Month: March 2018

12 Mar

Canada’s pace of new home construction saw surprising pick up in February, CMHC says

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Posted by: Shahin Golestani

Canada Mortgage and Housing Corp. said the seasonally adjusted annual rate of housing starts increased to 229,737 units in February, up from 215,260 in January. Economists had expected the rate to come in at 216,600.

Builders work on a new home in North Vancouver in this file photo. Canada Mortgage and Housing Corp. says the annual pace of housing starts picked up in February compared with January.
Builders work on a new home in North Vancouver in this file photo. Canada Mortgage and Housing Corp. says the annual pace of housing starts picked up in February compared with January.  (Jonathan Hayward / THE CANADIAN PRESS file photo)

 

OTTAWA—The pace of new home construction picked up unexpectedly in February driven by strength in the condo market in major cities, Canada Mortgage and Housing Corp. said Thursday.

Meanwhile, Statistics Canada reported that building permits rose beyond expectations in January — particularly in the condo market — signalling continued strength in the multi-family dwelling category.

CMHC said the seasonally adjusted annual rate of housing starts increased to 229,737 units in February, up from 215,260 in January.

Read more:

Canada’s real-estate market slowdown could be exacerbated by interest-rate hike

Canada’s annual pace of housing starts slowed in December, CMHC reports

New-build single-family home sales hit 17-year low

Economists had expected the rate to come in at 216,600, according to Thomson Reuters. Housing starts are considered a leading indicator of how the economy is performing.

TD Bank economist Rishi Sondhi said homebuilding continues to defy expectations.

“Starts are being boosted by a relatively firm economic backdrop, healthy population growth and past gains in pre-construction sales in Toronto,” Sondhi wrote in a report.

“However, February’s increase was driven by the volatile multi-unit sector, leaving some scope for reversal in March.”

Sondhi noted that while the pace of starts has held up so far this year, TD expects that cooling demand in the face of restrictive policy measures and higher rates will ultimately slow starts going forward.

New mortgage rules this year mean federally regulated lenders must subject homebuyers seeking uninsured mortgages to a stress test to ensure they can continue to make payments even if rates rise.

The overall increase in housing starts for February came as the seasonally adjusted annual rate of urban starts increased by 7.1 per cent in February to 211,211 units.

Multiple urban starts increased 15 per cent to 154,535 units while single-detached urban starts fell 9.8 per cent to 56,676 units. Rural starts were estimated at a seasonally adjusted annual rate of 18,526 units.

The six-month moving average of the monthly seasonally adjusted annual rates of housing starts was 225,276 units in February compared with 224,572 in January.

A separate report from Statistics Canada revealed that municipalities issued $8.4 billion in building permits in January, up 5.6 per cent from December.

Economists had expected the value of building permits to increase 1.3 per cent, according to Thomson Reuters.

The increase was due in large part to permits for multi-family dwellings in Ontario that rose 71.0 per cent or $404.3 million to $974 million in January, more than offsetting the 39.7 per cent drop reported the previous month.

Overall, residential permits climbed 5.9 per cent for the month to $5.32 billion, while commercial building permits gained 8.9 per cent to $1.7 billion and institutional permits increased 19.2 per cent to $834.9 million.

Permits for industrial buildings fell 18.6 per cent to $554.5 million.

Source: https://www.thestar.com/business/real_estate/2018/03/08/canadas-pace-of-new-home-construction-saw-surprising-pick-up-in-february-cmhc-says.html

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Phone: 778-231-9879

shahingolestani@dominionlending.ca

 

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12 Mar

Vancouver construction costs highest in Canada

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Posted by: Shahin Golestani

 

A high-quality 2,000-square-foot detached house would cost up to $460,000 in hard construction costs to build in Vancouver and $420,000 in Toronto, but around $300,000 in Montreal, Calgary or Halifax, based on the Altus Group Canadian Construction Cost Guide 2018.

Commercial construction costs are not as out of line, but are slightly higher in Vancouver than in the rest of Canada.

For example, the hard construction cost for a Class A five-to-30 storey office building in Vancouver ranges from $270 to $340 per square foot. This compares with $220 to $290 per square foot in Calgary and Edmonton. The price for such an office building in Toronto ranges from $210 to $315 per square foot, according to Altus.

construction costs chartIndustrial and retail buildings are slightly more expensive to build in Vancouver than in other major cities.

