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Average rental rates nationally for all property types declined for the second consecutive month, but are still up 9.4% annually. Surprisingly, the increase in rents is supported by some of the smaller municipalities such as London, Hamilton, Kanata, Burlington, and Kitchener, which are all experiencing double-digit rent growth when considering all property types.




National Overview

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When comparing the change in rent monthly, quarterly or annually, it is important to understand if the composition of the sample of transactions is changing. A way to look at rent that controls for changes in the size of properties is to look at the rent per-square-foot (psf).


The average rent per-square-foot nationally for all property types has increased by 8.4% annually from $2.14 psf in November 2018 to $2.32 psf. However, the average rent per-square-foot has been fairly flat since July.


It must be kept in mind, landlords and property owners do not list (or know) the unit size for every property on Rentals.ca, and these figures represent a smaller sample size in comparison to the total listings, which is more heavily weighted with Ontario and British Columbia urban markets, where every square foot counts, and there are more new units where the unit size is known.


To add another caveat, landlords with very small units may not list the unit size even though they know it, because they it might prevent prospective tenants from calling or viewing the suite. This is important because the smallest units typically have the highest rent per-square-foot outside of penthouses and units with expansive balconies.

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The 8%-9% rent increase over the past year is not consistent across built forms and bedroom types. The chart below looks at the average rent by bedroom type for all properties listed on Rentals.ca in November. The data shows two-bedroom units have experienced the highest annual growth at 17%, followed by one-bedroom and five-bedroom units at 11%, and three-bedroom units at 10%.

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According to survey data from Statistics Canada, 27% of people who moved over the past five years did so to move to a larger or more high-quality dwelling. Tenants want more space, and two bedrooms have always been a very desirable suite among renters. In November, two-bedroom units made up 37.9% of listings on Rentals.ca, just edging out one-bedroom units at 37.8%.


Across the country, two-bedroom units from 900 sf to 1,100 sf have been popular and experiencing strong rent growth nationally.


The chart below looks at the average rent by rounded unit size for all property types in Canada in November 2019, with the last 12 monthly readings shown via the faded markers (square footage is rounded to the nearest hundredth).

The highest annual appreciation in rents is occurring for units from 1,600 sf to 1,900 sf, with the higher point in that range being units rounded to 1,900 sf, which are up 19% annually. The second grouping experiencing the high growth is units from 900 sf to 1,100 sf, which are up between 8% and 15%. The slowest annual growth is occurring in the 2,000 sf to 2,200 sf range (the sample size is small) and in the 1,200 sf to 1,500 sf range.

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Single-family homes (single-detached and semi-detached) experienced the highest annual price growth among property types in Canada at 10.3%, rising from $2,286 per month in November 2018 to $2,522 per month in November 2019.


Townhouses increased by 9.1% annually, rental apartments grew by 8.2% annually, while condominium apartments lagged with growth of just 2.6%. Basement apartments declined year-over-year, but the sample size is small, and the results are not likely an indication of a big drop in demand for this property type.

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Provincial Rental Rates

On a provincial level, Ontario had the highest rental rates in November, with landlords seeking $2,339 per month on average (all property types), up from $2,334 in October, and 9.1% annually from $2,144 in November of 2018.

In Saskatchewan, the average monthly rent declined 9.7% annually, while average rents in Alberta are down 3%.

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Municipal Rental Rates

The majority of listings on Rentals.ca are rental and condominium apartments, and the chart below looks at the average rent and the annual change in average rent for a select number of Canadian municipalities (and former municipalities prior to amalgamation) in November 2019.


As was the case in October, Hamilton and Scarborough led the pack with year-over-year rent growth of 25% and 23%, respectively for apartments with rental or condo tenure.


Two of the more affordable Canadian rental markets, Quebec City and Winnipeg, have both experienced a significant jump in rent year-over-year, increasing by 22% and 21%, respectively.


On the other extreme are the municipalities in Alberta and Saskatchewan, with Red Deer, Calgary, Regina, Saskatoon, Edmonton and Fort McMurray all seeing average rents for apartments decline from November 2018 to November 2019. The declines range from 1% to 7% annually.

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2020 Forecasts

Vancouver


The chart below looks at the average rent for all property types in Vancouver from October 2018 to November 2019, and the Rentals.ca and Bullpen Consulting forecast for 2020.


In November of 2018, the average rental rate was $2,353 for all property types listed on Rentals.ca. That rate increased to $2,507 for November 2019, an increase of 6.5% annually. Overall in 2019, the average rent in Vancouver was $2,351 per month (through 11 months).


The forecast calls for average rent in 2020 overall to be $2,423, with December 2020 rent at $2,585 per month, a 3% annual increase (3.1% from November 2019). This forecast is a moderation from the 7% annual growth forecasted by Rentals.ca and Bullpen last year.


New rental apartment completions are expected to rise in Vancouver in 2020, coupled with relatively flat resale market conditions, should result in less rent inflation.

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Calgary


The chart below looks at the average rent for all property types in Calgary from October 2018 to November 2019, and the Rentals.ca and Bullpen Consulting forecast for 2020.


In November of 2018, the average rental rate was $1,457 for all property types listed on Rentals.ca, that rate decreased to $1,381 by November 2019, a decrease of 5.2% year-over-year. Overall in 2019, the average rent in Calgary was $1,450 per month.


The forecast calls for average rent in 2020 overall to be $1,405, with December 2020 rent at $1,370 per month, a 1% annual decline. This forecast is a moderation from the 4% annual growth forecasted by Rentals.ca and Bullpen last year, which clearly put excess weight on some of the positive economic data at this time last year.

A continued slump in the energy sector should continue to keep rents flat in 2020.

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Edmonton


The chart below looks at the average rent for all property types in Edmonton from October 2018 to November 2019, and the Rentals.ca and Bullpen Consulting forecast for 2020.


The average rental rate was $1,223 for all property types listed on Rentals.ca in November 2018, that rate decreased to $1,175 for November 2019, a drop of 3.9% annually. Overall in 2019, the average rent in Edmonton was $1,257 per month.


The forecast calls for average rent in 2020 overall to be $1,207 for all property types, with December 2020 rent at $1,165 per month, a 1% annual decline. This forecast is similar to the zero growth forecasted for Edmonton by Rentals.ca and Bullpen in 2018. The forecast of 0% rent change was on track in the first half over the year, but rents slumped in the second half of 2019. Like Calgary, the continued uncertainties in oil-related industries should continue to keep rents flat in 2020.10 EdM D.png


Toronto


The chart below looks at the average rent for all property types in the former City of Toronto (pre-amalgamation) from October 2018 to November 2019, and the Rentals.ca and Bullpen Consulting forecast for 2020.


In November of 2018, the average rental rate was $2,385 for all property types listed on Rentals.ca, that rate increased to $2,591 for November 2019, an increase of 8.6% annually. Overall in 2019, the average rent in Toronto was $2,504 per month.


The linear forecast calls for average rent in 2020 to surpass $2,800, but Rentals.ca and Bullpen expect December 2020 rent to be $2,770 per month, a 7% annual increase. This forecast is a moderation from the 11% annual growth forecasted by Rentals.ca and Bullpen last year, which was a little too bullish, as condo rental rates have moderated more than expected (+4%), despite the more pronounced increase in rental rates for purpose-built apartments (+9%) and single-family homes (+11%).


