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China Real Estate Giant Country Garden Could Be Next To Go Bust



Evergrande, you have company.

Less than two weeks after China real estate conglomerate Evergrande Group filed for Chapter 15 bankruptcy protection in New York City, its competition, Country Garden, may be about to do the same.

Like Evergrande, Country Garden is about to become a household name for those working in the markets. It is China’s top real estate developer in terms of sales and is now poised to become the next casualty in China’s debt crisis. One of China’s best business news agencies, Caixin Global, said Country Garden was poised to default on its bond payments next month, barring a white knight or grace period extension.

Country Garden has three bonds set to mature or with a put option (the right to sell at a certain price booked by the option holder) beginning in September. They have a combined principal balance of 7.3 billion renminbi (or around $1 billion). Caixin said the company is looking to secure funds to pay bondholders.


One bond payment is due on Monday, which is right around the time its grace period ends on a missed August 7 payment. They are asking for more time. If they get an extension of the usual 30-day grace period they started in the first week of August, they either find the money to pay those lenders in that period, or the grace period ends again, and they go bust.

According to Bloomberg, BlackRock
has $358.5 million of Country Garden bonds as of Aug. 14. Allianz owned $301 million in Country Garden debt as recently as June. Fidelity, one of the biggest mutual fund companies targeting retirees and pension plans, is also an owner. As was emerging market asset manager Ashmore Group of London. They, too, have funds on offer for American investors, including retail investors. Ashmore said they had no comment when asked about their positions.

It is unclear if these asset managers still own Evergrande and Country Garden bonds at this time.

Country Garden stocks are part of the iShares MSCI Core Emerging Markets exchange-traded fund (EMG), among many other funds.

Country Garden’s chairwoman Yang Huiyan was once known as China’s richest woman. Forbes lists her family’s net worth at around $4.4 billion.

The company first failed to make interest payments of $22.5 million on dollar-denominated bonds on August 7.

Beijing does not seem willing to bail these guys out, according to Reuters.

Though this is anybody’s guess. As more real estate companies tumble, China’s government will likely be forced to take action. Adding Country Garden to the mix turns up the heat on the Chinese Communist Party (CCP) to make investors whole, or to lower credit costs which are already much lower than they are here.

Following a year of public health policy crushing the Chinese economy and manufacturing moving off-shore to avoid tariffs imposed by Washington, the CCP cannot afford to lose its goodwill with the locals. They will take to the streets if forced to.

“When the China Evergrande crisis unfolded, people feared that others would follow, but certainly not Country Garden. It was much less leveraged than Evergrande,” Alicia Garcia-Herrero, chief economist for Natixis, told German news publisher DW.

“Without a continual increase in (housing) prices, the whole real estate model is unsustainable and even a company like Country Garden can’t make it,” she told DW.

China is “very likely” to bail out Country Garden, Pushan Dutt, an economics professor at INSEAD business school in Singapore, told DW.

China’s real estate sector accounts for about 30% of the country’s gross domestic product. A real estate bubble implosion would have knock-on effects on China, forcing the CCP to pump money into the economy, something Xi Jinping remains reluctant to do.

China spent years wooing Western bond funds into its market, and Western bond lords pushed China to open that market. Asset managers from the U.S. have been big buyers of Chinese government and private bonds, priced in renminbi or dollars, for about 10 years. They were seen as investment-grade alternatives to the low U.S. and European bond yield.

The risks were known. China hawks have been hemming and hawing about a “China hard landing” at least since 2012. It all centered on real estate and provincial debt.

In 2021, Goldman Sachs began warning that Evergrande was teetering.

Kenneth Ho of Goldman Sachs research warned of this again in March 2022.

“More defaults will come. And if (credit) easing comes at a slower pace, more companies will default and it will be closer to our 31.6% default estimation,” he said. “It all hinges on policy outlook.”

Who Gets the Bailout?

The market is always salivating for stimulus and rate cuts. They do the same with China, wishing for rate cuts from the Central Bank, and Western-style money printing.

But Beijing might sit this out depending on how much economic pain the Chinese can take. Provincial governments have a lot of sway within the CCP in Beijing, though, and if major economic engines of the country are mired in unpayable debt obligations, Beijing might have no choice but to bail them out. This could include taking over the company and restructuring its debt. If they bail out bondholders, would it include Western investors, too? To avoid that, the CCP might reject helping money managers.

