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Buying or selling your home right now? Here's what the real estate landscape looks like these days –



The World Health Organization declared COVID-19 a pandemic in March. Subsequently, the number of home sales in Canada fell sharply as social distancing measures were put in place, open houses got cancelled and fewer new listings became available. 

Three months on, the Canadian real estate market is no longer in free fall — sales and listings numbers are rising (though both are down significantly compared to last year), and prices have remained fairly steady — but there continues to be a lot of uncertainty for both buyers and sellers. While bidding wars are still taking place in many markets, the Canada Mortgage and Housing Corporation (CMHC) predicts that prices will fall between nine and 18 per cent this year, and sales and prices might not be back to pre-pandemic levels even by the end of 2022. 

If you’re looking to buy or sell residential property this year, you may already know that it’s a quickly moving market with many regional differences — and the process looks quite different now than it did at the start of the year or even a month ago. With that in mind, we reached out to real estate experts in four different provinces* for their market insights and best advice on everything from staging a virtual showing to getting a mortgage approval. 

*Note: In Canada, real estate is largely regulated based on provincial or territorial legislation. Some information included in this article may not apply in your province or territory. 

It’s (still, kind of) a seller’s market

“There was, right at the beginning, a dramatic drop in properties listed for sale because many sellers were concerned enough to not want to have people in their house,” says Anthony Bastiaanssen, a Realtor in Kelowna, B.C., and chair of the British Columbia Real Estate Association. “People actually took their properties off the market for a period of time or delayed the process of listing it for sale.” But so far this spring, prices have remained relatively steady, despite sales falling significantly. “Prices have not, in any reports that I’ve seen, shown any significant adjustment,” says Bastiaanssen. “Most of the economic forecasts do call for a slight adjustment in pricing down in the short term, but honestly, we still haven’t really seen that.” 

According to many reports, attractive properties in in-demand areas are still selling quickly, and, in some cases, attracting multiple offers. “[In Quebec], it’s a very strong real estate market for the seller,” says Anouk Vidal, a real estate broker in Saint-Jérôme, Que., and spokesperson for the Quebec Professional Association of Real Estate Brokers. “We have very low inventory … [and] when a property comes on the market, there’s a lot of demand for it.” 

With many regions starting to reopen their economies and loosen restrictions, there’s been an increase in real estate activity over the last few weeks. “The market is actually extremely active right now,” says Vidal. “We were on pause and couldn’t do anything for a couple of months, [so] all the people that need to buy or sell are doing it at this point.” Notably, both Vidal and Bastiaanssen have either observed or heard of an uptick of interest in their provinces for rural and countryside listings, particularly from city-dwellers looking for more space or a recreational property. 

Expect virtual showings and tours, and new protocols

Because real estate is largely provincially or territorially regulated, the industry rules and guidelines pertaining to COVID-19 — which are constantly shifting as local regulations change — are slightly different in each region. For example, open houses are currently prohibited in Quebec, says Vidal, as they are in Ontario. But in Alberta, real estate professionals are starting to offer them again for vacant properties. 

Still, no matter where you are in Canada, expect to see an increased reliance on technology as videos, 3D renderings and other virtual tours become increasingly important sales and marketing tools. With sellers (and many tenants) hesitant to have people going through their home right now, open houses have gone online, with some real estate professionals doing video walk-throughs with their clients. “There’s been a pretty significant uptick [in] virtual tour-type photography,” says Bastiaanssen, who notes that more serious potential buyers will follow with a visit to the property in person. 

When it comes to those fewer, spaced out in-person showings, there are COVID-related guidelines that sellers, buyers and real estate professionals to adhere to. For example, in Quebec, real estate professionals will normally ask buyers (and sellers that are in the properties) to sign a declaration confirming that they’re healthy and haven’t been in contact with someone with COVID-19 ahead of any in-person visits. “[In British Columbia], very specific protocols and precautions, [created] with guidance from WorkSafeBC and the provincial real estate association and real estate council, are being taken to ensure the health and safety of both clients and Realtors themselves,” says Bastiaanssen. That could mean wearing face masks and gloves, using sanitizing wipes and giving buyers directions to avoid handling or touching anything in the home, including light switches and door handles. 

With these additional precautions and guidelines in place, both Vidal and Bastiaanssen note that they are seeing mostly “serious” buyers and sellers in the market right now. “It’s a lot more complicated with all the processes that we have to go through,” says Vidal. “We’re working with people that either need [or] really want to move, that are pre-approved at the bank for their mortgage and that, if they find what they want, [are] going to be willing to make an offer.”

