Monday, January 21, 2019

2019 Real Estate Market Predictions







Happy New Year, readers! Hope you had a great holiday season and that your 2019 is off to a great start. Now that everyone is back to business, who wants to talk some real estate? Today, we are going to offer our real estate market predictions for 2019.


Cap Rates Will Mostly Flatten Out or Even Increase A Bit

Cap rates have seemingly hit bottom. They didn’t really have much further to go, so this isn’t surprising. Now that interest rates have increased a bit, investors appear to be looking for a higher cap rate on their commercial investment properties. We reached a bit of a standstill with some properties in 2018, with sellers' lofty expectations not being achieved in the market. To get these deals done, sellers will need to adjust their expectations.


Multifamily Will Still Be On Fire

While it is our opinion that cap rates commercially will stall out, multifamily still has some positive dynamics that will keep it chugging along. First off, the demand is still very high from across Canada and the supply is very limited. It isn’t economical to build with these new construction prices, so adding new supply wont help the situation. Plus, the rental market is tight and rents are increasingthat doesn’t look like it will be changing anytime soon.


Interest Rates Will Increase, But Not As Much As Expected

Economists and market forecasters are expecting multiple interest rate increases this year, on the back of the three times the Bank of Canada raised last year. While we foresee rates to go a little higher, we don’t think the market in general can withstand an interest rate spike without causing a significant recession. The population is far too indebted andparticularly in expensive cities like Toronto and Vancouverthe cost of increased interest expenses can't be born. For these reasons, we think interest rates will have a lid on them.


The Lending Environment Will Get More Difficult For Borrowers

The government has introduced several measures over the last few years to try and cool the housing market. It finally seemed to have been working, as Toronto and Vancouver didn’t have such great stats in the second half of 2018. Combining these measures with higher interest rates, qualifying for the house you want is getting more difficult. We are also seeing lenders and mortgage insurers pulling back their risk, scrutinizing more deals and generally acting less competitive in the financing market.  We expect this to continue in 2019. This may also lead to more firm deals falling through at closing due to some of these factors.  So we advise sellers and listing agents to be extra diligent in ensuring buyers are qualified and pre-approved for a mortgage in your price range, with a little extra buffer for safety. Also, ask for big deposits!


Rents Will Rise & Vacancy Rate Will Fall Again

Residential rents have really increased in the last few years and the factors driving that don’t seem to be changing anytime soon. In fact, with the housing market continuing its climb and with the tightening lending environment, more people could be driven into the rental market, increasing demand. Adding to this is the start of the Gordie Howe Bridge, bringing with it a large influx of temporary workers coming to the area; the vacancy rate is forecast to continue to trend lower.


2019 should be an interesting year in the real estate market. Those are our predictions. What are yours?



Thursday, January 17, 2019

Real Estate Insider: January 2019 News Report





Welcome back to a brand new year, Real Estate Insiders! We thought this month would be a great time to cover a variety of topics including living life in a big city, creating wealth, performing background checks, and even why the numbers in your address could deter potential buyers!



Is the “American Dream” an outdated concept? Does yours involve a house with a yard and a white picket fence, or something more suited to your lifestyle? Read about why everyone might be a lot happier if they made their own definition of the American (or Canadian) Dream. >>


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Does your address contain the number 4 or 13? If so, that might be a deal breaker for some cultures. Read here how these numbers have caused headache in housing developments and how city planners and contractors are dealing with it. >>


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If you’re thinking of how to split your estate between your children, this article won't help you decide who is your favourite, but it will help with a few of the tax questions! >>


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Finding the right property manager is essential to creating and maintaining a good portfolio. If you decide to use a property manager, be sure to read this article to help find the right one for you! >>


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Are you thinking of buying your first home? Take it from someone who’s been there before! This article describes almost every cost you should prepare for when buying a home. >>


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Not every investment you make is going to be a winner, however a big part of investing is not making impulsive, emotional decisions! Read how this investor “lost” $130,000 on his rental property but managed to turn it around by keeping a level head and trusting the process. >>


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Don’t be blinded by the cap rate. Here’s a list of things to consider when evaluating cap rates or multiples on a propertyand why these tools are simply a starting point. >>


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There are so many options when it comes to creating wealth for yourself, but the common strategy between them all is to diversify. This blogger decided she needed a way to diversify her portfolio and caught the real estate fever! Read here how she turned her love of HGTV into a very profitable investment strategy. >>


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Tenants can make or break an investment property, so we want to make sure you are doing everything you can to ensure you have the best tenant possible! Here’s a list of what you should do to complete a successful background check. >>


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For many people, living in the big city would be a dream come true, but is it really worth it? Read here how the high costs of living are pushing many young adults to pursue a larger life in smaller cities. >>