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Posthaste: Calgary leads the luxury real estate pack but B.C. is home to Canada's most expensive house – Financial Post
Upscale market likely in a position to better weather higher rates: Sotheby’s report
You might not expect it, but even Canada’s luxury housing market has come down to earth — sort of.
“Canada’s luxury market is normalizing following its historically anomalous performance as rising mortgage rates, escalating inflation and global geo-economic headwinds progressively temper real estate consumer sentiment,” said a report this week from Sotheby’s International Realty Canada.
Luxury homes sold at a frenetic pace through the pandemic, peaking in the first quarter of 2022 when sales of homes costing more than $4 million in the Greater Toronto Area (GTA) soared 30 per cent from the year before. The pace has since “moderated,” the report said. Sales and prices are still up in the luxury sector, just not as much.
Calgary leads the luxury pack as revived economic prosperity returns to Canada’s energy capital. Sotheby’s said strong gains were posted in the city’s luxury $4 million-plus market, with five single-family homes sold in the first half of 2022, compared with none sold in that price range during the same period last year. Further, sales of single family homes and luxury attached properties over $1 million rose 36 per cent year-over-year and 85 per cent, respectively.
“By mid-year, the Calgary luxury market was recalibrating to a healthy, active, but more balanced market. Sales velocity moderated, multiple offer scenarios became less frequent, and prices stabilized in many neighbourhoods,” the report said.
In the GTA, sales of properties worth more than $4 million were up seven per cent from the first half of 2021. Sixteen homes worth more than $10 million sold in the first half, one more than at the same time last year. Condominium and attached home sales in the $4-million-plus category rose 13 per cent and 100 per cent, respectively, in the first half of 2022.
Sales of luxury condos, attached and single-family homes topping $4 million soared 71 per cent in Montreal during the first half of the year. Sales of $1 million-plus homes, however, dropped one per cent.
Vancouver was the laggard, moving from “frenzied” buying in the first quarter to a “retreat” in the second quarter. During the first half of 2022, luxury residential real estate sales, including condominiums, attached and single-family homes, declined 18 per cent year over year to 203 properties. Nine ultra-luxury residential sales ($10-million-plus) were recorded in the first half, down from 16 a year earlier.
Overall, the “conventional market” appears to be faring worse, with sales down 24 per cent in June from the year before and the average price falling two per cent, according to data from the Canadian Real Estate Association last week.
Sotheby’s chief executive Don Kottick said the luxury and ultra-luxury sectors are likely to strike their own paths in Canada’s shifting housing market based on the fact, among others, that wealthier buyers will have “greater financial resilience to adapt to rising interest,” he said in a press release. “Conventional homebuyers may require more time to adapt budgets to the new reality.”
In the meantime for those in the ultra-luxury market, here are some listings billed as the most expensive properties for sale in Canada, according to Point2 analysts. The international real estate portal compiled a list of the top homes on the market by province and by major metropolitan area.
The most expensive property on a provincial basis is an 8,700-square-foot mountain estate listed at $39 million in British Columbia.
In the city category, Point2 found a Mississauga, Ont. home listed at $37.5 million is the most expensive home in the country.
If you are looking for a place to hang your hat that has 14 bathrooms and a nightclub, this is it.
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- Prime Minister Justin Trudeau will make a clean energy announcement in Halifax
- Transport Minister Omar Alghabra, Mayor Amarjeet Sohi and Tom Ruth, CEO of Edmonton international airport, will make a funding announcement to support trade corridors
- Minister of Finance Selina Robinson and Jonathan Sheppard, president of the Home Inspectors Association BC, announce new consumer protections in the real estate market, based on advice from the B.C. Financial Services Authority.
- Minister of Jobs, Economic Recovery and Innovation Ravi Kahlon, Abbotsford Mayor Henry Braun and Joy Johnson, president and vice-chancellor of Simon Fraser University, make an announcement relating to the future of agritech in B.C.
