Blackstone Inc. BX-N said Monday it has no interest in investing in single-family homes in Canada, laying to rest speculation the giant global asset manager would scoop up hundreds of Canadian houses and turn them into rental properties.
After Blackstone announced plans in May to establish a Canadian office in Toronto, rumours abounded that the private equity firm would unleash its firepower, gobble up homes and increase competition for individuals and families looking to buy homes. The typical home price across the country has climbed 50 per cent over the past two years and real estate investors have come under scrutiny for their role in ramping up competition and driving up prices.
But Blackstone’s head of real estate Americas, Nadeem Meghji, said that is not in the cards for the company’s Canadian expansion.
“It’s just not an area that we are focused on in Canada,” he said in a joint interview with Janice Lin, the new head of Blackstone Canada.
The New York-based company, which has US$915.5-billion in assets under management, has been accused of profiting off the 2007 U.S. housing meltdown after it bought swaths of distressed properties and then rented them out to U.S. residents.
Blackstone has said it did not own any single-family homes before the crisis and didn’t foreclose on any of the properties. It has also said many of its purchases were homes that had been sitting vacant and dragging down local property values.
Blackstone has since sold that business and owns a rent-to-own business called Home Partners of America – one of the many players in a growing single-family home rental market in the U.S.
“We don’t have a similar platform in Canada and we don’t have the intention of launching one because, from our perspective, we think there are just more interesting places to deploy capital in the Canadian market,” Mr. Meghji said.
Ms. Lin, a former Canada Pension Plan Investment Board executive, is in charge of Blackstone’s expansion in Canada. She cited the country’s favourable immigration policies and its strong population growth as two key factors that make Canada a winner for Blackstone’s capital.
Blackstone mostly owns warehouses and other industrial space in Canada, as well as a couple of office towers. It also has some investments in apartment building developments. All together, they are worth about US$14-billion, according to Blackstone, representing just a tiny fraction of the company’s global real estate portfolio.
Ms. Lin and Mr. Meghji both said the company will continue to invest in industrial and top office buildings, as well as hotels.
Blackstone has previously said it expects its growth here will be significant. Mr. Meghji would not quantify “significant” except to say he expects growth will be material and Canada could eventually command a larger share of Blackstone’s global real estate portfolio.
Your time is valuable. Have the Top Business Headlines newsletter conveniently delivered to your inbox in the morning or evening. Sign up today.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
/cloudfront-us-east-1.images.arcpublishing.com/tgam/C7K5BA6PURCJXLZIHI6YCHMHHU.jpg)
