Can You Guess How Low These Mansion Rentals Are In Vancouver?!

Suddenly there are hundreds of multi-million dollar mansions on the rental market in Vancouver for insanely low prices!

“The first day we moved in, me and my family were like, ‘What? Is this real?'” said a UBC Student who moved from Toronto into a 6,000 sq.ft home in West Vancouver.

It could be a combination for the city’s empty home tax or the province’s speculation tax that are dropping the rental rates for these mega-homes.

Some numbers for thought… One $4.64 million home with 5 bedrooms is being offered at $5,900 per month, and another $7.23 million dollar mansion with eight bedrooms for $7,000 per month! With these astonishingly low prices, the City of Vancouver may have the cheapest real estate in Canada right now.

However, these low rental prices definitely put landowners in a difficult position when you think about the tax rate on such a large home. Taxes can add up to 1% of the home’s assessed value, and if the landlord declares less than 50% of their combined household income for the year, the minimum tax rate will be 2%.

One of the reasons landlords are renting at low rates is not to make a profit, but rather to hang onto the property until they are ready to retire and move back to Vancouver. If they don’t rent it out, they’ll need to pay hundreds of thousands a year. If you rent out a building, it saves hundreds of thousands per year, even if the renter does not may any rent.

Many of the renters for these properties feel fortunate to have such an affordable and large home. A lot of them are being asked “How much are you paying?” and “Are you rich?!”… One can only hope that Toronto will see such rental prices for fabulous properties in the near future.

Are you looking for a great rental property in the GTA area? We have thousands of condos, houses and townhomes for lease right now! 

Give us a call any time, we have real estate agents standing by waiting to help answer your questions and find you a perfect rental!

Sutton Group Realty Systems Inc., Brokerage

416-896-3333 / 905-896-3333

www.SuttonRealty.com

Which Canadian Province Is Leading In Multi-Family Building Permits?

New statistics show an increase of 1.6% per month in relation to permit value for residential buildings in Canada, with Ontario as the clear leader for both single-family & multifamily permits since January. In Toronto, the value for multi-family dwellings rose from 26.5% to $871 million which was the second highest value on record!

Since December, multi-family permit approvals have increased by 3.5%, totalling to 21,192. Single family home approvals decreased by 2.3% from the previous month.

As for non-residential permits, the drop was pretty significant with a total of $3.0 billion down 15.8% from December, which resulted from lower construction intentions from commercial buildings. The total value for all permits issued in January for both residential & non-residential was $8.4 billion in January, down from 5.5% from December’s record high.

Whether you are looking to invest or to buy the perform home for you and your family, do not hesitate to call us! We have agents standing by to answer any of your questions.

Sutton Group Realty Systems Inc., Brokerage

416-896-3333 / 905-896-3333

www.SuttonRealty.com

 

 

 

Severe Housing Downturn in Canada is Unlikely

 

Royal Bank has stated that a widespread real estate downturn is unlikely and that the probability is “still low but has increased somewhat in recent months”. Mortgage stress tests and rising rates are making it harder for buyers to get a foot in the door.

Toronto, Vancouver & Alberta are currently at risk due to the high interest rates put on the high-priced areas, and affordability is a major at a crisis level. “Regulatory changes made the market healthier – it is now balanced, well supported by economic and demographic fundamentals, and while condo building activity is elevated we see few signs of overbuilding,” says RBC.

Montreal remains one of Canada’s stronger markets at the present time, says RBC. Elevated levels of apartment construction in Montreal, Vancouver, and Toronto is a potential long-term concern, however unsold inventories are low.

 

For more on this article, visit: https://ca.sports.yahoo.com/news/severe-housing-downturn-canada-unlikely-rbc-190257940.html

 

Canada Considers Applying Mortgage Stress Test Rules To Private Lenders

Canada is considering subjecting private lenders to the same mortgage stress test rules faced by banks to prevent housing markets from being destabilized by the lenders’ rapid growth, three sources with direct knowledge of the matter said.

Private lenders currently account for approximately one-tenth of Canada’s $1.5 trillion mortgage market, and are still dwarfed by banks but their growth has accelerated since the new rules have been introduced. The B-20 rules that were introduced last January require banks to test the borrower’s ability to make repayments at 200 basist points above their contracted rate, and have resulted in more applications for loans being rejected.

As of now, private lenders are not subject to the B-20 rules because they are supervised by provincial regulations rather than the Office of the Superintendent of Financial Institutions, the federal regulator. Bringing them under federal supervision would require a change in the law.

Two options were discussed, either the federal government would have to ask provinces to apply the B-20 guidelines themselves, private lenders would then also need to provide stress tests the same as the banks’, or the less severe alternative – to recommend provinces ensure private lenders run tighter checks on the ability of their borrowers to repay loans but stop short of imposing the actual stress test. A final decision has yet to be made.

