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Canadians opt for longer commutes as home prices grow in suburbs – Global News

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For Al Figueiredo, the scenic drive down highway 116 to Crystal Beach was enough to convince him to leave Toronto.

The school teacher who splits his time between remote work and working in the city, decided to leave Toronto’s Trinity Bellwoods neighbourhood in late June for Fort Erie, Ont.

Figueiredo says the extra space, newer home and slower pace of life were worth the punishing one-and-a-half to two-hour drive to Toronto. Even if Zoom classes end and Figueiredo is expected to return to the classroom full-time, he says he prefers the company of his commuting radio station CHFI to cheerless interactions with neighbours in the city.

As prices rise in the suburbs of major Canadian cities, telecommuting workers like Figueiredo are looking further afield than what would be typically considered a “comfortable” commute.

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Before the pandemic began, a survey by staffing firm Robert Half suggested that about 36 per cent of commuters felt their commute was too long, with respondents’ commutes averaging 53 minutes each day — far less than the three to four hours of Figueiredo’s round trip.

Telecommuting — normalized by lockdowns during the COVID-19 pandemic — helps. But the rising cost of buying a home in the suburbs also plays a role.

Brenda and Jeff Suggett prepared earlier this year to move from St. Catharines to Burlington, Ont., to be closer to Suggett’s job. The pandemic meant that more Toronto dwellers were looking to buy in St. Catharines, boding well for the sale of their house. But purchasing in Burlington was another story — the closer to Toronto, the higher the prices, Brenda Suggett said. Instead, they also moved to Fort Erie — thanks to Jeff’s job going to a mostly remote model.

There is some data to suggest that as downtown dwellers look for more spacious abodes in the suburbs, suburbanites, in turn, are seeing home prices rise in their neighbourhoods.






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Getting buyers’ attention on the housing market


Getting buyers’ attention on the housing market

Brokerage Zoocasa estimates that the areas in greater Toronto that set new records in home prices in August were farthest from the city centre: Ajax, Burlington, Brampton, Clarington, Essa, Halton Hills, Innisfil, Mississauga, New Tecumseth, Oshawa and Scugog and Whitby.

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Other major cities are also seeing the affordability gap widening in the suburbs.

Median prices of single-family homes were up 27 per cent year-over-year in August in the North Shore suburb of Montreal, and 38 per cent in Saint-Jean-sur-Richelieu, according to the Quebec Professional Association of Real Estate Brokers.

Montreal suburbs can offer newer builds than homes closer to the city, while chalets are also in demand if they have waterfront access, says Audrey Tam, residential real estate broker at Re/Max Crystal in Saint-Eustache, Que.

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How will commuting change after coronavirus? Experts weigh in

In B.C., the areas of Sunshine Coast, Bowen Island, and Burnaby East all saw one-year price surges in August on par with North and East Vancouver. The Fraser Valley Real Estate Board had its best sales numbers in 15 years in August.

Real Estate Board of Greater Vancouver chairwoman Colette Gerber says she doesn’t see evidence of a mass exodus from Vancouver, since so many city-centre neighbourhoods are hot. She says that most buyers report wanting to move within their own neighbourhoods.

But Kristy Mattiazzo, an agent at Sutton-Centre Realty in the Vancouver area, notes that’s not always possible.

“With the pricing high as it is, and continuing to rise, people go wherever their money will allow. One municipality will be, ideally, wanting to move to the next, adjacent municipality. Money will dictate that and sometimes it will not work that way, with low inventory and prices continuing to rise,” says Mattiazzo.

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What houses are millennials in the market for?


What houses are millennials in the market for?

With future rail expansions and condo buildings a while away, and telecommuting becoming the norm, Mattiazzo says she does not see the “waves” of people moving farther from the cities as a temporary trend.

“Where are people going to go, with prices on the rise? Why would you sell your house to pay equal or more?”

Back in Al Figueiredo’s new hometown of Fort Erie, average prices are up 28 per cent from last year, owing in part to new developments, says Deanna Gunter, broker and manager at Royal LePage NRC Realty, Brokerage in Niagara-on-the-Lake and Niagara Falls.

