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“Mass psychology. Pessimism is needed to continue a bull market” -Jim Dines
JUROCK REAL ESTATE INSIDER FACTS BY FAX:
Vancouver-Chinese Yuan? Biggest flipper cities, Calgary heat
San Fran boom? Top three cities in Canada to collapse? Top three cities that are the most resilient?
TIP OF THE WEEK:
BOOK your attendance NOW. OUTLOOK is one week away!
Michael Campbell Jim Dines interview … Gold, Hyperinflation and why real estate is soaring
- London Calling At The Top Of The Market
- Canada Wants To Embrace China’s Yuan?
- US Flippers Still Strong In Phoenix
- Update: Calgary’s Apartment Rental Market
- Private Investors Make Up 80% Of Vancouver’s Commercial Market
- Boom ‘Only Beginning’ In Northern BC
- Buy A Vancouver Bungalow Or A Waterfront Legacy
- Real Estate Outlook Conference 2015
- Hot Property
JUROCK 2015 OUTLOOK CONFERENCE
The 22nd annual Jurock Real Estate Outlook Conference is heading for another sell-out when it opens September 13 at the
Renaissance Hotel in downtown Vancouver.
The long-awaited, all-day Outlook Conference is seen by real estate investors as the show to set up for success in 2015. A superb line-up of speakers, a
huge number of exhibitor booths and the opportunity to hear precise forecasts and information on where the deals are make for a must-see show.
- All attendees receive 100 deals under $100,000 within a 5-hour drive from Vancouver.
- Expert advice on where the real estate market is headed for 2015.
- Advice on what areas to buy – and what areas to stay away from.
- Where to get the (much tougher) financing in today’s real estate market in Canada
- Easy financing now available in the USA
- Specialist speakers from the USA, Canada, B.C. and Alberta.
- Debt and Demographics: Effect of aging population: Result? Inflation or deflation?
Forecasts for: Whistler, Kootenays, Vancouver, Kitimat, Calgary, Edmonton, Red Deer, Phoenix, 25 display booths. Commercial properties in
- Properties displayed : Waterfront on Bowen, Fab view acreages on Saltspring
You will learn:
Hottest markets, Worst markets.
How to make your mortgage tax deductible.
How to make an investment and get 2/3rds back in 3 years and then ride it forever
How to make money in any market
The secret of apartment building investment: The gross income multiplier and how it makes you money
The essentials of property management
100 properties (actual for sale now) under 100,000
For most subscribers attendance is FREE as part of their membership. Very few pay a nominal fee. ALL can invite guests for only $30 ticket. BUT YOU MUST REGISTER! You can do it online or call Max at 604-683-222 or Lubna at
604-683-1111 go to reoutlook.ca
INTERNATIONAL: London Calling At The Top Of The Market
We’ve talked about it, we predicted it and now we can report that London, England has seen a housing recovery since the crash like nowhere else in Europe and it is being led by foreign investors, particularly in the property
investment and rental market.
“London has become the place to invest for overseas buyers,” said London-based David Okeke, director of Austin David Apartments (http://austindavidapartments.com) which specializes in rental
investments. Okeke told us that wealthy buyers are coming from China, Russia and “others from Europe who are buying as a hedge against the breakup of the Euro currency.” And then there are the Canadians.
There are nearly 100,000 Canadians currently living in the United Kingdom and it is estimated that up to 90% of them live in London , After the USA and Hong Kong, the UK hosts the largest community in the Canadian diaspora. Also, awareness of the benefits of investing in the
UK property market is spreading rapidly and may be an attractive investment for some of the west coast entrepreneurs in British Columbia, according to
Latest figures from the UK Office for National Statistics show that property prices in London shot up 20.1% in the 12 months to May to an average of £492,000 ($Can 901,548) compared with a rise of 7.3%
across the rest of Britain.
London residential prices are expected to increase a further 15% this year, according to a forecast from property firm Savillas. Last year
it was forecasting that London prices would rise 8% – a prediction that proved far short of reality. However, Savillas is now warning “these extraordinary
rates of house price growth cannot continue in the current, more regulated mortgage environment, particularly in the face of likely interest rate rises.”
“[The high prices] doesn’t seem to be deterring international buyers”
“however changes in UK tax laws, and the closure of other tax loopholes, are issues potential overseas buyers need to be aware of as well as what to do
with their properties once they have them.”
Unlike countries such as Australia, Switzerland and Singapore where there is legislation controlling foreign buyer’s access to property,
London Mayor Boris Johnson has been a supporter of overseas investment in London real estate, arguing
the money has driven new development. However the rise in prices is now causing concern that local people are being priced out of the market and in a major
speech in January he said
“I hope international investors will understand that we want to see new build homes that they buy lived in. My view is that London homes aren’t some
sort of new global asset”.
