Greater Vancouver‘s real estate boom is beginning to move to the rest of the province, according to new figures released Tuesday by the B.C. Real Estate Association.

The new figures indicate the association’s members sold 10,320 homes worth a total of $3.01 billion in April — a 50-per-cent increase in dollar volume over April 2003.

And those gains aren’t limited to the Lower Mainland.

All 12 B.C. real estate boards across the province reported increased sales in April of 2004 over April of 2003. Only one — serving the Dawson Creek region — noticed a slight drop in the dollar value of its sales.

And while Greater Vancouver’s market remains hot — with a 32-per-cent jump in properties sold this April over last– other regions of the province also recorded dramatic gains over last year:

– Powell River is up 144 per cent.

– The north is up 48 per cent.

– Kamloops is up 29 per cent.

– The Fraser Valley and Vancouver Island are both up 25 per cent.

David Baxter of the Urban Futures Institute said increased sales outside Greater Vancouver suggest economically depressed parts of the province are finally coming around.

“I think the message we’re getting from those regions outside of the Vancouver sphere of influence is some renewed confidence,” he said. “I think it’s a pretty good indication that people are feeling better about the future.”

Baxter said the provincial boom is also likely a result of Vancouver having had a sizzling market for so long.

What is likely happening, he said, is that Vancouverites who have been tempted into the market by low interest rates are finding they can’t afford anything in Vancouver — and so have begun looking in the Fraser Valley instead.

Baxter said a hot market in Vancouver can also cause spin-off booms elsewhere in the province as older people see the equity in their homes grow and decide to cash out and move somewhere cheaper.

“You’re getting people whose house was worth $300,000 three years ago and now it’s worth $500,000 and they’re ready to retire, and here’s a tax-free gift of a couple hundred thousand,” said Baxter. “That will contribute to [housing growth in] Kelowna, Osoyoos, Oliver, Salmon Arm.”

Alex MacDonald, who has a Re/Max office in both Chilliwack and Kamloops, said he’s noticed a real boom in both communities this year.

“Definitely over the last year and a half we’ve seen a real increase,” he said. “It seems to move out from the Lower Mainland.”

For all of 2003, B.C. consumers purchased a record $24.2 billion worth of homes, shattering the previous record of of $19.7 billion set in 2002.

So far this year, sales have reached 33,444 units worth $9.55 billion — a 38-per-cent improvement in dollar volume and a 21-per-cent jump in unit sales over the first four months of 2003.

David Herman, past president of the B.C. Real Estate Association, which represents 13,000 licensed realtors, says 2004 is shaping up as another record year, with people buying homes across the province despite varying economic conditions and markets.

Association president Gordon Maroney said with mortgage rates expected to stay low through 2004 and B.C.’s economy performing well, he expects the market will remain strong.

In Greater Vancouver, 4,215 properties worth $1.59 billion sold in April, compared to 3,192 units worth $1.02 billion in April 2003, representing increases in units and dollar volume of 32 per cent and 55 per cent, respectively.

Figures from the Real Estate Board of Greater Vancouver show condominiums dominated the market in April, with 1,774 sales, up 52 per cent from 1,161 sales in April, 2003.

Sales of detached properties totalled 1,682, up 14 per cent from April last year.

“We have seen a steady buoyant market due to a number of factors, including the lowest interest rates in decades,” said Andrew Peck, president of the Real Estate Board of Greater Vancouver.

“In spite of small fluctuations in interest rates, consumers continue to seek real estate as a stable place to put their money. It would take a significant rise in interest rates to affect the market.”

© The Vancouver Sun 2004

The excitement over the 2010 Winter Olympics spilled over into Vancouver‘s Pan Pacific Hotel yesterday where 172 suites for the upcoming Hilton Whistler Resort sold in only five hours.

The frenzied buying for suites ranging from $249,000 to $1.5 million meant a unit was sold every 105 seconds. About $90 million worth was sold during the day.

“It really did exceed my expectations,” said John Ryan of Whist-ler Real Estate. “People came to buy one suite and ended up buying two.”

An average suite was 800 square feet, with one bedroom and two bathrooms. Sales were registered on a seven-metre electronic board that made a ding sound on each sale. “My favourite noise,” said Ryan. Only 13 suites went unsold.