The annual Altus construction cost report, released in January, also shows that prices for quality custom-built houses are much higher in Toronto or Vancouver than anywhere else in Canada. For example, a high-end custom house in Toronto has per-square-foot construction costs of $900 per square foot and it reaches $1,000 per square foot in Vancouver. This compares with Montreal, at a maximum of $700 per square foot, and Halifax at $600 per square foot.

The price spread is also pronounced in the condominium sector.

In Vancouver, for example, Altus Group says construction costs for a higher-quality four-storey, wood-frame condo building would peak at $250 per square foot. This compares with $195 per square foot in Toronto and $175 or less in nearly every other city in the country.

The Altus cost estimates are for hard construction costs only and do not include land values, or any of the soft costs, including profit, associated with completing a project. Altus did not provide an explanation why construction costs would vary from one jurisdiction to another.

Source: http://www.vancourier.com/real-estate/vancouver-construction-costs-highest-in-canada-1.23194873

 

 

Are you looking for Commercial Mortgages, Construction Mortgage and Land Acquisition?

Expert in commercial real estate, our dedicated Commercial and Construction team have originated well in excess of two billion dollars in commercial mortgage transactions and refinance. Our Commercial and Construction team arrange interim, construction and long-term financing for all types of commercial real estate, including commercial construction, shopping centres, industrial buildings, multi-family apartment complexes, Hotels, health care facilities, subdivision development, office towers and non-real estate business financing for acquisition or recapitalization purposes, with the best possible structure, terms and rates. We speak English, French, Chinese (Mandarin and Cantonese), Italian, Persian, Farsi and Indian. Whether you are a real estate and property investor, builder, developer, commercial realtor or an entrepreneur, I have access to the very best products and rates. Give me a call… I think you’ll be pleasantly surprised!

Shahin Golestani, M.A. Economics
Mortgage Broker (Residential, Construction, Commercial)
Phone: 778-231-9879

shahingolestani@dominionlending.ca

 

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12 Mar

Canadian commercial real estate sees record investments in 2017: CBRE

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Posted by: Shahin Golestani

Canadian commercial real estate sees record investments in 2017: CBRE

Nova Centre Halifax real estate

TORONTO — The Canadian commercial real estate market set another record for investments in 2017 and was one of only four countries in the world to do so, according to a new report from CBRE Ltd.

The report said there were more than $43.1 billion in investments last year, surpassing $34.7 billion in 2016, and CBRE predicts another record will be established in 2018.

CBRE said strong tenant demand, coupled with declining vacancy rates which are at, or near, all-time lows in many Canadian markets, will lead to strong increases in rental rates.

“Investors are not shying away from Canadian commercial real estate,” said CBRE Canada executive managing director Paul Morassutti Tuesday.

“We have record low vacancy rates, record low unemployment, increasing institutional allocation to real estate and supportive immigration that fuels population growth.”

CBRE said, however, that the commercial real estate market does face some risk in 2018, including rising interest rates and the fate of the North American Free Trade Agreement, but it believes the underlying strength in the market will outweigh these concerns.

The company says Toronto and Vancouver began 2018 with the lowest downtown office vacancies in North America at 3.7 per cent and 5.0 per cent respectively and predicts those rates will fall even lower this year due to growing tenant demand and a lack of new office supply.

CBRE says growth in tenant demand is spreading to other cities, with downtown office vacancy rates also slated to fall in London, Ont., the Waterloo Region, Ottawa, Montreal and Halifax.

After surging for the past two years, CBRE predicts vacancy rates will finally stabilize in Calgary as the recovery in Alberta starts to take hold.

“In 2018, Canada will once again find itself at the centre of two very powerful investment trends,” said Morassutti.

“Firstly, our status as a safe haven with stable rule of law gets more pronounced as geopolitical instability continues to accelerate. Secondly, real estate has arrived as a true ‘fourth asset class’ that provides yield in a yield-starved world. As a result, institutional allocations are set to increase by over 20 per cent in the next five years.”

Source: https://www.bnn.ca/canadian-commercial-real-estate-sees-record-breaking-investments-in-2017-cbre-1.1013459

 

 

 

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Expert in commercial real estate, our dedicated Commercial and Construction team have originated well in excess of two billion dollars in commercial mortgage transactions and refinance. Our Commercial and Construction team arrange interim, construction and long-term financing for all types of commercial real estate, including commercial construction, shopping centres, industrial buildings, multi-family apartment complexes, Hotels, health care facilities, subdivision development, office towers and non-real estate business financing for acquisition or recapitalization purposes, with the best possible structure, terms and rates. We speak English, French, Chinese (Mandarin and Cantonese), Italian, Persian, Farsi and Indian. Whether you are a real estate and property investor, builder, developer, commercial realtor or an entrepreneur, I have access to the very best products and rates. Give me a call… I think you’ll be pleasantly surprised!

