Stats Canada report shows increase in building permits, especially in BC while Nova Scotia slips back… High end property is booming… Could Chinese investment cause a real estate crash?… And why not everyone is content with construction…
Housing permit stats show increase
The first of this week’s important reports on the market was released yesterday. Statistics Canada’s building permits data for May shows an increase in permits issued; up 13.8 per cent from April; with commercial property in Ontario and Manitoba and multi-family units in BC being the big areas of growth. Quebec and Nova Scotia were the only provinces not to see an increase. For residential property, there was a 9.5 per cent increase in construction intentions, the third month of gains in a row, with BC seeing the highest increase and Nova Scotia posting a decline after recent growth. For commercial property, there was a 20.8 per hike in permits, with Ontario and Manitoba gaining most and Quebec, Saskatchewan and Nova Scotia seeing declines following large increases in April. Read the full story.
High end property soaring
Property over $1 million is a booming market in our four biggest cities according to Sotheby’s. The real estate firm’s report published today says that Vancouver, Toronto, Calgary and Montreal have all seen increased sales in the luxury market, with an overall growth of around a third year on year. They are predicting strong results for all markets in the second half of the year too. There are some sectors that show less growth; the Calgary luxury condo market for example; but that was largely due to fewer high-end properties being available. Sotheby’s points to greater consumer confidence and low mortgage rates among the drivers of the strong luxury market. Those buying a property over $1 million will no longer be able to get insurance from the CHMC from the end of this month, but this is not expected to cause a major problem for this part of the market. Read the full story.
China could threaten our booming housing market
Chinese investment in real estate is worth many billions of dollars; the exact amount is hard to assess as many of the loans are from outside the banking system. This is where the potential problem could be. Some analysts are questioning how good the loans are and the impact that it could have on international real estate if a high number go bad. While the main focus of Chinese investment in property has been in London, Chicago and Sydney; Canada is another favourite market for Asian-Pacific investment. The concern is that if bad loans end in default, it could have serious repercussions for our housing market. An MP in Australia is calling for the situation to be looked in to more closely and the Chinese authorities are trying to tighten regulations on the so called shadow-banking market. Read the full story.
Residents complain of the ‘wild west’ of Vancouver construction
Although the new Stats Canada report of increased demand for building permits is good for the economy and the market, it’s not always popular with existing residents. The noise, the dust, the construction traffic; can become a big irritation especially for those living in an area of almost constant development. A couple in Dunbar are calling for Vancouver to address the problem, and perhaps appoint an ombudsman to oversee complaints about construction. Homeowner Michael Denos says his complaint is not so much about the everyday inconvenience of living next door to a construction site, he alleges damage to his own property by developers and another property nearby is about to be redeveloped too. Mr Denos is not alone, neighbourhood groups are concerned at the level of development in the west side of Vancouver, particularly given the number of heritage buildings that are being demolished; the city issued over 1000 demolition permits last year. Read the full story.
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