New arrivals may further stress Canada’s already tight housing markets
Author of the article:
Just when you thought you could catch a break from pandemic-fuelled housing madness, experts are predicting the reopening of the U.S.-Canada border, and Canada’s commitment to boost immigration, could fuel even higher levels of demand. All those new arrivals, students and family members rejoining loved ones will need places to live. And Canada’s housing supply is tight.
“If you think it’s expensive now, just wait,” says Tom Storey, a real estate agent with Royal LePage in Toronto. “The numbers tell us that prices should go up because there’s a lot of people coming here and we’re not building enough new properties.”
Exactly when new arrivals will impact housing markets is vague. Border entry is limited to those who can show they’re fully vaccinated.
But, once the pandemic’s threat has largely passed, the U.S. and Canadian governments have both expressed hopes that border traffic will return to normal.
Likewise, while Canada’s immigration goals call for 401,000 new permanent residents this year (reaching 1.2 million by 2023), dates aren’t specific and COVID-19 will continue to delay things in the short term.
Canada’s borders have been closed to most immigrants for much of the pandemic. But as the country’s population ages, economic immigration from workers and employers who ultimately become permanent residents has become more important.
“The key to both short-term economic recovery and long-term prosperity is immigration,” Marco Mendicino, Canada’s Minister of Immigration, Refugees and Citizenship, said at a news conference where he revealed the country’s goals through 2023.
The newcomers will put pressure on housing — either as homebuyers or renters.
In addition to new permanent residents, the number of international students in Canada is also rebounding. Those numbers were rising sharply before the pandemic, growing to 402,500 in 2019 — a 15 per cent increase from 2018, according government data.
Those with temporary work permits will also grow the population. Almost 70,000 more people were issued work permits in 2019 (a total of 404,000) and 63,020 people with temporary work permits were granted permanent residency.
Home prices were rising pre-COVID-19, due to a lack of housing supply combined with low mortgage rates and strong consumer demand.
Amid the new immigration policies, a growing student population and a proposed childcare system that’s expected to give families room to save more of their income, demand for housing will only grow, according to a recent report from Scotiabank.
Yet, home construction hasn’t kept up with demand for several years.
This year, as fewer newcomers have entered the country, the ratio of home completions to population has improved slightly. That’s likely to worsen as the government meets its immigration targets, the report says.
To avoid a continued rapid acceleration in home prices, experts argue immigration targets should align with housing policies that help meet the demand.
“Our federal government’s decision to raise immigration targets today without making the corresponding supply-side housing policy changes needed to increase supply is a decision to inflate home prices out of reach of most Canadians tomorrow — including many of our newest fellow citizens,” John Pasalis, the president of Toronto-based Realosophy Realty, says in a recent market report.
While Canada’s major cities have seen double-digit home price growth in recent years, the market overall appears to be calming.
July sales slipped 3.5 per cent on a month-over-month basis, according to the Canadian Real Estate Association, and sales are down a cumulative 28 per cent from a March 2021 peak.
Home sales in Canada fell a significant 14 per cent year over year in August, the Canadian Real Estate Association (CREA) said Sept. 15. Still, the association says, home sales in this country remain historically strong. And a lack of supply of homes for sale is pushing prices to record levels in Canada’s most populous cities.
The rental market, too, has been down from its high — in part due to restrictions on Airbnb units, which released bundles of short-term rentals into the traditional leasing market.
“When the borders open and [people] go back to university, you’re going to see an increase in the rental market,” Storey says. “Then it will flood into the sale market.”
But analysts say the property market is facing headwinds — namely inflation and the specter of rising interest rates.
And many of the Canadians who wanted to buy a home in order to get more space amid the pandemic, or even downsize, have already done so, says Adil Dinani of the Dinani Group for Royal LePage West in Vancouver. That may help cool off prices in the months to come.
Building more housing also will help.
“Supply is the common denominator in most of these major markets,” Dinani says. “There’s a shortage of quality inventory.”
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
A condominium at 128 HazeltonAve. in Toronto’s Yorkville neighbourhood. The property was developed by Sam Mizrahi.Fred Lum/The Globe and Mail
Real estate developer Sam Mizrahi has filed a lawsuit against Edward Rogers and Constantine Enterprises Inc., the real estate fund Mr. Rogers owns, escalating a battle between the businessmen amid an alleged $30-million loss on their flagship condo project.
In a lawsuit filed this month in Ontario Superior Court, Mr. Mizrahi alleges Mr. Rogers and his business partner Robert Hiscox, who co-own Constantine, blocked multiple attempts made by Mr. Mizrahi to salvage more value from the two real estate ventures they were jointly developing. After Mr. Mizrahi’s efforts were denied, Constantine requested court-appointed receivers for both projects.
