By the time most divorcing couples find themselves in a lawyer’s office, glaring at each other from across a table, counselling has failed, goodwill has evaporated and the best way forward is a speedy division of assets so both parties can move on with their lives.
But with a volatile real estate market that has taken housing appraisals on a wild chicken run, the road to a new life has become rife with potholes.
“It’s just made everything so much harder,” says Diane McInnis, a collaborative family lawyer and mediator who focuses on “consensual dispute resolution.”
“All of my clients are in a panic — ‘I’m not gonna have enough money to be able to pay bills, to keep the house, to afford to rent!’ They’re desperate to get as much money as they can from the other person. And the other person is saying, ‘I need to house the kids and look after them too!’
“Two people and two homes on the same income level is much more expensive than one home.”
After months of escalation, housing prices have dropped in the wake of recent interest rate hikes to combat inflation, and that has sent anxieties through the roof.
With good reason. In October, Canadian mortgage interest costs increased year-over-year by 11.4 per cent, the biggest increase since February 1991, when there was an 11.7 per cent jump, according to Statistics Canada.
As interest rates continue their soufflé-like expansion, economists expect another 10 to 15 per cent drop in housing prices by spring 2023.
“I’m almost to the point where I’m saying, ‘OK, we’re going to start negotiations and deal with as much as we can, and get the house valued at the end, so we can see what we’re actually dealing with here, ’ ” says McInnis.
“Let’s say it takes three to six months to negotiate. If people get their house valued as an asset at the beginning, by the end they’re saying, ‘Wait a minute, that’s no longer what the value is!’ And now they’re renegotiating, and that’s causing headaches trying to get refinancing and all those things.”
She sighs. “It’s so stressful for clients. The housing market has been the bane of my existence as a lawyer assisting clients through separation and divorce.”
It’s no secret to Mary Goncalves, whose divorce proceedings have dragged on for almost three years, and for whom delays in reaching a settlement have meant massive financial penalties.
“Basically, you’re going through a terrible divorce, acrimonious, and it takes so long to get to the point where you need to settle,” says the retired mother of three adult children, whose multimillion-dollar home went on the market in August after 15 months of legal wrangling.
“It really holds you back with starting a new life and moving forward.”
Part of the issue was tensions with her ex, a familiar scenario exacerbated by the pandemic.
“I’m finding in the last few years that couples separating are higher-conflict than they’ve ever been,” says McInnis.
“People are so stressed out, so self-absorbed, so involved with social media, with so much feeding into their brains.
“I think what the pandemic did was expose the cracks in relationships sooner.”
Goncalves — whose housing appraisal dropped from between $10 and $12 million to $9 million while an agreement was being hammered out — knew the market was peaking, but says her ex kept finding reasons to delay.
“We finally got approval a year after the market peaked,” says the local woman, now living in a separate residence.
“But now we’re in a situation where there’s uncertainty with fluctuating interest rates.”
To minimize losses, some couples are considering more creative options.
“People say, ‘Well Diane, we could sell the house, but for both of us to go out and rent would cost us more than our monthly mortgage,’ ” says McInnis. “ ‘We don’t have enough money to buy. I’d rather try to keep the house and figure out a way where I can buy the other person out.’ ”
But in a market as variable as the weather, pinpointing a fair price again becomes an issue.
“Last year one client had their house appraised, then three or four months later it was reappraised and went up by $60,000,” says McInnis. “So there was still conflict over the negotiation. When they were into it six months, the house had gone up again.
“One person accused the other, saying, ‘You’re just delaying because house prices keep going up!’ But the other person was saying, ‘Well no, because the longer this negotiation goes on, the harder it is for me to buy into the market because housing prices are going up, so I can’t afford to accept a lower value.’ ”
She sighs. “With one couple, in the course of a six- or seven-month negotiation, the housing price changed three times upward. It was a nightmare.”
When prices dropped, which happened when interest rates began their upward ascent in March, the stakes became even higher.
“It just creates more stress for people because they’re not willing to make the jump, because they don’t know what the other side looks like,” says family lawyer Heather Caron, whose Kitchener law practice is “crazy busy” with a 25-per-cent jump in divorce cases.
“I can’t give them any idea financially of where they’re gonna be. If your house comes down in price $200,000, that’s $100,000 each that you’re losing.”
One local woman — who asked that her name be withheld while her divorce winds through the legal system — saw her matrimonial home drop 12 per cent in value while she and her ex wrangled over details and acknowledges that “when it comes to two warring parties, you can’t control the situation.
“There’s no point crying over something already done,” she says. “But the time lag has cost us dearly.”
For those whose finances were precarious to begin with, the impact can be even more devastating.
