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Reopening of borders may fuel a fresh round of Canadian real estate madness – Calgary Sun

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New arrivals may further stress Canada’s already tight housing markets

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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.

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“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.”

Canadian government raising immigration targets

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.

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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.

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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.

Newcomers will need housing

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.

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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.

Immigration to impact the resale and rental markets

While Canada’s major cities have seen double-digit home price growth in recent years, the market overall appears to be calming.

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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.”

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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.

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Saint John saw record real estate prices. So why did assessments barely budge, mayor asks – CBC.ca

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Thousands of Saint John properties that escaped assessment increases this year, including dozens that sold for record prices, are slowing growth in the city’s tax base for 2022 compared to other cities.

That’s at odds with predictions from Service New Brunswick officials earlier this year, and Mayor Donna Reardon wants to know why assessments in other communities appear to follow different rules.

“That to me is a question I’d like to get answered,” Reardon said.

“I have to say I don’t understand it.”

Real estate sales in Saint John set records in both volume and price over the past year.

But although Service New Brunswick officials told the city in February that it would “reap some of that reward” with growth in its 2022 tax base, the results announced earlier this month were underwhelming.  

Saint John Mayor Donna Reardon has been a critic of property assessments in Saint John for several years. She’s concerned Service New Brunswick operates differently in other cities than it does in Saint John. (Hadeel Ibrahim/CBC)

City’s tax base ranks 43rd among N.B. municipalities

Based on property assessments completed this year by Service New Brunswick, Saint John’s tax base is expanding by 6.24 per cent for 2022 according to figures released  earlier this month by the province

That’s more growth than in recent years, but still well below the provincial average of eight per cent.

Part of the sluggishness is because 5,332 residential, commercial and industrial properties in the city, one in every five, escaped any assessment increase at all from Service New Brunswick.   

That helped to drag growth in the city’s tax base down to 43rd place among all New Brunswick municipalities.   

Moncton had only 888 properties awarded no assessment increase for 2022 and Fredericton just 680.

Most perplexing for Saint John are dozens of properties given no change in their taxable values, even after being sold to buyers for double their assessment and more.

On Saint John’s upscale Anchorage Avenue, five waterview lots sold earlier this year at prices between $151,000 and $230,000. 

Houses on Saint John’s upscale Anchorage Avenue sell for up to $1 million. The street had five lots sell this year at prices an average of 144 per cent above their assessed values, but none received an assessment increase. (Robert Jones/CBC News)

The sales were an average of 144 per cent above the properties’ 2021 assessed values, but the high prices triggered no changes in their assessments or in assessments of other lots in the neighbourhood.   

As a result, the sales added nothing to Saint John’s critical tax base growth for 2022. One of the Anchorage lots purchased in May for $169,000 has since been relisted by its new owner at $209,900. However, for taxation purposes, Service New Brunswick continues to assess it at $75,200.

That appears to contradict Service New Brunswick’s claims that its annual assessments approximate what a property will reasonably sell for if it were put on the market.  

According to the agency, a collection of actual sale prices in a neighbourhood are considered the most reliable guide to what assessments should be in an area.

“Your property’s real property assessment value reflects its market value,” the agency explains on its website. 

“Our assessors aren’t actually determining market value,” it notes. “They are simply reflecting the values that have been established by buyers and sellers in local real estate markets across the province.”

That is what happened in Moncton in a development going up around the Mountain Woods golf course.

This year, eight lots in the development sold to buyers for an average price of just over $102,000 each — 98 per cent above their assessed values.  

Based on those sales, Service New Brunswick raised assessments on all eight lots and six others nearby by an identical 98 per cent.  The change accurately reflected sale prices in the development and the rising assessments added $621,400 to Moncton’s 2022 tax base.

Assessments on 14 undeveloped lots on and around St. Andrews Drive in Moncton went up 98 per cent after a number sold at those higher prices. (Pierre Fournier/CBC News)

It’s a sharp contrast to what Service New Brunswick did on Anchorage Avenue and in a second Saint John neighbourhood along the Bay of Fundy.

On a stretch of Saint John’s Sea Street, perched above Bayshore Beach with panoramic ocean views, 18 building lots sold to buyers this year for a combined $892,750.  

It was, on average, more than double their assessed value.

However, 13 of the lots have been awarded zero per cent assessment increases for 2022, as have seven existing homes that sit among them on the same street.

Service N.B. ‘can’t discuss the details’

Oceanview properties in Saint John have been among the highest in demand over the past year, selling for $100,000 or more above their assessed values in several cases.   

