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For many investors who own their own homes, having additional portfolio exposure to real estate can seem like overkill. That said, in this lower for longer interest rate environment, investments like Real Estate Investment Trusts (REITs) can provide very attractive yields for investors seeking income, a key driver of investment in this sector.
Here are three great options for investors in the REIT space.
Normally, I tend to stay away from diving too deep into the retail real estate sub-sector for obvious reasons. The rise in e-commerce as a percentage of overall retail sales in North America has meant volume declines at bricks and mortar retail locations continue.
This leads to increasing vacancy rates for landlords and REITs. Ultimately, this impacts the bottom lines of retail-oriented REITs like Smart REIT (TSX:SRU.UN). That said, Smart REIT is in a unique position relative to other REITs with heavy retail exposure. Smart’s real estate portfolio has strong anchor tenants which tend to be blue-chip businesses, like Walmart.
Due to the high quality and location of Smart’s sizable real estate portfolio, it could selectively be rezoned over time to mixed-use properties. This would provide additional residential exposure, complementing the trust’s retail square footage.
Perhaps one of the most diversified REIT options on the TSX for Canadian investors, H&R REIT (TSX:HR.UN) is another great defensive option for investors looking for a place to park cash in this low interest rate environment.
H&R is a solid operator, offering investors access to a high-quality income stream. H&R’s cash flow situation has somewhat held back the price of the trust’s units.
Cash flow and earnings are not growing as many investors had expected. However, H&R does have a number of construction projects in the pipeline which should be accretive and help push cash flow and earnings higher in the years to come.
Fundamentally, H&R is relatively cheap, trading around six times cash flow. H&R also has a very nice dividend yield of 6%.
Killam Apartment REIT
Sometimes I like to save the best for last. Killam Apartment REIT (TSX:KMP.UN) is a residential REIT, as its name would suggest. Killam focuses on apartments and condominiums, mostly in Atlantic Canada.
The trust has a fantastic track record of finding excellent sites. They either acquire and renovate the sites or demolish old product and build new units.
Killam has been one of my favourite REIT options in recent years. The company’s very smart and opportunistic management team has built a very impressive portfolio and created excellent shareholder value in recent years.
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Real estate transfers June 26 – July 2 – Massillon Independent
Hoover Jerry & Nancy from Burkhart Andrew & Cydney, parcel 1100192 Safari Trl, $5,300.
Penick Michael D Jr & Danielle from Snyder James G, parcel 1001007 Woodlake Cir SW, $7,500.
Seibert Terry L & Penny D from Rootring George A &Lynn L Trustees, 908 Market St NE, $85,000.
Stantz Donald P from Stantz Donald P & Reicosky Steven L, 103 Canal St W, $35,000.
Yoder Brandon J from Henry Eva O, 8200 Fohl Rd SW, $125,000.
Zimmerman Michael A & Twila D from Taylor James L & Mary K, 9819 Elton St SW, $430,000.
Fahrni Pharm LLC from Linmark Enterprises LLC, 977 Cherry St E, $300,000.
Hawthorne Gary J & Brenda S from Harwich Laurie, 91 Forge St, $155,000.
Martin Justin T & Jessica from Gramse John M Trustee/ Jag Irrevocable T, 873 Colonial Ave, $307,000.
Partlow Frances from Cleland Mark J Trustee of the James P CL, 912 Shackleton Dr, $194,000.
Powell Myrissa A from Allman Barbara J, 721 Tamwood Dr, $195,500.
Russell Kent L & Nancy L from Ruehling Judith A, parcel 9502730 St Helena Dr NW, $400,000.
Ashley Joseph A & Lauren M from Barnett Tyler W, 631 Leecrest St NW, $200,001.
Chung Hanh Duc & Quyen Hue from Berkshire Farms LLC, 7306 Greenview Ave NW, $96,900.
