January 30, 2014
Canada's Top Cities for Real Estate Investment
Real estate investments in Canada are just as lucrative today as they were before the worldwide financial crisis, in fact, arguably even more so. Due to Canada’s diverse regional economies, the Canadian real estate market is now better analyzed on an individual provincial basis.
As usual, the most vibrant real estate jewels are hiding in the small to mid-sized towns, where relatively low housing prices combined with surging local economies make for a more predictable and stable market.
Looking at a town’s future, rather than the success of its past, is the best way to scout out an investment property in Canada. With its arresting beauty, vast territories, and flourishing national prosperity, Canadian real estate investments remain a worthy venture.
Business Review Canada takes a look at some of Canada’s strongest real estate investment cities.
The City of Barrie, Ontario
Located only an hour’s drive from lively Toronto, Barrie is one of the fastest growing cities in Canada. Barrie is a charming and vibrant community that offers a laid-back lifestyle for people who prefer a slower pace with the convenience of a multi-cultural city only a short distance away.
Barrie is surrounded by the scenic wilderness that has captivated visitors from around the world for centuries. The city also has numerous winter recreation activities and facilities, ample parkland, and a breathtaking waterfront. The historic downtown boasts a variety of local fashion boutiques, music and arts scene, and a multitude of pubs and restaurants. In recent years, Barrie has managed to bloom from a picturesque vacation destination to a year round thriving economy.
The economy is multi-faceted and includes a full range of businesses from high-tech, industrial, and agricultural. The city has remained strong during the economic crisis due to new development, continuous improvements in public transportation, steady job growth, and economic diversification.
Maple Ridge & Pitt Meadows, B.C.
Maple Ridge is currently transforming their historically poor transportation infrastructure with the Translink/Gateway Project, which will address growing congestion and reduce travel times. The region will see tremendous benefit from the project with not only increased accessibility to other areas, but with greater opportunity as businesses move into the area.
The transportation and infrastructure investments have catapulted land value and building prospects for the area. While both commercial and residential properties remain at below-average prices, they are expected to skyrocket in value down the road. As the transportation improvements start to take hold, the city has predicted that an additional 400 businesses will call the area home.
Maple Ridge and Pitt Meadows is a perfect distance away from the Metro Vancouver area giving residents the luxury of living in a tranquil town while still having access to a big city.
City of Surrey, B.C.
With its cultural diversity and international flavor, Surrey is an emerging metropolis with a dynamic local economy. With over 6,000 acres of parkland and green spaces, and an array of bike lanes and trails sprinkled throughout the city, Surrey offers residents an arrestingly beautiful landscape with all of the amenities of a bustling city.
Surry attracts over 1,000 new residents every month and is currently the second largest city behind Vancouver in the province. However, it is expected to become the largest city, surpassing Vancouver in the next ten years. With two border crossings to the United States, and a $15 billion a year in trade with its neighbor, Surrey is in a prime location for local, national, and international business.
As business opportunities in Surrey increase, and the population continues its steady climb, the city’s tremendous growth looks to continue for many years to come.
Red Deer, Alberta
At the heart of the strongest economy in Canada, the Red Deer corridor invites those looking for strong investment opportunities. This perfect blend of country and city life makes our list for its revitalization efforts, economic stability, and its location as the main commercial and retail center for all of Central Alberta. As a halfway point between Edmonton and Calgary, Red Deer is perfectly situated to become Canada’s best location for real estate investments.
Businesses in the Red Deer region benefit from several competitive advantages: low operating costs, the lowest combined tax and utility rates in Canada, and access to key markets. It’s a vibrant and culturally diverse place to work and live supported by a young, industrious, and educated population.
Red Deer offers a lifestyle with all of the advantages of the city, but without the traffic. Boasting a booming rental and real estate market, as well as localized job growth, Red Deer will continue to attract people from across the province.
Retrieved from: http://www.businessreviewcanada.ca/money_matters/canadas-top-cities-for-real-estate-investment
October 16, 2013
Canadian Housing Market Expected to Stay on Hot Streak
Canada’s housing market is back on a roll, a finding that should be evident in the September sales data that the Canadian Real Estate Association will release on Tuesday.
The slump that began in the summer of 2012 came to an end this past summer, with sales topping economists’ forecasts, and the market showing a surprising amount of momentum.
Preliminary numbers from local real estate boards suggest that September’s national figures will continue the streak of strong results. The Toronto Real Estate Board said the number of houses sold in the Toronto area via the Multiple Listing Service during September came in 30 per cent higher than a year earlier, while Calgary’s real estate board posted a 19-per-cent increase. Sales in Vancouver, the Canadian city hardest hit during the recent downturn, rose 63.8 per cent from a year ago.
It’s worth noting that the market was in the doldrums at this point last year, which inflates the year-over-year comparisons. But the numbers still point to a market that has recovered, and then some. The 7,411 houses sold in the Toronto area was 9.6 per cent higher than the 10-year average for September. Calgary’s sales are 14 per cent higher than the long-term average for that month, and Vancouver’s sales are now back in line with the average.
Bank of Montreal senior economist Robert Kavcic said he expects that sales nationally will come in about 15 per cent higher than last September, and that prices will have risen by 8 per cent over the year.
While Mr. Kavcic sees the housing market as “pretty balanced and well-behaved,” Canadian Imperial Bank of Commerce economist Benjamin Tal thinks it is probably too hot for the comfort of regulators and the federal government.
Economists are watching to see how much of the recent strength stems from buyers jumping into the market to lock in preapproved mortgage rates. Some experts expect sales to slide in the next month or two, as that phenomenon wears off in the face of higher rates.
Meanwhile, housing starts continue to top expectations, with developers betting that the market still has legs. Last week, Canada Mortgage and Housing Corp. said there were 193,637 housing starts in September on an annualized basis. Economists had been forecasting 185,000 starts.
Retrieved from: http://www.theglobeandmail.com/report-on-business/industry-news/property-report/canadian-housing-market-expected-to-stay-on-hot-streak/article14853855/
August 30, 2013
No Ugly Downturn for Condo Market
A new report from the Conference Board of Canada predicts that the much-watched condo sector will avoid an ugly downturn, even in Toronto.
Economists and policy-makers are keeping a close eye on condos, especially in the country’s most populous city, where cranes dot the sky. A number of economists say that too many units are being built, a development that would put pressure on prices. The Bank of Canada has highlighted the risks that this market could pose to the economy.