Based on strong pre-construction condominium apartment sales from 2016, the level of condo apartment completions is expected to rise rapidly in 2020 based on this typical 4-year sales to occupancy lag. However, elevated population growth, and a recovering resale housing market will continue to price-out first-time buyers and should offset some of that increases condo rental supply.

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Mississauga


The chart below looks at the average rent for all property types in Mississauga from October 2018 to November 2019, and the Rentals.ca and Bullpen Consulting forecast for 2020.


In November of 2018, the average rental rate was $2,232 for all property types listed on Rentals.ca in Mississauga, that rate increased to $2,405 for November 2019, an increase of 10.2% annually. Overall in 2019, the average rent was $2,504 per month.


The linear forecast calls for average rent in 2020 to surpass $2,600, but Rentals.ca and Bullpen forecast that December 2020 rent will be $2,585 per month on average, an 8% annual increase. This forecast is a slight moderation from the correct 10% annual growth forecasted from December 2018.


Mississauga will continue to move in parallel with the former City of Toronto with prospective renters fleeing Toronto for less expensive units or larger properties.

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Ottawa


The chart below looks at the average rent for all property types in Ottawa from October 2018 to November 2019, and the Rentals.ca and Bullpen Consulting forecast for 2020.


In November of 2018, the average rental rate was $2,029 for all property types listed on Rentals.ca. That rate decreased to $2,018 for November 2019, a decline of 0.5% annually. Overall in 2019, the average rent in Ottawa was $2,032 per month. The decline for all property types is in contrast to the annual increase of 9% for condos and rental apartments presented earlier. The changing composition of listings contributes to some of these data anomalies, which can occur despite a robust sample of listings.


The forecast calls for average rent in 2020 overall to be $2,042 with December 2020 rent at $2,100 per month, a 4% annual increase. This forecast is a moderation from the 9% annual growth forecasted by Rentals.ca and Bullpen last year, which was accurate for condo and rental apartments, but a big miss for the rental market overall.


The resale ownership housing market in Ottawa has really started to pick up, and that should have the impact of pulling up rental rates as first-time buyers are priced out.

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Montreal


The chart below looks at the average rent for all property types in Montreal from October 2018 to November 2019, and the Rentals.ca and Bullpen Consulting forecast for 2020.


In November of 2018, the average rental rate was $1,412 for all property types listed on Rentals.ca. That rate increased to $1,618 for November 2019, an increase of 24.4% annually. The sample size of listing in Montreal is large, so the rent spike and monthly volatility wouldn’t typically be expected, but is an illustration of the wide variety of rental product in Montreal and that suites are getting snapped up quickly, and not lingering on Rentals.ca for months without being leased. Overall in 2019, the average rent in Montreal was $1,472 per month.


The forecast calls for average rent in 2020 of $1,583, but Rentals.ca and Bullpen expect December 2020 rent to be $1,695 per month, a 5% annual increase. Given the volatility in the monthly figures, there is a wide forecast band, but rent is expected to grow at twice the rate of inflation.

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One of the largest Indigenous-led housing developments in Canada is a step closer to rising in the heart of Vancouver after members of a First Nation voted in favour of the proposal.


The Squamish Nation says members made history Tuesday by voting in a referendum to approve the land designation and business terms of a 50-50 partnership with Westbank Projects Corp.


The First Nation is planning to build 11 towers on a 4.7-hectare parcel of its reserve lands at the south end of the Burrard Bridge near False Creek, with the tallest building being 56 storeys high.


It says in a news release that construction is expected to begin in 2021 and the completed project will bring about 6,000 units into the housing market, of which 70 to 90 per cent will be rentals.


The development, known as the Senakw project, does not need the city’s approval to go ahead but the city says it looks forward to discussing ways it can support the project.


The First Nation says 87 per cent of voting members endorsed the land designation while 81 per cent voted in favour of the business terms of the Westbank partnership.


“The Squamish Nation council is thrilled with the outcome of this referendum, which was approved by a landslide. This is truly a landmark moment in our nation history,” Khelsilem, a councillor and spokesman who goes by a single name, said in a statement on Wednesday.


“The Senakw project will transform the Squamish Nation by providing immense social, cultural and economic benefits to Squamish Nation members for generations to come.”


The city says it will continue discussions with the nation to determine how staff may be engaged in the project and, if desired, how it could best work with it as a government partner.


It also says it looks forward to discussing how to integrate the project with the existing community and the development of surrounding transportation and utility service connections.


“I want to congratulate the Squamish Nation on this historic vote and taking another step forward towards building Senakw,” says Mayor Kennedy Stewart.


“This project not only affords Vancouver an opportunity to practice meaningful reconciliation as we work in partnership with the Squamish Nation, it will also bring 6,000 new homes to the city — many of them rental — helping us tackle the city’s housing crisis.”


This report by The Canadian Press was first published Dec. 11, 2019.



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Sales activity in the Lower Mainland’s commercial real estate market continued to decline in the third quarter (Q3) of 2019 compared to recent years.


There were 405 commercial real estate sales in the Lower Mainland in Q3 2019, a 32 per cent decrease over the 596 sales in Q3 2018 and a 42.3 per cent decline compared to Q3 2017, according to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV).


The total dollar value of commercial real estate sales in the Lower Mainland was $1.886 billion in Q3 2019, a 59.8 per cent decrease from the $4.694 billion in Q3 2018.


“Activity in our commercial market this year is trailing the pace we’ve experienced over the last five years,” Ashley Smith, REBGV president said. “We’ve seen activity pickup in our residential market over the last few months and we’ll watch to see if conditions strengthen on the commercial real estate side in the last quarter of 2019 or the first quarter of next year.”


Q3 2019 activity by category


Land: There were 114 commercial land sales in Q3 2019, which is a 44.9 per cent decrease from the 207 land sales in Q3 2018. The dollar value of land sales was $821 million in Q3 2019, a 61.7 per cent decrease from $2.142 billion in Q3 2018.


Office and Retail: There were 155 office and retail sales in the Lower Mainland in Q3 2019, which is down 37.2 per cent from the 247 sales in Q3 2018. The dollar value of office and retail sales was $433 million in Q3 2019, a 78.4 per cent decrease from $2.005 billion in Q3 2018.


Industrial: There were 124 industrial land sales in the Lower Mainland in Q3 2019, which is a 4.2 per cent increase from the 119 sales in Q3 2018. The dollar value of industrial sales was $415 million in Q3 2019, a 41.7 per cent increase from $293 million in Q3 2018.


Multi-Family: There were 12 multi-family land sales in the Lower Mainland in Q3 2019, which is down 47.8 per cent from 23 sales in Q3 2018. The dollar value of multi-family sales was $217 million in Q3 2019, a 14.3 per cent decrease from $253 million in Q3 2018.



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VICTORIA – Many soon-to-be released property assessments will show a moderating market, with more modest changes in property values compared to previous years based on trends in the real estate market as of July 1, 2019.


"We first saw signs of moderation during the 2019 property assessments," says Assessor Tina Ireland. "For 2020 assessments, we are seeing a continued ripple effect of a moderating market expanding across the province."