As far as the U.S. investor goes, should things get really bad and all of these China-focused funds and overweight China emerging market products take losses, will the Treasury Department make the case to bail out “the retail investor” and “retirees” by handing checks to BlackRock and others?

“They won’t do it,” thinks Albert Marko, a partner at Florida-based hedge fund Mavarinas Management Group. It’s not because they can’t or wouldn’t want to. “It’s politics. In an election year, everything will be put under the microscope.”

Congress has spent much of the summer going after China investments. The House Committee on the CCP doesn’t miss a hearing without discussing ways to restrict capital to China.

Washington has consistently warned businesses and investors of the increasing risks of doing business with China. Bailing out Wall Street for taking on that risk would be a terrible look for Washington.

China is arguably the most significant foreign policy issue on Capitol Hill and one most Americans understand and support.

Evergrande shares fell to near $0 on Monday. They are down 14% as of this writing. Vanguard, BlackRock, Schwab and KraneShares ETFs and mutual funds all own this dud.

Country Garden shares are also trading under $1, but are up 12.4% today. DFA Emerging Markets owns it. BlackRock’s iShares own it. They’ll probably be down 12.4% tomorrow.

Still, true believers exist.

“China will recover,” Devan Kaloo, global head of equities and emerging markets for abrdn, the new company name for the Standard Life/Aberdeen merger, said in a note on Monday. “Consumer confidence will increase as debt issues are resolved.”

Abrdn did not respond in time regarding their China holdings.



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Class action against commissions in real estate clears another hurdle



After two years of deliberations, the Federal Court has granted approval for a class-action lawsuit alleging price-fixing and anti-competitive practices to proceed against the real estate industry in the Greater Toronto Area (GTA).

The lawsuit, filed in April 2021 on behalf Toronto resident Mark Sunderland and anyone who sold a home in the GTA after 2010, alleges misconduct by several of the nation’s leading brokerages, including Century 21, Remax and IproRealty Ltd. The Canadian Real Estate Association (CREA) and the Toronto Regional Real Estate Board (TRREB) are also named in the lawsuit.

On Sept. 25, Chief Justice Paul Crampton permitted the case to proceed, positing that there exists a plausible argument that rules put illicit restrictions on the pricing of buyer brokerage services. The respondents had petitioned the court to dismiss the claim, citing a lack of merit. 


The lawsuit contends that the brokerages engaged in an agreement to artificially increase buyer brokerage commissions, which were shouldered by home sellers in the GTA. It is also alleged that CREA and TRREB facilitated and contributed to the execution of this arrangement.

Commission structures for real estate agents and their brokerages differ nationwide, usually involving a percentage-based commission derived from a home’s sale price. In Alberta and British Columbia, the commission structure is typically seven per cent on the initial $100,000 and three per cent on the remaining balance. Conversely, in Toronto, commission is five per cent on the entire amount of the sale.

Although the seller is responsible for paying the entire commission, it is divided between the brokerage representing them and the one representing the buyer.

According to Garth Myers, a partner at Kalloghlian Myers LLP — the law firm responsible for filing Sunderland’s lawsuit — the agreement to split the commission obstructs market competition by forcing sellers to shoulder costs that would typically not be incurred in the absence of such an arrangement, consequently restricting the ability to negotiate prices and leading to inflated brokerage commissions. 


“What we’re hoping to achieve in this case, is to eliminate these rules, which will result in cost savings to real estate sellers and buyers in the Toronto market,” Myers said. “We think there’s massive public benefit if we are successful. And so far, the court has agreed with us.”


Kalloghlian Myers is pursuing compensation not just for Sunderland, but also for those who have sold residential real estate dating back to 2010.


“We won’t stop until we can get compensation for sellers who have been impacted by this,” stated Myers.

In an email, the Canadian Real Estate Association said, “we continue to believe the claims against TRREB, CREA and other defendants are without merit, and we will continue to defend our members in this case.”


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This $2 million Toronto home underwent a huge makeover and now looks better than ever



Back in 2014, we featured 325 Perth Ave. as the house of the week, boasting how great of a catch it was with its open concept layout, basement apartment, and deep backyard.

Nine years later, it’s had a massive glow-up and is now better than ever.

Listed for $1,899,000, 325 Perth Ave. underwent the renovation of a lifetime back in 2021.

