Connect with us

Real eState

A new wave of buyers expected to hit B.C. real estate market – The Globe and Mail

Published

 on


Vancouver is the favoured destination for the 300,000 or so passport holders who want to escape political instability in Hong Kong, as well as the high numbers of newcomers to Canada.

DARRYL DYCK/The Canadian Press

Throughout the pandemic, home sales soared, and in some markets, set record prices. Industry insiders say that postpandemic, the B.C. housing market is expected to boom again – driven by Canadians returning home and the federal government’s plan to bring in more than 1.2 million immigrants by 2023.

The wave is already happening according to Jacky Chan, president of BakerWest Real Estate Inc., who works closely with developers. BakerWest is the new Vancouver division of Baker Real Estate, Canada’s largest preconstruction sales and marketing agency, Mr. Chan says.

Mr. Chan says Baker’s sales are showing dramatic signs of a new wave of buyers.

Rapid growth for a young Vancouver developer

Toronto’s hot housing market calms as economy reopens, attentions shift to summer revelry

Baker is part of Peerage Realty Partners (a subsidiary of Peerage Capital), which did more $20-billion worth of sales in a year, and Mr. Chan says a lot of buyers are Canadians returning from Hong Kong. Vancouver is the favoured destination for the 300,000 or so passport holders who want to escape political instability in Hong Kong, as well as the high numbers of newcomers to Canada. That demand on the region will only push prices up – and the likelihood of supply outpacing that demand isn’t realistic, he says.

“It’s always been a wish, and it’s definitely been a misconception that prices will come down,” Mr. Chan says. “Prices will come down only in one way, and it goes back to supply and demand. If there is way more supply than there is demand, prices come down. If there is way less demand but the same supply, prices come down. Those are the only two ways. And where do we see that happening? Nowhere.

“In all honesty, the pandemic actually helped the Canadian real estate market.”

The transactions he is seeing are close to the levels that the market saw at the peak in 2017. His company is doing around $55-million in transactions a day, a historical high in Vancouver and Toronto.

“Demand is naturally increasing because of natural population increase and migration, and also with recent Canadian immigration policy,” Mr. Chan says.

“A lot of people are coming back from all over the world. We are seeing that every single day. … The true factors creating the price escalation are actually Canadians coming back from abroad, and a shortage of supply.”

Jacky Chan, president of BakerWest Real Estate Inc.

Handout

People from Hong Kong who came to Canada and then returned to Hong Kong will be looking to purchase properties again, he adds. There is a belief that many of the people who returned to Hong Kong may already own properties in Vancouver, but Mr. Chan isn’t seeing that. Instead, he says that many of the people who later returned to Hong Kong sold off their Vancouver properties so they could buy in Hong Kong.

“Price increases in Hong Kong are even higher than Canada, so now when they come back, they will sell off property in Hong Kong and put it into Canada. And now their net worth has increased dramatically over the last 10 years, so now their purchasing power is way, way higher than when they left,” he says.

“If you are in the real estate industry, that is a big positive contribution to the uptick of the market.”

Mr. Chan says more immigration and fewer regulations around home ownership will boost the economy and make housing more affordable. People who are moving here to purchase primary homes and investment properties will raise rents if regulations make properties more difficult to buy.

“The Canadians who are returning to live are definitely buying their primary homes, and ones that have financial capacity – which a lot of them do – also purchase investment properties. With the escalation of real estate prices, real estate ownership is becoming more and more difficult. And when that happens, real estate investments and rental returns increases proportionally with the scarcity of real estate ownership,” Mr. Chan says.

“We see it in other metro cities around world, in Hong Kong, Tokyo Taipei, London, Sydney, Paris, Manhattan and L.A. We see this time and time again: When the density of a city increases, the value goes up per square foot, and the wealth goes up because [people] own,” he adds. “But the people who study [in the city] and the people who work there still have to live there because usually the places with a higher density also have more opportunities, in terms of work and commerce, education – that’s why it draws people in.

“And that is why when real estate ownership is harder, the rent actually goes up with it.”