The map* demonstrates the forecasted ranges of typical changes in 2020 property assessments by region and property type:

 

*All numbers are preliminary projections only and are subject to change. The final numbers will be released on January 2, 2020.


"Changes in property assessments really depend on where you live," says Ireland. "For example, assessed values of homes in many areas of Metro Vancouver will see a softening in value, while other markets and areas of the province will see minimal change and even modest increases over last year's values."


"Commercial properties continue to trend upwards in many parts of the province, but have stabilized within the Lower Mainland," adds Ireland."


Based on what was happening in the real estate market as of July 1 this year, the table* below provides examples of what percentage changes that property owners in various areas of the province can expect to see with their 2020 assessed values (listed by property type):

 
 

*All numbers are preliminary projections only and are subject to change. The final numbers will be released on January 2, 2020.


All British Columbia property owners will receive their annual property assessment notice in early January 2020. However, to make sure property assessments are fair, they are all calculated based on the same date of July 1st every year.


"When properties similar to your property are sold around July 1, those sales prices are used to calculate your assessed value," explains Ireland. "Our job is to make sure your assessment is fair and accurate as compared to your neighbours." 


During December, BC Assessment is providing notification letters to property owners whose assessments are changing significantly more than the average change.


The contents of this news release is based preliminary information only and subject to change when all confirmed 2020 property assessment information is finalized and released on January 2, 2020.


Visit bcassessment.ca on January 2 to access a variety of 2020 assessment information including searching and comparing 2020 property assessments as well as market movement trends.


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The speculation and vacancy tax website has been updated to:


- Clarify that spouses declare as individuals not as a partnership
- Clarify how the 10-year period applies in the away from home for other reasons principal residence exemption
- Clarify exemptions, including the secondary residence exemptions, previous residence exemption, and away from home for any other reasons
- Clarify details about the exemption for spouses who are separated or divorced

The government announced it intends to introduce new speculation and vacancy tax exemptions for:

- Canadian Armed Forces members and their spouses, where the military member is away from B.C. due to service requirements
- Homeowners whose property can only be accessed by water

The government also intends a longer phase-out for these temporary exemptions:

- The exemption for rental restricted stratas will now end December 31, 2021
- The exemption for strata accommodation properties will now end December 31, 2020
- The exemption for vacant land will end December 31, 2019

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According to Rentals.ca listings data, the average rent for Canadian properties in October was $1,940 per month, a decrease of 0.7% monthly, but an increase of 5.5% annually. The median rental rate was $1,850 per month in October, up 8.9% from a year earlier ($1,700).

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It's important to understand the implications of purchasing a rental home and how that affects your taxes. There are some things that you don't want to miss just because you're new to the game - let us break it down for you.


Property vs. Business Income

If you’re a landlord, your rental income will be treated either as property income or business income, and each brings different tax implications to the table. According to the CRA, to differentiate between these two, you should consider the numbers and services that you offer to your tenants. 


Most often, you're collecting property income if you only provide basic services such as heat, parking, light, laundry facilities. If you offer more services such as cleaning, meals, or security, your rental operation is likely a business, and could be taxed as such. 


Keep in mind that the more services you provide to your tenants, the higher the chances it will be considered a rental business.


Why Property and Business Income Matters

As mentioned, there can be significant differences in your taxation, such as:

Property Income:

  1. Not subject to Canada Pension Plan premiums (CPP) on net income.

  2. Filing deadline: April 30th

  3. Deductions Such as Childcare Expenses Deduction, Canada Workers Benefit (CWB), or Refundable Medical Expense Supplement do not apply.

Business Income:

  1. Subject to CPP premiums

  2. Filing deadline: June 15th - for the individual and their spouse - although any taxes payable are still due by April 30th.

  3. All the following apply for deduction:

    1. Childcare Expenses Deduction 

    2. Working income tax benefit (WITB)

    3. Refundable Medical Expense Supplement


How co-owning or partnering can affect your taxes

Entering into a partnership or co-ownership on a rental property naturally comes with a lot of advantages. There’s less overhead for each individual, other costs can be easily shared, and often times your purchasing power will be increased. However,  a joint proprietorship also directly affects the way you should file your taxes. 

  1. Personal: You’re the sole owner, which makes it nice and simple for you to file your taxes by claiming all the rental income.

  2. Co-ownership: As mentioned by CRA, “if you own the rental property with one or more persons, we consider you to be a co-owner.” That means that if you share a rental property with your spouse or common-law partner, you are co-owners.

    Each co-owner claims their share of the rental income according to what they've previously agreed. As co-owners, it's vital to understand the details of your partnership for income tax purposes - it helps define if you have a property income or a business income.

  3. Partnership: In short, it's profit-oriented. CRA defines partnership as “ a relationship between two or more people carrying on a business, with or without a written agreement, to make a profit. If there is no business in common, there is no partnership.” 

One other important note: According to Canada Revenue Services, if you’ve received income from renting a property, you have to file a statement of income and expenses. Luckily, the always handy Form T776 will help you calculate them.


Hopefully, this quick overview of tax considerations helps you plan for your property renting future. Now to the fun part: Expense deductions!


What Are Current and Capital Expenses

Who doesn’t love a taxable deduction? However, it’s important to know that not all expenses for your rental property are created equal. There are two basic types of expenses that you typically incur as you earn a rental income: Current expenses (also called operating expenses) are expenses that serve a short-term benefit. For example, spending money on repairs to keep part of the rental unit in good working condition is considered to be a current expense.


On the other hand, capital expenses are typically related to things that provide long-term value. The costs incurred to buy or improve your property as a whole fall into this category. Normally, you cannot deduct the sum of these expenses in the year you incur them - instead, you get to deduct their amount over several years as Capital Cost Allowance (or CCA for short).


Deductible Rental Expenses

As stated by Canada Revenue Service, you can deduct expenses you incur to obtain rental income. To be more specific, here’s a list of deductible expenses along with links to learn more about each category.

We realize it’s quite an extensive list. The truth is, it can be challenging to keep track of every expense, repair, legal fees, bank charges, and utilities. Staying on top of these things comes with the landlord territory. While it’s certainly possible to manage and track these expenses yourself to save a bit of money, it’s very common for property owners to delegate it to a certified accountant to ensure they meet all the tax requirements (and get the maximum bang for their deduction buck).


You might want to pay special attention to maintenance and repair expenses, as they make it possible for you to deduct amounts paid to a property management company, as well as agents for collecting rent or finding new tenants.


Non-Deductible Expenses

While the list of deductible expenses is long, non-deductible ones are a bit easier to understand. They typically fall into one of five categories:

Though they aren’t deductible, you’ll still need the help of an accountant to calculate your expenses as required by the CRA.


Calculating loss, depreciation, advertising costs, and other fees can definitely pile up, so keeping everything in order makes it easier for you when tax season comes around.


Keeping Records

You may already know this, but records refer to every accounting and financial information document that you accumulate over the course of your property rental business. The CRA advises that you keep them “for six years from the end of the tax year to which they relate.''


Records that you should keep to support your current expenses and purchases include:

  • Invoices

  • Receipts

  • Contracts

  • Any document that may support an expense

You don’t have to send in all records with your income tax filing - just keep them organized by year and subject in case the CRA does ask for them to validate your claim. 

