Select a news topic from the list below, then select a news article to read.
Tenants from a controversial rental building want their superintendents reinstated. And they are going to the Landlord and Tenant Board to do it.
Almost 40 tenants are hoping that the Landlord and Tenant Board will side with their claim that their living conditions are being negatively impacted by not having a building superintendent on site.
The tenants reside in four different Toronto-based buildings owned by the controversial Akelius Canada group.
Earlier this year, the tenants claimed that the rental property firm were delaying repairs to force long-term tenants to move on so that they could renovate units and subsequently increase rent.
The Swedish company replaced its superintendents with a call centre, a move, they say, was designed to ensure the best quality of repairs.
The tenants claim that as well as overseeing services, such as collecting rent and attending emergency situations, the superintendents provided “a sense of security” to residents.
If the Board does not reinstate the superintendent, the tenants want a reduction in their rent. They also want Akelius to compensate them for out-of-pocket expenses allegedly incurred due to the loss of the superintendents, and for the board to fine Akelius for their actions.
The tenants claim that their tenancies began before Akelius purchased the buildings and it was therefore their reasonable expectation that part of the services for which they were contracting with the landlord included a superintendent and associated services.
They also claim that in the absence of a superintendent, there has been a number of issues with pest and garbage control.
A growing number of economists are now predicting a bubble that will burst... Too much supply in Edmonton's construction sector?... Similarities between the housing market in Canada and that of Australia... Canada’s most expensive condo...
Bursting bubble predicted by more economists
We’ve been hearing it for a while, it’s been denied by officials and ignored by many homeowners…. but a growing number of economists are now predicting a bubble that will burst. A poll of analysts by Reuters has revealed that more of them now believe that we will see a sharp correction in the market; but not yet. To be fair, the majority of the 20 polled did not believe that the chance of a correction had increased in the last 12 months. What they are predicting is an interest rate rise in 2015, but house prices to continue rising through into 2016 before seeing decline in 2017. However, most of them have forecast that it will be a cooling rather than a crash. Read the full story.
Are we building too much?
There are fears in Edmonton that there may be too much supply in the construction sector, especially in commercial property. At the centre of the discussions is the newly-announced Stantec Tower, a 62 storey building housing 320 residential units together with 26 floors of offices. Much of the office space will be taken by the professional services company that gives the tower its name but they will be relocating staff from four other buildings in the city and a further project will pull in municipal staff from multiple locations to a single one. That leaves potential vacancies in the offices they leave, which may or may not be taken up by other businesses. The other issue is parking, with many of the surface lots being replaced (eventually) by more expensive underground facilities. There is also a lot of condo development in Edmonton with some major projects underway, although figures show that building levels have fallen year-over-year and there is still plenty of demand. Read the full story.
Australia has the kind of data we could use
There are many similarities between the housing market in Canada and that of Australia; low interest rates, affordability issues, overvaluation and foreign investment. One big difference is the availability of data, particularly that relating to foreign ownership. Australia has data on the levels of overseas investors and as such it clamped down on that investment four years ago; foreigners can now only invest in new developments. Experts say we desperately need to have that kind of data here. Vancouver is the world’s second most expensive housing market, despite average income in the city being lower than the national average. The perception is that foreign ownership is pricing locals out of the market and some predictions suggest as much as 50 per cent of the downtown condos are foreign-owned. But we don’t know for sure, because we don’t have the stats. Read the full story.
Canada’s most expensive condo
Imagine arranging the mortgage on this one, a $33 million condo in the Toronto Trump hotel. The three storey building, 58 floors up boasts panoramic views of the city with 11,755 square feet inside and a further 2,091 wrap-around terrace. The penthouse has a dramatic glass atrium but there is still much being left to the potential buyer’s imagination as flooring and decoration have not been completed, to allow the new owner to add their personal touches. If $33 million is out of your price range, you could for now rent it at the modest cost of $10,000 per day. Read the full story.