For that reason, the urban core stays expensive as it grows, with relatively more affordable housing opening up outward like in the suburbs.

“You can only build more stuff from expanding out from the radius. So let’s say you have an epicentre, you can build out from there and the prices get equalized as supply increases,” Mr. Chan says. “However, that epicentre gets denser and denser and that in itself gets more expensive. You have more choices on the fringe.”

A 2017 paper called The economic effects of density, by Gabriel Ahlfeldt and Elisabetta Pietrostefani, explores the theory that increased density does not automatically result in reduced housing costs, and could in fact achieve the opposite effect.

Although density makes cities more innovative and dynamic, higher demand makes them more expensive, according to the report. In their study, the authors found that a 1-per-cent increase in density led to an increase in wages of $280 and an increase in rent of $485.

“Density has important positive amenity and resource implications, but also appears to create a scarcity rent, which harms renters and first-time buyers,” the authors say.

The common argument to create more affordable housing is to remove government regulation that gets in the way of more expedient market development, such as zoning regulations, says Kwantlen Polytechnic University geography instructor John Rose. But he’d like to see evidence because he’s not buying it.

Prof. Rose has long argued for more data to show how less regulation will translate into increased affordability, which, he says, is the long-standing position taken by some industry members and pro-supply activists. He recently wrote a letter to City of Vancouver director of planning Theresa O’Donnell, asking for data to back up a city target to provide 81,000 additional housing units over the next decade. He made the letter public, but has yet to hear back.

“I believe we have a supply problem in that you only get more supply of housing if it’s at higher prices. I want more evidence to show that such inelastic supply is because of government regulations,” Prof. Rose says.

“Because inelastic supply may simply be the product of decisions made by market providers, and we’ve seen ample evidence of that, such as land banking. I totally get the argument that removing regulation will lower costs for developers. The big question is: Will that translate into savings for the consumer? I don’t believe that. I really don’t.

“And given the stakes, it’s really important we figure out why the supply so far has been the wrong supply. Quantity only matters if it’s affordable quantity.”

University of British Columbia professor Patrick Condon, who started out as a city planner before becoming the James Taylor Chair in Landscape and Liveable Environments, recently published a book called Sick City, in which he looks at urban development as it relates to inequality. He agrees that denser urban cores generate pricier housing if the state doesn’t monitor against it.

“Privately held and traded urban land, due to its locational monopoly, drains all surplus value both from the efforts of wage earners and the entrepreneurial skill of their employers,” Prof. Condon writes.

“Because global wealth is flowing into urban centres, those making city policy need to be conscious of how their decisions might unintentionally increase poverty while their city progresses.”

Your house is your most valuable asset. We have a weekly Real Estate newsletter to help you stay on top of news on the housing market, mortgages, the latest closings and more. Sign up today.

Adblock test (Why?)



Source link

Continue Reading

Real eState

Boutique Ottawa real estate firms find freedom in doing business their own way – Ottawa Business Journal

Published

 on


After more than a decade in commercial real estate, John Zinati had settled into a comfortable career as a leasing manager at a well-known locally owned Ottawa firm and could have simply counted down the days until retirement.

Instead, he chose a different path. In 2016, he launched Zinati Realty, a boutique brokerage that serves mainly owners and landlords in the office, retail and industrial sectors. 

Since then, Zinati has brought on two more brokers and is looking to expand his team further as the industry slowly works its way toward a post-pandemic future. Looking back on his decision to leave the security of an established firm for the uncertainty of life as an entrepreneur, he has no regrets.

“I was just faced with too many limitations, so I made the decision to go out on my own,” Zinati explains. 

“Being nimble and quick and working closely with these owners to get their spaces filled or get their buildings sold is really rewarding.”

Zinati is one of a growing number of local real estate executives who’ve left comfortable, secure jobs at established big-name companies to start their own brokerages and advisory firms.

Many of these owner-brokers point to the freedom of being able to make their own decisions and do their own deals without having to answer to corporate bosses as a major factor in making the leap.

