Edmonton and Ottawa both saw greater increases in the number of home sales compared to other markets across the country, a new real estate report suggests.
Canadian home sales rose 1.3 per cent month-over-month in December according to Canadian Multiple Listing Service (MLS) systems, with both Alberta and Canada’s capitals leading gains, the Canadian Real Estate Association (CREA) said Monday. MLS is a co-operative marketing system that Canada’s real estate boards use to enhance exposure for listed properties, CREA said.
Alberta’s capital is settling in above average following a dramatic shift that unfolded over the past year, CREA senior economist Shaun Cathcart told Postmedia. Nationally, the number of transactions in December (not seasonally adjusted) fell just over 39 per cent year-over-year, CREA said.
“The Prairie markets are doing relatively better compared to B.C. and Ontario, similar to what’s going on in the East Coast,” he said. “More reasonably priced markets are doing better at a time when it’s really hard to borrow money.”
Inflation and rising interest rates that shaped the 2022 market will also play a role in determining the year ahead, Cathcart said.
By the end of 2022, the Bank of Canada raised the borrowing rate to 4.25 per cent from 0.25 per cent in March to drive down inflation, and economists have forecasted another rate hike in 2023.
Canadian employers added more than 100,000 jobs in December, suggesting an interest rate increase of 0.25 per cent toward the end of January, but forthcoming inflation data from last month to be released Tuesday could also play a role in the central bank’s decision.
“I think that’s going to be an important psychological milestone for a lot of people,” Cathcart said of the central bank’s upcoming Jan. 25 decision. “Because you don’t want to take a fixed-rate mortgage at the top — you want to take a variable-rate mortgage if you think the interest rate is going down.”
The number of seasonally adjusted listings in Edmonton also fell 1.2 per cent in December month-over-month to 3,671 from 3,716, while the year-over-year figure (not seasonally adjusted) fell 16.3 per cent to 1,389 from 1,659, CREA said.
— With files from Postmedia
Calgary's new real estate listings fall to level not seen since late 90s – Financial Post
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- Calgary’s new real estate listings fall to level not seen since late 90s Financial Post
- January home sales down 55% from year earlier, 21% from Dec: Vancouver board Halifax.CityNews.ca
- Victoria real estate market limps into 2023 – Victoria Times Colonist
Builder blames city as Toronto-area condo cancelled – The Globe and Mail
The first Toronto-area condominium project cancellation of the year has been registered by Aspen Ridge Homes, an arm of the De Gasperis family group of companies.
On January 26, investors who put down deposits to buy a condo at the project known as Union Margo on 1735 Bur Oak Ave., in Markham, Ont., received a letter from Union High Rise Inc. – the corporate entity set up to build a 20-storey building – with notice that they would be receiving their deposits back and their agreements of purchase and sale were cancelled.
According to the Home Construction Regulatory Authority, 176 agreements were cancelled, out of a potential 246 units that were planned for the building.
Aspen Ridge began marketing the project for sale in 2019 without having planning approval to build the 20-storey tower as part of an existing mid-rise condo project that was already under way. In 2020, Aspen Ridge made use of home warranty provider Tarion’s “unavoidable delay” protections – which can allow builders to push back important progress dates that are spelled out in contracts – and notified investors that the COVID-19 pandemic would create unknown delays.
Nevertheless, the company blames the City of Markham in its letter to investors, saying “The City’s inability to address the site’s outstanding planning issues in a reasonable and timely manner has resulted in today’s announcement.”
Beginning sales before planning is in hand is a standard practice in Toronto-area condominium development, though the risks of delays have risen in recent years thanks to spiralling construction costs and the increasingly high interest rates that are making debt more expensive.
Condominium analyst Pauline Lierman, Vice President Market Research with Zonda Urban, argues the cancellation is likely not a sign of financial distress for Aspen Ridge, which is part of the multi-billion-dollar TACC/Condrain group of companies that has dozens of projects scattered around the region.
Outright cancellations have been relatively rare in recent years, after Ontario condo investors saw a record number of contracts being annulled in 2018: a dozen projects accounting for more than 5,600 apartments were cancelled that year. “Last year was the lowest number of units cancelled in apartments since 2016: 379 units,” said Ms. Lierman.