Here are three tips for offshore investors to the London property market:
1: Be aware of the change to taxes. The British Chancellor brought in new legislation at the end of 2013, to take effect in April 2015, in
that foreign property owners will pay tax on any gains in value on UK properties they own. So Capital Gains Tax which was previously not
paid by non-UK resident sellers, be they individuals or companies, will be charged on resale at a rate of 28%.
2: Stamp tax: New offshore company purchasers will also pay Stamp Duty at 15% but beware … if you transfer a property to an individual or individuals who own the
company, this will avoid the charge but expose those individuals to UK Inheritance Tax at 40%, so this perhaps is an option which will appeal only to the
very young and very healthy who are quite certain of their own longevity.
Location: consider where to buy your property. London is one of the greatest cities in the world and there are two main things to consider before you buy. Firstly, do
you want to buy in an existing high value area like Mayfair or Knightsbridge or for access to the financial centre in the
City, in Docklands, or do you want to invest in one of thenew ‘hot’ areas such as south of the Thames from Battersea along towards the City and The Shard, the tallest building in the European Union. The redevelopment of this stretch is changing the landscape along the river and relocation of many
businesses and embassies, including the US, Chinese and Dutch, along with the Northern Line Underground extension, have been catalysts for
Or do you want to buy in an area that is popular
with your fellow countrymen? For instance … Chinese and Japanese people like to buy in Docklands or St John’s Wood; Americans and Canadians like Kensington, Chelsea, and St John’s Wood, especially if they work in the City; Russians like
Holland Park and Bayswater; Arabs like Bayswater and Lancaster Gate, or for the very wealthy of all nationalities Mayfair
and Knightsbridge. Nigerians like North London areas such as Hampstead, Golders Green and Hendon whereas Indians and Pakistanis prefer Wembley and Hounslow.
Canada Wants To Embrace China’s Yuan?
Financial groups, including four major Canadian banks and Advantage BC (formerly known as the International Financial Centre British Columbia) are pushing for Canada to become a trading hub for Chinese currency, the Renminbi (RMB),
also known as the Yuan.
British Columbia has already issued a government bond denominated in Yuan to become the first “dim sum” bond in Canada. The bond was quickly
oversubscribed, mostly by Asian investors.
In a joint statement Colin Hansen, president and CEO of AdvantageBC, and Janet Ecker, president and CEO of the Toronto Financial Services Alliance noted that both Vancouver and Toronto have large Chinese populations and are already attracting
impressive China investments. This is particularly true of real estate.
Making Canada a Yuan-friendly trading hub could further boost Chinese investments.
In B.C. so far this year, the following are some of the real estate investments linked to Mainland China investors:
- August construction start of a $50 million luxury hotel in Nanaimo;
- The Lake Okanagan Resort near Kelowna.
- The Sechelt Golf & Country Club on the Sunshine Coast (more next week on my meeting with the owners)
- 1,056 acres of industrial land in Terrace, worth $11.87 million,
- Skeena Sawmill, Terrace.
- Harrison Hot Springs Resort and Spa, sold for $32.3 million.
- Brentwood Bay Resort, sold for $14 million.
US Flippers Still Strong In Phoenix
The number of flippers – and the size of their returns – has cooled down in the United States, but some markets, most notably Phoenix and Los Angeles, have remained strong.
According to the second quarter U.S. Home Flipping Report by Realtytrac, nearly 31,000 detached houses were
flipped nationwide. This represented 4.6% of the total house sales, down from 5.9% in the first quarter and 6.2% a year earlier.
Flippers earned a gross profit of more than $46,000 per flip, or a 21% return on the average purchase. The average gross return was down from 24% in the
first quarter and down from 31% a year ago, which was the peak in percentage return on flips nationwide since RealtyTrac began tracking the flipping data
in the first quarter of 2011.
Highlights of the study include:
– Metro areas with the most flips were Phoenix (1,438 flips),
Los Angeles (1,371 flips) and Miami (1,290 flips).
However, all three metro areas saw declines in flipping activity as a share of total home sales from the previous quarter, and Miami was the only one
of the three metro areas to see its home flipping share increase from a year ago.
– Markets with
the best return on flips in the second quarter included Pittsburgh (106%), New Orleans (76%), Baltimore (73%) and Daytona Beach, Fla. (63%).
– Metros with the highest dollar amount of average gross profit on home flips included San Jose, Washington, D.C., San Diego, Los Angeles, and Seattle, all
of which had an average gross profit of more than $100,000 per flip.
