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All posts for the month July, 2019

Decline in 5-Year Fixed Mortgage Rate a Big Plus for Prospective Buyers

Published July 29, 2019 by Real Estate Leads

As a realtor, one of the things you’ll encounter often is people who are adamant that variable-rate mortgages are always preferable when financing a home. There’s a lot to be said for them, no doubt, and it’s one of the many things a client may ask their realtor long before they talk to a mortgage broker for the first time. As we keep harping at here, an informed and knowledgeable realtor is one who tends to be well regarded – and referred – by his or her clients.

Which leads us to also say again that there’s so much to be said for making a strong first impression when meeting with would-be clients. Here at Real Estate Leads, our online real estate lead generation system is a proven-effective way of not only creating more of these opportunities, but creating more genuine ones – meaning with people who are genuinely considering buying or selling homes in the near future.

So, in the interest of building on your knowledge base, let’s discuss the ramifications of this reduced 5-year fixed mortgage rate in greater detail.

Dipping to 5.19%

There it is – the interest rate used for mortgage qualification has fallen to 5.19% from its previous spot at 5.34%. it’s especially noteworthy because it marks the first decline since September 2016. Back then the benchmark qualifying rate fell to 4.64% from 4.74%. It’s been rising ever since, and that’s based on the same reflection of what the BoC (Bank of Canada) sees as the economic outlook of the country.

This past week’s drop has much to do with global central banks deciding to loosen lending policies, but we should keep in mind that Canada’s five-year bond yield – which impacts five-year fixed mortgages – has been going down from January 1st onwards.

More Purchasing Power

The consensus seems to be that the interest rate decline will allow a homebuyer earning $50,000 a year to afford a home that’s some $4,000 more expensive than would have previously been the case. For someone earning $100,000 a year, they can be looking at something $8,300 or so more expensive.

How this will be beneficial for homebuyers – and investors – doesn’t need much explanation. In tandem with the Bank of Canada’s decision to hold the interest rate two weeks ago, we’re currently seeing the most auspicious period for prospective buyers in 19 months. Further, economists believe we’re unlikely to see the interest rate move on the variable side over the next few months.

Additional Considerations

It should be mentioned as well that there has been considerable speculation that the Bank of Canada will cut rates before the end of the year. While this would be even more beneficial considering a mortgage, those same economists say we shouldn’t hold our breath in that one. The belief is that unless we see those risks affect the domestic economy, it is unlikely rates will decline this year. In contrast to the US, real policy rate in Canada is still 1.75% and inflation was 2%. Long story short, the real interest rate here in Canada will be lower.

Sign up with Real Estate Leads here and receive a monthly quota of qualified, online generated buyer and / or seller leads that are delivered to you exclusively and for your privately-served region of any city or town in Canada. It’s a dynamite way to supercharge your prospecting efforts, and you’re almost certain to see your business grow exponentially

Outskirts of Vancouver Seeing Bulk of New Rental Development

Published July 22, 2019 by Real Estate Leads

That both Vancouver and Toronto are cities in desperate need of more rental housing stock has been discussed at great length in the news these days, and it’s also true that other big Canadian cities are feeling this pinch too. Both Vancouver and Toronto have municipal governments that are taking steps to address the problem. However, it seems that while the results are in fact helping to create more rental housing it is not being built where it’s most critically needed – in the Metro areas of the cities.

We’ll take a look at this in greater detail here, but first mention that trends like these have a very measurable effect on a realtor’s business in big cities like these. Here at Real Estate Leads, our online real estate lead generation system is an excellent resource for real estate agents in Canada who want to get much more out of their client prospecting efforts.

Which – given this rental-housing shortage – is important. That’s because this aberration in the housing hierarchy is quite a departure from all the generations previous. The lack of rental housing in metro areas has the very detrimental effect of driving young, talented professionals out into suburban areas and forcing them to make long commutes.

In some instances, they leave the city area altogether. Not only is that something of a ‘brain drain’ as the expression goes, but it also disrupts the natural homebuyer continuum. That could be an entire discussion on its own, but just trust us when we say that adequate rental housing levels for young professionals makes for more property buyers in the future.

Most on The Outsides

The number of rental construction proposals in Vancouver’s satellite regions (tri-cities areas most notably) are currently far exceeding those seen in Metro Vancouver, as is laid out in the Goodman Report’s 2019 Mid-Year Metro Vancouver Rental Apartment Review.

