The value of social factors may also come in with respect to resolving difficulties in rent payments. For some tenants who are unable to make their monthly dues, the problem stems from a language barrier that hinders them from getting government aid they’re entitled to, in which case the landlord can step in and provide assistance, especially in cases where the tenant has been historically conscientious and trustworthy.
Going beyond specific tenant-landlord relationships, Floyd said real estate companies can also reap long-term benefits from becoming established pillars of the community. Embedding themselves and establishing goodwill through local engagement, she said, can make it easier to get approval for projects or rezoning requests from city and local officials, reducing risks and costs to future developments.
“We’re in the earlier stages of putting a number to social factors, but we can already feel or see its value in the returns of the capital market of the companies over long time periods,” Floyd said. “But this is becoming even more effective now. People will be increasingly conscious about putting money into companies that don’t consider those concerns. In effect, those who invest in such companies will see them as riskier, which means they’ll have to offer a richer risk premium.”
There are also issues to consider from a governance standpoint. Aside from questions of corruption, executive pay, ownership, and control, real estate companies are feeling the effects of a broader push for better diversity and gender representation at the board level. Diversity regulations are generally applied in Europe, though they aren’t much of a concern; real estate companies in certain Asian jurisdictions, Floyd said, generally require more encouragement.
Tracking ESG data and performance, she added, has become a key concern for European firms who seek to attract institutional investment. The European experience already shows how money flows can be influenced not just by a demonstrated history and potential for returns, but also compliance with regulatory standards defined by non-financial factors. Frameworks such as those established through the Paris agreements, as well as the UN Sustainable Development Goals and the new EU taxonomy for sustainable activities, have quickly become targets to hit for European companies, as well as North American equity and debt issuers who do not want to fall behind.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
