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Why Windsor’s hot real estate market has some opting for new builds

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As Windsor’s real estate market soars, becoming the hottest in the country, some folks looking for new homes are giving up on the resale market — and turning to new builds instead.

When Brenda DeBlauw lost her husband in December, she quickly decided to make the move from Burlington to Windsor, where she’s originally from, to be closer to her siblings and their families. But the stress of the bidding wars caught up to her quickly.

“It caused so much anxiety,” DeBlauw said.

“You’re afraid of even going into it, because you know you’re not even going to get it. Especially when it’s a hundred and fifty thousand over bidding, I just didn’t know what to do.”

After a couple of months of unsuccessfully trying to break into the market, it was suggested to her that she consider a new build, and she was quickly swayed.

“With a new build, you know what you’re going to pay, and you get what you want to get. And you’re not having all this anxiety and aggravation,” she said.

She recently signed a contract for a town home in Windsor within her budgeted range of $450,000 to $500,000.

DeBlauw said that with homes going way over asking, and then likely also being in need of upgrades, a new build was the best option for her in terms of value for her money.

Cheaper to build?

This shift toward new builds is unlike anything Lorraine Clark, the president of the Windsor-Essex County Association of Realtors, has ever seen before in her 30-year career.

“People are tired of the bidding wars. So what they’re doing is if they can afford to wait six months to build the home, they’re staying with family members. They’re staying at their cottage. They’re doing all kinds of alternative housing in order to avoid the bidding wars,” she said.

“Because you can build for sometimes cheaper than you can buy right now.”

 

Gintar Contractors is in the process of a new build in a newly developed neighbourhood in LaSalle. (Katerina Georgieva/CBC)

 

Home sales continue to skyrocket in Windsor-Essex. In September 2020, the average price of a home sold at a record $419,711, up 29.6 per cent from September 2019, according to a recent report from the Canadian Real Estate Association. It says the combination of strong demand and record low overall supply continues to drive prices up.

Further to that, according to a survey from Royal LePage released Wednesday, housing prices in Windsor saw the highest increase across Canada during the last quarter.

‘New home demand … is amazing’

Broker of Record Joe Montaleone, with Century 21 Showtime Realty, explained that affordability — and availability — are big reasons why more and more folks are being drawn to new builds.

“The new home demand right now is amazing,” he said.

Montaleone, who has been in the business for 31 years and has been working with developers and builders since the start, explained that the unfortunate part of the resale market is that you don’t know what you’ll end up having to pay to get a product, and sometimes, you might be paying more than what the home is really worth.

 

Broker of Record Joe Montaleone says bidding war fatigue has some choosing to build a new home, instead of buy a home through the re-sale market. (CBC)

 

Plus, there simply aren’t enough listings out there to meet the demand.

“That’s why in the end, they’re also saying, ‘OK, if I can’t get a home, I’m tired of the chase. My best solution is, let’s go into a condo. Let’s go into a town home. The price is the price. We know what we’re going to pay.'” he said.

Montaleone says he wishes there were more new home products available right now, because they’re selling out quickly, even though it can take six to nine months for a new build to be completed.

The City of Windsor says it’s seen an increase of 6 per cent in the number of building permits issued for single family homes in the last year, from September 2019 to September 2020.

That said, the average construction of a new single family house in Windsor was valued at $402,000 in 2019, but has gone up to $426,000 in 2020. That does not include the land value.

And still, Montaleone said that more and more first-time home buyers are being drawn to new condo or town home builds, in ways that they weren’t a year ago.

“That’s the most affordable product today,” he said.

“I believe that these builders and developers are seeing a continued trend again because of affordability. And I don’t see it slowing down.”

Will be strong for the next few years, developer says

Ezio Tartaro of Gintar Homes, a residential construction company, says he’s certainly seeing an increase in demand of about 10 to 15 per cent compared to same time last year.

 

Ezio Tartaro, of Gintar Homes, says he’s seen an increase in demand for new builds this year compared to last. (Katerina Georgieva/CBC)

 

“We think it’s actually going to be strong for the next few years,” he said.

“If you take an existing home and it doesn’t necessarily check all the boxes of that individual homeowner, the renovations they would have to do or the updates, it might be actually much more economical for them to just to build new.”

