Montreal Real Estate, Montreal Real Estate Developers, Montreal Real Estate Broker - Montreal Realtor Alexendre Sebe

Slight Increase in Existing-Home Sales in the U.S.

alexandre sebe — Thu, 23 May 2013 14:51:28 -0400

Slight Increase in Existing-Home Sales in the U.S.

According to the National Association of Realtors (NAR), U.S. existing-home sales decreased by 0.6 per cent in March 2013 compared to the previous month to reach 4,920,000 units (seasonally adjusted and annualized data). Compared to March 2012, however, this represents an increase of 10.3 per cent.

Source: National Association of Realtors

According to the National Association of Realtors (NAR), U.S. existing-home sales increased by 0.6 per cent in April 2013 compared to the previous month to reach 4.97 million units (seasonally adjusted and annualized data). Sales in March 2013 were revised upwards for a total of 4.94 million, narrowing this month's increase. However, compared to April of last year, sales grew by 9.7 per cent.

According to NAR, the median price of existing homes in the United States, for all housing types, was $192,800 in April 2013, an 11 per cent increase compared to April 2012. This was the 14th consecutive increase in median price and one of the largest increases since November 2005.

A significant drop in distressed sales (sales concluded at a sale price following a current or completed seizure of a property), among total sales, which fell from 28 per cent in April 2012 to 18 per cent in April 2013, contributed to the increase in median price.

Source: National Association of Realtors

To view the official NAR press release, click here.

Details About the United States Resale Market

Figures on existing home sales in the United States are published every month by the National Association of Realtors (NAR). They are expressed on a seasonally adjusted and annualized basis, which represents what the annual sales level would be if the sales pace of the current month is maintained for a full year. As we do here for the Québec resale market, the NAR publishes the median price of properties sold, rather than the average price.

The Resale Market in the United States and the Resale Market in Québec

The evolution of the U.S. resale market is a good point of comparison with real estate activity in Canada and Québec. Activity on the U.S. resale market may affect the housing market in Canada and Québec due to its potential influence on consumer confidence here in Canada. For example, a difficult situation on the U.S. real estate market may have a negative impact on Canadian consumer confidence, as consumers here may worry about a potential deterioration of Canada’s real estate activity.

- See more at: http://www.fciq.ca/Nouvelles_economiques/ReventeUS_EN.html?utm_source=Economic+News+QFREB&utm_campaign=ab71095f93-ECONOMIC_NEWS&utm_medium=email&utm_term=0_51fec631c0-ab71095f93-236107705#sthash.fLFNEijX.dpuf

Ninth Consecutive Drop in Residential Home Sales in Canada in April

alexandre sebe — Fri, 17 May 2013 11:24:56 -0400

Ninth Consecutive Drop in Residential Home Sales in Canada in April

Note: The data presented below are not seasonally adjusted so that they can be compared with data published by the QFREB. The Canadian Real Estate Association (CREA) publishes seasonally adjusted data in its monthly news release. As a result, there are certain differences between this document and CREA’s publication.

According to The Canadian Real Estate Association, there were 47,997 MLS® residential sales transactions in Canada in April 2013, a 3.1 per cent decrease compared to April 2012. This was the ninth consecutive decrease in sales, always comparing the month of the current year with the same month of the previous year.

Although MLS® sales in Alberta grew by 5.2 per cent, a slowdown was observed in Québec (-7 per cent), Manitoba (-8.8 per cent), Saskatchewan (-5.2 per cent), Ontario (-3.4 per cent) and, to a lesser extent, British Columbia (-2.2 per cent).

Source: The Canadian Real Estate Association

The average price for all residential properties sold in Canada reached $380,588 in April 2013, a 1.3 per cent increase compared to April of last year. The average property price in Alberta, Saskatchewan and Manitoba fell by 3.6 per cent, 4.1 per cent and 3.5 per cent, respectively. In Ontario, the average price increased slightly by 1.1 per cent, while in Québec it grew by 1.6 per cent.

Source: The Canadian Real Estate Association

Flaherty says Canadian real estate trust wave not a concern

alexandre sebe — Fri, 17 May 2013 11:23:54 -0400

Flaherty says Canadian real estate trust wave not a concern

OTTAWA – Canadian Finance Minister Jim Flaherty says he’s not worried by the recent wave of businesses spinning off real estate assets into tax-preferred trusts.

Canadian Tire, the country’s largest sporting goods retailer, said last week it will create a $3.5 billion real estate investment trust in an initial public offering this fall, becoming the eighth company to either sell or propose such an IPO this year.

“We have seen an uptick in commercial real estate certainly in recent times, so in that sense, it doesn’t surprise me,” Flaherty said Monday in an interview in Aylesbury, near London, where he was attending a meeting of Group of Seven finance officials. “As long as people play within the rules, we won’t need to intervene.”

Flaherty moved in 2006 to stop a trend of companies converting to high-yield income-trust securities in order to take advantage of favourable tax rules at the time. So-called real estate investment trusts, or REITs, were exempted in that decision, and Flaherty said in the interview that they deserve to be treated differently.

“We did not eliminate REITs back in 2006 because they were not considered to be passive investment vehicles,” Flaherty said. “They actually invest and reinvest in shopping malls and office buildings and various other things, so it’s not just a money flow-through to passive investors.”

Canadian Tire is joining Loblaw Cos., the country’s biggest grocery chain by market value, which said it plans to file regulatory documents for a $7 billion REIT this month. Retailers are using REITs to raise capital from yield-hungry investors amid increasing competition from U.S. companies such as Target Corp.

Hudson’s Bay Co., the Canadian retailer established in 1670, is looking at creating a REIT “sometime in the future,” chief executive officer Richard Baker said last month.

REITs, which receive preferential tax treatment from the government, are companies that invest in income-producing real estate and pay out most of their income to investors through unit distributions. They have raised $760 million from six Canadian IPOs this year, including Milestone Apartments REIT and Agellan Commercial REIT, to account for 74 per cent of $1.03 billion raised from initial offerings this year in the country, data compiled by Bloomberg show.

Canadian REITs raised almost $500 million in seven IPOs last year, more than any other industry in Canada, the data show. The Standard & Poor’s/TSX Capped REIT Index soared 165 per cent from a five-year low on March 9, 2009 through May 10. The benchmark S&P/TSX Composite index rose 66 per cent over the same period.

Flaherty also said in the interview his government will probably appoint a new chief executive at Canada Mortgage & Housing Corp. with experience in finance, because the nation’s housing agency has become an important financial institution. Karen Kinsley, CEO of the housing corporation, said last week she is stepping down, while the government this month also named Robert Kelly, former chief executive officer at Bank of New York Mellon Corp., as the agency’s new chair.

“It’s morphed into one of Canada’s largest financial institutions,” Flaherty said, adding Kelly is a “fabulous” appointment. “To be frank, its board did not reflect that fact.”

Flaherty gave new powers last year to the nation’s banking regulator to oversee the corporation’s finances and added two government deputy ministers to the agency’s board of directors. Most mortgage insurance in Canada is provided by the corporation, which is backed by the federal government’s top credit rating. The value of mortgages insured by the government’s housing agency was $566 billion at the end of 2012, according to its annual report, almost double from $291 billion in 2006.

The changes to the corporation’s oversight made last year require the Office of the Superintendent of Financial Institutions to check the housing agency’s finances at least once a year. Asked if the government planned any changes at the housing agency, Flaherty said he’ll wait for the results of the first review by OSFI. He didn’t say when that would be.

SOURCE:Bloomberg News

Signs of spring – and a soft landing – in Canadian real estate

alexandre sebe — Fri, 17 May 2013 11:18:52 -0400

Signs of spring – and a soft landing – in Canadian real estate

The housing market is doing precisely what policy makers in Ottawa set out to achieve, cooling down without flaming out.

The number of homes that changed hands over the Multiple Listing Service in April was just 3 per cent lower than a year ago on an annual basis, compared with a 15-per-cent drop in March. April’s relatively small decline comes on the heels of average declines that topped 13 per cent during the previous five months, noted Royal Bank of Canada economist Robert Hogue.

Economists say the latest data imply that the market is coasting toward the soft landing that Finance Minister Jim Flaherty and Bank of Canada Governor Mark Carney have been seeking. They expect sales this spring to edge upward, but not to return to the blistering pace of early last year.

