Today is Thursday August 31 and this is the 58th episode of the Marshall Report. Welcome to the podcast.
In this episode:
Crime
Trails and cemeteries
The GDP of real estate
Swimming pools
The ebb and flow of real estate agents
Home grown speculators
Real estate investment trusts
Tiny houses and Airbnbs
Keynesian economics
Serious debt levels
Selling Newfoundland and Buying Vancouver
Techies and Spotify in the news.
Lets get on with the show
What type of homes are most burglarized?
A recent story in the Record got me thinking about crime – break-ins (or burglary to be more exact).
In Kitchener Waterloo news…
Earlier this summer, I discovered the Laurel Creek Trail. From Uptown Waterloo to Manulife near King Street and the Expressway it is an interesting ride with all kinds of scenery. The city has a network of about 200 kilometres of trails and multi-use pathways, but only two trails — the Iron Horse Trail and the TransCanada Trail — have any formal signage.
The city’s new cemetery bylaw is expected to be in place by September. Among other things, it requires permission for anyone looking to take photographs or video at Parkview Cemetery on University Avenue. I can’t think of any reason why I’d want to do that. At the same time, I can’t think of any reason why it shouldn’t be allowed.
In General Real Estate News…
It was a slow August in real estate and that was just fine with me. I was busy enough over the first part of the year to sustain my love of being busy and productive for a while.
I am rested up though and now ready for the autumn market. Usually we have a mini spring market in the fall, essentially from the second week of September until the third week of November.
Stats Canada reports that real estate commissions, land transfer taxes, legal costs and fees for inspecting and surveying homes make up almost two per cent of Canada’s economy. By comparison, agriculture, forestry, fishing and hunting account for 1.6 per cent of GDP.
The high price of urban real estate and soaring cottage country prices have led to a surge in back yard swimming pool construction.
Since 2008, job growth for real estate agents has surged at ten times the pace of Canadian job growth. Now, as the market is expected to shrink, so too will the number of agents. A recent example? Following an oil price slump in 2015, sales in Calgary’s once booming housing market fell 5.5% from 2015 to 2016. There are now 5.4% fewer realtors in the city than there were in 2008.
Blame it on Joe Canadian
In the recent past, many Canadians had the view that market speculators are foreign individuals but there have been increasing evidences which specifies that speculators are mainly Canadians.
The Problem with REITs
REITs tend to have longer-term leases and less tenant turnover, meaning fewer opportunities for landlords to raise rents. This results in steady cash flow and higher leverage, creating bond-like securities that are more sensitive to interest rates than their global counterparts. Essentially REITs are stable but not as flexible as regular real estate
Will dorm-style living become the next hot housing trend?
Probably not, but it might become the next temporary housing trend. Some people are shacking up with strangers temporarily when they are changing cities and jobs or when leaving a marriage.
There has been lots said about tiny houses. There are articles, TV shows, books…lots of news. But tiny houses might not be for everyone. Although the minimalist movement has its perks, tiny houses are running foul of bylaws in many places. In fact more and more it one of those ideas that seems great but isn’t.
Airbnb is also running into trouble and restrictions are looming for short-term rentals. In one city, two years ago, there were 400 Airbnb homes listed, and now there are more than 800 listed. Municipalities and condo corporations are responding to concerns about dwindling rental stock, and unfair competition for bed and breakfasts.
A McGill study found that with Airbnb in three Canadian cities: 10% of hosts account for most of revenue.
In Money
What can Canada learn from Australia’s economic experience?
The present government’s budget deficit policies should not be dismissed as dangerous or irresponsible. Well-invested borrowed or newly created money can have many positive effects on the economy. This is Keynesian economics.
With Canadian debt levels a serious concern in the early ‘90s, one expert emerged with a plan to balance the books: sell Newfoundland. The price? $500 billion.
And here is some brief history of foreign buying of Vancouver real estate
Starting in 1976, the Canadian government rolled out a program to attract wealthy Hong Kong immigrants. Those with $365,000 ($1,541,504 in 2017 dollars) in net-worth, who invested in $183,000 ($772,864 in 2017 dollars) could come to Canada without any ties. The immigrant had to create 1 job, and establish either a home or have a child attend school.
Speaking of Vancouver…
The 10-year visa lead to the housing booms in Vancouver and Toronto. The government began offering the 10-year visas in February 2014. As a result, in that first year, the number of travel visas handed to Chinese nationals tripled to 337,000. The visas, which allow people to travel freely to Canada each year and stay for at least six months at a time, have sparked an explosion in foreign travel and property speculation in Canada, particularly from China.
And at the boarder, the Canada Border Services Agency has been warning Americans that their “right to bear arms” ends at the border. From 2012 to 2016, gun seizures across Canada were up almost 175%.
In Tech news…
A new report finds that the worst American tech employees are 57% more expensive than Canada’s top-notch techies. And, Canadian office space is a bargain too.
Shopify’s Q2 results showed a 75% revenue increase as it celebrates 500 merchant milestone. Shopify posted second quarter revenues of $151.7 million
