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How as Covid 19 Impacted the Canadian Housing Market

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Canadian Housing Market

Ever since the covid 19 pandemic began we have seen people retreat to there homes as new layers of lockdowns are being imposed on people. Living in your home and not going out can be tough for most people. This has most certainly caused a shift in demand for tight condos to bigger more spacious living arrangements.

I mean if you are going to live your house protected you ought to think in term of long-term benefits as well. Therefore, the demand and the retail price of the whole market are screaming at the top of there lungs.

Initially when the march lock down began, we saw a dip in the market and well that was quick to sprung back up when the market was relax by letting ease of the social distancing protocol. That would allow for dealing to be carried out in a much cleaner fashion.

This resulted in an aggressive month for trading for the months of July- September Last year.

The Rental Market of Canada;

The rental market is beginning to play a role in the housing market as well. We have seen rents go down in the Toronto area which is the Canadas largest and least affordable city. It is important to understand that renters tend to earn less than home owners and after the corona pandemic things are not looking good in the job market as well. Therefore, a lot of people are skipping up on the heavy rents and shifting to alternative means hence reducing the demand of an already established market.

Selling out Condos:

The condo investor is looking to sell. Keeping mind, the size of condos and the new space requirements brought about by the pandemic condos are going out. While most people now are shifting towards the cottage country. To look for more larger spaces to live in.

Meantime, affordability issues are driving many Canadians further afield into smaller towns and cottage country, where larger living spaces are available. Clearly COVID-19 has lit a fire under cottage country real estate.

Bank of Canada Cutting Rates Over Night:

More or less, we cannot ignore a simple fact. That the covid 19 has allowed people to own new homes. And has made this very easy. With the Bank of Canada’s overnight rate cut to close to zero and sharp declines in bond yields mortgage rates have been pushed to their lowest levels on record. This slightly reduced mortgage payments on a home priced at market value despite prices continuing to rise at an accelerating pace in most of Canada. Generous government income support programs for households most affected by COVID-19 also made it easier to carry mortgage payments.

Immigration has Fallen:

We have seen the level of immigrations have fallen and this means that there would be less people generating demand for houses and accommodations in general. Which would show into the impact on price of a relatively lower demand. Meaning this would be looking great of the people who are planning on buying.

And well not as good for people looking into selling. With income being impacted by the virus as well. I would say that is going to put people in a position to put out there assets quickly to generate cashflows.

 

The home owners are expected to wait and watch this pass by if they can. That is.

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Credit 'Zombies' on the Rise as Real Estate Firms Lead Charge – BNN

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(Bloomberg) — The walking dead of the corporate world are multiplying — and the property industry sustains the most.

A new study on companies that have dodged default for years, even though they don’t have enough money to pay interest, comes just as markets from Hong Kong to New York are roiled by real-estate giant China Evergrande Group’s showdown with its creditors. 

Consultancy firm Kearney found their numbers have expanded by 9% globally in the past decade, in part because loose monetary policy has allowed them to keep rolling over debts. 

While “zombies” have been on the rise since the last financial crisis, the pandemic looks likely to bolster their ranks, with more companies seeking waivers after taking on unsustainable piles of debt when economies were shuttered.

The OECD defines zombie companies as those that have been trading for more than 10 years and have been unable to cover their interest burden from their operating revenues for three consecutive years. 

Kearney studied records of 67,000 listed companies from 152 countries. It found:

  • 7.4% of real-estate firms were zombies
  • 5.9% of healthcare
  • 5.5% of telecommunications and media
  • 5.1% of travel and tourism

Within retail, online retail had a slightly bigger share of zombies than brick-and-mortar counterparts, potentially due to the low profitability of online players, according to the report.   

Europe

At least 5 issuers are offering debt on European markets on Thursday, with new issuance volumes of at least EU2.25 billion-equivalent.

