data solutions · 2019-04-03 · about altus group • leading provider of independent advisory...

DATA SOLUTIONS

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Market Presentation

Q & A

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About Us

Altus Group is the leading provider of independent advisory services, software and data solutions to the global real estate industry.

About Altus Group

• Leading provider of independent advisory services,

software and data solutions to the global real estate

industry.

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market insight and recognize value on their real

estate investments.

• Headquartered in Canada, with 2,500+ employees

worldwide and 75 offices in major markets across North

America, Europe and Asia Pacific

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Data Solutions

We connect the Canadian real estate industry through the delivery of data with unparalleled breadth, integrity and relevance.


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Our data coverage

Your single source for nationally researched

real estate market data, backed by local expertise.

500+ Clients

47,000+ Users

110,000+ Commercial sales records

11,500+ New Homes records

4,900+ Office building records

42,000+ Industrial building records

Data Going as Far Back as 1995


Data Solutions for GVA

New Homes Data

Sales Comp Data

Office and Industrial Inventory Data

Dev App Data: New and active residential and commercial development application details.

altusgroup.com/datasolutionsaltusgroup.com

Support throughout development cycle stages

Product type, mix and

pricing; construction

financing approvals

Site-sourcing,

negotiation, financing

and Pro Forma

Local market activity

analysis and project

benchmarking

Market intelligence for

ongoing monitoring and

project benchmarking

Market Monitoring

LAND

ACQUISITIONPROJECT

PLANNING

MARKET

LAUNCH &

PRE-SALES

CONSTRUCTIONPOST-

OCCUPANCY

Comparable land

sales for valuation

support

Site sourcing

Negotiation support

Surrounding activity

for thesis, financing

and proforma support

Market team selection

support

Project marketing support

Project launch support

based on local market

activity analysis

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presales to construction

financing support

Project planning support

for product mix and

pricing

based on previous,

current and future

projects

Support for construction

financing approvals

Mixed-use support

New home vs purpose-

built rental decision

making support


ongoing market

monitoring

Project benchmarking


ongoing market

monitoring


Our clients


Our Partnership with UDI

Membership Benefits

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UDI Partnership Benefits

✓ UDI support for all public-facing press releases, publications and market reports as the official source for all residential development data for the GVA

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Housing Trends, Risks and What's Coming

HOUSING TRENDS, RISKS, and WHAT’s COMING: VANCOUVER

At a glance

HOUSING MARKET TRENDS

16Altus Group Limited | altusgroup.com/datasolutions

Vancouver Sales Declined In 2018

6,108

12,344 11,850 12,506 11,079 14,67417,507

25,274

17,35315,619

0

10,000

20,000

30,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Vancouver Market Area Annual New Home Sales

10 year average

3,083

8,876

8,052

9,3008,309

11,31413,273

19,792

13,738 12,769

0

5,000

10,000

15,000

20,000

25,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

New Condominium Apartment Sales

10 year average

2017 Sales Decline

the Result of

Inventory

Constraints

2018 Sales

Impacted by

Supply + Gov’t

Intervention +++


Sales Trends Highlight Shift to Affordable Housing Supply –And Supply of Available Land

1,7511,072

798

5,867

3,565

2,566

0

2,000

4,000

6,000

8,000

City ofVancouver

Richmond NorthShore

Burnaby/New West./

Tri-Cities

Surrey/Delta/

White Rock

FraserValley

Vancouver New Home Sales by Subarea

2017 2018


Late Year Increase in New Supply Boosted Available Inventories – While Slower Demand Kept More Available for Sale

0

5,000

10,000

15,000

20,000

25,000

Q1 Q2 Q3 Q4 YTD

Vancouver New Condominium ApartmentProject Openings

2017 2018

24%

14%

6%29%

20%

7%

% of Vancouver Openings

2017

City of Vancouver Richmond

NorthShore

Burnaby/New West./Tri-Cities

Surrey/Delta/White Rock

FraserValley

14%

8%

5%

44%

16%

13%

% of Vancouver Openings

YTD Q4 2018


With the Resultant Increase in Available New Home Inventory to Multi-Year Highs – Although Still Below 10 Year Avg

