A surge in real estates prices that extended down the Highway 401 corridor created a 35-per cent jump in the average price of a home in the Windsor area this January compared to January 2020.
The average local sales price for the month was $510,716 compared to $379,813 just 12 months earlier and $206,383 higher than in January 2019.
“The underlying facet of this is really the fundamental of supply,” said Windsor-Essex County Association of Realtors president Damon Winney.
“In January 2020 there were more new listings than this January. We’ve all heard the stories of 10 to 20 bidders for a property.
“With fewer new listings, we’re moving through our inventory of homes quickly. We only have 319 active listings on the board right now.,” said Winney, who is also co-owner of Jump Realty.
Local homes are taking only eight or nine days on average to sell, he said.
The London/St. Thomas Association of Realtors reported the average price rose 40.5 per cent in the region, to sit at $607,431. Chatham-Kent’s average price rose 42.4 per cent to push the average home to $350,452 for January.
Homes were selling for 11.7 per cent over asking price in Windsor and 10 per cent over in London.
The rental market for apartments also remains tight with a 3.2-per cent vacancy rate compared to 3.6 per cent a year ago.
The average local rent for a two-bedroom apartment has crept up from $949 in 2019 to $1,058 currently. The national average is $1,330.
It’s a similar housing story in London and Chatham where homes are moving as quickly and there is less than a month’s supply of homes on the market based on the current rate of sales.
Windsor’s February figures, which haven’t been released yet, won’t maintain the same torrid pace as January, Winney said.
“They aren’t as eye-popping as 35 per cent, but they’re still strong at 24 per cent,” Winney said. “That’s more in line with the provincial average.”
The average home sale price for January in Canada increased by 22.8 per cent to $621,525.
Monthly prices increased 21 per cent in Ontario, the largest increase of any province, with the average home costing $796,884.
The highest average price remains in British Columbia at $843,830 with New Brunswick being the most affordable province to buy a home at $205,074.
Winney said “2021 started off just like 2020 ended, with a number of key housing market indicators continuing to set records,” Canadian Realtors Association chair Costa Poulopoulos said of the national scene.
“The two big challenges facing housing markets this year are the same ones we were facing last year — COVID and a lack of supply. With luck, some potential sellers who balked at wading into the market last year will feel more comfortable listing this year,” he said.
The inventory of new listings in Canada is at a record low.
CREA’s forecast released last week for the Windsor market remains robust in terms of prices and in economic and population growth.
Winney said COVID has made buying a home challenging, but supply has also become restricted as some homeowners have opted to renovate their homes and stay put.
At the same time, there’s also continued interest from outside buyers, particularly from large urban areas like pricier Toronto.
A stable workforce, good climate, border access and the ability to cash in their expensive Greater Toronto Area homes and buy cheaper in the Windsor region are all driving the rising prices in the local housing market.
“I also believe there’s a density concern when we look at people moving from the GTA to here,” Winney said. “People are seeking space.
“They can get a four-to-five bedroom home with space for a home office, larger yard, better lifestyle and a better cost of living.”
Bungalows were the most popular choice for buyers in January followed by two-storey dwellings.
(Bloomberg) — Real estate focused investment firm GCP said it closed a $2.3 billion fund that will be used to buy and operate warehouses tied to logistics and e-commerce.
The fund has already acquired about 25 million square feet of real estate and will will look to buy about 25 million more, GCP Chief Executive Officer Alan Yang said in an interview. Los Angeles-based GCP is aiming to own about 100 properties in the fund.
Yang said it’s GCP’s first discretionary fund and is unlike previous vehicles tied to specific investments.
GCP spun out of Singapore-based investment manager GLP in 2019 following Blackstone Group Inc.’s $18.7 billion acquisition of GLP’s U.S.-based assets. Yang, who was GLP’s chief investment officer, founded GCP after it took on $1.1 billion of GLP assets that weren’t part of the Blackstone deal.
GLP is a limited partner in GCP, alongside other investors including Goldman Sachs Group Inc. and several pension funds, according to people familiar with the matter who asked not to be identified because the information was private. Representatives for GLP and Goldman Sachs couldn’t be reached for comment.
Yang, who founded the firm with former colleagues from Blackstone where he worked earlier in his career, said he’s betting on e-commerce to keep driving the need for warehouses to help in the last-mile delivery of goods.
“Logistics 1.0 was about delivering wholesale goods,” Yang said. “Logistics 2.0 is now about retail and direct to consumer — getting goods to people’s doorsteps for the lowest price and least amount of time.”
The GCP fund will focus on real estate logistics, investing and acquiring warehouses and other facilities in key markets across the U.S., chiefly Seattle, Los Angeles, Miami, Portland and the northeast corridor via eastern Pennsylvania.
GCP also owns and operates Modlo, a logistics platform founded in 2019 that operates its properties and serves as its consumer-facing brand. Modlo’s clients include Amazon.com Inc., which leases a Seattle property that was custom-built for the e-commerce giant, Yang said. Other big clients include Keurig, Dr. Pepper, DHL and FedEx, he said.
