The Montreal Real Estate Blog

“Condo conversions aren’t allowed in many Montreal boroughs, so apartment owners are using another tack to sell their properties - and renters want the city to make sure they’re protected against sudden eviction.

Condo conversion is out and co-op conversion is in as the new battleground for tenants and landlords in Montreal, tenant advocates say.

Several tenants of a 300-unit apartment building on Mountain St. that was transformed from a rental building into a co-operative last fall attended a Ville Marie borough council meeting last night to demand a moratorium on that type of building conversion.

The tenants of Club Sommet at 3475 Mountain want municipal and provincial authorities to block such conversions until they can legislate the same kind of protection that exists for tenants whose buildings undergo condo conversion.

Some of Club Sommet’s tenants are facing eviction as the building manager proceeds with major construction work to combine some units to make larger dwellings and breaks up other units to sell.

The first evictions will be heard at the Quebec rental board in June.”

Source: Montreal Gazette. Read the complete article

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Canadian Home Sales to Dip in 2008 and 2009, Real Estate Agency Says - Canadian Economic Press
“Canada’s resale housing market will cool in 2008 and 2009, with the number of homes sold expected to drop and the pace of price increases to slow, according to a forecast issued Tuesday by the Canadian Real Estate Association (CREA).”
Read the complete article

More evidence housing market cooling - 660 News
“Two new reports are affirming the big chill is hitting our real estate market. R.B.C. Capital Markets is reporting a sharp decline in building permits is being led by this province, and the Canadian Real Estate Association says home sales will drop 19% in Aberta this year.”
Read the complete article

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Photo by kinalaya

“Even as Tremblay administration officials announced they were going to accept Devimco’s massive $1.3 billion Griffintown development plan, urban planners and assorted city activists are still trying to rally the forces required to knock the project off the tracks.

At a Thursday meeting held at the downtown St. James United Church, almost 100 people, including city executive council member Alan DeSousa, heard McGill urban planning Professor Raphael Fischler and other experts denounce the project as dull, uninspired, and completely out of date with modern urban priorities. While few had anything good to say about the company’s plans for the site, more than a few questions were raised about the Tremblay administration’s apparently cozy, complicit and complacent arrangements with Devimco. Even as Université de Montréal urban design professor Michel Gariepy believes the city’s present leadership lacks the background and the aesthetic sense required to make such long-lasting decisions, he was especially dismayed by the failure of Montreal’s own urban planning department to stand up to their political masters at city hall. Among several observations, he could not understand why city planners were ready to ignore the city’s own building code along with its six-storey height restrictions in favour of Devimco’s 20-storey plus high-rise condo buildings scheduled to go up alongside its commercial strip development.”

Read the complete article: The Suburban

Selected Griffintown News reading:

• Save Griffintown! - Save Griffintown Blog
• Council gives green light to Griffintown project - Spacing Montreal
• More details on the Griffintown redevelopment - Spacing Montreal
• Last Irishman Standing - Montreal Mirror

Interest rates drop half a point - The Star.com
“Bank of Canada governor Mark Carney has signalled the need for lower consumer borrowing costs and hinted further interest rate cuts may be required to shield Canada from a worse-than-expected slowdown in the United States. For the second time in eight weeks, the Bank of Canada slashed its policy-setting overnight interest rate by half a percentage point, to 3 per cent.”
Read the complete article

Big banks slow to react to Bank of Canada rate cut - The Vancouver sun.
“The Bank of Canada slashed its key interest rate a further half point, and hinted at more rate relief to come in an effort to keep Canada from being dragged into recession by a deeper and more protracted than expected downturn in the United States.”
Read the complete article

Canadian Mortgages Getting Cheaper, Variable Rates Gaining Popularity - CEP News
“With the Bank of Canada’s easing of interest rates over the last several months, including the most recent half-point reduction Tuesday, variable rate mortgages are gaining in popularity as Canadians try to take advantage of lower credit.”
Read the complete article

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• Market Blog - Just bought a house? Don’t read this - Globe & Mail Market Blog.
• Homeless crisis grows while Canada prospers - The Vancouver Sun.
• ‘Cooling’ the watchword in Canadian real estate - CBC News.ca.
• Slide ends housing boom - National Post
• Has the housing boom gone bust? - Calgary Herald
• Low inflation gives Canada wiggle room on rates, analysts say - Canada.com
• A little mortgage savvy gets some big savings - Report on Business.