“A lot of people are in the gig economy, working part-time,” notes McInnis.
“When dividing things up they just don’t have the cash flow for banks to approve them. It just feels like owning a home now is really an exception. It’s not attainable for the average person.”
At the end of the day, says Caron, the best option for divorcing homeowners is to wait until the market settles.
“Everything is in flux right now. I’m telling people if they can hang on, hang on. Let’s deal with this, maybe in the spring, when there’s some certainty and more stability.”
Realistically, she knows, this is an unrealistic option for many.
“For them to stay in the same house, sharing the parenting, is a huge stressor,” she admits, “because they can’t get any kind of finality on this. They can’t move on.”
Does anyone look at the “crazy house fluctuations,” reel from the sticker shock and head back to counselling to work things out?
“I’m not seeing that,” says McInnis.
“Most of my clients have said, ‘Yes, we’ve gone to couples counselling,’ but by the time they see a lawyer, they’ve pretty much decided it’s not workable.
“I can honestly say in the last five years I’ve never had someone come in and, when they look at finances and numbers, say, ‘We’ve got to work on this to make it work and stay together!’
“Occasionally people do reconcile, but it’s very unusual.”
Through Parvis, Real Estate Investment Opportunities Abound – Storeys
As we collectively ride the ongoing inflation rollercoaster, it’s only natural — and wise — to consider how you can make your financial foundation as stable as possible.
For many, investing is a preferred way to protect and grow wealth. And in the last several years, Canadian real estate has seen an unprecedented boom in interest from all angles, including the investment realm.
Today, investors are increasingly keen to stake claim on real estate assets as a means of diversifying their portfolio. Understandably so, considering the Canadian market’s demonstrated fundamentals of low supply and high demand lend themselves to steadily increasing value.
Making the sourcing and securing of such assets easy, Parvis Invest – a Canadian marketplace for real estate investing – offers a portfolio of curated, high-quality real estate developments to its investors through a user-friendly platform.
Parvis’ selection of real estate products is strategically built via direct collaboration with developers and property owners, plus team insights, analytics, and industry data. Opportunities also undergo vetting by the company’s Investment Committee, which has insight and experience from the worlds of real estate development, private equity, tech, law, and finance.
Capturing the essence of Parvis’ curated offerings, a new 24-storey condo development called Centra invites investors to get in on the ground floor of something special in Surrey, BC. The building’s developer, Everest Group, boasts a team with more than 150 years of combined experience in international real estate and construction management, with more than 30 successfully completed projects and over 1,000 acres of land developed.
The project, five months into its 24-month building schedule, brings 164 residential condominiums — plus three townhomes and two levels of underground parking — to one of Canada’s fastest-growing cities (and the fastest-growing in BC; Surrey’s population is expected to more-than double in the next decade).
Located at 13868 101 Ave, the building is near a host of restaurants and shops, as well as Simon Fraser University, Memorial Hospital, and Skytrain access. Downtown Vancouver is just a short drive away, serving spots to tuck into for a bite, a live show, or an afternoon of shopping. And at the end of the day, residents can comfortably return to their lush, green, and calm family-friendly neighborhood.
For investors, Centra’s risk profile is classified as moderate to high level of risk, because it’s a new construction building. Two factors that help de-risk this project, relative to comparable new developments, are that over 80% of its units are pre-sold, and Parvis investors will receive a preferential equity return of 17.5% IRR. The Parvis equity return is in priority to the remaining equity invested.
Even further assurance is provided by way of a corporate guarantee by Everest, and personal guarantees by its directors. The condominium’s minimum investment is $20,000, with a total equity raise of $18,500,000.
By spring 2023, Parvis will also introduce its secondary market, which will give investors the chance to liquidate and sell their investment ahead of time, should they wish — big moves, for a traditionally illiquid asset class. For Centra, there are no transaction or management fees for investors to pay, and in the case one chooses to sell on Parvis’ secondary market, the seller only pays 1% commission.
Also currently available for investment is a fully-tenanted residential building in Kitchener, Ontario, classified under the Parvis Core Plus Strategy, which typically features a longer investment horizon with a low to moderate risk profile for investors, and a targeted IRR of 9% to 16%. The building is located at 199 Ahrens Street, is home to 16 units ranging from one to three bedrooms, and was purchased by its developer below market value.
Renovations to the interiors by Mike Beer Investments, plus repositioning of the building and property, promise to increase its annual rental income by nearly double — and the financing for these upgrades is already in place.
This building’s minimum investment is $10,000, with a five-year investment term, and an average projected annual return of 16%. The product’s total equity offering is $1,700,000.