Diana Timothy Lee & Kathrine Elaine from Swensgard Brett E Successor Ttee, 7110 Corniche St NW, $245,000.
Diaz Leslie E & Fisher Kathleen from Kellamis Daunia, 5368 S Island Dr NW, $680,000.
Dougherty Brian P from Rand Esther L, 4577 Morgate Cir NW, $150,000.
Ganz Kathryn & Petrus Nicholas from Fink Max & Lisa, 8492 Portage St NW, $270,000.
Joy Lauren E from Butera Shannon C, 3589 Pinehurst Ave NW, $265,000.
Kari Henriette Sally from Maxsam Investments LLC, 3335 Jackson Park Dr 11B, $205,825.
Keith Jeffrey A & Jimsey F from Ruwadi Brain D, 6565 Culpepper St NW, $455,000.
Kitson Samuel Douglas from Pettigrew James A &Vicki D, 4154 Sunquest Cir NW, $251,000.
Lee Daniel E & Swallen Mary Catherine from Pemberton Matthew N, 7131 Shady Hollow Rd NW, $399,000.
Lush Properties LLC from Windows of Heaven Foundation, 5459 East BLVD NW, $500,000.
Lustig Todd C & Amy M from Wengerd Susan I, 9270 Shady Trail NW, $140,000.
Mason Kenneth C II & Meghan S from Trennell Paul & Helen, 3959 Bramshaw Rd NW, $369,000.
Mossor Joan Marie from Lemons Douglas, parcel 1602901 Fleetwood Ave NW, $25,000.
Nervo Taylor v & Conner Jacob W from Fearon Michael J & Norma J Co Trustees O, 2973 Carie Hill Cir NW, $317,940.
Popa Daniel E from Manning Ralph E & Jo Ann, 5611 Comanche St NW, $185,000.
Rose William W & Whitaker Danielle from Hamstra Jeffrey L & Heather, parcel 10013514 Emerson Cir NW, $105,000.
Snyder Dennis L & Linda K from Wiedlebacher Eric S & Monette J, 8816 Lake Bluff St NW, $380,000.
Swan Alexander W from Harvey Michael & Hannah & Frank H Jr, 4561 Rohrdale Ave NW, $140,000.
Thunder Holdings LLC from Gallucci Rosemary & Rufo Matthew G Co TT, 3463 Harris Ave NW, $175,000.
Walsh Thomas & Alexandra from Harbaugh Lorraine, 1844 Woodlawn Ave NW, $195,000.
Helms Eric & Samantha from Helms Edward J & Lenora, 8834 Indian Hill Cir NW, $160,000.
Russell Kent L & Nancy L from Ruehling Judith A, 12445 St Helena Dr NW, $400,000.
Venditti Elizabeth from Stanford Dennis R & Marnita K, 14821 Cenmont St NW, $146,000.
Asplin Nathan A from Woods Harvey A & Denise L, 2866 17th St SW, $220,000.
Asplin Nathan A from Woods Harvey A & Denise L, 2870 17th St SW, $220,000.
Auctus Properties LLC from 1370 Sanders LLC, 1370 Sanders Ave SW, $324,500.
Davidson Chancler from Stark Ronald F & Jill L, 1919 Vermont Ave SE, $110,000.
Greegor David from Witmer Melvin, 906 Niles St SW, $145,000.
Hill Angela R from Edmonson David P & Patricia S L/E Hill, 725 Milburn Rd NE, $106,750.
Home at Last Properties LLC from Knopp Phyllis I, 941 10th St NE, $85,200.
Lippert Robert L Jr from Shuck Loomis A, 1202 Duncan St SW, $61,000.
Mcdonald Donald R & Jeanette from Blackhawk Investments LLC, 2339 Lincoln Way W, $98,500.
MD Enterprises of Apple Creek Inc from Tocor Investments Ltd, 2611 Erie St S, $73,500.
Milenkovski Metodija from Ledgewood Investments LLC, 1746 Oak Trl NE, $125,000.