Over the last 3 years new proposals for rental-purpose buildings in the city have gone down by 29%. Considering the glaring need for rental housing, it’s hard to make sense of that. Much of the new volume has been focused on the suburb – where a 147% increase in proposals has been seen during the same time period.

Looking past the land available for development constraints that are a reality for nearly any major city in North America, this is a real failure on Vancouver’s part. Especially when you consider that many years will go by before all these suites are available – and assuming they’re all actually built.

Young, ambitious professionals who would be renting IN the city and building up their down-payment on a house are either taking themselves elsewhere or assuming the literal and quality-of-life costs that come with having to make long commutes 5 times a week.

One end result of this is that there are inevitably fewer ready home buyers once the next batch of them come around at the age they’re ‘supposed’ to.

Detrimental Government Intervention

Significant government intervention has pulled Vancouver’s rental transactions down by 50%, and overall value by around 27% in that same 2016-present timeframe. Along with that, dollar volume has shrunk by as much as 62%, from $1.383 billion last year to $529 million this year. And to ice this mismanagement cake, at the same time cap rates in the City of Vancouver have gone up 50%.

Long story short, in the last two years the City of Vancouver has been disproportionately outpaced by the suburban rental housing market. All this despite knowing full well that METRO rental housing was where the need truly existed.

What’s even more problematic is that these trends are usually self-perpetuating. Fast-forward two and a half years, and we’re likely going to see an even more disparate rate at which developers are applying to build rental in other municipalities.

All of which has a damaging influence on the real estate market as a whole, for the reasons stated above.

Sign up with Real Estate Leads here and receive a monthly quota of qualified, online generated buyer and / or seller leads that are delivered to you exclusively and for your privately-served region of any city or town in Canada. It’s a dynamite way to supercharge your prospecting efforts, and grow your client base like never before.

The Promise of Blockchain Technology Development for Real Estate

Published July 15, 2019 by Real Estate Leads

There’s few buzzwords if any that are as hot in the world of computing quite like Blockchain is. Some realtors in Canada may be familiar with Blockchain, but we imagine the majority aren’t familiar with it. A blockchain is a growing list of records that are resistant to modification of the data and can digitally record transactions between two parties efficiently, verifiably, and permanently.

Now some will read that and see the words ‘transactions’ and ‘verifiability’ to quickly make the connection for how blockchain technology could be beneficial for real estate. Others may still need it to be laid out a little further, and that’s perfectly fine too. And of course while we’re on the subject of beneficial technologies, here at Real Estate Leads our online real estate lead generation system is 100% proven beneficial realtors looking to build on their customer base. See out testimonials page for more convincing on that if you need it.

But back to Blockchain for now. What makes it have so much potential for Real Estate?

Open, Transparent, and Traceable

A group called the Enterprise Ethereum Alliance (EEA) recently put out a 30-page Real Estate Use Case document to promote blockchain as a more open, transparent and traceable method of conducting transactions in the real estate industry.

It lists eight different uses for blockchain, including:

-property identification (including listings and data)

-token-enabled marketplaces

-token securitization

-public registries detailing ownership of properties

-sales process optimization

Along with its role in the creation of a real estate exchange, blockchain has been used as a platform for conventional real estate sales. Look no further than New York-based ShelterZoom, who have plans to go live this year with a platform enabling buyers and sellers to make and consider offers over an Ethereum blockchain.

Real estate tokenization may take some time to take hold, but it’s quit likely that it will. How this will almost certainly work is that the firm will offer a number of buildings in an index, and participants can buy tokens from that index. The appeal is quite simple, less risk and more profit.

It’s important to remember that the real estate market is highly liquid, meaning property can be bought or sold relatively speedily with little to no loss in value. To date, however, the marketplace has primarily been for a wealthy investors. Blockchain has the potential to change that.

It will enable anyone to invest because the costs to do it are so much lower, and it enables fractionalized ownership. Tokenization makes it so that someone can indirectly acquire a piece of real estate, and it also has the potential to create a much more transparent marketplace. This makes more of a level playing field so that everyday people aren’t at a disadvantage compared to more seasoned, deeper-pocketed buyers.

It has the potential to enables anyone to own and acquire a piece of real estate. Blockchain allows anyone to sell anytime, even if that means selling your share on a secondary market. Of course, a decentralized exchange for real estate tokens.

