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Toronto area real estate is 'back to full-on madness' – The Globe and Mail

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A sold sign posted on a real estate sign outside a home in the East end of Toronto near Woodbine and Danforth Avenue on Jan. 23, 2020.

Deborah Baic/The Globe and Mail

With a severe contraction in the number of houses for sale in Toronto and surrounding cities, anxious buyers have been lobbing money at the few properties that do arrive on the market.

In Oshawa, Ont., and other parts of Durham Region, Shawn Lackie, a real estate agent with Coldwell Banker R.M.R. Real Estate, says buyers have been paying eye-popping premiums even for modest houses.

“These places that are selling are little shacks,” he says.

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Mr. Lackie sees worrying signs in the bedroom communities east of Toronto: Even during the frothy days of 2016, buyers typically only entered competition for the most desirable houses, he points out.

“They were bidding on properties that were worthy of insanity,” Mr. Lackie says. Now, “it’s right across all areas and all sizes. We’re back to full-on madness.”

He points to one recent example on Olive Street in Oshawa where a 1,100-square-foot house was listed with an asking price of $650,000 and sold for $802,000 after five bullies submitted bids ahead of the date scheduled for reviewing offers.

Mr. Lackie notes the house last changed hands in 2018 for $200,000.

Another bungalow of about the same size was listed with an asking price of $499,000 and sold for $713,000 in Oshawa.

In the small town of Orono a little farther east, a house listed with an asking price of $499,000 sold for $731,000.

In Mr. Lackie’s opinion, the growth in prices is not sustainable.

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When he works with buyers, Mr. Lackie advises them to think about their exit strategy before they purchase a property. Buyers need to think about how long they want to live in the property and whether the amount they’re paying represents good value if they sell after a number of years.

He fears that people who are paying amounts far above recent sales in the area are getting way ahead of the market.

“If you’re paying $800,000, how long do you have to live there until the market comes up to the home? People are throwing money around like drunken sailors. I’m not really a fan of this.”

Mr. Lackie says the combination of a lack of supply and rock-bottom interest rates is driving the run-up.

He adds that some of the purchasers appear to be first-time buyers who want to get into the market at any cost. Others are homeowners from Toronto who are flush with cash from selling a property in the city.

If homeowners sell their house in Willowdale for $1.6-million, for example, they don’t have a problem offering $800,000 or $900,000 in a small town because they still have $700,000 left over.

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The inflation is leading to mounting frustration for local people who have been saving up for a house over time, he adds.

“They’re getting blown out of the water,” he says. “They can’t compete with that.”

Mr. Lackie worked with one young Toronto couple who were renting a 740-square-foot townhouse in Liberty Village, he says, and wanted a backyard for themselves and their large dog.

Mr. Lackie says the couple looked at townhouses in Whitby and other parts of Durham, but they found the properties that fit within their budget small and uninspiring.

When they extended their search north and east to Port Perry, they found a vacant bungalow listed with an asking price of $750,000. They first submitted an offer of $695,000 and, after some back-and-forth, signed a deal for $715,000.

The couple was nervous at the time, Mr. Lackie says, but other bungalows nearby have since sold for $775,000 and $760,000.

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Looking ahead, Mr. Lackie expects the runaway price growth to slow at some point.

“This is accelerated. They’ve got their foot on the gas pedal and I don’t know how long this can go.”

The Canadian Real Estate Association reports that the number of listings across Canada stood at fewer than 100,000 on New Year’s Day, which marks the lowest tally recorded in data going back three decades.

Sales were up by more than new supply in December, CREA senior economist Shaun Cathcart says. The national sales-to-new-listing ratio tightened to 77.4 per cent – among the highest levels on record for the measure. The long-term average for the national sales-to-new-listings ratio is 54.2 per cent, Mr. Cathcart says.

Elise Stern, a broker with Harvey Kalles Real Estate Ltd., says buyers in Toronto grappling with the low supply are using tactics such as bully offers to get ahead of the competition.

