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Only 3 Real Estate Markets Saw Price Declines in Canada

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Canadian real estate buyers haven’t been slowed down, and cheap cash may be fueling a new rally – at least for now. Canadian Real Estate Association (CREA) data shows the seasonally adjusted price of typical (benchmark) home, made big increases in June. The growth over the past 12 months has actually been so large, it represents the majority of gains over the past 3 years.

Price Increases Over The Past Year Represent Almost 90% of The 3-Year Gains

Canadian real estate prices are growing at a breakneck speed in contrast to the past few years. The seasonally adjusted benchmark price for a home reached $623,000 in June, up 0.50% from the previous month. Over the past 12 months, prices are up 5.65%. This may not sound like a lot compared to how some cities have moved, but according to CREA prices are only up 6.36% over the past 3 years. That would mean 88.83% of the price increase over the past 3 years, was realized in just the last year. It’s a lot of growth for a short period of time.

Canadian Real Estate Benchmark Change

The 12 month change in the unadjusted benchmark price of a home across Canada.

Source: CREA, Better Dwelling.

Canada’s Biggest Monthly Price Increases Were Huge

Canada’s biggest monthly price moves were monster increases. Hamilton made the biggest price increase with the benchmark hitting $669,700 in June, up a seasonally adjusted 2.26% from a month before. Quebec City followed with a benchmark of $252,700, up 2.25% from last year. Winnipeg made the third largest move with a benchmark of $277,500, up 1.87% from a month before. Of the three, Quebec City’s movement is the most notable. The monthly increase is so large, it’s actually bigger than the 12-month increase.

Canadian Real Estate Benchmark Price Change

The seasonally adjusted monthly price change for Canadian real estate markets.

Source: CREA, Better Dwelling.

Only 3 Canadian Real Estate Markets See Price Declines

There were only three real estate markets to see a monthly price decline, but they were some of the biggest. Calgary made the largest monthly drop with a benchmark of $403,500 in June, down 0.39% seasonally adjusted from the month before. Vancouver followed with a typical home dropping to $1,013,600, down 0.23% from a month before. Toronto was the third market with a benchmark of $852,900, down 0.18% from a month before. Not huge drops, and certainly not movements the size of the gains, but three declines nonetheless.

Canadian Real Estate Benchmark Price Change

The seasonally adjusted annual price change for Canadian real estate markets, compared to the 3-year change.

Source: CREA, Better Dwelling.

Canadian real estate prices made substantial gains over the past month, pushing annual gains much higher. Over the past year, prices have moved so quickly, they dwarf the movements of the two years prior. Large markets that have recently outperformed national price movements like Toronto and Vancouver however, are making slower gains – actually rolling back a little last month.

Source:- Better Dwelling

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National Real Estate Deal Roundup 9.25.20 – Real Estate Daily Beat

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National Acquisitions Roundup

  • Amazon has acquired 550 Army Navy Drive in Pentagon City, Virginia from the Blackstone Group for $148.5 million. The tech giant plans to demolish the existing Marriott hotel and utilize the 1.5 acres of land as part of its second headquarters. With the deal, Amazon now owns the entire 11.6-acre PenPlace. The site was always part of the company’s HQ2 plans, but the hotel remained the last holdout, and it appeared the company would just build around it. (CO)
  • A consortium of South Korea’s Hana Alternative Asset Management has signed a contract to acquire a 38-story office tower in downtown Seattle for around $686 million. Skanska USA’s newly-constructed Qualtrics Tower spans 701,000 SF. Tenants include Qualtrics, Indeed, Dropbox, and co-working firm Spaces. (KI)
  • Invictus Real Estate Partners has purchased the remaining 90 percent stake in The Waypointe at 515 West Avenue in Norwalk, Connecticut from Carmel Partners. The two-building complex, which includes 56,000 SF of ground floor retail and restaurant space, opened in 2015. Its apartments are currently 93 percent occupied, while the retail space is 74 percent leased. The deal valued the asset at $157 million. (TRD)
  • As part of its ongoing industrial real estate expansion, PGIM Real Estate has acquired a 40 percent interest in a 5.4 million-square-foot, 12-complex industrial portfolio valued at $700.5 million. PGIM acquired the stake in the portfolio through a recapitalization of the interest in a JV with partner IAC Properties and a subsidiary of Perlmutter Investment Company. At that valuation, the deal works out to a 4.7 percent cap rate. The portfolio includes 30 industrial properties spread throughout the 12 complexes, which altogether are 97 percent leased. (CO)
  • July Residential and Firm Capital Apartment REIT have acquired North Pointe at 5735 29th Avenue in Hyattsville, Maryland from FCP for $37.5 million. The 19-building apartment community contains 234 units. (CO)

National Leasing Roundup

Office

  • Netflix has signed a 171,000-square-foot office lease in Burbank near major competitors like Warner Brothers and Walt Disney. Netflix’s new space is at 2300 West Empire Avenue near the 5 Freeway in Los Angeles County. Earlier this month, CEO Reed Hastings told WSJ that he expects employees back in the office once a coronavirus vaccine is available. (CO)

Industrial 

  • Logistics and storage firm Mega Lion has signed a 132,423-square-foot lease at 13021 Leffingwell Road in the Mid-Cities submarket of Los Angeles County. Golden Springs Development owns the property. Asking rent on the five year lease was reportedly $0.90 per SF, triple net. (CO)

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Real estate sales set record in Powell River – Powell River Peak

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Residential real estate sales in the Powell River region in August 2020 were significantly higher than those of the previous year.