Canadian Market updates delivered by RSS or Email. Subscribe now.

• Housing markets on shaky ground. [ Report on Business Globe & Mail ]“Canada is in better shape than many other countries and home prices here aren’t expected to drop this year.But that doesn’t mean home owners should expect, or want, to see the big gains of past years.”
• Voices: 40-year mortgages [ The Star.com ] “It should be against the law for banks to offer (and CMHC to insure) 40-year mortgages. If you have to finance with little or no money down and spread the payments of 40 years then it is obvious you cannot afford the home you are buying.”
• Softer sales will cool market. [ The Star.com ] “Canadian housing markets should cool down some this year and next with softer sales, construction and price growth from coast to coast”

On Blogs:

• TD Economics Special Report “Canada’s Red Hot Real Estate Markets to Cool” - Mortgage Dairies.ca

• Requirements loosened for rental investors [Montreal Gazette]
  No money down if lender satisfied. Tight market in some regions prompt CMHC changes.
  “Budding real-estate moguls will welcome the news that Canada Mortgage and Housing Corp. has relaxed the rules for would-be Donald Trumps to purchase investment properties with no money down.The changes apply to rental properties with a maximum of four units, but even The Donald had to start somewhere. CMHC has made the changes with the intention of easing the squeeze in the rental housing market.”
  Read the complete article
• More rate cuts likely says Bank of Canada [Financial Post]
  “More interest rates cuts may be necessary to buffer Canada from the impact of the U.S. economic slowdown, according to the senior deputy governor of the Bank of Canada.”
  Paul Jenkins said “the risks surrounding the Canadian economy have shifted to the downside, resulting in our decision to lower our policy interest rate by 50 basis points to 3.5%.”
  Read the complete article

• Canadian Home Prices to Moderate, but No Danger of Meltdown, Economist Says [CEP News]
  “Declining Canadian home sales and moderating home prices could sap domestic demand, a Canadian economist is warning.
  “Canada isn’t in danger of the same sort of real estate meltdown as experienced in the U.S. or the sudden hikes in interest rates associated with subprime mortgages, he said, but Canadians still need to be careful. The disappearance of strong domestic demand would have a negative impact on the economy, he added.”
  Read the complete article

• Longer payback loan fuels housing market [The Star.com]
  “There’s a revolution going on in Canada’s housing market, one that is propping up prices and extending the boom. More buyers are choosing mortgages with longer payback periods.
  By stretching payments over 30 to 40 years (instead of the usual 25), they can enter the market sooner or buy a better property. Mortgages with longer amortizations have caught on like a house on fire (pardon the pun).”
  Read the complete article

• Interest rates head south - but how far? [Times Colonist]
  “Canada’s mortgage rates are heading down. At a time when stock markets are volatile and with the economy and income growth slowing, the positive news for those planning to get into the housing market or whose loans are up for renewal is that it’s going to cost less to finance a mortgage.”
  Read the complete article

• Credit crunch? What credit crunch? - [Financial Post]
  “There is no sign of a credit crunch in Canada — yet.Household credit is rising at an annual rate of well over 10% with both mortgage and consumer credit growing strongly while short-term business credit is expanding at close to 20-year highs, figures from the Bank of Canada and chartered banks show.”
  Read the complete article

• Canadian households dodge U.S.-style credit woes - [Report on Business]
  “Canadians have dodged the severe credit woes gripping the U.S., where the collapse of the mortgage market has triggered rising delinquency and foreclosure rates and left households saddled with debt, says a report from CIBC World Markets.”
  Read the complete article