Shahin Golestani, M.A. Economics
Mortgage Broker (Residential, Construction, Commercial)
Phone: 778-231-9879

shahingolestani@dominionlending.ca

 

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6 Mar

CMHC study looks at rising home prices in Canada

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Posted by: Shahin Golestani

Canada Mortgage and Housing Corporation (CMHC) released a new study – Examining Escalating House Prices in Large Canadian Metropolitan Centres. The analysis shows that strong economic and population growth, together with low mortgage rates, have been important drivers of house price growth in Canada. As well, it also shows that the supply response has been weaker in Toronto and Vancouver, than in other Canadian metropolitan areas.

“While it is true that the supply response in Toronto and Vancouver has been significantly weaker than in other Canadian metropolitan areas, we do not fully know why this is the case,” said Evan Siddall, CMHC President and Chief Executive Officer. There continues to be data gaps and we need to work more closely with jurisdictions at all levels to fully understand what is happening.”

The report looked at data from Toronto, Vancouver, Montreal, Calgary and Edmonton from 2010 to 2016. These cities show marked differences in the growth of their prices. While Toronto and Vancouver showed large and persistent increases in prices, there was only modest price growth in Montréal. Despite softer local economic conditions, home prices rose slightly in oil-dependent Calgary and Edmonton.

“Large Canadian centres like Toronto and Vancouver are increasingly behaving like world-class cities. Their strong local economies and historically low interest rates make them attractive to both people and industry which drives up demand for housing,” said Aled ab Iorwerth, CMHC Deputy Chief Economist. When you have weak supply responses, as you do in these markets, prices have nowhere to go but up. Alleviating these pressures lies in finding ways to increase supply and that is a shared job for jurisdictions at all levels.”

Key report findings:

• House prices increased by 48% in Vancouver from 2010 to 2016 with conventional economic factors such as growth in population and disposal income, as well as low mortgage rates accounting for nearly 75% of that rise.

• House prices increased by 40% in Toronto over the same time period with 40% of the rise being explained by conventional economic factors.

• Price increases have tended to be greater for more expensive single-detached housing, rather than for condominium apartments.

• Supply responses have been proportionately greater for condominium apartments than for single-detached housing.

• Investor demand for condominium apartments has increased. In turn, this increase lifts the supply of rental properties, but these units tend to be more expensive than units from existing purpose-built rentals. There appears to be a wider prevalence of mortgage helpers as well.

• Measures targeted at alleviating supply challenges are more likely to have positive impacts on high-priced markets than measures focused on the demand side

The report represents one of the most thorough examination of house price patterns ever completed in Canada and is the result of advanced, data-driven analyses and engagement with stakeholders and government partners.

As Canada’s authority on housing, CMHC contributes to the stability of the housing market and financial system, provides support for Canadians in housing need, and offers objective housing research and information to Canadian governments, consumers and the housing industry.

For more information follow us on Twitter, YouTube, LinkedIn and Facebook.

Christina Haddad is the Vice-President of Public Affairs at Canada Mortgage and Housing Corporation. For inquiries call 416-218-3362 or e-mail publicaffairs@cmhc.ca

Source: http://ottawasun.com/life/homes/cmhc-study-looks-at-rising-home-prices-in-canada

 

 

 

Whether you are a first time home buyer, real estate and property investor, builder, developer, commercial realtor or an entrepreneur, I have access to the very best products and rates. Give me a call… I think you’ll be pleasantly surprised!

We speak English, French, Chinese (Mandarin and Cantonese), Italian, Persian, Farsi and Indian.

房屋及商業貸款,買地及建築貸款,商業器才租賃

(我們能說國語及廣東話)

Shahin Golestani, M.A. Economics
Mortgage Broker (Residential, Construction, Commercial)
Phone: 778-231-9879
http://shahingolestani.ca/
shahingolestani@dominionlending.ca

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2 Mar

Shortage of industrial real estate is pushing companies out of Vancouver

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Posted by: Shahin Golestani

Shortage of industrial real estate is pushing companies out of Vancouver

Demand is outpacing supply in the west coast city by more than a million square feet a month despite a raft of speculative construction

Canada’s stock of industrial space – estimated at just over 1.8 billion square feet at the end of 2017 – is being taken up at record speed in just about every urban market.Canadian Press

Demand is currently outpacing supply in the west coast city by more than a million square feet a month despite a raft of speculative construction.

