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4 Affordable Ontario Real Estate Markets Ideal for First-Time Homebuyers – Toronto Storeys

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While Toronto and the GTA are great places to purchase a home for some, rising real estate prices paired with a lack of spacious options have left many residents looking elsewhere to find their dream property. Thankfully, there are more affordable options in the province’s real estate market than Toronto-area prices show.

And sure, Toronto’s rental market is a great option for tenants right now, as average rents for a 1-bedroom have dropped 20% in 2020, but those looking to buy a home in Canada’s largest city (and its surrounding areas) can expect rising prices in the new year, as the median price of a standard two-storey home in the GTA is expected to rise 7.5% next year, reaching an average price point of $1,185,800. So, for many hopeful homebuyers, areas beyond the GTA might be more appealing now than ever.


According to a new report from RE/MAX, there are four notable regions across Ontario currently offering friendlier average home prices than what you’ll see in and around Toronto.

READ: Canadian Homes Sales Smashed Records in November: CREA

Although average prices may have surged upwards from what they were a year ago, RE/MAX says these cities continue to offer opportunities for first-time homebuyers. With interest rates at historical lows and consumer trends changing as people work from home, now could be a good time for first-time homebuyers to make that leap into the Ontario real estate market.

Below are four of Ontario’s most affordable real estate markets right now, according to RE/MAX.

Windsor

affordable
Windsor, ON

Notably one of the “hottest” real estate markets both provincially and nationwide currently is Windsor — a municipality that RE/MAX says has long been ignored by homebuyers. But recently, Windsor has turned into a seller’s market, with homeowners cashing in on the dramatic surge in prices.

The average price of homes sold in 2020 (based on January-October data) was a record $406,861, up 21% over 2019, according to the RE/MAX 2021 Housing Market Outlook Report.

Considering you can’t even purchase a house or a condo in Toronto (or Vancouver for that matter), this market could be considered a steal for first-time homebuyers.

What’s more, RE/MAX says Windsor is experiencing “rampant development, a population boom, and consumer and business interest,” which is chalking the ‘Automotive Capital of Canada’ up to be the next major urban centre in Ontario.

Sudbury

afffordable
Sudbury, Ontario

Just over four hours north of Toronto you’ll find Sudbury, a city that’s witnessed “monumental” price gains over the past year. But for newcomers, especially from the big cities, average prices still remain a lot cheaper than in Ontario’s large urban hubs.

The price of an average home sold in Sudbury in 2020 (January-October) reached $311,940, rising 9% over 2019 prices. Once again, RE/MAX says this dollar figure would buy you “very little” in nearly all of southern Ontario’s red-hot cities.

With more development expected to occur in Northern Ontario amid the strengthening housing demand, there might not be a better buying opportunity in Sudbury than there is right now.

Thunder Bay

affordable
Thunder Bay

For years, Thunder Bay was ranked as Ontario’s most affordable housing market. And now, in light of the pandemic, the northwestern Ontario town still remains a desirable destination for those looking to enter the real estate market — whether as an investor or as an occupant.

In 2020, the average sale price for Thunder Bay homes rose 7.4% to $248,462 (January-October) compared to 2019’s full-year figures.

And while Thunder Bay is quite a distance from Toronto – a 1 hour and 45-minute flight — with more companies offering remote work freedom, living near the picturesque shores of Northern Lake Superior is suddenly within reach.


Kingston

affordable
Kingston, Ontario

While Kingston has consistently ranked as one of the best places to retire in the country based on its affordability, access to health care, moderate weather, rich culture, diverse community, and low crime, it remains an appealing option for first-time homebuyers as well.

RE/MAX reported that Kingston’s average residential sale price in 2020 (January-October) was $464,083, up 11% over 2019’s average sale price, with much of this price creep linked to the spiking demand in the market.

With another 10% price increase forecasted for 2021, RE/MAX says first-time homebuyers who are looking at this market are advised to “jump in while they still can.”

With no end to the pandemic in sight, those looking to branch off and buy a home that offers enough space to work, live, and play, looking beyond the confines of the GTA seems like a suitable option. Especially given that Toronto’s average home prices are expected to keep climbing, and just outside Toronto proper, Durham is looking ahead to even higher projected jumps.

