Business

As condo market cools, niche buyers move in

Published

1 year ago

August 16, 2023

Andre Kutyan, broker at Harvey Kalles Real Estate, is finding the market inconsistent, but he says the spaciousness of units at 50 Yorkville Ave. draws people moving from large homes.The Print Market

The condominium market has slowed in Toronto this summer, except for one cadre of buyers. Downsizers who have cash to spend are driving sales.

But even those in the upper echelons are looking for a deal.

Farah Omran, senior economist at Bank of Nova Scotia, notes that condo apartments led monthly price gains in June compared with May. Nationally, the condo segment of the Canadian Real Estate Association’s MLS Home Price Index accelerated 2.3 per cent on a seasonally adjusted basis during the period.

Christopher Bibby, broker with Re/Max Hallmark Bibby Group Real Estate, says condo units were selling quickly in the spring to people who planned to live in them. Potential sellers saw sales bouncing back and began to list more units.

But the Bank of Canada’s interest rate hike in June – followed by another increase to its key rate in July – doused the enthusiasm of buyers.

“It very quickly took out those ideal conditions and deflated the market.”

The spacious living room at Home at 50 Yorkville Ave. Condo sales in the Greater Toronto Area dropped 22.8 per cent in July from June, but according to a National Bank of Canada economist, listings at the end of July were 11.6-per-cent higher than at the end of June.The Print Market

Condo sales in the Greater Toronto Area dropped 22.8 per cent in July from June on a seasonally adjusted basis, according to National Bank of Canada economist Daren King. Listings at the end of July were 11.6-per-cent higher than at the end of June, Mr. King says.

Mr. Bibby says the outlook from economists became more gloomy after the central bank announcements.

The downsizers tend to be well-educated and attuned to the word on Bay Street, he adds. As the outlook from economists became more gloomy after the central bank announcements, they were paying attention.

Those looking below the $1.5-million mark are more likely first-time and move-up buyers who need mortgages, he says, and they become increasingly cautious as rates and prices rise.

Mr. Bibby says condo prices in Toronto are currently 1- or 2-per-cent higher than they were at this time last year, but he estimates prices have dipped between three and five per cent since the spring peak.

The dining area just off the kitchen creates a sense of home for people downsizing. ‘They’re not going to be eating Thanksgiving dinner at a breakfast bar,’ says Christopher Bibby, broker with Re/Max Hallmark Bibby Group Real Estate.The Print Market

“Sellers have had to change their expectations very quickly,” as bidding wars backfire and properties sit on the market.

Mr. Bibby adds that suites that are large enough to appeal to empty nesters are hard to find. He recently sold a unit with 1,890 square feet and an outdoor terrace at 6 Jackes Ave. for $3.025-million.

Another buyer who had recently sold a house purchased a unit at 181 Davenport Rd. with just less than 1,500 square feet of living space for $2.59-million.

Deals tend to come together slowly, he says, and negotiations are extensive. Mr. Bibby believes the shift in sentiment is more than a traditional summer slowdown timed to vacations because buyers are still booking appointments.

“We’re getting showings on properties and nobody wants to pay.”

Andre Kutyan, broker at Harvey Kalles Real Estate, is finding the market inconsistent as some properties sell quickly and others sit.

Of all his listings, the busiest is a unit at the Four Seasons Hotel and Private Residences with an asking price of $6.495-million.

The building at 50 Yorkville Ave. draws people moving from large homes he says, and unit 3603 has a large outdoor terrace.

Windows that open have been more of a draw than balconies for condo buyers says Mr. Bibby, and the condos at 50 Yorkville Ave. boasts plenty of window space with views of the city.The Print Market

“You’ve got a lot of empty nesters with deep pockets looking for something like that.”

Properties listed between $1.3-million and $1.8-million are not getting the same action, he adds.

A trend that has not let up since the pandemic began is that downsizers looking for a condo are much more steadfast in their need for a unit with a terrace or balcony.

“COVID-19 has changed that – people want outdoor space,” he says.

In June, Mr. Kutyan listed a two-bedroom, two-bathroom unit in an older building at Bay and Bloor. The condo has a nicely renovated interior but doesn’t provide outdoor space, he says.

The sellers purchased the unit for $2.7-million in 2018.

