Any fall is likely to be brief and the long-term trend will be up, industry leaders say

Michael McCullough
Sun

After four years of ever-stronger growth, real estate and property development in Greater Vancouver may be in for a bumpy ride in 2005. But industry leaders remain bullish on the longer-term outlook.

The current real estate cycle is probably coming to a close, but the downturn will be brief before a new growth phase starts, panellists at the Urban Development Institute’s annual industry forecast luncheon seemed to agree.

“We’ve been in the throes of a strong housing cycle for at least four years,” said Polygon Homes Ltd. president Neil Chrystal.

The development boom was fuelled by declining interest rates, stable construction costs, and steadily building economic growth. Investors could speculate successfully by buying into unbuilt developments and flipping them once they were finished.

“That all ended last June,” he said. “Most of us expected September would be the bounce-back month, but it wasn’t.” Interest rates remain low and job creation and in-migration remain strong, but the rise in land values and building costs has begun to push prospective buyers out of the market.

“Some areas of the market will be oversupplied,” Chrystal said, singling out downtown south and parts of Surrey and Langley. In the former, he expects many of the 6,000 condominiums approaching completion will come back on the market as investors who bought them in pre-sales seek to flip them. In the latter, there is simply too much of the same product (townhouses mostly) coming on the market at the same time.

Should interest rates rise sharply, the picture could worsen. But Chrystal anticipates a softer landing as rates stay low or rise gradually, and growth resumes in subsequent years.

Macdonald Development Corp. president Rob Macdonald related his experience working in Atlanta around the time of the 1996 Olympics to illustrate what he believes will happen to Vancouver over the next 10 years. There, not just the economic activity but also the international exposure of the event created a growth period that lasted until at least 2000, when Macdonald sold an office building for three times what he paid. At its peak, more than 100,000 people a year were moving to the city, and Macdonald predicts Vancouver could see in excess of 80,000 net new arrivals in coming years.

“We are just in the early stages of a momentum buildup in this region,” he said. “When the world wants a piece of you, it has a powerful influence on property prices.”

Although there will be bumps along the road, Macdonald predicted a 10-year “golden era” for Vancouver through at least 2014.

The increase in land values means developers have to be creative to make money, he added, urging his colleagues to look for ways to provide public amenities in return for rezoning and higher density. Deals such as his own company’s redevelopment of a lot at Granville and Dunsmuir downtown — which will provide the first condo tower in the middle of the financial district and save TransLink $15 million on new handicapped access to the Granville SkyTrain station — represent “triple-win transactions” where the developer, governments and community interests all benefit, he said.

Instead of just reacting to government demands, “Seek out or dream up ideas that can benefit your community,” he told the packed ballroom. “We should create winning situations for government.”

Avtar Bains, senior vice-president of investment for leasing and sales brokerage Colliers International, advised the assembly to pay attention to what’s happening in the outside world because it is affecting local markets faster and more profoundly than ever before. The industry is cyclical and will remain so, Bains said, but instead of the old seven- or eight-year cycles we will experience shorter cycles with less dizzying highs and less paralysing lows.

© The Vancouver Sun 2005

Sun

CHILLIWACK – The Chilliwack market was the hottest of the hot last year, when it came to housing starts in the Fraser Valley.

While the number jumped for the region as a whole by 31 per cent, the rate for Chilliwack was the highest of all the communities at 83.3 per cent, according to Canada Mortgage and Housing Corp. figures.

By comparison, Langley showed the next greatest rate of growth at 66.7 per cent.

Mission‘s starts increased by 46.7 per cent.

Surrey and White Rock growth rates were 28.3 and 22 per cent respectively.

Abbotsford’s growth rate was only 2.6 per cent.

“Strong consumer confidence, improving migration and full-time job gains continue to drive growth in the housing market,” Robyn Adamache, a CMHC market analyst, said.

“Affordability also makes this market attractive to many home buyers.”

Single detached home starts shot up to 461 in 2004 in Chilliwack from 263 starts in 2003, a 75.3-per-cent increase, while the number of multiple-residence unit starts almost doubled in 2004 to 527 from 276 starts, an increase of 90.9 per cent.