Banks confident of mortgage growth… Vancouver condos “will never be affordable”… Home builders heading south…and the peril of late-billed taxes…
Banks confident of mortgage growth
Three of the big six banks have reported their earnings so far and all have shown growth in their mortgage books. RBC, Bank of Nova Scotia and Bank of Montreal have all seen their residential mortgage business increase from the previous quarter and year-over-year. Although they have seen a slowing in the rate of growth, they are confident that the mortgage business is in good shape and that it will continue to see gains. Regulators have been keen that banks should not be over-exposed to the real estate markets and so other areas of the banks’ profits have been in focus in the last year or so and are also looking stronger. The other positive news on the residential mortgage side is that delinquent loans, 90 days or more overdue, are trending down. Read the full story.
Vancouver condos “will never be affordable”
Housing in Vancouver, including condos “will never be affordable for the majority of potential home buyers” writes Vancouver real estate analyst Fred Schliewinsky in his latest report on the sector. Schliewinsky is talking about new homes in the city, pointing out that prices for a 2 bedroom new build of just over 1000 sq. ft. in a high rise will set you back over $700,000. He says he isn’t expecting the situation to change anytime soon. Figures from RBC show that it takes around 40 per cent of a household’s pre-tax income to afford a condo in the area, while in Toronto the figure is 34.2 per cent and in Calgary it’s just 24 per cent. Read the full story.
Home builders heading south
Some of Canada’s biggest construction companies are hedging their bets by developing projects in the US. With uncertainty over the domestic housing market, builders are picking up land in Texas, Florida and other parts of the US where prices have yet to recover from pre-crisis levels. Although there are mixed reports on the US housing market, it is expected to pick up and Canadian companies such as Mattamy and Brookfield believe they will be well placed to cash in on the uptick. Builders in the US appear more cautious about building on the low cost suburban land, but this is partly due to being less cash-rich than some of Canada’s firms; there are a lot of unsold new homes down south restricting cash flow. If Canada’s new home sales slow down significantly, those builders that have investments in the States are hoping that those projects will pick up the slack. Read the full story.
The peril of late-billed taxes
In a cautionary tale for homeowners, owners of townhouses in Barrhaven, Ontario have recently been hit by unexpected supplementary tax demands dating back three years. Property assessments were carried out last spring and now the 72 owners have received bills of up to $10,000 due to be paid today to avoid interest charges. Many of the owners pay their property taxes through their mortgage lenders but had seen the amounts they were paying drop due to lower bills. Some of the lucky ones had realised they were paying too little and put the extra money aside but for others it has meant dipping into emergency funds to cover the shortfall. It’s not clear exactly what went wrong in this case, although somehow the assessment of the development had not taken place and owners were being billed for vacant land. It highlights the importance of owners checking figures for themselves and having a contingency fund to cover unexpected property tax demands. Read the full story.
The loss of over $12 million in a major fraud case should be a warning to other buyers to be more vigilant and not so quick to hand over cash.
Buyers need to wake up to the threat of fraud in real estate or they could face huge losses.
That is the warning in the wake of the fraud case involving Toronto-based lawyer Meerai Cho. She represented the developer behind Centrium, the condo hotel project in North York that fell through earlier this year.
The lawyer faces 75 charges for failing to return deposits to purchasers of the mixed-use development. According to a police representative, the project seemed legitimate and not a front for a scam.
“Our thoughts are that it shows how important it is to buy pre-construction through reputable builders. Buyers should always research the project as well as other developments done by the builder,” Erica Smith of Condo Chicks told CREW. “We would never take clients to a pre-construction sales office without knowing the reputation of the builder.
“It's so important these days considering the amount of fraud and international money in the real estate market.”
It is believed that almost 140 people are affected by this case with buyers putting down deposits ranging from $40,000 to $700,000.
Farmland remains a coveted asset choice for many but investors are making the wrong choices and need to get more creative.
Farmland has been high on the agenda of investors in recent months, primarily because of the record-breaking values.
And as the global population increases, and so demand for agricultural crops, more investors want to get in now and earn the big returns and appreciation over time.
But entry prices and lack of knowledge has proved the downfall for most. ““What we have seen in recent years is an extreme demand to purchase land, regardless of the quality and in many cases multiple offers with farms selling very quickly,” says Kent Willmore, president of AGInvest Properties Canada.
According to the Food and Agricultural Organization of the United Nations (FAO), the global population is expected to reach 9.1 billion by 2050. To accommodate this surge, food production in developing countries need to rise by almost 70 per cent.