Developers are building on every vacant piece of dirt they own and it’s still not enough

“Developers are building on every vacant piece of dirt they own and it’s still not enough,” said Chris MacCauley, senior vice president of industrial properties at CBRE Group Inc. in Vancouver. “I have a lineup of clients looking for 4 million square feet in the Vancouver market right now. That equates to thousands of jobs and we just can’t find a place for it.”

An ongoing shift to online shopping has prompted a voracious appetite for industrial real estate among e-commerce companies such as Amazon.com Inc. who depend on a network of distribution centres to ensure same-day or next-day delivery to customers.

As a result, Canada’s stock of industrial space – estimated at just over 1.8 billion square feet at the end of 2017 – is being taken up at record speed in just about every urban market. And while more than 8.5 million square feet of additional space is currently under construction in Toronto and Vancouver, most of that is already committed to tenants.

In Vancouver, the demand has stretched the industrial property market to its limits. At 2.3 per cent, the rate of available industrial space is second only to Toronto where availability is the lowest in North America at 2.2 per cent.

“Both cities have shortages and both cities have rents that are going up but Vancouver’s situation is more dire,” said McCauley. “You can still go an hour outside Toronto and find options, whereas here, because of the geographical constraints, once you hit 45 minutes outside the city, that’s it, you might as well go to Calgary.”

Some say an economic migration is already happening.

“I’m working for a client now that’s closing distribution centres in Vancouver so they can supply western Canada from Alberta,” said Sean Ungemach, senior vice president at Cushman and Wakefield in Vancouver. “Everyone is comparing the two markets and when they look at ours it’s very tight and it’s very expensive. So they just have to look elsewhere.”

The situation is particularly difficult for small and medium sized companies who lack the budgets to compete with global players. Vancouver rents are soaring, increasing 13.6 per cent to $10.23 a square foot in the final quarter of 2017 compared to the same period last year – making the city’s market the priciest in the country.

Toronto rents, by comparison, rose 8 per cent to $6.42 per square foot. Rents in Calgary where availability rates sit at 8.2 per cent were $7.04 at the end of last year.

Given geographical constraints, Vancouver has long had to balance the property requirements of residential, industrial and commercial interests. But the unprecedented demand and record absorption of land over the past number of years has made the task particularly onerous.

“There is a trade-off of course,” said Tom Davidoff, a real estate economist at the University of British Columbia. “I would normally say follow the market’s lead but because jobs do more for government coffers, you probably do want to have your thumb on the scale a little bit in favour of commercial uses, including industrial.”

A 2015 Metro Vancouver report found “a notable amount” of conversions of industrial land to other uses had taken place between 2010 and 2015, resulting in a net reduction of 350 hectares.

“This conversion of land continues to reduce opportunities for industrial development and industrial business expansion, with economic, employment, and taxation implications for the Metro Vancouver region,” according to the report.

With so much demand for land to house and employ Vancouver’s growing population, British Columbia could consider releasing property from its Agricultural Land Reserve – a provincial zone protecting 4.6 million hectares of agriculturally suitable land across British Columbia, Davidoff added. But pressure to convert the land has met with considerable resistance in the past.

“That would be the big provincial tool that’s available, but I haven’t heard much rumbling about that as an option,” he said.

With little space left in which to build out, warehouses in Vancouver may soon have nowhere to go but up, said Kyle Hanna, executive vice president of industrial sales and leasing at CBRE.

“I believe Vancouver will be the first city in the Canadian market to see multi-story warehouse,” he said.

Prologis, the world’s biggest warehouse owner, broke ground on a three-floor 580000-square-foot warehouse just outside downtown Seattle last year – the first of its kind in the United States.