  • Bank of England voted to keep bond-buying target and interest rate benchmark unchanged at a record-low 0.1%
  • Ashmore Group Plc’s Jan Dehn is set to leave the firm, ending a 16-year stint at the emerging market-focused money manager
  • SMCP’s majority shareholder, European TopSoho’s, failed to redeem at maturity EU250 million 4.0% bonds exchangeable into SMCP shares

Asia

Financial regulators in Beijing issued a broad set of instructions to China Evergrande Group, telling the embattled developer to focus on completing unfinished properties and repaying individual investors while avoiding a near-term default on dollar bonds.

  • Global investors will focus on China Evergrande Group’s $83.5 million interest payment due Thursday on a five-year dollar note
  • The People’s Bank of China pumped in 110 billion yuan ($17 billion) of cash with seven- and 14-day reverse repurchase agreements.
  • Four Chinese firms were offering dollar bonds Thursday, ending a three-day lull in the Asian credit market amid holidays and concern about contagion from the distressed property giant Evergrande

U.S.

Federal Reserve Chair Jerome Powell said there is little direct U.S. exposure to debt of the Chinese company Evergrande but said it could impact global financial conditions

  • Powell said the Fed could begin scaling back asset purchases as soon as November and complete the process by mid-2022
  • The takeover of medical supply company Medline Industries Inc. is being funded by the largest leveraged buyout loan in three years
  • A gauge of volatility in the $4 trillion market for state and local-government debt has tumbled to just shy of a record low set in early January

©2021 Bloomberg L.P.

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Record-breaking real estate: North Saanich property sells for nearly $23M – CHEK

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The sale of a multi-million dollar listing in North Saanich is shattering any previous record for highest house price on Vancouver Island.

For $22.75 million, the Lawrence Road property includes a 13,000-square-foot home with eight bathrooms, six bedrooms, a two-storey study, a detached yoga studio, an infinity pool, tennis court, gym — even an underground wine cellar.

The president of the Victoria Real Estate Board, David Langlois, said the property is unique.

“You are looking at a very high-end, very interesting property that is going to offer features that you simply can’t find anywhere else,” he said.

It also comes with its own detached two-bedroom guest cottage.

“It’s significant in that it’s certainly the largest recorded sale that we’ve seen in our marketplace,” Langlois said.

“We do have a lot of really valuable real estate throughout the Greater Victoria area. We’ve got lots of private islands, and lots of estate-like settings. It’s not surprising.”

In June, a property in Metchosin sold for $12 million. It sits on 67 acres and a stream runs under parts of the 10,000-square-foot home.

WATCH: Luxury home with stream running through it sets real estate record in Greater Victoria

At the time, it was the highest price ever paid through the Victoria Real Estate Board listings.

Tina Ireland, a regional assessor with BC Assessment, said there are fewer homes in the luxury market available right now.

“The luxury home market is more unique though of course, because the properties are more unique.”

With demand up for properties worth $4 million and more, so are prices.

“Last year’s assessment, we had seen a 10 per cent increase,” Ireland said. “This year I think we’ll see at least that in our assessed values.”

There have been 245 sales of homes in the $2 million category so far in 2021, compared with just 94 in the same period in 2020.

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Dubai real-estate firm DAMAC approved to take firm private – 95.7 News

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DUBAI, United Arab Emirates (AP) — A Dubai real-estate company known for its deals with former President Donald Trump said Thursday it had received regulator approval for an effort to take the firm private.

DAMAC Properties still plans to offer $595 million for outstanding shares of the company, the firm said in a filing on Dubai Financial Market stock exchange.

It said it would offer an update on the plan in the coming weeks. It earlier announced plans in June for the offer to take the company private, then withdrew them as regulators examined the plan.

The buyout would be through Maple Invest Co. Ltd., a holding company of DAMAC’s billionaire founder Hussain Sajwani. Sajwani owns nearly four-fifths of the company through various investment firms.

DAMAC stock traded up Thursday over 3% on the news. The firm has a market capitalization of over $2 billion.

DAMAC is known in Dubai for a development that features a Trump-branded golf club surrounded by villas and apartments, making it the only one of its kind in the Middle East that bears the Trump logo.

The company’s partnership with the Trump Organization to manage and run the golf course was struck before Trump’s election as U.S. president.

The Associated Press

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