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CREB says city real estate market settling into 'the new normal' – Calgary Sun



Calgary housing prices are expected to stabilize in 2020 as the city’s real estate market settles into what is likely a “new normal,” the Calgary Real Estate Board said Tuesday.

Calgary housing prices are expected to stabilize in 2020 as the city’s real estate market settles into what is likely a “new normal,” the Calgary Real Estate Board said Tuesday.

Six years after the oil price crash, Calgary’s real estate market is slowly moving toward more balanced conditions, CREB chief economist Ann-Marie Lurie said at the organization’s annual forecast event. However, detached home prices remain nearly eight per cent lower than 2014 highs, and the days of buying a house and selling it for a tidy profit five years later aren’t coming back anytime soon.

“It’s not going to be like what we had prior to 2014,” Lurie told reporters. “We’re moving into slower, more normal conditions. When you compare it to other markets across the country, we’re looking a lot more like them.”

According to CREB, overall sales activity in 2020 is expected to improve by two per cent over 2019. That, combined with easing inventories, should help slow the pace of decline in the average benchmark price for a home to just 0.5 per cent in 2020 (versus the larger-than-expected 3.3 per cent decline in the benchmark price that occurred in 2019).

Driving the stabilization is the improvement at the lower end of the Calgary real estate market, Lurie said. In 2019, sales growth in the under-$500,000 market grew by seven per cent, while resale sales for the over-$500,000 segment declined by nine per cent. The most affordable areas of the city — such as the northeast, southeast and far north — saw the least amount of price decline in 2019 while the more expensive areas, particularly the city centre, saw the steepest drops in price.

While improving conditions in the lower end of a market can eventually spill into the upper end of the market, this is not expected over the next year, Lurie said. Part of the problem is that while the city’s unemployment rate has improved from 2016, it is still high (6.9 per cent in November) compared to historic norms. The employment situation isn’t expected to improve significantly in 2020, and most of the gains that have been made so far have been in education and health care, not in the higher paid scientific and technical occupations.

In 2019, home sales in the under-$500,000 range remained strong, despite overall weakness in the market.

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“We don’t have the same type of job growth in those higher-paid sort of salaries that we’ve seen historically, so, for that reason alone, it will take a lot longer to see those improvements filter through the higher end of the market,” Lurie said.

Lurie said there are risks that could threaten CREB’s 2020 forecast. If recent job losses in the Calgary market continue into 2020, it will affect consumer confidence and housing market activity.

In addition, if new-home construction projects exceed anticipated demand growth, this will slow the downward adjustment in overall housing supply and affect price stabilization. According to the Canada Mortgage and Housing Corp., there were 3,101 housing starts in Alberta in December 2019 — a 117 per cent increase from December 2018.

Still, CREB CEO Alan Tennant said evidence of market stabilization is a reason for optimism, and added he believes “the new normal” is nothing to be afraid of.

“Normal may not be sexy and fun, but there’s still a lot of business to be done there,” Tennant said. “That’s the start of maybe the dominoes starting to fall in the right direction.”


Twitter: @AmandaMsteph

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Vancouver real estate agent makes surprise guilty plea in murder trial – Vancouver Sun



Tejwant Danjou startled his own lawyers when he admitted at the outset of what was to have been a three-week trial that he killed Rama Gauravarapu in a West Kelowna motel room

At the outset of what was to have been a three-week trial for second-degree murder, Tejwant Danjou pleaded guilty Tuesday to killing Rama Gauravarapu in a West Kelowna motel two years ago.

Kelowna Daily Courier

A surprise guilty plea was entered in a Kelowna courtroom Tuesday to a murder charge.

Tejwant Danjou startled his own lawyers when he admitted at the outset of what was to have been a three-week trial that he killed Rama Gauravarapu in a West Kelowna motel room.

“I’m guilty,” Danjou, a 70-year-old Vancouver real estate agent said when asked how he was pleading to the charge of second-degree murder.

Asked by Judge Allison Beames if he had consulted with his lawyer, Donna Turko, before entering the plea, Danjou responded: “I don’t need to speak to anybody. I’m guilty.”

Danjou said Crown counsel had offered him the mandatory minimum sentence for second-degree murder of 10 years before parole eligibility in exchange for a confession.

Beames asked Danjou if he fully understood the implications of the guilty plea. She also told him that, despite whatever deal the Crown might have offered him, it would be up to her to impose the sentence, which for second-degree murder means imprisonment for between 10 and 25 years before parole eligibility.

“I need to be sure that you know what you’re doing,” Beames told Danjou. “Do you understand that only I can make a determination as to what the appropriate sentence is?”

“Yes, m’lady,” responded Danjou, dressed in red prison clothes.

Given the surprising turn of events, a short recess was declared. 

After proceedings resumed, Turko said she’d spoken with Danjou and confirmed his desire to plead guilty to second-degree murder.

“He’s very clear about it,” Turko told the judge.

Crown counsel Simone McCallum was also surprised by Danjou’s guilty plea: “This has come on the sudden, a little bit,” she said.

Proceedings will resume at 10 a.m. today, when it’s expected there will be a joint submission from Crown and defence on a statement of facts, describing events surrounding the murder.