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A static luxury real estate market begs the question, how can we increase an overall sense of urgency in today’s luxury buyers? Real estate market trends are showing that most markets are currently leaning in the buyer’s favor, and as a result, listings are sitting a bit longer on the market than usual.


When there are too many luxury listings available, buyers tend to feel like they have more time to mull over their options and take their time making an offer.


As a luxury real estate agent, this can become a great source of frustration both for you and the sellers you’re representing. However, adapting to real estate trends in the luxury market means being able to see past the things you can’t control and leveraging the things that you can. 

USE YOUR SOLD, UNDER CONTRACT, AND PENDING LISTINGS TO MOTIVATE BUYERS TO TAKE ACTION

You can’t force buyers to be more decisive, but you can certainly motivate them by showing them that other buyers are taking action. This is called creating “social proof”, and it’s becoming more and more necessary to adapt to today’s real estate market trends. 


Most agent websites focus heavily on their available listings, but giving just as much air time to listings that are under contract, pending, or just sold is a direct, yet non-aggressive way to show buyers that they aren’t the only ones interested in what you have to offer. 


Similarly, posting about these unavailable listings on social media can help create a sense of forward motion in the market for prospects who are just passively following your accounts. When they see a property they were interested in is now “under contract”, it sends the message that they need to take a more active approach to their home search. When agents do this, it not only helps them, but it helps the entire local market. 

TODAY’S LUXURY BUYERS ARE RESPONDING TO INFLUENCER MARKETING

With the rise of social media also came the rise of all types of consumers seeking third-party influencers’ opinions on what to buy.


People are being sold something everywhere: on their television, their radio, and now on their social media feeds. They’re aware that whoever is doing the selling is likely going to say that whatever they’re offering is the best, whether it really is or not, which is what makes influencer marketing so appealing.


Influencer marketing entails having an unbiased, third-party person or entity of influence who already has an established audience within your target market endorsing whatever it is you’re trying to sell, whether it’s something as small as a book or as big as a luxury property. 


Using established community influencers is another way to create social proof around your listings. This lets potential buyers know that people they trust— or who are at least not going to significantly profit from whatever it is you’re promoting— are interested in what you’re selling. 


While this is a big topic with lots of conditions to consider to apply it correctly to luxury real estate, one example would be to consider that health and wellness are major priorities for most of today’s affluent buyers.


With this in mind, reaching out to yoga instructors or wellness coaches with a large social media following to host a yoga class or private wellness workshop at one of your available listings that happens to have an incredible view, a meditation room, or spa-like space,  would be a great way to create buzz within the community about your listing.


Although influencer marketing might not work for all of your listings, it’s something to consider when you’re running out of ways to build momentum.

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April 20th, 2018 marked Canada’s last “4-20 celebration”.  Historically, this annual quiet protest gathered hundreds of marijuana enthusiasts who urged for the legalization of cannabis (or marijuana).  The Liberal government heard their pleas and, if all goes to plan, in July 2018 Bill C-45 will legalize marijuana cultivation, distribution and consumption Canada-wide.


The issue of marijuana legalization is a hot-button topic for many Canadians. Whether it be from a health and safety perspective, a moral standpoint or, a rights and freedom angle, everyone has an opinion about it.  When it comes to real estate, the issue of cannabis consumption can be just as divisive.


How C-45 Will Impact Landlords


The federal government is responsible for drafting laws regulating industry-wide standards, production and manufacturing.  It’s then up to the provinces to regulate sales, distribution and, most importantly for landlords, where marijuana can be consumed.


On that last point, provinces are inspiring themselves from existing tobacco laws which prohibits consumption in public places.  Essentially, tenants will have to enjoy marijuana in the comfort of their homes.


Landlord advocacy groups are concerned by this.  They argue that marijuana consumption in rentals will incur additional costs when the tenant leaves and the smells need to be cleaned up.  Landlords also argue that smoke will bother other renters in multi-unit properties and maybe even adversely affect surrounding families with children.


Tenants, on the other hand, argue that not being allowed to smoke in public restricts them to their apartments.  Where else will they be able to smoke?


Both are valid arguments and provinces haven’t yet addressed this issue in their public consultations.


Not Just The Smoke


The other major challenge for landlords will be managing the impact of individual marijuana production.  Ontario, for example, will allow residents to grow up to four plants.


Growing marijuana inside a rental is a recipe for disaster: the humidity required to grow a marijuana plant can cause mould buildup.  When the tenant leaves, the landlord is forced to spend thousands to fix the issue.


This isn’t only an additional cost for the landlord, it can also have serious health implications to the tenant growing the plants.


On this issue, Quebec doesn’t intend to make personal cultivation legal.  However, landlords in Ontario, BC and the prairies and the Maritimes will have to deal with this problem.


So What Now?


Landlords used to be able to rely on provincial tenant laws that prohibited illegal activities from taking place in their units.  Since smoking or growing cannabis was illegal, it was a straightforward process: “stop doing that or we’ll evict you”. Landlords will lose this tool in July 2018 since every aspect of cannabis production and consumption will be legal.  


So what now?  Quite simply, landlords will have to find creative ways at preventing marijuana consumption or cultivation in their rentals.


The easiest and most effective tool will be to include stipulations in drafting new leases where the tenant agrees not to smoke inside the rental.  Such clauses can be similar to existing tobacco ones. To avoid any misunderstanding, a specific marijuana clause should be drafted and be made separate from tobacco.


As for existing leases (where adding clauses can’t be done), landlords can use tenancy act stipulations that prevent one tenant from interfering with the reasonable enjoyment of other tenants or the landlord.  This, of course, varies province to province and may be difficult to establish if the issue goes to court.


Finally, if the landlord is renting a unit that’s part of a condominium community, the issue may not even be the landlord’s to decide.  Some condo associations are planning on banning smoking marijuana inside units or on balconies by making it a condo bylaw.


As with any new condo bylaw, the issue will have to go to a vote which can take a few months.


Tenant-Landlord Communication Is Key


Cannabis legalization is still a few months away and landlords hoping to prevent tenant problems can get ready now.


If smoking clauses weren’t part of existing leases, landlords should take the first steps and communicate with their tenants.  Simply asking them if they intend to regularly smoke inside their units will help predict where problems may occur. In such cases, a gentle reminder asking the tenant to, for example, open a window so as to not affect neighbours, may prevent issues between tenants.  


Like any landlord-tenant matter, it’s better to address an issue before it becomes ones.


Similarly, a landlord could ask the tenant to turn on the fan over the oven and blow the smoke under the range hood.  In most units, this is enough to prevent smoke from leaving the unit.


Alternatively, if a tenant who intends to frequently smoke marijuana is informed that a family with children live next door, that may affect their willingness to smoke on their balcony.


For Existing Leases, Consider Retrofitting Units


In the event a tenant intends to take full advantage of cannabis products in their unit, landlords can take active steps at reducing odours by retrofitting the property to limit the spread of smoke.


For multi-unit properties, ensuring that the door isn’t allowing air to flow through will prevent the smells from affecting the common areas.  The same high-quality door draft stoppers that save heating costs during the winter can be used to curtail the propagation of smoke.


As for reducing the smells, landlords can offer to install ozone air in the unit.  This will drastically cut down on the smell left by smoke.


