Today is August 15, 2017 and this is the 57th episode of the Marshall Report. Welcome to the podcast.
In this episode we’ll talk about some changes in KW, what’s going on in the real estate market, interest rates, Toronto and Vancouver, Kingston, garbage, money and tech. Let’s get on with the show.
Let’s start with Waterloo Region News and Views
I learned recently that Waterloo Region has a higher percentage than the Ontario average of millennial generation (those aged 15 to 34) residents. That’s right, we are younger than you think. Millennials make up 28% of our population
I also learned that when you buy a house in Waterloo you get a bill from the City to set up your tax account. The new account set up fee is $68.50. I’ve never liked so-called administration fees.
From the Department of Nudge we learned that four months into our new waste collection rules, Waterloo Region residents are adopting the green bin. In June, green bin tonnage topped 2,000 tonnes, compared to 880 the previous June. Good things happen when you give people hard choices.
In Kitchener there is a proposed development at 588-600 Queen St. S. would replace the auto repair shop as well as a two-storey building that was the home of Nougat bakery and delicatessen. If approved it will be an 11-storey, 102-unit condo tower beside Iron Horse Trail.
In terms of bacon, Kitchener Waterloo spends 20% more than the national average on it. We are not obsessed with it like Calgary, Edmonton and St.Johns. There, they spend an average of about $70 a year on bacon. Here in Kitchener-Cambridge-Waterloo we spend $59 a year. The national average is $49 a year.
In Canadian Real Estate news
We haven’t had a downturn really since 1991. It took from 1991 until 2004 for house prices to recover. The problem is that most of us have thought the good times go forever. And now the average Canadian house price is down 10% since April. Changes to Ontario housing policy made in late April have clearly prompted many home buyers in the Greater Golden Horseshoe region to take a step back and assess how the housing market absorbs the changes. Average prices are expected to cool slightly into next year. Most real estate agents and homeowners don’t want to see a crash, but that might actually be the better option for the market. Sharp drops are better than prolonged smaller negative numbers. Downtrends are a natural part of the real estate cycle, so failing to acknowledge their existence is just dumb.
Will rates go up again?
The Bank’s next rate announcement is set for September 6th. If the economy continues to do well, we could see the rate get hiked again. However, I wouldn’t expect another rate hike until early 2018.
Statistically, the last mortgage rate increase cost you about $53/month. As little as 6 per cent of household disposable income was recently going towards debt, versus nearly 11 per cent in 1990.
Also in Money
Pre-construction development charges can add as much as $10,000 to your condo purchase, a surprise and substantial addition to your closing costs. Know your costs before you sign on the line. Development levies are collected by the municipality to pay for various services, including sidewalks, parks, sewers, and subway extensions – as well as improvements to nearby police, fire, and health services. Know how your developer will be dealing with these costs.
Unlike in the U.S., we don’t have any kind of gift tax, which means if you have money you’ll never spend in your lifetime, it’s worth considering making a financial gift while you’re alive to help your kids get started in life. The average gift size parents have given or would give their children was $24,125 nationwide. In households with incomes above $100,000, the average gift size is $40,558.
The CRA is serious about going after house and condo flippers
Canada Revenue Agency officials say they want details about people who signed agreements with the developers to buy condo units, but then assigned that purchase agreement to another person before the units were constructed.
I like to keep an eye on the Toronto real estate market because what happens there has some impact on what happens here. CMHC says Toronto housing market downturn to be short The response we’re seeing in the Toronto market seems almost emotional and a knee-jerk reaction to some of the changes, which suggests that these impacts will be short-lived. Property prices in the city should pick up again due to supply constraints and a stronger economy. Number of transactions down. Prices not so much. Toronto cooled in terms of sales quite abruptly, on par with 2008-2009 recession but you don’t see much of a decline in prices. That takes time if it happens at all. And, Toronto’s condo market hasn’t been impacted like the rest of the housing market due to rents, resilience, and relative prices. Toronto real estate currently has two distinct markets. Detached homes are soft, but condos are fetching up to 50% more in some neighbourhoods.
Catalyst137, a light industrial and office building in downtown Kitchener will be the world’s largest hardware technology hub when it opens this fall. The former Uniroyal-Goodrich tire warehouse at 137 Glasgow St. was built in 1957. It was acquired in June 2016 for $21 million and the redevelopment has been ongoing since last July.
Waterloo has partnered with Honk Mobile to allow people to pay for extra parking time using an app on their phone. Starting in September visitors to uptown Waterloo can pay through the app after their free two hours expires.
Toronto is North America’s fastest growing technology market, according to CBRE’s fifth annual Scoring Tech Talent Report, which shows Canada’s largest metropolis moving up six spots to number six out of 50 cities. Kitchener-Waterloo, Montreal and Halifax are other Canadian cities where the tech sector is having a positive impact on local office markets.
I grew up in Kingston so I take a casual interest in what’s going on there. The Kingston Farmer’s Market has some of the fastest food around – zucchini strapped to the bottom of a set of wheels. They call it the Zucchini 500. It is kind of like the lego races at the St Jacobs Outlet Mall.
Also in Kingston, they have a new monument that is getting a lot of attention. It is a life-sized Kingston sign with the I missing. People are standing where the I should be taking selfies.
Speaking of signs, the residents living near the Hollywood sign are doing their very best to keep tourists out of the neighbourhood. That sign they say defines the self-loathing, self-loving, self-generative, self-destructive city.
And still on the west coast, Chinese still hot for Vancouver. From an investment perspective, Vancouver is a mature real estate market and does not experience large market swings like those in Asia. Chinese demand for Vancouver luxury real estate not waning. And with the high number of immigrants, tourists and international students from Asia flooding into Vancouver, the market has become ripe as the landing spot for another type of import: overseas restaurant franchises.
For more on all of these stories please visit KWrealestatenews.com.