Sentencing is expected on March 13.

Police were called to the Best Western Hotel Plus on Carrington Road in West Kelowna on July 22, 2018.

Inside one of the hotel rooms, they found Gauravarapu’s body. Police said Gauravarapu and Danjou, both from the Lower Mainland, were known to one another.

Danjou has been in custody since July 2018. After he was arrested and charged with murder, his licence to sell real estate was suspended by the Real Estate Council of B.C.

Gauravarapu had worked as a financial planner for a Royal Bank branch in Surrey.

Read more Kelowna Daily Courier news here

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Montreal real estate: Luxury home prices spiked in 2019, and will continue to in 2020, Royal Lepage forecasts – CTV News



Prices of luxury homes in the Montreal metropolitan area increased more than anywhere else in Canada over the past year, according to a survey by real estate firm Royal LePage.

During the 12 months that ended Jan. 31, the prices of luxury homes in Greater Montreal increased by 8.5 per cent, while those of high-end condominiums increased by 8.3 per cent.

Luxury properties of the Greater Montreal region are experiencing the same price momentum as in the more general residential real estate market, said Dominic St-Pierre, vice-president and general manager of Royal LePage for Quebec.

Demand for well-established high-end sectors, such as the city of Westmount and the Montreal borough of Outremont, remains stable,    Royal LePage noted.

There was also an increase in the price of luxury properties in other districts, such as Plateau-Mont-Royal and Griffintown. Luxurious West Island residences remain popular, especially because of the quality of the schools and views of the water, features that would be popular with wealthy newcomers, according to Royal LePage

The firm also observed that a lack of confidence among sellers is a factor that greatly contributes to the reduced supply of luxury properties in the Montreal region. Sellers are worried that they will not find what they are looking for after their current home is sold, and most are concerned about rapid price increases.

Royal LePage forecasts that over the next 12 months, the median price of a luxury home should increase by 5.5 per cent in the Montreal region to reach $1.955 million, while that of a high-end condominium is expected to rise 5 per cent to $1.48 million.

This report by The Canadian Press was first published Feb. 25, 2020.

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CBRE predicts record $50 billion investment for commercial real estate this year – Toronto Star



TORONTO – Canada could see a record-breaking $50-billion worth of investment in commercial real estate this year as economic tailwinds and immigration policies support the booming sector, according to a report by CBRE, but it says the strong economy is also creating challenges of affordability and supply.

The commercial real estate services firm said Tuesday that total investment would be about $5 billion higher than 2019 and about a billion dollars higher than the record set in 2018.

Growth comes even amid low vacancies in major markets as tech companies in particular continue to prize downtown locations. Other strong areas include investments in rental apartments as home affordability gets out of reach for many Canadians, and industrial growth driven by e-commerce demand for logistics centres.

“Canada has so many advantages, and so many underlying fundamentals that are positives over the long-term, that we certainly think that growth in the Canadian commercial real estate market is going to continue,” said CBRE Canada vice-chairman Paul Morassutti.

Those trends, along with strong population growth and stable banking and governance, would help steer the sector if a recession hits, said Morassutti.

“The wild card is a recession. My feeling is we’re very well positioned to weather a recession, and I think we’ll continue to flourish after that because of those attributes.”

Heightened interest in the market is also creating challenges, including rising rents and limited office and industrial space, while climate change is creating its own issues.

CBRE says prime office rents jumped 20.9 per cent in Vancouver between 2018 and 2019, 14.2 per cent in Montreal, and 10.1 per cent in Toronto, while national industrial rents rose by 12.3 per cent between the two years for the largest increase on record.

Rents still form a small portion of company budgets and don’t seem to be a major constraint on growth yet, said Morassutti. He noted that in the industrial sector, costs savings in transportation from better locations more than offset costs from higher rents.

Rental rates for apartments are also climbing in major centres as home ownership becomes more expensive, which has helped drive investment in the multifamily. The sector could see about $11.9 billion in investment this year, up from $8.3 billion in 2018, to see the most of any commercial sector, CBRE expects.

The upward trend in residential rental rates is however putting pressure on income inequality, said Morassutti.

“Partially because of that lack of home affordability, you have all these people becoming renters, so on the one hand that’s a good thing. On the other hand, it’s not great for society that our two major cities are becoming unaffordable, it’s not great for the income divide, which is already a large social issue.”

Along with affordability, CBRE says the lack of investment in transit infrastructure, and increasing pressures of climate change on the construction sector and land values are also structural issues of concern for the year ahead.

More immediately, the impacts of the coronavirus outbreak also loom as a big unknown, but could be short-lived if it is contained, said Richard Barkham, global chief economist at CBRE said in a statement.

“If the coronavirus outbreak is relatively contained sometime in March, impacts on the Canadian economy and most commercial real estate sectors will be noticeable in the near term but less substantive over the year.”

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He noted that short-term impacts would largely hit the hotel and retail sectors. He said the global property market should be able to weather the effects of the virus as anticipated today, but that a clearer picture of the epidemic should materialize sometime in March.

This report by The Canadian Press was first published Feb. 25, 2020.

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