“I think commercial real estate brokerage in the boutique setting is one of the last few places where you can just earn more with a little bit more elbow grease,” says Darren Fleming, the CEO of Real Strategy Advisors. “There’s so much upside.”

Before launching his own firm, Fleming spent seven years as managing director of Cresa’s Ottawa office. His lengthy real estate resume also includes four years as a sales representative at Colliers International and a one-year stint as a leasing agent with Montreal-based developer Canderel. 

In 2016, Fleming sold his shares in Cresa, left the company and enrolled in the Executive MBA program at the University of Ottawa’s Telfer School of Management. 

The following year, he launched Real Strategy Advisors, which provides advisory and brokerage services to office tenants in the tech, professional services and not-for-profit sectors.

He’s never looked back. Too often, Fleming says, strict corporate policies at bigger firms put entrepreneurial-minded brokers in a straightjacket. He points to an example from early in his career, when an employer told him he was storing too much sales data on a company server. 

“I think I’m addicted to being an entrepreneur and being my own boss,” Fleming says. “Are there days when you wish someone would sign off on payroll other than you? Yeah, but it’s worth it in the end.”

KOBLE thriving

Graeme Webster is a partner at Ottawa’s KOBLE Commercial Real Estate, a firm that brokers mainly off-market and unlisted office and industrial transactions for buyers such as entrepreneurs and well-heeled professionals looking to build up their investment portfolios.

He and fellow partner Marc Morin founded KOBLE seven and a half years ago after cutting their teeth for more than a decade at large, well-established firms. Webster says he thrives on the feeling of satisfaction he gets from navigating clients through deals that can set them up for retirement or attain assets that can be passed on to future generations. 

“Our focus is to help people establish that family legacy,” he says. “Real estate is really just the tool to allow them to do that.”

Now at six employees, KOBLE recently brought Ottawa commercial real estate veteran Richard Getz on board as a senior adviser. The firm is also looking to hire someone to oversee its business operations as it continues to expand.

Webster says that despite the overall uncertainty facing the industry at the moment, KOBLE is thriving. The firm has more deals in its pipeline than at any other time in its history, a development he attributes largely to the city’s reputation for being a safe haven in times of economic turmoil.

“It’s a place where when there’s volatility, people want to jump in (the market),” he explains.

Adblock test (Why?)



Source link

Continue Reading

Real eState

Boutique Ottawa real estate firms find freedom in doing business their own way – Ottawa Business Journal

Published

 on


After more than a decade in commercial real estate, John Zinati had settled into a comfortable career as a leasing manager at a well-known locally owned Ottawa firm and could have simply counted down the days until retirement.

Instead, he chose a different path. In 2016, he launched Zinati Realty, a boutique brokerage that serves mainly owners and landlords in the office, retail and industrial sectors. 

Since then, Zinati has brought on two more brokers and is looking to expand his team further as the industry slowly works its way toward a post-pandemic future. Looking back on his decision to leave the security of an established firm for the uncertainty of life as an entrepreneur, he has no regrets.

“I was just faced with too many limitations, so I made the decision to go out on my own,” Zinati explains. 

“Being nimble and quick and working closely with these owners to get their spaces filled or get their buildings sold is really rewarding.”

Zinati is one of a growing number of local real estate executives who’ve left comfortable, secure jobs at established big-name companies to start their own brokerages and advisory firms.

Many of these owner-brokers point to the freedom of being able to make their own decisions and do their own deals without having to answer to corporate bosses as a major factor in making the leap.

“I think commercial real estate brokerage in the boutique setting is one of the last few places where you can just earn more with a little bit more elbow grease,” says Darren Fleming, the CEO of Real Strategy Advisors. “There’s so much upside.”

Before launching his own firm, Fleming spent seven years as managing director of Cresa’s Ottawa office. His lengthy real estate resume also includes four years as a sales representative at Colliers International and a one-year stint as a leasing agent with Montreal-based developer Canderel. 

In 2016, Fleming sold his shares in Cresa, left the company and enrolled in the Executive MBA program at the University of Ottawa’s Telfer School of Management. 