© The Vancouver Sun 2005

Bob Rennie moved a total of 703 units last year, MLS figures show

Michael McCullough
Sun

Vancouver‘s condo king sold an astonishing $405 million worth of real estate last year, and Bob Rennie figures he could top that amount this year.

An unaudited list of “Medallion Club” winners — representing the top sellers of homes on the Multiple Listing Service in Greater Vancouver — showed Rennie, of Rennie Marketing Systems, moved 703 units worth $405,809,512 in 2004.

The figure easily topped Rennie’s previous personal best of $274 million in 2003, as well as Medallion Club runner-up Jason Craik’s total of $172.5 million in 2004.

“I have an infrastructure. I have 14 people who run me,” Rennie said, conceding that he did not personally deal with every buyer.

Rennie is the first to admit you can’t compare what he does to a realtor selling existing homes. His sales total represents all new multi-family developments. Working with the developers, Rennie Marketing will design the layout of the suites, often hiring the architect.

As a result of these value-added services, the company receives a significantly larger commission than a resale agent.

“The world’s pretty good to me,” said Rennie, 48. “When you do this for 30 years, everybody expects you to burn out or cash out. I get up at 5 a.m. every morning. I still really, really enjoy it.”

Moreover he believes he can surpass his new sales benchmark this year.

“I think I will equal it or beat it,” he said, naming a number of new developments coming on stream including the Park Royal Hotel in West Vancouver, L’Hermitage downtown, the Norman Foster Tower and the Woodward’s redevelopment on the downtown eastside, plus condominium towers in Richmond, New Westminster and Burnaby.

Rennie said about 30 per cent of what he sells represents high-end condos, up from 10 per cent typically in the 1990s.

“If you look at all the cranes downtown, they’re all 95 per cent sold, so I’m not worried about oversupply,” he said.

However, he added, “we can’t have rapid absorption and rapid price increases at the same time. I’m thinking they’ll both level out.”

Other leading realtors on the Medallion Club list included Craik, of Mac Real Estate Corp., who sold 340.5 units; high-end home seller Malcolm Hasman of Angell Hasman & Associates Realty Ltd., who sold 39 homes worth $97.9 million; Grace Kwok of Anson Realty Ltd., who sold seven homes worth $62.1 million; Jason Soprovich of Prudential Sussex Realty, 31 units, $52 million; and Winnie Chung of President Canada Real Estate Services Inc., 50.5 units, $51.5 million.

Created by the Real Estate Board of Greater Vancouver, the Medallion Club honours the top 500 realtors in Greater Vancouver and the Fraser Valley. Following a random audit, 2004 inductees will be feted at an awards banquet to be held on Feb. 23.

© The Vancouver Sun 2005

HOT MARKET: Six local realtors sold more than $50m in houses

Ashley Ford
Province

There is simply no question about who is the barometer of residential real estate in Greater Vancouver.

Bob Rennie of Rennie Marketing Systems sold a staggering $405,809,512 worth of homes on the Multi Listing Service last year, putting him far ahead of his nearest competition Jason Craik of MAC Real Estate Corp who rang up an impressive $170,898,845 in sales.

Following them was perennial strong performer Malcolm Hasman of Angell Hasman with $97,890,599 in sales.

Others topping the $50 million mark were Grace Kwok of Anson Realty at $59,892,462, Jason Soprovich of Prudential Sussex Rlty. $50,515,520 and Winnie Chung of President Canada Real Estate Serv. Inc. $50,064,400.

Rennie listed 1,482 units during the year and sold 703 of them while Craik listed 880 selling 339. Hasman listed 58 properties and sold 39.

Rennie’s performance reflects the continuing consumer fascination with downtown apartment and condominium living.

“My performance is directly related to the economic confidence in Great Vancouver and B.C. and 30 years of hard work does pay off,” Rennie said.

It is well known within industry circles that Rennie is on the job at 5.30 a.m. every morning and sometimes puts in 16-hour days.

