All posts by karimkanji

Real Estate Weekly Newsletter (from KPMG)

Thank you to KPMG for the following:

The following information was obtained from newspaper articles appearing in the Globe and Mail and the National Post for the week ending December 3, 2006:

Ivanhoe Cambridge will purchase a 93% stake in the Arcaden mall in Dusseldorf,
Germany, for $249.3-million. The mall is scheduled to open in 2008.
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FirstService Corp. has purchased a majority interest in PGP Valuation Inc., a San Diegobased
commercial real estate appraisal and consulting firm. FirstService will rebrand its
Colliers CMN appraisal business in the U.S. as PGP Valuation.
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According to CB Richard Ellis Ltd., Canadian companies and pension funds have invested
nearly $10-billion in foreign real estate in 2006, about twice the amount invested in 2005. At
the same time, foreign investors have purchased between $5-billion and $6-billion in
Canadian commercial properties in the past 12 months. In 2006, the total value of
commercial real estate transactions in Canada is expected to reach about $23-billion.
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Developers expect substantial building opportunities to arise as the federal government
reorganizes its office space in Ottawa. The federal government’s Public Works department
expects to renew about 3.4 million square feet of space and replace about 861,113 square
feet of office space over the next three years. Also, BMO Nesbitt Burns and the real estate
division of RBC Dominion Securities are expected to release a report in December
recommending solutions for 40 government-owned buildings across Canada that are
underutilized, outdated or fail to comply with new environmental standards. Eighteen of
these buildings are located in Ottawa and comprise about 10.3 million square feet of office
space.
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According to Cushman & Wakefield LePage, class A and B office vacancy rates in Kanata,
Ontario, have fallen to 8% from 28.3% at the end of 2003.
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According to Statistics Canada, new housing construction in Canada dropped 3.3% in the
third quarter and investment in residential structures fell 2.2%, or 8.2% at annual rates.
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Canada Mortgage and Housing Corp. signed a memorandum of understanding with the
Federal Agency of the Russian Federation for Construction and Housing and
Municipal Services to promote the export of Canadian housing products and expertise.
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According to the Canadian Institute of Mortgage Brokers and Lenders, the total
outstanding mortgage debt in Canada is expected to reach $730-billion by the end of 2006
and more than $800-billion by the end of 2007. In 2006, $197.7-billion in new mortgages will
be completed, with approvals projected to exceed $200-billion in 2007.
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According to LaSalle Investment Management, global real estate funds raised a record
US$55-billion in 2006.
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According to the Lower Manhattan Construction Command Center, about 50 Lower
Manhattan projects, costing US$20-billion, are planned or currently underway. These include
the Ground Zero construction, a new US$2-billion, 43-storey headquarters for Goldman
Sachs Group Inc., and new underground water pipes, subway stations, parks and
residential buildings.
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Toll Brothers Inc. reported that orders for new homes fell 58% in the third quarter.
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According to the U.S. Commerce Department, sales of new homes fell 3.2% in October
from September, increasing the supply to seven months’ worth of new homes. Sales in
October were down 25.4% from a year ago. Investment in housing in the third quarter
dropped 18% during the third quarter. Overall construction spending dropped 1% in October.
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According to the National Association of Realtors, new-home sales in the U.S. are
expected to fall 17.3% in 2006 to 1.06 million.
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According to the National Association of Realtors, sales of existing homes in the U.S.
increased 0.5% in October from September to a seasonally adjusted annual rate of 6.24
million, but fell 11.5% from October, 2005. The median selling price dropped 3.5% from a
year earlier.
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Donald Trump is proposing to build a golf resort on a 566-hectare site near Aberdeen in
Scotland that will cost up to £1-billion ($2.2-billion). Plans call for a golf academy, two golf
courses, nearly 1,000 holiday homes, 36 luxury villas and a 450-bedroom luxury hotel.
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State-run Qatari Diar Real Estate & Investment Co. is reportedly in talks with Britain’s
Ministry of Defense to purchase London’s Chelsea Barracks. In October, Westminster City
Council approved plans to demolish the tower blocks to allow for 1,500 homes, shops and
offices on the 13-acre property in the heart of London.
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According to the Dutch Housing Ministry, there are almost 150 people seeking housing for
every 100 houses offered for rent in Amsterdam.
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OAO Gazprom plans to build a 300-metre-high skyscraper in St. Petersburg’s historic
centre. The project, called “Gazprom City,” is encountering opposition from cultural leaders.
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Dubai Property Ring is developing a US$109-million, 30-storey, 80,000-ton rotating
condominium tower, called Time Residences, in Dubai which is scheduled for completion in
2009.
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Aldar Properties will begin construction of a US$40-billion island, known as Yas, off the
coast of Abu Dubai in 2007 that will feature a leisure complex including a Ferrari theme park.
The island will be completed in 2014.
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According to JPMorgan Australia, foreign investment accounts for about 40% of all real
estate held through the Australian public markets due to limited product available in
Australia.
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According to the Sydney Morning Herald, housing prices in Australia climbed 2.2% in the
September quarter and increased 9.5% from September, 2005. Prices rose 10.1% in Perth
in the quarter and 45.9% annually. For the September quarter, prices were up 3.1% in
Darwin, 3.8% in Canberra, 0.6% in Adelaide, 1.5% in Hobart, 1.7% in Melbourne, 0.9% in
Brisbane and 0.2% in Sydney. On an annual basis, prices climbed 17.3% in Darwin, 10.5%
in Canberra, 6.4% in Adelaide, 9.4% in Hobart, 7.5% in Melbourne, 6.5% in Brisbane and
1.4% in Sydney.
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News for Tuesday December 5th 2006:

Just a couple of days ago I posted here an report by Royal LePage that Canadians were flocking to ‘luxury’ real estate. Now I find out that an American Luxury Home Builder is having problems. Makes you wonder if Canada will see the Real Estate bubble burst like is happening in the U.S. of A.

Here’s what empty nesters are doing. Watch out first time home buyers! If I was licensed to give advice I would buy the homes these empty nesters are leaving….

***I think this is an important article for Real Estate Agents and their clients***

Now here’s a Canadian Success Story that is worth celebrating.

Another Canadian Success Story! Excellent!

Karim Kanji
Manager – Client Services
RealCash Bancorp Inc.
MoneyNow@RealCashCanada.com
www.RealCashCanada.com
416.444.7790 and 1.800.265.2694

Real Estate News for Monday December 4th 2006:

Hey folks!

I’ve always wondered what role politics plays in Real Estate. Do you think the election of a new Liberal Leader will have an effect on our industry? Let us know if you have any thoughts.

Here is an interesting article:

The “O.J. Simpson” close. I’m not kidding…

Today, more and more real estate agents and other self-employed entreprenuers are looking to stay as healthy as possible. Here is an interesting article to help all of you. Maybe it can be a part of your New Year’s Resolution!

Mortgage Brokers NOW need a Licence (you mean to tell me that they didn’t before?!)

Carriage Trade Luxury Properties Report released by our pals at Royal LePage Real Estate Services.

Norm Edelmann is selling his 5 investment properties online – Does this mean Real Estate agents are going the way of the dinosaur?

U.S. construction continues to PLUNGE!

A Lean Green Athletic Machine for Living.

First News for the 1st of December 2006

25 days ’till Christmas! Don’t forget, if you have earned commissions but are waiting weeks or even months to be paid, call 1.800.265.2694 or 416.444.7790. RealCash Bancorp will be more than happy to assist you in getting Money into your pocket Now!

Regards,

Karim Kanji
Manager
Client Services
RealCash Bancorp Inc.
416.444.7790
1.800.265.2694

This Just In……..

Discount Realtor Closes Door!

(Thanks to the Toronto Star for the above article.)

Wow! This is interesting news. Here is a history of Realtysellers recent woes as chronicled by REM Magazine:

Realtysellers Launches.

