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Real estate in Canada: Vancouver’s luxury market cools

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Rising interest rates, inflationary pressure and widespread economic uncertainty are cooling the luxury real estate market in Vancouver, according to a new report.

Sotheby’s International Realty Canada has found that high-end buyers and sellers alike are opting to sit on the sidelines in the country’s major cities, causing both demand and supply to dry up.

“Canada’s conventional and luxury real estate markets are undergoing a long-awaited transition after an era of over-exuberance during the pandemic, particularly in those regions that saw the most acceleration over the past two years,” said Don Kottick, president and CEO, in a news release summarizing the report’s findings.

“The market is still absorbing the effects of rapid-fire interest rate hikes, as well as changes in the domestic and global economic landscape, and real estate sellers and buyers are taking a step back to strategize.”

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In Vancouver, sales of residential properties listed for more than $4 million saw a 51 per cent year-over-year decline in July and August, and a 58 per cent drop in September. The report, however, characterized last year’s activity as “unsustainable,” “frenetic,” and “exceptionally exuberant,” and described the decline as an indication that this segment of the market is normalizing.

The city remains, the report says, one where the housing market is beset by “affordability challenges,” which have been exacerbated as the cost of living continues to climb. However, even those looking to buy or sell multi-million-dollar properties are being deterred by rising interest rates and inflation.

“Despite the greater financial resilience of luxury and ultra-luxury buyers and investors to absorb the impact of rising interest rates and inflationary pressures, many have temporarily positioned themselves on the sidelines in anticipation of future price declines,” it reads.

“At the same time, the reluctance of many sellers to list and sell properties at appropriate prices for new market realities has resulted in what is widely regarded as a temporary period during which price and activity stickiness will prevail as buyers and sellers adjust to new norms.”

The full report is available online.

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Latest real estate numbers for Delta, BC – Delta Optimist

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Things are lagging more than usual when it comes to real estate activity in Delta and the Lower Mainland.

The Real Estate Board of Greater Vancouver (REBGV) says that while November is typically a quiet month of market activity based on seasonal patterns, last month’s home sale and listing totals lagged below the region’s long-term averages.

The REBGV reports that residential home sales in the region last month saw a 52.9 per cent decrease from the sales recorded in November 2021, and a 15.2 per cent decrease from the homes sold in October 2022.

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Last month’s sales were also 36.9 per cent below the 10-year November sales average.

According the REBGV, the benchmark price for a single-detached house in Ladner last month was $1,298,700, down 1.4 per cent from the previous month while down 3.6 per cent from November 2021.

The benchmark price for a Tsawwassen detached house last month was $1,464,800, down 4.6 per cent from the previous month while down 2.5 per cent from November 2021.

The REBGV also notes the benchmark price from a townhouse in Ladner in November 2022 was $909,900, down 3.4 per cent from November 2021. The benchmark price for a Tsawwassen townhouse last month was $925,500, down 4.1 per cent from November 2021.

The benchmark price for a Ladner condo last month was $699,400, which is up 10.9 per cent from the same time last year, while a Tsawwassen condo was $718,200, which is up nine per cent from the same time last year.

Meanwhile, the Fraser Valley Real Estate Board (FVRB) says that with sales this November were down almost seven per cent from October, and new listings were off by more than 20 per cent, the Fraser Valley housing market continues its slowing trend heading into the holiday season.

However, despite the market slowdown, opportunities are available, as evidenced by brisk turnover time frames.

According to the FVRB, the benchmark price for a single-detached house in North Delta last month was $1,272,600, down 10.3 per cent compared to November 2021.

The benchmark price for a North Delta townhouse last month was $827,900, down 2.1 per cent from the same time last year. The benchmark price for a North condo last month was $544,000, up almost seven per cent compared to November 2021.

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Accacia tackles the real estate industry’s massive carbon emissions problem – TechCrunch

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The real estate and infrastructure sectors contribute about 40% of global carbon emissions, and part of solving the climate crisis is fixing how those industries work. Accacia gives large property owners a way to track their carbon impact in real-time by integrating with ERPs and property management systems like Yardi. It’s already been deployed to over 20 million square feet of real estate in Asia and announced today $2.5 million in seed funding that will be used to expand across Southeast Asia, the Middle East, the United States and Canada.