The main damage to Aspen Ridge is likely to be reputational, as the company suggested in its letter to investors.
“We know that the termination of your purchase agreement will be a disappointment. It was to us as well,” the letter reads. “For decades, Aspen ridge has worked [sic] relentlessly to earn an unparalleled reputation … Determined to maintain that good reputation with those affected by the unique circumstances that forced the termination of Union Margo agreements, we are prepared to offer you additional benefits beyond those owed to you under Tarion.”
Self-identified investors who discussed the “additional benefit” online described it as a cash payment over and above the return of their deposit, which has accrued interest for some parts of the three years since the project began selling in 2019.
But there are questions in the industry as to whether cancellations even cause much in the way of reputational damage.
“The last time we saw a wave of cancellations in 2018, the large developers were able to subsequently launch other projects in the following years with no impact on sales. It’s really the small developers that generally don’t recover from a cancellation,” said Shaun Hildebrand, president of real estate analysts Urbanation Inc.
According to Mr. Hildebrand, two formerly cancelled projects relaunched in late 2022 with sales “that were fairly in line with other launches”: Highlight of Mississauga and Vic Condos. He expects that Aspen Ridge will also eventually relaunch the Margo project – without the initial investors – once zoning is obtained.
“They are a large, reputable developer with a long track record in the GTA, so I don’t think one cancellation will dent their reputation,” he said.
Graywood Developments LP Launches Tenth Private Real Estate Development Fund – Canada NewsWire
TORONTO, Feb. 1, 2023 /CNW/ – Graywood Developments LP (“Graywood”) announced the launch of its tenth private real estate development fund, Graywood Fund X Limited Partnership (“Fund X”). Graywood aims to raise CAD $200 million from Canadian financial institutions, pension plans, family offices and high-net-worth individuals. The Fund will pursue investments in for-sale and rental development properties in Toronto, Canada with a targeted net return to investors of 15% Net IRR/ 2.0x Net MOIC. It is anticipated that a first closing will be held in mid-2023.
Stephen Price, President and CEO of Graywood commented, “We continue to see an urgent need for more housing in Toronto, which is only expected to increase as Canadian immigration targets grow over time. As a full-service developer operating in the Greater Toronto Area for almost 40 years, we are well positioned to continue to pursue the development of residential properties within Fund X.”
The launch of Fund X follows the final closing of Graywood Fund IX Limited Partnership (“Fund IX”) in November 2021 which raised total commitments of CAD $148 million. Fund IX has acquired four investments, representing approximately 2,900 residential units and over $2.2 billion of development value.
For further information regarding Fund X, contact Stephen Price or Aleks Karamarkovic, Vice President, Corporate Development.
More about Graywood
Graywood is a private real estate development management company based in Toronto that specializes in the development of residential mixed-use real estate projects of exceptional quality. Graywood’s expertise includes identifying attractive development sites, deal structuring, all aspects of development management including land use approvals, project design, sales and marketing, construction management and project financing.
Graywood currently has 15 active projects with 6,500 residential units under development, representing $4.9 billion in development value. During its 38-year history, Graywood has managed 54 projects, representing $8.9 billion in development value and 31,500 units.
This document is for information purposes only and does not constitute an offer or solicitation for any security, product, service or fund. The information in this document should not be considered legal, tax, investment, financial or any other professional advice. This document contains only summary information as of the date hereof and no representation or warranty, express or implied, is or will be made in relation to the accuracy or completeness of the information contained herein, by Graywood or any of its affiliates or funds. Target returns are hypothetical in nature and are shown for illustrative, informational purposes only. Target returns should not be relied upon in making investment decisions, are not indicative of future results, and are not guarantees. There can be no assurance that any targeted investment returns will be met. Should any of the descriptions or terms herein be inconsistent with any applicable governing documents, such other documents shall prevail.
SOURCE Graywood Development
For further information: Stephen Price, President & CEO, Graywood Developments LP, (416) 599-1930; Aleks Karamarkovic, Vice President, Corporate Development, Graywood Developments LP, (416) 599-2466
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