Blockchain and REITs

A Real Estate Investment Trust (REIT) is a fund or security that allows investors to purchase shares of income-generating real estate properties. REITs are owned and operated by shareholders who invest in commercial properties such as office and apartment buildings, hotels, and shopping centers.

With the new technology, the property will have its own smart contract and thus its own token. They can choose to invest in a specific property at a specific address wherever they like.

How It Works

There will be a central authority of users who whitelist those who can participate by first authenticating their identities. Once the individual is cleared, their personally identifiable information is encrypted and stored in a crypto wallet – a piece of software that keeps track of the secret keys used to sign blockchain transactions digitally.

The blockchain onboarding process involves potential users automatically being asked questions and required to submit sufficient proof of identity through a business automation application known as a smart contract – which serves to satisfy financial industry regulations. Once buyers / investors have completed the onboarding process they’ll have their crypto wallets whitelisted for blockchain real estate transactions.

All very interesting stuff, and something for real estate professionals in Canada to keep tabs on.

Sign up for Real Estate Leads here and receive a monthly quota of buyer and / or seller leads delivered to you exclusively and for your similarly-exclusive area of any city or town in Canada. You’ll quickly come to see it as money well spent as you build your client base much more quickly than you would by traditional means. It’s a proven performer in every sense of the term!

Real Estate Industry-Related Employment Taking a Big Hit Nationwide

Published July 8, 2019 by Real Estate Leads

For well over a century now there has been an entire segment of people who’s livelihood is directly connected to the real estate industry in Canada. It’s not an entire dependency on it, but the connections is a fairly arterial one that’s of great importance to their well being in ‘making a living.’ Without going into any unnecessary detail about them, they’re known as the FIRE (finance, insurance, and real estate) sector of the industry, and that industry is the buying and selling of homes in Canada.

Now of course working with the understanding that most of you reading this will be real estate agents, it’s definitely newsworthy to note that Stats Canada has put out some findings recently that indicate the FIRE sector is beginning to take a bit of a beating in Canada. In particular, larger provinces like Ontario, and Quebec have actually seen job losses in the sector number in the thousands in the last few months.

The weight of these undesirable turns doesn’t come down only on realtors, but it’s yet another factor making it difficult for realtors to realize the expectation they have for their business within each quarter of the year. Here at Real Estate Leads, our online real estate lead generation system for realtors is an excellent way to be put more directly in touch with prospective clients. This makes for more in the way of opportunities to make new clients in a current environment where that’s increasingly more challenging to do.

But back to our topic here today, what are the realties of this big hit being taken by the FIRE sector in Canada?

Undeniable Shift

Statistics Canada (Stat Can) data shows FIRE sector jobs made a small decline in June. Aggregate movement was small, but most of the gains that kept the decline from being larger were made in smaller provinces and that should continue to be the case. Larger provinces like Ontario and Quebec lost thousands of jobs in the sector last month.

The home buying and selling industry booms when asset prices rise and / or more interest payers are added, which is an immediate indication that more credit is being issued. It declines when asset prices fall, or credit growth begins to slow down. As manufacturing jobs disappear (and this trend has been picking up steam in Canada over nearly 30 years now) the sector becomes more important to the financial health of the country. The reality is that debt-driven economies like Canada’s are increasingly dependent on this sector.

FIRE Employment Is Flat in Canada

As it stands now here in the first week of July, Canadian FIRE sector employment is virtually flat from the month before. FIRE seasonally-adjusted employment went down to 1.193 million jobs in June, representing a 0.02% decline from the month before. 2014 was the last time a monthly decline for June was seen here. It equates to about 200 jobs lost in the sector, and some Provinces got it much worse than others.

  • Ontario – Over 5,000 FIRE sector jobs lost in June, with FIRE seasonally-adjusted employment falling to 577,400 in June, down 0.98% from the month before. The decline equates 5,700 FIRE sector jobs lost in June. This follows 1,300 jobs lost in May. Worth noting that half of all FIRE sector employees in Canada work in Ontario.

 

  • British Columbia – FIRE employment hits all-time high, with FIRE seasonally-adjusted employment growing to 162,000 in June, up a very large 4.99% from the month before. This works out to an increase of 7,700 jobs for the month, the biggest June increase ever. Considering some of the largest declines in real estate sales in the country have been seen in BC recently, this one is hard to make sense of.