The signs of a thaw in the Canadian housing market are especially encouraging heading into the all-important spring home-buying season, said Toronto-Dominion Bank economist Sonya Gulati. But she added that she does not expect sales to rebound significantly in coming months.

“There simply is no economic impetus for a full-fledged comeback in the cards,” she wrote in a research note. “In turn, the 2013 spring home-buying season should be mediocre at best.”

That will be welcome news to policy makers, because a revival of the housing market at this stage could once again raise fears of a bubble, something that Mr. Flaherty has suggested has not occurred so far. In a bid to keep it that way, he coaxed banks into backing off from some ultralow posted five-year mortgage rates in March.

“Generationally low borrowing costs will continue to provide underlying support to domestic housing activity,” Bank of Nova Scotia economist Adrienne Warren wrote in a research note. “At the same time, however, high home prices and tighter mortgage rules are squeezing affordability, especially for first-time homebuyers.” Over all, Ms. Warren expects Canadians to remain more cautious about borrowing and spending.

Thirty-year-old Daniel Collins-Forrester had been looking at homes for the past year and bought his first house, a bungalow in Oshawa, Ont., last month. Over the course of the time he was looking, he noticed more buyers actively on the hunt for homes. “There was more competition than I’d thought,” he said.

Sales fell in April on a year-over-year basis in about 60 per cent of the local markets that the Canadian Real Estate Association tracks; that was still an improvement from March, when sales declined in more than 90 per cent of local markets.

Home prices as measured by the MLS Home Price Index were up 2.2 per cent from a year earlier, the smallest gain in more than two years. But they are still rising faster than inflation, and prices are at all-time highs, pointed out Bank of Montreal economist Doug Porter. “Despite the very loud gnashing of teeth and excessive wringing of hands for well over a year on the topic, Canadian home prices remain incredibly calm, cool, and collected,” he said.

There are regional variations. Calgary saw sales rise 10.4 per cent and its average selling price rise 3.6 per cent from a year ago, to $429,717 from $414,932. In Toronto, where sales fell 5.2 per cent, the average selling price rose 1.7 per cent to $526,335 from $517,556. Vancouver, which led sales declines last year, saw sales fall 6 per cent, while the average selling price rose by 0.6 per cent from a year ago to $739,587.

The number of newly listed homes in April came in 0.9-per-cent below March, and the decline in new listings has been a key factor that’s kept home prices from full-scale retreat despite the double-digit correction in sales, said Mr. Hogue, the RBC economist.

“The interesting – and often overlooked – development in the past year or so has been the restraint on the supply side of the market,” he wrote in a note. “The cooling of the market, in fact, took place on both sides of the equation – buyers and sellers.”

And the wider economic situation is unlikely to upset that balance, Bank of Montreal economist Sal Guatieri said. “Unlike the early 1990s experience with double-digit unemployment and mortgage rates, or the more recent U.S. subprime credit debacle, Canadian home owners are under no pressure to sell amid record-low interest rates and relatively low joblessness.”

Quebec realtors dispute figures showing more condos on sale in Montreal than Toronto

alexandre sebe — Sat, 04 May 2013 07:38:43 -0400

Quebec realtors dispute figures showing more condos on sale in Montreal than Toronto

Condos: “Montreal is actually where the greatest supply-demand imbalance currently exists,” analyst Ben Rabidoux wrote Wednesday in The Globe and Mail.

Photograph by: Allen McInnis , The Gazette

MONTREAL — Whenever there’s a big national story on the spectre of a tidal wave of plunging resale prices, empty condos and foreclosures turning major Canadian housing markets into ghost towns, the epicentre of the impending collapse always seems to be in either Toronto or Vancouver.

So when recent opinion pieces warned of “signs of another bust in the making” — that the number of homes for sale in Greater Montreal on the Multiple Listing Service now surpassed active listings in Vancouver and Toronto combined, the figures were startling.

Equally surprising were figures showing double the number of condos for sale on the MLS (or on the Centris listing system in Quebec) in Greater Montreal as in Greater Toronto — the largest real estate market in the country, which has more condos under construction than anywhere else in North America.

“Montreal is actually where the greatest supply-demand imbalance currently exists,” analyst Ben Rabidoux wrote Wednesday in The Globe and Mail.

While active listings for condos have soared in Montreal, direct comparisons between the number of homes for sale in the two cities have come under fire.

In a response Wednesday, the Quebec Federation of Real Estate Boards challenged the argument that there were more condos for sale in Montreal than in Toronto, citing the disparity in housing starts between the two cities.

There are now 51,000 condos under construction in Greater Toronto, compared to 12,600 in Greater Montreal, the federation said, citing Canada Mortgage and Housing Corp. data. As of January, 20,800 of those condos in Toronto have yet to be sold, compared to 5,800 units in Montreal, wrote Paul Cardinal, the federation’s director for market analysis citing data from research firms in both cities.

“Right there, that’s about four times less than in Toronto,” Cardinal wrote.

“It’s clear that there are far more condos for sale in Greater Toronto than in Greater Montreal. So we cannot confirm that supply is more problematic in (Montreal) than in Toronto.”

What’s more, the Toronto Real Estate Board tracts data separately for condo apartments and condo townhouses, while in Montreal, those numbers are compiled in one category for all types of condos. Yet most of the comparisons between the cities include all 12,623 condos for sale in Montreal last month, but only cite the 6,123 condo apartments in Toronto, which make up the majority of the active listings in that category.

In March, there were about 1,000 condo townhouses for sale in Toronto, data from the TREB show.

But while the comparison may not be two to one, there is still a gap in the active listings between the two cities.

Either way, it’s clear that supply is rising in Greater Montreal, where the condo market now favours buyers for the first time in 15 years with March inventory up 25 per cent to 12,623 units, compared to the same month in 2012.

While certain Montreal condo projects have already sold out, some developers are now giving away cars, raising brokers’ commissions and running special promotions to sell units. And on Saturday, the downtown Montreal condo tower Avenue is holding a sale where buyers can get higher-floor apartments for the same price as units on lower levels.

For Montreal buyers, it doesn’t take a comparison with Toronto to know that choices abound these days in the city’s condo market.

alampert@montrealgazette.com

Twitter:@RealDealMtl

SOURCE:The Montreal Gazette

Realistic pricing pays off in sales in a slowing housing market

alexandre sebe — Sat, 04 May 2013 07:29:06 -0400

Realistic pricing pays off in sales in a slowing housing market

Real estate broker Nina Miller says that despite the slowdown in Montreal’s real estate market, brokers like her are still selling homes in a matter of days when they’re priced realistically.

Photograph by: Phil Carpenter , Montreal Gazette

MONTREAL — Real estate broker Nina Miller advertised the home in the paper, but the offers arrived so quickly she didn’t have the chance to even put up a “for sale” sign outside the Hampstead cottage.

Despite the recent slowdown in Montreal’s real estate market, Miller’s phone buzzed with inquiries last month as soon as she’d listed the renovated, four-bedroom house for sale mid-week. She showed it that weekend, while her clients were off for a quick getaway in the Laurentians. By the time they got back, she’d received a conditional offer on the home for just over $1.1 million — the full listing price.

“There are still some homes that sell right away,” Miller said. “There are buyers for turnkey homes. And it (the Hampstead home) was priced properly. What happens often is that people put their properties out for $200,000, or even $300,000 too high. It takes a much longer time to sell because it puts (buyers) off.”

That the home took a week to sell was not a one-off fluke, buyers, evaluators, mortgage and real estate brokers say, even at a time when the inventory of Montreal homes for sale is at its highest point since the late 1990s. Indeed, brokers point to several cases of Montreal Island properties selling for full asking-price within days — or even within hours at some new condo towers.

They suggest the current market slowdown is due not just to the highly-publicized tightening of rules on insured mortgages and a vast condo supply inflated by years of near-record construction — but also to some extent, by greedy sellers. Indeed, a Gazette analysis of around 70,000 Montreal homes sold by brokers since 2008 shows the gap between average asking and selling prices widens as the real estate market gets weaker, suggesting some sellers are still making unrealistic demands following years of rapidly climbing property values.