Purchase agreements may include COVID-19 related clauses

In addition to typical purchase agreement clauses, such as home inspection or property inspection conditions, some individuals who are worried about losing their job or getting sick have been asking for COVID-related clauses to be worked into contracts. According to Jeffrey Kahane, a real estate lawyer at Kahane Law Office in Calgary, real estate brokerages have differing policies when it comes to these COVID-related clauses,; but ultimately, the contract terms should come down to what’s important for you as a buyer or seller. “Sometimes, it has nothing to do with getting out of the deal,” says Kahane. It could be about requiring that “the seller hire a reputable company to come in and do a deep clean on the property before possession.” For buyers doing virtual tours of properties, Kahane notes that it’s important to “put in a condition on the offer that you actually get to go in and view the property” in person. 

Additionally, because of COVID-19, some provinces are currently allowing virtual signings of legal documents such as agreements of purchase and sale. “In Alberta, they have allowed virtual signings until August at least, where we can have people swear affidavits and sign declarations by video, and take ID by video,” says Kahane. “It works fine, but we’re finding that very few of our clients inside of Calgary are opting for that; they’d rather just come into the office.”

For buyers, mortgage rates are exceptionally low

One thing going in favour of buyers? Low mortgage rates. “Rates are exceptionally low relative to what we’ve seen over the past 12 to 24 months,” says Paul von Martels, vice president of prime and reverse mortgage credit at Equitable Bank. He notes that the five-year, fixed-rate mortgage remains the most popular product by far, and the mortgage-approval process isn’t taking any longer than it did pre-COVID. “We’re offering electronic signatures for all of our mortgage documentation, right from start to finish, if a client chooses to take that option,” says von Martels. “We’ve done a lot of things to enable a more remote home buying, selling and refinancing.” For example, some of Equitable Bank’s home-appraisal partners are doing virtual appraisals, “taking pictures through windows and working with clients to acquire other interior pictures.” 

One thing that all buyers should keep in mind is that CMHC’s stricter mortgage insurance rules will be coming into effect on July 1, requiring buyers who want to access CMHC’s mortgage default insurance to have higher credit scores, no borrowed down payments and lower debt ratios. “All else being equal, in many cases, the changes will reduce buying power for borrowers,” says von Martels, but adds that the two other companies in Canada that offer mortgage default insurance, Genworth and Canada Guaranty, “have publicly come out and said that they will not be making the same changes that CMHC will be implementing.”     

For prospective home buyers whose income might have been temporarily impacted by the pandemic, von Martels’ advice is to explore options with a mortgage broker who has experience working with a wide range of mortgages, as they might be able to guide you toward alternative products and lenders who offer more flexibility. 

It might also make sense to temporarily pause your real estate search if you have a low risk tolerance or are experiencing any economic uncertainty. It’s hard even for experts to forecast what the Canadian real estate market will look like in six months, or in 2021 with confidence. “I think that it’s important for clients or borrowers to stay honest with themselves and not to rush into things because they see market activity picking up or maybe because they think that they can get a deal on something,” says von Martels.

Sellers, presenting well is still key

Homeowners with extra time on their hands should be working on landscaping and improving the outside appearance of their home right now ahead of listing their home for sale, advises Vidal. Aside from the outer areas of a home always drawing buyers’ eyes in the summer, Vidal thinks that people will place value on comfortable outdoor spaces especially now, after being stuck inside.

Truc Nguyen is a Toronto-based writer, editor and stylist. Follow her at @trucnguyen.

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Firm Capital announces its Special Situation Finance Group | RENX – Real Estate News EXchange



Firm Capital Corporation, a leading non-bank lender since 1988, is pleased to announce its Special Situation Finance Group that will provide “tailor made” structuring to real estate companies impacted by COVID-19. The program will provide liquidity, restructuring of existing loans, bridge financing and debtor-in-possession funding (DIP).

See below for more details.

Special Situation Finance Group

The Special Situation Finance Group was created to focus on structured real estate finance across Canada, for unique transactions that require “tailor made” structuring for; debt purchases; debtor-in-possession or DIP lending; margin loans secured by stock ownership; re-capitalization of special situation transactions and all other non-traditional real estate lending situations.

Firm Capital offers fast execution on:

* Performing and non-performing debt purchases;

* DIP lending;

* Restructuring finance;

* Lending against partial ownership interests;

* Re-capitalization of balance sheet & special situation transactions;

* Margin loans secured by stock ownership;

* Bridge financing for leveraged buyouts;

* All other non-traditional real estate lending situations;

– Bridge and transitional lending solutions: In a tightening financing environment, Firm Capital will assist borrowers on new acquisitions and refinancing, offering a mix of senior, mezzanine and junior loans;

– Acquisition and restructuring of loans: Working with lenders facing impaired performing and non-performing loans and securities to purchase and restructure; and

– Flexible liquidity solutions for sponsors: Firm Capital will use preferred equity to help recapitalize and stabilize balance sheets where existing debt or equity is constrained.