“With so much attention on land, it is becoming extremely difficult for both farmers and investors to privately source land at real market value,” adds Willmore.
AgInvest Properties are tapping into the needs of such potential buyers through its two investment vehicles.
***Do you want to learn more about these farmland investment options? In the September issue of Canadian Real Estate Wealth, we outline the arguments for investing in this asset class and show how Canadian investors are doing it without breaking the bank. The issue is currently on the newsstands. You can also subscribe here today to avail of a special offer.
Chinese investment is good for Canada says President of Asian Real Estate Association… More private investors buying commercial property… Affordable housing faces opposition in Halifax… And could a 3D model change the real estate business?
Immigrants are good for the economy and the housing market
There has been a lot of focus on the levels of foreign investment in our real estate market and although it’s not always said directly, there is often an undertone of suspicion and negativity around these discussions. Tina Mak is the President of the Asian Real Estate Association of America (Vancouver) and says that immigration is positive and reflects the ‘promise of Canada’. Tina came to Canada 26 years ago and became a citizen in 1993; she owns multiple properties and is an employer. She is also passionate about Canada and says that the fact that people from, for example China, want to come here is because it is seen as a safe haven, a solid investment. Mak argues that this should be seen as a positive thing. She highlights the large amounts of investment that is brought into the country, not just in our real estate, and maintains that we should welcome this and be proud that people want to make Canada their home. Read the full story.
Commercial ownership sees changing trend
Much of our commercial property is owned by the large pension funds but new figures show that this changed in the last quarter. Investment firm CBRE say that private investors outpaced the pension funds, whose activity in the sector fell sharply from Q1. Investment from private buyers has increased by more than 50 per cent. Large pension funds are focusing on developing property rather than buying while smaller pension funds are still making acquisitions. The private investor surge is helping to boost commercial property transactions, especially in the west. Read the full story.
Affordable housing faces opposition in Nova Scotia
A plan to create extra affordable housing in part of Nova Scotia is under threat from those opposed to greater housing density. The Housing Trust of Nova Scotia wants to build 123 affordable new homes in the Gottingen Street area of Halifax but says that opponents have challenged the council’s zoning decision. Read the full story.
Is technology set to revolutionise real estate?
Technology is disrupting almost every sector of business and real estate and the mortgage business is no different. We see new software solutions every day and now a Vancouver company is hoping that its 3D model of the city will revolutionise everything from construction to sales. The model city is so advanced is can be used for searching for attributes such a ‘south facing window’ or even a fire hydrant. GeoSim who have created the product say it takes the idea of Google Earth and adds complete freedom of movement; you can even walk into and around a building. The company says that the uses for its model are multiple; from planners to developers to realtors. It could be used to show prospective property purchasers, especially commercial buyers, almost every aspect of the building and its neighbourhood. Read the full story.
Home buyers lie on their loan applications and ten per cent of Canadians believe it’s acceptable to do so.
A recent survey conducted by Equifax Canada found that 10 per cent of Canadians lie about their annual income on loan applications.
"Make no mistake, lying on your loan application is a type of mortgage fraud," Tim Ashby, vice president of personal solutions for Equifax Canada said in a release. "Whether you're a lender or a consumer, data protection and the integrity of the data should be priorities at all times.
“For the consumer, it's not just a matter of protecting your information, it's critical to know what's on your credit file - especially when looking to buy a new home."
The survey, which included a sample of 1,500 Canadians from across the country, also found that Canadians are becoming increasingly worried about protecting their personal information; 79 per cent are more concerned today about protecting their personal data than they were just a year ago.
"Consumers and lenders are certainly becoming more wary of the potential threats related to fraud and identity theft," Ashby said. "In the home-buying process, a lot of personal data is on the table when dealing with mortgage brokers, real estate agents, and lawyers among others."
One other surprising detail that emerged from the study was that home buyers aren’t much more informed about their credit health than the average Canadian.
Landlords are up in arms after a Tribunal ordered a Toronto landlord to pay a young woman for denying her an apartment because she was under-18.
Investors have been warned again about the implications of age discrimination in light of a ruling in favour of a then underage tenant.