“If you bought last year, there won’t be any appreciation,” noted Brad Weigensberg, a BMO mortgage specialist.

In April, Royal LePage Real Estate Services said it expects Greater Montreal home prices will decline between three to five per cent this spring as sellers recognize they’ll have to “negotiate further with buyers to sell their homes.” The Greater Montreal Real Estate Board says median prices are still expected to rise slightly this year.

According to board data, it took an average of 77 days to sell a single family home on Montreal Island during the first three months of 2013, up 10 days from the same quarter in 2012, after tougher July rules on insured mortgages hit an already weakening housing market. While owners of single family homes still have a slight advantage when they sell their properties, Montreal Island’s condo market now favours buyers for the first time in 15 years.

Yet unlike the economic downturn of 2008 and 2009, triggered by the collapse of the U.S. housing market and subsequent global credit crunch, softening demand for homes in cities like Montreal isn’t linked to weakening employment or plummeting consumer confidence. On the contrary, Quebec’s unemployment rate dropped to 7.4 per cent during the first quarter of 2013 and record-low mortgage interest rates are unlikely to rise before 2015, analysts say.

“This (the slowdown in sales) cannot be based on any one macro-economic indicator,” said National Bank economist Marc Pinsonneault.

“I think it’s different this time around,” agreed Dominic St-Pierre, director of Royal LePage for Quebec. “Now it’s not a question of consumer confidence. Buyers just don’t feel that the prices they’re seeing are the right ones. It’s not that people don’t want to buy, it’s just that they can now be very selective.”

Pinsonneault attributes slowing sales to the July rules, which, among other changes, reduced the amortization period on insured mortgages from 30 to 25 years. But even before July, the market was slowing because of warnings by the Bank of Canada over rising personal debt, and soaring real estate prices that have far outpaced salaries over the last decade. According to the Teranet House Price Index, the price of a Greater Montreal home soared more than 103 per cent between 2002 and 2012, Pinsonneault said.

Active listings have swelled as the once-common practice of “testing” the market — where owners price their homes significantly above market value and then negotiate — no longer translate into sales.

“In the past, it was always set your prices and then negotiate,” mortgage specialist Weigensberg said. “Now the houses are getting burned if they are on the market for too long.

“This means being realistic. Shoot for your final negotiated price at the beginning.”

While “they’re not the majority of sales,” St. Pierre says he still sees cases of homes selling within days.

Take Royal LePage real estate broker Patricia Benezra, who recently sold two homes within a week. One of the houses, a four bedroom cottage in St-Laurent that was listed at $849,000, sold for $826,000 within a week.

“It was sold at the price that it should be sold at,” she said. “My clients listened to me.”

Then there was the 1950s duplex in Outremont that sold in six days, for $36,000 above the $969,000 asking price, and $300,000 above the municipal evaluation.

The buyers of the duplex had been househunting for three years, and knew what comparable properties in the area were selling for, said their broker Marc Fragman.

“We know whether it’s the right price or not,” said Fragman of the RE/MAX-affiliated Équipe Bardagi. “There is a great demand for Outremont, and there is not a lot of inventory.”

For Miller, coming up with a fair price for the old Hampstead home wasn’t difficult since she had recently sold a similar home in the area that was just a bit smaller for $1,075,000.

“I think they were happy,” she said of her clients. “Sometimes you wonder if you shouldn’t have put the price higher, but I think they were realistic.”

alampert@montrealgazette.com

SOURCE: The Montreal Gazette

Foreign investors prominent in Canada's luxury real estate market

alexandre sebe — Sat, 20 Apr 2013 22:05:22 -0400

Foreign investors prominent in Canada's luxury real estate market.

Toronto has a smaller proportion of foreign buyers in its luxury real estate market, but it still accounts for the bulk of luxury sales to foreigners in the country. (Sotheby's International Realty Canada )

Foreign investors have a prominent and growing influence in the luxury real estate markets of Montreal, Vancouver and Toronto, a realtor survey by Sotheby's International Realty Canada suggests.

Half of the luxury home buyers in Montreal are from other countries while in Vancouver it's 40 per cent, the Sotheby's Top Tier Trend Report found.

The company, which specializes in high-end real estate, surveyed around 30 Sotheby's realtors responsible for the firm's biggest deals in a dozen Canadian markets.

"In every market, they're dealing with more international buyers, and in a place like Montreal, it's significantly more than they've ever seen," said company president and CEO Ross McCredie.

Montreal has seen buyers from China, Syria, Mexico, Russia and the U.S. emerging as big players in the luxury market in recent years, and McCredie says agents also reported an increase in buyers from Egypt and the Middle East in the wake of the Arab Spring uprisings in that region.

The highest average entry price for luxury single family homes in Montreal is $3.5 million, with buyers favouring established neighbourhoods like Westmount and Outremont, as well as the downtown district of Ville-Marie and the tony Town of Mount Royal, a small municipality in the centre of the island of Montreal.

Vancouver sees influx of Iranian, U.S. buyers

In Toronto, where international buyers make up 25 per cent of the luxury market, the average starting price for a luxury single family home is $2 million, the same as in Calgary. In Vancouver, it's $2.8 million, although that price can fluctuate from about $4 million in neighbourhoods such as the West Side to $2 million in North Vancouver.

This quaint house is considered a luxury property in Vancouver, where the starting price for luxury homes can be as high as $4 million in neighbourhoods like the West Side. (Sotheby's International Realty Canada )

Buyers from China continue to be the most dominant investors influencing the luxury market in Vancouver, the report said, but investors from Iran and the U.S. have recently increased their share of the market.

Foreigners buying luxury homes in Toronto are mainly from the U.S., China, Russia, the Middle East and India and gravitate to wealthy enclaves like Rosedale, Forest Hill or the Bridle Path, as well as downtown areas such as the Annex, Yorkdale and Hoggs Hollow.

While Toronto may have a smaller proportion of foreign buyers, it still has the largest volume of luxury sales, accounting for between 70 and 80 per cent of the market, McCredie said.

"Toronto has been a more established market, and foreigners have been buying there for a long time," he said. "The difference is the foreigners have not been buying in Montreal to the same degree — and Vancouver."

Calgary's luxury market is driven mainly by younger Canadian buyers. The city has the lowest proportion of foreign buyers among the large cities where realtors noted an increase. Foreigners account for only 15 per cent of the luxury market, although McCredie says that is still more than what it was a few years ago.

Market would suffer without foreign buyers

In all four cities, foreign investors are key players whose influence is felt, McCredie said.

"If you take those buyers out of our market …it would have a massive impact on the housing market — and certainly in the high end," he said.

To get a clear picture of what role foreign buyers are playing in the Canadian market, one needs to first ask what they're doing with the properties they purchase, says Ben Rabidoux, an analyst with Mark Hanson Advisers.

"For example, if all of a sudden, the U.S. starts to recover, will that money flow out of our housing market and into the States?" he said. "Is it hot money looking for a quick return? That would be my concern."

McCredie says his customers are not flipping properties but using them as second homes or vacation properties. The typical profile of a foreign buyer is often a member of a large wealthy family that owns at least three properties in different countries, and often more, he says.

"We recently worked with a family that was from Poland," McCredie said. "They had about eight properties worldwide. They arrived in Vancouver, and they bought a property in Vancouver, they bought a property in Whistler, they bought a property in Toronto, and they're coming back next year and they want to buy something in Montreal."

It's families like that that can turn a whole market around, says McCredie, by bringing in multiple buyers at once and by influencing people within their ethnic community to buy into the market — or conversely, to pull out. That ripple effect is also why certain nationalities will emerge as dominant in the market for a certain time and later be replaced by others.

Canadians still 'driving' market

Sotheby's qualified its findings by saying in the report that "while international buyers play a more prominent influence in urban markets such as Vancouver, Montreal and Toronto, it is largely Canadian buyers who are driving the purchase of top-tier family homes in the majority of markets surveyed."

But there's no doubt that it's the high-stakes foreign buyers who have been getting most of the press in recent years. Last spring, a $1-million sale of a modest bungalow in north Toronto to a university student from China made headlines around the country.

Rabidoux says that while the Sotheby's report does echo what analysts and realtors have been hearing anecdotally for years, it's hard to draw firm conclusions about foreign participation in the real estate market without the numbers to back it up.

