Analysts are Holding Their Breath For the Collapse

The real estate market has been in constant growth in Canadian markets like Vancouver and Toronto for YEARS. Market analysts foresee a reversal, but it never comes. The factors that they predict jeopardize the market’s momentum are:

  1. The deceleration of the global economy means less minting of millionaires. The accessible pool of international investors seeking Canadian real estate has peaked.
  2. The decline of the oil and gas industry has two effects: Decreased demand – businesses fail, and the enterprises that depend on them also fail. This means less jobs, and weakens the demand for housing. Increased supply – as homeowners become unemployed and unable to maintain mortgage payments, they could be forced to sell which means an influx of housing supply.
  3. Also tied to the energy sector, more businesses and supporting businesses default on loans. This means the banks are increasingly vulnerable, and will likely tighten up loan policies, which in turn means it will be harder to finance homes through the banks.
  4. There is an enormous excess of supply nationwide. While the demand appears to nearly match the large supply in major markets, some of this originates from smaller Canadian cities where houses are put on the market in favour of migrating to the city. This intra-border exodus is not automatically accounted for.

Read the whole story at The Financial Post.

Seeking Construction Financing in the US? These 4 Trends Could Have an Effect

In 2015 in the USA, it was still easier to obtain a construction loan than back in 2011. Here are four trends that outline how lenders are beginning to be more cautious this year.

  1. Bank underwriting is tightening. Debt lenders run debt-coverage-ratio tests or  debt-yield tests to restrict proceeds for apartments. The for-sale market hasn’t seen quite the same stringency for condos, subdivisions, and townhomes; lenders are simply being more cautious in these markets.
  2. Banks have exhausted their construction allocations. Some lenders have a certain allocation for construction and have recently exhausted or nearly exhausted it. They need time to recover the funds from previous construction loans in order to move forward with new ones. Of course, no lender wants to advertise that they don’t have the money, because borrowers will simply go to the competition.
  3. There are new regulations. One such regulation is the High Volatility Commercial Real Estate (HVCRE) requiring lenders to prove that a borrower has 15% equity in a project at stabilization. Even when a project is a success, it is a difficult proposition because the as-stabilized value may exceed 15% cash equity in the deal. This means the bank will be out of compliance, which in turn means they will need to reserve more against the loan. The inability to put that money out costs the bank, a cost which they will eventually find a way to pass on to the borrower.
  4. Banks are increasingly concerned about submarkets. Open secret: some banks won’t lend in certain submarkets until the products are in the process of stabilizing at their pro-forma rents. The same lenders have no issue funding deals in the overall markets.

Knowing these issues and understanding the deal going in is critical for approval success. Read the case at

What Makes a Condo the Right Home for a Family?

A growing number of families are considering condos over single-detached homes, due to rising housing prices in certain Canadian markets. Developers are responding to the growing demand by building family-friendly condominiums. So what constitutes as a family-friendly condo?

Number one: appeal to parents with young children. Builders make bedrooms smaller and increase family living space and closet sizes (where do they keep those seasonal jackets, sports equipment, and musical instruments?). They create family-centric amenities like indoor play rooms, splash pads, or daycare centres on site.

And families need neighbourhoods. They need parks, playgrounds, and streets they can walk. Services like dentists, doctors, transit, and schools are strong magnets for families to buy.

To read more on the topic, visit

Get With The Times! Are evCharging Stations the New Standard?

In our market, technology changes things at an exponential rate. To keep up, meet the current buyer standards and make sure your product is relevant in the long-term.

Concord Pacific is a trailblazer in the changing market. Their new ARC development in Vancouver is the first North American residential high-rise to offer electric car charging in every single parking stall.

Concord Pacific committed to 20% of all parking stalls in their developments being equipped with electric charging stations in a development five years ago. The success of that first project indicated a demand in the market. The City of Vancouver eventually adopted that same policy for all future condo buildings. Many investment property owners also seek to retrofit parking stalls with electric charging stations, having had potential tenants ask about it.

Read the whole story at Vancity Buzz

How First Impressions Can Make or Break a Sale

A 2013 Bank of Montreal study found that 80% of potential buyers know immediately upon entry if a home is suited to them. The psychology behind first impressions for objects and places is a topic with little research behind it, but it is something that has come up often in the real estate industry.

Toronto real estate agent Ralph Fox shares insight about first impressions of homebuyers. “The number one thing I’ve learned in sales is that people buy on emotion and justify with logic afterward. That’s why when it comes to making first impressions with sales, it’s very important to have that emotional connection with a space. If someone disconnects with a space right off the bat, they’re going to have a tough time getting their emotions around it after the fact,” said Fox. (more…)