Major Point: Most of the flippers interviewed by Realtytrac said they were doing more than “lipstick” renovations to get homes ready for resale
within a year, which is the time frame that qualifies for a flip in Realtytrac tracking. An example is OB Jacobi, president of Windermere Real Estate in Seattle, who noted that residential inventory is tight in the city.”
This means investors looking to flip a home and make a healthy profit must think outside the box. Gone are the days of lipstick-on-a-pig flips –
today’s flips must be total remodels from the studs out with high-end finishes, built-out basements and additional square footage. Those are the homes
that are bringing the most return on investors’ dollars in Seattle.” (Seattle is also a recommendation in our Annual Outlook Issue)
CANADA: Update: Calgary’s Apartment Rental Market
The vacancy rate in Calgary is 1.4%, according to Canada Mortgage and Housing Corp. (CMHC) and the city has one of the strongest economic
growth and population rates in the country. Calgary’s population grew by 38,508 people between April 2013 and April 2014, a record for any 12-month period
in the city’s history. There are now more than 1.1 million people in the city.
So why is the apartment rental market suffering? In the year ending June 30, only four apartment building sales were reported, down from 8 in the same
period a year earlier. The average price per building was $7.4 million, but the slow sales meant that the apartment building market represented the
smallest sector of the overall Calgary commercial market this year, with a total sales volume of $29.5 million and a 3.9% share. This is down from an 8.6%
slice of the commercial market a year earlier.
It all comes down to a lack of product for sale. In short, many apartment building owners don’t want to sell and you can’t blame them: with no rent
controls, a steady influx of young workers and capitalization rates in the 6% to 7% range Calgary apartments remain a solid play, despite the high prices.
Per-door prices, based on the four largest deals in the first half of this year, range from $138,700 to $563,000, according to a mid-year survey by
The lack of product has ramped up construction of build-to-suit rental properties, with some building sites dormant for years now being activated.
The first in the new wave of these rental projects is the Allure, a 154-unit building by Intergulf Cidex, which opens this fall.
Rental investors should look at
Calgary’s suburban single-family market if they have trouble sourcing rental apartment buildings. It is quite possible to purchase three-bedroom
detached houses for less than $450,000 in many suburban communities.
Rental demand for houses is strong, prices are increasing, and Calgary Mayor Naheed Nenshi is pushing for City Council to legalize and
allow for development of secondary suites in detached houses throughout the city. A [positive] vote is expected this fall.
Private Investors Make Up 80% Of Vancouver’s Commercial Market
Institutional investors – like pension funds and real estate investment trusts (REITS) made up less than 20% of the commercial real estate buys – including
apartment buildings – across Metro Vancouver in the second quarter of this year. The rest of the buyers, 80.5%, were private investors, according to survey from CBRE Commercial!
Vancouver commercial real estate sales hit $766.7 million in the second quarter, up 10% from the first three months of this year. The market was led by
sales of apartment buildings and land sales, CBRE said.
Many of the Vancouver investment deals today are the result of “creative, unsolicited offers driven by brokers,” said Norm Taylor, executive vice-president and managing director of CBRE’s Vancouver office.
“The off-market transaction process is often better-suited to private investors than it is to institutional owners on both the buy and sell sides of
“Private buyers benefit most from low interest rates as they are looking to leverage newly acquired assets,” noted Ross Moore, CBRE’s director of
research “You have to think that the REITs are near the bottom in terms of purchasing activity. I would expect that REITs would be more active going
Nationally, $5.1 billion of Canadian commercial real estate traded hands in the second quarter of 2014. That was down from $6.7 billion in the first
quarter of the year; however, the number of transactions actually rose 9.7% quarter-over-quarter. More deals, though smaller in size, were completed.
Across Canada, pension funds accounted for 11.4% of commercial property purchases in the second quarter of 2014, down from 31.6% of transactions in the
first quarter. Private investors logged a dominant performance, as their share of the total investment volume surged from 39.6% from the first quarter to
61.6% in the second quarter. REITs were responsible for a mere 8.7% of commercial property purchases in the second quarter, down slightly from 11.5% in the
Boom ‘Only Beginning’ In Northern BC
In Dawson Creek and Fort St. John – near the largest LNG fields and B.C. Hydro‘s planned $8 billion Site C dam – an
average two-bedroom apartment rents for around $1,100, according to Canada Mortgage and Housing Corp., second only to Vancouver. In
Terrace, Prince Rupert and Kitimat in the northeast, vacancy rates are below 1%.