“We are seeing competing offers on properties in every municipality across the region. Some of the higher-end are people moving out of Toronto,” says Gunter.

“First-time buyers, a lot of times, are more local people getting into the market. Because the prices are up this year and in the past four or five years, it’s very difficult for young people and first time buyers to get into the market.”

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© 2020 The Canadian Press

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RioCan CEO says real estate industry's norms have turned upside-down – OrilliaMatters

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TORONTO — Demand for space in prime office towers and shopping malls has plunged because the pandemic suddenly turned them into places that customers and tenants “don’t even want to go to,” RioCan Real Estate Investment Trust’s veteran chief executive said Tuesday.

“Unfortunately … everything that was accepted wisdom in the real estate business only eight months ago has been turned on its head, even in the face of record low interest rates and massive government spending,” Edward Sonshine told analysts on a conference call.

Another formerly “bulletproof” segment of the industry — multi-unit residential rental properties — is also being questioned due to government freezes on rents and evictions, Sonshine said.

An exception to the gloom, Sonshine said, has been strong demand for new condo developments and single-family residences.

Sonshine said RioCan fared better during the third quarter than he expected it would and credited the work of RioCan management, led by Jonathan Gitlin, who becomes chief executive April 1. Sonshine, who announced on Oct. 21 that he’ll retire as CEO in March after nearly three decades, will become chairman of the board.

Gitlin told analysts on RioCan’s third-quarter conference call that rent collected from tenants, plus government subsidies, represented 93.4 per cent of billed rent for July, August and September and 91.9 per cent for October.

That compared with just 73 per cent in the months of April, May and June, as reported in July with RioCan’s second-quarter results.

“While we’d clearly prefer to report 100 per cent collection, as we’ve been able to do during the first 26 years of our operation, we’re pleased with the steady upward collection trajectory since April,” Gitlin said.

RioCan had estimated early in the pandemic that its overall property occupancy rate could fall to as low as 94 per cent by the end of 2020, but it had improved to 96 per cent as of Sept. 30 and it’s expected to be stable through to the end of the year.

“Happily, we’re leasing space up almost as fast as the tenants disappear,” Sonshine said.

But he said forecasts about coming trends are difficult to make without knowing how long new COVID shutdowns will be in effect. especially in the Greater Toronto Area and the Ottawa region — the biggest markets for RioCan.

“You know, there’s only so long that tenants can go without revenue before they start wanting to talk to their landlord,” Sonshine said.

RioCan said that as of the end of the quarter on Sept. 30, essentially all of its tenants were open and operating — compared with only 85 per cent as of July 28.

The real estate trust said it had $117.6 million of net income or 37 cents per unit for the three months ended Sept. 30, down from $177.6 million or 58 cents in the 2019 third quarter.

It said $14.4 million of the $60-million decline was due to pandemic-related provisions related to rent abatement and bad debts, while $48 million was due to higher net fair value losses.

Funds from operations, a key metric in real estate, declined to $128.8 million or 41 cents per unit from $142.8 million or 47 cents per unit.

All the key financial measures were an improvement from RioCan’s second quarter ended June 30, when it posted a net loss of $350.8 million or $1.10 per unit and FFO dropped to 35 cents per unit.

In July, RioCan said it would divest from brick-and-mortar apparel retailers in favour of grocery stores, pharmacies and e-commerce.

But Sonshine said Thursday that RioCan has decided to hold onto its traditional retail properties, which include shopping malls and plazas, and look for better opportunities.

“It’s a really slow market, in any event, because (I think) there’s so much uncertainty about the future of retail,” he said.

Revenue fell to $302.3 million from $353.9 million a year earlier.

This report by The Canadian Press was first published Oct. 29, 2020.

Companies in this story: (TSX:REI.UN)

David Paddon, The Canadian Press

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Mall real estate company collected 5 million images of shoppers, say privacy watchdogs – CBC.ca

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The real estate company behind some of Canada’s most popular shopping centres embedded cameras inside its digital information kiosks at 12 shopping malls across Canada to collect millions of images — and used facial recognition technology without customers’ knowledge or consent — according to a new investigation by the federal, Alberta and B.C. privacy commissioners.