• Email: npowell@nationalpost.com | Twitter:

Source: http://business.financialpost.com/real-estate/property-post/shortage-of-industrial-real-estate-is-pushing-companies-out-of-vancouver

 

 

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Shahin Golestani, M.A. Economics
Mortgage Broker (Residential, Construction, Commercial)
Phone: 778-231-9879

shahingolestani@dominionlending.ca

 

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2 Mar

Mortgage applications rise 2.7 percent as rates take a brief breather from surge

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Posted by: Shahin Golestani

Mortgage applications rise 2.7 percent as rates take a brief breather from surge

  • After rising sharply for weeks, mortgage interest rates steadied last week, and homebuyers responded, the Mortgage Bankers Association says.
  • Total mortgage application volume increased 2.7 percent, seasonally adjusted, from the previous week.
  • The increase was driven by homebuyers, who have been sidelined significantly this year by a record low number of listings and by weakening affordability.

A real estate agent and a potential home buyer in Coral Gables, Fla.

Getty Images
A real estate agent and a potential home buyer in Coral Gables, Fla.

After rising sharply for weeks, mortgage interest rates briefly steadied last week, and homebuyers responded.

Total mortgage application volume increased 2.7 percent from the previous week, the Mortgage Bankers Association said Wednesday in its seasonally adjusted report. Compared with a year ago, however, volume was 2.4 percent lower.

The week-over-week increase was driven by homebuyers, who have been sidelined significantly this year by a record low number of listings and by weakening affordability. Home prices continue to rise faster than wages and inflation, and higher interest rates have reduced buying power.

Mortgage applications to purchase a home rose 6 percent for the week but were just 3 percent higher than a year ago.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($453,100 or less) remained unchanged from last week at 4.64 percent, with points increasing to 0.63 from 0.61 (including the origination fee) for 80 percent loan-to-value ratio loans.

Interest rates have been on the rise since the start of this year, and were volatile last week, despite finally ending unchanged.

“Rates moved higher last week as the minutes from the latest FOMC meeting indicated a positive view of the economy overall and firming inflation. Mortgage rates for three of the five loan types that we track in the survey increased over the week,” said Joel Kan, an MBA economist. “The refinance share of all applications dropped to 41.8 percent, its lowest share since May 2017 as we move further into a purchase-dominated market.”

Applications to refinance a home loan fell 1 percent for the week and were down nearly 10 percent from a year ago, when interest rates were lower. Refinancing is quickly drying up amid higher interest rates, as fewer homeowners want to lose the low rates they may already have, even in return for pulling cash out of their homes in the refinance.

The rate respite, however, was short-lived. Mortgage rates moved higher this week, following the new Federal Reserve Chairman Jerome Powell‘s first testimony before Congress.

“The bonds that underlie mortgage rate pricing actually aren’t quite back to last week’s levels. Lenders are simply quicker to adjust things for the worse when the trend has been unfriendly and when the prices of those underlying bonds have been jumping around as much as they have,” said Matthew Graham, chief operating officer of Mortgage News Daily.

Sales of newly built homes slumped unexpectedly in January, with economists blaming higher mortgage rates and the loss of some tax breaks for homeowners, especially those in more expensive housing markets. Sales of existing homes have been lagging due to the lack of supply on the lower end of the market, where most of the demand is today.

Source: https://www.cnbc.com/2018/02/28/mortgage-applications-rise-as-rate-increases-take-a-breather.html

 

Whether you are a first time home buyer, real estate and property investor, builder, developer, commercial realtor or an entrepreneur, I have access to the very best products and rates. Give me a call… I think you’ll be pleasantly surprised!

We speak English, French, Chinese (Mandarin and Cantonese), Italian, Persian, Farsi and Indian.

房屋及商業貸款,買地及建築貸款,商業器才租賃

(我們能說國語及廣東話)

Shahin Golestani, M.A. Economics
Mortgage Broker (Residential, Construction, Commercial)
Phone: 778-231-9879
http://shahingolestani.ca/
shahingolestani@dominionlending.ca

 

Residential Mortgage
Refinance
Second Mortgage
Self Employed Solutions

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Retail, Shopping Centers, Plazas, Shopping Malls
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1 Mar

Vancouver’s Empire Landmark Hotel begins ‘quiet’ demolition in March

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Posted by: Shahin Golestani

Vancouver’s Empire Landmark Hotel, home to the Cloud 9 Revolving Restaurant until its final spin last October, will undergo a slow demolition process beginning in March.

The 42-storey hotel, at 1400 Robson St., is only 43 years old, but with downtown real estate prices going up, its owners have decided the building needs to come down. It will be the tallest building to be demolished in Vancouver history.

It may also be one of the slowest. Rather than a quick controlled implosion, which would scatter debris and likely coat much of the West End in dust, developer Asia Standard Americas has opted for a quiet, controlled demolition to take place over the span of a year.