Modlo’s staff — part of GCP’s total team of about 35 employees — also helps identify new assets for investment.
The logistics real-estate world already has some big players, including real estate investment trust Prologis Inc. and Blackstone, which created a company called Link to manage its U.S. logistics real estate.
One of GCP’s largest deals was a $308 million portfolio of properties in Pennsylvania and Central California that it bought from USAA. It has invested about 60% of the fund and will start raising its next one when 75% of it is deployed, Yang said.
“How we designed GCP and the fund is that it can go anywhere on the risk spectrum,” Yang said. “We’re agnostic to specific deal size or market.”
Yang said that the fund is targeting mid-teens returns for the fund.
After a years-long campaign to tame property prices, China is upping the ante to break a stubborn cycle of gains that’s made homes increasingly unaffordable.
In recent days, China jacked up mortgage rates in a major city, vowed to accelerate the development of government subsidized rental housing, and moved to increase scrutiny on everything from financing of developers and newly-listed home prices to title transfers. Echoing Xi Jinping’s famous words that “housing is for living in and not for speculation,” Vice Premier Han Zheng added that the sector shouldn’t be used as a short-term tool to stimulate the economy.
The intensified focus on real estate — an industry that was already under the scanner — mirrors broader crackdowns on businesses such as education that are seen as widening social inequities. As China’s economy slows and President Xi tries to increase the nation’s birth rate, the policies underscore the Communist Party’s growing resolve to respond to mounting dissatisfaction with hoarded wealth and narrowing avenues for advancement.
“China’s property sector has been one of the biggest sources of discontent and the government is hell bent on controlling prices so it doesn’t lead to social unrest,” said Beijing-based Liao Ming, a founding partner of Prospect Avenue Capital. “The measures echo the policy curbs in education in that they are aimed at easing public angst against inequity.”
While China has spent years trying to cool property prices, analysts say this round of crackdowns will be different. One clear signal came in Vice Premier Han’s comments on steering away from using real estate to provide short-term boosts for the economy.
“In the past, Beijing has consistently used the property sector to stabilize overall growth,” Nomura analysts led by Lu Ting wrote in a research note, adding that they expect Beijing to change its playbook. Policy makers won’t lift property restrictions this time partly due to concerns about a systemic financial crisis, the analysts wrote.
Another signal came from the unusually large number of government entities that vowed recently to strengthen measures on everything from project development and home sales, to rental and property management services. Eight policy bodies said in a joint statement that they would step up penalties for misconduct. In the line of fire will be developers that default on debt repayments, delay deliveries on pre-sold homes or elicit negative news or market concerns.
Local bureaucrats’ careers are on the line. Officials in cities that lack sufficient regulations and experience rapid price spikes will be held accountable, Zhang Qiguang, an official for the Ministry of Housing and Urban-Rural Development said on July 22.
On Monday, commentary from state-media Xinhua urged governments across the nation to keep home prices at a reasonable level and make it an urgent task.
“New residents and young people can’t afford to buy or rent good homes,” the editorial said. “Those problems are especially acute in cities with population inflow and metropolises.”
Investors have responded by selling property stocks, with the recent stream of news piling pressure on developers that were already being pressed to deleverage and meet China’s “three red lines” on debt metrics.
China Evergrande Group shares were little changed as of 14:13 p.m., after plunging more than 40% in just under two weeks. A Bloomberg Intelligence index of 33 major Chinese developers mostly traded in Hong Kong dropped for a fourth consecutive day on Wednesday.
China Chengxin International Credit Rating revised its outlook for the country’s real estate sector to negative from stable on Monday, citing concerns about policy tightening and weakened investor confidence.
“Owning property is one of the key ways in which income inequality has worsened in China so the clamp down will come and will be severe,” said Alicia Garcia Herrero, the Hong Kong-based chief economist for Asia Pacific at Natixis. The cost of mortgages will increase, particularly for those with multiple homes, as will things like property taxes, she estimated.
The policies are here to stay, Ren Yi, the social media commentator and Harvard University-educated princeling otherwise known as Chairman Rabbit, wrote in commentary online.
“The nation’s leaders are looking at this issue from a bigger point of view, property isn’t just a economic tool, it sits at the root of all social economic and political issues, and must be dealt with,” Ren said.
The Chinese government needs to maintain a delicate balance. The real estate sector accounts for 13% of the economy from just 5% in 1995, according to Marc Rubinstein, a former hedge fund manager who now writes about finance.
Policy missteps could have unintended consequences for the banking system. Chinese banks had over 50 trillion yuan ($7.7 trillion) of outstanding loans to the real estate sector, more than any other industry and accounting for about 28% of the nation’s total lending.
Of those loans, about 35.7 trillion yuan were mortgage loans to households and 12.4 trillion yuan were for property development, according to official data.
But all signs point to the government’s determination to ensure social stability, even if it spells near-term turmoil for capital markets. Just in June, Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission, warned against betting that property prices will never fall.
“Property is the single most important source of financial risks and wealth inequality in China,” said Larry Hu, head of China economics at Macquarie Securities Ltd. It “is worth watching.”
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