"There's very little strong, hard data on the prevalence of foreign buyers," he said. "At this point in the cycle, I think that's something the policy makers need to be looking at, because it could well be an important part in understanding why house prices in Canada are where they are. I don't know, but I would think it's something the policy makers would want to look into."

Canada lags behind other jurisdictions, such as the U.S., when it comes to compiling solid statistics on the real estate market, Rabidoux said.

"They have a very strong sense of who's buying in what market segments," he said. "They can tell you the exact percentage of foreign investors that bought in a certain Florida neighbourhood in the past three months, and we don't have that data availability here, and I think it's problematic."

Having better data would also help inform the conversation about whether Canada should follow the example of countries like Australia and place greater restrictions on foreign ownership of property, he said. Currently, what limits do exist are at the provincial level and mostly pertain to agricultural land

162 Av. Percival, Montreal, Quebec

alexandre sebe — Sat, 20 Apr 2013 21:30:34 -0400

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Greater Montreal a buyer’s market for condos

alexandre sebe — Sat, 13 Apr 2013 12:53:12 -0400

Greater Montreal a buyer’s market for condos

One of many new condo projects, Le William, begins to take shape in the Griffintown district of Montreal.

Photograph by: Allen McInnis , Montreal Gazette

MONTREAL — Greater Montreal’s condo market now favours buyers for the first time in 15 years, after the number of units listed for sale soared 25 per cent in March compared to the same month in 2012, the Greater Montreal Real Estate Board said Monday.

“Market conditions for condominiums have been relaxing quickly in recent months,” said Diane Ménard, vice-president of the GMREB board of directors, in a statement. “In early 2012, the condominium market still (favoured) sellers slightly, but after a short period in balanced territory the condominium market is now a buyer’s market, both on the island of Montreal and in the suburbs.”

Buyers can now choose from 12,623 condos listed for sale in Montreal — nearly double the number of condo apartments and townhouses listed in Canada’s largest real estate market, Greater Toronto — data from both real estate boards show. Montreal, however, has historically had a larger number of condos and homes in all categories for sale at a given time than in Toronto, five years of real estate board data compiled by analyst Ben Rabidoux show.

In Greater Montreal, where the number of total properties for sale has grown by more than 40 per cent over three years to nearly 33,000 in March, some analysts and real estate agencies are forecasting a price drop of three to five per cent in 2013.

Since August, the price of a Montreal home has declined 2.1 per cent, according to the Teranet National Bank House Price Index, senior economist Marc Pinsonneault said. Montreal home prices, however, are still up two per cent over 2012, the Teranet index showed in February.

The real estate industry continues to blame the federal government’s July tightening of rules governing insured mortgages for the slowdown in Canada’s major markets — Greater Montreal resales were down by 17 per cent last month compared to an especially strong March in 2012.

What’s more, Montreal real estate brokers point to a reluctance by sellers to lower their prices to meet demand in a slowing market, where buyers are no longer rushed by the fear of missing out on low interest rates.

In its latest quarterly outlook, national real estate services firm Royal LePage said last week it expects Montreal condo prices to drop by up to five per cent during the spring home-buying season, as impatient sellers finally agree to bargain with buyers after months of slowing sales.

“Gone are the days of fishing,” said Montreal real estate broker Carly Fridman, in reference to the practice of listing properties at inflated prices with the hope of catching an eager buyer. “You can still make money by selling your house. The market is not collapsing by any means.

“But you have to be competitively priced to sell. They (sellers) really have to start listening to the market.”

Fridman said buyers — especially those who are looking for a condominium — are no longer as motivated to purchase a home quickly as they were in 2011 when the market was fuelled by the allure of rock-bottom rates.

“Interest rates aren’t going up, and if they do go up, they’re rising very slowly,” she said. “Many buyers are still buying, but they’re not in a rush. They want the right price. They’re being picky because they can.”

In Greater Montreal, total sales for all types of property were down 18 per cent during the first quarter of 2013, compared to an exceptionally strong first three months of 2012. The median price for a condo on Greater Montreal was flat at $220,000 during the first quarter, while it dipped two per cent on Montreal Island to $255,000.

Prices of single-family homes — that market remains balanced in Greater Montreal — grew one per cent during the first quarter of 2013, while rising three per cent on Montreal Island.

alampert@montrealgazette.com

Twitter: @RealDealMtl

SOURCE: The Montreal Gazette

Residential Sales Fall in Montreal Area in First Quarter of 2013

alexandre sebe — Sat, 13 Apr 2013 12:51:39 -0400

Residential Sales Fall in Montreal Area in First Quarter of 2013

Centris® Residential Sales Statistics for the Montreal Metropolitan Area

ÎLE-DES-SOEURS, QUEBEC--(Marketwired - April 12, 2013) - According to the real estate brokers' provincial database, there were 9,927 residential sales transactions in the Montréal Metropolitan Area in the first quarter of 2013, an 18 per cent decrease compared to the first quarter of 2012, indicated the Québec Federation of Real Estate Boards.

"We're still feeling the effects of the new mortgage rules introduced last summer," said Diane Ménard, Vice-President of the GMREB Board of Directors and spokesperson for the Québec Federation of Real Estate Boards (QFREB) for the Montréal area. "Since the tightening of the rules, this has been the third consecutive quarterly decrease in sales in the Montréal area," she added.

All property categories and all geographic areas were affected by the sales slowdown in the first quarter of 2013. The North Shore fared best with an 11 per cent decrease in sales.

The median price of single-family homes in the Montréal area increased by 1 per cent to reach $272,000. The median price of condominiums remained stable at $220,000 and that of plexes grew by 2 per cent, reaching $420,000, compared to the first quarter of 2012.

The number of properties for sale increased by 10 per cent in the first quarter of the year, mainly due to a sharp increase in the supply (25 per cent) of condominiums.

"Buyers now have the upper hand on the Montréal condominium market, for the first time in 15 years," said Paul Cardinal, Manager, Market Analysis, at the Québec Federation of Real Estate Boards. "In general, sellers of condominiums must now be more patient as the average selling time reached 108 days in the first quarter of 2013, 18 more days compared to one year earlier," he added.

Province's Real Estate Market Slows in First Quarter of 2013

According to the real estate brokers' provincial database, there were 18,939 residential sales transactions in the province of Québec in the first quarter of 2013, a 16 per cent decrease compared to the first quarter of 2012, indicated the Québec Federation of Real Estate Boards (QFREB).

The decrease in sales was spread across all of the province's metropolitan areas and most of its smaller urban centres. Only the agglomerations of Rouyn-Noranda (+25 per cent), Salaberry-de-Valleyfield (+6 per cent) and Shawinigan (+6 per cent) bucked the trend and posted an increase in sales. In contrast, the agglomerations of Sept-Îles (-36 per cent), Val-d'Or (-27 per cent) and Drummondville (-28 per cent) registered the largest decreases in sales.

The median price of single-family homes across the province stood at $225,000 in the first quarter of the year, only $1,000 more than in the first quarter of 2012. The largest price increases for single-family homes were in the agglomerations of Val-d'Or (+15 per cent), Saint-Lin-Laurentides (+8 per cent), Saint-Hyacinthe (+8 per cent) and Sept-Îles (+7 per cent). Among the Census Metropolitan Areas (CMAs), Saguenay registered the largest increase in median price of single-family homes, at 4 per cent.

As for condominiums, the provincial median price reached $208,000 in the first quarter of 2013, up 1 per cent compared to the same period in 2012. The largest price increases were in the agglomerations of Granby (+13 per cent) and Saint-Hyacinthe (+8 per cent), as well as in the Québec City CMA (+7 per cent).

The number of properties for sale increased for a twelfth consecutive quarter. There were an average of 70,239 properties listed on the Centris^® system in the first quarter of 2013, a 7 per cent increase compared to the first quarter of last year. "The increase in supply and the decrease in sales resulted in an easing of market conditions in most urban centres, which translated into smaller price increases and longer average selling times," explained Paul Cardinal, Manager of the Market Analysis Department at the QFREB.

About the Greater Montréal Real Estate Board

The Greater Montréal Real Estate Board is a non-profit organization that brings together close to 11,000 real estate broker members. Its mission is to actively promote and protect its members' professional and business interests in order for them to successfully meet their business objectives.