5,601

1,143

6,744

0

3,000

6,000

9,000

12,000

15,000

Q1

-07

Q3

-07

Q1

-08

Q3

-08

Q1

-09

Q3

-09

Q1

-10

Q3

-10

Q1

-11

Q3

-11

Q1

-12

Q3

-12

Q1

-13

Q3

-13

Q1

-14

Q3

-14

Q1

-15

Q3

-15

Q1

-16

Q3

-16

Q1

-17

Q3

-17

Q1

-18

Q3

-18

Vancouver New Home Inventory

Condominium Apartment

Single-family

Total


At a glance

Development Application Activity


2016 2017 2018 Total*

Abandoned 5 1 0 6

Refused 0 0 0 0

Approved 18 21 7 46

Under Review 28 46 25 99

First Submission 0 3 31 36

Total Applications 51 71 63 187

0%

20%

40%

60%

80%

100%

Current Status of Recent Development Applicationswith Residential Units by Year of First SubmissionCity of Vancouver

Source: Altus Group based on municipal information

* Total includes 2 applications in early 2019

% of Applications in Each Year by Current Status

Number of applications


Timeline for Project Approvals City of Vancouver


* Total includes 2 applications in early 2019

% of Applications in Each Year by Current Status

0

50

100

150

200

250

300

350

400

450

500

0 10 20 30 40 50 60 70 80 90 100

Size

of

Pro

ject

(U

nit

s)

Months to Approval

Affordable Housing

Apartment Condominium

Mixed Use

Purpose Built Rental

Retirement


Vancouver - # of

Approved

Applications*

Vancouver - # of

Approved Units*

Burnaby/North Van

City/North Van DM -

# of Approved

Applications**

Burnaby/North Van

City/North Van DM -

# of Approved

Units**

Rental/Affordable/Other - Post-Approval Status

Untracked23 1,776 9 1,782

Condo - Launched - Completed 0 0 0 0

Condo - Launched - Under Construction 11 1,235 0 0

Condo - Launched - Pre-construction 6 1,033 1 298

Condo - Not Launched 6 774 2 300

Total Applications 46 4,818 12 2,380

0%

20%

40%

60%

80%

100%

Approved Recent Development Applications with Residential Units by Project Current Market Status

Source: Altus Group based on municipal information* Applications with first submission from January 2016

** Applications with first submission from January 2017

% of Applications

Number of applications


Recent Development Applications with Residential Units by Primary Project Type


* Applications with first submission from January 2016



City of Vancouver* Burnaby**City of North

Vancouver**

District of North

Vancouver**

Other 357 32 0 255

Freehold 0 0 0 0

Social Housing 2,632 52 0 0

Affordable Rental 766 513 91 849

Purpose-built Rental 5,944 1,090 837 600

Condominium 13,525 6,646 784 2,404

Total (Known) 23,224 8,333 1,712 4,108

0%

20%

40%

60%

80%

100%

Residential Units in Recent Development Applications by Residential Type

Source: Altus Group based on municipal information * Applications with first submission from January 2016


% of Units

Number of units

New Dev Apps will

bring 5,000

affordable and

social housing

units to market –

almost 15% of the

total new supply


17%13%

6% 5%

34%

31%52%

45%

35%42%

31%

4%

14% 14% 11%

46%

0%

20%

40%

60%

80%

100%

City of Vancouver* Burnaby** City of North

Vancouver**

District of North

Vancouver**

3+ Bedroom

2 Bedroom

1 Bedroom

Bachelor/Studio

Residential Units in Recent Development Applications by Planned Unit Type (Where Provided)


* Applications with first submission from January 2016


% of Total Residential Units


0

1,500

3,000

4,500

6,000

7,500

2016 2017 2018

New Applications Approved Applications (Submitted Since January 2016) New Home Sales

Residential Units in New Applications and Approved Applications and Total New Home Sales by YearCity of Vancouver

Source: Altus Group based on municipal information and Altus Group New Homes sales database

Number of Units


Housing Policy Trends


Housing Policy and Housing Market Performance

-8%

0%

8%

16%

24%

32%

25.0

30.0

35.0

40.0

45.0

50.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Total Existing Home Sales, Canada Home Price Index

Existing Home Sales SA (000’s)

CREA HPI® 11-market aggregate composite index

Source: Altus Group, Economic Consulting and data from The Canadian Real Estate Association

Y/Y Change in Benchmark Price (%)

30 YR AM

Int Only

35 YR AM

40 YR AM

High Ratio

definition

25% to 20%

Max 35

YR AM

Min 5%

DPmt Tighter Standards

20% down on invest.

properties

Max 30

YR AM

HELOC

Max 25 YR AM

Price Cap

GDS max 39%

Min 10% DPmt

above $500K.

