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Halifax bucks real estate trend –



Turns out COVID isn’t the only thing we have less of than most parts of Canada.

We also have fewer Office Space for Rent signs.

Statistics released Thursday by commercial real estate firm CBRE show Halifax’s overall office vacancy rate dropped to 15.4 per cent in the third quarter of 2020, down from 16.1 per cent in Q2, bucking the trend of increased vacancies in Canada’s other markets.

The Halifax market is also stronger when it comes to sub-lease space, akin to a sublet by a residential renter.

“I look at other large markets across the country, Toronto, Vancouver, Calgary, we’re seeing significant spikes in sub-lease vacancy,” said Andrew Bergen, managing director for CBRE in Halifax. “And I think that’s directly tied to COVID and the situation other provinces are in. Atlantic Canada, Halifax, we’re in a bit of a unique situation out here, and we haven’t seen that spike in sub-lease because most offices have reopened in some capacity.”

Unlike most office markets in the country, Halifax’s sublease listings also decreased this quarter, by 23.9 per cent, now representing 3.1 per cent of all vacant space. CBRE says the number of sublet vacancies has remained stable throughout 2020, which it says demonstrates resiliency in dealing with the impacts of COVID-19.

Bergen points out that in Toronto, for example, some companies have declared they won’t bring people back to the office until next year, which he doesn’t see here.

“Having to carry empty office and pay full freight while people aren’t using your office, well, you’re going to have to do something about your real estate,” he said. “Out here, people are in the office, albeit in a limited capacity, but we’re in a unique situation in that offices are somewhat full these days.

“Anytime there’s an economic slowdown, the first thing we see is a spike in sub-lease space. What that does is soften pricing of lease rates, so the more sub-lease space there is on the market, that competes with direct vacancy, with landlords potentially bringing down pricing.”

In the industrial real estate market, the start of construction on Leon’s 150,000 square foot warehouse this quarter in Dartmouth contributed to the addition of 208,600 square feet to the development pipeline.

It’s just the second quarter since the fourth quarter of 2012 that the under-construction total has surpassed 200,000 square feet.

“That’s a healthy development pipeline, something we haven’t seen in a while,” Bergen said. “The market on the industrial side has been running extremely tight for a number of years, so it’s become something of a supply issue. We’re seeing more development under way but I think a lot of the projects that are being built are owner occupied, so I don’t think that will have a huge impact on vacancy.”

The CBRE report says that for the third consecutive quarter, Halifax’s downtown office market has outperformed the suburbs, with 14,000 square feet of positive net absorption in Q3 2020. That caused the downtown vacancy rate to compress by 20 basis points to 19.7 per cent.

“I think Q4 is going to be an interesting quarter, given that a lot of the government support programs have ended,” Bergen added. “I think we’ll see in the next three months who’s going to survive and who just can’t, and are going to close their doors.”


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Canada real estate: RBC Economics reports condo listings on the rise as investors look to sell – The Georgia Straight



RBC Economics reported on October 15 that condo prices have “stagnated over the past six months”.

Previous to this, the bank’s economics section on September 30 predicted that condo prices could “weaken in larger markets next year”.

Another thing is happening as well with the condo market in Canada.

In its latest housing report, RBC Economics noted that the real-estate market is awashed with condo supply.

According to economist Robert Hogue, “condo investors are looking to sell”.

“As rents soften and vacancies rise, condo listings are spiking in Toronto, Montreal and Vancouver—albeit from low levels,” Hogue reported on Wednesday (October 29).

In the City of Toronto, condo listings in September 2020 increased 133.9 percent compared to supply in the same month last year.

For the rest of the Greater Toronto area, condo listings last month posted year-over-year growth of 81.5 percent.

In the island of Montreal, listings rose 41.4 percent in September compared to the same month in 2019.

However, for the rest of the Greater Montreal area, listings declined 32.8 percent year-over-year.

In Greater Vancouver, listings of condo properties rose 20.9 percent in September 2020 compared to the same month last year.

In contrast, listings for detached homes in all Toronto, Montreal, and Vancouver metropolitan regions decreased year-over-year in September.

“New, stricter regulations in Toronto are adding to the impulse to sell – at a time when new condo completions are bringing more units to the Toronto and Vancouver markets,” Hogue noted in his October 29 report.

Hogue’s report covered in broad strokes how the COVID-19 pandemic is affecting the Canadian housing market.

“Rural and suburban areas that once lagged desirable city addresses are now roaring hot as homebuyers wearied by lockdowns seek bigger yards and larger living spaces,” Hogue wrote.

Meanwhile, “Tight downtown condo markets that previously commanded expensive rents are now thick with supply.”

Hogue also stated that “rent is now declining in Toronto, Montreal and Vancouver, especially in higher density, downtown locations”.

“Underlying the shift,” according to the bank economist is a “surge in rental supply as the short-term rental business dries up and new purpose-built rental and condo units are completed”.

As well, “Big-city living has lost some of its luster with social distancing measures severely restricting cultural life and socializing opportunities.”

“Meantime, affordability issues are driving many Canadians further afield into smaller towns and cottage country, where larger living spaces are available,” Hogue wrote.


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The Importance of Mortgage Loan Insurance



Mortgage Loan Insurance is meant to shield the borrower from default on the borrower’s part, both straightforward and easy. However, the Canada Mortgage and Housing Corporation (CMHC) has built mortgage loan insurance to cover more than just banks. The CMHC needed homeowners to be better able to reach the housing market at an earlier time and better results. After all, more privately-owned housing means more employment, more market activity, more money invested, and so on. If there are more jobs and more investment, the economy will gain. In short, the risk to lenders has been eliminated, leaving them in a stronger position to offer lower interest rates and lower payments.