The following year, he launched Real Strategy Advisors, which provides advisory and brokerage services to office tenants in the tech, professional services and not-for-profit sectors.

He’s never looked back. Too often, Fleming says, strict corporate policies at bigger firms put entrepreneurial-minded brokers in a straightjacket. He points to an example from early in his career, when an employer told him he was storing too much sales data on a company server. 

“I think I’m addicted to being an entrepreneur and being my own boss,” Fleming says. “Are there days when you wish someone would sign off on payroll other than you? Yeah, but it’s worth it in the end.”

KOBLE thriving

Graeme Webster is a partner at Ottawa’s KOBLE Commercial Real Estate, a firm that brokers mainly off-market and unlisted office and industrial transactions for buyers such as entrepreneurs and well-heeled professionals looking to build up their investment portfolios.

He and fellow partner Marc Morin founded KOBLE seven and a half years ago after cutting their teeth for more than a decade at large, well-established firms. Webster says he thrives on the feeling of satisfaction he gets from navigating clients through deals that can set them up for retirement or attain assets that can be passed on to future generations. 

“Our focus is to help people establish that family legacy,” he says. “Real estate is really just the tool to allow them to do that.”

Now at six employees, KOBLE recently brought Ottawa commercial real estate veteran Richard Getz on board as a senior adviser. The firm is also looking to hire someone to oversee its business operations as it continues to expand.

Webster says that despite the overall uncertainty facing the industry at the moment, KOBLE is thriving. The firm has more deals in its pipeline than at any other time in its history, a development he attributes largely to the city’s reputation for being a safe haven in times of economic turmoil.

“It’s a place where when there’s volatility, people want to jump in (the market),” he explains.

Adblock test (Why?)



Source link

Continue Reading

Real eState

City incentives, 'red-hot' real estate market fuel action on brownfields – Windsor Star

Published

 on


Article content

A city program created in 2010 to entice investors to build on contaminated old industrial sites has been blazingly successful in the last 18 months.

Advertisement

Article content

In its first six years, uptake on the Brownfield Redevelopment Community Improvement Plan was tepid — just four approvals for grants to help investigate possible contamination and tax breaks to compensate for the considerable costs of cleanup. Things sped up in the next four years with 23 approvals. And since January 2020, interest has kicked into high gear with 15 approvals. The increased interest has been driven by the attractiveness of the incentives and the red-hot demand for housing, says Greg Atkinson, a senior City of Windsor planner who has administered the program since its inception.

“When I put the numbers together I was quite impressed,” he said Wednesday, referring to a recent report on the program’s success and suggested tweaks. Normally, such a review happens after five years but there wasn’t enough data available due to the low initial uptake.

Advertisement

Article content

“We’ve got that now,” said Atkinson, referring to the 42 total approvals — most of which happened in the last few years — to spur new projects on these usually vacant properties contaminated by years of use as factories, dry cleaners, fuel depots, landfills and gas stations.

City council has so far approved $13.2 million in incentives to drive redevelopment of derelict old properties. The result is private sector investment to the tune of $182.7 million and a rise in the assessed value of the properties totaling $216.2 million.

“Just doing quick math, it’s close to $14 in private investment for every public dollar in incentives,” Atkinson said. “So value for money, this community improvement plan (one of several created by the city in recent years) is really performing well.”

Advertisement

Article content

Greg Atkinson, a City of Windsor senior planner, stands by a vacant brownfield site on Riverside Drive in April 2016. Since January 2020 there have been 15 applications to the Brownfield Redevelopment Community Improvement Plan.
Greg Atkinson, a City of Windsor senior planner, stands by a vacant brownfield site on Riverside Drive in April 2016. Since January 2020 there have been 15 applications to the Brownfield Redevelopment Community Improvement Plan. Photo by Tyler Brownbridge /Windsor Star

A study conducted in 2009 identified 137 brownfield properties on 559 acres that had sat unused for many years. “Historically, there has been little interest in redeveloping brownfield sites due to the uncertainty surrounding the extent of contamination and the potential cost of cleanup,” Atkinson’s report said.