About the Québec Federation of Real Estate Boards

The Québec Federation of Real Estate Boards is a non-profit organization composed of Québec's 12 real estate boards and more than 14,000 real estate brokers who are members. Its mission is to promote and protect the interests of Québec's real estate industry so that the boards and their members can successfully meet their business objectives.

About Centris®

Centris^®, a division of the Greater Montréal Real Estate Board, offers technology resources to Québec's 12 real estate boards and their 14,000 real estate brokers. Centris.ca is Québec's real estate industry website for consumers, grouping all properties for sale by a real estate broker under the same address.

For more information on the Centris^® statistics for each of the province's regions, don't miss the upcoming publication of the QFREB Barometer.

Construction, permits point to Canadian housing soft landing, not crash

alexandre sebe — Tue, 09 Apr 2013 12:52:01 -0400

Construction, permits point to Canadian housing soft landing, not crash.

By Julian Beltrame, The Canadian Press

OTTAWA - There are fresh signs of cooling in the Canadian housing market, but analysts say fears of a major crash have yet to materialize.

Canada Mortgage and Housing Corp. reported Tuesday that the pace of housing starts crept up slightly last month from February, despite a drop in the number of single dwellings begun in some urban markets.

Starts in March totalled 12,273 or 184,028 annualized, just slightly higher than in February but down 13.6 per cent from a year ago.

Simultaneously, Statistics Canada released a report on building permits that showed future building intentions for residential construction fell 7.2 per cent in February to $3.6 billion.

Both numbers were bad news for the Canadian economy as a whole, suggesting the key housing market will be a net drag on growth during the quarter and likely in the near term as starts and sales come off higher levels of previous years.

But analysts added that the recent slow descent from very high altitudes in a sector that some calculate is overpriced by as much as 25 per cent and overbuilt — especially in Vancouver and Toronto — is actually what the doctor ordered and may hold off a punitive collapse.

"The slowdown suggests we are not crashing, people are not panicking, especially condo builders," said Benjamin Tal, a senior economist with CIBC World Markets.

"All the indicators we are seeing as of today, in the resale market and in the housing start market, suggest this is a market that is slowing softly. We should be in the neighbourhood of 170,000 to 180,000 in housing starts and we should be getting there."

Tal said demographics dictate that builders should be erecting about 180,000 new units a year in order to keep the market in equilibrium. At 184,000, that is still too high and he predicts starts will eventually slow to about 170,000 to soak up excess supply.

Canada's housing market, which had been among the world's hottest following the recession, began to slow at about this time last year and braked sharply after Finance Minister Jim Flaherty tightened mortgage rules in July. The policy move, which made it more difficult for first-time buyers to enter the market, was widely praised at the time as necessary to avoid a U.S.-light housing crash that would be crippling to the economy.

Recently, Flaherty has upbraided lenders from cutting mortgage rates too far and undercutting his policy objectives, succeeding in having both the Bank of Montreal and the Manulife reverse mortgage rate cuts.

Arlene Kish of IHS Global Insight said she expected residential construction to remain subdued for the rest of the year, but added that it has become "increasingly unlikely there will be any kind of precipitous collapse in new home building activity."

A major ballast for the market is that despite Flaherty's recent efforts, mortgage rates remain at historic lows, and affordability — the measure of household disposable income in relation to home ownership costs — remains near historic levels.

Tal said the cooling, if it continues for a year so, will prepare the market for the eventual squeeze when interest rates start rising, likely in 2014.

"We've never seen a crash without a trigger. In 1990-91, the trigger was a huge increase in interest rates. In the U.S., the trigger was an increase in interest rates and the sub-prime shock," he explained.

"So any slowing we are doing now without those triggers is a bonus because it means we will be more ready to absorb interest rates rising."

The March start numbers show the downturn was all in urban construction, which dipped slipped 2.7 per cent to 157,217 as single-unit construction fell 6.6 per cent and multiples by 0.1 per cent. By contrast, rural starts had their best month in three years, increasing 24 per cent to 26,800 units.

Regionally, urban starts decreased 15.7 per cent in Ontario on a seasonally adjusted annual rate and were down 13.5 per cent in Quebec.

However, urban starts jumped 27.1 per cent in Atlantic Canada, were 13.8 per cent higher on the Prairies and 13.1 per cent higher in British Columbia.

Emanuella Enenajor, an economist at CIBC World Markets, said the overall numbers were in line with her expectations but better than a consensus estimate calling for the seasonally adjusted rate to fall to 175,000 in March.

Canada housing data suggests soft landing so far

alexandre sebe — Tue, 09 Apr 2013 12:51:04 -0400

Canada housing data suggests soft landing so far

By Andrea Hopkins

TORONTO (Reuters) - Canadian housing starts edged higher in March and building permits were weaker than expected in February, reports released on Tuesday showed, offering some reassurance that Canada's housing sector is simply cooling, not crashing.

While housing starts rose for a second straight month, all the strength was in the rural market - urban starts dropped sharply - and a longer-term trend showed construction is continuing to moderate, according to a report from government agency Canada Mortgage and Housing Corp.

Meanwhile, data from Statistics Canada showed the value of Canadian building permits rose a weaker-than-expected 1.7 percent in February as a sharp decline in plans for multi-family housing partially offset strength in other projects.

The reports furnished further evidence of a slowing in Canada's housing market, which was red-hot a year ago but has cooled dramatically since the government tightened mortgage rules in mid 2012 to prevent a U.S.-style real estate bubble.

"So far, so good on the soft landing in Canadian housing," BMO Capital Markets senior economist Robert Kavcic said in a research note, pointing out that starts have receded to just above levels seen two years ago.

"Starts have now bounced back in two straight months since January's deep decline, and the average for all of Q1 sat at a comfortable 177,100. That's ... in line with fundamental demand and probably right about where policymakers would like to see activity."

The seasonally adjusted annualized rate of housing starts was 184,028 units in March, up from 183,207 in February and well above the consensus forecast of analysts in a Reuters poll for 176,500.

But the monthly gain was entirely due to a 24 percent surge in rural starts to the highest level since 2010, a pace one economist said was not sustainable.

The six-month trend level in housing starts was 189,742 in March, continuing a downward slope that began in the middle of 2012, when Canada's robust housing market peaked.

The Conservative federal government tightened mortgage lending rules in July 2012 to cool the sizzling housing sector, its fourth such move in four years. The changes shortened the maximum mortgage length, making it harder for Canadians to take on too much debt to get into the expensive real estate market.

"We look for the level of housing starts to remain around this level for the balance of the year," Mazen Issa, Canada macro strategist at TD Securities, said in a research note.

"Slowing construction will also help limit the risk from an accumulation of inventory when interest rates inevitably move higher. Moreover, at these levels, the pace of construction activity is more in line with demographic fundamentals."

URBAN STARTS DOWN

The rise in the standalone monthly rate of housing starts was fueled by a surge in rural starts. Construction starts fell for urban single-detached houses and edged lower for multiple-unit urban starts, typically condos.

Urban starts fell 2.7 percent in March to 157,217 units, led by a 6.6 percent decline in single-family starts to 60,558 units. Multiple-unit urban starts were relatively unchanged at 96,659 units in March, CMHC said.

Separate data showed Canadian building permits rose 1.7 percent in February after a 1.8 percent gain in January. Market players had expected a February gain of 4.3 percent.

Permits for the nonresidential sector jumped 18.9 percent and residential permits fell 7.2 percent.

In line with the softening trend in the housing market since mid-2012, permits for multi-family housing fell 19.1 percent in February, the seventh decrease in eight months, Statscan said.

Permits for single-family houses rose a tepid 1.1 percent. Municipalities approved 14,071 new residential buildings in February, down 12 percent from January.

"Despite the earlier-released upside surprise in March housing starts, today's data confirm that homebuilding activity could continue to struggle in the months ahead, weighing on the overall economy," Emanuella Enenajor, economist at CIBC World Markets, said in a note.