Her clients recently tried to submit a bully offer for a four-bedroom house in Thornhill Woods with an asking price of $1.699-million. The sellers declined to look at the offer, so Ms. Stern’s clients showed up on the scheduled night with a bid of $1.761-million, which the homeowners accepted.

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The house on a quiet cul-de-sac was previously listed in December, 2019, with an asking price of $1.588-million, but at that time it failed to find a buyer after 50 days on the market.

Ms. Stern says one reason for the low supply in the city is that some sellers prefer to sell quietly without launching their home on the Multiple Listing Service of the Toronto Regional Real Estate Board. The homeowners are reluctant to have numerous people through the property and they also don’t want to undertake the decluttering, painting and staging that helps to make a home appealing to a wider pool of buyers.

Ms. Stern has recently sold two properties on an exclusive basis.

In such deals, sellers are saying “this is the number that I’d be prepared to sell it at today,” and Ms. Stern puts the word out to fellow agents and her own list of buyers to see if there are any takers.

“The exclusive network is up-and-running.”

Ms. Stern expects the intense bidding to continue because buyers have preapproved mortgages with low rates lined up, and they become anxious when they miss out on properties that sell to competing buyers. If they sit on the sidelines, they see prices rapidly escalate.

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“If a house sells for a lot of money, that becomes the new benchmark,” she says.

Ms. Stern advises clients to visit a mortgage broker and become educated about the market action in advance so that they can feel confident when the time comes to make an offer.

“I try to keep them level-headed,” she says. “I don’t ever want them to overextend themselves financially.”

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Why Windsor-Essex Real Estate Is Still Dominating Headlines – RE/MAX News

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The Canadian real estate market has been a persisting headline over the last year thanks to record-setting growth in many housing markets, the migration from major urban centres to rural communities, as well as the industry successfully adapting to the pandemic utilising digital tools. It is hard to pick just one story that has encapsulated the real estate industry in 2020 – and in the early start to 2021.

One southern Ontario city is a great example of how fortunes can turn around in an instant. Prior to the pandemic, the Windsor-Essex real estate market was not quite as red-hot as that of Toronto, Mississauga or Ottawa. However, all that changed over 2020 as Windsor transformed into one of the hottest markets in the province, and in the broader Canadian real estate sector.

Windsor’s growth has been jaw-dropping and record-setting, and the early forecasts suggest that 2021 could be a repeat performance for the city, thanks to a mix of soaring demand, limited stock and ultra-low interest rates.

So, how strong were the trends in the Windsor real estate market last year? Immense, impressive and important. Here’s why.

Here’s Why the Windsor-Essex Real Estate Market Is Still Dominating the Headlines

According to the Windsor-Essex County Association of REALTORS®, residential sales soared, with the number of homes sold in January surging 31.5 per cent year-over-year, a new sales record for the month of January.

Average price also went through the roof in January, climbing 31.4 per cent year-over-year to $492,480.

“Home sales continued at the same breakneck pace they ended 2020 on, with no signs of slowing down,” said Damon Winney, President of the Windsor-Essex County Association of REALTORS® in a press release. “With new listings still tepid since the recovery in comparison to sales, the housing market in the Windsor-Essex County region is experiencing similar trends as other markets in Southern Ontario – the tightest market conditions in history, record low inventories, and accelerating price growth.

In total, the dollar value of all home sales in January swelled 72.8 per cent to $215.7 million from the same time in the previous year.

So, what are real estate experts saying about the rest of 2021? It could be a rudimentary case of supply and demand.

Will Low Inventories Spur New Records in the Windsor Housing Market?

In December, the Windsor-Essex County Association of REALTORS® warned that the city’s housing inventories are approaching record levels, although some new supply is coming to market over the next several months.