Murgatroyd Larry J & Rebecca L Trustees from Wilson Ronda M, 720 16th St NE, $111,200.
Obes Agustina from Barkheimer Realty Ltd, 19 Edwin Ave SE, $1,000.
R&W Home Improvement LLC from Langley David C & Lynne M, 4862 Sippo Reserves Dr NW, $36,000.
Rightside Investments LLC from Stewart Arnold R, 319 Valleyside Cir NE, $100,000.
Scharver Joseph P & Wayman Chelsea M from Rodocker Ryan, 624 24th St NW, $162,500.
Stevenson William from Epm Properties LLC, 539 29th St NW, $137,000.
Thomas Lisa M & Webb Judith A from Bruce Rental One Inc, 802 Warren St SW, $115,650.
Waicak Jeffery S from Lunsford Joey M, 521 Tremont Ave SE, $12,000.
Webb Jordan Dale & Robson Jamie Lee from Stanford Alan E & Kimberly A, 1715 Woodruff Ave NW, $195,000.
Weinland Samuel & Jackson Emily from Kreiger Ryan A, 2144 Main Ave W, $118,000.
Whitt Christina Marie from Blackhawk Investments LLC, 605 Wellman Ave SE, $91,000.
Baugh Kevin F from Berg Dorothy A, 1130 Singing Brook Ave NW, $210,000.
Bischoff Michell J & Savannah from Cornerstone Real Estate Holdings Ltd, parcel 4308202 Wynnbrook Rd SW, $6,500.
Erie Avenue LLC from Smith Stanley L, 6201 Fairacres St SW, $120,000.
Evans Robert E & Diana L Ttees from Koepf Linda M Trustee of the Miller Irre, 2936 Fasnacht Cir NW, $165,000.
Grosschmidt Virginia L Ttee from Amato Stephen L & Mary K, 2429 Ashwell Ave SW, $324,900.
Hinamon William J from Ferrell Hattie M, 1128 Manor Ave NW, $175,000.
Hooper Katelyn D from Gillard Diane L, 4517 Tioga St NW, $119,900.
Knapp Stephen from Ehret Cortney J, 313 Ingall Ave NW, $100,000.
Kuller Janet from Noggle Jeffrey W & Karen L, 1003 Norwich Ave NW, $192,000.
Mac’s Convenience Stores LLC from Kooshtard Property VII LLC & Coutar Rema, 6341 Navarre Rd SW, $1,056,273.
NVR Inc A Virginia Corporation DBA from Dehoff Agency Inc, 6079 Longview St SW, $60,000.
NVR Inc D/B/A Ryan Homes from R L Deville Holdings Ltd, 6955 Gauntlet St SW, $47,895.
Quinn David J & Jill A from Huntsman Cynthia M, parcel 10013357 Klick St SW, $92,400.
Ulrich Robert P from Morales Kathryn A, 181 Gnau Ave SW, $40,000.
Whitehurst Amber & Quinn from Dash Residential LLC, 335 Eden Ave NW, $160,000.
Davy Jeffrey & Laurie from Selby Gregory S, 9237 Oak Ave SE, $150,000.
Jones Anthony S & Cynthia M from Bevington Diana Lynn, 2275 Farber St SE, $240,000.
Kinnerson James M & Annemarie from Mowery Steven E, 2225 Kingsbury Dr SW, $4,000.
Davis Brandon M & Rager Stephanie from Kamban Landon & Pietro James, 180 4th St SE, $135,000.
Davis Brandon M & Rager Stephanie from Kamban Landon & Pietro James, parcel 7001443 4th St E, $135,000.
Menyes John D & Donna Marie from Jordan Dennis C, 11327 Crestline St SW, $325,000.
Csokmay Joseph from Ries Joseph & Elizabeth, 12056 Lochwood St SW, $250,000.