(Additional reporting by Louise Egan in Ottawa; Editing by Janet Guttsman, Chizu Nomiyama and Peter Galloway)

Home prices edge up in most markets, Royal LePage says

alexandre sebe — Fri, 05 Apr 2013 10:11:06 -0400

Home prices edge up in most markets, Royal LePage says

Home prices are still rising in most markets in Canada, according to the latest market survey from realtor Royal LePage. But there are unmistakeable signs that the market is well into a cooling phase. (Reuters)

Average home prices were slightly higher in Canada during the first quarter, according to the latest survey from realtor Royal LePage.

Royal LePage said the average price for a standard two-storey detached home in the first quarter of this year edged up 2.2 per cent over the same quarter last year to $407,044. The average detached bungalow was worth $364,857 in the January to March quarter — up 2.4 per cent. The average condo in its survey was worth $246,071 — up 1.2 per cent over the year.

Among 16 major markets in Canada, the country's largest real estate company found that prices for all three major types of housing increased year-over-year and quarter-over-quarter in 13 markets. Vancouver, Victoria, and Saint John, N.B., saw price declines in all housing types.

Royal LePage CEO Phil Soper acknowledges that there are some housing watchers who are anticipating big price declines in the Canadian market. But he says his firm hasn't seen that happen yet, and doesn't expect to.

"While some have spoken loudly about impending market volatility and dramatic downward pressure on home prices, we are simply not seeing evidence of this," he said.

"The current environment is very supportive for housing. Those waiting for big declines in home prices will likely be disappointed."

Soper says the housing market is undergoing a bit of an anomaly at the moment.

"The combination of very low mortgage rates and flat home prices, against a background of general economic improvement across the nation, is not something we've seen before," Soper said.

"Typically one of these variables is moving hard in an opposite direction."

Cooling market

Sales data released by the Canadian Real Estate Association last month showed more evidence of downward price pressures. CREA's February numbers, which are based on actual MLS sales, showed year-over-year price declines in seven of 26 markets surveyed, with average prices down by 1.0 per cent overall.

There is broad agreement that the Canadian housing market is cooling. The Teranet-National Bank house price index recorded its sixth straight month-to-month decline in February. CREA data also showed a double-digit drop in sales activity in most markets, with February sales down 11.6 per cent nationally from a year earlier.

The Toronto and Vancouver real estate boards both released sales figures this week for March. Toronto's board said sales were off 17 per cent from a year ago, while Vancouver saw 18.3 per cent fewer sales. Average selling prices were up 3.8 per cent in Toronto from last March, but Vancouver said the MLS home price index composite price was down 3.9 per cent year-over-year.

Some economists are calling for average national prices to drop by about 10 per cent over the next several years. The U.S. ratings agency, Fitch, released a report last month that said Canadian housing prices were overvalued by about 20 per cent. But over the next several years, it said the combination of inflation and existing price momentum would mean that "the actual observed decline in prices could be as low as 10 per cent."

Last year, the federal government tightened mortgage rules to make it more difficult for less-qualified buyers to obtain an insured mortgage.

Royal LePage Q1 2013 home price survey - 2-storey detached houses
City	Avg. price	Change from Q1/2012
St. John's	$387,667	+10.6%
Halifax	$319,833	+4.3%
Charlottetown	$205,000	+2.5%
Saint John, N.B.	$275,000	-6.2%
Montreal	$392,929	+1.4%
Toronto	$671,252	+4.0%
Winnipeg	$319,409	+3.3%
Regina	$337,000	+12.7%
Calgary	$439,800	+5.2%
Vancouver	$1,116,250	-5.6%
Victoria	$452,115	-1.5%
NATIONAL	$407,044	+2.2%

Student protests took bite out of downtown rentals in 2012

alexandre sebe — Fri, 05 Apr 2013 10:09:26 -0400

Student protests took bite out of downtown rentals in 2012

Last year's student protests contributed to weaker demand for downtown Montreal rentals in 2012, a new report says.

Photograph by: ALLEN MCINNIS, THE GAZETTE , The Gazette

Quebec's student strike against higher tuition fees contributed to weaker demand for downtown Montreal rentals in 2012, a blip in what was a record-breaking year for multi-residential deals, a sector outlook to be released by CBRE Limited on Thursday says.

The outlook, timed to the start of the Montreal Real Estate Forum this week, is forecasting $1 billion in multi-residential deals this year - a decline from last year's record-breaking $1.4 billion in investments - largely because of a lack of supply rather than demand, said Alexandre Sieber, a senior vice-president with the commercial real estate services firm.

Low interest rates and demand for stable returns made 2012 a record year for multi-residential market deals in six Canadian cities, including Toronto with $1.6 billion and Vancouver with $815 million in investments.

Bolstered by three major deals worth a total of more than $500 million - including the sale of the Olympic Village apartments - Montreal's multi-residential investment volume was 43 per cent higher in 2012 than during the previous peak of $946 million in 2008, CBRE said.

And despite fears by landlords, the rental sector was not hard hit by the low-interest rate-fuelled housing boom, including two years of record condo construction in Greater Montreal, the report said.

Yet the student strike, estimated in media reports to have cost Quebec taxpayers $90 million in police overtime, repairs and extra security, is believed to have also contributed to the rise in the vacancy rate last year of Montreal bachelor units, from 3.5 to 4.4 per cent, the outlook said.

These smaller units "have been most attractive to students."

"Owners have reported softer demand in general in areas around post-secondary institutions," CBRE said. "It has been more difficult to fill units and increase rents in these typically strong areas - 2012 was certainly a more challenging year in this regard."

Weaker demand for bachelor apartments was the main contributor to the increase in Montreal's overall vacancy rate, which grew slightly from 2.5 per cent in 2011 to 2.8 per cent in 2012, the outlook said, citing the Canada Mortgage and Housing Corp's latest rental market report.

The "stability in the education sector" this year "could solidify demand from younger renters," the outlook noted.

Demand by students and new arrivals will offset the growing number of condominiums being built and purchased by investors for use as rentals, the outlook says. While more than half of the units at certain downtown Montreal towers are being purchased by investors, only about 11 per cent of the city's 130,691 existing condos are now being rented out.

The number of newly constructed but unsold condos - which are more likely to be rented - dropped to 1,764 in February from a four-year high of 1,894 units in January, CBRE said.

Competition from the condo sector - where owners generally charge tenants 40 per cent higher rents - will have a greater impact on the luxury rental sector, than on most multi-residential buildings, Sieber said.

alampert@ montrealgazette.com

Twitter: @RealDealMtl

SOURCE: The Montreal Gazette

Montreal home prices expected to dip

alexandre sebe — Fri, 05 Apr 2013 10:08:13 -0400

Montreal home prices expected to dip

The inventory of condos for sale in Greater Montreal is now up 24 per cent, with single family homes rising 17 per cent, compared with the same time last year.

Photograph by: John Mahoney , THE GAZETTE

MONTREAL — Montreal property prices could decline by up to five per cent during the crucial spring homebuying season, amid rising inventory and weaker demand from buyers, Royal LePage said Thursday.

Royal LePage said there is “now a strong possibility” that Greater Montreal home prices will decline between three to five per cent during the second quarter of 2013, before rebounding during the later months of the year.

Sales of Montreal homes fell by a larger-than-expected 25 per cent during the first three months of 2013, after rules on insured mortgages introduced last summer by the federal government continue to drive away first-time buyers, the report by Royal LePage said. By extension, the market has also slowed for houses and higher-end homes because repeat buyers are unable to sell their existing properties.

While Montreal home prices remained virtually flat during the first quarter of 2013, sellers now recognize that they will have to negotiate further with buyers to sell their homes, said Dominic St-Pierre, Quebec director of the national real estate services firm.

“The main reason why prices have not dropped yet in Montreal is because sellers have held on (to their homes),” he said. “Now the people who’ve had their homes on the market for six months are becoming a little more impatient to sell.”

During the first quarter, the median price of a Montreal condo rose 0.4 per cent, year over year, to $240,044, while the price of a standard two-storey home grew by 1.4 per cent to $392,929, Royal LePage said.

Nationally, average prices for three common types of housing — including condos, two-storey detached houses and bungalows — were up year-over-year in most Canadian markets, the report said.

But despite rock-bottom mortgage rates offered by lenders, March sales fell 17 per cent in Toronto and 18 per cent in Vancouver, compared with the same period in 2012, real estate boards in those cities reported this week.