Service New Brunswick says it cannot reveal why it concluded Oceanside properties on Sea Street warranted no increases in their values, even those that sold for higher than their assessed price.
   
“We cannot discuss the details of individual properties,” Jennifer Vienneau, Service New Brunswick’s director of communications, said in an email.

“It is not uncommon for external factors to affect the market value.  On an annual basis, property assessors analyze these factors to make adjustments to assessment values that are in line with market activities.”

Reardon thinks Service New Brunswick is not following the same assessment rules in Saint John as it does in Moncton, and that difference is restricting growth in her city’s tax base.

“If I say a lot’s worth $150,000 to me and there’s been a few of them that have sold for that, that’s the price. That’s what they’re worth,” she said.

“We’re trying to work with Service New Brunswick. I think it needs to be more transparent, more clear to people. We need to understand how they come up with the calculations.”

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Windsor-Essex real estate market slows down — so sellers pulling out all the stops – CBC.ca

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Windsor’s sizzling real estate market is seeing a slight slowdown — and it means sellers have to up their game to draw people in. 

Prices are still high in Windsor-Essex but realtors say more listings over the last several months are leading to fewer offers on individual homes, putting buyers in a better position with more options and less competition.

“When buyers have more choice, sellers have to do a little bit more to stand out from the crowd,” explained Danial Malik, a broker at ReMax Preferred.

“They have to do more in terms of professional photography, videography, staging. They want to make sure there’s as many eyes as possible on their property, so it gets sold for top dollar.”

The average price of a Windsor-Essex home in September was $552,186, according to data from the Windsor-Essex County Association of Realtors. That’s 27.4 per cent more than September of last year. 

Listings have also doubled from what we saw at the beginning of the year (1,035 listings in September compared to 475 in January).

One home stager says business has doubled

“Things have picked up quite a bit,” said Julie Kapitan, owner of Lemon Tree Living, a home staging company in Windsor-Essex.

Julie Kapitan, owner of Lemon Tree Living, says demand for her home staging services has doubled since June. (Katerina Georgieva/CBC)

At the start of the year, there was a “buying frenzy,” and homes were selling quickly with or without staging, she said.

“But something shifted I think in May and June and the calls started to come in,” Kapitan said. 

Her business has doubled since then. 

She said it helps people imagine living in the space.

‘Property has to stand out’

Aditya Soma with the WinCity Real Estate Team says staging is “crucial” for any sale.

Realtor Aditya Soma says home staging is crucial. (Katerina Georgieva/CBC)

“There is more inventory,” he said.

“That means your realtor and your stager, you know, have to do a fantastic job by pricing it right, by presenting it well to attract as many buyers as possible.”

Soma added that some sellers list their homes and try to sell without a stager, and later realize they need to “revamp” their approach in order to get the offer they’re hoping for. 

Malik explained that he’s also seeing more cancellations of listings in recent months. That’s because, given the trend of the last year or so, expectations are very high for sellers. 

“They’re trying different realtors or they’re trying different strategies to get that dollar amount, whereas the property … may not be worth what they’re asking for,” Malik said.

WATCH | Broker Danial Malik on what the current market means for buyers:

Broker Danial Malik on today’s market

3 days ago

Broker Danial Malik explains what the current real estate market climate means for buyers. 0:59

Hence, there’s a stronger lean toward marketing tools like home staging — though it can be a pricey option, depending on what you need. 

Kapitan explained that staging could start at $1,000 if accessories are the only items required by the seller. However, if furniture is required, home staging could cost $5,000 or more depending on the size of the home. 

She also works with house flippers in the community to help them get the best possible price.

Flippers turn to stagers

Jami Jacklyn, a partner at M & J Doors Ltd., a St. Thomas company that flips houses, recently acquired a Windsor home that cost them close to $200,000, they invested between $30,000-$50,000 into renovations. After listing the home for $199,000 and using Kapitan’s home staging service, it recently sold for more than $100,000 over asking. 

“Previous, in my real estate career, I didn’t think it was important, to be honest. I’ve sold houses before,” Jacklyn said. 

“Now that we’re doing this in more volume, I have a massive respect for stagers and it has helped my business tremendously.”

Jami Jacklyn flips houses with her company, M & J Doors. The home behind her, a recent project, sold for more than $100,000 over asking. (Katerina Georgieva/CBC)

Jacklyn explained that her company tries to choose “eyesores” in the community to flip in order to improve the neighbourhood, while still being able to sell the renovated property to first-time home buyers, even though the work on the home drives that price up. 