Condo sales plunged in most Canadian cities last year, and are expected to be down again this year.
But Wednesday’s report, which was done for mortgage insurer Genworth Canada, argues that the market will not sink too low, and will be propped up in part by population growth and modest employment gains.
While the report does say that higher mortgage rates could cool things off later this year or early next year, it adds that “a flood of foreclosures, and subsequent sharp supply increases, is simply not in the cards.”
Homeowners are taking advantage of low interest rates to pay down their mortgages, offering a cushion when it comes time for them to renew, it says.
“Markets in Toronto and Montreal are cooling, but we think they will avoid major downturns, partly because, on the demand side, demographic requirements remain decent,” the report says. “Also, the banks will continue to require builders to have healthy pre-sale levels before advancing construction financing, keeping supply somewhat in check.”
Vancouver’s condo market, it notes, is already well into a slowdown.
“While regional markets clearly vary in strength, all will benefit from an expanding population and a rising share of condominium-loving empty-nesters aged 55 or more,” the report adds.
It also says that “weak pricing will help affordability.” It predicts that principal and interest payments will drop in at least five major cities this year, led by a 2.5 per cent decline in Victoria.
While payments are expected to rise in Alberta, the report says that Calgary and Edmonton are still the most affordable condo markets when local incomes are taken into account, with mortgage payments taking only about 9 per cent of household income. “By contrast, we expect payments to eat up roughly 20 per cent of Vancouver incomes,” it says.
The report forecasts a 0.5 per cent drop in Vancouver resale condo prices this year, to $364,593. Victoria and Montreal are also expected to record price declines, with Montreal’s average resale price dropping 0.7 per cent to $265,344. Toronto is forecast to see its average price remain flat this year, at $305,239.
The report predicts that all cities will see some price growth, ranging from 1.4 to 3.6 per cent, in 2014.
Retrieved from: http://www.theglobeandmail.com/report-on-business/economy/housing/no-ugly-downturn-for-canadas-condo-market-even-in-toronto-report/article13994362/
August 21, 2013
Canadian Home Sales Gaining Momentum
Canadian home sales are edging back toward the levels they were at before Ottawa decided to tighten the market last summer.
For the first time in a year, the number of homes that changed hands over the Multiple Listing Service last month came in higher than one year earlier, driven by rebounding markets in Vancouver and Toronto.
The large gains are partly due to the fact that last month’s sales are being compared with a weaker market. It was in July, 2012, that sales plunged after Finance Minister Jim Flaherty changed the rules, cutting the maximum length of an insured mortgage to 25 years from 30.
But the numbers show momentum nevertheless, and most economists expect sales to gain traction in the coming year.
Canada Mortgage and Housing Corp. said Thursday that, because of the weakness during the first half of this year, it forecasts about 448,900 sales of existing homes during 2013, down from 453,372 last year. But it expects sales to rise to about 467,600 units next year, with prices growing at roughly the same rate as inflation.
Royal Bank of Canada economist Robert Hogue said the next major test the market now faces will be in late 2014, when interest rates will likely rise at the same time as a large number of newly built condos come on stream.
“We expect that the combination of flattening demand later next year and strong supply of newly completed condo units will lead to some modest price declines in 2014, mostly centred in condo segments,” he wrote in a research note.
While the market appears to be on a modest upward trajectory for the moment, there are some factors that could weigh on it this year. Mortgage rates are likely to trend up. The job market could continue to be worse than expected. And CMHC says that “lower population growth among the 25-to-34-year age group … will moderate growth in the pool of first-time home buyers.”
“Higher mortgage rates of late have led to some erosion in affordability,” Toronto-Dominion Bank economist Sonya Gulati wrote in a research note. “This should keep a lid on sales growth in the second half of the year, but positive annual sales gains are slated for 2014.”
There also remains the possibility that if the market shows too much of a resurgence, the government will act to rein it in again.
“Sales dropped sharply in August last year, so we may see some year-over-year increases in sales and average prices next month that would reflect weakness in the rear view mirror,” said Gregory Klump, chief economist of the Canadian Real Estate Association.
“Canadian home sales have staged a bit of a recovery in recent months after having declined in the wake of tightened mortgage rules and lending guidelines last year, but the numbers for July suggest that national activity is levelling off at what might best be described as average levels.”
Home sales in the first seven months of this year are 4.6 per cent below the first seven months of 2012. The average selling price of existing homes in July was $382,373, up 8.4 per cent from a year earlier. CREA said much of that is because of the resurgence in Vancouver and Toronto, which tend to be pricier markets. The MLS Home Price Index, which attempts to adjust for any change in the type or location of homes that are selling, was up 2.7 per cent. That’s a slightly faster pace than the 2.3-per-cent annual increase in June.
“A tightening [though not yet tight] market balance has put a floor under average prices, with 23 of 26 cities posting gains in the past year,” Bank of Montreal economist Robert Kavcic wrote in a research note. Calgary, Winnipeg and Edmonton were among other markets that saw significant year-over-year sales increases last month, while Ottawa, Halifax and Montreal posted declines.
Retrieved From: http://www.theglobeandmail.com/report-on-business/canadian-home-sales-gaining-momentum/article13803433/
May 31, 2013
Home Construction Slowdown May Be Good News for Real Estate
The housing bears ask: what’s to keep the soft landing in housing from morphing into a hard landing? Won’t a slowdown in sales and prices, they ask, curb housing-related industries and homeowners’ consumption, producing a retrenchment in the economy that leads to greater selling pressures in the housing sector? Let me try to answer the housing bears’ questions, although it may not be quite the response they would like to see.
First, a drop in home construction is actually a positive development for the housing market. It supports prices by curtailing supply. Layoffs in housing-related industries could possibly dampen the economy and cut into housing demand, but there will be an offset on the supply side.
In fact, the home building industry is now cutting back. But this is good news. As Gluskin Sheff economist David Rosenberg notes in his May 9 research report: “Housing starts for the past four months have come in below underlying demographic needs of around 185,000 units per year, and that is a critical part of the process in terms of prices finding a bottom.”
Second, I believe Roberto Cardarelli, the International Monetary Fund’s chief economist for Canada, has it right when he says the hit to construction-related sectors and homeowners’ consumption will be offset by an expansion in other industries. “We expect the pace of expansion [in Canada] to accelerate over the course of 2013,” declares Mr. Cardarelli in the IMF Survey Magazine. “The main reason for our optimism is that we expect export growth to strengthen, as the recovery in the U.S. economy gradually steps up the pace.”