The demolition will be conducted using the Brokk system, which trusts much of the work to remote-controlled robotics. Often used in Europe, Brokk Inc. claims its machines “take the danger out of demolition by allowing you to control the unit from a safe distance with split-second accuracy.”

Through this system, a concrete crusher will start at the top and work its way down, floor by floor, with dust and debris controlled by pushing the concrete through the elevator shaft before removal from the site.

A Youtube video of the Brokk 90 demolition robot demonstrates the slow and steady nature of the demolition process through this system.

How will traffic on Robson Street be affected? Only minimally, the developers say. Per a community announcement posted at the site, “for the first three months, the only traffic impact will be trucks using the back lane.”

And even then, the developers say trucks will keep to one side, allowing cars and pedestrians to pass through.

Additional questions and concerns will be answered at a public open house, scheduled for Friday, March 9 from 4 p.m. to 6:30 pm. It will be held at the Listel Hotel at 1300 Robson St., a block from the demolition site.

Demolition of the tower is slated to take nearly a calendar year, ending in approximately February 2019.

Once the process is complete, construction will begin on the two towers, at 31 and 32 stories, with 237 market condos, 63 social housing units, and retail and office space on the bottom three floors.

hmooney@postmedia.com

Source: http://vancouversun.com/news/local-news/vancouvers-empire-landmark-hotel-begins-quiet-demolition-in-march

Are you looking for Commercial Mortgages, Construction Mortgage and Land Acquisition?

Expert in commercial real estate, our dedicated Commercial and Construction team have originated well in excess of two billion dollars in commercial mortgage transactions and refinance. Our Commercial and Construction team arrange interim, construction and long-term financing for all types of commercial real estate, including commercial construction, shopping centres, industrial buildings, multi-family apartment complexes, Hotels, health care facilities, subdivision development, office towers and non-real estate business financing for acquisition or recapitalization purposes, with the best possible structure, terms and rates. We speak English, French, Chinese (Mandarin and Cantonese), Italian, Persian, Farsi and Indian. Whether you are a real estate and property investor, builder, developer, commercial realtor or an entrepreneur, I have access to the very best products and rates. Give me a call… I think you’ll be pleasantly surprised!

Shahin Golestani, M.A. Economics
Mortgage Broker (Residential, Construction, Commercial)
Phone: 778-231-9879

shahingolestani@dominionlending.ca

Commercial Mortgages, Construction Mortgage and Land Acquisition

Construction Mortgage and Land Acquisition
Commercial Mortgages:
Multi Family, Investment Properties, Refinance
Retail: Shopping Centers, Plazas, Shopping Malls
Business and Franchise
Hotel Financing and Acquisition
Offices and Medical Buildings
Nursing Homes and Care Facilities

 

1 Mar

Canadian commercial real estate sees record investments in 2017: CBRE

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Posted by: Shahin Golestani

Canadian commercial real estate sees record investments in 2017: CBRE

Nova Centre Halifax real estate

TORONTO — The Canadian commercial real estate market set another record for investments in 2017 and was one of only four countries in the world to do so, according to a new report from CBRE Ltd.

The report said there were more than $43.1 billion in investments last year, surpassing $34.7 billion in 2016, and CBRE predicts another record will be established in 2018.

CBRE said strong tenant demand, coupled with declining vacancy rates which are at, or near, all-time lows in many Canadian markets, will lead to strong increases in rental rates.

“Investors are not shying away from Canadian commercial real estate,” said CBRE Canada executive managing director Paul Morassutti Tuesday.

“We have record low vacancy rates, record low unemployment, increasing institutional allocation to real estate and supportive immigration that fuels population growth.”

CBRE said, however, that the commercial real estate market does face some risk in 2018, including rising interest rates and the fate of the North American Free Trade Agreement, but it believes the underlying strength in the market will outweigh these concerns.

The company says Toronto and Vancouver began 2018 with the lowest downtown office vacancies in North America at 3.7 per cent and 5.0 per cent respectively and predicts those rates will fall even lower this year due to growing tenant demand and a lack of new office supply.

CBRE says growth in tenant demand is spreading to other cities, with downtown office vacancy rates also slated to fall in London, Ont., the Waterloo Region, Ottawa, Montreal and Halifax.

After surging for the past two years, CBRE predicts vacancy rates will finally stabilize in Calgary as the recovery in Alberta starts to take hold.

