MacLac
Senior Member
Ian, sounds like YYC has a major Grift Game going on now…….doesn’t sound so rosy according to this guy….
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Edmonton Real Estate Market
- Thread starter Daveography
- Start date
policyenthusiast
Senior Member
I am skeptical of what he's saying. Selling MLI Select properties requires either paying off the full mortgage balance outright (which would be idiotic because MLI S has among the most competitive financing available in any market), or having a new owner purchase the place and take over the payments. The existing requirements and term (affordability, accessibility and energy efficiency) also have to be maintained by the new owner, and 10:1 odds it stays as a rental, not affecting the volume of rental DUs on market.
The point he's making is that the rental market weakening means these MLI-funded products will "flood the market". I really, really doubt any owners of these properties want to sell the properties, lose the full growth potential, and then pay capital gains (obviously no principal residence exemption) on any potential real revenue from the sale.
If people are panic selling, but it doesn't affect the availability of rentals, doesn't affect the affordability of rentals, and is a near-guaranteed payoff for longer-term holders, who besides small-scale builders with no risk tolerance are going to be impacted? I swear, it's like no one believes in economics anymore.
FrankRizza
New Member
I think he’s talking about developers with new product flooding the market. It’s happening here too. Anything that is attractively priced is still selling but if you’re asking for a premium, with rents falling from even early 2025 rental rate predictions, the building will sit on the market for awhile.
I have been financing real estate for the last 23 years, IMO the MLI Select program is the the single biggest game changer I have ever seen in real estate financing. It has basically replaced any sort of “conventional” financing, at least in Alberta. There are really no other competitive financing options for multi-family developers. When you hear developers talking about a project “that pencils”, there is nothing that is penciling better than the MLI select projects. That’s why we’re only seeing 6-storey boring wood frame buildings. That’s also why developers are racing to build these things and same for the 6 and 8 unit buildings that are popping up in every central neighborhood in the city.
Again only my opinion, but I think we’re really getting close to an overbuilt situation. It’s based on what I’m seeing for getting these smaller projects leased up. It’s taking longer and rents are coming down. I hope I’m wrong.
My advice to anyone developing or building small scale or even 6-storey’s is stick to the best neighborhoods and hire a good builder who’s built/building cool shit. There are lots of them but there’s probably more building garbage so do your homework.
I have been financing real estate for the last 23 years, IMO the MLI Select program is the the single biggest game changer I have ever seen in real estate financing. It has basically replaced any sort of “conventional” financing, at least in Alberta. There are really no other competitive financing options for multi-family developers. When you hear developers talking about a project “that pencils”, there is nothing that is penciling better than the MLI select projects. That’s why we’re only seeing 6-storey boring wood frame buildings. That’s also why developers are racing to build these things and same for the 6 and 8 unit buildings that are popping up in every central neighborhood in the city.
Again only my opinion, but I think we’re really getting close to an overbuilt situation. It’s based on what I’m seeing for getting these smaller projects leased up. It’s taking longer and rents are coming down. I hope I’m wrong.
My advice to anyone developing or building small scale or even 6-storey’s is stick to the best neighborhoods and hire a good builder who’s built/building cool shit. There are lots of them but there’s probably more building garbage so do your homework.
Oilers99
Active Member
Conventional financing options are becoming more attractive from various lenders for well-heeled borrowers v. CMHC MLI. There are term sheets now coming out with 85% leverage on a conventional loan without the associated CMHC insurance premiums and affordability requirements. This will start to become an attractive option over the next couple years.
Jspr
New Member
Should we expect commensurate adjustments in CHMC program? I assume this government remains interested in creating long-term affordable units.
Oilers99
Active Member
CMHC continually makes negative adjustments on the MLI product...
policyenthusiast
Senior Member
Changes were already made this year, such as removing the ability for developers to bundle multiple products/lots into one MLI S application. CMHC funding reductions are coming fast too.
Subjectively, I would say the gravy train is slowing down.
David A
Senior Member
Maybe that is a good thing, when things move too fast more bad decisions seem to get made, like building in areas not as well suited or building cheap/unattractive projects, all to make a quick buck.
Some other parts of the country need to speed up with building, but here it seems a bit like the wild west.
Out of Towner
Active Member
Raising the personal taxable threshold level is a better way to address the affordable housing problem. A higher threshold would allow more renters to pay market rates rather than creating an "artificial rental market" by incentivizing builders with lower down payments and extended amortizations.
IanO
Superstar
David A
Senior Member
Interesting how Ottawa and Halifax have become more expensive in the last couple of years. Montreal, while a much bigger city, is not too much more than here.
Young people in BC and Ontario are clearly voting with their feet and fleeing unaffordability, which is probably one reason high rents there are starting to go down.
Young people in BC and Ontario are clearly voting with their feet and fleeing unaffordability, which is probably one reason high rents there are starting to go down.
policyenthusiast
Senior Member
You can check the location people searching home listings in AB are looking from. Here are the Q3 2025 numbers:
84.1% Alberta
11.6% British Columbia
4.9% Ontario
While checking out a listing is obviously different from buying and moving, that's a concerning proportion of non-Albertans salivating over Alberta's homes. To compare, here are Ottawa's numbers:
77.4% Ontario
2.6% British Columbia
2.2% Alberta
Good thing we're still building homes.
David A
Senior Member
kcantor
Senior Member
It think it's more than young people voting with their feet. I think what you're seeing is the impact of vacancy taxes in metro Vancouver and metro Toronto "working their way through the system". Not only are the reporting requirements (in some cases to three levels of government and to your condo board/management company) onerous, the additional taxes paid on vacant units can get quite punitive for most investors.
In Vancouver the municipal vacancy tax is 3% with an additional 3% levied by the province (plus the feds potential imposition of their underused housing tax). The trigger is 6 months in any calendar year unoccupied and that would include any time needed to renovate and/or re-lease.a vacant unit. For the average $725,000 condo, that could represent in excess of $43,500 per annum or $3,625 per month in annual holding costs. With average rents of $2,500 per month for a one bedroom and $3,500 per month for a two bedroom unit, it takes a long time to recover that (if ever) vs taking a lower rent.
Stevey_G
Active Member
How does that work for people trying to sell a vacant unit out of curiosity? Are there any caveats for single unit owners who lived there a certain amount of years and have decided to move and thus the unit is vacant?
I know very little about this stuff.