© The Vancouver Province 2005

FALSE CREEK: Lesson in relative rates of appreciation in residential values led couple to Coopers Lookout

Sun

When Alexander and Frances Stewart bought their current Vancouver residence 16 years ago, nearby Southwest Marine Drive wasn’t the busy truck route it is today.

In between then and now, consequently, the Stewarts have come to the conclusion that because of that increase in passing trucks they will not generate the same return on their home that other westside homeowners might generate on their homes.

Accordingly, when it came time to investigate investment property to which they might someday retire, finding property whose appreciation will more likely than not meet or beat the norm was a priority.

And that’s how the Stewarts ended up buying a Coopers Lookout apartment on the north shore of False Creek.

Championed by Concord Pacific as one of the last opportunities to own Vancouver waterfront for under $1 million, the 221 Coopers Lookout residences range in price from $240,000 to $2.3 million.

The buildings in which they will be located will be among the last Concord Pacific will build on the old Expo lands.

“I’m sure the apartment will be worth more than this house and land,” says Alexander Stewart, 67. “Real estate is a funny thing. It’s like buying stock. You try and hedge your bets.”

The Stewarts bought a 1,200-square-foot, two-bedroom-plus-den apartment on the 29th floor of the 30-floor concrete tower at Coopers Lookout. They paid more than $700,000 for it.

“I don’t want to be paying tomorrow’s prices for it,” he said, adding Frances, 53, told him she believes it will increase in value.

“She thinks it’s a winner and I always listen to my wife.”

Stewart said his only concern is the views won’t be unimpeded water views, noting Concord Pacific will be building another residential tower nearby.

The tower in which the Stewarts bought is at the rear of the site, which is adjacent to the Plaza of Nations just east of Cambie Bridge. “A third of the way up the tower there will be expansive views from English Bay to Mount Baker,” Concord Pacific’s Tracie McTavishbites,

He added the project will look out over the Olympic Village on the south shore of False Cree,. “This is the first time we’ve sold a building where the views aren’t there yet. We’ve gone to the city to see the drawings of Olympic Village and it’s going to be a tiered back from the water.”

The best False Creek water views at Coopers Lookout will be from the 10 villas to be built in the front of the property, residences that will overlook the seawall, said McTavish.

Six two-storey townhouses and 12 two-storey lofts will be located between the apartment tower and the villa building.

The three-bedroom-plus-den villas range in price from $1.5 million to $2.3 million; the townhouses, from $770,000 to $880,000; the lofts, from $500,000 to $640,000.

McTavish said it’s Concord Pacific’s policy not to say how many of the units it has already sold, but he added there’s still plenty of choices for buyers because it’s only been on the market since December. He added there was an earlier pre-sale to buyers who registered nearly one year ago but all of the residential options, from villas to lofts to apartments, are available.

“This is a chance for people to buy affordable waterfront that won’t soon exist,” said McTavish. “Its all run out. Its all been developed. The harsh reality is we’ve very close to completing all of the foreshore.”

Concord Pacific has spent the past 13 years developing the former Expo 86 site, working in close conjunction with the city of Vancouver.

It is currently the largest residential community being developed in Canada.

Coopers Lookout is part of Coopers Quay, a five-building mix of low and high rise buildings that stretch along the north shore of False Creek. In total Coopers Quay will have 600 units.

Concord marketing director Ivan Tsao earlier told the media the residential site is the second to last of the lands bordering False Creek being developed by Concord.

“We have one more site to the east, but this is the last small-scale waterfront development,” he said

McTavish said Coopers Lookout is linked to the water and the activities it offers and residents of the development will even have the opportunity to sign out a kayak they can then walk down to False Creek.

Coopers Lookout residents will also have membership to the Coopers Quay Esprit City Club, a 14,000-square-foot recreation centre, where the fleet of kayaks are stored. The centre also boasts a private, two-lane, 10- pin bowling alley, a 60-foot lap pool, big screen video theatre, fitness centre and a yoga-Pilates studio.

