Alberta - Where is the opportunity ?

aileen

Inspired Forum Member
REIN Member
Aug 30, 2007
44
3
8
“Their sales last year were apparently the lowest in two decades. The city has grown by hundreds of thousands of people but home ownership is down so much that they are hitting new record lows.” It is good new for people who have house , they can rent house for rent。 we are housing provider. Is it right?


从我的 iPhone 发送,使用 myREINspace
 
Likes: Bill Mitsui

Rickson9

Senior Forum Member
Registered
Oct 27, 2009
1,168
47
48

ThomasBeyer

Senior Forum Member
REIN Member
Albertans are the most indebted in Canada

I agree with Jason Kenney that we should make it easier for Albertans to access more debt

It’s what Albertans want

—-

Jason Kenney wants Alberta exemption on housing stress test

https://globalnews.ca/news/4908054/kenney-alberta-housing-stress-tests/amp/
Jason Kenney is right on. The stress test was developed mainly with run away prices in GTA and Vancouver in mind. With interest rates pretty flat the stress test introduced about a year ago, called B20 by OSFI (Office of the Supervisor of Financial Institutions) to test abilities to pay mortgages is ill advised. Testing a borrower on a 5.2% mortgage if in fact she/he is paying only 3.2% for five years is ridiculous and esp hurts first time buyers, #GenY and immigrants. Testing on a 60% higher mortgage, thus reducing mortgage amounts by a whooping 20%, is plainly wrong. Let consumer decide how much to borrow. By law it is capped at 80% of property value already, unless insured.

https://business.financialpost.com/...nment-should-rethink-the-mortgage-stress-test

Mortgage rates on the rise? Think again. Five year mortgage rates about to drop. Far lower now than a year ago. Why ? Canada's 5 year bond yield is now at or close to a TWO YEAR LOW following the US Federal Reserve removing its expectation of "further gradual increases" from today's statement: https://www.ratespy.com/5-year-canada-bond-yield


Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
 

Rickson9

Senior Forum Member
Registered
Oct 27, 2009
1,168
47
48
Keep going...

Number of vacant new homes reaches record high in Edmonton

The number of vacant new homes in Edmonton has reached a record high for the fifth consecutive month.

ATB Financial says the number of completed — but not purchased — homes climbed to 1,941 in January.

That is a 63 per cent increase compared to a year ago and a 7.5 per cent increase from a month earlier, according to ATB.

https://globalnews.ca/news/5013337/edmonton-vacant-new-homes/
 

ThomasBeyer

Senior Forum Member
REIN Member
IMG_5511.jpg

10 year GofC bond rates sub 2%. This shows me mortgage rates will NOT increase, and likely decreases a bit, and that therefore the B20 rule to underwrite mortgages at rates that are over 50% higher than current rates is ill advised.


Thomas Beyer, Asset Manager, Investor, Community Improver, Author, Father, Mentor www.prestprop.com
 
Likes: KhoaN

Rickson9

Senior Forum Member
Registered
Oct 27, 2009
1,168
47
48
Calgary is #1 again

(Also stress-test will remain)

Real estate prices continue to fall in Calgary, with single-family homes leading the plunge.

That's down 7.3 per cent — or more than $36,000 — compared with the same time last year.

A national look at real estate shows softening prices for single-family homes in most major centres.

But Calgary's house prices fell the fastest in February, on a year-over-year basis, of 11 metropolitan areas monitored by Teranet and National Bank.

The declining prices can be seen as good news or bad news, May said, depending on your perspective.

"For some people who bought when prices were really high, these are very stressful times. There's days where we go out and we meet people who bought three or four years ago and who now find themselves underwater and they feel trapped. They can't sell their house and they're losing equity," she said.

"For other people, for people who are not in the market yet, it's an opportunity.... “

https://www.cbc.ca/news/canada/calg...e-prices-teranet-national-bank-creb-1.5054471
 
Likes: kuikui1988

Matt Crowley

Senior Forum Member
Registered
Dec 14, 2013
886
398
63
Calgary
@Rickson9 there are going to be opportunities to catch the falling knife here. In my opinion, I think it is more on the bottom of market inventory (SFH, duplexes, fourplexes) than the investment-sized.

Be cautious U/W $1800 to $2000 rents... there is too much supply at this level IMHO. The middle around $1100 - $1500 is still excellent.
 
Likes: Rickson9

Rickson9

Senior Forum Member
Registered
Oct 27, 2009
1,168
47
48
How will this impact the local RE?

Slammed by downtown 'tax shift', shop owners bail out of trendy districts

The iconic retail and entertainment strip had 370 operating businesses in December 2018 and 341 at the end of February 2019 — a decline of 8.5 per cent.

According to information presented to a city council committee by the 17th Avenue Retail and Entertainment District, businesses along 17th Ave S.W. have seen a 79 per cent increase in property value assessments since 2016, translating to a 140 per cent increase in property taxes on average. This year, these same businesses could see a projected 20 per cent further increase on their property tax bills.