Many people are worried about recent softening in the housing market, Chinese economy and commodity markets, but the U.S. accounts for about 75 per cent of Canadian merchandise exports. As it engages in unprecedented monetary stimulation and ramps up its economy, there should be a substantial and positive spill-over effect for Canada.
Furthermore, “as the U.S. economy strengthens and commodity prices moderate, we would expect some natural depreciation of the Canadian dollar, which will help boost exports and economic growth,” adds Mr. Cardarelli.
“These positive developments should more than offset the unfavourable conditions from weaker construction activity and more moderate consumption,” he concludes.
In short, the current housing slowdown likely isn’t headed toward a hard landing.
Retrieved from: http://www.theglobeandmail.com/globe-investor/investor-community/trading-shots/home-construction-slowdown-may-be-good-news-for-real-estate/article12171482/
March 14, 2013
Canadian Luxury Real Estate Set for a Boost from the Newly Rich
Dramatically growing numbers of mobile, wealthy individuals around the world promise to push up demand for luxury real estate, making high-end properties in Canada’s biggest cities increasingly valuable.
In 10 years, there will be 50 per cent more people on the planet with more than $30-million (U.S.) in net assets – or about 286,000 – according to a new report from British-based real estate consultancy Knight Frank. Emerging markets in Asia and Latin America will see the most dramatic growth, with China’s wealthy population expected to more than double by 2022.
In Canada, the numbers in that category will rise by about 35 per cent over the decade to roughly 6,640, the study says. The largest concentration in Canada will be in Toronto, which currently ranks 20th among global cities for the number of high-net-worth individuals.
One of the consequences of the growing number of wealthy people is that there will be an increasing demand for high-end real estate, even though the supply of luxury properties will remain virtually static, the report suggests. That means the most popular cities for the wealthy – New York and London are at the top of the list – will see increasing upward pressure on prices.
For Canada’s key luxury markets, particularly Vancouver, that will mean a long-term jump in prices for high-end real estate, despite recent softness.
The Vancouver region’s premium real estate market took a breather last year, although sales of properties valued at $3-million or higher remained well above levels of a decade ago.
The current weakness in Vancouver’s luxury market “is probably a temporary thing,” Andrew Hay, head of global residential property at Knight Frank, said in an interview from London.
The amount of money pouring into high-end real estate in any specific location shifts as wealthy people look for new places to put their funds, currency rates fluctuate, and governments put in place measures to cool overheated real estate markets, he said. “There is an increasing amount of money waiting to be spent, but it is better informed and changes direction quicker than ever before.”
While Vancouver is clearly on the radar screen for wealthy Chinese investors, they will assess other options such as Sydney, London or New York, depending on the situation at any particular time, he said.
Still, over the long term, Vancouver’s attractive attributes will draw even more international wealth and put upward pressure on prices of luxury properties, Mr. Hay said. Over all, he predicted, Canada will become increasingly popular as a destination for international wealth along with New Zealand and Australia. That’s because of “the rule of law, strong domestic balance sheets, political stability, and [the fact that] they are lovely places to live.”
Vancouver is definitely the most favoured Canadian location for the newly wealthy, he said, outstripping Toronto or Montreal.
Dan Scarrow, vice-president of corporate strategy at Macdonald Realty in Vancouver, said some of the high-end market in that city is being driven by immigrant investors, including many originally from China. “It’s not like there’s a group of investors who are sitting in China and are playing around with the Vancouver real estate market. That is not happening, but there are many Chinese buyers who are already here or will eventually become Canadian citizens,” he said.
Don Campbell, a senior analyst at Real Estate Investment Network in Vancouver, noted that the pattern of home price growth in Vancouver closely tracks the movements of Chinese GDP – an indication that Chinese investors have a considerable influence on the Vancouver market .
Mr. Campbell said the overall increase in the number of wealthy individuals in Canada will also be good for premium real estate markets outside the biggest cities. There is new wealth being created by the oil business and other industries, and many of the newly rich aren’t in Toronto or Vancouver. “You are starting to see the wealthy not being concentrated in the heart of old Toronto and [Vancouver’s] West Van and British Properties,” he said, but also in Calgary, Edmonton, Saskatoon and even in Atlantic Canada. There is now demand for luxury accommodation in all those places, he said.
Retrieved from: http://www.theglobeandmail.com/report-on-business/economy/housing/canadian-luxury-real-estate-set-for-a-boost-from-the-newly-rich/article9360442/
September 26, 2012
Real Estate Adapting to Changing Demographics
According to the latest census, the average Canadian family is shrinking. More adults are living on their own, parents are having fewer children, more families are being headed by single parents, and more couples are choosing not to have children at all.
How will all this affect housing in Canada? John Andrew, the director of the Queen's Real Estate Roundtable, says it’s going to mean a vast re-thinking of real estate from the traditional notion of the 3-bedroom house in the suburbs.
“These demographic changes mean two significant things for real estate,” he told CTV News Channel Friday. “One is that households are getting smaller, and also that households becoming more numerous. In fact, in every five-year period since 1961, the number of households in Canada has actually grown faster than the population itself.”
With many people wanting many houses, there is a shortage of single family homes in many cities across Canada. That may be why, Andrew says, condominiums now make up a growing share of new housing in Canada’s biggest cities.
“In Toronto, about 62 per cent of new housing being built is condominiums. I’ve talked endlessly about the oversupply of condominiums coming down the line. But certainly, the demographic trends are that there will be greater demand type of housing,” he says.
Andrew notes that for many Canadians who grew up in houses, especially those who grew up in the suburbs, it’s hard to imagine why anyone would want to live in a high-rise condo. But he says for urbanite Canadians, condos simply make sense.
“A lot of people are fed up with commuting. They want a central location. And condos do represent a form of affordable housing,” Andrew says.
“In Vancouver, you can buy a condominium for about a third of the price of the average single-family home.”
Margot Austin, a senior design editor with Canadian House and Home magazine, says many people are able to live the dream of owning a piece of land in the country, while also keeping a condo in the city.
“The city dwelling then becomes just the landing spot during the work week,” Austin explains.
Other Canadians have snapped up low-priced properties in the southern U.S. or bought homes in sunnier vacation destinations, while maintaining small homes here in Canada. Still other people move to condos after life changes, or simply choose to downsize.