Coopers Lookout is the first phase of the Coopers Quay neighbourhood, which is expected to create 1,700 person years of employment.

Stewart said initially he was against the former Expo land being sold to one developer but now he is supportive of what the developer has done to create a community on the site.

“They have a pretty good reputation and have turned out good buildings. It’s turned into a magnificent setting for the city. You get a mixture of families and there’s parks, shops and restaurants there now. It’s become quite the centre,” he said.

Indeed, Frances added the couple are so encouraged by the work by Concord they have also bought a second investment property from the company- this one in the 32-storey Park West Towner that overlooks Granville Island.

“Because Concord is developing the entire site you know you’ll have view corridors,” she said. “It really is a good investment.”

Presentation centre: 1550 Homer

Centre hours: Daily from 10 a.m. to 5 p.m.

Telephone: (604) 899-8800

Website: www.cooperslookout.com

Developer: Concord

Architect: Jim Hancock

Interior design: David Hepworth of Situ Design

Project size: 30 storey tower, 6 townhomes, 12 lofts, 10 villas

Residence size: 550 sq. ft. for a one bedroom to 2,866 sq. ft. for a villa Residence price: $240,000 to $2.3 million

Construction: Concrete

© The Vancouver Sun 2005

Sun

Address: Richards and Nelson, Vancouver

Project Size: 53 lofts and apartments, of which 12 are unsold

Residence size: Originally, from one bedroom with home office, about 600 sq. ft., to two bedroom with home office, about 1,100 sq. ft.

Price: From $279,900

Developer: Chandler Development Group

Architect: Hancock Bruckner

Groundbreakings are rarely news, although it’s possible to dig up news at them.

For example, a groundbreaking on Friday that Rennie Marketing Systems organized generated this news: 12 lofts and flats are still available at the Tribeca Lofts project.

The Tribeca development generated its share of notice earlier this year, not least because of the marketing pitch — that living in a Tribeca residence would be akin to living in a “New York Style Loft.”

(Whatever is on offer figuratively, 41 sold before Friday’s ceremonial observation of the start of construction.)

For the Tribeca Tribune, the project was one more example of the “Manhattanization” of the world.

“From Dallas to Dublin, the neighbourhood name is being adopted by restaurants, bars, a social club, financial and marketing firms, a cigar store and a yacht,” the 10-year-old community monthly reported.

“Even a recycling company … calls itself Tribeca.”

The report quoted Regis Chung, owner of the Tribeca restaurant of Vancouver, as saying: “At first, only people who had travelled or been reading the papers and hearing about De Niro’s restaurant and ‘John-John’ knew what it was.”

Five years on, “the town also sports a condo development by the same name,” the Tribune commented.

It also reported “Tribeca lofts” have sprung up in Santa Barbara, Calif., Seattle and Dallas.

Two colour schemes are available, with the black and white, called (of course) Broadway and the brown SoHo.

In the kitchen, the floor is hardwood and the appliances stainless steel. Bosch will supply the gas range; Amana, the fridge.

The starting price on the 12 residences left is $279,900. Call Rennie Marketing Systems at 604-682-2088.

By the way, the Lower Manhattan neighbourhood is called Tribeca ias a short from of of Triangle Below Canal Street.

© The Vancouver Sun 2005

Some 30,884 homes were started in 2004 — that’s 25 per cent more than the previous year

Michael McCullough
Sun

B.C.’s urban housing starts hit their highest level in 10 years last year and the Canada Mortgage and Housing Corp. is predicting further growth in 2005.

Builders broke ground on 30,884 dwelling units across the province in 2004, up 25 per cent from 2003 and the highest number since 1994, when 34,619 homes went up. CMHC, a federal Crown corporation, expects B.C. will be the only province to record another increase in 2005 — to 32,000 starts.

The same factors that boosted new home construction in 2004 — strong job creation, migration from other provinces, a historically low inventory of vacant properties and continued low interest rates — are still in place as we head into 2005, CMHC senior market analyst Cameron Muir said.

In the middle of last year there were fewer than 100 unoccupied new units available in all of Greater Vancouver, Muir noted. In 1999, by contrast, there were 2,600 such homes on the market.