“Looking ahead to 2021 we have some new supply beginning to come back to the market but not nearly enough to keep up with the pace of demand. With inventories testing new record lows with each passing month, we’re likely to see double-digit price growth through the first few months of the year.”

With pent-up demand exhausted and the housing market adapting to historically low rates, industry leaders are combing through some of the more technical data points to gauge where the market is heading this year. These include listings and housing starts.

The real estate association in Windsor found that new residential listings decreased 10 per cent year-over-year to 515. Active residential listings, meanwhile, tumbled 46.2 per cent to 421 at the end of January.

The months of inventory came in at just one by the end of January 2021. This is down from 2.3 months from the same time in the previous year. The long-run average is 4.4 months for this time of the year. Industry experts note that this is a good measurement to better understand where the market is heading since the figure suggests how long it would take to sell present inventories at the current rate of sales activity.

Housing starts are beginning to balloon in Windsor. According to Canada Mortgage and Housing Corporation (CMHC), housing starts increased an astounding 946 per cent year-over-year to 136 in January. Completions fell 65 per cent, from 81 to 28, in January. While these figures are encouraging for some price relief, CMHC data suggest that three-quarters of these new construction projects are rental units.

Windsor: Continued Growth into 2021

The Windsor real estate market could be the hottest in all of Canada in 2021. The RE/MAX Windsor Housing Market Outlook (2021) forecasts an increase in average price of as much as 20 per cent to approximately $478,062 across all property types. Move-over homebuyers will drive demand, while consumers will be searching for townhomes and two-storey detached homes.

Despite the meteoric growth, Windsor is still considered to be one of the most affordable markets in Ontario, alongside London. That said, it is remarkable how much the Windsor real estate has grown since 2019, when prices were a little more than $300,000. It is a testament to how stellar the Canadian housing market is today, as well as how resilient the sector is, considering that this growth has taken place over the course of a global pandemic.

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Private Equity Has $300 Billion for Pandemic-Hit Real Estate – Yahoo Canada Finance

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(Bloomberg) — Real-estate bosses at Blackstone Group Inc. quietly smiled when Britain’s biggest-selling tabloid unwittingly endorsed their largest European real estate deal since the pandemic.

The Sun’s front page teased readers that foreign travel curbs meant they’d be splashing their cash at the much-maligned seaside town of Bognor Regis this year. Less than two weeks earlier, it had emerged Blackstone was in talks to spend about 900 million pounds ($1.3 billion) on a majority stake in the owner of Butlins, which has run a popular holiday park in the south-England town for 60 years.

The private equity giant is leading cash-rich peers including Lone Star and KKR & Co. in preparing for a world beyond the pandemic as the rollout of vaccines hints at commercial properties stirring back to life. Buyout firms’ global real estate funds are now sitting on more than $300 billion of unspent cash, according to Preqin data.

“There is a lot of money on the sidelines looking for yield and you have a market that will rebound quite considerably,” said Keith Breslauer, founder of London-based real estate private equity firm Patron Capital Advisers LLP. “That’s why 2021 is interesting.”

More than a decade on from the last financial crisis when buying at the bottom was a one-way bet, the dynamics are a bit different this time. Back then rent was still coming in and much of the distress was debt related, meaning those with money could buy cheap and ride the recovery as interest rates collapsed and asset values rose.

This time, hotels, leisure parks and malls have seen their incomes evaporate as the world essentially shut down. Lockdowns pushed about $146 billion of commercial real estate into distress, serious risk of bankruptcy or default at the end of last year, concentrated in hotels and retail, according to Real Capital Analytics, a commercial property data firm.

Read More: ‘Purgatory’ Grips $146 Billion of Distressed Commercial Property

Buyout firms seeking to repair those income streams as economies reopen expect to be richly rewarded when they sell them on to pension funds that are now even hungrier for yield in a world of negligible interest rates.