• Canada consumers unscathed by credit crunch-report - [Reuters]
  “Canadian households have felt little fallout from the global credit troubles, with mortgage and consumer credit expanding and no big increases in arrears or delinquencies, according to a report released on Wednesday.
  The report, prepared by the Canadian Imperial Bank of Commerce, supports the Bank of Canada’s view that the country has been less affected than Europe and the United States by the financial market breakdown that originally stemmed from the U.S. subprime mortgage market.”
  Read the complete article

Photo: Payton Chung

The administration of Mayor Gérald Tremblay announced last friday, their plans to make sections of St. Paul and Notre Dame Sts. pedestrian-only each day in the summertime.

Starting from June 15 to September 15th, Rue St. Paul, between Bonsecours Market and St. Laurent Blvd., would be closed to vehicles between 11 a.m. and 6 a.m. every summer. Also Notre Dame, in front of Notre Dame Basilica, at Place d’Armes, would be closed to vehicles during the same hours and months.

• Read the full article at the Montreal Gazette.

According to the latest monthly starts survey conducted by Canada Mortgage and Housing Corporation (CMHC), residential construction registered a strong increase this past month in centres with 10,000 or more inhabitants across Quebec. In fact, 2,810 housing units were started in February, or 50 per cent more than during the same period a year earlier.

The dynamics were different, however, depending on the centres. Starts rose by 51 per cent in the census metropolitan areas (CMAs) but fell by 6 per cent in the smaller agglomerations (50,000 to 99,999 inhabitants). The Montréal area stood out by being the engine of this growth. In fact, foundations were laid for 2,167 new dwellings there in February 2008, compared to 1,262 in February 2007, for an increase of 72 per cent. Housing starts went up less significantly in Saguenay (+56 per cent) and Trois-Rivières (+ 21 per cent), while they declined in Québec (-32 per cent), Sherbrooke (-10 per cent) and Gatineau (-3 per cent). The survey also revealed >>

[ Source: CTV News. Read complete article ]

Tuesday’s announcement comes as fewer Canadians are contemplating buying a home in the next two years, finds a study conducted for the Royal Bank.

“Overall intentions to purchase a home have dropped by five percentage points to 23 per cent,” said a news release issued Tuesday.

“The intensity to buy has also decreased with those very likely to buy slipping from nine per cent in 2007 to seven per cent in 2008, the lowest level since the survey was started 15 years ago.”

However, Royal Bank’s vice-president, Home Equity Financing Catherine Adams said Canadians still strongly believe that home ownership is a good investment. “It’s merely the degree of optimism which is down from last year,” she said.

Some findings:

• Percentage of those who would buy now rather than wait until next year: 58 per cent, down 6 points from 2007
• Percentage of those who expect housing prices to rise: 56 per cent, down 3 points from 2007
• Percentage who think mortgage rates will be higher: 46, up 3 points
• Percentage who think mortgage rates will be lower: 23 per cent, up 7 points

Fixed-rate mortgages are the preferred choice for both potential buyers and current homeowners. Read more »»

The interest rate cut announced today by the Bank of Canada will help Canadian home owners and buyers, according to The Canadian Real Estate Association. The Bank of Canada cut its benchmark overnight lending rate by one-half of one percentage point to 3 1/2 per cent on March 4th, and signaled further cuts in the near future. The trend-setting Bank rate, which is set 0.25 percentage points above the overnight lending rate, now stands at 3.75 per cent.

“The threat of inflation is being eclipsed by concerns about slower economic growth, so the Bank of Canada cut its trend-setting bank rate to boost growth,” said CREA Chief Economist Gregory Klump. “Financial market turmoil will remain a downside risk to growth for some time. This means the Bank will probably continue lowering interest rates.”