325 Perth Avenue Toronto


The living room with custom built-ins.

“The owners bought this house in 2014 against 32 other offers and for 133 per cent over asking price, and the media debated heavily at the time if it was a smart decision,” realtor Maggie Lind told blogTO.

But they really made the best of their decision and in 2020, they began a renovation to add a 16-foot addition, build a laneway suite and gut the main floor.

325 Perth Avenue Toronto

The primary bedroom ensuite bathroom.

But then the pandemic hit.

325 Perth Avenue Toronto

One of three bedrooms in the main house.

“Because of COVID the laneway house was completed first, and the owners, and their two boys (both under 6) moved into it, even though it was only 350 square feet. Each night they went back to the construction to sleep in the two bedrooms on the second floor,” added Lind.

325 Perth Avenue Toronto

The kitchen.

The sacrifice was worth it, though, as the renovated home is gorgeous.

325 Perth Avenue Toronto

The dining room.

The main floor, with an open-concept floor plan, wide plank white oak flooring, and custom built-ins, is beautiful.

325 Perth Avenue Toronto

The hidden powder room beside the dining room.

There’s also a cheeky hidden powder room on the main floor and the custom kitchen is sleek and modern with quartz counters.

325 Perth Avenue Toronto

The family room.

The 16-foot addition at the back of the house is now a cozy family room that walks to the back garden and is filled with natural light.

325 Perth Avenue Toronto

What was formerly the primary bedroom is now another bedroom upstairs.

Upstairs, there are three bedrooms, including a completely new primary suite.

325 Perth Avenue Toronto

The new primary bedroom.

It has soaring ceilings, double closets, and an ensuite bathroom with a deep soaker tub, walk-in shower, and double vanity.

325 Perth Avenue Toronto

The lower level unit.

The basement has a separate entrance and could be used as an income-generating space as it has a kitchen, bedroom and bathroom.

325 Perth Avenue Toronto

The bedroom in the basement.

And if one income-generating space wasn’t enough, there’s also the laneway house at the back of the property.

325 Perth Avenue Toronto

The laneway house with a garage.

The laneway home is similar in design to the main house – modern, bright, and airy.

325 Perth Avenue Toronto

The kitchen in the laneway house.

It’s a studio apartment with about 400 square feet of living space, as well as parking and a storage room. It also has its own laundry, making it ideal for tenants and guests alike.

325 Perth Avenue Toronto

The backyard with storage.

Currently, the laneway house is tenanted for $1,700 a month.

325 Perth Avenue Toronto

The back of the house with two decks.

This home really went from a snack to the full meal deal.


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New to Canada? Here’s how to purchase or rent a home



As a new immigrant, navigating the Canadian real estate market can feel daunting, especially if it differs significantly from that of your home country.

Whether you’re contemplating buying or renting a home, this brief guide will help you get a better lay of the land so you know what to expect.

I’ll outline some of the most common property types while explaining the documentation you need to rent or purchase a home, and the key expenses you should budget for.

Can non-Canadians purchase real estate in Canada?

Before jumping in, I’d like to address the Prohibition on the Purchase of Residential Property by Non-Canadians Act and how it could affect new immigrants searching for housing. The act was passed by Parliament(opens in a new tab) in June 2022 and came into effect in January 2023.


The temporary foreign homebuyers ban(opens in a new tab) was passed in an effort to reduce pressure on the real estate market and make housing more affordable. The ban will remain in effect for two years before expiring and effectively prevents non-Canadians and foreign corporations from purchasing a home.

Canada has been going through an affordable housing crisis(opens in a new tab) characterized by strong demand and a lack of affordable homes. The current shortage has been one of the leading drivers of inflated home prices and rental rates(opens in a new tab), experts say.

New data from the Canada Mortgage and Housing Corporation (CMHC) shows that 3.5 million more housing units(opens in a new tab) will need to be constructed in order to restore affordability by 2030, in addition to homes that are already being built.

