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WILD: Low supply, high demand wreak havoc on Toronto real estate market – Toronto Sun

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COVID has fuelled the migration of buyers from the downtown core to the suburbs and beyond

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When the global pandemic hit a year ago, working remotely became the new normal for many.

Instead of starting the day stuck in traffic, the new nine-to-five starts with video meetings with a cast of dogs, kids and bad hair in the background.

And while companies counted lower office space costs as one rationale to embrace the growing work-from-home culture, better work-life balance — especially for working moms — has been a life-changing benefit for employees.

It has also had a growing impact on Ontario’s real estate market.

Although the migration of people from cities — especially Toronto and particularly retirees — has been a trend for several years, the COVID-19 virus has given many working families pause for thought when it comes to commuting, traffic and city living.

House prices in communities like Hamilton and Barrie for example, have become red hot throughout the pandemic.

However, while COVID has also fuelled the migration of buyers from the downtown core to the suburbs and beyond, it’s also playing havoc with market supply.

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  1. The Toronto real estate market is red hot.

    LACKIE: Dilemma of Toronto real estate market for sellers is you have to buy too

  2. A real estate sign that reads

    LACKIE: Toronto real estate market out of control and unsustainable

  3. A real estate sign that reads

    LACKIE: Toronto housing prices have become detached from reality

Many sellers are hunkering down in place — waiting to see what COVID brings — and as a consequence resale housing supplies have been constrained, which in turn fuels rising prices.

New home construction has also been impacted by COVID, from delays in the municipal building approval processes and approvals to labour, workplace safety and other hurdles for builders who now must deal with social distancing and other measures in workplaces.

All of this adds up to tight supply.

And looking at February’s numbers, the story is absolutely about low supply and continued strong demand from buyers.

The Toronto Regional Real Estate Board (TRREB) reported GTA sales of 10,970 in February 2021, up 52.5% compared over the previous February.

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There were 15,137 homes listed in the GTA this February, up 42.6% from last year, while the average selling price hit a record-breaking $1,045,488, a gain of 14.9% compared to the same period last year.

The condominium market was particularly hot in the GTA — with a 64% sales increase compared to last year.

March’s numbers will be out shortly and will almost certainly confirm the trend.

TRREB President Lisa Patel suggested in a recent news release that supply issues will continue to dog the market even post-COVID.

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“It’s clear that the historic demand for housing experienced in the second half of last year has carried forward into the first quarter of this year with some similar themes, including the continued popularity of suburban lowrise properties,” she said. “It’s also evident that the supply of listings is not keeping up with demand, which could present an even larger problem once population growth picks up following widespread vaccinations later this year and into 2022.”

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The ongoing COVID vaccine rollout will clearly play a role in market behaviour as millions get a vaccine in April and throughout the spring and summer.

But all levels of government will need to look at measures to encourage new and diverse construction of a range of housing.

“Once the economy opens further and immigration into the GTA resumes, there will be an even greater need for housing supply. Understandably, COVID-19 has been front and centre for policymakers,” TRREB CEO John DiMichele said in the recent news release.

With Ontario’s real estate market showing no immediate signs of cooling down, working from home (but not necessarily close to work) is an increasingly important consideration for many buyers and sellers.

The hot market, like COVID, won’t be with us forever but meanwhile, patience, research and preparation are the new golden rules.

Penelope Wild is the former Homes Editor of the Toronto Sun and a realtor with Keller Williams Real Estate Associates.

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Credit 'Zombies' on the Rise as Real Estate Firms Lead Charge – BNN

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(Bloomberg) — The walking dead of the corporate world are multiplying — and the property industry sustains the most.

A new study on companies that have dodged default for years, even though they don’t have enough money to pay interest, comes just as markets from Hong Kong to New York are roiled by real-estate giant China Evergrande Group’s showdown with its creditors. 

Consultancy firm Kearney found their numbers have expanded by 9% globally in the past decade, in part because loose monetary policy has allowed them to keep rolling over debts. 

While “zombies” have been on the rise since the last financial crisis, the pandemic looks likely to bolster their ranks, with more companies seeking waivers after taking on unsustainable piles of debt when economies were shuttered.

The OECD defines zombie companies as those that have been trading for more than 10 years and have been unable to cover their interest burden from their operating revenues for three consecutive years. 

Kearney studied records of 67,000 listed companies from 152 countries. It found:

  • 7.4% of real-estate firms were zombies
  • 5.9% of healthcare
  • 5.5% of telecommunications and media
  • 5.1% of travel and tourism

Within retail, online retail had a slightly bigger share of zombies than brick-and-mortar counterparts, potentially due to the low profitability of online players, according to the report.   

