion as of Q3 2020, up 4.8 per cent compared to the same period last year.

Nearly a third of the major projects are under construction, including LNG Canada ($36 billion) the Coastal GasLink Pipeline Project ($6.2 billion) and the Trans Mountain Pipeline (12.6 billion).
“B.C.’s major projects, driven by natural resource and infrastructure projects, provide thousands of both direct and indirect jobs and are spread across every region in the province. With employment and GDP expected to remain below pre-crisis levels in 2021, these projects will meaningfully increase economic growth and help pay down the large provincial debt incurred to support businesses and citizens through the pandemic,” said Lori Mathison, president and CEO of the Chartered Professional Accountants BC (CPABC).

The data is contained in the CPABC’s annual BC Check-Up for 2020.

Investment into both residential and private non-residential projects also cooled, and despite recent price gains, housing starts steeply declined. The overall number of housing units started was down by nearly a fifth (-18.3 per cent) through 2020 compared to the number started in 2019. Attached units, such as condos and townhomes, accounted for the majority of the decline, according to the CPABC.

Private non-residential investment, such as commercial and industrial construction, declined to $5 billion in 2020, representing a 7.9 per cent drop compared to the level of investment in 2019. 

“Economic uncertainty saw investors delay or cancel both residential and non-residential investment projects in 2020,” noted Mathison. “Over 7,800 fewer residential housing units were started compared to 2019, and over $430 million less was invested in private non-residential developments. This is worrying as construction has been a large factor in the province’s robust economic growth. “

She noted that both attached and detached starts rebounded from earlier in 2020, and the pace has continued into 2021.

According to Canada Mortgage and Housing Corp. total Metro Vancouver housing starts in January 2021, at 1,394 units, were up 36 per cent from same month a year earlier. A total of 44,213 units are currently under construction in Metro Vancouver, including 37,135 apartments – 15 per cent of which are rentals – , 2,994 townhouses and 3,464 detached houses.

 

© Copyright 2020 Western Investor



Zillow’s innovative approach to provide a better customer experience in Real Estate market


The REAL Takeaway From The News Of Zillow Buying ShowingTime

Tom Ferry
other

 Peter Drucker told us many years ago: All business is innovation and marketing.

We should know this. We should collectively strive for this.

Yet what do we see when someone innovates to provide a better customer experience in real estate?

Outrage. Fear. Consternation. Condemnation.

If you felt any of those emotions when you heard the news that Zillow purchased ShowingTime, it may be time for a long, hard look at yourself.

It’s time to use this news as a wake-up call and channel your misplaced energy into action.

Disruption is a Part of Life… Or Certainly Business

Disruptors have always existed. And as long as people continue seeking better ways of doing business, they will always exist.

Zillow is just being Zillow. They’re innovating. They’re marketing. They’re creating a consumer-friendly alternative to an industry that sometimes feels stuck in the dark ages.

Taking those two things into account – disruptors will always exist and Zillow is just doing their thing…

The question is not “What can be done to stop them?”

The question is this: What are YOU doing to compete?

It’s Time to Look Within

If this announcement struck fear in you, my hope for you is to use this “scare” to do more of what you know you should be doing. The question to ask yourself now is “How can this get me to innovate and actually do better?”

Here are five questions to ask yourself to break it down to the nitty gritty:

  • Who is my customer?
  • What are their problems?
  • How am I going to solve them in a unique way?
  • How am I going to do it at scale?
  • How am I going to build my team so I can bring consistent value to my customers and attract more of them?

Now is the time to put yourself in a “wartime general” mindset.

It’s not about running around with your hair on fire…

It’s about remaining calm in the face of adversity and challenges.

It’s about taking a step back, assessing the situation, and asking yourself the right questions to get into massive action.

This Won’t Be the Last Big Zillow Announcement

Whether you want to accept it or not, this won’t be Zillow’s last big announcement.

They’re a brokerage now. They’re one of your competitors. They’re going to keep doing their thing.

And more disruptors will be seeking ways to infiltrate our industry every day.

So you have two options: Keep complaining about their every move and eventually get squeezed out entirely, or get your butt in gear to compete by:

  • Building a more trusted brand. Your brand has to be everywhere in your localized market
  • Bringing the most value and being of service to your past clients and sphere to stay top of mind
  • Maybe expanding your geo farm
  • It might be time to upgrade your website
  • Or to start thinking more strategically about your video content and how to drive traffic back to your website
  • To counter their moves with the addition of localized Google ads

The point is… there’s plenty of work to be done, so why waste your energy worrying about what some industry behemoth is doing when instead you can channel it into your own improvement?

Go execute… because that’s the ultimate way to create the degree of separation.

And if you need help, we’re always here to guide your journey, help you make the right decisions, and keep you focused and in action.

 

 

© Tom Ferry – #1 Coach in Real Estate Training. All rights reserved.