The Ontario Human Rights Tribunal recently ordered a landlord to pay a young woman $10,000 for denying her an apartment because she was under-18.
The woman was 17 when she applied for a bachelor apartment at 500 Dawes Rd., the rental building that is often cited as one of the worst in Toronto with reports of mice, bed bugs, broken heating, mould and fire damage.
The building superintendent told the woman that the building had a policy of not renting to anyone under-18 despite Ontario law stating that 16 and 17-year olds can sign leases.
The ruling ordered the payout for injury to the woman’s “dignity, feelings and self-respect,” with the landlord claiming during the hearing that the apartment was not vacant at time of application. The adjudicator also reported that the landlord tried to influence a witness to deny that age was a deciding factor and that she fabricated evidence.
The landlord was also ordered to develop a human rights policy specific to rental housing for 500 Dawes Rd., to post the policy and the Ontario Human Rights Commission's Code in the rental office, and to provide human rights training to anyone who shows prospective tenants units in the building.
While much of the focus has been on the landlord and building, other investors have raised their concerns about the age ruling and general leniency, once again, towards tenants in such cases.
"No property owner should be told who they should rent to," says Kayla Andrade from Ontario Landlords Watch. "Landlords should be allowed to choose whomever they want for their properties and should not feel obligated or pressurised to allow someone they do not feel comfortably with in their rental property."
She advises landlords to explain to each potential tenant viewing the rental unit that they will only be contacted if they are accepted. "Landlords should not give potential tenants a reason why they did not get accepted."
Consumer confidence rises but not in the real estate sector… Rural communities at threat from ‘urban sprawl’… And poor data on new home sales in the US…
Consumer confidence rises – but not in real estate
An index of consumer confidence has recorded an increase for last week, fuelled by better optimism on job security. However the Bloomberg Nanos Confidence Index was less positive on the housing market as the sub-index on real estate saw a fall in those that expected house prices to increase in the next six month; that marker hit a four month low. Although the real estate stats are still just above this year’s average, it shows that Canadians may be thinking that the boom time if coming to an end, in the light of the mixed messages we have seen recently. Read the full story.
Ottawa writer on the ‘scourge of sprawl’
As our thirst for urban living grows, so do our cities. Expansion may increasingly be upwards but the traditional outward growth of urban communities is as strong as ever. Ottawa writer Jonathan McLeod says that urban ‘sprawl’ is a threat to our rural communities. As more developments are allowed on previously undeveloped land on the edge of cities, the suburban spills further into the rural. McLeod says that increasing density in city centres should be the focus; he says it reduces the impact on rural areas but also cuts down car journeys and the requirements for greater infrastructure projects. He says that we should all be united against urban sprawl. Read the full story.
US new home sales fall to four month low
New figures from The Commerce Department revealed that the housing market south of the border has not yet turned a corner. Despite generally positive news on the US economy and some good indicators on the housing market in general, the stats show that sales of new homes fell to their lowest level in four months; down 2.4 per cent to 412,000 units (seasonally adjusted figures.) The prognosis is good though, with higher levels of supply and a moderation in prices expected to boost sales in the months to come. Read the full story.
Landlords may think a “nice” approach is good for tenant retention but you could be devaluing your property, according to a leading property manager and investor.
Investors may want to keep long-term tenants happy by offering a break on rental increases but they should start thinking of the long-term implications from their act of kindness.
Kathy Berner, owner of Regency Property Management and Real Estate in Regina, says landlords need to keep rents in line with current market values.
“As well as allowing the tenants to run the show, this low rent is also de-valuing the building,” says Berner.
“In such cases, a savvy investor scoops the building for a low price since the value of multi-family buildings is directly related to the income, and so the tenant’s low rent.”
These landlords, she adds, then raise the rents drastically after buying, causing further unrest among renters in the building.
“Smaller and fair rental increments are far more effective and acceptable in keeping rental rates in line,” she says.
This should be one of the 10 rules that landlords adhere to when renting properties, says Berner.
***Do you want to learn more about Kathy Berner’s 10 landlord rules? She outlines each in the September issue of Canadian Real Estate Wealth which is currently on the newsstands. You can also subscribe here today to avail of a special offer.