Feijoo Tony & Corina S from Triplett Kerry & Stephenie, parcel 10003293 Poorman St SW, $19,000.
Luxury Real Estate Sees Unprecedented Growth in First Half of 2021 – Storeys
Canada’s luxury housing markets were on fire the first half of the year.
The Engel & Völkers 2021 Mid-Year Canadian Luxury Real Estate Market Report reveals that Canada’s luxury market experienced unprecedented levels of growth in the first six months of 2021.
The report combines market data with intel from Engel & Völkers’ local Canadian market experts to produce a residential property analysis for the markets in Halifax, Montréal, Ottawa, Toronto, and Vancouver. It shares notable trends, in-demand neighbourhoods, economic factors, and changing buyer and seller preferences in three different price segments; under $1 million, $1-$3.99 million, and over $4 million.
Factors like changing homeowner priorities, low interest rates, easy access to borrowing, and extra savings amongst professionals who stayed employed during 2020 combined to accelerate what Engel & Völkers calls ‘the COVID shuffle’. The report acknowledges the slight cooling of Canada’s red-hot housing market as of mid-April as competition levelled out. Overall, it forecasts that prices in premium markets are anticipated to stabilize in the short term while still increase in the long term as borders reopen in the wake of COVID-19 recovery.
In the luxury market, the start of 2021 brought an increase in demand for high-end condominiums. Driving the luxury condo sales market were (somewhat surprisingly) first-time homebuyers looking to enter the real estate market and retirees hoping to cash in their suburban homes, says Engel & Völkers. As many clients who moved to rural areas during the pandemic kept their city properties, luxury condo prices are expected to continue to rise with reopening rollouts across the country.
Interestingly, there is also an increase in multigenerational living. In fact, it’s the fastest-growing housing type in the country. Defined as homes with three or more generations living together, multigenerational homes allow families to redistribute and pool their resources to attain higher-quality luxury homes, says Engel & Völkers. The company forecasts that this fast growing phenomenon will become more frequent in Canada’s urban and surrounding areas.
Engel & Völkers also reports global pent-up demand for properties in Canada’s major metropolitan cities. As international borders have remained closed since start of the pandemic, international demand upon their reopening is expected to drive the luxury market in Vancouver and Montreal in particular. Given Canada’s limited housing supply, this influx of buyers is anticipated to significantly strain the market.
“After an unprecedented run, premium real estate markets are normalizing across Canada’s most in-demand cities, and that’s a good thing. At a global level, Canada’s real estate market is largely undervalued,” said Anthony Hitt, President and CEO, Engel & Völkers Americas. “But with low housing inventory and the buyer frenzy we saw in the first half of the year, Engel & Völkers believes the unprecedented demand for luxury properties will sustain. Local demand for luxury housing increased exponentially during the pandemic and international buyers are excited to return after a year of border closures. 2022 will be a year to watch.”
Engel & Völkers finds that The Halifax Regional Municipality (HRM) is a strong seller’s market that continues to draw both interprovincial and international interest. Draws of the city include its cultural attractions, the stunning landscape, and relatively attractive prices compared to other parts of the country, says the company. Last year, the average price for a home in Nova Scotia was $304,590 compared to a national average of $607,250.
Throughout the first half of this 2021, Halifax’s real estate market began a historic run. From January to June, homes priced between $1 million and $3.99 million stayed on the market for an average of only five days, while homes priced below $1 million spent 43 days on market. Despite record low inventory numbers in February 2021, total sales in Halifax increased from the previous year.
Overall, single-family detached homes were by far the most popular housing type. In the luxury bracket, 21 homes were sold from $1 million to $3.99 million in both April and May 2021, respectively. The average price hovered at $1.4 million during both months. This is a marked difference from the previous year, highlights Engel & Völkers, which saw zero sales at this price point in April 2020 and only five in May 2020 (though that was also at the height of COVID’s first wave). Now, as Halifax is open to the rest of Canada, Engel & Völkers anticipates a floodgate of interest from clients who were not prepared to purchase site unseen. Historically low inventory levels could create an even more pressurized situation, says the company.