According to Powell River-Sunshine Coast Real Estate Board president Neil Frost, August featured a significant year-over-year gain and marked a new sales record for that month.

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“Home sales in the region continued to rebound in August, smashing the previous record for the month set back in 2005,” said Frost. “New supply is also on the rise but is not keeping pace with demand. As a result, the market has tightened significantly and the imbalance between supply and demand is putting upward pressure on prices in the region.”

In August 2020, the average single-family home sold for $464,655 and was on the market for an average of 60 days. In 2019, the average single-family home sold for $394,763 and was on the market for 70 days.

Frost said August statistics regarding vacant land speak to how busy the market has been, and that more people are turning to building. Some people coming from out of town want new properties or are not finding what they want, according to Frost.

He said the median house price of $419,000 is probably accurate. He said that is the going price of a decent family home in Powell River.

“We have seen a bit of a bump here over these past couple of months,” said Frost. “The activity has kind of pushed prices up. It’s still active and there were quite a few sales in the higher price range in August, which really pulled average prices up.”

In terms of single-family homes, in August 2020, there were 48 homes sold, valued at $22,768,111, compared to 28 homes, valued at $11,053,358, in August 2019.

There were three single-family mobiles and manufactured homes, valued at $598,900, sold in August 2020, compared to five units, valued at $668,000, in August 2019.

For single-family condos, apartments and duplexes, there were four sold in August 2020, valued at $1,178,200, compared to eight, valued at $2,090,500, in August 2019.

Totals for residential properties for August 2020 were 56 units valued at $24,545,211, compared to 41 units, valued at $13,811,858, in August 2019.

For non-residential, in August 2020, there were 10 parcels of vacant land sold, valued at $1,761,000, compared to five parcels in August 2019, valued at $363,000.

In terms of industrial, commercial and institutional, there were three units sold in August 2020, compared to no units the previous year.

Frost said Texada Island has been active, with affordability and the lifestyle it offers over there.

In terms of year-to-date residential sales comparisons between this year and last, in 2020, there were 283 homes sold, compared to 274 in 2019.

“In a year where we thought we were going to sell less, we’re pleasantly surprised that we’re on track to do the same kind of sales,” said Frost.

According to the buyer and seller statistics for August 2020, there were 30 local buyers and 25 out of area buyers. Statistics for all of 2020 show 51.1 per cent local buyers and 48.9 per cent out of area buyers.

In terms of sellers in August 2020, 49 were local and 10 were from out of the area. The year’s statistics show 87.3 per cent of sellers were local and 12.7 per cent were out of area.

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The Pandemic is Changing Life Sciences Real Estate – GlobeSt.com

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As other segments of the economy have suffered in 2020, life sciences are emerging as a bright spot. 

Private investors have put more than $16 billion to work in life sciences in the first half of 2020, while the National Institutes of Health continues to up its grant volume. In 1994, NIH gave out $11 billion in grants. By 2019, that number jumped to $39.1 billion, JLL’s Life Sciences practice Global Leader Roger Humphrey wrote for NAIOP

The pursuit of COVID-19-related therapeutics, antibody tests and a vaccine contributed to this increase in funding. But it wasn’t the entire story, according to Humphrey. An aging US population needing life-sustaining and life-extending care, wellness-conscious millennials and a prescription drug market on track to reach $1 trillion by 2022 also drove this market. 

To secure funding, Humphrey writes that life sciences companies must create a work environment that encourages innovation and productivity while remaining flexible to meet new and evolving demands. 

As these firms need to remain flexible, they’re adopting more technology, such as machine learning and artificial intelligence. 

“That means a growing portion of today’s lab looks more like a traditional office, even if its operational systems are far more sophisticated,” Humphrey writes.

While computers and the internet have allowed many office workers to work remotely, Humphrey writes that life sciences companies still brought workers into labs. They are incorporating staggered shifts and social distancing to keep their work on track. Many administrative staffers at these companies are working from home.

“Flexible lab space that can adjust to a variety of work tasks with limited downtime will be critical, along with ‘free’ space that can be called on to meet changing industry conditions,” Humphrey writes.

The locations of this space could be changing, though. Boston, San Francisco and San Diego secured up to 70% of venture capital investments in 2019. While these locales offer proximity to a highly educated workforce and ties to leading research institutions, Humphrey reports some companies are starting to look to secondary markets to cut costs. He writes that these secondary markets include Maryland, North Carolina’s Research Triangle, Philadelphia, New York and Los Angeles.

Others agree that high costs are creating new life science hubs. “Major metropolitan cities like Boston, San Francisco, Seattle and San Diego that have been long-established life science hubs are expensive to operate in,” Mark Hefner, CEO and shareholder of MGO Realty Advisors told GlobeSt. in an earlier interview

 “Everything from real estate to cost of living in these cities is expensive. Now, with the Covid-19 crisis, companies are facing tremendous budget constraints and increasing pressures on their bottom line, forcing them to reconsider where they are located.”

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