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Shifting Priorities: The Rise of Alternative Real Estate – Commercial Property Executive

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Zain Jaffer, CEO & Founder, Zain Ventures. Image courtesy of Zain Ventures
Zain Jaffer, Founder & CEO, Zain Ventures. Image courtesy of Zain Ventures

Traditional asset classes will likely continue to attract investor interest going forward due to their stable income stream and low risk-return ratio. However, the pandemic has given investors the opportunity to take a closer look at other asset types, while also accelerating trends that were already underway, such as the rise of e-commerce. 

According to Zain Jaffer, founder & CEO of Zain Ventures, the past decade has seen an emergence of new types of real estate assets and investment structures—and their performance is less dependent on local market dynamics. Here’s what Jaffer thinks about the most attractive and financially viable asset types, especially in the current economic climate.  


READ ALSO: Alternative CRE Types to Attract More Funding


Tell us more about the main trends that form the basis of long-term demand in the alternative real estate sector.

Jaffer: Institutional investors have been smart to pay attention to alternative real estate sectors over the last decade. Performance in those sectors has been steady and counter-cyclical. Returns have been desirably less correlated to the performance of the market as a whole. COVID-19 and its long-term implications make that detached performance all the more valuable, and emerging technological trends are setting the foundation for long-term growth in the alternatives sector.

Anyone active in the market knows everything is interconnected. Right now, technological and social change is underway—health care is experiencing accelerated growth, flexible and remote workspaces are undergoing a mass reimagination, and e-commerce and digital solutions are driving our economic recovery. The demographic shift toward an increasingly elderly population argues a strong case for investing in senior facilities. Health is driving the market and investors who are able to support smart portfolio acquisitions with high-level health and safety operations will see outsized returns in the alternatives market.

How can these forces sustain or increase demand in the long term?

Jaffer: To understand long-term trends in the market, consider the parts of our routine that are undergoing renovation. Businesses are discovering that remote work has the potential to be a more efficient and more cost-effective new normal. Hybrid work models are everywhere, driving demand for more specialty workspaces and data centers.

Similarly, the ensuing silver tsunami is a sure sign that there are returns to be had in health-care facilities, senior housing and assisted living facilities. Growing in its attraction, the senior housing market is being shaped as we speak. Although demand is steady and rising, major inefficiencies have come to light throughout the duration of the pandemic.

Owners and operators will be overwhelmingly rewarded for improvements to design and investments in experience-assisting technology. Investments in the sector that prioritize integrated tech, design innovation and a higher standard of health care will be well positioned for steady returns.

Another pandemic-born trend is the shift to e-commerce, a move that experts are considering semipermanent. Not only are retailers around the world disappointed by the holes in their supply chain operations, they’re also in need of more self storage, cold storage and safety inventory space. E-commerce is a new driving force in the market and the specialty real estate that supports it can be considered a safe bet.

Elaborate on the opportunities arising due to these shifting trends.

Jaffer: A recent report by CBRE compares investor interest in different alternatives from 2016 through 2020. The largest spikes are seen in the health-care and data center sectors.

Health-care employment often has an inverse relationship to economic performance, growing faster in times of economic duress. More employment will be linked to more space absorption and greater rental income. It’s not always a straightforward investment since health-care facilities are highly specialized and require sizable initial investments. But in the aftershock of the pandemic, demand is likely to rise and service offerings are evolving as we speak.

Image by Akela999 via Pixabay

Already a key player in our ever-connected world, data centers will hugely benefit from the shift to remote and hybrid working. Growth in areas with strong infrastructure, tech literacy and power supply—Silicon Valley, Singapore, Tokyo, London and similar areas—will see the greatest returns, and markets with strong growth in tech-related positions will share in the momentum.

If we shift for a moment to the trends in e-commerce, one of the biggest spikes in demand has come from food and grocery sales. Perishables and refrigerated/frozen foods have introduced a completely novel need for cold space solutions and investors have taken notice.

As smaller retailers enter the market as newcomers, opportunities like sale/leasebacks, joint ventures with cold chain operators and metropolitan-adjacent build-to-suit developments are particularly attractive. And as cold storage spaces command higher rent premiums compared to dry spaces, owners and investors might consider space conversions—the transformation from dry to cold storage—as a place to introduce higher portfolio returns.


READ ALSO: Medical Office Buildings Poised for Quick Recovery


What can you tell us about todays leading sectors of alternative real estate?

Jaffer: Roughly 12 percent of commercial real estate investment in the Americas is made up of alternative assets, with the most market activity coming from the U.S. While the market suffered the same pressures as other sectors in the COVID-19 economy, investor interest remains steady in the aforementioned fields.

