Real eState

News of Blackstone's Toronto Real Estate Office Met with Mixed Reactions – Storeys

Published

2 years ago

May 13, 2022

Earlier this week, global investment giant Blackstone Inc. made headlines when it announced it would open a real estate office in Toronto.

The move was quickly met with mixed reactions, as Blackstone became the subject of passionate online banter. In the past decade-plus, Blackstone has been accused of profiteering in the U.S. during the 2008 housing crisis by buying foreclosed single-family homes at cheap prices.

So, it didn’t take long for the alternative investment management business to start to get slammed on social media after Monday’s announcement. “The vultures are here in anticipation of a housing market bloodbath,” wrote one Twitter user, for example. Meanwhile, Reddit was alive and well with banter of its own.

Whether a scapegoat or a legitimate culprit, institutional investors like Blackstone have been blamed in part for North America’s housing crisis. And many Canadians — some, inevitably would-be homebuyers in another time and place — are shouting “NIMBY” at them loud and clear.

On one hand, proponents argue that the entry of institutional investors could add much-needed rental supply to the housing market. On the other, critics say it may make it even more difficult for first-time buyers to purchase homes by removing stock from the market, ultimately contributing to the affordability crisis.

Residential suburb in Toronto/Shutterstock

But, while some may have been quick to assume that Blackstone will come in and purchase large quantities of single-family homes like they did south of the border, there is actually no indication to suggest this is the case in Canada. In fact, the company says it’s not happening.

“In Canada, we’ve been long-term investors in areas like logistics, which continue to be under supplied and are benefiting from growing ecommerce. Our focus will continue to be on investing in our highest conviction themes, including logistics, high quality creative offices and life science offices, studios, and multifamily residential,” said Nadeem Meghji, Head of Real Estate Americas, in a statement to STOREYS.

This doesn’t mean that other institutional investors aren’t buying up single-family homes in Canada. Last June, Core Developments purchased $1B worth of single-family homes, including properties in eight Ontario communities. Core has purchased properties in Cambridge, Hamilton, Peterborough, London, Barrie, Kingston, and St. Catharines, and Guelph.

“These are mostly in secondary markets; they’re buying these homes, renovating them, adding basement suites, and creating an additional unit in the rental marketplace. I don’t see that as having a major impact on some of those smaller markets,” says Ben Myers, President and owner of Bullpen Research & Consulting Inc, of Core Developments’ mass purchase. “Yes, it’s removing one unit of ownership housing, but it’s creating two units of rental housing. In a lot of those markets, the percent of single-family homes for rent is only 10% — a small percentage of an overall total and it’s a good option to have for people.”

Not everyone is as thrilled with the growing presence of institutional investors in the housing market. “In our opinion, it’s a disaster,” says Geordie Dent, Executive Director of the Federation of Metro Tenants’ Associations of Blackstone’s move further into Canada’s real estate market. “Institutional investors tend to look at units as money making machines, not as places where people live. So, they’ll often cut services, try to jack up rents for existing tenants, or — more often or not — try to evict tenants who are in there now. They’ll try to jack up rents through renovictions or other illegal means. When they did this in the U.S., the rents went up. They were a disaster in the U.S. and they’ll be an issue in Canada.”

But, even if they wanted to, it would be difficult for Blackstone to purchase clusters of homes in Toronto, says Myers. “In the U.S. markets, they’re able to purchase so many cheap homes in sprawl-like communities,” he says. “They can scale the business and have one person looking after a cluster of homes. I don’t think there’s the same availability in the Greater Toronto Area market to do more of that. There’s no more room to build single-family homes in Leslieville, or The Annex, or Rosedale. There’s a fixed number of houses. So, it’s not something I’m too particularly worried about.”

Myers points to how Blackstone has been investing with existing rental owners like Starlight in the U.S., which is intensifying their existing rental supply. “Blackstone is essentially creating more rental housing supply,” he says. “I know people always want to get scared of big bad companies coming into Canada from the US, but I think this will actually be a positive thing.”

When it comes to the growing role of institutional investors in Canada, Elke Rubach, principal at Rubach Wealth Management, says the idea sounds good in principle. “But if permits take forever to go through, the supply issue still won’t be solved at all,” says Rubach. “Canada will continue to be an attractive place to live and work. The demand for supply is there; the need is there. If they can provide it, by all means. I do think there has to be political support there to make that happen, and some oversight to ensure there aren’t abuses. Every level of government needs to collaborate on the supply issue.”

Whether you’re for or against it (or indifferent), the presence of institutional investors in Canadian real estate isn’t going away.

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Real eState

Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

Published

3 days ago

November 6, 2024

Anne Joseph

TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.

The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.

The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.

“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.

“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”

The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.

New listings last month totalled 15,328, up 4.3 per cent from a year earlier.

In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.

The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.

“I thought they’d be up for sure, but not necessarily that much,” said Forbes.

“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”

He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.

“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.

“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”

All property types saw more sales in October compared with a year ago throughout the GTA.

Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.

“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”

This report by The Canadian Press was first published Nov. 6, 2024.

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Homelessness: Tiny home village to open next week in Halifax suburb

Published

2 weeks ago

October 24, 2024

Anne Joseph

HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.

Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.

Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.

The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.

Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.

They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.

The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.

This report by The Canadian Press was first published Oct. 24, 2024.

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Here are some facts about British Columbia’s housing market

Published

3 weeks ago

October 17, 2024

Anne Joseph

Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.

Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.

Average residential home price in B.C.: $938,500

Average price in greater Vancouver (2024 year to date): $1,304,438

Average price in greater Victoria (2024 year to date): $979,103

Average price in the Okanagan (2024 year to date): $748,015

Average two-bedroom purpose-built rental in Vancouver: $2,181

Average two-bedroom purpose-built rental in Victoria: $1,839

Average two-bedroom purpose-built rental in Canada: $1,359

Rental vacancy rate in Vancouver: 0.9 per cent

How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent

This report by The Canadian Press was first published Oct. 17, 2024.

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