- Today’s Data: U.S. initial jobless claims
- Earnings: Mullen Group Ltd., AT&T, Snap
Inflation in Canada registered at a bone-chilling 8.1 per cent in June compared with a year earlier, the largest increase since January 1983, according to Statistics Canada, which released the anxiously awaited Consumer Price Index (CPI) reading on Wednesday.
Once again, the largest culprit in the unrelenting rise in the cost of living was the price of gasoline. It was up 54.6 per cent in June from the same month in 2021. Still, remove gasoline from the equation and the June CPI rose 6.5 per cent from the same time last year.
Based on these numbers, FP editor-in-chief Kevin Carmichael warns that the Bank of Canada’s goal of a soft-landing is looking harder and harder to pull off. Read the full story here.
Despite the ongoing pandemic, a looming recession and inflation hitting a 40-year-high in May, many Canadians are still eager to take to the skies this summer.
And because money is tight, sales and discount codes will be an important part of planning for their dream getaway.
Our content partner MoneyWise can help you to save and spend at the same time, by making smart use of your travel and credit card loyalty points.
Knowing the dollar value of your points and the best times to use them can help you budget for your next big trip
Today’s Posthaste was written by Gigi Suhanic (@GSuhanic), with additional reporting from The Canadian Press, Thomson Reuters and Bloomberg.
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Simcoe County's real estate market shows signs of recovery – CTV News Barrie
Real estate experts paint a cautiously optimistic outlook after a year of downward market trends across the country.
Trends in Simcoe County show an increase in viewings and buyers re-entering the market after key interest rate hikes from the Bank of Canada warded off many last year.
Lance Chilton, the broker of record at Re/Max Hallmark Chilton Realty, calls the local market “more or less balanced.”
“Inventory conditions are the same as they once were in 2018,” he noted.” From 2020 to 2022, prices rose to about 43 per cent, which was rather rapid.”
Chilton said key interest rate hikes eventually bottomed out the local market by about September – that’s when home prices that peaked at around $1 million dropped to about $730,000.
“Since then, it’s recovered by about five per cent,” Chilton said. “In fact, we actually saw showings increase for the first time in about six months.”
The Barrie and District Association of Realtors (BDAR) confirms that showings have picked up again, with people getting that “spring fever.”
However, the one key issue that remains is low inventory.
“We saw prices dip because of interest rates and people pulling out of the market, but we never saw that supply come back online,” said Luc Woolsey, BDAR president, adding the situation creates multi-offer bids.
“So there’s still a lot of people having to come in firm, waiving conditions and inspections because they’re having to compete.”
‘Million Dollar Listing’ star warns CA mansion tax will deliver ‘hardest hit’ to market since 2007 – Fox Business
Though it’s home to some of the most luxurious and expensive real estate listings in America, California is readying to pass a housing bill that one “Million Dollar Listing” agent warned could create the “hardest hit” to the market since the 2007-08 crash.
“In about ten days or so, there’s a measure called the ULA measure that’s going to go into effect, which is going to be probably the hardest hit to the real estate market that we’ve seen since 2007,” broker and television personality Josh Altman said on “Varney & Co.” Monday.
Altman’s comments come in response to the recently-passed “United to House L.A.” (ULA) measure in California, which adopts a so-called “mansion tax” on property sales or transfers over a certain value to pay for affordable housing.
Properties sold above $5 million but below $10 million are subject to a 4% sales or transfer tax, while properties that sold for more than $10 million will face a 5.5% tax, according to the city clerk’s voter information pamphlet.
‘MILLION DOLLAR LISTING’S’ JOSH ALTMAN GIVES INSIDE LOOK AT ‘BOTCHED’ STAR PAUL NASSIF’S $27.9 MILLION HOME
At least 92% of taxpayers’ money would “fund affordable housing under the Affordable Housing Program and tenant assistance programs under the Homeless Prevention Program,” the pamphlet also clarified.