“Shoppers had no reason to expect their image was being collected by an inconspicuous camera, or that it would be used, with facial recognition technology, for analysis,” said federal Privacy Commissioner Daniel Therrien in a statement.

“The lack of meaningful consent was particularly concerning given the sensitivity of biometric data, which is a unique and permanent characteristic of our body and a key to our identity.”

According to the report, the technology Cadillac Fairview used — known as “anonymous video analytics” or AVA— took temporary digital images of the faces of individuals within the field of view of the camera in the directory.

It then used facial recognition software to convert those images into biometric numerical representations of individual faces  about five million images in total.

That sensitive personal information could be used to identify individuals based on their unique facial features, said the commissioners.

The report said the company also kept about 16 hours of video recordings, including some audio, which it had captured during a testing phase at two malls.

Cadillac Fairview said it used AVA technology to assess foot traffic and track shoppers’ ages and genders — but not to identify individuals. The company also argued shoppers were made aware of the activity through decals it had placed on shopping mall entry doors that referred to Cadillac Fairview’s privacy policy.

But the commissioners said that wasn’t good enough and did not meet the standard for meaningful consent. 

“An individual would not, while using a mall directory, reasonably expect their image to be captured and used to create a biometric representation of their face, which is sensitive personal information, or for that biometric information to be used to guess their approximate age and gender,” they wrote.

The privacy watchdogs also took issue with the way the five million images were stored.

Cadillac Fairview said the images taken by camera were briefly analyzed then deleted — but investigators found that the sensitive biometric information generated from the images was being stored in a centralized database by a third party.

“Our investigation revealed that [Cadillac Fairview Corporation Limited’s] AVA service provider had collected and stored approximately five million numerical representations of faces on CFCL’s behalf, on a decommissioned server, for no apparent purpose and with no justification,” notes the investigation.

“Cadillac Fairview stated that it was unaware that the database of biometric information existed, which compounded the risk of potential use by unauthorized parties or, in the case of a data breach, by malicious actors.”

Company says technology couldn’t identify people

The company said the technology was used to detect the presence of a human face and assign it “within milliseconds” to an approximate age and gender category and maintains it did not store any images during the pilot program and was not capable of recognizing anyone. 

This directory in Chinook Centre mall in south Calgary uses facial recognition technology. (Sarah Rieger/CBC)

“The five million representations referenced in the [Office of the Privacy Commissioner] report are not faces.These are sequences of numbers the software uses to anonymously categorize the age range and gender of shoppers in the camera’s view,” Cadillac Fairview spokesperson Jess Savage said in a statement to CBC News.

“The OPC report concludes there is no evidence that CF was using any technology for the purpose of identifying individuals.”

CF suspended its use of cameras back in 2018 when provincial and federal privacy commissioners launched their probe following a CBC investigation.

In a statement to CBC News on Thursday, the company said it has no plans to reinstall the cameras.

“We subsequently deactivated directory cameras and the numerical representations and associated data have since been deleted,” said Savage.

“We take the concerns of our visitors seriously and wanted to ensure they were acknowledged and addressed.”

However, the three commissioners said they have concerns about the company’s plans going forward.

“The commissioners remain concerned that Cadillac Fairview refused their request that it commit to ensuring express, meaningful consent is obtained from shoppers should it choose to redeploy the technology in the future,” said the commissioners’ statement.

Savage said Cadillac Fairview accepted and implemented all the recommendations “with the exception of those that speculate about hypothetical future uses of similar technology.”

The investigation found the technology was used in five provinces at the following malls:

  • CF Market Mall (Calgary)
  • CF Chinook Centre (Calgary)
  • CF Richmond Centre (Richmond, B.C.)
  • CF Pacific Centre (Vancouver)
  • CF Polo Park (Winnipeg)
  • CF Toronto Eaton Centre (Toronto)
  • CF Sherway Gardens (Toronto)
  • CF Fairview Mall (Toronto)
  • CF Lime Ridge (Hamilton, Ont.)
  • CF Markville Mall (Markham, Ont.)
  • CF Galeries d’Anjou (Montreal)
  • CF Carrefour Laval (Laval, Que.)