 

  • Quebec – Loses over 5,000 FIRE sector jobs. Quebec really did take a significant hit here, with seasonally-adjusted employment falling to 239,600 jobs in June, down 2.12% from a month before. This roughly equates to a loss of 5,200 jobs, and loss numbers of that type haven’t been seen since 2006.

 

  • Alberta – Largest June increase since 2012. Substantial gains in the Province’s FIRE sector were seen last month. Seasonally-adjusted employment reached 105,800 jobs in June, up 2.42% from the month before. This meant somewhere in the vicinity of 2,500jobs being added.

While the decline in FIRE sector employment was marginal across the country, there’s an interesting trend to be seen here. The country’s largest province by population is experiencing a decline in FIRE sector employment while provinces with smaller populations are seeing that type of employment increase. While net change from all of this probably isn’t going to shake things up too much, there’s very likely going to be regional impacts.

Sign up with Real Estate Leads here and receive a monthly quota of qualified, online-generated buyer and / or seller leads that are delivered to you – and only you – for your also exclusive region of any city or town in Canada. It’s your area, and they’re your leads and when you see how efficiently this service puts you in touch with people who are genuinely considering buying or selling a home in the near future it really shines a light on how you’ve made a smart decision as a real estate agent.

RentSteady – New Digital ‘Landlord’ Service for Renting Investment Properties

Published July 2, 2019 by Real Estate Leads

Slowly creating wealth by buying investment properties and then selling them at a later date for a profit is a method that’s been around for more than a century now. When it comes to residential properties, unless the buyer is EXTREMELY deep pocketed they will often need to rent these properties during the duration of their ownership of them. Some owners have the means of doing this, but for others a property management company is the way they choose to go.

A new digital resource has arrived on the scene that promises to be very advantageous for homeowners who are renting out a property and have encountered headaches from doing so on their own in the past. As a real estate agent, you’re more than likely going to have clients that fit this description, and if you’re able to share helpful information with them that of course goes a long way to creating repeat clients.

Here at Real Estate Leads, our online real estate lead generation system is an excellent way to get more out of your prospecting efforts and gain more in the way of opportunities to meet potential clients of ALL types. It’s been especially well received by realtors all across Canada, and of course anything you can do to build on your knowledgebase increases your chances of turning making clients out of these opportunities.

Which leads us back to our topic here today..

RentSteady – Providing Landlords with Payment Assurance

Get Digs™ is a digital service that improves the way renters make rent payments, and landlords receive them. Renters can pay their rent by one of five methods: credit card, VISA Debit, Debit Mastercard, Interac e-Transfer, or cheque. They can also set up alerts to make sure they’re never late with a payment.

On the other side of the equation, landlords get the assurance that they will receive their rental income in a timely manner each month, even if the tenant is late with paying it. That’s made possible with a feature called RentSteady, and it works to ensure they get paid on time no matter what goes on with the tenant. The appeal for landlords is that it helps remove the negative impact on cash flow associated with late rental payments, and giving the landlord the security and peace of mind when it comes to their making necessary payments of their own.

How does RentSteady work? Landlords receive an e-mail notifying them that the tenant is late paying the month’s rent. From there, RentSteady handles all of the follow up associated with late payments and continues to send weekly notifications to update the landlord of the renter’s payment status.

Long story short, the important part for most here is that if the renter defaults, the landlord will continue to be paid on the first of the month, and for up to 4 months of consecutive non-payments.

Truly Unique Product

Other products in the market that attempt to protect landlords do exist, but the consensus is that most aren’t particularly effective. Most add more tasks and processes to what is already required of landlords and do not solve the main issue of being out of pocket for the rent owed.

If you’re looking for a validation of that, consider that Get Digs is backed by RBC Ventures. We believe it’s going to have a long-term impact in the Canadian market. Being backed by RBC provides a legitimacy and peace of mind that other products aren’t capable of providing.

Having tenants fails to pay rent on time can have serious ramifications for homeowners with their own payment schedules for the property. RentSteady can help with that and you’re encouraged to recommend it to your clients.

Sign up with Real Estate Leads here and receive a monthly quota of qualified, online generated buyer and / or seller leads delivered to you exclusively for you own private region of any city or town in Canada. It’s a dynamite way to supercharge your client prospecting efforts and so many professionals like you can’t recommend it highly enough..