Austin says that furniture makers are noticing the shifts and offering new options to accommodate smaller homes.
“So where you used to only be able to buy an 80-inch sofa, now you can choose what length you want it to be,” she says. “And that’s a change you’re seeing across the board.”
They are also creating pieces that can serve multiple functions. So a table or ottoman might also offer storage, or chairs might be able to be folded up and stored away.
“The other thing is that appliance manufacturers are downsizing the size of appliances available,” Austin says, noting that Europeans and Japanese learned how to get by with smaller appliances a long time ago.
Austin says the key to downsizing is choosing furniture pieces wisely and surrounding yourself with what you love.
“The one thing that doesn’t change is your desire to have your home reflect your personality and your aesthetic taste,” she says.
Read more: http://www.ctvnews.ca/canada/real-estate-adapting-to-changing-demographics-1.966456#ixzz27hL4NuHK
September 19, 2012
Great opportunity exists for home ownership
The wavering economy and loose forecast have left some home buyers with reservations on when the right time to purchase might be.
The unknown about if or when housing prices bottom out has become an attractive incentive for some buyers, but there are two sides to every coin.
Waiting for our prices to bottom out to achieve the best deal possible might actually work as a disadvantage, as before you know it, prices are back on the climb and your opportunity is missed.
With sale prices down and interest rates remaining low, making the move from being a tenant to becoming a homeowner can be a smooth transition. Or is it?
“The government is saying you should not be a homeowner if you cannot afford it,” warns Benjamin Tal, deputy chief economist at CIBC World Markets Inc.
But how can you not afford not to make a long-term investment in real estate when on a $200,000 mortgage at the current rate of 3.09 per cent on a five-year term with a 25 year amortization period, one example offered by Dominium Lending Centres, your monthly mortgage rate would be about $955.
But there seems to be another concerning factor for purchasers, the lingering issue that the current housing market bubble will burst.
But how long are we to wait for this to possibly occur? When will we really hit rock bottom?
Perhaps we should consult with what other economists see in their crystal balls.
Tsur Somerville, director of the University of BC’s Urban Economics, states: “I don’t have a crystal ball but if I had to guess I would be more likely to guess this kind of lower sales/flat prices is more likely to continue.”
David Madani, economist with Capital Economics, is continuing to forecast housing prices in Canada to crash 25 per cent over the next few years.
The Canadian Real Estate Association has forecasted sale prices to increase 2.2 per cent from 2011 and rise modestly in 2013 another two per cent.
So despite conflicting views from economists and continuous scares of mortgage rates climbing and the housing bubble bursting, Canada has continued to show strength by being ranked in the top seven of 39 countries for housing markets by Global Property Guide’s.
September 4, 2012
Seven Reasons to Join the Property Investment Game
If talk about a housing correction are keeping you out of the property investment game, here are seven top reasons to overcome those fears. As real estate veteran Paul Kondakos, president of RealtyHub.ca, points out your time to buy an income-producing property may be now.
1. Mortage Rates - Canadian bond yields continue to sit at historic lows, as a result it is not uncommon to secure multi-unit residential financing with interest rates as low as 3 - 4%. While Canada has enjoyed a prolonged period of historically low rates, the window of opportunity is finite as interest rates have no where to go but up. (Window of opportunity - up to 18 months)
2. Vacancy Rates - CMHC has reported that vacancy rates have been trending downward across most major urban centres across Canada with rates sitting as low as 1 to 2% in many areas. In addition, recent changes to mortgage rules in Canada have made it more difficult to qualify and thus will force many to become renters instead of buyers, thus putting even more downward pressure on vacancy rates in the coming months. (Window of opportunity - up to 36 months and beyond)
3. The Spread - This is the difference between your mortgage rate and your cap rate and determines the strength of your cash flow. Even with the market cap compression taking place in the larger urban centers like Toronto and Vancouver, smaller urban centers still offer healthy cap rates in the 7-8% range (you need to do your research or have a great JV partner). Thus, with mortgage rates as low as 3-4% you can achieve a very healthy spread of 3-4%. (Window of opportunity - up to 18 months)
4. Home Equity - With the Canadian real estate market on fire, home owners have enjoyed a significant increase of the equity in their homes. Equity can be unlocked through a mortgage re-finance or HELOC (Homeowner's Equity Line of Credit) which can be used to purchase an income property. The added bonus is that the interest costs of the re-finance or HELOC can be written off on your taxes. (Window of Opportunity - up to 18 months)
5. CMHC Insurance - Placing CMHC insurance on a multi-unit property reduces the mortgage rate by between 1/2% to 1% over the life of the mortgage and represents significant savings. CMHC is approaching its $600 billion government-imposed limit on issuing mortgage default insurance. While the government may raise the limit, this is just another reason to buy now and take advantage of CMHC mortgage insurance while it is readily available. (Window of opportunity - up to 36 and beyond)
6. Time - In real estate investing, time is your best friend as it facilitates appreciation, mortgage paydown and cash flow. The longer you own an income property, the greater the ROI. (Window of Opportunity - becomes smaller the longer you wait)
7. Alternatives - With interest rates at historic lows, bank accounts, savings bonds and any other interest bearing investment vehicle offer little return on your capital. The stock market has shown incredible volatility with neglible returns over the past decade and shows little signs of improving any time soon. REITs offer a respectable return on your investment, but investing directly into the asset itself (income property) offers an even greater return on your investment.
Writer: Paul Kondakos, BA, LL.B, MBA - Professional Real Estate Investor
July 11, 2012
Housing starts up? Yes, up!
Housing starts climbed in June, driven by Quebec and British Columbia, but were probably too little and too late to prevent a construction slowdown, according to the Canada Mortgage and Housing Corp.
The seasonally adjusted annualized rate of housing starts rose to 222,700 units in June, compared to the 217,400 units logged in May.
The climb runs counter to expectations, given the government announcement in late June that it would tighten conditions for both homebuyers and mortgage lenders to slow the market and prevent a bubble.
That collective action is still likely to cool construction, but not in the near-term, said one economist Tuesday.
"Today's starts … confirmed that homebuilding is showing no signs of cooling off yet," CIBC World Markets economist Emanuella Enenajor said. "Today's data suggest homebuilding could be a contributor to growth in the second quarter, and the current low rate environment is continuing to support already elevated housing construction activity, namely in the condo/multi-family segment."
