Institutional investors and developers based in Mainland China are expected to not only slow down their outbound investment into overseas real estate markets, but increase their dispositions, especially with the economic uncertainty arising from COVID-19.
A new survey by Cushman & Wakefield found that 48% of these investors are planning to reduce their investment in international markets in 2020. The Canadian market is no exception, which was already experiencing a slowdown in investment originating from Mainland China prior to the pandemic.
“[The activities] by Mainland China investors were mainly due to central government policy guidance and tightened lending to real estate developers and operators, and we anticipate this trend of decreasing investments and increasing dispositions to continue in 2020 by Mainland China investors globally,” Jason Zhang, the head of China outbound investment capital markets at Cushman & Wakefield, told Daily Hive.
This is the third consecutive year the number of investors that were increasing their overseas investment dropped, now down to just 13% of respondents. As well, 2019 marked the first year dispositions by Mainland China and Hong Kong investors outweighed acquisitions.
This comes as China just reported its first GDP contraction since at least 1992, with the first quarter of 2020 seeing the economy shrink by 6.8%.
“The COVID-19 pandemic also has undoubtedly added more obstacles to investing overseas in general for Chinese investors,” he added.
That said, while there will be a significant impact on deal volume in 2020, his firm believes some international markets could recover and become accessible more quickly than others. Certain sectors of the real estate market, such as retail, hotels, and senior care facilities, may also see sector-specific distress.
Attention recently turned to investing in the United Kingdom, with the uncertainty over Brexit representing an opportunity to invest.
Based on their findings, the trade war is not as significant a barrier as may have been reported for Mainland Chinese investment in the United States. Just 35% of investors said trade tensions were prohibitive to ongoing investment, and only 16% plan to reduce their exposure to the American market.
Real estate: These are Ottawa's five hottest neighbourhoods – CTV News Ottawa
Ottawa’s July real estate market was as hot as the temperatures.
Despite these uncertain times, the market experienced double-digit growth.
Taylor Bennett of Bennett Property Shop Realty says a normal July would mean a slight dip in the number of sales, and the average sale price of properties.
“As we all know, 2020 hasn’t been your normal year, and unsurprisingly the historical trend was broken,” he says.
Bennett explains that even though the market prices continued to climb during lockdown, inventory levels were at an all-time low.
“Buyers had fewer options to consider during a time of the year when we normally see the highest levels of inventory. But now that we are entering our 4th week of Phase 3, we are seeing activity we normally see in the spring.”
Residential numbers are up more than 15.7 per cent over July of 2019. The condo market has had even more growth, up 18.2 per cent over last July.
“Properties are selling faster than they are being listed, creating an extremely competitive market for buyers. They have to be more prepare than ever to enter into negotiations, especially if they are looking in some of the more sought-after areas.”
As for the hottest neighbourhoods: Hintonburg, Dunrobin, Vanier and Greely are up by more than 45 per cent over last year.
Manotick and Overbrook are tied for fifth place, up by more than 37 per cent.
“Hintonburg and Manotick have appeared on this list before. But both Dunrobin and Greely likely make this list due to the new societal working habits – the need to be close to your office may not exist as more people are telecommuting and both of these neighbourhoods offer more home for your dollar,” he said.
Bennett says Vanier’s popularity is no surprise.
“As the city population continues to grow we are seeing more gentrification, and Vanier is perfectly positioned for that – great proximity to downtown and the Queensway & next to Rockcliffe and New Edinburgh, a new pedestrian bridge connecting it to Sandy Hill, new infrastructure project being completed by the city and an LRT stop to the south.”
Kelowna real estate agent fined $6500 for 'misleading' website – Kelowna Capital News
A Kelowna real estate agent has been fined $6,500 for creating a website that advertised services he was not licensed to provide.
According to a July decision from the Real Estate Council of B.C. (RECBC), James Kevin Adams, an agent who used to work with local real estate firm Sage Executive Group, created a website called “K-O Properties” in 2017. The site advertised property management services around the Okanagan and Kootenay regions.
In its decision, the council called the website “false and/or misleading” as neither Adams nor anybody else affiliated with the site was licensed to provide such services in B.C.
Adams said the K-O Properties site was a working prototype, which he planned to have fully-running only after he was licensed to provide strata and rental property management services. He argued he only published the site to “work out the bugs” and “see how it would work by having [his] friends interact with it.”
The web designer Adams hired to build the website said Adams “most likely was not aware that [the website] was live.”
While the council said no evidence existed of Adams actually providing such services through K-O Properties, it still deemed his actions constituted professional misconduct.
Adams signed a consent order on July 16, agreeing to pay a $5,000 fine and a further $1,500 in fees to the council. He also agreed to complete a real estate and trading services remedial education course at his own expense.
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Real estate market in Durham advantageous for sellers during coronavirus pandemic – Global News
Industry leaders are reporting a resurgence in the real estate market in Durham after the region took an initial hit in the early stages of the coronavirus pandemic.
According to Vicki Sweeney, president of the Durham Region Association of Realtors, if you’re looking to sell your home in Durham, now is the time.
“The pandemic hit and obviously our numbers went right down,” Sweeney said. “But now we’re seeing unprecedented numbers for a summer market.”
According to housing reports released by the association, in July there were 1,583 homes sold at a record-high average of $709, 640.
This is a notable difference compared to sales in April, when only 513 homes were sold at an average of $612,563. What’s more, in July, properties only lasted on the market for an average of 16 days compared to 23 days this time last year.
Sweeney says right now the competition is fierce for buyers, with sellers getting multiple offers. She says the sudden increase in sales could be due to a number of factors.
“I think there’s also another trend happening right now, where before living in (Toronto’s) downtown core was important for avoiding long commutes,” she said.
“Since COVID, we’ve had to adapt to the online platforms, and people have realized, if they can work from home they don’t have to live in the downtown core.”
Mortgage brokers say another reason for the spike in interest for homes in Durham is a significant drop in mortgage rates, which currently hover around two per cent.
Mortgage broker Craig Howie says that while the current state of the market has posed a challenge for first-time home buyers, it’s proven to be even more difficult for those who are self-employed.
“Previously, lenders would look at a two-year average and look at what their self-employed income was,” Howie said.
“Now they’re looking at whether or not the job is going to be feasible, if it’s going to be around in the next couple of years because of everything that’s gone on with the pandemic.”
Howie adds that with the value of homes going up, there have also been difficulties when it comes to appraisals.
“When a lender is, say, lending 95 per cent of the value of that home, there’s concern that maybe the value isn’t there and some appraisals aren’t coming in the way we need them to be.”
Realtors in Durham say Clarington is currently the region’s largest hotspot for buying homes.
© 2020 Global News, a division of Corus Entertainment Inc.
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