The funding was led by Accel and B Capital. Participants included Blume Ventures, Good Capital, Zerodha’s Rainmatter Fund, Loyal VC and angel investors.

Founded in 2022 by Annu Talreja, Piyush Chitkara and Jagmohan Garg. Before Accacia, Talreja worked for more than 15 years in real estate, with companies like AECOM and Marriott.

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During that time, she saw an evolution in how the industry was affected by climate-related events.

Accacia founder and CEO Annu Talreja

Accacia founder and CEO Annu Talreja

“Climate change-led flash floods, hurricanes and forest fires have impacted property prices globally and rising energy costs have necessitated the use of alternative energy sources,” she told TechCrunch. “Unlike many other sectors, the impact of climate change in real estate is ‘here and now’ and as someone who has worked on building design, construction and investments, the combination of my skill sets allowed me to look at this impact in a holistic way.”

Accacia’s target customers are large real estate owners and asset managers, including REITs, pension and sovereign funds, and developers. Most own and manage real estate AUMs of more than $1 billion. Accacia’s platform can track carbon emissions from all investment asset classes, including commercial, retail, multi-family housing and data centers. It is also used by consulting firms that are serving real estate and infrastructure companies that have set net-zero goals.

Emissions tracked by Accacia include Scope 1 (direct emissions), Scope 2 (indirect emissions from purchasing generated energy) and Scope 3 (emissions from a company’s value chain) for real estate, including embodied carbon, financed emissions and emissions from business operations.

An example of how Accacia can be used is a commercial real estate fund that has over 10 million square feet of assets. After it deployed Accacia, it was able to cut its direct emissions by 20% within the first six months of using the platform. Another client, a listed hotel company with more than 100 assets, used Accacia to reduce its Scope 3 emissions through the platform’s vendor recommendation engine.

In a statement about the investment, B Capital partner Karan Mohla told TechCrunch, “As an industry, real estate and infrastructure requires a nuanced and focused approach towards climate reporting, adaptation and mitigation. Accacia is taking a leadership role in building a global platform in solving this challenge. A B Capital. we believe in their vision of building a tech-led and scalable SaaS platform to get to net zero targets for real estate owners and asset managers.”

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Property assessments expected to rise despite real estate cooling off – Times Colonist

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The after-effects of a blistering hot real estate market will be felt into 2023, as B.C. Assessment warns property owners to be prepared for a five to 15 per cent jump in their annual property assessments.

Although the market cooled off considerably across the province in the second half of this year, assessment values are still expected to eclipse those of last year, according to preliminary information gathered by the assessment authority.

Assessor Bryan Murao emphasized that assessments are based on market values for similar properties sold up to and around July 1 of this year, a few months after property prices peaked in March and April.

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Since July 1, the market has changed as interest rates continue to rise and overall sales volume has declined, he said. “As a result, your next property assessment will likely be higher than what the current market value might be.”

The new assessment notices will be mailed out in the first week of January.

The assessment is the estimate of a property’s market value as of July 1 and physical condition as of Oct. 31.

To determine value, assessors take into account current sales in an area as well as the size, age, quality, condition, view and location of a property.

In January 2022, homeowners in Greater Victoria saw their annual property assessments increase by an average of 22 to 35 per cent — something that could happen again this year for some owners, Murao said.

The assessment authority is once again sending early notification letters to a small number of properties around B.C. that could experience an increase or decrease in value outside the normal range — including those facing a 30 to 40 per cent increase or decrease.

Murao said no single region experienced more of an increase than others. “What the market has done is quite smooth across the entire province — you’ve got typical changes everywhere,” he said.

On Vancouver Island, the larger increases tend to be in urban areas, especially where new condo developments have been built, but there are no “hotspots” of note.

Changes in assessed value do not necessarily mean a change to amounts paid in property taxes — what affects individual property taxes are assessment changes relative to the average change in their community. A higher-than-average increase might bring higher taxes, while a bigger-than-average drop might decrease them.

Those who feel that their property assessments do not reflect market value as of July 1 can appeal, but Murao said the assessment authority does not expect to see much of an increase in the number of homeowners challenging their assessments this year.

Each year, more than 98 per cent of property owners accept their property assessments without proceeding to a formal, independent review.

Murao said one of the reasons for the low appeal rate is the public seems to have a better understanding of the true relationship between assessed values and property taxes.

aduffy@timescolonist.com

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