When it came time to sell this year, Mr. Kutyan advised the sellers to list the unit for less than they paid for it. The owners set an asking price of $2.495-million but, after three weeks, the unit hadn’t sold so Mr. Kutyan reduced the price to $2.349-million.

Two days after the price cut, the unit sold for $2.315-million, or $1,137 per square foot.

Luke Dalinda, a real estate agent with Royal LePage Real Estate Services, says many empty nesters seem to be spurred on by the central bank’s moves. Some who sold property in the Kingsway, Oakville and other upscale areas are ready to jump quickly when attractive units become available.

While condo prices in Toronto are currently higher than they were at this time last year, but they have dipped since the spring peak, according to Mr. Bibby.The Print Market

“They have funding from a sale – that got them going in July,” he says.

Mr. Dalinda recently represented buyers who purchased a two-bedroom-plus-den condo at Riverhouse at Old Mill for $3.895-million.

Unit 1002 at 30 Old Mill Rd. has 2,381 square feet of interior space and a terrace of 1,400 square feet.

The buyers are downsizers who sold their large home and moved to Humber Bay Shores, he says. After a time they found the area too became too congested, Mr. Dalinda says, and they departed for the more tranquil location next to the Humber River.

Mr. Dalinda notes that in the second week of August, Humber Bay Shores had 149 units listed for sale under $1-million. In the range from $1-million to more than $6-million, there were 46 units on the market.

The imbalance shows how the market has been tilted toward smaller units, he adds.

Mr. Dalinda says most downsizers are interested only in a turnkey unit with outdoor space.

The irony to him is that many owners find that condo balconies are not very comfortable because they are too windy or there are too many bugs.

“Most balconies are being used for storage or not used at all,” he says. “I see more people trying to bypass condo rules to store stuff there.”

While a balcony may not be a draw for everyone, Luke Dalinda, a real estate agent with Royal LePage Real Estate Services says most downsizers are interested only in a turnkey unit with outdoor space. And unit 3603 at 50 Yorkville Ave. has a large outdoor terrace.The Print Market

For many owners, he says, having windows that open turns out to be a better option.

And while most buyers do not want to renovate, he adds, there are good opportunities in older buildings for people who are willing to put in some work. Trades are more readily available than they were in the past couple of years, he adds.

Mr. Bibby says downsizers have no wish to live in many of the newer condos for sale downtown, which tend to be cramped units with micro-appliances and no window in the bedrooms. Those were designed for investors who rent them out, he says.

“If you’re downsizing, you have stuff. I am working with a couple right now and they bring a measuring tape every time.”

Many today favour older buildings because they provide more generous layouts with dining rooms and space for the extended family.

“They’re not going to be eating Thanksgiving dinner at a breakfast bar,” he says of empty nesters.

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Business

Natural gas producers await LNG Canada’s start, but will it be the fix for prices?

Published

2 days ago

October 25, 2024

Anne Joseph

CALGARY – Natural gas producers in Western Canada have white-knuckled it through months of depressed prices, with the expectation that their fortunes will improve when LNG Canada comes online in the middle of next year.

But the supply glut plaguing the industry this fall is so large that not everyone is convinced the massive facility’s impact on pricing will be as dramatic or sustained as once hoped.

As the colder temperatures set in and Canadians turn on their furnaces, natural gas producers in Alberta and B.C. are finally starting to see some improvement after months of low prices that prompted some companies to delay their growth plans or shut in production altogether.

“We’ve pretty much been as low as you can go on natural gas prices. There were days when (the Alberta natural gas benchmark AECO price) was essentially pennies,” said Jason Feit, an advisor at Enverus Intelligence Research, in an interview.

“As a producer, it would not be economic to have produced that gas . . . It’s been pretty worthless.”

In the past week, AECO spot prices have hovered between $1.20 and $1.60 per gigajoule, a significant improvement over last month’s bottom-barrel prices but still well below the 2023 average price of $2.74 per gigajoule, according to Alberta Energy Regulator figures.

The bearish prices have come due to a combination of increased production levels — up about six per cent year-over-year so far in 2024 —as well as last year’s mild winter, which resulted in less natural gas consumption for heating purposes. There is now an oversupply of natural gas in Western Canada, so much so that natural gas storage capacity in Alberta is essentially full.

Mike Belenkie, CEO of Calgary-headquartered natural gas producer Advantage Energy Ltd., said companies have been ramping up production in spite of the poor prices in order to get ahead of the opening of LNG Canada. The massive Shell-led project nearing completion near Kitimat, B.C. will be Canada’s first large-scale liquefied natural gas export facility.