Montreal’s position on the urbanization curve is steadily climbing, says Engel & Völkers, as the city continues to attract buyers from French-speaking regions around the world. “Additionally, strong working and education opportunities paired with a charming European-like lifestyle have garnered interprovincial and international attention,” says Engel & Völkers.
Both home prices and production in Montreal continued to rise during the first half of 2021. Total sales priced $1 million or higher grew 115% in January, from 61 to 131 year-over-year. This compares to an only 17% increase in sales for all homes in the market, says Engel & Völkers, signalling a new era for premium real estate. Plexes did exceptionally well in the first four months of 2021, seeing a 74% increase in sales compared to the first four months of 2020. Similarly, condo sales for units priced $1 million or higher climbed from January to April 2021, totalling 138 units.
While Montreal is still one of Canada’s most affordable cities on the real estate front, Engel & Völkers forecasts it entering a strong growth period, with investors creating funds specifically for purchasing luxury detached homes in coveted neighbourhoods like Westmount and Outremont. This, coupled with growing opportunities and new construction projects, has positioned Montréal to be the new investor favourite of Canada’s real estate markets, according to Engel & Völkers.
In the nation’s capital, the first half of the year brought a strong seller’s market that drove home prices to increase exponentially. Engel & Völkers point to fear of missing out among buyers that has resulted in a 513% increase in the number of homes sold in the $1 million to $3.99 million category from January to May 2021 compared to the same period in 2020. The uptick in notable sales in Ottawa was replicated in surrounding rural areas as well, says Engel & Völkers.
Since January 2021, average days on market for all homes decreased steadily in Ottawa. In April, the average days on market for all residential properties dropped to 18, down 40% from April 2020, in the thick of the first wave of the pandemic.
In May, Ottawa houses sat on the market for an average of 13 days. For condos, however, days on market increased. In April and May 2021, units sat for 122 and 110 days, respectively, an increase from 90 days in May 2020, says Engel & Völkers. The market began to level off by May. Although prices continued to increase, sales returned to pre-pandemic levels and there was a notable drop in seriously interested buyers.
Engel & Völkers anticipates a return to a more balanced market in the fall. “As more government and tech jobs become available and borders reopen, Ottawa will likely see increased domestic and international migration,” says the company. “On a global scale, the city’s real estate is largely undervalued compared to other capital cities, leaving room for growth as Ottawa rises from a government town to a dynamic hub of tech and business.”
Like other major Canadian cities, Toronto saw a record-breaking population loss from July 2019 to July 2020, with 50,375 residents leaving the city for rural areas. However, as restrictions ease and vaccines roll out, the city is seeing a renewed interest in urban living, says Engel & Völkers.
January 2021 started off strong, with average home prices rising to $967,885, growing by 15.5% year-over-year in the Greater Toronto Area (GTA). Overall, home sales were up by more than 50% compared to January 2020, for a total of 6,928. All homes sold in the $1 million to $3.99 million bracket nearly doubled from January 2020, with single-family detached homes driving this increase. Homes in this category sat on the market for 24 days in January 2021, down 33% from January 2020. “The luxury condo market, deemed almost extinct in 2020, has remarkably held its value into 2021, as the number of condo units sold valued between $1 million to $3.99 million has also doubled and prices have held,” says Engel & Völkers.
The company predicts the market will continue to normalize. New inventory coming on the market will remain low, which will likely increase pressure for buyers looking to enter, it says. While the city and GTA have not run out of buyers and sellers, Engel & Völkers predicts a slow summer and holding pattern scenario as lockdown restrictions ease.
