Those Panicked Phone Calls From Landlords
A report from Bloomberg on Canada. “Canadians may finally be getting skittish about real estate. The share of survey respondents who expect a decline in local housing prices jumped by 8.5 percentage points, the most since weekly polling began three years ago for the Bloomberg Nanos Canadian Confidence Index. The increase to 20.5 percent from 12 percent dragged the broader sentiment index down from 2016 highs. The reading marks a change from almost unbridled consumer optimism in a housing market that has carried the Canadian economy since the 2008 global financial crisis, even as policy makers warn price gains in some cities are unsustainable.”
“‘If there was to be a bit of a slowdown I don’t think it would be surprising given the strength that we’ve seen in the market over time,’ Bank of Montreal Chief Financial Officer Tom Flynn said of the Vancouver market in an Aug. 23 phone interview. ‘We’re protecting ourselves from a risk perspective by having higher levels of equity down payments on more expensive properties, and we’ve been doing that for a period of time.’”
The Canadian Press. “Canada’s mortgage insurance agency is reporting a 52 per cent increase in the number of insured home loans in arrears in Alberta, as low oil prices weaken the provincial economy. Canada Mortgage and Housing Corporation says in its second-quarter report that payments on 1,487 mortgages in Alberta were three months or more overdue as of June 30 — up from 978 at the same time in 2015. Saskatchewan’s list of troubled mortgages is also up, to 529 from 392, in the same period.”
The Western Wheel. “A slowing real estate market is leaving an impact on the rental market in Okotoks, forcing many landlords to drop their monthly rates. Web-based rental listing site RentFaster.ca showed an average of approximately 25 to 30 rentals available in Okotoks in 2014, but as of Aug. 23, there were 52 listings in town on the site. Rent in Okotoks, according to RentFaster.ca, varies from $800 for shared accommodations to $3,000 for a single detached four-bedroom home. The average rent in town currently sits just over $1,550.”
“Prairie Management and Realty Inc. office administrator Jennifer MacTavish said slow home sales is driving many to list their homes for rent. The result is a number of large, single-detached homes being put on the rental market alongside the typical condos and suites. There has also been an increase in the number of homes being offered as rent-to-own properties, she said. ‘The sales market was low, so a lot of people weren’t selling or getting what they asked for, so in turn they decided to rent their homes,’ said MacTavish. ‘There just isn’t a market for homes over $700,000 to $800,000.’”
“With so many properties available and a slow economy, she said many landlords have been forced to reduce their rents or provide other incentives. Prairie Management acts as a liaison between homeowners and renters, often in cases where owners have moved away and can’t manage the property on their own. When tenants are difficult to find, they often make suggestions to their clients on how to attract renters, she said.”
“‘We’ll talk to them and say, ‘You’ve had it up for rent for three months now, there’s been no serious inquiries, we should maybe consider other options like a first month off or something to make it more appealing to the public,’ said MacTavish.”
“Landlord Chantel Van Buren has owned a rental property in Crystal Shores for more than 10 years and has dealt with other rental properties for more than 18 years. Initially, she and her husband purchased the home to live in while their own house was being built. Van Buren listed the home for rent at the end of June but said she was not receiving nearly as many inquiries as in past years. This month, she lowered rent on the property to match a reduction in rent across the board, and is offering the first week free to the right tenant.”
“‘We try to keep our rent at or below what the current rents are because we would rather have quality tenants that are going to look after our property and stay for a while,’ said Van Buren. ‘At the same time, we have mortgage payments to make and all the rest of our bills go up every year, so it is a balance.’”
From Global News. “Post-secondary students head back to class in September, which means time is ticking for those who have yet to find a place to live. The good news in Calgary is there are still many apartments available in prime locations — and for prices that won’t break the bank. It’s the one silver lining to Alberta’s badly bruised economy. Vacancy rates are up about eight to 10 per cent in Calgary, according to Mark Hawkins from Rentfaster.ca. That’s compared with three per cent last year.”
“Rent near Mount Royal University is down about 16 per cent from last year. By the University of Calgary, it’s down about 18 per cent. The number of available units is between 10 and 20 per cent higher near these schools. ‘I’m just starting to get those panicked phone calls from landlords who would usually have their apartments rented by now,’ Hawkins said. ‘There’s a glut of supply and students aren’t going to absorb that.’”
“Arthur Kupper has had his property listed since mid July, and just signed a lease with a student at the end of August. He said he had to drop the price three times before he received any real bites. It was originally listed for $1,500, and over time he was forced to lower the asking price by about $200. ‘I’d rather drop the price a little than have it sit empty for months,’ Kupper explained.”