OFSI raise K req.

for banksBC Foreign

Invest.Tax

Tighter

federal

standards

ON Fair

Housing

Plan

OFSI

B-20(announcement)

B-20

Implemented


Action Being Taken to Solve Housing Affordability Challenges

• Foreign Buyer Tax

• Empty Home Tax

• OFSI B-20 Mortgage Qualification Test

• Tighter Lending Practices (HELOC/Debt Ratios)

• Policies Targeting Investors • Rent Controls

• Speculation/Assignments Policies

• Short Term Rental Restrictions (AirBnB)

• Rental 100 Program

• Up-Zoning Along Transit Corridors

Policies Impacting Housing DemandPolicies Targeting Housing Supply


Housing Starts Nationally Highlight Shift Into Apartment –But Stable Overall Unit Counts

0

50

100

150

200

250

1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4 1 2 3 4

2010 2011 2012 2013 2014 2015 2016 2017 2018

Single Family Apartment Total

Source: CMHC (2018) Altus Group (forecasts)


Housing Starts Forecast Remains Stable; Demand Drivers for New Housing Remains Positive in Most Markets

Source: CMHC (2018) Altus Group (forecasts)

0

10,000

20,000

30,000

Vancouver Edmonton Calgary Toronto Montreal

Apartment Starts Forecast

2018 2019f 2020f

0

3,000

6,000

9,000

12,000

Vancouver Edmonton Calgary Toronto Montreal

Single-Family Starts Forecast


49%

-15%

-34%

205% 412%

23%

10%

-31%

66%

45%

-18%-9%

29%32%

-7%

-48%

-9%

62%

-6%

-38%

19%

-75%

-50%

-25%

0%

25%

50%

75%

100%

Vancouver Edmonton Calgary Kitchener-

Waterloo

Hamilton Greater

Toronto Area

Montreal

% change 2016 % change 2017 % change 2018

Apartment Sales Down in Almost Every Market in Canada

Source: Altus Group

New Condominium Apartment Sales


38%

9%

-10%

28%

18%

6%

43%

-34%

7%1%

-7%

5%

-57%

10%

-16%-22%

33%

-16%

-63%

-50%

3%

-75%

-50%

-25%

0%

25%

50%

75%


Waterloo

Hamilton Greater

Toronto Area

Montreal*


Affordability and Supply Challenges Impacted Townhouse Volume

Source: Altus Group and CMHC * Approximated by housing starts

New Townhouse Sales


Missing Middle in Vancouver - Built Form, Not Consumers

Source: http://pricetags.ca/2012/04/03/the-missing-middle-new-housing-types-for-a-changing-city/

http://pricetags.ca/2012/04/03/the-missing-middle-new-housing-types-for-a-changing-city/


$0

$200

$400

$600

$800

$1,000

Vancouver

Region

Edmonton Calgary Kitchener-

Waterloo

Hamilton Greater

Toronto Area

Montreal

New Townhouse New Condominium Apartment

Average Condo Prices in Vancouver and GTA Converging

Source: Altus Group

$ P

SF*

* Projects opened in 2018; values are rounded


1.8

15.7

13.4

10.6

19.1

2.7

9.5

5.3

33.8

18.3

11.713.3

6.07.0

0

10

20

30

40


Waterloo

Hamilton Greater

Toronto Area

Montreal

End of 2017 End of 2018

New Condo Apartment Inventories in Vancouver and GTA Below Historical Averages

Source: Altus Group

Mo

nth

s

* At average monthly pace of sales in the previous 12 months

Month of Available New Inventory*


108%

60%

-51%

-20%

63%

8%19%

-16%

103%

71%

16%

51%

-20%

19% 18%13%

-56%

-31%

-14%

-100%

-50%

0%

50%

100%

150%


Waterloo

Hamilton Greater

Toronto Area

Montreal


n.a.

