This week’s news: Changes to the OMB may force council to own its decisions

Changes to the Ontario Municipal Board will give more power to city councils to make their own decisions when it comes to a city's development.
Changes to the Ontario Municipal Board will give more power to city councils to make their own decisions when it comes to a city’s development.

Our weekly round-up of real estate news in Toronto, across Canada and the world for the week ending May 19, 2017.

Toronto

Why changes to the OMB may force council to own its planning decisions (CBC News)

After a years-long process involving Ottawa municipal officials, community groups and landlords, a community design plan was approved for Wellington West.

Among other things, it called for a nine-storey landmark building at the corner of Wellington Street West and Island Park Drive.

Toronto housing sales slip 6.7%, listings spike as new rules cool the market (Financial Post)

Home sales cooled in April after setting a record the previous month as the pace of transactions in the Greater Toronto Area slowed, the Canadian Real Estate Association said Monday.

There was a 1.7 per cent decrease in sales over the MLS system last month compared with March, said the association, which represents more than 100,000 real estate brokers, agents and salespeople in the country.

Toronto rent up 15% since last year (BlogTO)

There’s good news and bad news for Toronto apartment hunters. Rental rates have decreased for the first time in almost a year this May, but they’re still hovering near an all time high.

According to apartment listing site Padmapper’s monthly rental report, one bedroom units dipped 1.7 per cent to $1,750 this month, while two bedroom units decreased 0.9 per cent to $2,250.

Canada

‘The worst scenario’: What if Canada’s real estate bubble bursts? (CBC News)

It’s the question lingering behind every headline. It’s whispered among homeowners, would-be buyers and sellers, economists and policy-makers. What actually happens if Canadian real estate prices crash?

On the one hand, a crash might be good for some Canadians already priced out of the market. And even a dramatic 40 per cent drop in prices would set homeowners in markets like Toronto or Vancouver back, what, two or three years?

Foreign buyers seek shelter from the storm (Business in Vancouver)

“Canadian commercial real estate is at the intersection of two powerful investment trends: the search for hard assets in order to generate yield in a yield-starved world and Canada’s increasing status as a safe haven in a world of growing geopolitical uncertainty,” observes Paul Morassutti, executive managing director with CBRE Ltd., in assessing the investment outlook for Canadian real estate in 2017.

In Vancouver, commercial investment transactions totalled $8.1 billion in 2016, or 23 per cent of the national total of $34.7 billion. This is expected to continue in 2017, with foreign players remaining a key element.

Canada’s Housing Market Has 30% Chance Of Busting Out: Goldman Sachs (Huffington Post)

Overvalued houses and too much home construction mean Canada has a 30-per-cent chance of a housing bust within two years, New York-based investment bank Goldman Sachs says in a new research note.

The report defines a “bust” as a decline in inflation-adjusted prices of five per cent or more. It looked at the housing markets in the G10 economies — the countries that use the 10 most commonly traded currencies in the world.

USA

How Tales of ‘Flippers’ Led to a Housing Bubble (The New York Times)

There is still no consensus on why the last housing boom and bust happened. That is troubling, because that violent housing cycle helped to produce the Great Recession and financial crisis of 2007 to 2009. We need to understand it all if we are going to be able to avoid ordeals like that in the future.

But the explanations for what happened in housing are not, I think, to be found in the conventional data favored by economists but rather in sociologically important narratives — like tales of getting rich through “flipping” houses and shares of initial public offerings — that constitute the shifting mentality of the era.

Real estate CEO: Record-low housing inventory is ‘freaking us out’ (CNBC)

The number of homes for sale in America has been falling steadily for the past year, but the situation is apparently getting much worse as spring demand heats up.

“The inventory is reaching historic lows. It’s never declined faster than it did last month. It’s freaking us out — it’s affecting our business; it’s limiting our sales,” said Glenn Kelman, CEO of Seattle-based Redfin, a real estate firm. “We’re going to be fine in terms of market share, but I think the overall industry for the first time is seeing sales volume really limited by the inventory crunch.”

IPE RE Global Awards: US real estate to benefit under Trump presidency (IPE Real Estate)

The US real estate sector is set to benefit under the presidency of Donald Trump, according to a group of investors and managers gathered at this year’s IPE Real Estate Global Conference & Awards in Munich.

A straw poll of delegates at the conference was split over the question. A slight majority (53.8% of delegates) took the view that Trump administration’s actions would drive growth US real estate.

International

Avocado toast may be a symptom of our housing affordability crisis: Wells (The Toronto Star)

It would be generous beyond measure to suggest that Australian real estate developer Tim Gurner didn’t anticipate the mess he would be stepping into with his riff on fancy toast.
By “fancy toast” we mean to say smashed avocado on toast, which Gurner seized as the apotheosis of millennials, literally, misspending their relative youth. “When I was trying to buy my first home, I wasn’t buying smashed avocado for 19 bucks and four coffees at $4 each,” Gurner said in an interview with Australian media this week.

The ‘Coffin Homes’ of Hong Kong (The Atlantic)

Associated Press photographer Kin Cheung spent time recently photographing some of the tiny subdivided housing units in Hong Kong, known as “coffin homes,” and those who live in them. Cheung reports that there is a “dark side to the property boom in wealthy Hong Kong, where hundreds of thousands of people priced out of the market must live in partitioned apartments, ‘coffin homes’ and other inadequate housing.” These residents are among an estimated 200,000 people in Hong Kong living in such tiny subdivided units, some so small that a person cannot even fully stretch out their legs.

IKEA is building micro-apartments for employees that are like an IKEA catalogue come to life (Business Insider)

In the summer of 2017, IKEA employees living in Reykjavik, Iceland may come home to apartments that look just like the retailer they left.

The Swedish furniture giant announced in April that it is building housing for a lucky few employees so that they have an affordable place to live near work. The 34-unit apartment building will be partially furnished with products straight from the IKEA showroom, and will be located within walking distance of the IKEA store in Reykjavik.

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