While the foreign homebuyers ban remains in place today, immigrants who have obtained permanent residency status or citizenship are exempt. Some other exemptions include(opens in a new tab):

  •  International students(opens in a new tab) who meet certain requirements, including having spent most of the last five years in Canada
  •  Foreign nationals with temporary resident status, such as refugees and those fleeing international crises
  •  Consulate staff members and diplomats
  •  Foreign work permit holders with at least three years of filed tax returns

Types of properties you can rent or buy

Now that we’ve discussed the elephant in the room, here’s a quick look at the most common types of property you can rent or buy in Canada:

  •  Detached house: A single-family home that stands alone on its own property, separated from other homes by open space.
  •  Semi-detached house: A house that shares one common wall with another home, but is not attached to any other structure.
  •  Townhouse: A multi-level home that shares one or more walls with adjacent homes, usually in a complex.
  •  Condominium: Condos are individually owned units within a larger building or complex. Owners have exclusive rights to their units but share common areas such as hallways and building amenities.
  •  Apartment: A rented living space within a larger building. Apartments are similar to condos, but require a monthly lease agreement and can’t be purchased outright.

Most common living arrangements

Whether you plan on renting or buying a home, these are the most common agreements you can choose from.

1. Standard lease

A standard lease is a fixed-term rental agreement(opens in a new tab) that can be as long as both parties want. Typically, apartments offer lease terms that range from three months to a year in length, or even longer. This legal agreement outlines monthly rent payments, utility responsibilities, and other rights, rules and responsibilities that both parties have agreed to.

Remember that each province and territory has specific laws and regulations regarding landlord and tenant obligations. It’s always a good idea to research some of the key regulations in your province or territory so that you know your rights as well as what’s expected of you.

Signing a longer-term lease or renewing an existing one can lock you into a lower rental rate, versus terminating your current tenancy and looking for a new rental property on the market. In many provinces and territories, landlords are allowed to increase rent(opens in a new tab) once a year for existing tenants, and several governments have set limits on how much landlords can raise rates.

Meanwhile, in several provinces such as Ontario, there are no limits on how much a landlord can ask from a new renter. Also keep in mind that breaking a lease early can result in penalties.

2. Month-to-month lease

Many landlords offer month-to-month rental agreements for those who are uncomfortable with a long-term commitment. Most provinces and territories require tenants to provide a minimum of either one month(opens in a new tab) or 60 days’ notice(opens in a new tab) if they plan on leaving, regardless of whether they have a long-term or monthly lease.

However, in provinces such as Nova Scotia(opens in a new tab) and New Brunswick(opens in a new tab), tenants with monthly leases have more flexibility. Those who rent on a monthly basis must give at least one month’s notice before moving out, while those on a year-to-year lease must provide at least three months’ notice.

The downside of month-to-month leases is that rental rates are generally higher, as landlords assume more risk. Once you move out, it could take them time to find another tenant, and they may need to invest money in cleaning or preparing the unit for the next occupant.

3. Purchasing a home

Buying a home involves securing a mortgage with a bank or other financial institution, and making an initial down payment. You own the property and are responsible for all mortgage payments, property taxes, insurance and maintenance. It’s a long-term financial commitment that may involve a lengthy approval process.

4. Rent-to-own

With today’s high mortgage and interest rates(opens in a new tab), some buyers are considering rent-to-own agreements(opens in a new tab), which offer a compromise between renting and purchasing.

In a rent-to-own arrangement, tenants rent a property for a specific period of time with the option to purchase the home at the end of their rental term, often at a predetermined price. Additionally, a portion of the rent payments may go towards the home’s down payment.

The downside is that rent-to-own arrangements typically involve higher monthly payments. Your payments will be broken down into two parts(opens in a new tab) – your monthly rent and the money you put towards a down payment or home equity.

Renting: The basics

A landlord is defined as an individual, company, or entity that owns a property and leases it to a tenant in exchange for rent payments.

When you apply to rent a property, landlords typically ask you to complete an application form with your personal details. Although documentation requirements may vary depending on the landlord, most rental agreements require prospective tenants to provide the following documentation:

  •  Passport, visa, or immigration documents for identification
  •  Proof of income, such as bank statements, pay stubs, or an employment letter
  •  References from previous landlords (if applicable)

Many landlords may also request approval for credit and background checks. Your landlord may require a higher security deposit if you’re new to Canada and have little or no credit history. A security deposit generally can’t be higher than one month’s rent(opens in a new tab), but those with good credit and rental history may be offered a lower security deposit.