DeBlauw is waiting to find out when she’ll be able to move into her new home before she sells her house in Burlington.

She said she’s excited for the new chapter her new build allows her.

“It’s like a new beginning. At my age I didn’t think I’d ever be doing this,” she said.

“But I am looking forward to it.”

Source:- CBC.ca

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Damages For Lost Opportunity Cannot Be Awarded In A Failed Real Estate Transaction – Real Estate and Construction – Canada – Mondaq News Alerts

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Canada:

Damages For Lost Opportunity Cannot Be Awarded In A Failed Real Estate Transaction

To print this article, all you need is to be registered or login on Mondaq.com.

A recent decision from the Ontario Superior Court of Justice has
confirmed that damages for lost opportunity will not be awarded
when a real estate deal goes wrong.

In Akelius Canada Inc. v. 2436196 Ontario Inc., 2020
ONSC 6182, Justice Morgan held that when a real estate deal falls
apart due to a seller’s default, damages are to be determined
at the closing date and a claim for the future appreciation of the
property is therefore not available.

In Akelius, two sophisticated real estate investors
entered into an Agreement of Purchase and Sale
(“APS“) in 2015 for seven residential
apartment buildings in Toronto. The plaintiff buyer was a Canadian
subsidiary of a large international investment corporation with
holdings across Europe, the United States, and Canada. Over the
course of the transaction, the purchase price was negotiated to a
final price of $225,400,000.

After the APS was executed and prior to closing, the buyer
discovered that there were several mortgages encumbering the title
of some of the properties with total outstanding amounts of over
$48 million. The existence of the mortgages constituted a breach of
the APS and the buyer therefore objected after discovering
them.

The defendant sellers failed to remove the mortgages. However,
in an attempt to salvage the transaction, the sellers proposed to
revise the APS to exclude the encumbered properties from the sale
or alternatively, they proposed that the buyer could assume the
mortgages with a price abatement.

The buyer refused the sellers propositions, sued for breach of
contract, and brought a motion for summary judgment. The sellers
eventually sold the properties in 2018 for about $50 million more
than the purchase price in the APS. In its damages claim, the buyer
sought $50 million, reflecting the appreciation reaped by the
sellers, as well as about $770,000 in sunk costs that it incurred
as a result of the failed transaction.

Justice Morgan had little difficulty finding that the sellers
breached the APS. The buyer was ready, willing, and able to close
the transaction and the sellers were unable to convey good title on
the closing date as a result of the mortgages.

As such, the primary issue for determination was the appropriate
measure of damages. Justice Morgan noted that the basic principle
is that damages should put the injured party back in the position
it would have been in if the contract had not been breached. There
is some flexibility to this approach; courts have stated that the
date of assessment should be determined by what is fair on the
facts of the case.

However, it has also been well established that damages for lost
speculation profits is not an available remedy in a real estate
transaction. The damages must make up what the purchaser lost in
value on the closing date, not what a property speculator standing
in the purchaser’s shoes would have lost.

It was also noted that it did not matter in this case that the
buyer was an “income investor” rather than a true
property speculator. Damages were therefore measured at the date of
closing, which precluded any claims for lost appreciation
profits.

While the case law provided a complete answer to the lost profit
claim, the court in Akelius went on to discuss mitigation,
because the parties had spent much of their time fighting over that
issue. The court held that the buyer had either failed to mitigate
its damages or, more likely, fully mitigated its damages. The buyer
refused to produce records of its transactions after January 2016,
and Justice Morgan accordingly drew an adverse inference that the
funds saved on this transaction were spent on other comparable
investments.

As a result, it was held that the buyer was only entitled to
damages for the amount of sunk costs thrown away on the
transaction. Damages for lost opportunity were not awarded. Because
both parties had mixed success, no costs were awarded to either
side.

This decision affirms the courts’ reluctance to consider
claims for lost profits from capital appreciation, even where a
buyer is unfairly deprived of a lucrative opportunity. Real estate
investors should be mindful of this before they opt to sue for
damages.


The authors would like to thank Allan Tung, Articling Student,
for his assistance with this article.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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BC Real Estate: The Markets to Watch this Winter – RE/MAX News

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While COVID-19 and social distancing adaptations have proven challenging for the overall economy, there has been an upswing of activity in most BC submarkets since the spring.