“In 2018, Canada will once again find itself at the centre of two very powerful investment trends,” said Morassutti.

“Firstly, our status as a safe haven with stable rule of law gets more pronounced as geopolitical instability continues to accelerate. Secondly, real estate has arrived as a true ‘fourth asset class’ that provides yield in a yield-starved world. As a result, institutional allocations are set to increase by over 20 per cent in the next five years.”

Source: https://www.bnn.ca/canadian-commercial-real-estate-sees-record-breaking-investments-in-2017-cbre-1.1013459

 

Are you looking for Commercial Mortgages, Construction Mortgage and Land Acquisition?

Expert in commercial real estate, our dedicated Commercial and Construction team have originated well in excess of two billion dollars in commercial mortgage transactions and refinance. Our Commercial and Construction team arrange interim, construction and long-term financing for all types of commercial real estate, including commercial construction, shopping centres, industrial buildings, multi-family apartment complexes, Hotels, health care facilities, subdivision development, office towers and non-real estate business financing for acquisition or recapitalization purposes, with the best possible structure, terms and rates. We speak English, French, Chinese (Mandarin and Cantonese), Italian, Persian, Farsi and Indian. Whether you are a real estate and property investor, builder, developer, commercial realtor or an entrepreneur, I have access to the very best products and rates. Give me a call… I think you’ll be pleasantly surprised!

Shahin Golestani, M.A. Economics
Mortgage Broker (Residential, Construction, Commercial)
Phone: 778-231-9879

shahingolestani@dominionlending.ca

Commercial Mortgages, Construction Mortgage and Land Acquisition

Construction Mortgage and Land Acquisition
Commercial Mortgages:
Multi Family, Investment Properties, Refinance
Retail: Shopping Centers, Plazas, Shopping Malls
Business and Franchise
Hotel Financing and Acquisition
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Nursing Homes and Care Facilities

 

 

 

1 Mar

4 Signs You’re Ready For Homeownership

General

Posted by: Shahin Golestani

4 Signs You’re Ready For Homeownership

While most people know the main things they need to buy a home, such as stable employment and enough money for a down payment, there are a few other factors that may help you realize you’re ready, perhaps even earlier than you thought!

As a mortgage broker, it is my job to ensure that each one of my clients is getting the best service I can provide. Part of this means educating as much as possible when it comes to buying a home, which is why I’ve put together a list of 4 signs that may tell you that you are ready to become a homeowner.

You should have more funds available than the minimum of a down payment
This one may seem obvious, but it’s something that people may not realize until they actually think about it. It’s very difficult to afford a home if you only have enough money for a down payment and then find yourself scrambling for day-to-day living after that.

If you have enough money saved up (more than the minimum needed for a down payment), you may be ready to start house-hunting.

Your credit score is good
This might seem obvious at first glance, however, if you don’t have a good credit score, chances increase that you could be declined altogether or stuck with a higher interest rate and thus end up paying higher mortgage payments. If you have a less-than-optimal credit score, working with a mortgage professional can help you get on the right track in the shortest time possible. Sometimes a few subtle changes can bump a credit score from “meh” to “yahoo” in a few short months.

Breaking the bank isn’t in your future plans
Do you plan on buying two new vehicles in the next two years? Are you thinking of starting a family? Are you considering going back to school?

Although you may think you can afford to purchase a home right now, it’s extremely important to think about one, two, and five years down the road. If you know that you aren’t planning on incurring big expenses that you need to factor into your budget anytime soon, then that’s something that may help you decide to buy a home.

You are disciplined
It’s easy to say, “it’s a home, I’m going to have it for a long time so I may as well go all-in!”. While that would be nice, that’s rarely the case!

You must have a limit that you’re willing to spend. Sitting down with a mortgage broker or real estate agent and analyzing your finances is crucial. It’s important that you know costs associated with buying a home and what the maximum amount is that you can afford without experiencing financial struggles. IMPORTANT: This is not the amount that you are told is your max!

This is the amount that you calculate as your max based on your current monthly budget and savings plan. It’s quite frequent where I have clients tell me that their max budget is, say, $1200 and then when I run the numbers they could actually be approved for much more. Low and behold suddenly these guys are looking at homes that are hundreds of dollars a month higher than their initial perceived budget. It is up to you (with my help or pleading, when necessary) to reel things back in and make sure that you aren’t getting into something that affects the long-term livelihood of a well thought out budget or savings plan.