Another thing to consider is to make sure the ducts from a smoker’s unit aren’t connected to others in the building.


After Legalization


While the media makes it seem like every Canadian will become Cheech and Chong, it’s not necessarily true that every tenant will become an avid marijuana consumer


According to a number of studies, there may not be a direct link between increases in marijuana consumption and legalization.  For example, a 2017 study showed that “the steep rise in marijuana use in the United States […] is attributable to general period effects not linked specifically to the liberalization of marijuana policies in some states”.


To put it simply, it’s unlikely that a non-smoking tenant today will suddenly become a frequent and avid consumer in July.



If you would like to learn more about how to prevent the cannabis use in rental property or if you are thinking about rent or management your investment properties, please contact Princess Pan who is a top luxury real estate agent situated in Vancouver, who can help you with all of your needs. To contact Princess Pan,  please call email her at princess-bc@hotmail.com.


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Metro Vancouver’s sluggish residential real estate market has caused some developers to pull the plug on projects, while others either delay or “retool” housing developments or switch their firms’ focus to rental housing.


Pre-sale homebuyers at Richmond’s Alfa condominium project were left in the lurch in July when developer Anderson Square Holdings Ltd. sent them notices to say that it was cancelling their contracts for units in the under-construction building because the developer was “facing serious and significant circumstances beyond its reasonable control.”

 

Anderson’s executives were not available to comment on the decision to halt the Alfa project, but developers across the region are grappling with a sluggish housing market.

 

alfaThe Alfa development on Anderson Road at Buswell Street was recently halted. Photo Maria Rantanen/Richmond News

“The market is totally in the dumps right now,” said Holborn Group of Cos. CEO Joo Kim Tiah. “I don’t think people are aware or have a full grasp of what is going on. The B.C. economy is headed for tough times. The real estate economy is not going good.”

One project indefinitely on hold is the redevelopment of the Bay parkade on Seymour Street — a site that is connected to the Bay department store by a skywalk above the street. Tiah’s family owns most of the block bounded by West Georgia, Seymour, Dunsmuir and Richards streets, and he has been eyeing redeveloping that land for years.

He told Business in Vancouver that he plans to keep his commitment to build a social-housing building at 155 East 37th Ave., on a 15-acre site that his company owns in Vancouver’s Little Mountain neighbourhood. Market condominium towers on the site, however, are delayed.

“I was hoping to bring [market housing in Little Mountain] to market in the spring of next year but it is now looking hopefully to be in the fall,” he said. “I don’t want the market to tank even further or to go even worse.”

Tiah blames the slowdown on taxes, including the longtime property transfer tax and the goods and services tax and new levies.

One new tax is the B.C. government’s 20 per cent charge to foreign buyers who purchase homes in certain parts of the province, including the Lower Mainland. Another is its so-called “speculation tax,” which is levied on second homes in certain regions of the province. For Canadian citizens and permanent residents the tax on second homes in the province is one per cent on the value of the home above $400,000. For non-citizens, and what B.C. Finance Minister Carole James calls “satellite families,” the second-home tax rate is two per cent on the value that exceeds $400,000.

The City of Vancouver separately has an empty-homes tax that is one per cent of the property’s value.

“Why would investors, or anyone, even want to invest in B.C. anymore?” Tiah asked. “The yields are so low and the taxes that you pay on an annual basis are higher than the yields are.”

Tiah said he fears that developers across the province will have to start laying off staff.

The good news, however, is that there was a 23.5 per cent bump in the region’s home sales in July, compared with the same month a year ago, although sales in every other month this year have been below the pace set last year. Even in July, sales were 7.8 per cent below the 10-year sales average for that month, according to the Real Estate Board of Greater Vancouver.

Altus Group vice-president Matthew Boukall told BIV that his company is tracking at least 19 Metro Vancouver projects that were supposed to launch either in late 2018 or in early 2019 and that have either delayed their opening date or shifted their marketing message to be “coming soon.”

Out of those projects, at least four have either approved or conditionally approved development permits, he said.

Boukall added that the delayed projects represent around 4,300 units that were supposed to come to market between Jan. 1 and June 1. About 8,700 units were brought to market during the same time period in 2018, he said. That means that the delayed projects have reduced the inventory of new homes entering the market by almost half, he said.

Not all projects are struggling in the current market.

Beedie Living managing partner Rob Fiorvento told BIV that his company sold about 80 per cent of the 39 homes at its Storia development in Burnaby in the two weeks after pre-sales launched July 13.

The development may owe its success to its many larger three-bedroom condos, he said.

Even Beedie has one project that is delayed, however. It had planned to launch pre-sales for its Slate development at Brentwood in September and has pushed that back to early next year.

The solution for some developers has been to pivot their businesses toward purpose-built rental housing.

Coromandel Properties, for example, has primarily built condominiums but plans to develop rental buildings on 41st Avenue near Oakridge.

“In 2016, we became uncomfortable with the home values that were being achieved for condominium product,” said Cressey executive vice-president Hani Lammam.

“We felt it was unsustainable so we shifted our business model at that time to do more rental and more office product, and to step away from condominiums.”

Municipal and federal incentives helped Cressey make that shift.

conradCressey's Conrad project at 3365 Commercial Dr. is under construction. Photo Chung Chow/Business in Vancouver

City incentives usually include lower development cost charges, higher maximum heights and densities and fewer required parking spaces, Lammam said. Federal perks from the Canada Mortgage and Housing Corp. can include lower interest rates and longer amortizations, Lammam added.

The result is that Cressey’s Conrad rental building at 3365 Commercial Dr. is well underway, and the company just started building its Wilkinson project at 1715 Cook St. in the Olympic Village neighbourhood. The City of North Vancouver also provides incentives for developers to build rental apartments, and Lammam said that Cressey is going through a rezoning process for a potential rental project on West Esplanade.

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Vancouver real estate prices have stopped surging on excessive expectations they will keep rising in the future


Vancouver’s housing market stability has gone from “highly vulnerable” to moderate for the first time in three years, according to the new assessment from Canada Mortgage and Housing Corp.


The shift comes as the CMHC has also dropped its red flag on real estate price acceleration in the Vancouver market, taking it from a “moderate” rating in May to “low” today.


These assessments, contained in CMHC’s third-quarter report released Thursday, won’t surprise anyone following the Vancouver real estate slump in which sales and prices started crumbling in early to mid-2018 after several years of stratospheric gains that had Vancouver among the frothiest markets in the world.


CMHC tracks long-term changes in each market by also considering indicators of overheating, overvaluation and overbuilding. In Metro Vancouver, the CMHC kept its low rating for overheating and overbuilding from May 2019 and also its moderate rating for overvaluation.


Price acceleration happens when there is speculative activity, said Eric Bond, a Vancouver-based senior specialist, market analysis at CMHC.


“Overvaluation is grounded in the idea that price levels are not justified considering employment growth and wage or income growth,” he said. “We continue to detect a moderate degree of overvaluation, but it’s down from a high degree which existed two quarters ago.”


In other words, Vancouver real estate prices have stopped surging on excessive expectations they will keep rising in the future. However, they remain expensive compared to local economic conditions, even though the gap between the two is now closer than they had been.


Condo sales signal cooling market

Sales-to-Available ratio for condos at the end of May this year compared to the same time last year. The CMHC considers a balanced housing market to be from 10-18%.