Mayor Drew Dilkens said the CIP was designed to change that.

“With the combination of the program and a hot real estate market, we’re seeing a lot of action,” he said, explaining that developers are looking everywhere — including these brownfields — for places to build.

“Having this program … is really instrumental in seeing some of the more difficult land activated in an improved way.”

The first application was approved back in 2012, for redevelopment of a long-abandoned gas station at Dougall Avenue and West Grand Boulevard. Andre and Hoda Abouasli used the grants available to help clean up contamination before building an attractive commercial building. The project served as a visible example of what the CIP can do to transform eyesores throughout the city, Atkinson said.

Advertisement

Article content

The projects since have ranged from modest to major. The biggest by far was for up to $12.5 million in incentives to help with the cleanup of the former GM Trim plant on Lauzon Road so that Farhi Holdings could proceed with a massive $250-million residential development that’s one of the biggest in the city’s history. A cleanup costing $6.5 million to remove contaminated soil and remove the footings and concrete from the former building cleared the way for the project, which is well underway.

Other big projects approved recently approved include: $3 million in incentives for the 123-unit Graffiti residential/commercial project at 1200 University Avenue West; $457,700 for an 81-unit apartment project on Argyle Road, formerly the site of a pharmaceutical plant destroyed in a 2018 fire; and $579,185 for a project to build a 24-unit residential building at 840 Wyandotte St. E., formerly a commercial building destroyed in a 2016 fire.

Advertisement

Article content

And in June, a committee of council endorsed a CIP application to help with the $81,600 cleanup of an 11-acre former industrial site bounded by Walker Road, Edna Street, St. Luke Road and Richmond Street. The owner, the Sood family, has a plan to build three five-storey towers with 62 units each, plus 90 two-storey townhouses. It’s a development that Atkinson believes will help link up Walkerville and Ford City, which for decades have been separated by industrial wasteland.

The CIP provides grants for 50 per cent of the cost of studies to see how feasible it is to redevelop a brownfield and study what it would cost to clean it up. Those are cheques the city writes in the range of $7,500 to $25,000. The CIP can also reduce development charges by 60 per cent. But the biggest incentives by far are the Brownfields Property Tax Assistance and Brownfield Rehabilitation Grant
programs, which provide annual grants to offset either 70 or 100 per cent of the tax increases that occur after a brownfield site is redeveloped into something more valuable, like an apartment building. The grants are paid out for 10 or 13 years and can end up saving developers many thousands of dollars — after the projects are built.

Advertisement

Article content

  1. Developer Anuj Sood talks about progress made to rental units on Walker Road in Walkerville, on Wednesday, June 16, 2021.

    As Walker Road townhouses near completion, Soods plan transformation of industrial wasteland

  2. Farhi Holding Corporation drawing for 1600 Lauzon Road.

    ‘Massive’ 543-home project starts this fall at former GM Trim site

“The whole premise is the city is not collecting a lot of tax revenue, in some cases almost nothing, from these properties that are negatively impacting their neighbourhoods,” said Atkinson. “So forgoing some of that tax revenue, over a 10-year grant period, is a low price to pay for a redevelopment where you might get 50 dwelling units where you had vacant land before.”

If all 42 of the approvals proceed, the result will be 962 new dwelling units on 119.2 acres of brownfields. Based on a metric from a 2003 national round table, that would prevent 512 acres of greenfield from being developed, according to Atkinson’s report. In addition, the spinoff effect of $182.7 million in private investment is $694 million invested into the economy.

bcross@postmedia.com

Comments

Postmedia is committed to maintaining a lively but civil forum for discussion and encourage all readers to share their views on our articles. Comments may take up to an hour for moderation before appearing on the site. We ask you to keep your comments relevant and respectful. We have enabled email notifications—you will now receive an email if you receive a reply to your comment, there is an update to a comment thread you follow or if a user you follow comments. Visit our Community Guidelines for more information and details on how to adjust your email settings.

Adblock test (Why?)



Source link

Continue Reading

Trending