Engel & Völkers reports a robust condo market in Vancouver since the start of 2021. “Sales remain stable and are continuing to increase, indicating that buyers are still interested in condo living or taking an initial step into real estate,” says the company. Condos at all levels within premium and ultra-luxury markets continue to sell to discerning buyers with an increased focus on quality over quantity. Rather than a focus on the amount of money they’re spending on a home, wealthy buyers are more concerned with the quality of the home, as its reflected in things like amenities, square footage, and parking, says Engel & Völkers.
“Like Toronto, Vancouver is emerging from the third wave of the pandemic in a promising position,” says Engel & Völkers. The company says significant growth in the pricy city is fuelled by buyers’ growing interest in real estate as an investment and desire to own primary residences. As in Toronto, recreational homes and property outside of Vancouver continue to experience high sales as city residents crave an escape from the concrete and more space.
Vancouver is still in a seller’s market, but Engel & Völkers predicts that the west coast city will start to see a normalization period and return to a more balanced market in the fall, thanks largely in part to Canada’s new mortgage stress test. Finally, as we emerge from the pandemic, the city will experience an influx of national and international migration. According to Engel & Völkers, the luxury market will continue to grow steadily and see increasingly more ultra-luxury home sales.
Calgary real estate predicted to moderate this year, with hot spring demand – Calgary Herald
The forecast is calling for hotter conditions — only not as heated as this past spring.
That’s not a prediction about the weather. Rather it’s a forecast for Calgary resale real estate prices.
Royal LePage recently released its Housing Price Survey and Market Forecast predicting home prices and sales across Canada will remain strong throughout the rest of the year — just not as heated as the sizzling hot markets seen in spring.
“It’s not sustainable,” says Corinne Lyall, broker/owner of Royal LePage Benchmark in Calgary, about sales and price growth that occurred in the second quarter.
As the report notes, from April to the end of June, the aggregate price of home in the city increased by 9.7 per cent year over year to $568,500, a record high.
The price acceleration was driven by record sales, including an all-time resale record for any month, set in April of more than 3,200 homes, Calgary Real Estate Board figures show.
Driving the market in the second quarter were single-family detached home sales. The median price for this housing type grew by more than 10 per cent year over year to $638,000, the study found.
Yet even the sagging condominium market saw growth, jumping by 4.1 per cent over the same span in 2020 to $226,000.
“One thing were are seeing is a bigger impact in the $600,000-plus whereas, years previous, all the sales were under $500,000,” Lyall says. “This is the first year I can remember since 2014 that we actually saw sales grow and an increase in price (in this range) because people were competing for these properties.”
Price growth has been even stronger nationally, the report notes, with the aggregate price of a home rising by about 25 per cent in the second quarter over the same period in 2020 to $727,000.
In fact, 89 per cent of regions surveyed saw double-digit percentage gains. Royal LePage forecasts sales will remain strong for the year, driving prices higher — just not at the pace seen in the spring.
The aggregate price nationally is expected to grow to more than $771,000, up 16 per cent from the end of last year. Montreal is forecast to be the hottest market with a year over year price gain of 17.5 per cent.
Calgary is also projected to see price growth, though more moderate at 7.5 per cent, year over year.
Veteran realtor Wendy Morrow with Real Estate Professional Inc. in Calgary says the price growth amid the pandemic is hardly surprising, given rising demand and limited supply.
“Inflation has risen above what we expected this spring and summer due to pent up demand,” she says.
But this problem is not unique to real estate, she adds. Inflation is rising throughout the economy due to bottleneck supply issues.
Yet supply in the resale market should grow in the months ahead, Morrow says. “This will soften the real estate market prices somewhat.”
Still, uncertainty remains with COVID variants and vaccine rollout, among other concerns like job growth.
“None of us have a crystal ball as to what will happen,” Lyall adds.
What is certain is the city remains an attractive place to call home, she says.
“Calgary is a great place to raise kids, be close to the mountains… and so there’s a really great lifestyle here that a lot of people are attracted to.”
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