Europe

At least 5 issuers are offering debt on European markets on Thursday, with new issuance volumes of at least EU2.25 billion-equivalent.

  • Bank of England voted to keep bond-buying target and interest rate benchmark unchanged at a record-low 0.1%
  • Ashmore Group Plc’s Jan Dehn is set to leave the firm, ending a 16-year stint at the emerging market-focused money manager
  • SMCP’s majority shareholder, European TopSoho’s, failed to redeem at maturity EU250 million 4.0% bonds exchangeable into SMCP shares

Asia

Financial regulators in Beijing issued a broad set of instructions to China Evergrande Group, telling the embattled developer to focus on completing unfinished properties and repaying individual investors while avoiding a near-term default on dollar bonds.

  • Global investors will focus on China Evergrande Group’s $83.5 million interest payment due Thursday on a five-year dollar note
  • The People’s Bank of China pumped in 110 billion yuan ($17 billion) of cash with seven- and 14-day reverse repurchase agreements.
  • Four Chinese firms were offering dollar bonds Thursday, ending a three-day lull in the Asian credit market amid holidays and concern about contagion from the distressed property giant Evergrande

U.S.

Federal Reserve Chair Jerome Powell said there is little direct U.S. exposure to debt of the Chinese company Evergrande but said it could impact global financial conditions

  • Powell said the Fed could begin scaling back asset purchases as soon as November and complete the process by mid-2022
  • The takeover of medical supply company Medline Industries Inc. is being funded by the largest leveraged buyout loan in three years
  • A gauge of volatility in the $4 trillion market for state and local-government debt has tumbled to just shy of a record low set in early January

©2021 Bloomberg L.P.

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Record-breaking real estate: North Saanich property sells for nearly $23M – CHEK

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The sale of a multi-million dollar listing in North Saanich is shattering any previous record for highest house price on Vancouver Island.

For $22.75 million, the Lawrence Road property includes a 13,000-square-foot home with eight bathrooms, six bedrooms, a two-storey study, a detached yoga studio, an infinity pool, tennis court, gym — even an underground wine cellar.

The president of the Victoria Real Estate Board, David Langlois, said the property is unique.

“You are looking at a very high-end, very interesting property that is going to offer features that you simply can’t find anywhere else,” he said.

It also comes with its own detached two-bedroom guest cottage.

“It’s significant in that it’s certainly the largest recorded sale that we’ve seen in our marketplace,” Langlois said.

“We do have a lot of really valuable real estate throughout the Greater Victoria area. We’ve got lots of private islands, and lots of estate-like settings. It’s not surprising.”

In June, a property in Metchosin sold for $12 million. It sits on 67 acres and a stream runs under parts of the 10,000-square-foot home.

WATCH: Luxury home with stream running through it sets real estate record in Greater Victoria

At the time, it was the highest price ever paid through the Victoria Real Estate Board listings.

Tina Ireland, a regional assessor with BC Assessment, said there are fewer homes in the luxury market available right now.

“The luxury home market is more unique though of course, because the properties are more unique.”

With demand up for properties worth $4 million and more, so are prices.

“Last year’s assessment, we had seen a 10 per cent increase,” Ireland said. “This year I think we’ll see at least that in our assessed values.”

There have been 245 sales of homes in the $2 million category so far in 2021, compared with just 94 in the same period in 2020.

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Dubai real-estate firm DAMAC approved to take firm private – 95.7 News

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DUBAI, United Arab Emirates (AP) — A Dubai real-estate company known for its deals with former President Donald Trump said Thursday it had received regulator approval for an effort to take the firm private.

DAMAC Properties still plans to offer $595 million for outstanding shares of the company, the firm said in a filing on Dubai Financial Market stock exchange.

It said it would offer an update on the plan in the coming weeks. It earlier announced plans in June for the offer to take the company private, then withdrew them as regulators examined the plan.

The buyout would be through Maple Invest Co. Ltd., a holding company of DAMAC’s billionaire founder Hussain Sajwani. Sajwani owns nearly four-fifths of the company through various investment firms.

DAMAC stock traded up Thursday over 3% on the news. The firm has a market capitalization of over $2 billion.

DAMAC is known in Dubai for a development that features a Trump-branded golf club surrounded by villas and apartments, making it the only one of its kind in the Middle East that bears the Trump logo.

The company’s partnership with the Trump Organization to manage and run the golf course was struck before Trump’s election as U.S. president.

The Associated Press

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