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‘It all comes back to lodging’: electrician says lack of housing slows construction

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KUUJJUAQ, Que. — Daniel Gabois would usually be out hunting this time of year.

Flocks of Canada geese have started to appear overhead in their V-formations, returning to nesting grounds in the northern Quebec region of Nunavik. That’s the signal for him and many others in his hometown of Kuujjuaq to head out on the land.

But the electrician and entrepreneur is working 10- to 12-hour days, trying to finish more work than he can keep up with as companies and governments scramble to fill a critical housing gap.

“The North is growing too fast,” he said.

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Statistics Canada population projections from 2020 show that Nunavut and the Northwest Territories will have the youngest median populations in the country over the next four decades, well below the Canadian average.

A study of Nunavik’s population between 2006 and 2016 shows it grew at a much higher rate, 22 per cent, than the rest of Quebec at eight per cent. At the time, a third of the people in Nunavik were under the age of 15.

Gadbois comes from a family of tradespeople. One brother owns a plumbing and heating company. The other is a carpenter.

They’re local companies working to build housing in the North. But even the solutions are being hindered, he said, by housing issues.

“It all comes back down to lodging,” Gadbois said.

To fulfil his contracts, he’s renting eight workers from a company near Val-d’Or, Que., paying for their flights, food, lodging and salaries.

“You’re looking at all your profits going into renting a place for someone who’s going to be flying in and out.”

Gadbois and his family lived in southern Quebec while he got his certification. He said he missed home, but wanted his daughter to get the best education possible. They stayed until “she started losing the language.”

The family sold their house and applied for housing in Nunavik, where they learned there was a three-year wait-list.

Gadbois built his home in Kuujjuaq, but knows that isn’t something everyone can do. The short construction season and long distance from suppliers add to the challenge.

“It’s always money, right?” Gadbois said.

The recent federal budget set aside $150 million over two years to support affordable housing and related infrastructure in the North.

In a meeting of the House of Commons status of women committee Friday, NDP MP Niki Ashton said the budget “is nowhere near what it needs to be to address the housing crisis in terms of Indigenous communities.”

In a response, Indigenous Services Minister Marc Miller said the housing commitments “will be game-changers.”

“But are they enough? Absolutely not,” he said. “I don’t think anyone credible could actually stand up and say that.”

Inuit Tapiriit Kanatami president Natan Obed called the budget a “significant step in the right direction” at the time it was released, adding that “the Inuit housing crisis is both uniquely acute and long-standing.”

Locals want to be part of the solution.

Gadbois employs three other men from Nunavik at Ikumak Services, and he’s working to encourage more young people to join the trades.

“You see a lot of the young ones have interest in getting out of their hometown to … get out of their overcrowded homes, because that’s really the problem, right? You can end up with seven, eight people in a two-bedroom home.”

He’d like to see a comprehensive trade school in Nunavik to train the next generation. Most Nunavik residents do what Gadbois did: head to what he calls the south, to schools in Quebec and Ontario.

“For someone who’s never really been down South, who’s been up North all their lives, it’s kind of a culture shock,” he said.

Still, he said he sees change occurring.

“Nothing happens overnight, right?”

For now, Gadbois is waking up before sunrise to try and get some goose hunting in before the work day starts.

This report by The Canadian Press was first published May 24, 2022.

 

Sarah Ritchie, The Canadian Press

Real eState

The Realtors' Big Defeat – The New York Times

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A settlement in the real estate industry is a case study of a central flaw in free-market economic theory.

Free-market economic theory suggests that the American real estate market should not have been able to exist as it has for decades.

Americans have long paid unusually high commissions to real estate agents. The typical commission in the U.S. has been almost 6 percent, compared with 4.5 percent in Germany, 2.5 percent in Australia and 1.3 percent in Britain. As a recent headline in The Wall Street Journal put it, “Almost no one pays a 6 percent real-estate commission — except Americans.”

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If housing operated as an efficient economic market should, competition would have solved this problem. Some real estate brokers, recognizing the chance to win business by charging lower commissions, would have done so. Other brokers would have had to reduce their own commissions or lose customers. Eventually, commissions would have settled in a reasonable place, high enough for agents to make a profit but in line with the rest of the world.

That didn’t happen. Instead, an average home sale in the U.S. has cost between $5,000 and $15,000 more than it would have without the inflated commissions. This money has been akin to a tax, collected by real estate agents instead of the government.

The situation finally seems to be ending, though. On Friday, the National Association of Realtors, the industry group that has enforced the rules that led to the 6 percent commission, agreed to change its behavior as part of an agreement to settle several lawsuits.