The fees you’ll need to budget for include:

  •  A security deposit: While this fee can vary according to province or territory(opens in a new tab), it is usually equal to one month’s rent and is paid at the start of the tenancy. You should receive this amount back at the end of your lease agreement, along with any accumulated interest, provided you leave the unit in good condition and don’t violate any terms. Landlords in provinces such as Ontario often use this money as payment for the last month of rent.
  •  Common area maintenance (CAM) fees: Often referred to as “CAM fees” or simply “maintenance fees,” this is paid in addition to your monthly rent to help maintain the property’s shared spaces. Fees may cover services such as landscaping, pest control and trash service.

Your monthly rent payments are typically made in one of four ways:

  •  Cash
  •  Cheque
  •  Electronic bank transfer
  •  Credit or debit card

Each landlord may have their own system for collecting rent payments. For example, larger commercial properties often won’t accept cash due to security risks and may require a cheque, money order, or electronic payment.

In most provinces and territories, landlords aren’t allowed to increase rent more than once every calendar year and must adhere to laws governing rental increases. Landlords must also give you between one and three months’ notice of plans to increase rent, depending on the length of the agreement. Once your lease is up, you can renew it or move out.

Buying a home: The basics

The application process to buy a home is typically far more demanding than renting. Unlike signing a lease agreement, buying a home requires you to obtain a mortgage.

A mortgage is a loan from a bank or financial institution to finance your home purchase. You’ll pay regular installments over a fixed period of time. Along with contributing to your home equity, a portion of your payments will go towards interest fees charged by the lender.

There are two types of mortgages you may encounter:

  •  Fixed-rate mortgage: These have a constant interest rate throughout the term, ensuring predictable monthly payments. Borrowers are shielded from interest rate fluctuations in the market.
  •  Variable-rate mortgage: The interest rate can change based on market conditions, potentially affecting monthly payments. Borrowers might benefit from lower rates but also face the risk of rate hikes.

In addition to documents and references that show proof of residency, most lenders want to see several years of financial history to ensure you’ll be able to keep up with the long-term commitment of a mortgage. This can include proof of income and employment history.

Your credit report and score(opens in a new tab), which determine your creditworthiness, are also major factors that lenders will consider before approving you for a mortgage.

Traditional mortgages usually require a down payment of at least 20 per cent of the home’s value. CMHC-backed mortgages may only require a five per cent down payment(opens in a new tab), but will involve a lengthier approval process and the purchase of additional mortgage insurance.

Here’s a quick breakdown of the fees associated with buying a home:

  •  Down payment: This is a percentage of the home’s purchase price that is paid prior to moving in. Providing a down payment allows you to secure your mortgage. Some lenders may ask for an even larger down payment based on your individual financial situation.
  •  Mortgage payment: This is the monthly amount you pay for your home loan.
  •  Mortgage insurance: A monthly insurance payment that provides coverage in the event that you default on your loan. This is usually optional for traditional mortgages but is always required for CMHC-backed loans.
  •  Homeowners insurance: This insurance covers you from unexpected damage to your home, such as hail, flooding, and natural disasters. This coverage can be obtained through insurance providers.
  •  Property taxes: These are annual taxes paid by property owners to the municipal government.
  •  Closing costs: These are additional expenses, aside from the cost of purchasing your home, that must be paid to complete a real estate transaction. They can include a land transfer tax(opens in a new tab), inspection fees, and other legal or administrative costs.
  •  Homeowners Association (HOA) fees: Homes in some neighbourhoods require monthly HOA fees, which go towards maintaining and improving common areas and shared structures within the community.

All of these fees can add up and contribute to a higher upfront cost than you may have expected. When determining your budget, take some time to look into the average prices of these fees based on where you’re located and the value of the property you’re looking at.

Once you’ve completed the mortgage financing process and paid your closing fees, you will have officially purchased a home.

Is it better to rent or buy in Canada?

If you’re new to Canada and have limited income and credit history, you may find it difficult to obtain a mortgage and purchase a home outright.

Before buying a house, you should put together a budget detailing your projected monthly expenses and research the average home prices in your area to better understand how much of a mortgage you can afford(opens in a new tab).

If you’re serious about buying a home, it’s worth getting in touch with a real estate agent. They will be able to show you your options based on your budget and can help you navigate the complexities of applying for a mortgage.

If you’re unable to get approved for a mortgage, it may be best to start by renting your home or enrolling in a rent-to-own agreement with your landlord. Both of these options provide flexibility while you take time to build your credit and income history.


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