Mortgage investment companies (MICs), have been the main driver of private lenders’ growth, picking up borrowers spurned by the banks. Lending up to 90 per cent of a property’s value, they typically charge borrowers an annual rate above 10 percent, sometimes as high as 15-20 compared with the 3-5 percent offered by banks.

For more on this article visit: https://business.financialpost.com/real-estate/mortgages/exclusive-canada-mulls-measures-to-curb-private-lenders-growth

 

 

10 Canadian Housing Charts That Show How Out Of Whack The Market Is

After years of booming times, Canada’s housing markets are at a turning point. Interest rates are rising, and the new mortgage rules have taken some steam out of the market.

Below are 10 charts illustrating just how out of whack things have become.

Canadians have never had to shell out more of their income to own a home:

Condo construction is at an all-time high:

Young families are not wanting to live in said condos:

You need to be a one-percenter to own an “average” Vancouver home:

Vancouver homes are comically overpriced:

Vancouver’s new distinction: Worst housing market:

There aren’t enough new residents to prop up Vancouver’s market:

Toronto has as much as it can handle:

Mortgage growth is at historic lows:

Investment condos are now often losing money:

 

Liberals Look To Make Home-Buying More Affordable For Millenials

 

Finance Minister Bill Morneau gave a speech in Aurora, Ont., where he asked if Ottawa has any plans to help first time-buyers. Morneau said the Trudeau government is looking for ways to make home-buying more affordable first-time buyers.

Housing is expected to be a prominent campaign issue ahead in October’s federal election. The Liberal government has focused on three housing-related issues: Canada’s shortage of affordable housing, a run-up in real estate prices and ensuring millenials can afford homes.

He stated that the Federal government has already taken steps to increase the supply of affordable housing and to cool the hottest markets by introducing stress tests that limit some people’s ability to take out big mortgages.

According to the Toronto Real Estate Board, the average price for all types of housing there was $810,000 in December. Detached homes were going for more than $918,000. Conservative MP Karen Vecchio argued in a statement Tuesday that Trudeau government policies, including it’s carbon tax, have made housing less affordable.

NDP Leader Jagmeet Singh proposed measures he insisted will help build 500,000 new affordable housing units across Canada over the next 10 years. He said Ottawa should stop applying GST to the cost of building new affordable units, provide a subsidy to renters who spend more than 30 per cent of their incomes on housing and double a tax credit for first-time home-buyers from $750 to $1,500.

In 2015, Liberals promised to enhance the popular Home Buyer’s Plan which enables first-time buyers to borrow up to $25,000 tax-free from their registered retirement savings to purchase a new home. The amount musst be repaid within 15 years. And in 2017, they unveiled a 10-year, $40-billion national housing strategy which the government has billed as a plan that will provide more social housing and affordable renting units.

 

For more on this article, visit:  https://www.princegeorgecitizen.com

 

 

 

 

 

 

 

Toronto remains popular choice for global CRE investors

Among the top 30 cities favoured by investors for commercial real estate, Toronto ranks among the top 30 cities. It has help this position for every year in the past decade. However, Canada’s only city in the annual JLL rankings has slipped down the list from 14th to 19th, through the duration of 2017 to 2018. Asia Pacific cities are increasing in popularity.

London is still being favoured in the commercial real estate world, despite Brexit. The global rankings show that investors prefer cities they are familiar with, that have a well-established investment market, and high levels of transparency. New York slipped back in 2017 with Los Angeles becoming North America’s top city.

“In a year when investors have had to deal with increasing populism, protectionism and political uncertainty, the appeal of real estate as an asset class has continued to increase,” commented Richard Bloxam, Global Head of Capital Markets at JLL.

Investors remain focused on gateway cities, despite tight pricing. Many are looking at alternatives or emerging locations, as well as varying real estate properties within these cities, rather than exploring other less familiar cities.

Total volumes in 2018 were $733 billion, up 4% from 2017, the best annual performance in a decade.

Cross-border purchases accounted for 31% of activity in 2018, close to the 10-year average, suggesting investors still have appetite to buy outside their own markets.

“A notable trend is that half of these established gateway cities are in Asia Pacific. Increasing transparency in these markets is encouraging more investment, moving these cities even higher up the rankings in 2019 and beyond,” Bloxham said.

Looking ahead for 2019
Over the next year, JLL is forecasting a pull-back by some investors due to caution and selectivity.

That could mean a 5-10% reduction on 2018’s volumes although real estate remains an attractive investment compared to other asset classes with strong fundamentals.

Yields are now at historic lows in most markets across the globe. A sharp correction is unlikely, as there is still a significant weight of capital looking to invest in real estate, and corporate occupier market fundamentals across many markets are positive.