“The way that this ULA measure was passed is just mind-boggling to me,” Altman added, “and I think it’s one of the most ridiculous bills that I have ever seen in my entire 20-year career.”
The Los Angeles city administrative officer estimated the proposed tax could generate $600 million to $1.1 billion in revenue each year. However, he noted it would “fluctuate” based on how many property transactions with values within the scope of the tax actually occur.
While those who support the measure argue it could help solve L.A.’s housing affordability and homeless crisis, others like Altman caution the tax policy would lead to higher home prices and bureaucracy.
“Think about these people that bought houses three years ago for $5 million and they want to sell now,” Altman hypothesized. “The market’s down, rates are up, that happens. But now they got to cut a check for $200,000 out of their own pocket because there’s no profit on that. So it’s really going to rock the real estate market that we’re in here in Los Angeles.”
California’s real estate market, the “Million Dollar Listing” star further argued, is on “a race to the bottom” over the next 10 days as buyers try to close deals before the mansion tax is enacted.
“I’m seeing deals get done that should never have gotten done,” the L.A. agent said. “I’ve even done as much as, on a $28 million listing that I have, we have offered a $1,000,000 bonus for anybody who buys and closes before April 1.”
The “main issue” with the ULA measure remains its “trickle down” effect — not on mansion or luxury homeowners, but on working and middle-class California families.
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“People who voted who said, ‘Oh, I don’t have a $5 million house,’ which by the way, is not a mansion in L.A., we’re talking about a four-bedroom, 4,000 square-foot house in L.A. is $5 million, so this isn’t a mansion tax,” Altman said.
“This isn’t a $30, $40, $50 million house tax – these are regular people that work bill to bill, that have to pay their mortgage just like everybody else, and now they’re being penalized here.”
FOX Business’ Aislinn Murphy contributed to this report.
Real estate investor pleads guilty to fraud on $149M loan
Commercial real estate investor Raheel Bhai’s twisting legal saga finally came to an end in a federal courtroom in Texas recently when he pleaded guilty to one count of wire fraud for allegedly securing a $149 million loan from lender Benefit Street Partners by falsifying or forging dozens of documents, Bis Now reported.
At his hearing, Bhai admitted to inflating the length and amount of lease terms his company IBF had with 24 Walgreens across 10 states to secure the loan, which Bhai claimed was to be used to refinance the properties as well as create a new REIT.
As part of the loan agreement, Bhai created an account in which rent from all of the Walgreens leases would be deposited monthly.
Bhai prepaid $2.3 million, three months of rent, into the account, telling Benefit Street Partners that it was so he could iron out some difficulties he was having with Walgreens concerning rent payments, according to the outlet. But the prepayment was really to cover up how much actual rent Walgreens was paying, which was less than what he told the lender.
Instead of creating a REIT, Bhai funneled about $21 million to family members through a front company.
When Benefit Street Partners discovered the scheme, Bhai and several family members and business associates fled the country, Bis Now reported. It was later revealed that $5 million of the loan proceeds was allegedly converted to cryptocurrency to help Bhai flee, according to Bis Now, citing a lawsuit against Bhai’s alleged co-conspirator, Di Hao Zhang.
An IBF employee said she found at the office and at Bhai’s private residence bags of shredded documents related to the scheme.
Bhai ultimately returned to the U.S. to face criminal charges. He faces a prison sentence of up to 20 years and fine of up to $250,000, the outlet reported.
In addition to producing a couple of criminal indictments and multiple lawsuits, the case represents a cautionary tale for the commercial real estate industry, which had huge infusions of cash from lenders eager to dole out loans and possibly overlooking fraud in the process.
“The whole point of fraud is that there’s some sort of concealment,” attorney Bonnie Hochman Rothell, of Morris, Manning & Martin, told Bis Now. “With a clever fraudster, it might not be so obvious. Despite really diligent underwriting, a lot of lenders will miss something because they, too, have been defrauded.”
Benefit Street Partners, for its part, said it properly performed its underwriting, including its due diligence.
— Ted Glanzer
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