Within walking distance of several parks, cafes, restaurants, and shops, the address is perfectly situated just north of downtown Kitchener’s main strip. And with GO Transit also only steps away, residents have day trips at their fingertips.
Like with Centra, there are no transaction or management fees related to this building for investors, and in the case one chooses to sell on Parvis’ secondary market when the option opens up, that 1% seller commission comes into play.
It’s no question that 2022 was filled with trials, and ended with uncertainty for many sectors. But through marked financial growth, multiple instances of professional recognition, and licensing approvals secured, Parvis came out of last year an anomaly: exceptionally grounded, stable, and strong.
If these are the attributes you want to see in your own investment portfolio, Parvis can help you get there.
This article was produced in partnership with STOREYS Custom Studio.
Historic Muskoka Resort Hits the Market for $12M – Storeys
Erin Nicole Davis
An iconic Muskoka resort has just hit cottage country’s real estate market.
For those looking for a new business venture in the summertime hot spot, Windermere House has just been listed for $12M.
The sprawling, long-time landmark sits on Lake Rosseau — one of the “Big Three” Muskoka lakes — and is known for its quintessential Old Muskoka charm mixed with modern luxury and amenities. Beloved by both tourists and local cottagers, the picturesque resort has been synonymous with Muskoka tourism since 1870.
Known as ‘The Lady of The Lake,’ this 56-room resort hotel sits in a prime location in the Village of Windermere, overlooking the stunning lake. Offering a dose of timeless charm, its historic features include original stone architecture, a charming veranda, and classic Muskoka-style windows. The hotel features several food and beverage outlets, full-service spa capabilities, and a 3,200 sq. ft. of function space that ranges from a private boardroom to state-of-the-art conference facilities.
With quintessential cottage country recreation front and centre, the 6.62-acre resort features a heated outdoor swimming pool, tennis court, sand beach, marina, and golf course.
The new owner of the property will have the opportunity to take up residence in Windermere Cottage, the traditional four-bedroom private cottage with a separate entrance from Fife Avenue that can also be rented as an additional resort property. Or, as the listing highlights, there’s also the option to personalize a penthouse “cottage” suite within the hotel.
The Muskoka chair-filled property includes three detached staff houses, an older, staggered row-style 10-plex, and ample on-site parking.
While its price tag isn’t within reach of everyone, considering that most of the sprawling cottages on the lake sell for upwards of $5M — coupled with its inevitable income-generating potential — the property may be considered a steal for someone in the market for a breezy new business venture.
Find the full listing here.
Erin Nicole Davis
Erin Nicole Davis is a born and raised Toronto writer with a passion for the city and its urban affairs and culture.
Toronto building home to historic pub to be converted into new hotel – blogTO
Toronto is getting a new hotel by expanding an old hotel that has spent decades not being a hotel. I know, very confusing, but I can totally explain.
A four-storey building that has stood at the southwest corner of Church Street and Richmond Street East for over 140 years could soon undergo a significant transformation.
The building at 124 Church Street was originally constructed as a hotel in the 1880s, and after 14 decades, a developer has filed plans to bring the property back to its roots with a renovation and expansion supporting a new boutique hotel.
M&G Hotels Limited has big plans for the property, filing a minor variance application that calls for a YY Architecture Studio-designed addition extending the building’s roofline and providing additional space for hotel and other hospitality uses.
This address has been home to McVeigh’s Irish Pub since 1962, and despite major changes on the horizon for the property, it looks like the bar will maintain its presence in the building, and be left practically undisturbed through the renovations.
Plans for the site show little modifications in store for the first two levels of the existing building, aside from a new elevator shaft and other small changes.
The current space occupied by McVeigh’s is listed simply as “existing bar” and “existing kitchen” in plans, a good indication that the establishment will maintain its long-term presence at the intersection.
New floors would be added above the current parapet, bringing the existing four-storey building to an increased height of six levels.
A total of 24 hotel suites are planned on levels three through six, topped by a new rooftop bar and terrace.
The rejuvenated hospitality property will reportedly operate under the branding Clover Hotel, and this will not be the first time that the site or even the current building has been home to a hotel.
The southwest corner of Church and Richmond has been home to bars and hotels since the mid-19th century, and the current 1882-built structure was originally constructed as a hotel, replacing an earlier timber hotel building dating back to the 1850s.
Opened as the Windsor Hotel and later renamed the New Windsor Hotel in the early 20th century, the building was maintained as a hotel into the 1960s.
Plans to expand the building and open a hotel are just some of the big changes happening to the property.
The existing building at 124 Church Street stands as the lone holdout against a huge condo development now under construction that will soon tower over the property’s south and west elevations.
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