“This year you will see some of the foundations of real success being laid by some of the smartest investors,” said Alex Price, chief executive officer of Fiera Capital Corp.’s U.K. real estate unit. “Post-financial crisis all you needed was the cash to buy assets and a rising market made everyone look like heroes. This time you are going to need to be much more selective and have the skill set to execute highly transitional assets strategies.”

Filling the Pipeline

Blackstone’s real estate deal pipeline has swollen in the past two months as lockdowns pile pressure on struggling landlords and operating companies, according to people with knowledge of the money manager’s plans who asked not to be identified discussing internal information. British lender Natwest Group Plc appointed PricewaterhouseCoopers to help sell a portfolio of loans secured against U.K. malls with a face value of about 550 million pounds, people familiar with the process said. The instruction was first reported by React News.

“We are increasingly seeing owners who are losing interest, losing money or losing hope, and are now considering transacting,” said Bill Benjamin, head of real estate at Ares Management Corp. “There will be some very exciting cyclical opportunities to buy assets at deep values.”

Pimco teamed up with mall landlord NewRiver REIT Plc to buy a mall in the center of Sheffield, England, at a “significant discount,” according to a Feb. 19 statement. The site can accommodate 1,100 rental apartments and dorms for 300 students. Deals for European hotels will rebound in the second half of this year, according to a report published Monday by broker Cushman & Wakefield Plc, which said investors have raised “notable capital” for when opportunities emerge.

The potential rewards for private equity firms are underpinned by the growing allocations to real estate among pension funds and insurance companies. Investors’ target allocation for real estate reached 10.6% in 2020, according to an annual survey of 212 institutions managing about $12.6 trillion conducted by Hodes Weill & Associates LP and Cornell University. That’s the highest since the series began in 2013.“There is a near-insatiable appetite for income and duration, so if we can re-manufacture risk for something that looks like income and duration we are going to get well paid for it,” Ric Lewis, chief investment officer and co-founder of London-based private equity firm Tristan Capital Partners, said at an event hosted by law firm Goodwin.

Wait For It

Widespread state and central bank support, coupled with a more conservative approach to borrowing by real estate investors in the run-up to the outbreak, has held off fire sales so far. Commercial real estate prices also adjust to economic shocks at a glacial pace, as valuations are based on comparable transactions that all but dried up in the pandemic.Buyout funds initially turned to publicly traded property companies to bag discounted deals after share prices plunged in the early stages of the pandemic. Hammerson Plc, the U.K.’s largest retail-focused listed landlord, trades at a discount of about 95% to the reported value of its net assets. Derwent London Plc, the biggest London office landlord, trades at a discount of about 15%.

“There will be selective distressed opportunities that come up, but at the moment we don’t see anyone needing to fire sale because the banks have generally been cordial in managing things through,” said James O’Neil, a senior director at CBRE Group Inc. in London. “So those people that bought at discounted share prices may look very shrewd in their timing.”

Lone Star agreed to buy U.K. senior housing specialist McCarthy & Stone Plc in February. KKR and Brookfield Asset Management Inc. have both bought stakes in London office landlords, with the latter also bidding to take its New York-listed real estate unit private.

As the vaccine rollout gathers steam, attention is now turning to what happens when government support and bank forbearance expires. For private equity firms looking for real estate bargains, it should mean opportunity, according to Breslauer at Patron Capital, which finished raising its latest fund in January.

“Banks have basically deferred decisions until the third quarter of this year because by then we’ll know where we stand” with vaccinations, he said. “There is definitely more distress coming, if it happens it’ll be over the next six to nine months.”

(Updates with hotel investment report in 11th paragraph)

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Toronto woman says she was sexually harassed by real estate agent while looking for an apartment – CP24 Toronto's Breaking News

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A Toronto woman is sharing her story after she says she was sexually harassed by a real estate agent while looking for a rental apartment in the city.

Originally from Belleville, Ont., Alyssa Graham made the move to downtown Toronto in 2014 and has been living there ever since.