But with or without a stager, Kapitan suggests depersonalizing your home by removing family photos, de-clutter, avoid patterns, use white linens and white towels, and clean so that your home is spotless.

Meanwhile, even though the lull in the market puts buyers in a better position, it’s still a seller’s market. 

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Hamilton mixed-use dev. gets height-limit exemption – Real Estate News EXchange

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IMAGE: A rendering of the proposed high-rise multiresidential development at 75 James St. S. in downtown Hamilton. (Courtesy Fengate Asset Management)

A rendering of the proposed high-rise multiresidential development at 75 James St. S. in downtown Hamilton. (Courtesy Fengate Asset Management)

Ground has broken on the latest project in downtown Hamilton, a mixed-use development at 75 James St. S. which will tower more than 30 storeys and include over 500 residential units.

The Labourers’ International Union of North America’s LiUNA Pension Fund of Central and Eastern Canada (LPFCEC) holds 100 per cent interest in the development. Fengate Asset Management is the investment manager, developer and asset manager, while The Hi-Rise Group is the development manager and SG Constructors is the builder.

The Downtown Hamilton Secondary Plan states buildings shall not exceed the height of the Niagara Escarpment, which works out to about 30 storeys, but the partners applied for and received permission from the city to exceed the height restriction with the James Street building.

“Working collaboratively with city staff and local stakeholders, the building height was determined with consideration for relevant planning policies, precedent projects and addressing local housing needs,” Fengate managing director and group head of real estate Jaime McKenna said in an email exchange with RENX.

An application filed with the city called for a tower of up to 34 storeys.

Plans for the James St. S. property

The James Street site was formerly a bank and was acquired for an undisclosed price in 2018. It was assembled in 2020 with another site at 44 Hughson St. S. – which is the current home of the LiUNA Local 837 and LiUNA Central and Eastern Canada regional offices.

It’s still to be determined if the residential component of the development will be a purpose-built rental apartment or condominium. It will include office and commercial space and a heritage component.

“Due diligence is underway to determine the best model to meet residential needs in downtown Hamilton,” McKenna wrote.

The development will help address significantly increased residential needs in Hamilton from people of all ages and occupations, including students, millennials priced out of the Toronto market and retirees.

The residential units will range in size from studios to three bedrooms. Building amenities will include fitness facilities, party rooms, relaxation lounges, private rooftop green space and underground parking.

LiUNA and the development

“LiUNA is incredibly proud to be addressing the increasingly critical residential needs in Hamilton,” Joseph Mancinelli, LPFCEC chair, LiUNA International vice-president and regional manager for Central and Eastern Canada, said in an email interview with RENX.

“I myself, a Hamiltonian, have a personal passion for the future of our city, addressing current infrastructure needs that will continue to foster economic development, job opportunities and growth.”

Mancinelli said the location is transit-oriented and pedestrian-friendly, offering easy access to necessities, work, school and entertainment.

“Our LiUNA HQ of the Central and Eastern Region as well as the LiUNA Local 837 office at 44 Hughson will be seamlessly integrated into the development and expanded with new office space, keeping the artistic and historic façade of the front of the building, honouring the foundation and history of those before us,” said Mancinelli.

“Further, a number of live/work units will be provided, catering to local small business needs.”

A 2025 completion is being targeted for the development.

The development partners

LiUNA has half-a-million members across North America, including more than 140,000 in Canada, who predominantly work in construction.

The LPFCEC was established in 1972 and is one of the fastest growing multi-employer pension funds across Canada. Its diverse investment portfolio has more than $10 billion in assets.

Fengate Asset Management is an alternative investment manager focused on infrastructure, private equity and real estate strategies. It has a total asset value of more than $20 billion and offices in Toronto, Oakville and Houston.

Fengate Real Estate is involved with more than 75 properties and investments. The completed value of its portfolio is more than $9 billion and it has more than $4 billion in value under development.

The Hi-Rise Group is a fully integrated development and construction company that was founded in 1979. It initially functioned as a merchant builder that sold most of the projects it developed and built, but it now holds a number of properties across Ontario.

SG Constructors was founded by Matt Stainton and its management team has accumulated more than a century of experience working on construction projects.

The two-tower King William Residence in Hamilton and the revitalization of Yonge Eglinton Centre, Yonge Sheppard Centre, 66 Wellington St. W., 111 Richmond Street West and 180 Wellington in Toronto are among its projects.

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