Lower lending rates will help offset the effect of tightening credit conditions and allow homeowners to obtain better mortgage terms. This will also benefit Canadian homeowners dealing with variable rate mortgages. Read more »»

• Scotiabank Forum Predicts Another Healthy Year Ahead For Canadian Real Estate Markets (Exchange Morning Post)
  TORONTO - Canadian real estate markets remain remarkably buoyant, especially in light of the deepening housing downturn in the United States and the generally softening conditions in most other advanced economies globally, according to experts who presented today at Scotiabank’s Canadian Real Estate Outlook and Trends Forum 2008.
  >>> Read complete article

• Bank of Canada sets interest rate, Tuesday. (Globe and Mail)
  Bank of Canada makes its interest rate announcement. Economists expect the target for the key overnight rate to be set at 3.75 per cent, down from 4 per cent.
  >>> Read complete article

• Interest-rate cut expected, question is how much. (Financial Post)
  OTTAWA — It’s no longer a question of to cut or not to cut for the Bank of Canada, but of how low will it go. Canadians will find out Tuesday.
  >>> Read complete article

• Canada economy to slow, risks to downside - IMF (Reuters)
  Canadian economic growth will slow to 1.8 percent this year and there is a risk of an even sharper downturn as weakness in the U.S. economy spreads beyond the housing sector, the International Monetary Fund said in a report on Monday.
  After growing about 2.5 percent in 2007, Canada’s healthy economy and fiscal standing will help it withstand the global turbulence but external risks will pose a challenge. >> read more
  …….
• Canadian institutions expected to make writedowns (Exec Canada)
  Some of Canada’s five biggest banks are expected to report headline-catching writedowns when they announce first-quarter earnings. The banks have so far escaped with remarkably little damage from the credit market turmoil. >> read more
  …….
• Storm clouds threaten to rain on bank profits (Globe and Mail)
  Canadian Imperial Bank of Commerce said in January that it will take $2.46-billion (U.S.) in pretax writedowns for the two months ended Dec. 31 because of its exposure to the U.S. subprime mortgage market. >> read more
  
  …….
• UPDATE IMF lowers growth projections for Canada on back of US economic downturn (Forbes)
  Canada’s growth will likely decelerate further in 2008 and 2009 as a result of the sharp downturn in the US economy, the International Monetary Fund (IMF) reported. >> read more
  

• Bank of Canada’s Carney ponders degree of rate cut - (Reuters) The Bank of Canada has to weigh strong domestic demand against the spillover effects of the slowing U.S. economy when deciding how much to cut interest rates next month, Governor Mark Carney said on Monday. Carney used his first speech since becoming central bank chief on February 1 to convey that he is keeping his options open, suggesting he could potentially reduce the bank’s overnight rate by 50 basis points, as most market players expect.

>> Read the complete article on reuters.ca

• U.S. credit woes seep across the border (Globe & Mail)
  American subprime shemozzle is beginning to squeeze mortgage and funding availability in Canada.

“Canadian chartered banks have been the main source of financing for real estate projects, but they have got caught up in the U.S. subprime mess and have had to write off those investments. Now, they have returned to what is known as balance sheet lending - or traditional mortgage financing. To maintain government-mandated equilibrium between a bank’s equity and its loans outstanding, the banks have had to both call in loans and cancel commitments for new ones, industry observers say.”

“Intense competition for funds has both increased interest rates on mortgages and created a demand for higher cash-to-mortgage ratios, says David Bowden, president of real estate broker Colliers International Canada in Toronto.”

“The credit crunch is having its greatest effect in smaller centres, says Sheila Botting, senior managing director of Canada for the capital markets group at Cushman & Wakefield Lepage Inc.”

>>Read the complete article on Globe and Mail

• Rate cuts likely to trump inflation fears (Globe & Mail)
  The inflation watch is under way this week in Canada and the United States, but investors are betting the U.S. Federal Reserve Board will to continue to cut regulated interest rates despite price pressures, while the Bank of Canada is expected to play some catch up.It’s anticipated that domestic inflation data scheduled for release today will provide plenty of leeway for the Bank of Canada to lower its target overnight rate on March 4.>> Read the complete article on Globe and Mail

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