Graham said she started searching for a new place in mid-January, with plans to move in on Feb. 1.

“This certain property that I wanted was listed on Zolo.ca. So I just reached out to them and asked them if it was still available,” Graham told CTV News Toronto.

From there, Graham said she was paired up with a real estate agent who was “very confident” he could find her a place by her desired move-in date.

And while her first pick for a rental property fell through, Graham said she agreed to work with the agent on a go-forward basis.

That’s when things started to get weird, she said.

Realtor

Graham said she noticed that some of the texts and phone conversations with the agent were “rather flirty.”

“I answered the phone and I said ‘hello’ and he said ‘you sound so sexy when you answer the phone.’”

Nonetheless, Graham said she agreed to meet the agent for a showing at another unit as she was desperate for housing, chalking up his unorthodox approach to being part of his “spiel.”

“This was our first time meeting. He kept calling it a date, he kept asking when we were going to make out, he offered to pay $500 a month in rent for me.”

“When we were leaving the unit, he shut all the lights off and the door was locked. We’re in a pitch-black apartment, I can’t even see my hand in front of me. I’m trying to find a door to get out, but I can’t see anything.”

When the real estate agent eventually did turn the lights back on, Graham said she was eager to remove herself from the situation, but that he continued his advances.

Graham explained that following the showing, the agent was insistent on driving her home and that he would “not take no for an answer.”

She said she apprehensively accepted the offer and was dropped off at a nearby hotel, where she had been staying while in between apartments.

“He dropped me off and was like ‘so can I get a kiss?’” she said. Graham quickly refused and then made her way into the hotel.

The agent then called her asking if he should come up to her room and offered to “get a place for the night” if she was interested, Graham alleges.

After a number of unanswered texts and phone calls from the agent later — where Graham says he claimed that he couldn’t help being attracted to his client — Graham said she decided to report the incident to his employer, Zolo.

Realtor

“I told them everything that happened, that I don’t think he submitted any offers for me, that he wasted a month of time, cost me money, scared me, made me incredibly uncomfortable, etc.” Graham said.

Graham admits that she was originally nervous to submit the complaint as it would likely result in his termination and that the agent was aware of where she was living.

She said she was assured by the company that she “should be fine” because Zolo has “screenings for things like that.”

“We would have caught that,” she said she was told.

In a statement issued to CTV News Toronto on Thursday , Zolo president Mustafa Abbasi said the company acted quickly to address the issue.

“In January 2021, Zolo received a complaint from a customer regarding their interaction with an agent. We acted swiftly and in accordance with our zero-tolerance policy, terminating the agent effective immediately, within 24 hours of receiving the complaint,” the statement reads.

But Graham said that weeks later, the agent reached back out to her asking for her to retract her complaint so that he could be reinstated.

realtor

She refused, but agreed to speak with his boss in exchange for compensation for the money paid to cover her hotel expenses.

“We signed a contract for this, which was also sent to his boss, and I spoke with his boss, and they reinstated him.”

Graham said the agent agreed to pay her $1,500 to cover those expenses, of which he has paid $150.

“I’ve contacted him about the payments countless times, which I don’t like doing as this man made me feel very uncomfortable in the past, he’s now claiming he’s not paying me and has blocked my emails and texts,” she said.

However, in a follow up statement to CTV News Toronto, Abbasi claimed that the agent was not reinstated following his termination adding that he is “no longer affiliated with Zolo in any way.”

With relief, Graham said she was finally able to find an apartment with a female real estate agent and is set to move out of the hotel on March 1. But she says that the “nightmare” experience has left its mark.

“With COVID-19, it’s been hard for everyone, but I’ve had some pretty rough days and he [the real estate agent] knows about those too and he was still giving me the runaround and I guess, just saw me as a piece of ass.”

“I thought I was talking to someone who was genuinely trying to help me, and it turned out not to be the case whatsoever.” 

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