“The combination of very low mortgage rates and flat home prices, against a background of general economic improvement across the nation, is not something we’ve seen before,” Royal LePage president and CEO Phil Soper said Thursday in a release. “Typically, one of these variables is moving hard in an opposite direction.”

Soper dismissed warnings of a housing bubble in certain Canadian markets: “The current environment is very supportive for housing.”

The Greater Montreal Real Estate Board is to report its sales figures for March on Monday. In 2013, Greater Montreal resales are expected to drop five per cent over 2012, while prices are expected to rise slightly this year, according to the Quebec Federation of Real Estate Board.

With Montreal buyers now able to choose from a wider selection of properties — condo inventory rose 24 per cent while single family homes were up 17 per cent, year over year — St-Pierre said he expects sales will be weaker this spring compared to an exceptionally strong second quarter homebuying season in 2012.

“We’re expecting sales to be down, but not by as much as in the first quarter.”

alampert@montrealgazette.com

Twitter: @RealDealMtl

The Canadian Press contributed to this report

SOURCE: The Montreal Gazette

Despite housing concerns, investing opportunities in Canada and the U.S. abound

alexandre sebe — Tue, 02 Apr 2013 20:26:24 -0400

Despite housing concerns, investing opportunities in Canada and the U.S. abound

Brent Lewin/BloombergReal estate as an asset class should not be mistaken for just owning one’s home or buying a second house or condo as an investment. Instead, it should include commercial properties including hotels, apartments, office buildings and both retail and industrial premises.

Canada’s housing market is apparently on the ropes, particularly in major cities such as Vancouver and Toronto where prices appear overvalued. The softening market might lead investors to consider trying to cash in on the rebounding U.S. market. Housing prices stateside are expected to grow in the high single digits this year and nearly 15% next year, after several years of steady declines.

No longer foreclosure nation

The note to investors was entitled: “Someone say house party?”

Strategists at the Bank of America assessed the U.S. real estate market and have bravely announced that the “positive feedback loop has begun.”

Continue reading.

But real estate as an asset class should not be mistaken for just owning one’s home or buying a second house or condo as an investment. Instead, it should include commercial properties including hotels, apartments, office buildings and both retail and industrial premises, where there are still huge opportunities on both sides of the border for investors looking to diversify their portfolios.

“While we cannot make a case for speculating in residential real estate based on current rents and prices, we continue to hold and acquire high quality commercial real estate in Canada and the U.S.,” said Dylan Reece, a financial advisor at Vancouver-based Nicola Wealth Management Inc., in a recent report to clients.

Some people invest in real estate by directly purchasing properties, but that requires significant capital and specialized expertise, and comes with the headaches of being a landlord. As a result, most real estate investment is done indirectly, either through listed securities such as real estate investment trust (REITs) or through unlisted real estate companies, funds and limited partnerships known as RELPs that usually have direct ownership of the assets.

In Canada, there are dozens of REITs trading publicly in Toronto, as well as several mutual funds and exchange-traded funds that invest in the sector. Private real estate investment options are less prevalent, but growing in number.

Some examples include the Great-West Life Real Estate Fund, a segregated fund that invests in more than 100 Canadian properties and KingSett Capital’s suite of real estate limited partnership funds.

Institutional investors, including some the world’s biggest pension funds, and high-net-worth individuals are by far the most active participants in this asset class.

For example, members of Tiger 21, a North American networking organization for the wealthy that collectively manages US$18-billion in investable assets, allocate an average of 25% of their portfolios to real estate.

Karl Mergenthaler, an executive director at J.P. Morgan, said real estate has emerged as an attractive investment class following the global recession to help diversify portfolios and hedge against inflation risk. He believes both public and private real estate investment offer opportunities, but due to their different characteristics in risk and return, it may be appropriate for investors to invest in both types.

REITs are perhaps the most popular real estate vehicle for both institutional and retail investors, he said, largely because they offer greater transparency and liquidity, while also providing steady income, usually derived from rents or interest payments due to refinancing.

Since stock markets bottomed in March 2009, the S&P/TSX REIT index has climbed 160% compared to just 68% for the S&P/TSX composite over the same period. A similar story has unfolded south of the border.

But REITs have some drawbacks, including their tendency to experience higher volatility than private real estate investments.

“Consequently, it is easier for investors to be affected by euphoria and panic in the broader stock market,” Mr. Mergenthaler said. “As a result, asset pricing can more easily diverge from the underlying property value, and downturns in the public real estate realm tend to happen more quickly.”

This characteristic was particularly evident during the financial crisis that caused stock markets around the world to lose 50% over their value. From the end of 2007 to Mar. 31, 2009, Canadian REITs fell 44%.

“In many ways, REITs behave like equities in the short term and direct real estate over the long term,” he said.

Private real estate funds, by comparison, tend to be less correlated with the broader equity markets and react less to short-term trends or news.

Mr. Mergenthaler said they also provide the prospect of higher returns than REITs and the potential for active improvements and more control over the properties.

It is easier for investors to be affected by euphoria and panic in the broader stock market

On the downside, he said investors are often hesitant to put their money into a private fund because of liquidity and fee concerns, as well as initial investment requirements that can be as high as $1-million.

“Physical properties are rather illiquid, potentially taking months to sell,” Mr. Mergenthaler said. “As a result, investments are usually locked for long periods of time, and thus downturns can be more prolonged.”

Mr. Reece’s firm prefers investing in a combination of private and public real estate and offers clients exposure to both through its Real Estate Fund, which primarily holds REITs, and through SPIRE and SPIRE U.S., its two real estate limited partnerships.

“Our investment approach to real estate has been to allocate a reasonable portion of our clients’ wealth and our own personal assets in income-producing real estate such as office, retail, industrial and self-storage properties,” he said.

“While we like real estate as a hard asset and a long-term store of wealth, we primarily own real estate for its sustainable and predicable cash flow from rents. Capital appreciation — or growth — is a secondary consideration.”

Mr. Reece said commercial real estate generally yields 5% to 8% unlevered and expects that to more or less continue.

Given the choice between the U.S. and Canada, he favours the former where property values have been dramatically cheaper than in Canada, especially considering the 30% appreciation in the Canadian dollar over the past decade.

“Where we are seeing the most opportunity is in U.S. real estate,” he said. “Pension plans around the world, including both the Canada Pension Plan and Norwegian Sovereign Wealth fund recently announced that they are making strategic shifts into the U.S. commercial real estate markets.”

Allied Properties Real Estate Investment Trust Makes Room for the Arts in Montreal's Vibrant and Transforming Plateau Mont-Royal

alexandre sebe — Tue, 02 Apr 2013 20:24:43 -0400

Allied Properties Real Estate Investment Trust Makes Room for the Arts in Montreal's Vibrant and Transforming Plateau Mont-Royal

Real Estate — April 2, 2013

Allied Properties Real Estate Investment Trust Makes Room for the Arts in Montreal's Vibrant and Transforming Plateau Mont-Royal

TORONTO, ONTARIO--(Marketwired - April 2, 2013) - Allied Properties REIT (TSX:AP.UN) announced today that it has finalized a lease arrangement with Pied Carré for 208,424 square feet square feet of gross leasable area at 5445-5455 de Gaspé, Montréal. The lease premises are comprised of 28,354 square feet of gallery space on the ground level of 5445-5455 de Gaspé and 180,075 square feet of studio space on the 3^rd, 4^th, 5^th, and 6^th floors of 5445 de Gaspé. The lease has a term of 30 years commencing on November 1, 2013, at net rental rates that escalate annually. As part of the lease arrangement, Allied has agreed to complete base-building work on the leased premises, including the installation of new windows and the upgrade of the mechanical and electrical systems.

Pied Carré is an established and well organized artists' collective based in Montréal's Plateau Mont-Royal. As part of the lease arrangement, Pied Carré has agreed to complete leasehold improvements for the artists it represents and to coordinate the use and financial administration of the leased premises.

Allied is attentive to the impact of it business on surrounding communities. Its investment and development activities can have a displacing impact on members of the artistic community. As building inventory in an area is improved, the cost of occupancy can become prohibitive. Allied believes that its buildings and tenants are best served if artists remain viable members of the surrounding communities. Accordingly, Allied has allocated an appropriate portion of its rentable area to artistic uses on an affordable basis as part of its Make Room for the Arts program. What Allied foregoes in short-term rent, it more than makes up in overall occupancy and net rent levels.