June 27, 2012
Tighter Mortgage Rules Mean Rent Increases
The majority of property investors are already licking their chops, anticipating tighter mortgage rules will allow them to bump up rents, suggests a new CREW poll.
Just under 60 per cent of those responding to an online survey this week answered “yes,” they will indeed raise the rent because of the new mortgage rules. That, of course, is only where the law permits, most likely with empty units and not sitting tenants. The anticipation is based on an expected bump-up in the number of Canadians -- in particular, first-time buyers -- who'll now find themselves shut out of the housing market.
Such a development would be specifically pegged to Ottawa’s decision to limit maximum amortizations to 25 years for insured mortgages. For the first-timer in pricey markets such as Toronto and Vancouver, that may effectively block them from purchasing even starter condos, which already strain affordability. While economists expect some price declines because of the tighter mortgage rules that may not come soon enough to encourage young Canadians to buy instead of rent.
Since the new rules were announce last week, investors have also been grappling with them, trying to decide whether they afford a net negative or benefit to landlords, already enjoying relatively low vacancy rates in most markets.
“Since rental properties require 20% down, therefore not a CMHC insured mortgage, the rule will have no effect on most investors in terms of obtaining financing,” writes “shaune,” in responding to the CREW poll question. “The upside is that less people can afford homes therefore more renters. The downside is that it may reduce prices if the demand softens.”
June 19, 2012
Canada�s Wildest Condominium Buildings
Love ‘em or hate ‘em, condominium-living is a lifestyle many Canadians are embracing. In urban centres like Montreal, Ottawa, Toronto, Calgary and Vancouver, it seems there are new condo towers popping up on the skyline every day. To critics, many of the condominium buildings are inefficient towers which will not stand the test of time or design. There are some gems, however, which are inspirational testaments to the power of innovation and imagination. Here’s a look at eight special condominium buildings.
Where: Vancouver, B.C. at West 7th Street
What: Named after a nearby park, Chokolit, the former site of a Purdy’s chocolate factory has three spacious homes with nearly 3,000 square feet designed with a hip modernist style. The condo features massive roof decks with breathtaking mountain and city views, 12 to 30 foot ceilings, two bedrooms, natural light throughout, polished concrete floors and 15 foot skylights.
Who: Designed by Arthur Erickson, a Canadian born legend and architect.
Availability:On the market
How much: There are only three units, so if you want to know, you’ll have to call. Bet on seven figures for sure.
Where: Mississauga, Ont., at Mississauga City Centre
What: Five towers, up to 56 stories high with a ‘twisted design’ that some say are evocative of Marilyn Munroe’s hips. The residential towers are the tallest of any of their kind in a suburban city — clearly that doesn’t included downtown areas of major cities.
Who: The design of Chinese architect Yansong Ma — of the MAD office — who was selected from a group of finalists in a design competition.
Availability: The first towers were started in 2007 and the last two were finished in 2011. There are units currently on the market.
How much: Roughly $400 a square foot and up depending on view and floor.
Where: Vancouver, B.C., at West Hastings Street
What: A 36-storey tower featuring 138 residential suites with office and retail units on the first 14 floors. Four curved bays are functional as well as esthetic, cutting down on the wind tunnel effect. The key, however, is the obsessive attention to interior design which is both functional, minimalist and efficient with ultra high-quality materials and master class workmanship.
Who: Designed by the U.K. firm Foster and Partners and built by Bosa Partners of Vancouver.
Availability: The units are open for occupancy but have sold out.
How much: Starting at about a $1 million and rising to about $1.5 million. Since all the units have sold out, you’ll have to take your chances on the resale market.
Where: Toronto, Ont., at Yonge Street — overlooking Lake Ontario
What: Eschewing the ceramic wall which has curtained off most of Toronto from a view of Lake Ontario, Pier 27 offers two modest towers, four and 12 storeys high with a fabulously funky cantilevered bridge spanning them. There are a whopping 705 units starting at just under 700 square feet. Three more towers will be added to bring the number of units to 4,000. Hope everyone doesn’t take their condo pups for a walk at the same time. It’ll be stoop and scoop chaos.
Who: Peter Clewes Architects with Cityzen Developments and Fernbrook Homes.
Availability: Now under construction with a slated fall occupancy date.
How much: A mere $600 a square foot and up will get you started. That’s $600,000 for a 1,000 square foot unit, depending on what floor and view.
The L Tower
Where: Toronto, Ont., at Front Street and Yonge Street
What: A dramatic 58-storey tower rising above the Sony Centre in the heart of the city. As a building, it’s impressive from the outside. Inside you’ll find 600 units ranging from about 500 sq. feet to 2000 sq. ft. It has its own cinema, spa, saunas, lap pool, gym and more.
Who: Another project from Fernbrook, Cityzen Builder and Castlepoint. These guys just keep showing up on innovative projects.
Availability: Slated for occupancy in late fall.
How much: It’s pricey at $800 a square foot to $1,300 a square foot depending on the floor, view and configuration.
Where: North York, Ont., at Sheppard Avenue and Yonge Street
What: Twin green-hued towers which look as though they are delaminating from the top down. It has sort of an organic look, with the exterior seemingly out of synch and uneven like a tree trunk. The overall effect, however, is very positive. There are 565 units with condo retail space on the first 14 floors.
Who: This is an amazing comeback story for Bazis, the builder which is based in Almaty, Kazakhstan, and has three projects on the go in Toronto. Not so long ago, due to circumstances beyond their control relating to the collapse of a major private bank in the 2008 meltdown, they lost control of their key project at One Bloor East and teetered at the edge of oblivion. With some help, however, they pulled it together and are back, stronger and better than before.
Availability: Not clear since construction seems to have been delayed.
How much: Prices are around $500+ a square foot depending on floor, view and configuration.
Where: Vancouver, B.C., at Beach and Howe Street — at the Granville Street Bridge
What: A wild design which starts with a triangle-like structure at the base and then ends in a rectangle rising to the top. The wacky design features 600 residential units at approximately 150 metres high, making it the fourth highest tower on the Vancouver skyline.
Who: Danish architect Bjarke Ingels is the one of the hottest architects in the world and his company BIG has partnered with developer Ian Gillespie.
Availability: It’s still very much in the proposal and approvals processes.
How much: The investment for the building is $200 million but there’s no saying how that is going to translate into a per square footage cost.