There are 12,000 housing units under construction around the region, but most have been pre-sold, Muir said, meaning they will never sit vacant.

However, while the market in 2003 and 2004 was driven by first-time buyers and investors, those buyers will represent a largely spent force in 2005, he said.

Highly price-sensitive, many first-timers will be gradually priced out of the market by rising building costs and, in all likelihood, interest-rate hikes later this year. As real estate prices reach new highs, investors will opt for other venues such as the stock market.

“More buyers are going to be move-up, move-down, move-over,” Muir said.

For example, he foresees a strong market for high-end downtown condominiums and suburban townhouses near amenities such as golf courses and waterfront promenades from empty-nesters selling their suddenly very valuable single-family houses.

The demand for those houses, in turn, will come from new arrivals to the province and young families seeking a patch of land.

Factors that weigh against CMHC’s rosy forecast include possible interest-rate hikes and higher construction costs.

“Construction material costs have gone up dramatically in the last year to 18 months,” Muir acknowledged. And though labour cost increases have been modest to date, residential builders will soon have to compete with Olympic-related construction projects for skilled tradespeople.

As for interest rates, Muir believes it would take a substantial 200-basis-points (two per cent) increase in mortgage rates to derail the current market momentum.

Greater Vancouver boasted 19,435 home starts last year, a 24.4-per-cent increase from 2003, with some of the fastest growth in Langley, where the number of starts rose 67 per cent year-over-year, and Burnaby, up 61 per cent.

As one of the few places left around Vancouver to build a single-family house, Langley township saw brisk development in the Willoughby area just north of Langley city.

Closer to the city core, Burnaby witnessed the “upzoning” of several walk-up style apartment areas into higher-density condominium towers.

One of the constraints to new development that has been building over the long term is a lack of new building sites, Muir said.

Some developers are resorting to so-called “brownfield” sites — erstwhile industrial land such as the former Canadian White Pine sawmill site in southeast Vancouver and another abandoned millsite being developed by Parklane Homes near Fort Langley.

Greater Vancouver Home Builders Association CEO Peter Simpson was not surprised by the housing start numbers.

“We knew we were headed towards the best year in a decade,” he said Tuesday. In fact, based on the 11 months to Nov. 30 it was already the best year in 10 and the 2,372 starts provincewide in December were just “gravy,” he said.

Given that each housing unit creates 2.8 person-years of employment in construction and manufacturing, the increased activity in 2004 created an additional 10,665 jobs in Greater Vancouver alone, Simpson said.

CMHC’s forecast of a further 2.2-per-cent increase in starts this year is fine by him.

“It’ll basically be a flat line and that’s not altogether a bad thing because it’ll be manageable,” he said. Though the scarcity of skilled trades is stretching completion times longer for some projects, it is not affecting closing dates for buyers, he said.

Virtually all major centres in B.C. saw growth in housing starts in 2004. Victoria enjoyed the best year in the past 11 with 2,363 starts, representing an 18-per-cent increase over 2003. But the strongest markets on Vancouver Island last year were Nanaimo and Parksville/Qualicum, where starts rose 56 and 73 per cent, respectively.

Peggy Prill, CMHC’s market analyst for the Island, expects strong growth from these up-Island communities, with the addition of Courtenay-Comox and Duncan, in the coming year as demand for retirement homes and recreational property intensifies.

An aging population will prompt a gradual shift towards multi-family developments from houses and acreages, Prill said.

After a very strong 2003, housing starts increased just four per cent in Kelowna in 2004, but area analyst Paul Fabri expects a stronger 2005.

New home markets are strong throughout the Okanagan and are picking up in Kamloops and Salmon Arm, he said.

The other hot spots in the southern Interior for residential construction were ski and other resort communities such as Big White, Sun Peaks, Panorama, Fernie, Kimberly, Invermere and Radium Hot Springs.

Prince George saw the best new home market in a decade, with 195 new units in 2004, up from 103 in 2003.

© The Vancouver Sun 2005