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Real estate transactions: Mainstreet Equity thriving amid slump

Mainstreet Equity Corp. is on a buying rampage. The Alberta company has been continuing with a number of residential real estate transactions and has solidified itself as one of the nation's largest residential landlords. The company hasn't been paying any attention to the naysayers when it comes to Wild Rose Country's economic climate, and marching to its own drum has paid off. 

In fact, Mainstreet actually picked up speed in 2018 and churned out its best year ever since 2014. Not only has it been buying up property voraciously, but the vacancy rates of its assets also showed some impressive numbers. The vacancy rate dropped to more than 6 per cent in last year's fourth quarter compared to nearly 10 per cent during the same time in 2017.

Residential real estate: South-Central Alberta feels oil pinch

Oil seeps into every area of Alberta's economy. The residential real estate market is no different. According to the Alberta Real Estate Association (AREA), a sluggish oil industry, more stringent mortgage qualifications, escalating interest rates, all played a part last year in falling sales, especially in places like Fort McMurray and Lloydminster. In fact, sales were down about 18 per cent below a 10-year average in most south-central areas of the province last year.

In Lloydminster, particularly, many homes continue to sit on the market. For the past four years sales continue to be below the average. The glut of homes has caused a decrease in pricing, but buyers aren't biting like they used to. Again, it may be due to outside factors such as a lacklustre oil industry. All these factors aren't helping Lloydminster's realtors.

Luxury residential real estate market favours buyers in Calgary

It seems buyers have the upper hand in the Cow Town real estate market. When it comes to the luxury sale of residential real estate in Alberta -- particularly Calgary -- the economic downturn has put a damper on sales of more upscale homes. Add to that other factors like tighter federal mortgage regulations and heightened interest rates, which are barriers to homebuying.

Buyers have more muscle in this kind of market. And with prices of luxury homes in the Calgary area continuing to plummet throughout 2018, many buyers and sellers took themselves out of the game. But all indications are that those buyers and sellers may be ready to play ball again.

Alberta real estate transactions: Kudos to the industrial sector

In what otherwise has been a pretty bleak economic climate in Alberta, there have been some glimmers of hope. Real estate transactions in some sectors such as investments in the commercial and industrial areas, have provided the business-minded in Alberta with some light at the end of a dark tunnel. And the commercial sector just continues to gain momentum in urban areas like Edmonton and Calgary.

Both Edmonton and Calgary set records in industrial real estate transactions in the third quarter of 2018, with figures of $3.3 billion and $3.8 billion, respectively.  Pure Industrial Real Estate Trust was snapped up by Blackstone for nearly $4 billion back at the beginning of 2018 -- a transaction that could have figured prominently in the elevated figures in both urban centres. Those numbers put Alberta on the positively on the map, accounting for a generous portion of the more than $38 billion of commercial real estate deals in Canada in 2018.

Calgary resale residential real estate pummelled in 2018

The resale home market in Calgary was hard hit in 2018. Residential real estate sales dropped but so did prices. In fact, Cow Town was one of the hardest hit Alberta city's when it came to resale properties last year. The Calgary Real Estate Board (CREB) said home sales were more than 14 per cent lower in 2018 than they were in 2017. Sales in December were even worse with a 21 per cent drop from the same time in 2017.

Last year was definitely a buyer's market with some purchasers inking great deals. But times weren't so great for sellers intent on listing at asking prices more than the market could bear. Contributing to the real estate market climate were stagnant job growth, problems in the oil sector, higher interest rates and the federally imposed mortgage stress test.

Influences on real estate transactions in Canada in 2019

The real estate market will continue to have its challenges in the coming year. Real estate transactions in Canada have been affected not only by higher interest rates, but also be the additional mortgage stress test that potential purchasers have had to, and will continue to have to, pass moving into 2019. The Canadian Real Estate Association (CREA) says the tighter rules brought the market down to earth this year.

In fact, CREA predicts that home sales in 2019 will decline to the lowest point ever in nine years. In more expensive markets, any hike in interest rates could mean the difference between affording a home and not. Even though the Bank of Canada is looking to normalize interest rates, some real estate experts say the market needs time to play catch up and any adjustments won't be felt until months down the line. 

Real estate transactions: Condo buildings rise up in Alberta

Real estate market developments in western Canada point to many likely positives in 2019.  Condo buildings are going up in both Edmonton and Calgary and in other areas in the west and that points to increased real estate transactions despite a still relatively slow economy in Alberta. A Calgary builder is erecting a 19-storey condo building in the Beltline with an aim of enticing investors.

Even though the market is sluggish, the developers of this tower, known as Nude, have already sold 20 of 177 units. Building is expected to be completed by 2021. One pull for investors in Alberta is that the province doesn't have rent controls nor does it have foreign buyer or speculations taxes. Another selling point of the building is that units start at less than $200,000.

Alberta real estate transactions: Builders say industry crippled

Home builders in Wild Rose Country say the industry is in a dire straits situation. Real estate transactions in Alberta are affected by a myriad of forces, including market fluctuations and supply and demand. Builders believe that the market is suffering from many uncertainties and the fact that more people are taken out of the market because the prices of homes are out of their reaches. With fewer builds come fewer construction jobs.

Some construction companies have had to cut their staff and cut various projects due to the difficult economy. BILD Alberta, representing those in the building and construction industries, says there are more vacant homes on the market now than ever before and housing starts are the lowest they've been in 10 years. Regulations from the federal government aren't helping matters, a BILD spokesperson says. Those include a buyer stress test and higher interest rates from the Bank of Canada.

Residential Real Estate: Alberta Tops List Of Affordability

Those who are looking for affordable homebuying markets in the country should pay attention to Wild Rose Country. Alberta still tops the list of affordability when it comes to residential real estate. Wages in Alberta have kept pace with housing prices -- one of the primary reasons potential homeowners can still think about buying their dream homes that are still within reach.

After an analysis of the 25 major housing markets in the province, it was found that, when using the median household income of Albertans, they could afford homes in all of those markets. Leading the pack on affordability is Fort McMurray, followed by Beaumont and Cold Lake. The least affordable areas (although still within reach of most Albertans) are Canmore and Calgary.

Real Estate Transactions: Pot Shortage Affects Store Licencing

The Wild Rose Country has only received about 20 per cent of the cannabis it ordered because there seems to be a shortage of the herb. Since the legalization of marijuana on Oct. 17, many entrepreneurs have been wanting to get on the bandwagon to set up cannabis shops. But Alberta has put a stop to issuing store licences because there's nothing to sell, which is affecting commercial real estate transactions.

 

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