The existing Delta Whistler Resort will be changed into the Hilton by Dec. 1. Ryan said excitement for the Olympics, plus the Hilton’s prime location — in the village at the bottom of both mountains — fuelled sales.

The project is being developed by WW Hotels (Whistler) Limited Partnership. [email protected]

Mortgage rates are going up again in Canada as the cost of borrowing rises in the bond market because of solid job gains and inflationary pressures in the economy.

CIBC, Royal Bank and Bank of Montreal announced Friday they are raising rates by up to a quarter point on long-term mortgages, reflecting rising costs in the bond market, where banks finance their mortgage lending.

Effective Saturday, a five-year rate at all three banks rises by a quarter point to 6.4 per cent, while rates rise by varying amounts on one-year to 10-year terms.

With the Canadian and U.S. economies rebounding, a strengthening employment market has led economists to predict the U.S. Federal Reserve Board will begin raising rates this summer for the first time in more than four years.

As inflationary pressures build, investors are demanding higher interest rates to lend their money, which forces up the cost of raising funds in the bond market.

Earlier this week Canada Mortgage and Housing Corp. said it expects the country’s builders to start 4.5 per cent fewer homes this year than last.

The government agency’s chief economist, Bob Dugan, issued the forecast:

“The decrease . . . will reflect rising mortgage rates as monetary policy moves from an expansionary to a more neutral stance bringing starts in line with the rate of household formation,” Dugan said in a statement in Ottawa.

This year, builders will start 208,500 homes, CMHC forecasts. Last year they started 218,400. a 15-year high.

Sales of existing homes will likely fall from last year’s record of 439,500 units to 438,400 this year and 419,600 in 2005, the agency said in its Housing Outlook report.

Home resale prices will rise 7.7 per cent this year to $222,100 and another 4.2 per cent next year, CMHC said.

© The Vancouver Sun 2004

British Columbians who purchase real estate will receive increased protection under new legislation introduced Thursday by the provincial government.

Key changes include the creation of a special compensation fund to protect consumers from losses incurred from theft or fraud by real estate service providers.

Another significant change imposes a new licensing requirement for managers of strata buildings.

A third move greatly enhances the powers of the Real Estate Council of B.C., giving the province’s public watchdog statutory regulating authority to govern licensed realtors, as well as imposing penalties — including fines — and taking other disciplinary action in cases of misconduct.

The council would also be enabled to develop codes of conduct and ethics and to enforce them, along with authority to make disciplinary orders and freeze orders in urgent circumstances.

The new legislation, tabled in the house by Finance Minister Gary Collins, represents the first major overhaul of B.C.’s real estate laws in nearly half a century.

“The real estate industry has been enjoying a banner year as economic conditions in B.C. continue to improve,” Collins said. “These changes will help to ensure that this important industry remains a vibrant part of our economy for years to come.

“Further, by replacing the old act, we are ensuring that people who retain the services of real estate professionals, or who purchase units from developers, are better protected while at the same time significantly reducing unnecessary regulatory requirements and red tape.”

Collins said many of the elements contained in the new Real Estate Services Act, and the Real Estate Development Marketing Act, resulted from extensive discussions with affected parties, including broad public consultations.

Other key changes include:

– Condominium purchasers are given the right to rescind a contract for not receiving a disclosure statement, as well as a standardized seven-day cooling-off period, during which time buyers who received disclosure can still rescind the purchase contract.

– Developers will be provided with greater opportunities for the pre-selling of residential projects, and will be allowed access to purchasers’ deposit monies if those monies are appropriately insured.

– The superintendent of real estate will be given the ability to impose administrative penalties, and to act against a developer who fails to file a disclosure statement, or to provide it to purchasers.

– Realtors’ remuneration will be protected by requiring commissions to be kept in trust until paid out.

The proposed new changes were immediately welcomed by real estate council chairman Barry Clark.

“The whole act is a step in the right direction to provide consumers with greater protection than ever before,” Clark said in an interview.

“The expanded enforcement powers contained . . . will enable the council to more effectively regulate the real estate industry. This will ultimately serve to strengthen consumer protection.”

Clark said the special compensation fund to be established would be partly financed through interest earned from funds held in trust.

© The Vancouver Sun 2004

Don’t expect Greater Vancouver’s red-hot construction boom to cool off any time soon.