2021 industrial real state vacancy rate below 1 percent for the first time – CBRE


Metro Vancouver industrial vacancy rate flirting with zero

Wl Staff
Western Investor

 — | CBRE

The industrial real estate vacancy rate in Metro Vancouver, which is already in the sub-1 per cent level in four municipalities, will soon fall below 1 per cent across the entire region, which is unprecedented, according to a forecast from commercial real estate agent CBRE.

“We believe continued strong demand and a critical lack of supply in the current market will force the vacancy rate below 1 per cent for the first time [in 2021]” said the CBRE Industrial projection, released February 18.

The four markets where the industrial vacancy are under 1 per cent are Delta (0.4%), Surrey (0.6%), Maple Ridge/ Pitt Meadows (0.9%) and North Vancouver (0.8%).

“Surrey is the largest industrial market in the Lower Mainland and seen as a safety net for supply over the past decade,” CBRE noted, adding “But this is no longer the case as the Fraser Valley now has a lower overall vacancy rate than Vancouver, Burnaby and the Tri-Cities.”

Demand for industrial space appears driven by distribution space needed by large retailers and the e-commerce sector.

 In 2020, warehouse and distribution accounted for 34 per cent of the 4.9 million square feet taken up in the industrial market, with food and beverage accounting for 23 per cent, up from a 6 per cent share in 2019. E-commerce claimed 12 per cent of absorption, which was ahead of both manufacturing and the film industry, which each accounted for 11 per cent of the industrial demand. Third-party logistics – which involves storage and shipment from multiple sources – captured a 9 per cent of the 2020 industrial take up in 2020.

Major companies completing built-to-suit industrial asset last year include grocery giant Sobeys, building a 530,500-square-foot distribution warehouse in Surrey.

This year, Walmart is expected to complete a 296,000 square foot “fulfillment centre” in Surrey and dairy firm Saputo Inc, will open a production and distribution centre of approximately 358,000 square feet in Port Coquitlam.

There continues to be an imbalance of demand and supply, with few significant speculative industrial projects underway, according to CBRE, which suggests vacancy rates will remain the third-lowest in North America in 2021 and 2022.

The shortage of space and high demand has driven Metro Vancouver industrial rates higher. CBRE is forecasting average industrial lease rates to hit a record high of $14.00 per square foot this year, up 6 per cent from 2020.

 

© Copyright 2020 Western Investor



Metro Vancouver’s sales increase of rental properties up to 2.7 percent in 2020 compared 2019


Sales of Vancouver rental apartments soar as vacancies rise

WI Staff
Western Investor

— Kerrisdale 18-suite rental building sold in January 2021 for $7 million. | Cushman & Wakefield

Despite rental vacancies rising to the highest level in 20 years and a province wide ban on rent increases due to the pandemic, sales of Vancouver multi-family rental buildings surged in the second half of 2020 after collapsing 38 per cent in the first six months compared to the same period a year earlier.

“The Metro Vancouver market saw a total of 78 properties trade in 2020, just one less than the 77 transacted in 2019,” reported Mark Goodman, a partner and managing broker of Goodman Commercial, Vancouver, which specializes in the multi-family market.

Metro Vancouver’s 2020 total dollar volume increased to $1.13 billion, up 2.7 per cent in compared to 2019, and the average price per suite rose 8 per cent to $403,088, Goodman noted.

After being outsold by suburban markets in 2019, the city of Vancouver rebounded last year, posting $674 million in sales with 36 buildings sold, an increase of 53 per cent and 28 per cent, respectively, from a year earlier. Vancouver’s action continued in 2021, with the $292.5 million purchase of a 15-building portfolio in January by InterRent Real Estate Investment Trust and Crestpoint Real Estate Investments Ltd., both of Toronto. That one deal, brokered by CBRE in Vancouver, represents 43 per cent of Vancouver’s total dollar volume in 2020.

In 2020, the average per-suite price of a rental apartment building sale in the city of Vancouver was $499,500, but that spiked to $782,000 in Kerrisdale, due to the sale of two properties that were sold for development potential, Goodman noted.

Overall, suburban markets witnessed a 22 per cent decrease in buildings sold over the year, compared to 2019. Maple Ridge was the only area that saw an increase, Goodman said.

This could be linked to Metro Vancouver’s rising rental vacancy rate, which increased to 2.6 per cent as of October 2020, from 1.1 per cent a year earlier, the highest increase in 20 years, according to Canada Mortgage and Housing Corp. (CMHC).

As well, while a ban on evictions ended in the fourth quarter of last year, rental increases in B.C. remain frozen until July 2021, due to pandemic regulations from the provincial government.

This has recently translated into some price reductions on apartment buildings listed for sale.

Goodman said that low mortgage rates – it is possible to secure CMHC-insured mortgage for multi-unit residential buildings of five units or more at 1.3 per cent or less – and a “search for safety and security” has kept Metro Vancouver’s rental apartment market relatively stable.

 

© Copyright 2020 Western Investor