It is expected to start operations in mid-2025, giving Western Canada’s natural gas drillers a new market for their product.

“In practical terms everyone’s aware that demand will increase dramatically in the coming year, thanks to LNG Canada . . . and as a result of that line of sight to increased demand, a lot of producers have been growing,” Belenkie said in an interview.

“And so we have this temporary period of time where there’s more gas than there is places to put it.”

In light of the current depressed prices, Advantage has started strategically curtailing its gas production by up to 130 million cubic feet per day, depending on what the spot market is doing.

Other companies, including giants like Canadian Natural Resources Ltd. and Tourmaline Oil Corp., have indicated they will delay gas production growth plans until conditions improve.

“We cut all our gas growth out of 2024, once we’d had that mild winter. We did that back in Q2, because this is not the right year to bring incremental molecules to AECO,” said Mike Rose, CEO of Tourmaline, which is Canada’s largest natural gas producer, in an interview this week.

“We moved all our gas growth out into ’25 and ’26.”

LNG Canada is expected to process up to 2 billion cubic feet (Bcf) of natural gas per day once it reaches full operations. That represents what will be a significant drawdown of the existing oversupply, Rose said, adding that is why he thinks the future for western Canadian natural gas producers is bright.

“That sink of 2 Bcf a day will logically take three-plus years to fill. And then if LNG Canada Phase 2 happens, then obviously that’s even more positive,” Rose said.

While Belenkie said he agrees LNG Canada will lift prices, he’s not as convinced as Rose that the benefits will be sustained for a long period of time.

“Our thinking is that markets will be healthy for six months, a year, 18 months — whatever it is — and then after that 18 months, because prices will be healthy, supply will grow and probably overshoot demand again,” he said, adding he’s frustrated that more companies haven’t done what Advantage has done and curtailed production in an effort to limit the oversupply in the market.

“Frankly, we’ve been very disappointed to see how few other producers have chosen to shut in with gas prices this low. . . you’re basically dumping gas at a loss,” Belenkie said.

Feit, the analyst for Enverus, said there’s no doubt LNG Canada’s opening will be a major milestone that will help to support natural gas pricing in Western Canada. He added there are other Canadian LNG projects in the works that would also provide a boost in the longer-term, such as LNG Canada’s proposed Phase 2, as well as potential increased demand from the proliferation of AI-related data centres and other power-hungry infrastructure.

But Feit added that producers need to be disciplined and allow the market to balance in the near-term, otherwise supply levels could overshoot LNG Canada’s capacity and periods of depressed pricing could reoccur.

“Obviously selling gas at pennies on the dollar is not a sustainable business model,” Feit said.

“But there’s an old industry saying that the cure for low gas prices is low gas prices. You know, eventually companies will have to curtail production, they will have to make adjustments.”

This report by The Canadian Press was first published Oct. 25, 2024.

Companies in this story: (TSX:TOU; TSX:AAV, TSX:CNQ)

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Business

Corus Entertainment reports Q4 loss, signs amended debt deal with banks

Published

2 days ago

October 25, 2024

Anne Joseph

TORONTO – Corus Entertainment Inc. reported a fourth-quarter loss compared with a profit a year ago as its revenue fell 21 per cent.

The broadcaster says its net loss attributable to shareholders amounted to $25.7 million or 13 cents per diluted share for the quarter ended Aug. 31. The result compared with a profit attributable to shareholders of $50.4 million or 25 cents per diluted share in the same quarter last year.

Revenue for the quarter totalled $269.4 million, down from $338.8 million a year ago.

On an adjusted basis, Corus says it lost two cents per share for its latest quarter compared with an adjusted loss of four cents per share a year earlier.

The company also announced that it has signed an deal to amend and restate its existing syndicated, senior secured credit facilities with its bank group.

The restated credit facility was changed to reduce the total limit on the revolving facility to $150 million from $300 million and increase the maximum total debt to cash flow ratio required under the financial covenants.

This report by The Canadian Press was first published Oct. 25, 2024.

Companies in this story: (TSX:CJR.B)

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Business

Hiring Is a Process of Elimination

Published

3 days ago

October 24, 2024

Nick Kossovan

Job seekers owe it to themselves to understand and accept; fundamentally, hiring is a process of elimination. Regardless of how many applications an employer receives, the ratio revolves around several applicants versus one job opening, necessitating elimination.