Conclusion

These are just four signs that you may be ready to purchase a home. If you’re seriously considering buying or selling, talking with a Dominion Lending Centres mortgage broker, such as myself, can help put you on the right path to a successful real estate transaction.

 

Article by Shaun Serafini

Dominion Lending Centres – Accredited Mortgage Professional https://dominionlending.ca/news/4-signs-youre-ready-homeownership/

 

1 Mar

Fixed versus variable interest rates

Mortgage Tips

Posted by: Shahin Golestani

Fixed versus variable interest rates

 

Fixed Interest Rates

This is usually the more popular choice for clients when it comes to deciding on which type of interest rate they want. There are many reasons why, but the most unsurprising answer is always safety. With a fixed interest rate, you know exactly what you are paying every month and you know that the amount of interest being charged for the term of your mortgage will not increase and it will not decrease. Fixed interest rates can be taken on 1-year, 2-year, 3-year, 5-year, as well as 7 and 10-year terms. Please note, term is not meant to be confused with amortization. When you have a 5-year term but a 25-year amortization- the term is when your mortgage is up for renewal, but it will still take you the 25 years to pay off the entire debt. The biggest knock on fixed interest rates when it comes to mortgages, especially 5-year terms, is the potential penalty. If you want to break your mortgage and pay it out, switch lenders, take advantage of a lower rate, or anything like this and your term is not over, there will be a penalty. With a 5-year term, a fixed rate penalty can be anywhere from $1,000- $20,000 or more. It all depends on the lender’s current rates, what yours currently is, the length of time remaining on your term, and the balance outstanding. The formula used is called an IRD (interest rate differential) and the penalty owed will either be the amount this formula produces or three month’s interest- which ever is greater. Fixed interest rates, especially 5-year terms can be the most favourable. They are safe, competitive interest rates that you will not need to worry about changing for the term of your mortgage. However, if you do not have your mortgage for the entire term, it could hurt you.

Variable Rate Interest

The Bank of Canada sets what they call a target overnight rate and that interest rate influences the prime rate a lender offers consumers. A variable rate, is either the lender’s prime lending rate plus or minus another number. For example, let us say someone has a variable interest rate of prime minus 0.70. If their lender’s prime lending rate is 5.00% in this example, they have an effective interest rate of 4.30%. However, if for example the prime rate changed to 6.00%, the same person’s interest rate would now be 5.30%. Written on a mortgage, these interest rates would look like P-0.7. Variable interest rates are usually only available on 5-year terms with some lenders offering the possibility of taking a 3-year variable interest rate. When it comes to penalties, variable interest rates are almost always calculated using 3-months interest, NOT the IRD formula used to calculate the penalty on a fixed term mortgage. This ends up being significantly less expensive as breaking a 5-year term mortgage at a fixed rate of 3.49% with a balance of $500,000 will cost approximately $15,000. That is if you use the current progression of interest rates and broke it at the beginning of year 3. A variable interest rate of Prime Minus 0.5% with prime rate at 3.45% will only cost $3,800. That is a difference of $11,200. You can expect to pay this kind of amount for the safety of a fixed rate mortgage over 5-years if you break it early.

Which one is best?

It completely depends on the person. Your loan’s term (length of time before it either expires or is up for renewal) can be anywhere from a year to 5 years, or longer. A first-time home buyer typically has a mortgage term of 5 years. Within those 5 years, the prime rate could move up or down, but you won’t know by how much or when until it happens. Recently, variable rates have been lower than fixed rates, however, they run the risk of changing. With fixed interest rates, you know exactly what your payments will be and what it will cost you every month regardless of a lender’s prime rate changing. If you go to the site www.tradingeconomics.com/canada/bank-lending-rate you can see the 10-year history of lender’s prime lending rate. Because lenders usually change their prime lending rate together to match one another (except for TD), this graph is a good representation. As you can see, from 2008 to 2018, the interest rate has dropped from 5.75% to 2.25% all the way back up to 3.45%.  Canada has had this prime lending rate since 1960, and in that time it has seen an all-time high of 22.75% (1981) and all-time low of 2.25% (2010). Whether you want the risk of variable or the stability of a fixed rate is up to you, but allow this information to be the basis of your decision based on your own personal needs. If you have any questions, contact a Dominion Lending Centres mortgage professional near you.

 

 

 

 

Article by Ryan Oake

Dominion Lending Centres – Accredited Mortgage Professional https://dominionlending.ca/news/fixed-versus-variable-interest-rates/