About Firm Capital’s mortgage operations:

As part of the Firm Capital Organization, Firm Capital Corporation, a leading non-bank lender since 1988, provides creative and innovative solutions to real estate finance. Firm Capital is the mortgage banker for various capital pools, including Firm Capital Mortgage Investment Corporation (TSX: FC), Firm Capital Mortgage Investors Corporation (a private mortgage fund since 1994), Firm Capital Private Mortgage Trust and Firm Capital Private Partners Inc.

Tailored mortgage engineering by Firm Capital®

To learn more, contact Michael today:

Michael Carragher
Vice President, Mortgage Investments
Tel.: (416) 635-0221 x 245

Ontario Mortgage Brokerage, Lenders and Administrators Act License #10164, Administrators License #11442

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Toronto's real estate market is rebounding fast as pandemic restrictions lift – blogTO



Home sales are surging in Toronto once again this summer after a brief yet steep drop due to COVID-19, and prices are following suit despite holding steady (if not increasing in most parts of the city) amid the pandemic.

The Toronto Regional Real Estate Board (TRREB)’s latest Market Watch Report, released on Tuesday, indicates that GTA realtors made 8,701 residential sales in June of 2020 — a whopping 89 per cent jump from the previous month’s figures.

“This result represented a very substantial increase over the May 2020 sales result, both on an actual (+89 per cent) and seasonally adjusted basis (+84 per cent), and was only down by 1.4 per cent compared to June 2019,” the report reads.

Considering that sales were down 53.7 per cent year over year in May, and 69 per cent in April, that’s not a bad data point at all.

Some GTA market segments and regions even saw growth in June, most notably detached homes and townhouses in parts of the GTA “surrounding the City of Toronto.”

Detached and townhouse sales were up 10.4 per cent and 7.8 per cent respectively in the 905, according to TRREB. Home prices were up across the board for all market segments and parts of the GTA.

“The average selling price for all home types combined was $930,869 – up by 11.9 per cent compared to June 2019,” reads the report. “The actual and seasonally-adjusted average selling price was also up substantially compared to May 2020, by 7.8 per cent and 9.8 per cent respectively.”

New listings are up slightly, year over year, by 2.1 per cent, but TRREB reports that “active listings” are down by about 28.8 per cent.

“It will be important to closely monitor housing market conditions as economic recovery continues in the second half of 2020 and into 2021,” said TRREB CEO John DiMichele.

“The persistent lack of listing inventory in the GTA understandably took a back seat to COVID-related issues in the short term, but supply should once again be top-of-mind once the recovery takes hold, in order to ensure long-term affordability in the GTA.”

Hey, at least rent prices are down.

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Zara Founder Unveils $17.2 Billion Global Real Estate Empire – Financial Post



(Bloomberg) — After making a fortune in clothing, Amancio Ortega turned his attention to real estate.

The Spanish billionaire’s property holdings have soared to 15.2 billion euros ($17.2 billion), his firm revealed Tuesday for the first time, giving him the largest real estate portfolio among Europe’s super-rich.

Ortega, 84, the founder and owner of fashion label Zara, invested 2.1 billion euros in real estate last year through various subsidiaries of his holding company Pontegadea, according to an emailed statement. Pontegadea, which owns 59.3% of Zara parent Inditex SA, had a net income of 1.8 billion euros for 2019, including 1.64 billion euros in Inditex dividends and 621 million euros from real estate assets.

Ortega, Spain’s richest man, has diversified his fashion fortune to preserve his sizable wealth, investing more than $3 billion in U.S. real estate in recent years.

Acquisitions include landmark properties like Manhattan’s historic Haughwout Building and Miami’s tallest office tower. Last year, his investment firm completed a $72.5 million deal for a downtown Chicago hotel, which followed purchases of a building in Washington’s central business district and two Seattle office buildings.

As well as being landlord to tech giants such as Inc and Facebook Inc, Pontegadea also counts Inditex rivals Hennes & Mauritz AB and The Gap Inc as tenants.

The son of a railroad worker, Ortega has a net worth of $58.5 billion, according to the Bloomberg Billionaires Index, the bulk of which comes from his majority stake in Inditex. His fortune has slumped more than a fifth this year in the wake of the coronavirus pandemic, which has forced Inditex to close stores. The company’s shares have fallen 22% this year.

Aside from real estate, Ortega has also invested in energy and telecommunications, buying a 5% stake in Enagas last year. In 2018, Pontegadea bought a 9.99% stake in Telefonica SA’s tower unit for 378.8 million euros.

Pontegadea said it expects to receive 646 million euros in dividends from Inditex in 2020.

©2020 Bloomberg L.P.

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