Where: Ottawa at Laurier West at Bank Street
What: A 24 story glass box in charcoal and reds is an homage to the modernist Dutch painter Piet Mondrian whose experimentations in cubism produced a unique style he called Neo-Platicism. The style has been described as white with an imposed grid of vertical and horizontal black lines and the three primary colours. The condo in his name also has a very cool rooftop swimming pool. Residences start from the sixth floor up.
Who: The Urban Capital Property Group.
Availability: It’s up and running and is 100 per cent sold but resales and rentals are on the market.
How much: Units started at $375,000 when it was in the construction phase and a 20th floor two bedroom unit with balcony was recently listed for $409,000.
May 16, 2012
Buyers increasingly view cottages as cash cows
"Many Canadians aspire to own a recreational property because of the lifestyle benefit it provides,” said Phil Soper, president of Royal LePage, which commissioned the survey. “But potential buyers must understand how they plan to finance their purchase to ensure they can afford it."
The Leger poll suggests they have, and it’s by renting out their cottages, cabins and beach homes.
Among intended buyers, 51 per cent said they would rent their property either to a tenant that was referred by someone they knew, or otherwise, to offset the cost of ownership. That thinking represents something of a sea change for recreational property owners. Among current owners answering poll questions, 83 per cent said they do not rent out their recreational property to offset carrying costs. Only 10 per cent indicated that they would "like to."
On the other side, only 32 per cent of would-be owners said they are prepared to reduce their spend to get into a cheaper property. Even fewer, 25 per cent, were ready to buy a fixer-upper in order to trim property costs.
The survey hints at the growing willingness of Canadians to take on the role of landlord in order to protect the lifestyles to which their generation has become accustomed. Those younger buyers have also seen the cost of cabins in Ontario cottage country more than double in the last 20 years as a scarcity of lakeside lots drives up property values.
But becoming a real estate investor/landlord isn't the answer for everyone looking to bridge the gap between their funds and the cost of acquisition, said Soper.
"While renting out your property is an attractive option to improve affordability, the ability to do so profitably varies by region,” he said, in a release announcing this year’s survey. “Some areas have bylaws that restrict rental activity while other regions have strict noise regulations that might limit your ability to attract renters.”
April 18, 2012
Debate On Banning Foreign Buyers Resurfaces
It’s a controversial suggestion that isn’t about to go away, with new calls for a ban on property buying by foreigners -- increasingly faulted for outbidding local investors.
The Financial Post’s right-leaning columnist Diane Francis is the latest to float the idea of dramatically clawing back the buying privileges of foreign nationals, whether they reside in Canada temporarily or seek to plant their investment flag in a country they’ve never called home.
More specifically, Francis is asking any temporary resident — a person with a work permit — be restricted to one owner-occupied residence, which must be sold when he or she leaves the country. That temporary resident would also be banned from buying any investment property for the purpose of leasing it.
The ban is all but complete for non-resident foreigners wanting homes or investment properties.
“The only exception is if a foreign entity doing business … wants to buy housing for its Australian staff,” she writes, referencing Australian law introduced in 2010 and advocating it as a model for Canada.
The suggestion echoes some Canadian property investors concerned that they are being shut out of the Vancouver and GTA markets as deep-pocketed Asian buyers ratchet up buying prices.
Francis points to a Toronto house sold in March for $400,000 above its $759,000 asking price. The new owners are Chinese nationals, buying the property as a college residence for their child.
It’s a strategy more and more Canadian investors are adopting, although GTA selling prices have largely limited the viability of those plans. Americans, still grappling with tight credit and decimated home equities are also complaining about an influx of Canadian competitors now moving in to buy condos, townhouse and multi-family properties, often with cash in hand.
Still, in this country, foreign investors can’t be blamed for the spike in condo construction in either Toronto or Vancouver, counter critics of any Canadian move to follow several Asian and Western markets already restricting foreign ownership.
They blame the price surge in this country on a buying spree by Canadians, themselves, relying on low-interest rates and "liberal" default insurance guidelines.
March 28, 2012
Canada�s Housing Market Won't Be Cooling Down Just Yet
Canada’s housing market won't be cooling down just yet, with a new report by Re/Max pointing to a growing number of bidding wars in markets across the country.
The report found 12 of 15 of Canada’s major metropolitan centres reported year-over-year increases in sales activity in the first two months of 2012, and more than half had double-digit increases. Low interest rates and consumer confidence, along with the recent mild weather, will push an early start to an expected strong spring market, said RE/Max. Average price climbed in 14 of the 15 markets.
“Major Canadian real estate markets continued to show exceptional resiliency throughout the first quarter of the year, with strong demand and diminished supply setting the stage for a heated spring 2012,” according to the Re/Max report.
The tight conditions have recently sparked bidding wars, said Re/Max, noting such trends in Winnipeg, Toronto, Saskatoon, Regina, London-St. Thomas, Hamilton-Burlington, Ottawa, St. John’s, and Halifax-Dartmouth.
In Halifax-Dartmouth, sales activity has been up 35% since the same time last year, bolstered by the announcement of a $25 billion shipbuilding contract late last year.
Sales activity was also up 21% in Saskatoon and 20% in Saint John. Sales were down 16% in Vancouver, however, which has an average price of $786,695 – well more than $300,000 higher than any other Canadian major city.
Victoria was the only one of the 15 markets to see a price decline in the first two months of this year compared to the same time in 2011, down 1% to reach $469,399. St. John’s, the Greater Toronto Area and Winnipeg all saw 10% average price increases over last year. Kitchener-Waterloo wasn’t far behind at 9%.
March 20, 2012
If national real estate prices are to begin to decline or stabilize this year, it’s not going to be happening in the first few months.
Following a 2% gain in prices in January, the average sale price in February again rose 2% to reach $372,763, according to the Canadian Real Estate Association (CREA).
National sales and listings also increased in February, leaving the national sales-to-listings ratio essentially unmoved at 53.6%, which CREA said was a balanced mark.
Buyers don’t seem to be showing any concern about an overheated market thus far.
February sales were up 8.6% from a year earlier, according to the CREA.
“The national rise in both sales activity and the number of newly listed homes beyond the normal seasonal increase provides clear evidence that Canadians are confident in housing market prospects,” said Gary Morse, CREA’s president.
While Vancouver was behind many of the gains last year, Toronto has kept the national average price moving in 2012. CREA Chief Economist Gregory Klump said a tight balance between supply and demand in Toronto has pushed prices up, especially in single family homes.