Realtysellers expand Lawsuit.

Realtysellers settles Lawsuit.

Realtysellers plans agressive Growth!

Realtysellers expands in Ontario!

Wow! Stay tuned to this BLOG for more details!

Regards,

Karim Kanji
Manager
Client Services
RealCash Bancorp Inc.

Mortgages, mortgages, mortgages

Recently, “Mortgages” have been popping up in the news. Some are bad and some are good. For example, mortgage rates being low are good. However, mortgage fraud is bad. Very bad. What are your thoughts? How can consumers get the best deal? How can consumers protect themselves from such things as identity thefts and high broker costs?

Here is a smattering of mortgage news that might be of interest to you and your clients…

The Toronto Star’s Mortage Fraud investigation. This is a very extensive and intense investigation. This should be must reading for everyone in the mortgage and real estate business.

Globe and Mail had a report last week that focused on the feverish pace of borrowing. You can read that article HERE.

As more and more news and reports surface on the Canadian mortgage industry, be sure to check back to this blog. I am committed to helping you stay on top of the latest information on not just mortgages but the WHOLE real estate industry.

And don’t forget to let your clients know about this site. Consider it my blog for YOU!

Until next time,

Karim Kanji
Manager
Client Services
1.800.265.2694
416.444.7790

According to…

(This just came into my email box…)

Thank you to KPMG for the following:

November 27, 2006

The following information was obtained from newspaper articles appearing in the Globe and Mail and the National Post for the week ending November 26, 2006:

The Caisse de dépôt et placement du Quèbec’s office property subsidiary, SITQ, has
purchased a 50% interest in the 40-storey TD Canada Trust Tower and the twin-tower TD
Square building in Calgary from Alberta Investment Management for a price reportedly
between $350-million and $400-million.
********
The Ontario Municipal Employees Retirement System’s property investments will return
more than 20% in 2006 after returning 26% in 2005.
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According to CB Richard Ellis Ltd., office occupancy costs in Calgary rose to US$53.51 a
square foot per year in the third quarter, compared with US$52.80 a square foot in Toronto.
In Edmonton, occupancy costs climbed to US$29.58 a square foot from US$17.45 a square
foot two quarters ago.
The most expensive district in the world is London’s West End, where occupancy costs are
US$212.03 per square foot, followed by Tokyo’s inner central district at $145.68 per square
foot. Midtown Manhattan is North America’s most expensive district at US$62.07 per square
foot.
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According to Cushman & Wakefield LePage, the national office vacancy rate is expected to
fall from 7.1% at the end of the third quarter to 6.9% by year end and further to 6.7% by the
end of the fourth quarter in 2007. The vacancy rate in Toronto is projected to drop to 7.2%
by the end of 2007 from 7.5% at the end of the third quarter and 7.3% at the end of this year.
Downtown Toronto is expected to add 3.2 million square feet of space. The vacancy rate in
Calgary is expected to go down to 0.4% in 2007 from 1.4% at the end of September. The
city has 10 projects planned that could add 10 million square feet of space. Winnipeg will
add 700,000 square feet of space and the vacancy rate will drop to 6.2% by the end of 2007
from 6.4% this year.
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According to CB Richard Ellis Ltd., the third-quarter industrial vacancy rate in Richmond,
British Columbia, is 1.1%, compared with 0.8% in Vancouver and Surrey. Richmond added
141,150 square feet of industrial space in the third quarter, while Langley added 277,998
square feet. For the 12 months ended October, industrial building permit values in eastern
Richmond reached $72.5-million, more than twice the value issued in west Richmond.
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According to Century 21 Real Estate Corp., the selling price of a typical bungalow has
risen 144% in Edmonton, 128% in Calgary and 129% in Vernon, British Columbia, over the
past five years. The price of a typical home in the Beaches neighbourhood in Toronto has
climbed 106%, while the price of a detached house in Ottawa is up 23%. Housing prices in
Canada are expected to climb between 7% and 9% in 2007, with increases of more than
10% in Alberta.
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According to the Canadian Real Estate Association, the average house price in Alberta
will go up 9.9% in 2007, while prices east of Manitoba will increase 4% or less.
© 2006 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International, a Swiss cooperative. All rights reserved.
********
According to Canada Mortgage and Housing Corp., the average house price in Alberta will
rise by about 30% in 2006 and 12.6% in 2007. The national average price is expected to
climb 5.7% next year, compared with 11.6% this year.
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According to Royal LePage Real Estate Services, sales of luxury homes jumped 160% in
Calgary, 153% in Halifax, 129% in Edmonton and 57% in greater Vancouver in the first three
quarters of 2006, compared with the same period in 2005. Sales of luxury homes increased
34% in Ottawa, 32% in Montreal, 27% in Victoria, 25% in Winnipeg, and 20% in greater
Toronto.
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According to the Canadian Institute of Mortgage Brokers and Lenders, more than 31% of
Canadian home buyers sought the advice of a mortgage broker in 2006, compared with 25%
in 2005.
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According to Statistics Canada, 1.7 million or 14% of Canadian households spent 30% or
more of their total budget on shelter costs in 2004. Some 12% spent between 30% and 50%
of their incomes on housing, while 2% spent 50% or more. Only 6% of those who owned
their own homes spent 30% or more of their budgets on shelter, compared with 31% of
renters.
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Blackstone Group LP will purchase Equity Office Properties Trust for US$20-billion, or
about US$48.50 per share. Including debt, the transaction is worth US$36-billion.
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According to Bloomberg, buyout firms more than doubled their acquisitions of property
companies to US$16.5-billion in 2006, before Blackstone Group LP’s acquisition of Equity
Office Properties Trust.
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According to Thomson Financial, the value of transactions in the U.S. real-estate sector
this year has risen nearly 50% to $264-billion from 2005.
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According to Private Equity Intelligence, 68% of investors in private equity funds plan to
add more money to real estate investments, while only 4% plan to reduce their allocation
toward property. In 2006, private equity funds with a focus on real estate are expected to
exceed the $45-billion in new capital raised in 2005.
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According to Colliers International, U.S. office vacancy rates fell in the third quarter to
12.96% from 14.13% in 2005. Rents for class A space in Manhattan climbed to a record
US$63.26 per square foot in October.
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According to Fidelity Investments, global REIT investment could rise to US$1-trillion by
2010 from less than US$50-billion 16 years ago.
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Cintra Concesiones de Infraestructuras de Transporte SA, which runs Toronto’s 407-
ETR highway, is studying about 50 toll road projects in Europe, Australia and the U.S.
involving a potential investment of more than €80-billion ($117.5-billion). The company is
targeting toll road projects in North America, where Georgia and Virginia are among five
U.S. states inviting bids, as well as Ireland and Portugal’s Azores Islands.
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Trump Entertainment Resorts Inc.’s US$1.25-billion of 8.5% notes due 2015 have
returned 5.2% in the past month. The bonds are rated Caa1 by Moody’s Investors Service
and B- by Standard & Poor’s. Trump Entertainment is competing against four gaming
companies for two licenses to build a new casino in Philadelphia. Trump is also reportedly
considering a plan to swap some of its holdings in Atlantic City with property in Las Vegas
owned by Steve Wynn, according to the Star-Ledger newspaper.
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Best Western International Inc. reportedly plans to triple the number of its four- and fivestar
Premier hotels in China to 60 by 2009, while abandoning its plans to build a network of
three-star, budget hotels in China by 2007.
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Wyndham Worldwide Corp.’s Super 8 chain reportedly plans to expand from 33 to 110
hotels in China over the next couple of years.
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According to the European Mortgage Federation, the volume of mortgage loans in the EU
climbed 11% in 2005 to €5.1-trillion ($7.5-trillion), above the 9.4% average of the past 10
years. Mortgage volumes soared 97% in Latvia, 94% in Lithuania and 80% in Estonia.
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