Made with Flourish
 

The latest report said the CMHC originally detected price acceleration in the Vancouver market in the second quarter of 2016, but its model only indicates “price acceleration is present in a market if a significant price increase occurs in at least one quarter in the previous three years.”


Now, “with lower prices in the resale market in recent quarters, an evaluation of the trends in the most recent data provided sufficient evidence to end the watch on price acceleration” for Vancouver, according to the report.

“What does it mean? We are seeing a greater availability of homes. Buyers have more choices,” said Bond, who said it was difficult to guess what actions policy-makers might take or reverse as the Vancouver market goes from being heated to more balanced.


To compare, the CMHC report, which looks at 15 Canadian metropolitan areas, rated housing markets in Toronto, Victoria and Hamilton as having a high degree of vulnerability.


In Toronto, overheating and price acceleration and overvaluation are still under watch even though overvaluation is easing. In Hamilton, high ratings for all four factors were maintained as being at high degrees, even though overheating, price acceleration and overvaluation have eased since the first quarter of 2019.


The CHMC report focuses on the resale market, but there has also been a significant shift in the presale market where developers and realtors have been trying to coax potential buyers who show any modicum of interest.

There have been gimmicky promotions offering avocado toast and wine for a year, but now also some more significant cash offers or discounts such as covering mortgage, interest and tax payments for a year, said condo marketer Adil Dinani. He’s even driven potential, but non-committal buyers from a recent condo launch in East Vancouver to see the developer’s previous and finished projects in an effort to seal deals.


The latest report said the CMHC originally detected price acceleration in the Vancouver market in the second quarter of 2016, but its model only indicates “price acceleration is present in a market if a significant price increase occurs in at least one quarter in the previous three years.”


Now, “with lower prices in the resale market in recent quarters, an evaluation of the trends in the most recent data provided sufficient evidence to end the watch on price acceleration” for Vancouver, according to the report.

“What does it mean? We are seeing a greater availability of homes. Buyers have more choices,” said Bond, who said it was difficult to guess what actions policy-makers might take or reverse as the Vancouver market goes from being heated to more balanced.


To compare, the CMHC report, which looks at 15 Canadian metropolitan areas, rated housing markets in Toronto, Victoria and Hamilton as having a high degree of vulnerability.


In Toronto, overheating and price acceleration and overvaluation are still under watch even though overvaluation is easing. In Hamilton, high ratings for all four factors were maintained as being at high degrees, even though overheating, price acceleration and overvaluation have eased since the first quarter of 2019.


The CHMC report focuses on the resale market, but there has also been a significant shift in the presale market where developers and realtors have been trying to coax potential buyers who show any modicum of interest.

There have been gimmicky promotions offering avocado toast and wine for a year, but now also some more significant cash offers or discounts such as covering mortgage, interest and tax payments for a year, said condo marketer Adil Dinani. He’s even driven potential, but non-committal buyers from a recent condo launch in East Vancouver to see the developer’s previous and finished projects in an effort to seal deals.




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Renting is now cheaper than buying in Vancouver, according to a recent report by the National Bank of Canada.


According to the report, housing affordability in Canada deteriorated for the 14th consecutive quarter at the end of 2018. With that, the worst deteriorations in affordability were in Vancouver, Victoria, and Toronto.


According to the report, the city’s housing affordability “deteriorated for the condo sector in fourth quarter.”

 

The average price of a representative condo in the Vancouver market is $638,842 and the annual household income needed to afford a condo at that price is $117,227. The report says that it would take a total of 61 months to save for the condo’s down payment (with a saving rate of 10%).


A Vancouverite is looking at an average monthly mortgage payment of $3,127 for a two-bedroom condo, compared to a monthly rental for a similar property costing $1,913.

National Bank of Canada


The median detached home price remains over $1 million, averaging $1,318,768. With that, a monthly mortgage payment is about $6,456.


The National Bank report also showed that the time required to save for the down payment on a representative home at a savings rate of 10% will take 415 months in Vancouver.


Vancouver isn’t the only city in Canada suffering from rising real estate costs. Renting has become cheaper than buying throughout the country.



National Bank of Canada


The same report outlined home prices around the world per square footage, and Vancouver ranked as the 10th most expensive.


Hong Kong came in first place globally, and in Canada, Vancouver placed first with an average of $770 (US) per square footage for a place downtown.


National Bank of Canada


No wonder Vancouver is one of the most ‘severely unaffordable’ cities in the world.


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The luxury lifestyle isn’t just about looking great anymore. It’s about feeling great, too. Of course, the world’s affluent still want jaw-dropping properties with inspiring views, but they’re also looking for more substance. In today’s fast-paced world, they also want homes that can challenge them physically, calm them mentally, and keep them centered.


As a result, wellness-related amenities have exploded in recent years. In fact, according to a report from ONE Sotheby’s International, properties with wellness-focused amenities sell for anywhere from 10% to 25% more than traditional luxury properties. In the luxury world, that can mean a significant sum of cash.


But what exactly are these amenities that today’s luxe buyers are looking for? The following are just some of the health and wellness features today’s top-tier buyers have on top of their wishlists. The Institute for Luxury Home Marketingis an authority on the world of luxury real estate and works with its members to provide insights and information about the latest trends.

#1: MEDITATION ROOMS

meditation room

Meditation rooms—quiet, peaceful spots dedicated to self-reflection—are quickly becoming a hot commodity for the world’s elite. Tech-driven virtual mediation spaces are even hotter. These use a combination of virtual reality technology and tranquil design to enhance the owner’s meditative practices.

#2: SAUNAS AND MASSAGE ROOMS

sauna on lake

Dedicated places to unwind and relax are also high on the list for top-tier buyers. They want saunas that can remove all the toxins of the day, private massage rooms where their on-call masseuse can get to work, and in-home spa stations, where they can enjoy a facial, get a Botox treatment or have their hair done without ever leaving the comfort of their own home.

#3: ON-SITE ORGANIC MEALS

on-site organic meals

Access to fast, healthy, and sustainably sourced meals is important to the world’s elite, and many luxury developers are finding ways to cater to this need. From bringing in five-star restaurants to deliver door-side, organic meals to on-site nutritionists and rooftop vegetable gardens, luxe real estate is offering buyers their pick of healthy at-home dining options.

#4: YOGA AND PILATES STUDIOS

personal pilates stuido

Those dedicated to the art of yoga or Pilates often seek out properties with in-house studios—places they can hone their craft or enjoy one-on-one sessions with their trainer. In high-rise builders or condos, these might even take the shape of outdoor yoga decks or rooftop, private studios. 

#5: TRANQUILITY GARDENS

tranquility garden luxury

These peaceful gatherings of greenery bring peace to the busy lives of affluent clients. Typically situated on high-rise rooftops in gritty, concrete-filled urban centers, they’re a haven of natural foliage to the affluent city-dwellers who call these spots home. Some developers are even taking this trend to the next level and offering full, on-site private parks.

#6: OXYGEN CHAMBER PODS AND CRYOTHERAPY BOOTHS

oxygen chamber pod

One of the perks of affluence is getting to enjoy the latest technologies and products before they become publicly widespread. In the wellness world, you can count cryotherapy and hyperbaric oxygen therapy among these. Many of today’s top-tier clients are looking to bring these new and evolving approaches into their homes to improve their health and increase their longevity. They’re especially popular with athletes, runners, and fitness enthusiasts, these high-tech amenities are known to increase blood flow and improve energy.