While Toronto has seen its supply of high-rise condos spike, and a growing demand to match it, some of that has shifted back to the more expensive single family home option.
National prices peaked by the spring of 2011, but they appear to be approaching that market again this year. Year over-year, average prices have not declined nationally since September 2010.
Of all provinces, only British Columbia declined in price, slipping about 2% year-over-year in February. Prince Edward Island gained the most over that period, nearly 16%, followed by Manitoba at about 10% and Ontario at about 9%.
December 6, 2011
Canadian Housing Market "Defies Logic"
It wasn’t magic, or smoke and mirror, but the Canadian Real Estate market “defied conventional logic and outperformed expectations in 2011, posting another solid year of housing activity virtually across the board.”
According to RE/MAX, they expect the show will continue in much the same way through 2012, despite continued uncertainty brewing in global markets.
The RE/MAX Housing Market Outlook 2012 looked at 26 different markets across the country, and determined that in 88% of them, price increases were expected by the end of 2011, ranging from 1% to 16%. While activity is expected to moderate somewhat through 2012, there is still a belief that it will outpace 2011.
RE/MAX said in their report, “Overall home sales are expected to remain on par or ahead of last year's levels in 85 per cent (22/26) of markets in 2011—including Saskatoon with a year-over-year percentage increase of 13 per cent and an eight per cent uptick in Calgary, Winnipeg, Hamilton-Burlington and Sudbury. Almost half of Canadian markets will match the 2011 performance, while the remainder should post increases ranging from one to five per cent next year.”
Looking at prices, they expect the average price in this country to have climbed by 7% by the end of 2011 from the year prior. They forecast another 2% hike through 2012.
"What 2011 proves is that real estate continues to have momentum," says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. "The economic underpinnings support ongoing demand, particularly as job creation efforts continue and unemployment rates edge down further. Nationally, we remain on an upward track, and the confidence consumers have demonstrated in housing over the past decade will prove well founded once again next year. The rising belief in homeownership is key, especially among Generation X and Y—some of whom are making their moves sooner. Boomers and retirees are changing, too. They're healthier and more active, with longer life expectancy. Overall, we're seeing an extension of the homeownership cycle, and its great news for housing going forward."
“Canadian consumers are intent on making their moves now, in advance of higher housing values," says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. "Housing markets are not impervious to the impact of economic concerns moving forward, but real estate has proven its resilience time and again—2011 was case in point, as residential real estate markets actually experienced an upswing in the volatile third and final quarters, instead of responding to economic concerns both here and abroad with a retreat in sales and prices."
Seemingly, despite headwinds that continue to blow ferociously against our borders, the Canadian Real Estate market, while not immune, continues to move forward. Many attribute this inner fortitude to sound domestic economic fundamentals- many of which are taking place at the local and provincial levels, as well as stringent lending policies to reduce risk of consumer vulnerability in regards to mortgage debt.
November 9, 2011
Canadian Housing Prices Double in the Last Decade
In a testament towards the consistent upward trend in the Canadian Real Estate market, a new report by RE/MAX suggests that housing prices in this country have more than doubled in the last decade, rising from $163,951 to $339,030 in 2010.
Much of this price hike can be attributed both to new developments, but also to substantial amounts of money being poured into home renovation, supporting an increase in asset value.
Underscoring the sheer dollar impact that construction and renovation has on economic activity, RE/MAX said that the value of residential building permits issued nationally between 2000 and 2010 tallied at $340 billion and a further $450 billion was directed towards renovation existing properties.
RE/MAX suggests that this cash infusion has been responsible for keeping the construction industry robust for the past decade.
“While a number of external variables were also behind the exceptional gains, revitalization—amid an aging housing stock—and newer construction are largely underestimated factors supporting Canadian housing values,” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “The trend is expected to continue for years to come as investment in residential real estate through renovation, infill, and redevelopment ramps up across the country. City planners, builders, developers, and homeowners have only just begun.”
Infill has exploded across the country- in particular in areas where the value of structures currently occupying land has not increased at the same rate as the value of the land itself. This has contributed heavily to the changing complexion of neighbourhoods across the country, particularly in larger centres like Toronto and Vancouver, where land is at a premium, and is being snapped up to create housing on smaller lots, as well as many multi-family properties.
“Renovation has also had a tremendous impact on housing throughout the decade, so much so that it’s emerged as, arguably, Canada’s next national past time,” says Polzler. “Residential renovation spending has been gaining momentum year-over-year since the early part of the decade and now exceeds $60 billion annually.”
RE/MAX also attributes much of this asset gain in real estate over the last decade to population growth as well: “Since 2000, Canada’s population has experienced double-digit growth of 11 per cent. By 2031, over 42 million people are expected to call Canada home.”
“There’s no question that population growth will continue to support investment, propping revitalization and new construction in the years ahead, and by extension raising the bar and prices in real estate markets even further,” says Polzler.
Having experienced a particularly huge boom over the last decade is condo and multi-family dwelling construction. With land being at a premium in many centres, developers have elected to go up, rather than out, and buyers have followed in droves. Similarly, in many of the larger centres, there is a lack of decent, affordable rental stock to support the growing need. Many of these areas are home to new immigrants to Canada, who actively are seeking out these rentals.
August 18, 2011
Canadian Housing Market Continues to be Strong in Face of Adversity
You can shake it, you can try to knock it down with the force of global economic crisis, but the Canadian housing market is proving resilient- this according to recent remarks made by BMO economists.
On the heels of the release of data suggesting that home resales rose by 12.3 % in July, year-over-year, Douglas Porter, Deputy Chief Economist, BMO Financial Group said: “Canadian housing remains surprisingly robust, thanks to still-low interest rates and solid job growth .While the strong year-over-year growth is flattered by a weak year-ago comparison – when the HST was introduced in B.C. and Ontario – sales are certainly faring better than what we expected earlier this year. While new listings have also risen recently, the backlog of unsold homes just nudged up last month, almost bang on the long-run average.”
“The recent financial market turmoil may temporarily weigh on activity, but sales should ultimately find support from continued exceptionally low borrowing costs.”
"Today’s data release is yet another sign that Canada’s real estate market has great resiliency,” said Laura Parsons, Mortgage Specialist, BMO Bank of Montreal. “As long as consumers continue to push demand, which remains the case, we see ongoing strength in the housing market across the country.”
