Companies that were poised for online retail have been the big winners of the COVID-19 pandemic, with a large part of the population now staying at home as much as possible.
Those companies that are able to stockpile more product have been able to ship it, and those that haven’t had the warehouse space are looking to fix that problem.
Mitchell Blaine is an industrial broker with CBRE’s Waterloo Region office and the Sr. Vice President of the company.
“Trends that were there before are really becoming pronounced, either downward or upward,” said Blaine in an interview. “Going into the crisis, you saw a real acceleration of online buying and consumer behaviour. Everything you buy on amazon, or even if it’s groceries online, they have to come from somewhere.”
Blaine said that also includes stockpiling personal protective equipment, creating an additional demand for industrial real estate.
“What is anticipated is, those consumers that had not adopted online buying of groceries and/or goods are really going to start picking it up because they have to through the crisis, and will likely continue to post-crisis as well.”
Having product in-stock isn’t the only advantage of having industrial real estate, according to Blaine. He said that companies like Inksmith and Toyota are the kinds of companies who have this resource, and will be able to get back to work sooner as a result.
As companies have adjusted to increased demand for online shopping, they’re also looking to decrease shipping time.
“We have not had the supply chains established for ‘just-in-time’ shipping to people’s houses, say, e-commerce,” explained Blaine. “So out of this you’re now seeing a ramp-up of facilities from online and warehouse distribution players, even during the pandemic, to be able to service what’s in Kitchener-Waterloo, you know, a 600,000 population, it’s a fairly significant centre.”
It’s not just an acceleration of the warehouse industry and industrial real estate, but also of worker safety.
“That is, by far, the most consistent comment we hear from the operators of these distribution centres is making sure the employees are safe, first and foremost. Then the ability to service their customer base,” said Blaine.
He also explained that companies like Shopify, which has an office in Waterloo, can help get small businesses online, creating diversity in the market and giving the ability to buy locally. As companies like Shopify see success, it will create an even greater demand for warehousing.
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.