Residential Land Sales Down Where Its Becoming Increasingly Difficult to Find Available Land to Purchase

Source: Altus Group

Residential Land Sales ($ Volumes)


Montreal Development Perspective

MARKET OPPORTUNITIESMARKET CHALLENGES

• Fast rising housing market

causing growing pains –

affordability, development costs,

approvals

• House prices rising rapidly in a

market that historically has seen

very slow growth

• Political pressure to avoid

housing issues created by rising

prices - 20/20/20 policy

• Despite price growth, Montreal

remains comparably affordable

to GTA and Vancouver

• Second largest French speaking

city in the world attracting global

migrants

• New investments improving

quality of life and entertainment

opportunities in the inner-city


GTA Development Perspective

• Long approval cycles create

uncertainty in timing

• Development charges are

reviewed regularly - and always

rising…

• Transportation infrastructure

challenges – Downtown Relief

Line?

• OMB to LPTA transition

• CAC = Section 37 = $$$


• Growing economy with

substantial international

migration

• Employment growth fuels

demand

• Higher density developments

can offset costs

• Planned and potential transit

expansions opening up new

redevelopment opportunities


Calgary Development Perspective

• More density than market

demand

• Multiple target areas for

redevelopment –

cannibalization of demand

• Housing affordability creates

challenges in urban areas

• Transportation Infrastructure

supports suburban

development

MARKET OPPORTUNITIESDEVELOPMENT CHALLENGES

• Housing affordability is

excellent

• Incomes remain high – and

cost of living low

• Economic growth drivers

have shifted since 2014

• Affordable single family

homes + good schools =

young family mecca?


Vancouver Development Perspective

• Multiple municipalities each

with their own zoning/

approval rules

• Limited land supply = high

land prices

• Low densities + CAC charges

(or DBZ contribution) =

higher density challenges

• Long development approvals

with uncertain outcomes


• Strong employment growth

(opportunities)

• Attractive climate and environment =

positive quality of life

• Connection to Asia and Global

markets

• Housing shortage – of all types and

tenures – supports new developments

• New transportation infrastructure

expanding development opportunities


6808 – 6968 Ash Street; 575 West 54th Avenue

Cambie Corridor

Approximately ~75 unit townhouse development in the CambieCorridor

Community Amenity Contributions (CAC) exempt

RM-8A/RM-8AN (1.20 FSR) rezoning application rather than to CD-1City-initiated rezoning Intended to “streamline” the rezoning process

New Density Bonus Zone Contributions (DBZ)Over $2,000,000 for subject application, plus nearly $600,000 in

Development Cost Levies

Planning Examples

1640 – 1650 Alberni Street

West End42-storey, 276 unit secured purpose built rental development

38% family-sized units

$40M + CAC Contributions

Sold in April 2018 to Landa Global Properties, $130,000,000$550 per square foot buildable based on abandoned rezoning application


Market Trends and Outlook

OVERVIEW OF KEY FACTORS SHAPING THE OUTLOOK


TRANSIT AND INFRASTRUCTURE

Consumers care about their commute

HOUSING AFFORDABILITY

The right price, for the location, is key

Recipe for success?

APPROVALS

Efficient planning mechanisms to bring new development to market


Construction Levels Remain Elevated

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000Jan-9

0

Nov-9

0

Sep-9

1

Jul-92

May-9

3

Mar-

94

Jan-9

5

Nov-9

5

Sep-9

6

Jul-97

May-9

8

Mar-

99

Jan-0

0

Nov-0

0

Sep-0

1

Jul-02

Ma

y-0

3

Mar-

04

Jan-0

5

Nov-0

5

Sep-0

6

Jul-07

May-0

8

Ma

r-09

Jan-1

0

Nov-1

0

Sep-1

1

Jul-12

May-1

3

Mar-

14

Jan-1

5

Nov-1

5

Sep-1

6

Jul-17

May-1

8

Apartment Units Under Construction

Source: CMHC


4.7%

0.0%

-1.5%

0.6%0.1%

1.7% 1.5%

3.1%

0.4%

3.3%

2.2%

8.3%

2.1%

3.6%

1.8%

2.5%

0.9%

1.5%

-1.0%

2.1% 1.9%

-2%

0%

2%

4%

6%

8%

10%


Waterloo

Hamilton Greater

Toronto Area

Montreal


Employment Growth Has Fizzled – But Still Benefits from Prior Growth

Source: Altus Group based on StatCan data

Total Employment


Higher Mortgage Rates Impacting the Affordability Equation – for New Buyers But Also Renewers