Essentially, job gatekeepers—recruiters, HR and hiring managers—are paid to find reasons and faults to reject candidates (read: not move forward) to find the candidate most suitable for the job and the company.

Nowadays, employers are inundated with applications, which forces them to double down on reasons to eliminate. It’s no surprise that many job seekers believe that “isms” contribute to their failure to get interviews, let alone get hired. Employers have a large pool of highly qualified candidates to select from. Job seekers attempt to absolve themselves of the consequences of actions and inactions by blaming employers, the government or the economy rather than trying to increase their chances of getting hired by not giving employers reasons to eliminate them because of:

Typos, grammatical errors, poor writing skills.

“Communication, the human connection, is the key to personal and career success.” ― Paul J. Meyer.

The most vital skill you can offer an employer is above-average communication skills. Your resume, LinkedIn profile, cover letters, and social media posts should be well-written and error-free.

Failure to communicate the results you achieved for your previous employers.

If you can’t quantify (e.g. $2.5 million in sales, $300,000 in savings, lowered average delivery time by 6 hours, answered 45-75 calls daily with an average handle time of 3 and a half minutes), then it’s your opinion. Employers care more about your results than your opinion.

An incomplete LinkedIn profile.

Before scheduling an interview, the employer will review your LinkedIn profile to determine if you’re interview-worthy. I eliminate any candidate who doesn’t have a complete LinkedIn profile, including a profile picture, banner, start and end dates, or just a surname initial; anything that suggests the candidate is hiding something.

Having a digital footprint that’s a turnoff.

If an employer is considering your candidacy, you’ll be Google. If you’re not getting interviews before you assert the unfounded, overused excuse, “The hiring system is broken!” look at your digital footprint. Employers are reading your comments, viewing your pictures, etc. Ask yourself, is your digital behaviour acceptable to employers, or can it be a distraction from their brand image and reputation? On the other hand, not having a robust digital footprint is also a red flag, particularly among Gen Y and Gen Z hiring managers. Not participating on LinkedIn, social media platforms, or having a blog or website can hurt your job search.

Not appearing confident when interviewing.

Confidence = fewer annoying questions and a can-do attitude.

It’s important for employers to feel that their new hire is confident in their abilities. Managing an employee who lacks initiative, is unwilling to try new things, or needs constant reassurance is frustrating.

Job searching is a competition; you’re always up against someone younger, hungrier and more skilled than you.

Besides being a process of elimination, hiring is also about mitigating risk. Therefore, being seen as “a risk” is the most common reason candidates are eliminated, with the list of “too risky” being lengthy, from age (will be hard to manage, won’t be around long) to lengthy employment gaps (raises concerns about your abilities and ambition) to inappropriate social media postings (lack of judgement).

Envision you’re a hiring manager hiring for an inside sales manager role. In the absence of “all things being equal,” who’s the least risky candidate, the one who:

offers empirical evidence of their sales results for previous employers, or the candidate who “talks a good talk”?
is energetic, or the candidate who’s subdued?
asks pointed questions indicating they’re concerned about what they can offer the employer or the candidate who seems only concerned about what the employer can offer them.
posts on social media platforms, political opinions, or the candidate who doesn’t share their political views?
on LinkedIn and other platforms in criticizes how employers hire or the candidate who offers constructive suggestions?
has lengthy employment gaps, short job tenure, or a steadily employed candidate?
lives 10 minutes from the office or 45 minutes away?
has a resume/LinkedIn profile that shows a relevant linear career or the candidate with a non-linear career?
dressed professionally for the interview, or the candidate who dressed “casually”?

An experienced hiring manager (read: has made hiring mistakes) will lean towards candidates they feel pose the least risk. Hence, presenting yourself as a low-risk candidate is crucial to job search success. Worth noting, the employer determines their level of risk tolerance, not the job seeker, who doesn’t own the business—no skin in the game—and has no insight into the challenges they’ve experienced due to bad hires and are trying to avoid similar mistakes.

“Taking a chance” on a candidate isn’t in an employer’s best interest. What’s in an employer’s best interest is to hire candidates who can hit the ground running, fit in culturally, and are easy to manage. You can reduce the odds (no guarantee) of being eliminated by demonstrating you’re such a candidate.

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Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.