The rental shortage is deepened due to gun-shy local builders afraid of speculation in what has traditionally been a boom-bust economy, suggests
Vancouver-based investor Jason Pender. Pender‘s firm Joint Venture Real Estate (www.nwbcinvestmentproperties.com) – which will have a booth at the Jurock Real Estate Outlook Conference Sept. 13 – is completing the first multi-family
project built in 20 years in Kitimat. The project sold out its 36 townhomes in 40 days. All but four of the units sold to out-of-town investors.
“You can make significant double-digit cash flows here,”
Pender said. The two-bedroom suites sold for $300,000 to $325,000 and Pender said they would rent from $2,500 to $3,000 per month when they complete this
The white-hot demand is an indication of the economy in Kitimat, which is a western terminus for LNG shipments and the planned Northern Gateway Pipeline. The ongoing $3.3 billion expansion of the Rio Tinto Alcan aluminum plant is a major employer.
“The rental vacancy rate in Kitimat is zero,” Pender said.
Investors can buy older 2-3 bedroom townhouses in Kitimat for from, $150,000 to $170,000, and detached houses under $250,000, but there is not a lot for
sale. We found just 88 residential listings for sale on MLS in Kitimat this week.
Pender’s Joint Venture Real Estate is planning a larger 120 to150-unit residential subdivision in Kitimat and has started a second condominium project in
Terrace, the major service and retail centre for the Northwest. He expects competitors to come into the market, but he is not worried.
“This is like Fort Mac 25 years ago,” Pender said referring to the Alberta oil-fired city of Fort McMurray. “This is not a boom. It is just a
1. Maple Ridge
3 bedroom, fully renovated Bungalow. Price $325,000;
2. Saskatchewan, 2880 (!) acres, $1.5 million.
If you think you have a deal, as owner
or realtor please send it, we may feature it here. NO charge for this – no guarantees either. Must do your own due diligence.
Buy A Vancouver Bungalow Or A Waterfront Legacy
With detached houses price on Vancouver’s West Side and West Vancouver surpassing $2 million, some well-heeled buyers may want to look at what kind of
high-end real estate that money that will buy outside of the city.
At the Jurock Real Estate Outlook Conference Sept. 13, one waterfront option close to the West Vancouver may prove enticing.
The Cape on Bowen Island (www.thecapeonbowen.ca) just 30 minutes by water taxi from downtown Vancouver or via the ferry
from West Vancouver, is five miles of coastline and 618 acres of forest where 10-acre building lots are available in an exclusive community. “The rarity of
such real estate is unparalleled. Within Metro Vancouver, having the right to build a new private dock is only possible here. Pair that with the vastness
of 10 acres and hundreds of feet of private waterfront, just minutes from the finest metropolis on earth. This is the ultimate, legacy investment,” said
marketing manager Candy Ho.
Waterfront properties vary from 200 to 700 feet of straight-line ocean access. Each property has a winding private driveway, 3-phase electricity and a
certified water well that is 300-500 feet deep. There is even a fibre optic station, dedicated exclusively for The Cape on Bowen’s 59 estates.
Waterfront ranges from $1.87 – 3.68 million. Non-waterfront (a short walk from the ocean) are from mid $600s to $880,000, which is about the price of a
West Side condo.
See more details at the Outlook Conference.
Real Estate Outlook Conference 2015
On September 13, 2014 we will have our 22 annual Real Estate Outlook conference at the The Renaissance in downtown Vancouver. We will tackle inflation,
deflation, demographics (yes), mortgages, interest rates, niche markets … but also … The Smith Manoeuvre and a number of investor type
workshops. This will be the best conference yet.
As always – if you are in the real estate industry umbrella – this can be an opportunity for you to exhibit your expertise and become a sponsor. We
offer booth space to subscribers at a discount. So book your development, your service or your product booth early to benefit.
Our audience is paying to be there to be informed of the latest, up to date news in the Real Estate market by top notch Presenters. They are
serious Real Estate Investors.
Our conference is different in terms of having a smaller number of booths and a full room of serious Real Estate Investors – not loads of booths and a
few freebie attendees.
is also proven as this will be our 23rd year. It is
Please let me know if you would be interested in this Sponsorship Opportunity as interest for the OUTLOOK Conference is always high (more so in these
Don’t miss out on this year’s Subscriber Early Bird Special, available only until August 15th! Book early and save!
We’d be happy to send you more details on our
OUTLOOK Conference 2014
Sponsorship packages, just reply with
in the subject line, alternatively please don’t hesitate to contact
with any questions or comments
To subscribe to Jurock’s Facts by Fax ($177 p.a.) call 1-800-691-1183 or 604-683-1111 or fax 604-683-1707. While the above information is compiled from
sources believed to be reliable, its accuracy cannot be guaranteed. Any type of investing carries inherent risks; as such, JREI cannot assume
responsibility for any subscriber’s actions