Canadians should be mindful though, of affordability in taking on debt- and are reminded to stress test debts at higher interest rate levels.
Leslie Penney, Vice President, Business Development, APlus Mortgage Group/Mortgage Alliance, agrees that there in an environment of affordability being created: “With the US Fed stating that they will keep rates low until 2013, it kind of ties the hands of the Bank of Canada in such a way that they cannot increase rates too much from the US. Aside from increasing prices, as interest rates go down affordability goes up. Right now we're seeing a prolonged period of affordability, and it looks like it'll be on the table for a while yet.”
And as Penney suggests, this is an excellent time for all members of the industries to be proactive with clients. “From the real estate perspective now is a great time to inform buyers that affordability is at an all-time high. Regarding mortgage brokers, especially those with a clientele, now is a time to do a review with your clients and determine if their current mortgage suits their situation and how you may be able to save them a great deal in interest and shave years off their mortgage, and at the same time taking care of consumer debt which can be as high as 20%.”
“It's also a good time to work with real estate partners to demonstrate to their client base how they may be able to afford their first home or upgrade to a newer home and highlight the impact that these ultra low interest rates have on affordability.”
Source: PropertyWire.ca - Aug. 18/11
August 16, 2011
Mortgage Stats Canada Compared to US & Australia
When comparing Canada's mortgage industry to Australia's and the U.S. ours is much more competitive & stable. But we can never take our enviable position for granted. This is why the Federal government has done several things this year and last to ensure we keep in that way.
Some of the changes included reducing the longest amortization from 35 to 30 years and requiring 20% down payment when purchasing an investment property. There are a number of other changes as well so please feel free to contact me should you want to inquire further.
In the meantime please take a read of the attached article from CAAMP's international mortgage panel which provides a glimpse into the Australian & U.S. markets. It shows just how strong Canada's mortgage industry is in comparison.
Tony Marchigiano | Mortgage Specialist - Mortgage Sales BC Region, RBC Royal Bank | Royal Bank of Canada | T. 604-505-7109 | F. 778-737-0054
Monday, 29 November 2010 10:27
Canada’s mortgage industry is vastly more stable and competitive than its Australian and U.S. counterparts. But we can never take our enviable position for granted.
For that reason, it’s important to examine trends in other countries to see if/how they could materialize here.
Last week, CAAMP’s international mortgage panel provided a glimpse into the U.S. and Australian markets. It underlined just how strong Canada’s mortgage industry is in comparison.
Here are some key points that stuck out. (CMT notes in italics).
Australian market report (Facts provided by Phil Naylor, CEO, Mortgage and Finance Association of Australia)
• Non-bank lenders have a paltry 3% market share in Australia. The top four banks have an extraordinary 90% share.
(This is largely due to the banks’ ability to fund mortgages without relying on Australia’s dried-up securitization market.)
• Australia has no equivalent to CMHC to back its mortgages. As a result, many non-banks have encountered life-threatening liquidity problems.
• The Australian government “needs to move in the next couple months" or "it could be all over for non-bank lenders," says Naylor.
(This comment struck us as quite dire. If CMHC didn’t exist, Canada’s non-bank lenders would have also fared significantly worse during the credit crisis.)
• "Those with the gold make the rules." When securitization disappeared in Australia, several non-bank lenders were unable to access funding and competition dwindled. In turn, banks slashed broker compensation by 1/3 “overnight.”
(Naylor hinted at bank collusion, albeit with a smile on his face.)
• With compensation reduced dramatically, more Australian brokers are now “selling” advice and acting as professional consultants. Professionals generally don’t act for nothing, Naylor said. “Brokers should be entitled to charge for (advice and mortgage planning services). Naylor said some brokers are nervous about that, but there is “virtually no consumer resistance if you can convince the consumer you add value."
• Broker share is 40% in Australia.
(Interestingly, despite falling compensation, fewer broker-centric lenders, and the advent of consulting fees, Naylor expects broker share to climb to 50% in coming years.)
US market report (Facts provided by John Courson, CEO of the Mortgage Bankers Association)
• Three years ago, there were 54,000 mortgage brokerage firms in the U.S. Today there are 8,000. This number may shrink further as state and federal governments add net worth minimums and slather on a heavy layer of regulation.
(The Americans obviously needed more regulation, but some accuse U.S. regulators of going to extremes, to the detriment of competition and consumers.)
• There is “no liquidity in the U.S. market,” Courson said.
• New rules that take effect on April 1, 2011 will “prevent loan originators from increasing their own compensation by raising the consumers' loan costs.” (Source) For example, brokers won’t be able to make more by selling the same mortgage at a higher rate.
(While not as prevalent, rate-based compensation still exists in Canada, in both retail bank and broker channels. In other words, certain lenders allow bank and/or broker originators to make more based on the rate they sell. It’s not as insidious as it sounds, however. A mortgage is a product and “sellers” of this product are free to determine their own margins. Fortunately for consumers, competition is increasingly keeping margins in check.)
• The next 12 months will see the creation of 300 new U.S. laws on mortgage lending.
Canadian market report (Facts provided by Jim Murphy, CEO, Canadian Association of Accredited Mortgage Professionals (CAAMP)
• Consumers should know that brokers are compensated, but there is no need for them to know exactly how much, says Murphy. This type of specific disclosure is not required in other industries and CAAMP has discouraged it here.
• Trailer-fee compensation models can add value. However, "Most people like to be paid up front."
There are two primary payers of trailer fees in Canada: Merix Financial and Macquarie Financial. Most major banks aren’t too keen on the idea, from the sense we get. However, if banks paid something (however small) it would greatly alleviate the concern brokers have with bank retention practices. That would, undoubtedly, increase bank volumes in the broker channel.)
• We "need to do more" to standardize broker rules on a national basis. It’s “hard to compete across provincial boundaries." For example, brokers must refer to themselves as something different in every province (e.g., “Agent” in Ontario, “Sub-mortgage Broker” in BC, “Associate” in Alberta, etc.). In addition, every province has its own disclosure rules and forms, and each province has different educational testing requirements.
(The differences in provincial regulations, while necessary in some cases, do inhibit nationwide competition. A reputable, highly experienced, and licensed broker in one province should be able to service clients in another province without undue red tape. The vast majority of knowledge that brokers need, to effectively serve consumers, is not province-specific. While there are real estate and legal differences in each jurisdiction, this information can quickly be learned by brokers licensed elsewhere, and easily tested for.)