Although overall, post-COVID economic recovery isn’t in sight just yet. The need for affordable housing options is dire in this province. A large gap remains between available housing options and types of housing that are in demand. Demand is edging towards single-detached homes due to shifting lifestyle desires as a result of the virus. Many people who were confined to condos longed for more space and this is evident in purchasing trends.

Historically, winter is typically a slow real estate season, as people don’t want to deal with blistery weather conditions, and many are preoccupied by time spent with family during the holidays. Will these trends remain consistent as we creep closer to the 4th quarter?

Below we explore the top BC real estate markets to watch this winter, and the trends that are propelling their post-COVID recovery.

The Greater Vancouver Real Estate market 

The Greater Vancouver real estate market was buzzing over the summer months, but will this activity trickle into the fall and winter seasons? Considered a popular and expensive market to purchase in, there is a lot of uncertainty as to how the market will fare as 2020 draws to a close.

This will likely depend on the COVID-19 pandemic and the potential for another wave causing businesses to shut their doors and residents to stay in their homes. For now, many are surprised at the level of activity as an outcome of the pent-up demand from spring.

The prices of homes have been edging up since spring homebuying had been put on hold due to the virus. As a result, there have been an influx of new homes on the market. Demand has started to pick up, leading to even more competition in the Greater Vancouver market and multiple offer bidding wars on listed properties.

Year over year there were 60.6 per cent more homes sold in September. The high sales numbers included properties that have been on the high end of the market.

Condo market

In Vancouver condo prices year over year in September had increased by 26.7 per cent. It remains uncertain whether trends within the Vancouver condo market will play out in the same manner as we have seen in Toronto, where demand and prices in the local condo market are trending downward.

Condo prices may begin to drop further as homebuyer preferences shift to large floorplans over small, well-located condos. If a flood of condo supply comes to the market, this could dramatically decrease condo pricing overall. As a result of the residents of the Greater Vancouver area working from home during the pandemic and home-schooling their children, some are recognizing the need for more space. Therefore, a shift may occur whereby single-detached homes with more greenspace could become more desirable.

Fraser Valley Real Estate market

When looking at the Fraser Valley market, one would never know we were in a pandemic or recession. According to the Fraser Valley Real Estate Board, similar to the summer months, sales and new listings were at record highs in this area. Sales of single-detached and townhomes spiked, which put upward pressure on prices. This may continue into the winter season, although, with the potential for further COVID-19 waves, there’s no telling how this market will react.

Victoria Real Estate Market

The Victoria real estate market has seen an acceleration of sales as a result of the pent-up demand from the spring homebuying season. High home inventory in September has not kept up with demand. While local industry experts project that this strong activity will continue throughout the winter, they are well aware that the situation can change in the blink of an eye due to the uncertain nature of COVID-19 outbreaks.

Overall BC Market Uncertainties

Uncertainties related to the coronavirus means that the real estate market in BC could dramatically slow down once again in the winter. With flu season returning, fears of another wave could be heightened and lead to a decrease in activity across the province. People may put their real estate agenda on the backburner until there is more certainty within the provincial housing market and the economy at large.

The BC real estate market remains a popular destination for homebuyers. Although the coronavirus affected the market early on, with increased confidence and improving market conditions, we’ve seen activity in this market pick up at a promising rate in local markets province wide.

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Top Canadian Real Estate Trends to Look For in 2021 – Toronto Storeys

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It’s safe to say that 2020 has been unpredictable, to say the least. This theme carries over to the Canadian real estate market, which still managed to experience unprecedented growth despite many buyers deciding to hold off on purchases amid uncertain economic conditions brought on by the pandemic.


However, the uncertainty of the past seven months — and the fact that some parts of Canada are now living amid the second wave of the coronavirus — makes thinking about real estate in 2021 a daunting experience for some.

But to get a better grasp of what Canadian investors, realtors, and mortgage brokers can expect in the new year, PwC Canada and the Urban Land Institute teamed up to share their take on what Canadian real estate trends will take precedence in 2021.

Earlier this month, the groups released their Emerging Trends in Real Estate report, which looks at how Canadian real estate has proven to be resilient as buyers amid accelerated change brought on by the pandemic.