WHAT DO YOUR BUYERS WANT?

Knowing what the buyers are currently looking for in your local market—whether that is health and wellness or the latest interior decor trend—is critically important in today’s market, which is predominantly controlled by the purchaser. It can help understand the value of your property and determine whether or not adjustments, renovations or changes need to be made in order to achieve your desired goals, or more importantly help you stand out from your competition!


Want to learn more about what today’s luxe buyers and sellers are looking for? Consider working with Princess Pan, Certified Luxury Home Marketing Specialist, who offer a deep understanding of this niche market.

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The British Columbia Real Estate Association (BCREA) reports that a total of 8,221 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in May, a decline of 7 per cent from the same month last year. The average MLS® residential price in the province was $707,829, a decline of 4.3 per cent from May 2018. Total sales dollar volume was $5.8 billion, an 11 per cent decline from the same month last year.


“BC home sales increased 9 per cent in May compared to April, on a seasonally adjusted basis,” said BCREA Chief Economist Cameron Muir. “However, consumers continue to struggle with the negative shock to affordability that stringent mortgage lending policies have created.”


Total MLS® residential active listings were up 23.2 per cent to 41,519 units compared to the same month last year. However, total active listings were down 2 per cent from April, on a seasonally adjusted basis, the first monthly decline since the B20 Stress test was introduced in January 2018.


Year-to-date, BC residential sales dollar volume was down 25.1 per cent to $19.8 billion, compared with the same period in 2018. Residential unit sales decreased 20.2 per cent to 28,711 units, while the average MLS® residential price was down 6.2 per cent to $688,339.

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Overall, 9 cities saw an upward trend, 3 downward, and 12 remained stable last month. Following a similar progression to the last report, about half of the cities on this list had a flat month and though there were more monthly upticks in rent in this report, the increases were fairly small. On a year over year basis, however, about a third of the cities experienced double digit year over year growth rates, showing the demand still present in these markets.

Notably, Vancouver and Windsor had the fastest growing rents last month, both up 3.8%, while Montréal took the largest rent dip, down 2.7%.

Top 5 Most Expensive Markets

  1.  Toronto, ON one bedroom rent dropped 0.9% to $2,230, while two bedrooms remained flat at $2,850.
  2. Vancouver, BC had one of the largest monthly one bedroom growth rates in the nation, up 3.8% to $2,210. Two bedrooms increased 3.6% to $3,200.
  3. Burnaby, BC stayed the 3rd priciest with one bedrooms staying flat at $1,570 and two bedrooms dropping 3.1% to $2,210.
  4. Barrie, ON moved up one spot to become the 4th most expensive city with one bedroom rent growing 0.7% to $1,450. Two bedrooms, on the other hand, saw rent drop 0.7% to $1,490.
  5. Montréal, QC moved down one spot to rank as the fifth priciest market with one bedroom rent falling 2.7% to $1,420 and two bedrooms remaining flat at $1,710. Notably, one bedroom rent is up 14.4% since this time last year.

Upward

Windsor, ON, along with Vancouver, had the largest monthly one bedroom rental growth rate, up 3.8% to $830. This large increase pulled up the city 2 spots in our rankings to become the 22nd priciest city.

Saskatoon, SK was the 21st most expensive city with one bedroom rent growing 3.4% to $900.

Regina, SK ranked as the 20th priciest market with one bedroom rent jumping 3.3% to $930.

Downward

Edmonton, AB was rent drop 2.1%, settling at $950, and down 2 spots to become the 18th priciest city. Two bedrooms also had a downward month, decreasing 0.8% to $1,200.

Full Data

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Greater Vancouver office sales are remaining strong amidst an overall lag in commercial sales value, according to a new 2019 Q1 investment report. 
 
Sales value are down 49 per cent in the first quarter of 2019 as compared to the same period last year, totaling $1.58 billion. Sales velocity also slowed considerably, down 36 per cent from the year prior. Three hundred and twenty-two transactions mark the lowest sales volume in 18 quarters, according to Altus Group's report. 
 
“The lowest transaction volume since Q1 2013 is reflective of the gap between vendor and purchaser price expectations, the lack of product and has resulted in decreased market activity,” said Paul Richter, director of data solutions at Altus Group.
 
The industrial sector posted the strongest sales value decline, down 54 per cent from the fourth quarter of 2018 to $228 million.  Just 40 sales took place, versus 70 last quarter. The decline is more to do with a lack of availability rather than a decline in sales or prices. Prices increased 5 per cent over the quarter, to an average of $399 per square foot. 
 
Retail saw its second consecutive decrease in investment, posting 35 sales worth $136 million in Q1 2019, down 47 per cent in dollar volume from last quarter and 78 per cent year-over-year. However, Altus reports that despite the two-quarter slump, capitalization rates are expected to level out moving forward following a period of flight compression. 
 
Vancouver’s office sector remains the outlier, recording the only increase in sales and dollar volume this quarter. Twenty-six sales took place this quarter, up from 16 the quarter prior and 13 during the same time last year. Two suburban office transactions accounted for approximately $303 million of the $395 million traded in the office market, vaulted the sector’s dollar value by 639 per cent from the previous quarter and 221 per cent year-over-year.
 
chart
 
“This was the strongest quarter for Vancouver’s office market since Q1, driven by key transactions as well as new, centrally-located, high-end strata projects,” the reports reads. 
 
Typically Greater Vancouver’s strongest performing sector, residential land market sales dipped under the $1 billion mark for the first time in 13 quarters to $446 million. This was the sector’s transaction volume since Q2 2014. This represents a decrease of 68 per cent in dollar volume from the previous quarter and 66 per cent year-over-year. 
 
 
 
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Millennials make up the largest cohort of today’s home-buying population. As Canadians find themselves in the throes of another busy spring housing market, many sellers are taking an age-specific approach to marketing their listing to this younger demographic. This is especially relevant in Vancouver – one of Canada’s hottest and most competitive real estate markets.


Millennials dominate the first-time buyer group in Vancouver, favouring the condominium market. This generation is tech-savvy and environmentally conscious, and both factors play a huge role in their decision-making process. It is important to keep this information in mind when showcasing listings to a prospective client.


So, what are Millennials in Vancouver looking for in a home?


Green, energy-efficient homesWell-designed, energy-efficient homes are crucial for a generation that cares about the climate crisis and their ecological footprint. Good insulation, efficient lighting and updated plumbing systems are important features that affect how large a house’s footprint is. For environmentally conscious buyers, it is important to demonstrate the long-term value of a home both in terms of energy savings and a reduced footprint.


Smart, connected homes: Smart home technology is growing with this buyer cohort. The ability to control the lights, home security upgrades and smart thermostats should all be integrated into a property.


Entertaining spaces: Today’s home buyers are looking for open and usable spaces to host friends and family. Open floor plans and functional outdoor spaces are key selling points – a view of Vancouver’s waterfront is a bonus!