The promises of alternative real estate still ring true—these assets tend to have less turnover and offer higher yields. Investors are attracted to the stable income and the way that alternatives investing can properly diversify a portfolio. Sectors like health care and student housing are also well known for their downturn protection.

Now, with the transformative force of COVID-19 leaving trends clear in the market, these sectors have added potential due to their involvement in our collective pandemic recovery. The demographic shift underway, combined with the technological and social changes that have been accelerated by COVID-19, present career-defining opportunities for specialty investors to grow the market and be involved in the road back to recovery.

What are the challenges of alternative real estate investment?

Jaffer: Competition is growing quickly and investors need both a clear strategy and an eye for innovation to find their fit in a fast-evolving market. In crafting an investment plan, successful investors are being rewarded for their fresh thinking, agility and, above all, patience. High returns often require the exploration of new sectors, the taking on of risk and an active engagement in the complexities of operation.

In the past, the operational expertise required in the alternatives sector made it a space largely dominated by owner-occupier investments. While it’s clear that new capital in the space will be rewarded, it’s imperative that investors familiarize themselves with the nuances of the spaces they take on. Value-add investors that partner with operators to maximize their understanding will be well positioned. Investors that can identify, comprehend and capitalize on the opportunities present in the alternatives sector will create a winning platform to reap the coming rewards.

How do you see the alternative real estate sector going forward?

Jaffer: My outlook is that the real estate sector holds immense promise and it is likely to become more mainstream in the future. Market information is already more available than it has been in years past and improved transparency in the sector will continue to be beneficial. It’s my opinion that competition in the sector will only be increasing.

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Canadian commercial real estate services firm acknowledges cyberattack – Saskatoon StarPhoenix

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The spokesperson was mum when asked to confirm if the attack was ransomware, that files had been copied, whether the information affected was corporate or personal, and, if personal, did it involve current and former employees.

In its most recent quarterly financial statement for the period ending September 30, 2020, Colliers said it had a net income of just under $32 million on revenues of just over US$692 million. According to its 2019 financial results at the beginning of last year, it had about 15,000 employees.

Colliers performs a number of services for real estate firms including property management, sales and appraisals as well as tenant representation.

The Netfilim website entry for Colliers has the headline “Part 1,” suggesting the two files it has posted proves the firm was compromised and could be followed by more trouble.

According to Brett Callow, a British Columbia-based threat researcher for Emsisoft,  Nefilim was first noticed in the spring of last year and has since racked up a string of enterprise-space victims including Whirlpool, MAS Holdings, Luxottica and Australian logistics company Toll Group. “Unlike most other big game-hunting groups, Nefilim appears to be a closed shop rather than a ransomware-as-a-service provider, which may explain why the group is less active others,” he said in an email. “The group typically uses Microsoft RDP (remote desk protocol) and other public-facing applications for initial access of victims. Frequently, it also exploits unpatched versions of Citrix’s Application Delivery Controller going after CVE-2019-19781.”

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Local firm anticipates Spring surge in Fort Saskatchewan real estate market – Mayerthorpe Freelancer

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“Looking at the cyclical nature of the real estate industry, combined with suppressed demand during lockdown, we’re going to see an uncapped demand. People are antsy and they want to get looking for their new home.”

Revere Real Estate is a local real estate firm, tracking market trends in order to give their clients the best home-buying experience possible.

Records have been set in real estate throughout COVID, including in November 2020, which Blais pointed to as an “historical month,” with an increase in sales of 27 per cent over the same timeframe in 2019.

Similarly, October 2020 home sales in the Edmonton region grew by 26 per cent compared to the same month in 2019. “The numbers we saw were unheard of for the fall,” he said. “November is typically the month that things really cool off, but sales remained steady.”

The new surge could prove hugely beneficial for Fort Saskatchewan, specifically, Blais said, as suburbs and more rural areas surrounding Edmonton could see significant real estate gains through COVID.

“Anecdotally, I was helping a client out in St. Albert look for a home in the range of $450,000, and every home we identified had offers accepted within three days of going to market,” he said. “It was crazy, and I think we’ll see that again in certain areas in and around the city.”

Noting that similar experiences are being had in Fort Saskatchewan, Blais pointed to anticipated growth in the Fort come the spring. “There’s quite a bit of development that continues outside of the City of Edmonton, and we’re also seeing what I call ‘perpetual urban sprawl’ in Edmonton,” he explained. “Developers have met that demand pretty well, expanding into regions that used to be farmland, so you can now get into single-­family homes for under $425,000 just west of the city.

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