"This is the outcome of extensive collaboration between ourselves, Pied Carré, Ateliérs Creatifs, the Borough of Plateau Mont-Royal, the City of Montréal and the Province of Quebec," said Michael Emory, Allied's President & CEO. "A wonderful example of our Make Room for the Arts program, the lease to Pied Carré will afford long-term stability to the artistic community in the Plateau, while simultaneously enhancing the upgrade of our de Gaspé properties.

Canadians’ house buying plans drop sharply: RBC

alexandre sebe — Tue, 26 Mar 2013 20:41:00 -0400

Canadians’ house buying plans drop sharply: RBC

A majority of Canadians are taking a wait-and-see approach when it comes to home purchases and plans to buy have suffered the steepest year-over-year drop in two decades, thanks to Ottawa's move to tighten mortgage rules last summer, says a poll released on Tuesday by the Royal Bank of Canada.

RBC's annual home ownership poll showed just 15 per cent of Canadians say they are likely to buy in the next two years, down from 27 per cent last year. The 12-percentage-point drop is the biggest year-over-year fall in overall buying intention as tracked by the poll, which has been conducted annually for the past 20 years.

“The more cautious mood this year is not surprising and is consistent with broader economic and industry forecasts," Sean Amato-Gauci, senior vice-president, home equity financing at RBC, said in a statement.

An unseasonably warm spring, ultra-low rates and anticipation of mortgage rule changes may have led many Canadians to buy homes in the first half of 2012, said Amato-Gauci.

Last summer, the federal government implemented tighter mortgage rules -- the fourth move in as many years -- to calm the once-hot real estate market and limit the record levels of debt Canadians have accumulated in recent years.

Data earlier this month showed that home sales in Canada fell in February and the rate at which people amassed household debt slowed in the fourth quarter, adding to the pile of evidence that the stricter rules are filtering through.

Overall, 75 per cent of Canadians say that Ottawa's move last summer will impact or delay prospective homebuyers from getting into the market.

At the same time, however, the poll showed nearly six-in-10 recent and prospective homebuyers say that a shortened mortgage amortization period to 25 years from 30 years had little to no impact.

Affordability is a key barrier

Despite the caution, 84 per cent believe that a house or condominium is a good investment.

The poll suggests confidence in the housing market is still high and young Canadians are the bright spot as they look to buy their first home and seek the advice to do it right, said Amato-Gauci.

Four-in-10 Canadians planning to enter the housing market over the next two years will be first-time homebuyers, says the poll conducted on 3,005 Canadians between Jan. 31 and Feb. 8.

But times are tight. Almost half of first-time homebuyers cite affordability as a top reason for not buying. Other key factors cited were saving for a down payment, 32 per cent, and job security at 28 per cent, with both factors rising in importance from last year.

Canada-wide, Atlantic Canadians and residents in Manitoba and Saskatchewan are the least likely to buy a house in the next two years, while British Columbia is the only region where a majority of people describe the current market as a buyer’s market.

Consumer Confidence Increased Slightly But the Proportion of Quebecers Who Feel This is a Good Time to Make a Major Purchase Decreased in March

alexandre sebe — Tue, 26 Mar 2013 20:40:08 -0400

Consumer Confidence Increased Slightly But the Proportion of Quebecers Who Feel This is a Good Time to Make a Major Purchase Decreased in March

According to the Conference Board of Canada, the overall Consumer Confidence Index among Québec consumers increased in March 2013 compared to the previous month. After decreasing in February, the Index registered a 1.3-point increase in March to reach 71.2 points. Conversely, the proportion of Quebecers who felt that it was a good time to make a major purchase, such as a property, decreased in March after having increased in January and February, and now stands at 46.4 per cent (see chart below).

In Canada, both the overall Consumer Confidence Index and the proportion of consumers who felt that it was a good time to make a major purchase remained stable in March compared to the previous month, reaching 80.5 points and 41.4 per cent, respectively.

Source: Conference Board of Canada

Details About the Index of Consumer Confidence

The Index of Consumer Confidence is measured by the Conference Board of Canada, which, every month, conducts a survey among Canadian households. As its name implies, the Index measures consumers’ level of optimism regarding the economy. The survey consists of four questions: the first two questions focus on respondents’ perception of their current and future financial situation; the third question concerns respondents’ perception about the short-term employment outlook; and the fourth question measures the proportion of households who think that the time is right to make a major purchase, such as a property or other big-ticket item.

Every month, the Conference Board publishes – for Canada and for each province – a global index (with a base year of 2002) and the four sub-indexes.

The Index of Consumer Confidence and the Resale Market in Québec

Québec‘s resale market is most sensitive to the evolution of the sub-index that measures the proportion of Québec households that feel the time is right to make a major purchase, such as a property. This sub-index is a contemporary and direct indicator of activity on the Québec resale market.

Why a Cyprus bailout is good for Canadian REITs

alexandre sebe — Fri, 22 Mar 2013 16:18:28 -0400

Why a Cyprus bailout is good for Canadian REITs

Simon Dawson/BloombergCanadian REITs could be a big benefactor from the crisis in Cyprus, says one analyst. Above, Cypriots in Nicosia line up to try and withdraw their money.

Could a bailout in Cyprus be good for Canadian real estate investment trusts? At least one analyst thinks so.

Chris Damas, an analyst with BCMI Research believes some investors might go looking for a safer place to stash their money and thinks Canadians REITs are a good substitute for bonds for anybody focused on yield.

“[One reason] you might pull the trigger on REIT’s is because I believe the Cypriot crisis will result in a major Russian investor or the European Union, International Monetary Fund and European Central Bank (the troika), performing a last minute bailout of Cyprus and two Cypriot banks most likely to fail, over the weekend,” said Mr. Damas.

He acknowledges his firm holds REITs, so you are getting his own bias with that opinion. His top picks are Dundee, Calloway, and RioCan REITs.

Another good piece of news is the release of the Canadian budget, which included no crackdown on REITs (although that was a slim possibility, according to many in the sector). REITs have held a tax advantage since the government eliminated the break from regular business trusts.

“They will continue to enjoy tax flow through treatment to unitholders. This probably has been one reason why they haven’t been more buoyant to the upside in spite of their impending ‘ex distribution’ dates next Tuesday,” said Mr. Damas. “Canadian and foreign investors in Canadian income trusts and funds remember all too well how Finance Minister Jim Flaherty kyboshed their tax status on October 31, 2006.”

On the Russian front, he says it is “not surprising that [president Vladimar] Putin government did not want to bail out the Russian oligarchs that have a big stake in Cypriot financial sustainability, as Moscow has had sometimes rocky road with the cowboy capitalists that made out like flint from the dissolution of the USSR.”

Mr. Damas says he does not favour Canadian banks as the obvious alternative to the REITs because the situation in Cyprus has put pressure banks in general and that could continue.

He adds that although Canadian Gross Domestic Product is weak-to-slowing in Alberta’s oil industry, real estate continues to perform well.

“Canadian retail sales for January were reported yesterday up 1% to $38.9-billion, and flat on a volume basis, which was pretty good considering the drop in Canadian oil industry revenues and growing pressure for federal and provincial government austerity,” said Mr. Damas. “As long as retail sales do not plunge, retail commercial REITs should do fine.”

In particular, health and personal care (drug stores) and food and beverage (shopping malls) have been doing well during the last twelve months. General merchandise has been reasonable (up 2.8% January over December) and this favors Calloway REIT. RioCan REIT is extremely diversified with top quality national tenants. Target has come in to Canada and is drawing traffic towards enclosed malls and RioCan is the largest Target landlord.

He notes that for the office REIT sector, impacting Dundee REIT, full-time job numbers should translate to low vacancy rates in the big cities. “Dundee would have faced weakness from its core position in Calgary office, but is now larger and well-diversified across the country,” said the analyst.

“This is not a ‘quick flip.’ I find the Canadian REITs are more worry free than some other investments. I prefer the top names to the growing list of smaller REITs that have been floated on the market lately,” said Mr. Damas.

Montreal Real Estate, Montreal Real Estate Developers, Montreal Real Estate Broker - Montreal Realtor Alexendre Sebe

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