Mr. Mizrahi is suing Mr. Rogers, Mr. Hiscox and Constantine for breach of contract, negligence, and breach of fiduciary duty, among other allegations, and is seeking $100-million in damages.
Mr. Mizrahi alleges his 20-unit luxury condo project developed with Constantine, known as 128 Hazelton in Toronto’s Yorkville neighbourhood, has incurred losses totalling more than $30-million, and that Constantine wants him to share 50 per cent of this loss. Because Mr. Mizrahi has refused, he alleges Constantine blocked his attempts to sell undeveloped land at their other project, known as 180 Steeles or 180 SAW, and also blocked other financing initiatives he put together.
“The defendants refused to realize the profit to be garnered on the 180 SAW project based upon offers Sam solicited, because Sam asserted his legal rights and could not be coerced to agree to indemnify Constantine 50 per cent of its losses on the 128 Hazelton project as a condition of accepting the offers on the 180 SAW project,” the lawsuit alleges.
In an e-mail to The Globe and Mail, Constantine’s Mr. Hiscox disputed Mr. Mizrahi’s narrative, claiming that “in December 2021, Sam, through one of his entities, had agreed, as a 50-per-cent partner in Hazelton, to share equally in the losses of that project. This was documented in the ‘contribution agreement.’”
Mr. Hiscox also wrote: “We are about to enter the 10th year of what Mizrahi represented would be a three-year project,” adding that the project has exceeded Mr. Mizrahi’s original budget by more than $50-million, or almost double the original estimate.
Mr. Mizrahi filed his lawsuit after two major developments. In January, the senior lender to 128 Hazelton, Duca Financial Services Credit Union Ltd., alleged default and requested a receiver for the project.
A month later, Constantine bought out Duca’s debt, then filed its own request for court-appointed receivers for both 128 Hazelton and 180 Steeles, with the hope that a third party would complete sales for each. In an interview with The Globe at the time, Mr. Mizrahi referred to the action as “predatorial” behaviour.
As of January, Constantine and Mr. Mizrahi owned eight units in 128 Hazelton, and in its receivership application Constantine alleged Mr. Mizrahi’s company “failed or neglected to provide its share of the required additional funds necessary to complete and sell the remaining Hazelton project units.”
As for the 180 Steeles project, Constantine alleged it was owed $29-million by Mr. Mizrahi, but had lost confidence in his ability to repay the debt. Constantine was also concerned that Mr. Mizrahi’s company “will continue to fail or neglect to make its required capital contributions to the partnership.” 180 Steeles is located on Toronto’s northern border but is in the preconstruction phase and was put up for sale a year ago.
As the legal battle escalates, both sides have alleged the other has acted in bad faith. In February, for instance, Mr. Mizrahi told The Globe he tried to arrange financing from Third Eye Capital, or TEC, a private lender, to buy out Duca’s loan and sought Constantine’s approval, but later learned Constantine had struck a private deal to do the same itself. “They didn’t tell me, they weren’t transparent,” he said.
In his e-mail Wednesday, Mr. Hiscox wrote, “There were a number of issues with that financing proposal, not the least of which was the cost of the TEC debt being much higher than the existing Duca debt.”
Mr. Mizrahi also brought in Hyundai Asset Management, a South Korean entity, as a potential buyer for the 180 Steeles project, but Constantine would not agree to the transaction, he alleged in his lawsuit.
Mr. Hiscox wrote in his e-mail that the potential buyer “walked from the deal because of the current status of the zoning approval.”
While Mr. Mizrahi battles Constantine in court, another of his Yorkville condo projects, known as The One, is operating under a receiver. The 85-storey project was put into receivership last fall because it owed $1.6-billion to its lenders, is years behind schedule and faces multiple lawsuits. Mr. Mizrahi was recently replaced by Skygrid Construction Inc. as the project manager.
TORONTO, April 25, 2024 /CNW/ – Final Offer, a new online platform for real estate brokerages, agents, home sellers and buyers to leverage the negotiation and offer process, has officially launched in Canada. In partnership with Royal LePage Signature Realty, Royal LePage Your Community Realty and Royal LePage Connect Realty, Final Offer empowers licensed real estate agents to provide a more transparent offer and negotiation experience for the consumer.
For decades, Canadians looking to buy or sell a home have looked for greater transparency during the process. With the implementation of the Trust in Real Estate Services Act, 2002 (TRESA), Final Offer aligns itself well to disclose to the public exactly what sellers want for their home, including the price and terms. Potential buyers and their real estate agents receive real-time notifications of any action on the property, including when offers are made. Every buyer gets a fair shot at purchasing the property for its true market value. Sellers are confident they got the best outcome and achieved their goal.
“The way homes have been bought and sold hasn’t evolved in 100 years, until now,” says Nathan Dart, Senior Vice President of Final Offer. “We set out to enhance the way agents, sellers and buyers collaborate in the offer process by ensuring transparency and visibility. This is particularly important during a time of high housing costs in Canada. We’re thrilled to partner with such well respected market leaders in the GTA that are elevating the home buying and selling experience for all parties.”