According to the report, the impact of COVID-19 on retail, office spaces, as well as suburbanization has accelerated the pace of change for developers, sellers, and buyers. The report suggests that the best opportunities going into 2021 include warehousing and fulfillment, multifamily residential, and medical office space.

“The coming year will be all about embracing opportunities to be resilient in the face of uncertainty while shifting strategies in anticipation of market headwinds,” says Frank Magliocco, National Real Estate Leader, PwC Canada. “For the first time in a few years, we’re hearing divergent views from industry players about issues like the future of office spaces and the urbanization and suburbanization trends.”

READ: Will Canada’s Real Estate Market Stay Hot This Winter? RE/MAX Thinks So

The 117-page report is based on interviews and surveys with almost 3,000 commercial investors, real estate advisors, banks, and builders, which resulted in a wide-scale summary of the trends that will shape Canadian real estate in 2021.

Here are a few of the most relevant highlights.

Residential real estate

Creating 18-Hour Cities Across Canada

Amid the pandemic, Canadians are now looking at suburban and rural areas as an alternative away from major cities like Toronto and Montreal given the available affordability and space.  As more people work from home and look for more affordable housing outside dense cities, there is a stronger demand for areas that offer more space to live, work, and play.

With remote working making it possible for more people to live in the suburbs, the report points to an “18-hour city” trend to pick up across Canada, whether in larger city centres like Toronto and Montreal or in places like VictoriaQuebec City, and Halifax due to accelerated growth. According to Investopedia, 18-hour cities “describe a mid-size city with attractive amenities, higher-than-average population growth, and a lower cost of living and cost of doing business than the biggest urban areas.”

Meanwhile, cities like Ottawa are also looking into the “15-minute city” which allows urban residents to meet their daily needs, such as a trip to the grocery store or school, within 15-minutes of their home either by walking or cycling. The report says one way to make this happen is through “gentle intensification of traditional single-family neighbourhoods while encouraging more diverse land uses.”

Commercial Real Estate

Retail Troubles and Warehousing Gains

According to the report, warehousing and fulfillment centres were identified as the “number one best bet.” With the retail industry being impacted by lockdown measures brought out by the pandemic, COVID-19 accelerated the already growing move to eCommerce, which is now paving the way to a need for increased warehouse space.

Survey respondents indicated that malls with excess lands need to be re-imagined into residential or mixed-use properties, or, some of this space could be used for warehousing, distribution or fulfillment centres — including last-mile delivery — to satisfy the growing demand for online shopping. The report says that grocery-anchored strip malls will fare best, as grocers have seen record sales during the pandemic.

Office Space

According to the report, the uncertainty around the “return-to-office process” sparked divergent views from interviewees. Some predict that employees and their strong desire for social connections will result in employees returning to the office, while others question whether the pandemic will spark a renewed interest in suburban office development, as some employees might prefer to work closer to home and plan more work from home in the future.

According to PwC Canada’s Workforce of the future survey published in September 2020, 34% of employees said they prefer to work mostly or entirely remotely, 37% want to be in the office most or all of the time, with the remaining 29% looking for an even split between the two options.

“We’re hearing different points of views on office space. Companies that have the digital capabilities to have a remote workforce are now reevaluating their real estate portfolio needs,” said Magliocco.

Medical Office Space

As hospitals continue to be limited on space amid the pandemic, the report says there may be opportunities to move some health care functions to high-traffic community locations — such as malls.

While the pandemic has led to the rapid adoption of virtual health services, there will still be an ongoing need for physical space for care that can’t be delivered digitally as well as space for diagnostic equipment.

Additionally, the report says an ageing population will continue to put pressure on health services and the shift to virtual care could lead to some repurposing of medical office space as practitioners adjust to digital delivery.

Proptech (Property Technology)

Prior to COVID-19, the real estate industry was on the cusp of widespread proptech adoption and since the pandemic, industry digitization has accelerated.

Looking ahead, proptech trends such as digital solutions to ensure business continuity, customer engagement, and sales platforms and tools to manage costs and efficiencies, as well as construction technology, are expected to generate demand in 2021. Other key areas to watch out for include data analytics and cybersecurity.

The report concludes with the top markets to watch in 2021 including VancouverTorontoMontrealOttawa, and Québec City.

You can read the full report here.

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