Contractors took out building permits worth $340 million in March, a slight drop (4.3 per cent) from February ($356 million), Statistics Canada reported Thursday.

But the value of building permits issued in Greater Vancouver for the first three months of the year was $1.18 billion, up 41 per cent from January-March 2003.

Vancouver and Montreal led the gains in over-all construction plans this year, thanks to the demand for new multi-family dwellings in both areas, widespread strength in all non-residential construction intentions in Montreal and commercial building plans in Vancouver.

In every province, the cumulative value of housing permits has been higher this year than in 2003.

B.C. saw its January-March value of all permits jump to $1.47 billion, a 32.7-per-cent increase from the same period of 2003.

Only Newfoundland and Prince Edward Island had higher percentage increases.

The report will be greeted with mixed feelings by the Bank of Canada, which is counting on strong spending by Canadian businesses and consumers to offset the weakness in exports caused by last year’s runup in the dollar.

“Over-all construction intentions fell in March as a plunge in the value of building permits for non-residential projects far offset a gain in housing projects,” Statistics Canada said.

Nationwide, contractors took out building permits worth $4.2 billion in March, down 4.2 per cent from February. Residential permits totalled $2.91 billion, up 4.5 per cent, just below the record high set last December, it noted. In contrast, non-residential permits nosedived 19.4 per cent to a two-year low of $1.29 billion.

“March’s big dip in mortgage rates likely inspired that month’s increase in residential construction intentions,” said RBC economist Carl Gomez. “But other fundamentals are also keeping the housing sector well supported, including relatively tight resale market conditions, strength in full-time employment and solid consumer confidence.

“As such, the housing market is set for yet another great year, although slightly higher mortgage rates down the road suggest some moderation,” Gomez added.

“Canada‘s housing market remains strong, as building permits have surpassed the $2.9-billion mark for three of the past four months,” Statistics Canada noted. “This remarkable result is because of the strong demand for both single- and multi-family dwellings.”

“The vigorous housing market … had a direct impact on other sectors of the economy,” it said, pointing to strong sales of furniture, home furnishings and electronics, and heavy demand for manufactured wood products.

© The Vancouver Sun 2004

Capers Community Markets plans to open its fourth store in the South Cambie area.

The natural-foods seller will take up 20,000 square feet of space in the new $50 million Cressy condominium development at 16th and Cambie Street.

“The Olive,” which begins construction in July, will feature 103 condos and six cityhomes and is breaking new development ground in that every home will have a true “gourmet kitchen.” Prices start at $259,900 and the project is scheduled for completion late next year.

“The urban gourmet-living concept we are creating is why Capers is the perfect fit as the development is for people who love to prepare and cook food,” Cressy vice-president Hani Lamman said.

“Capers completes the urban-gourmet concept the development embodies and puts a gourmet food market under the same roof as gourmet lovers. Capers is not just another food store. It is organic and has a reputation for integrity and for quality,” he added.

Capers newest store will be the largest in the stable and be environmentally friendly in design and construction.

Capers cooks up a new condo complex for the urban gourmet

‘Olive’ building will feature units with luxury kitchens and house an organic foods store on ground floor

Vancouver Sun

May 7, 2004

Designers Allisa Karvonen (left) and Kari Henshaw have created stainless steel appliance-equipped condo kitchens for the development at Cambie and 16th in Vancouver. CREDIT: Ian Lindsay, Vancouver Sun

Living above the shop is about to take on a fresh meaning in Vancouver. Capers Community Markets announced Thursday its fourth and largest natural and organic foods store will occupy the ground floor of a novel condo complex designed for “urban gourmet” living.

If the marketing marriage between retailer and developer pays off, the greens and granola set will be moving uptown and up-market.

Every suite in the $50-million “olive” building, at the corner of Cambie and 16th, will feature a “gourmet” kitchen with built-in wall ovens and microwaves in trendy stainless steel, gas cooktops favoured by the finest chefs, and optional glass-fronted wine fridges for guests to admire their host’s extensive selection of expensive bottles.

“This is the kind of kitchen where dinner guests deliberately come early — to hang out drinking wine while watching the host crank out home-made pasta, crack fresh crab and put together a 20-ingredient salad dressing from scratch,” publicist Pamela Groberman said.