The neighbourhood: When it comes to buying a home, it’s important to look beyond the property itself and think about the neighbourhood. According to the RE/MAX 2018 Spring Market Trends Report, Millennials prefer to live closer to work and have access to green spaces and parks. These are the factors they consider beyond the price of a home.


With more Millennials entering Vancouver’s real estate market, whether it’s a starter home or investment property, it’s important to keep the key features they’re looking for top of mind. Thankfully, Vancouver is a very liveable, so these features won’t be hard to come across in a house hunt!

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Burnaby's city council has approved a motion aimed at protecting rental stock in the city.


At a Monday night city council meeting, councillors voted in favour of a bylaw that would create rental-only zoning across the city, require a minimum of 20 per cent rental housing in all new developments and allow rental housing in commercial zones.


"This is about ensuring Burnaby is a city with vibrant, diverse neighbourhoods, where everyone feels at home," said Mayor Mike Hurley in a statement. "This would mean people can find a place to rent that is affordable, and it would give them options to live in all areas of our city."


NDP MLA Spencer Chandra Herbert said it's going to mean "more secure housing for people in Burnaby, more affordable housing in the long-term." 


Chandra Herbert, who represents the West End and Coal Harbour, also chairs the province's rental task force.


Vancouver insists its zoning rules are just as pro-renter – but Kennedy Stewart is keeping a close eye on what happens across boundary road.


"Definitely looking at these with great interest and if Burnaby can make them work than there is no reason we shouldn't adopt them here," Stewart said. 


The proposal was met with mixed reaction from housing advocates, however.Earlier in the day, the Association of Community Organizations for Reform Now (ACORN), called the motion a "good first step" but added more protections are still needed for renters.


"We see this as a first of many steps by Mayor Hurley to make Burnaby affordable and to stop mass tenant displacement that is still happening," ACORN spokesperson Murray Martin said earlier Monday.


Martin called on the city to force developers to fully relocate tenants displaced by developments and combat renovictions, amongst other concerns.


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Metro Vancouver home sales 43% below April's 10-year average as buyers wait it out


April is usually the month when we see an uptick in real estate prices and sales, but that is not the case this year.  


April home sales in Metro Vancouver were 43 per cent below the 10-year average as many buyers continue to sit on the sidelines hoping that if they are patient, the market will continue to become less expensive.



We are at an impasse as sellers want last years prices (which were much higher) and buyers want tomorrow's prices (expecting them to be lower) — nobody wants to act first.


To get a deal done, we first need to understand what motivates people to buy and sell real estate. It often boils down to two emotions — greed or fear.



In our current market it's all about fear. Buyers hope to find a seller who has had a house on the market for some time and who is reading all the negative headlines about the housing market. They want a seller to agree to their low offer out of fear. Buyers need a compelling narrative, backed by data, to convince sellers that the longer they wait, the worse it could get.   


By feeding into the seller's fear of a price collapse, a buyer hopes they capitulate and take the "bird in the hand" low-ball offer. And buyers have a number of arguments at their disposal.


 
Buyers hope sellers will take a low-ball offer out of fear that the market will get worse. (Jonathan Hayward/Canadian Press)


B.C. Finance Minister Carole James vowed to stop money laundering which, in her words, has hiked real estate prices by 20 per cent in certain parts of Vancouver. This, combined with the mortgage stress test, the foreign buyer's tax, school and speculator tax, have all reduced demand.


Real estate is a numbers game. Many sellers reject initial offers they see as too low, so buyers need to continue to negotiate or just move on until they find the right deal. It's currently a buyers' market so there is no need to rush a purchase.


Values will rise


I believe that real estate values will continue to rise over time as it is very expensive to build a home or condo in the Lower Mainland.  Back in 2011, I built two homes at a build cost of $100 per square foot, not including the price of land. To build similar homes today it would cost over $300 per square foot. In just eight years the cost to build has tripled due to higher labour and material costs and new regulations.



Recently several developers cancelled or delayed projects citing cost as the reason. If this trend continues, once the current stock of condos is sold, we could experience a lack of housing inventory in a couple of years. It is at this point in the real estate cycle when demand outstrips supply and prices start to rise.


More choices for single family homes


One group that I believe should take advantage of our current market are the owners of two- or three-bedroom condos and townhouses who are looking to upgrade to single family homes.


Over the past three years, the price of townhouses has been increasing while single family homes were trending down. If these owners sell their townhouse, they would be able to buy a lot more house today than they could have two or three years ago. 


 
Construction crew working on laneway home in East Vancouver. The cost of building homes in the Lower Mainland continues to rise. (David Horemans/CBC)


Another group who should consider buying are those who are looking to buy a home to live in for at least five years. Prices could continue to trend down for a couple more years, but they will rebound. If you negotiate a good deal and are happy living in your home, then you needn't worry about the short-term fluctuations.


For people looking to be landlords, it's a much harder call. It is very tough to make the numbers work to justify the headaches of owning a revenue property. Unless you get an amazing deal or are an experienced landlord, you might want to take a "wait and see" approach.


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Overall, 8 cities saw an upward trend, 3 downward, and 13 remained stable last month. While more than half of the total cities continued to have flat monthly growth rates, the cities that experienced an upward trend actually more than doubled when compared to the previous rent report. As the hot moving season begins, we should expect to see rents grow on a monthly basis.

The top 10 markets saw some slight adjustments with Barrie outpacing Victoria to rank in the top 5 markets again and St. Catharines jumping up 3 positions to rank in the top 10 as 9th.

Notably, Windsor had the fastest growing rent in the nation last month, up 5.3%, while Halifax and Kelowna took the largest rent dips, both down 3%.

Top 5 Most Expensive Markets

  1.  Toronto, ON saw one bedroom rent drop $10 to $2,250 but remain the most expensive city in the nation. Two bedrooms, on the other hand, were flat at $2,850. Notably, on a year over year basis, one bedroom rent is up over 8%.
  2. Vancouver, BC one bedroom rent grew 1.4% to $2,130, which is a peak it has not reached since the January 2019 report. Two bedrooms, on the other hand, decreased a slight 0.3% to $3,090.
  3. Burnaby, BC continued to rank as third with one bedroom rent remaining flat at $1,570, while two bedrooms grew 1.3% to $2,280.
  4. Montréal, QC one and two bedroom rent both stayed stable at $1,470 and $1,710, respectively. On a year over year basis, one bedroom rent in this city is up 14%.
  5. Barrie, ON moved back into the top 5 markets, outpacing Victoria, with one bedroom rent jumping 4.3% to $1,440. Meanwhile, two bedrooms were flat at $1,400.

Upward

Windsor, ON, ranking as the most affordable city in the metro, had the fastest growing one bedroom rent last month, up 5.3% to $800.

St. Catharines, ON moved up 3 spots, and into the top 10 markets, as the 9th priciest rental market. One bedroom rent grew 5.2% to $1,210 while two bedrooms increased 5% to $1,470.

Saskatoon, SK was the 21st most expensive city with one bedroom rent increasing 3.6% to $870, while two bedrooms had an even larger growth rate, climbing 4% to $1,040.

Downward

Halifax, NS, dropped 2 spots to become the 18th most expensive city. One bedroom rent decreased 3% to $960, while two bedrooms remained flat at $1,270.

Kelowna, BC was the 7th priciest city and saw one bedroom rent drop 3% to $1,280.

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