“It is getting worse now,” said David Wallach, owner of Barclay Street Real Estate and co-chair of Calgary Economic Development’s real estate advisory committee. “We are talking about big numbers in the core and around the core.”

Wallach, with Barclay Real Estate, said his brokerage’s latest report pegs the commercial vacancy rate in the Beltline at a startling 13 per cent, compared to just 4.4 per cent for the city overall.

“If it doesn’t get solved, I predict we will lose more businesses. We’ve had meetings with business owners where people have said straight to our face, ‘We will look at leaving the city if this continues,’” he said.

https://calgaryherald.com/business/...closures-hits-calgarys-most-popular-districts
 
Last edited:

Matt Crowley

Senior Forum Member
Registered
Dec 14, 2013
886
398
63
Calgary
I'm on the Kensington Community League (one of the neighbourhoods featured in the article) and we had a presentation from the BRZ President yesterday. The property taxes are absolutely out of control and it is hurting businesses. The ARP in the area prevents any big-box from coming (thankfully) but LL are holding back from leasing spaces as they care more about credit right now as rates on everything is crap.

However, in Kensington the 15 business that have closed their doors, only 3 of them were main floor the rest were 2nd story. So from a walkability and neighbourhood-appeal perspective, we are not that much worse...but more money needs to go to support these independent businesses. Looks like the city is adopting some scab-program that will allow tenants to apply for a partial rent rebate due to growing property taxes.

Anyone inner-city who wants to live in a walkable neighbourhood should be super choked about this. This is exactly what makes a city cool and fun and interesting.
 
Likes: Rickson9

Martin1968

Frequent Forum Member
Registered
Jan 22, 2017
165
141
43
50
I'm on the Kensington Community League (one of the neighbourhoods featured in the article) and we had a presentation from the BRZ President yesterday. The property taxes are absolutely out of control and it is hurting businesses. The ARP in the area prevents any big-box from coming (thankfully) but LL are holding back from leasing spaces as they care more about credit right now as rates on everything is crap.

However, in Kensington the 15 business that have closed their doors, only 3 of them were main floor the rest were 2nd story. So from a walkability and neighbourhood-appeal perspective, we are not that much worse...but more money needs to go to support these independent businesses. Looks like the city is adopting some scab-program that will allow tenants to apply for a partial rent rebate due to growing property taxes.

Anyone inner-city who wants to live in a walkable neighbourhood should be super choked about this. This is exactly what makes a city cool and fun and interesting.
Why would we need to be super choked about this? I don’t think any type of subsidy/rebate should go to towards this type of aid. Why would tax money need to go towards making inner city liveable for mainly young urbanites to sip there expensive latte,s, wear their expensive brand clothing and watches, enjoy fancy dinners but on the flip side shopping mainly online for all other consumer products incl custom grocery delivery and so on, contributing very little otherwise to their neighbourhood economy. Living inner city is a choice, wether it’s liveable or not, not any different then living in a far away rural community with very little local services.

Do not confuse what I’m saying with a lack of empathy for the struggling small business owner. Far from that. They deserve support, no question.

To fully understand the challenges business owners face in Calgary one needs to understand commercial leases, as well as the difference between property taxes and business taxes. They are 2 different things.

Due to (many) NNN leases, any increase in property taxes will be passed on by the landlord to their tenants. The landlord isn’t the one hurting. When a tenant pulls out and building sits empty, landlord will still have to pay prop tax to CoC. Now it stings! City wouldn’t loose out due to building being empty. They would loose out on business tax.

Reading the articles it appears landlords and realtors are worried and asking for help. Why? Cause they see businesses pulling out, empty spaces are harder to rent out and less entrepreneurs are willing to take a chance in our current economic climate.
Do you really think landlords and realtors worry about the (small) businessowner? I highly doubt it. (Except a very few good ones out here)

But how about landlords are doing their part, and discounting their base rent to help out the struggling businessowner. (Especially in the highly overpriced sq/ft rates in inner city) True, property tax is not something they can control, however base rent and partial CAM cost (often hidden profit centers) can be controlled and discounted to help out these business owners.
Experience tells me tho that they don’t care, as long as there is a signed lease in place, in most cases with a PG, they can’t care less how well the tenant is doing, as long as they are paying.

So, tax money to go towards this? Not a good idea. CoC Lowering property taxes or lowering the business tax and adjusting their spending budgets, sure I would support that. That’s how the business owner is directly helped.
 
Likes: Rickson9

Rickson9

Senior Forum Member
Registered
Oct 27, 2009
1,168
47
48
Calgary SFH buyers have the advantage

"You could say it's slow to start," said Doug Hayden, a realtor at eXp Realty.

"I think what we're going to see for the rest of the year is — it's not going to be a good year for Calgary. Not in terms of home sales."

He said Calgary's housing market has been deteriorating since 2014, due to the economy, and as mortgage stress tests drive down the affordability index, with the weakest spot in Calgary being the mid to move-up market.

"There's just so much inventory in that area, just in terms of what is available," Hayden said.

https://www.cbc.ca/news/canada/calgary/spring-market-calgary-housing-1.5087863