Prices at “olive” range from $259,900 for a 522 square-foot condo to $600,000 for a 1,200 square foot townhouse. In smaller units, bedrooms are being slimmed down to accommodate the all-important kitchens by Kari Henshaw and Allisa Karvonen of Vancouver‘s Insight Design.

“This is the kind of luxury kitchen that turns a dinner party into a kitchen party,” said Hani Lammam, vice-president of Cressey, one of Vancouver‘s oldest and largest developers.

“Capers completes the urban gourmet living concept — gourmet kitchens, gourmet people, and a gourmet food market, all under the same roof.”

Capers, bouncing back from a hepatitis A scare two years ago that led to eight cases of infected customers, says the new store represents the first phase of a planned doubling of its presence in the Vancouver area over the next five years.

Demand for organic and natural products continues to grow in excess of 25 per cent a year, Capers marketing manager Aron Bjornson said in a release.

According to market research conducted by Synovate for the Certified Organic Associations of B.C., 53 per cent of residents in Greater Vancouver have purchased some organic food in the past year.

The 20,000-square-foot new store, expected to open late next year, will offer a greater range of fresh, locally produced organic and all-natural products with an easy-to-shop layout and high levels of customer service, Bjornson said.

A ” European market shopping experience” will include destination departments that feature cheeses from around the world, fresh baked artisan breads, a fresh seafood marketplace, and a holistic health and nutrition centre.

It will be the first new Capers store since 1995 when the company opened its third location on Robson Street. Capers was founded 10 years earlier in West Vancouver by healthy foods activist Russell Precious.

Wild Oats Markets, the American health store chain which acquired the company in the late ’90s, has pledged to preserve the Capers name.

© The Vancouver Sun 2004

In the words of Berkshire Hathaway’s Charlie Munger, “the only way smart people can get clobbered is through leverage.” On Tuesday, Alan Greenspan gave us a clear warning we may want to put a helmet on.

His statements made it clear the interest rate debate isn’t about whether rates are going to rise, but when. Investors in the bond market and other interest-sensitive areas have made it clear since early April that they see a notable rise coming.

Whether the rate increase comes in June or after the U.S. election makes little difference over the long term. The more important question becomes how high will rates go. Those consumers in the States who have taken on massive variable-rate mortgages and other consumer loans should shudder at the comment by respected analyst Jim Bianco that it’s time for rates to move from the Fed’s one-per-cent emergency position established after 9/11 to a neutral position that would take the overnight rate to four per cent.

That would spell a double yikes for people who are leveraged to the hilt. It should also scare Canadians, given that our economic well-being is tied so closely to the States.

The timing of the interest rate hike will resolve itself over the next six to eight months, but the size of the eventual increase will still be debated. My bet is that a couple of small hikes won’t hurt the U.S. economy. In Britain, two quarter-point rises have done nothing in the short term to whet consumer appetites, as mortgage lending in March still grew at a 15-per-cent annual rate.

The big question — and I mean the mucho, mega, supremo question — is at what point will interest-rate increases deter consumers from borrowing. Our willingness to borrow has been a key component to our economic growth. For example, the rising prices in real estate throughout the Western world, including Canada, have not reflected a huge jump in demand through population growth or a major jump in productivity. They are primarily a reflection of the abundance of money available to bid prices up through low interest rates.

Car sales, electronic sales and other major retail purchases have been spurred on by lower rates. So what happens to those industries if rates take a significant jump? Famed investor John Templeton is on record as predicting 20 per cent of home owners will lose their property in the next decline. Whether you buy into the hypothesis that we are in the midst of a real estate bubble or not, most experts agree that a significant rise in rates will be cause for concern.

Certainly the popularity of getting a second mortgage to take advantage of rising home prices — which has been a major source of capital for the purchases of other consumer goods — will also diminish, thereby hurting the economy.

I worry that if investors who have borrowed short term to purchase higher-yielding long-term bonds get spooked, we could see a sharp sell-off in the bond market, which will push rates much higher and faster than the Federal Reserve would like. It’s a dangerous game with massive consequences, which is why the feds have so far erred on the side of excessive monetary stimulus.

Michael Campbell’s Money Talk radio show can be heard on CKNW 980 weekdays from 6 to 7 p.m., and Saturdays from 8:30 to 10 a.m.

© The Vancouver Sun 2004