Among other key factors in JLL’s forecast:

  • The institutional real estate universe will continue to expand, driven by factors such as low volatility, diversification benefits, long-term income and an attractive pricing premium to core sectors. Asset classes such as student housing, senior living and multi-family have continued to attract more institutional money in 2018 and this is likely to continue in 2019.
  • Industrial now accounts for 17% of all investment, up from 10% in 2009. In contrast, the retail sector has seen less activity as investors adjust their investment approach to reflect changing consumer behavior. In gateway cities, the office sector tends to account for a higher proportion of investment volumes—68% in 2018, compared to 51% in global volumes.
  • The top 30 will continue to be dominated by the gateway cities in 2019. However, at the edges, investors will consider a widening range of cities in their strategies. Reflecting real estate investors’ risk appetite, secondary cities in established transparent markets, such as Osaka and Atlanta, are likely to attract more attention, as opposed to moving into entirely new countries.

For More On This Article, Visit: https://www.canadianrealestatemagazine.ca/

The drop in 2018 Canadian Home Prices Isn’t What It Seems

Robert Kavcic, a senior economist for BMO suggests the decline in Canadian home sales and prices is not as bad as it seems. “Remember: If the price of every house in the neighbourhood stays the same in a given year, but fewer of the expensive ones change hands in favour of the cheaper ones, the ‘average price’ will fall”.

The average price of a Canadian home this past December was $472,000 down 4.9 percent from the same month a year ago, according to the CREA.

For the whole year, home prices have gone down by 4.1%, marking the biggest drop since 1995. Sales were especially low in the costly Toronto and Vancouver markets, which is going to have a considerable pull on the nation average price.

Removing Greater Vancouver and the GTA from calculations trims close to $100,000 from the national average.

“Main points here: It wasn’t as bad as the headline 2018 national price decline look; but it wasn’t good for much of the country either; and this year could see housing stagnation become a wider and more persistent theme” Kavcic concludes.

 

For more on this article, visit: https://www.livabl.com/2019/01/drop-2018-canadian-home-prices.html?utm_source=Weekly+BuzzBuzzReport&utm_campaign=fa2f6e35d1-EMAIL_CAMPAIGN_2018_06_29_03_54_COPY_01&utm_medium=email&utm_term=0_6d6db2b31f-fa2f6e35d1-217826257

Government intervention can backfire! Who knew?

Could the city of Toronto really have overestimated its revenue from its land transfer tax by almost $100 million?

It has been a common government refrain for years now — and from all levels of government, mind you — that something must be done to cool the city’s housing market. The Ontario government has been trying to cool the market by implementing a foreign speculation tax for the Greater Golden Horseshoe region. The Bank of Canada has been trying to cool the market by raising interest rates. The country’s federal financial regulator has been trying to cool the market by tightening up mortgage rules.

Revenues from the land transfer tax are projected to come in $99.2 million short, due primarily to what a city council finance update describes as “lower residential market activity.”

In other words, the market cooled, and Toronto politicians were caught off-guard. Astonished. Startled. Who could have predicted? No one saw that coming. Except maybe everyone who is not a member of Toronto’s City Council.

To be fair, Toronto councillors may have thought they were just being realistic. Governments everywhere have a poor track record of achieving their desired results by intervening in the market. Maybe Toronto thought, “Well it’s true that the feds and the folks at Queen’s Park and all their friends are trying to cool the market. But there’s no real reason to believe they’ll succeed. I mean, it’s government. You know.”
Or maybe Toronto’s city council was just too clueless and greedy to notice all the signs that its cash cow would soon be producing significantly less milk. And to plan accordingly.

Now the city must figure out how to make up the money.

Fortunately, the city came in underbudget in other areas, so there will be no budget deficit this year. Going forward, however, is a different story. To get by, Toronto will have to cut services or institute a significant increase in property taxes.

As we are seeing firsthand in Toronto, that further interference — in particular, interference designed to cool markets — can lead to funding gaps when municipal revenues fall, due to factors such as the land transfer tax, or simply lower property values which decrease property tax revenues.

taken from & read more: https://nationalpost.com/opinion/marni-soupcoff-wow-looks-like-government-intervention-can-backfire-who-knew

CRA Recovers Over $240M From Housing Audits In B.C & Ontario

 

 

 

 

 

The Canada Revenue Agency recently announced that it’s collected more than $240 million from real estate tax audits in B.C and Ontario as of last month!

The probe came amid censure from various quarters over the agency’s alleged neglect to investigate money laundering and tax evasion in Canadian real estate – looking into house flipping, unverified fund sourcing, unreported income, unreported taxes/capital gains and tax rebates on any homes sold.

The recovered money in Ontario mostly comes from audits and rebates, states the CRA. The funds in B.C predominately came from GST/HST.

Approximately $12.5 million in penalties have been levied upon individuals from both provinces on grounds of knowingly false statements in the filing of tax returns, with the highest individual fine at $2.5 million.

For more on this article, click below:

https://www.canadianrealestatemagazine.ca/news/cra-recovers-over-240m-from-housing-audits-in-b-c–and-ontario-216048.aspx