Final Offer has attracted the attention of top real estate leaders in Canada looking to maximize the value of their sellers’ homes, while also giving their buyers transparency into what it will take to make an offer that will be accepted. Agents submit offers for their buyers on finaloffer.com and an interested buyer can have their real estate agent submit their “final offer” at any time and immediately put the home under contract.
“As an owner and operator of a real estate brokerage, I’ve seen the disappointment of our agents’ clients who lost out on their dream home for only a few thousand dollars or sellers who question if they got as much for their home as they possibly could,” says Chris Slightham, Owner and President of Royal LePage Signature Realty. “The ability to see offers in real time and to set and make a ‘final offer’ creates greater transparency and puts all parties in control. After introducing this platform to our realtors, they are seeing the confidence it gives their clients when making purchasing decisions. I believe Final Offer is going to change how real estate is transacted in Canada and beyond.”
Licensed real estate agents, sellers and buyers can all sign up for an account on finaloffer.com. There is no cost for sellers, buyers, and real estate agents making offers for their clients. Agents representing sellers can subscribe for a monthly fee.
“Realtors play a monumental role when advising clients throughout the home sale and purchasing process,” says Vivian Risi, President and Broker of Record of Royal LePage Your Community Realty. “The expectations clients have of their agent have never been higher. Partnering with Final Offer empowers our agents with the latest technology and data to set a strategy with clients to achieve the outcome they desire.”
Final Offer is currently available in Ontario, with further regions to come. Final Offer’s mission is to bring transparency, fairness and efficiency to the Canadian real estate market by empowering all parties involved to make informed decisions during the complex real estate transaction process.
“Canadians are looking for transparency in their real estate negotiations and Final Offer delivers,” says Michelle Risi, Broker of Record of Royal LePage Connect Realty. “There is no better tool available that our agents can use to deliver clear information and real time offer alerts that buyers and sellers demand.”
About Final Offer:
Final Offer is the sole consumer-centric platform, driven by agents, dedicated to managing and negotiating offers for residential real estate. The platform champions transparency throughout the buying and selling process and includes real-time offer alerts, promoting fairness and equity for all parties involved. For more information, visit finaloffer.com.
SOURCE Final Offer
For further information: Media Contact: Samantha Jen, [email protected]
|
|
Luxury home prices have been rising at a steady pace, and so far this year, values have hit a fresh record high. According to a new Q1 report by the real estate site Redfin, the cost of luxury residential properties—those estimated to be in the top 5 percent of their respective metro area—rose by 9 percent compared to last year and increased twice as fast as non-luxury homes. At the same time, high-end abodes sold for a median price of $1.22 million in the first quarter, a new benchmark from the $1.17 million set in the fourth quarter of 2023.
“People with the means to buy high-end homes are jumping in now because they feel confident prices will continue to rise,” explained David Palmer, a Redfin Premier agent in the Seattle metro area, where the median sale price for luxury homes is a whopping $2.7 million. “They’re ready to buy with more optimism and less apprehension. It’s a similar sentiment on the selling side: prices continue to increase for high-end homes, so homeowners feel it’s a good time to cash in on their equity.”
More from Robb Report
ADVERTISEMENT
To that point, the number of sales of luxury homes saw a 2.1 percent uptick from the year prior. In January, luxury sales began seeing consistent, year-over-year increases for the first time since August 2021. Another notable trend is that buyers are shelling out all-cash offers. Per the report, 46.8 percent of high-end residences purchased between January and March 2024 were paid for in cash, a staggering 44.1 percent gain from last year and the highest percentage in a decade.
Redfin found that Providence, Rhode Island, had the biggest jump in luxury prices in Q1, with values rising to $1.4 million, a steep 16.2 percent gain. Next was New Brunswick, New Jersey, where the median sale price bounced up 15 percent to $1.9 million. On the flip side, there were eight metros where luxury home prices dipped. Leading that pack was New York City, where prices dropped 9.9 percent to $3.25 million, followed by Austin, Texas, with a 6.9 percent decline.
Opinion: Fear the politicization of pensions, no matter the politician
Pecker’s Trump Trial Testimony Is a Lesson in Power Politics
NASA Celebrates As 1977’s Voyager 1 Phones Home At Last
B.C. puts online harms bill on hold after agreement with social media companies
B.C. online harms bill on hold after deal with social media firms
Oil Firms Doubtful Trans Mountain Pipeline Will Start Full Service by May 1st
Trump poised to clinch US$1.3-billion social media company stock award
FLAGSHIP COMMUNITIES REAL ESTATE INVESTMENT TRUST ANNOUNCES CLOSING OF APPROXIMATELY US