The settlement is important in its own right. Americans now spend about $100 billion a year on commissions. That number will probably decline by between $20 billion and $50 billion, Steve Brobeck, the former head of the Consumer Federation of America, told my colleague Debra Kamin.

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Allied REIT buys out Westbank on two building projects, the Home of the Week and more top real estate stories – The Globe and Mail

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Home of the Week, 80 John St., Upper Penthouse 1, TorontoJohn Lee/John Lee/Soare Productions

Here are The Globe and Mail’s top housing and real estate stories this week and one home worth a look.

Take The Globe’s business and investing news quiz

Canadians’ wealth is bolstered by stock rally amid housing slump, Statscan says

In the fourth quarter, households saw their net worth rise by $290-billion, or 1.8 per cent, to roughly $16.4-trillion, Statistics Canada said in a report Wednesday. But many homeowners have yet to face the full brunt of higher interest rates until they renew their mortgages, writes Matt Lundy. Others have variable-rate mortgages with fixed payments, which means that as rates have increased, more of their bill is going toward the interest portion rather than paying down the principal. The looming renewals, among other factors, led Canadians to stay cautious about taking on new debt — financial liabilities only rose by 3.4 per cent in 2023.

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Allied REIT takes control of two towers co-developed with Westbank

Allied Properties REIT AP-UN-T is buying out its partner, Westbank Corp., on two office skyscrapers as the Vancouver-based real estate developer faces rising costs and legal claims at projects in Toronto and Seattle, writes Rachelle Younglai and Shane Dingman. The deal, which is expected to close in early April, will significantly cut the amount of debt Westbank owes Allied — giving them an infusion of cash in the process. In November, The Globe and Mail reported that Westbank faced legal claims for $25-million in unpaid work at the Mirvish Village development in Toronto.

Open this photo in gallery:

Advertised rents for purpose-built rentals were up 14.4 per cent nationwide in February, compared with the same month in 2023. An apartment rental building in Toronto’s Beach neighbourhood on Mar 11.Fred Lum/The Globe and Mail

Why rent inflation is much higher for rental apartments than for condos

In Canada’s overheated rental market, tenants are increasingly gravitating toward purpose-built rentals, experts say – demand that is driving up rent for these units much faster than for condos, writes Erica Alini. Advertised rents for purpose-built rentals, also called rental apartments, were up 14.4 per cent nationwide in February, compared with last year— rents for condos, on the other hand, grew by just 5 per cent in the same timeframe. A severe supply shortage, affordable prices and the allure of rent control in older buildings is driving up the prices in purpose-built rentals.

Renters have harder time accumulating wealth than homeowners, RBC report says

According to the report, homeowners have seen their net worth grow from nine times household disposable income to 13 times since 2010, while for renters, net wealth grew from three to 3.5 times over the same period. The gap has widened even though renters’ incomes have risen at the same pace as homeowners. Meanwhile, homeowners are also accumulating home equity with their housing payments. The tightening of renters’ incomes will make it even harder to save up for a down payment, economists say.

Home of the week: Festival Tower penthouse with an interior designer touch

  • Home of the Week, 80 John St., Upper Penthouse 1, TorontoJohn Lee/John Lee/Soare Productions

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80 John St., Upper Penthouse 1, Toronto

The 46th-floor penthouse sits right above the TIFF Lightbox theatre, which is home to the Toronto International Film Festival. When you first enter the two-bedroom-plus-den condo, you’re greeted by 11-foot-tall ceilings leading you into the living room. The previous owners had white-lacquered book cases installed on the wall separating the living area from the kitchen — which frames the spacious room — and the primary bedroom has its own hotel-style bathroom attached. The 180-degree view from the penthouse features a panoramic view of the city’s downtown. and stretches across Lake Ontario.

What do you think is the asking price for the property?

a. $2,999,000

b. $3,875,000

c. $4,195,000

d. $4,500,000

c. The asking price is $4,195,000.

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At Real Estate's Biggest Conference, Property Crisis Denial Shifts to Acceptance – Bloomberg

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Welcome to The Brink. I’m Jack Sidders, a reporter usually based in London but this week I’ve been in Cannes where about 20,000 real estate professionals gathered for the annual Mipim conference. We also have news on German giant Bayer, crypto exchange FTX and Swedish debt collector Intrum. Follow this link to subscribe. Send us feedback and tips at debtnews@bloomberg.net or DM on X to @JackSidders.

Mipim is supposed to be a time for developers to show off their grand visions for projects of the future, with cities built in miniature hoping to lure pools of capital that will turn them into full scale realities.

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