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Damages For Lost Opportunity Cannot Be Awarded In A Failed Real Estate Transaction – Real Estate and Construction – Canada – Mondaq News Alerts

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Canada:

Damages For Lost Opportunity Cannot Be Awarded In A Failed Real Estate Transaction

To print this article, all you need is to be registered or login on Mondaq.com.

A recent decision from the Ontario Superior Court of Justice has
confirmed that damages for lost opportunity will not be awarded
when a real estate deal goes wrong.

In Akelius Canada Inc. v. 2436196 Ontario Inc., 2020
ONSC 6182, Justice Morgan held that when a real estate deal falls
apart due to a seller’s default, damages are to be determined
at the closing date and a claim for the future appreciation of the
property is therefore not available.

In Akelius, two sophisticated real estate investors
entered into an Agreement of Purchase and Sale
(“APS“) in 2015 for seven residential
apartment buildings in Toronto. The plaintiff buyer was a Canadian
subsidiary of a large international investment corporation with
holdings across Europe, the United States, and Canada. Over the
course of the transaction, the purchase price was negotiated to a
final price of $225,400,000.

After the APS was executed and prior to closing, the buyer
discovered that there were several mortgages encumbering the title
of some of the properties with total outstanding amounts of over
$48 million. The existence of the mortgages constituted a breach of
the APS and the buyer therefore objected after discovering
them.

The defendant sellers failed to remove the mortgages. However,
in an attempt to salvage the transaction, the sellers proposed to
revise the APS to exclude the encumbered properties from the sale
or alternatively, they proposed that the buyer could assume the
mortgages with a price abatement.

The buyer refused the sellers propositions, sued for breach of
contract, and brought a motion for summary judgment. The sellers
eventually sold the properties in 2018 for about $50 million more
than the purchase price in the APS. In its damages claim, the buyer
sought $50 million, reflecting the appreciation reaped by the
sellers, as well as about $770,000 in sunk costs that it incurred
as a result of the failed transaction.

Justice Morgan had little difficulty finding that the sellers
breached the APS. The buyer was ready, willing, and able to close
the transaction and the sellers were unable to convey good title on
the closing date as a result of the mortgages.

As such, the primary issue for determination was the appropriate
measure of damages. Justice Morgan noted that the basic principle
is that damages should put the injured party back in the position
it would have been in if the contract had not been breached. There
is some flexibility to this approach; courts have stated that the
date of assessment should be determined by what is fair on the
facts of the case.

However, it has also been well established that damages for lost
speculation profits is not an available remedy in a real estate
transaction. The damages must make up what the purchaser lost in
value on the closing date, not what a property speculator standing
in the purchaser’s shoes would have lost.

It was also noted that it did not matter in this case that the
buyer was an “income investor” rather than a true
property speculator. Damages were therefore measured at the date of
closing, which precluded any claims for lost appreciation
profits.

While the case law provided a complete answer to the lost profit
claim, the court in Akelius went on to discuss mitigation,
because the parties had spent much of their time fighting over that
issue. The court held that the buyer had either failed to mitigate
its damages or, more likely, fully mitigated its damages. The buyer
refused to produce records of its transactions after January 2016,
and Justice Morgan accordingly drew an adverse inference that the
funds saved on this transaction were spent on other comparable
investments.

As a result, it was held that the buyer was only entitled to
damages for the amount of sunk costs thrown away on the
transaction. Damages for lost opportunity were not awarded. Because
both parties had mixed success, no costs were awarded to either
side.

This decision affirms the courts’ reluctance to consider
claims for lost profits from capital appreciation, even where a
buyer is unfairly deprived of a lucrative opportunity. Real estate
investors should be mindful of this before they opt to sue for
damages.


The authors would like to thank Allan Tung, Articling Student,
for his assistance with this article.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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