When the CMHC developed its Mortgage Loan Insurance (MLI) plan, it had a stipulation that if the borrower had less than 20% of the purchase price as a down payment, the insurance was necessary. Before introducing MLI, the Canadian Bank Act restricted federally controlled lending institutions from lending to those with less than 20% of loans. Banks will now fund up to 95 percent of the purchase price, given that MLI is purchased. The move meant that so many more people, who had previously given up on owning a house, now had hope.

MLI offers choices for those who already own a house for those who want to renovate, refinance, or move to another place. CMHC MLI’s are portable from an existing home to a newly purchased one, often without paying the initial premium for a new home. Besides, self-employed individuals looking to fund the purchase of a new home are now in a position to do so without offering conventional forms of proof of income. And those new to Canada are eligible. Current homeowners who choose to integrate energy-efficient elements into their home (the NRCan Energy Assessment Rating must increase by at least five points) are entitled to an extended amortization period-without a surcharge and with a 10% insurance premium rebate. There are also more incentives for borrowers to buy a second home or income land.

Now that we know the value of MLI, how do we translate it into numbers? Ok, it depends on a few equations, for instance. Your lender will do it for you, but if you want an idea ahead of time, start measuring the Gross Debt Service (GDS). The GDS estimates the most expenses you can afford per month, particularly those related to running your house. The cumulative GDS need not be more than 32% of your gross household income to apply for an MLI. Next is your Total Debt Service (TDS) estimation, which calculates the most debt cost your payment can cover. The TDS should not be more than 40% of your total monthly household income. Use the online mortgage calculator to enter the details and your gross monthly income, along with other factors, and you will be presented with the maximum allowable mortgage you apply for.

The MLI premium rate will then be measured as a percentage of the overall loan, taking into account the down payment size. For example, if you need the lender to fund 80% of the property’s cost, your fee would be 1 % of the total loan. If the purchase requires 95 percent of the lender’s funding, the price would be 2.75 percent of the total amount of the loan. The lower the sum financed, the lower the insurance premium.

Also, the harder homeowners work to pay off their mortgage, the more equity they create in their house. The ability to buy earlier than was traditionally feasible (through the MLI), homeowners took the opportunity to go faster than even the lender had expected. As of 2009, the CMHC estimated that Canadian homeowners’ equity status was, on average, 74 percent, while that of its American counterparts was 43 percent. The importance of the MLI is obvious now.


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Tips to Get the Best Mortgage – Ontario Mortgage



Best Mortgage

There are more choices than going to your bank if you are finding an Ontario mortgage. Banks in Ontario, Canada, loan money more quickly than during the global economic collapse, but when you step off the highway, they will rarely give you the best price. Offices in individual high-rise buildings owned by central Canadian banks in downtown Toronto each have a vested interest in catching the Canadian loan market within their product offerings. Loan officers work for the bank, and they can only offer you limited services or solutions for mortgages. On the other hand, by buying your loan from several different forms of lenders in Ontario and elsewhere in Canada, a mortgage broker works with you and can help you find the best price with your mortgage needs.

When buying a home in Canada, having the right financing is essential because it will possibly be the single largest investment you make in your life. It makes much more sense to purchase a house than to rent one in Ontario as an investment, since there are no capital gains taxes on real estate in Ontario, Canada, unlike elsewhere in the United States.

There is access to bank mortgages from a Canadian mortgage broker who can always get better deals for you than if you approach a bank on your own. Besides, hundreds of other lending options are available to mortgage brokers in Ontario, including loans from Canadian finance firms, trust companies and private lenders. You will save time and money by not having to shop around on your own for your Ontario mortgage, and you only need to fill out one request. Then the mortgage agent or broker has lenders vying for your business. The best part is that you get professional advice that can save you thousands of dollars and that doesn’t cost you anything. The mortgage agent is paid a fee if you choose the lender, so it costs you nothing to tap into their expertise.

A seasoned, licensed mortgage expert from Ontario knows how to negotiate the best deals and can clarify to you all your choices. Since over 25% of all Canadians live in Southern Ontario, it is necessary to draw on the local experience of an Ontario mortgage broker or agent as lenders in various parts of Canada and all have other requirements internationally. Although it is essential to get a low-interest rate, it is not the only consideration. The mortgage brokerage industry in Ontario, Canada, is governed by the Ontario Financial Services Commission or the FSCO. On all promotional materials and blogs, you can see a fair Ontario mortgage brokerage license number released. Taking into account fixed versus variable rates; payment options; terms or fees, a mortgage agent or broker can help you get the best package for your financial needs.

The Bank of Canada recently signaled a rise in mortgage rates, which in turn causes higher mortgage rates in Ontario. In Southern Ontario, the housing market was doing exceptionally well in 2018, and prices are again rising. Recent inflation worries may have been overshadowed, and the Bank of Canada’s urge to increase interest rates is being balanced by the need to boost a rising but still fragile Canadian economy. Given the current interest rate levels in Canada, one solution for Ontario home buyers is to lock in lower rates for at least 90 days while shopping for their home to take advantage of the lowest Canadian mortgage rates available.

If you’re a first-time buyer, self-employed or new to Canada, you’ll have a much stricter time applying for a bank mortgage. Recent amendments to Ontario legislation have put constraints more stringent on mortgages, so it’s best not to go alone, but to get the assistance of a local mortgage specialist. If you’re shopping for a home, it’s also worth being pre-qualified for a mortgage to guarantee the rate and know how much you can pay. From extended hours to house calls, you’ll even get generous support for your Ontario mortgage from a central mortgage agent or broker.


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