5.34

3.49

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Q1 2

006

Q3 2

006

Q1 2

007

Q3 2

007

Q1 2

008

Q3 2

008

Q1 2

009

Q3 2

009

Q1 2

010

Q3 2

010

Q1 2

011

Q3 2

011

Q1 2

012

Q3 2

012

Q1 2

013

Q3 2

013

Q1 2

014

Q3 2

014

Q1 2

015

Q3 2

015

Q1 2

016

Q3 2

016

Q1 2

017

Q3 2

017

Q1 2

018

Q3 2

018

Q1 2

019

Earl

y A

pr

Canadian Mortgage Rates

Average Rate Being Paid (Across All Terms and Types) Posted 5 Year Fixed Rate Current 5 Year "Special Rate"

Source: Altus Group, The FIRM Survey and Bank of Canada data

%


10%

12%

14%15% 15% 16%

11%11%

13%

12%

26%

10%

17%

8%

0%

5%

10%

15%

20%

25%

30%


Waterloo

Hamilton Greater

Toronto Area

Montreal

Winter 2018 Winter 2019

Good News - People DO Still Want to Buy Homes!

Source: Altus Group, The FIRM Survey

Plan to Buy a Home in the Next Year or So

% o

f A

ll H

ou

seh

old

Sayin

g “

Yes”


14%

8%

17%

10%

15%

11%

16%

8%

32%

9%

22%

14%

17%

9%

0%

5%

10%

15%

20%

25%

30%

35%


Waterloo

Hamilton Greater

Toronto Area

Montreal

Winter 2018 Winter 2019

First-time Buyers Want Back Into the Game –But Many Hesitant – FOMO turns to FOU (Fear of Unknown)

Source: Altus Group, The FIRM Survey

% o

f R

en

ter

Ho

use

ho

ld S

ayin

g “

Yes”

Plan to Buy a Home in the Next Year or So - Renters


3.0

6.4

5.0

1.7 1.8

2.7

8.48.1

8.8

7.5

1.8

3.0 3.0

6.7

0

2

4

6

8

10


Waterloo

Hamilton Greater

Toronto Area

Montreal

End of 2017 End of 2018

Competition from the Resale Market Growing

Source: Altus Group based on data from The Real Estate Board of Greater Vancouver, The Fraser Valley Real

Estate Board, The Realtors Association of Edmonton, The Calgary Real Estate Board, The Kitchener-Waterloo

Association of Realtors, the Realtors Association of Hamilton-Burlington, The Toronto Real Estate Board and The

Greater Montreal Real Estate Board

Mo

nth

s

* At average monthly pace of sales in the previous 12 months

Month of Resale Inventory*


Although Overall Market Pricing Remains Fairly Flat – For Now

$0

$250

$500

$750

$1,000

$1,250

$1,500Q

1-0

8

Q3

-08

Q1

-09

Q3

-09

Q1

-10

Q3

-10

Q1

-11

Q3

-11

Q1

-12

Q3

-12

Q1

-13

Q3

-13

Q1

-14

Q3

-14

Q1

-15

Q3

-15

Q1

-16

Q3

-16

Q1

-17

Q3

-17

Q1

-18

Q3

-18

$/S

F

Vancouver New Home Blended Prices*

Condominium Apartment Single-family


0%

20%

40%

60%

80%

100%

Trade/Labour

shortages

Development

approval process and

timing

Project cost

escalation

Ability to secure

financing

Profit margins Land availability and

cost

BC Alberta Ontario Quebec

Canadian Developers Facing Other Challenges

Source: Altus Group, Real Estate Development Trends Report 2018

% in Each Region Rating Each Factor as

Being Among Biggest ChallengesHow big do you believe the following

challenges stemming from these market forces will be for your

development business over the next five years?


VANCOUVER EDMONTON CALGARYKITCHENER-

WATERLOOHAMILTON

GREATER

TORONTO

AREA

MONTREAL

2018

2019

2019 New Home Sales Trends Predictions

Source: Altus Group


1. Location, Location, Timing….

2. Stability > Constant Change

3. Price Direction > Land Price > Development Charges

4. Vancouver Market “Normal” ≠ Canada Market “Normal”

5. There is still one more election to go…

Last Thoughts…

Contact Us

[email protected]

(416) 596-7676 or (877) 992-9933

33 Yonge Street, Suite 500

Toronto, ON M5E 1G4


Thank you

58

data solutions · 2019-04-03 · about altus group • leading provider of independent advisory...

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