Beijing to continue property price-controlling efforts

Province

SHANGHAI — China faces a potential property “bubble” whose bursting could leave banks with huge losses, the central bank said in a report signalling that efforts to curb rising real-estate prices will continue.

Average real-estate prices in China rose by 14.4 per cent in 2004 over the previous year and by 12.5 per cent in the first quarter of 2005.

Prices in cities like Shanghai have risen still faster, although they have moderated in recent months following government moves to cool the property boom.

“Property price inflation can easily result in prices soaring out of line with real values and thus cause a bubble,” said the report, posted on the website of the People’s Bank of China. “Once the bubble bursts, it can cause a contraction in the real-estate sector and significant losses for banks.”

Alarmed by signs that ordinary citizens have been priced out of the market, China‘s leaders have made controlling property prices part of their strategy of reaching out to families left behind in the country’s rush to affluence.

In a weekend tour in northeastern China, Vice-Premier Zeng Peiyan visited both a real-estate project and a shantytown. “Maintaining the healthy development of the property market has a crucial bearing on national economic and social development and on the immediate interests of the broad masses of the people,” Zeng was quoted as saying.

This spring, the government began acting to curb speculative real-estate investment that it says has pushed prices to unsustainable levels. Local governments, such as Shanghai, boosted taxes on real-estate transactions and ordered banks to limit credit for property deals, among other measures.

Zeng urged continued efforts to curb speculative demand and increase construction of affordable housing.

Given those developments, property developers’ shares slipped yesterday. China Merchants Property Development Co.’s shares fell 2.2 per cent and China Vanke Co. declined 2.6 per cent.

“It’s not possible that this is a one-day fall. It’s likely to continue for quite some time,” said Grace Lin, an analyst at CSC International Holdings.

The central bank’s report focused mainly on the financial risks from the property sector. It noted that housing loans, including those to property developers, stood at 2.6 trillion yuan ($310 billion US) at the end of 2004, accounting for about 15 per cent of all yuan-denominated loans.

© The Vancouver Province 2005

BIOMETRICS: Scanners replace keys, locks

JOHN BERMINGHAM
Province

Yaletown developer James Schouw has his fingerprints all over his latest project, B.C.’s first biometric condo. Residents in the Grace project at 499 Drake can enter only by passing their finger over a palm-sized reader. The system records who’s entering through the front door, elevators, parking garage and bike storage. A concierge scans visitors’ fingerprints for temporary access. “We don’t worry that someone came home in the middle of the night and lost their key somewhere,” Schouw said yesterday. “It’s pretty darn difficult to lose your fingerprint,” he said. Warren Kimmel, who installed the system through his Vancouver company Fingerprint-IT, said biometric accesscontrol came out of the U.S. and Israeli military but is now being used by companies to clock workers in and out. And instead of sending fingerprints of criminals off to the lab, police cars carry print-readers that can instantly match prints against most-wanted lists. “You don’t want to carry your keys around with you everywhere,” said Kimmel, 35.

Jason Gratl, president of the B.C. Civil Liberties Association, said condo residents are giving their consent for mutual security.

“There might be a residual concern . . . that the biometric information not fall into the wrong hands,” he said. “Is this is a big deal, though? It’s not huge.”

Kimmel said only police and building managers can access the biometric records, stored as lists of numbers.

“The police are just getting a more accurate record of what they could get before,” he said. “There are no civil-liberties concerns.”

Houses flipped among friends at inflated prices

Fiona Anderson
Sun

B.C. real estate lawyers have been warned to be on the lookout for fraudulent mortgage schemes, called Oklahoma flips. In a notice to members last week, the B.C. Law Society said that the schemes, which flip real estate among friends at inflated prices, have “reared their ugly head” in the province.

According to the notice, the scam involves the legitimate purchase of property that is then sold and re-sold to a number of co-conspirators at ever-increasing prices, with the final purchaser obtaining mortgage funding based on the inflated price. The final purchaser is likely an innocent nominee or someone using a false identity, Ontario lawyer Sidney Troister told lawyers attending a Canadian Bar Association conference Monday.

What has made the market vulnerable to this type of fraud is the competitiveness of mortgage lending, the law society’s Ron Usher told the conference.

“There’s more cash than there is sense,” Usher said.

As a result, the kind of “know-your-client due diligence” that was a hallmark of mortgage lending in the past no longer exists, Usher said in an interview.

But these types of flips are not yet a big deal in B.C. despite getting a lot of attention, Usher said.

“We are certainly concerned about it. The banks are talking about it. So we’re just trying to do our best to keep the profession informed,” he said.

One type of mortgage fraud that has increased in the past two or three years in B.C. is the use of false information to get a mortgage on property that is used for criminal purposes, such as marijuana grow operations, said Ken Fraser, executive-director of investigative services for the Financial Institutions Commission.

There are two types of real-estate fraud, Fraser said. The first is fraud for shelter — which means that an individual who isn’t able to qualify for a property will misrepresent his or her ability to pay for the it. Most of the time, mortgage payments are made and there is no problem.

The other type of mortgage fraud is fraud for profit.

“What we’re finding a lot of now is organized criminal involvement in mortgage fraud in order to obtain properties for a variety of reasons,” Fraser said.

These frauds usually involve providing false information or false identities in order to qualify for mortgages for property that will be used for crime. In many cases, the named buyers are nominees who are paid a fee or, in some cases, don’t even know they have a mortgage in their name, Fraser said.

In December, mortgage broker Danh Van Nguyen was suspended for 10 years for providing false employment letters to help clients get mortgages to buy properties, dozens of which were identified by the RCMP as marijuana-growing operations.

Another type of mortgage fraud that was identified at the conference was identity fraud, in which an imposter claims to be the property owner, borrows money against the property, and then disappears, Troister said.

Lawyers should look for red flags to ensure they are not assisting these types of criminals, Troister said. Things to look for include whether the client is known to the lawyer, if he seems to be in a hurry, and if he is willing to pay large fees with little work done, Troister said.

© The Vancouver Sun 2005

Cash taken out must be repaid on schedule

Ray Turchansky
Sun

With the housing market booming during recent years, I’ve received a number of inquiries about registered retirement accounts and real estate.

Here are a few:

Q: Is there a method of taking money out of or transferring an RRSP and using the funds for a mortgage or down payment, without tax consequences? Previously the government had a RHOSP program for this very instance.

— M.D.

A: The RHOSP was eliminated some years ago, and we now have the RRSP Home Buyers Plan. It allows a first-time homebuyer to take up to $20,000 out of his or her RRSP tax-free and use it toward purchasing a home, but the amount must be repaid over a 15-year period.

If spouses are co-tenants of the house, they may each withdraw up to $20,000 from their own RRSP.

If the yearly amount is not repaid, it is treated as fully taxable income. And you lose that RRSP contribution room.

You can also have your RRSP make you a loan secured by a mortgage on your home, but it must be insured by Canada Mortgage and Housing Corp. or public mortgage insurer GE Capital.

When you hold your own mortgage within your own self-directed RRSP, you must pay yourself principal and interest at the going rate. Also, this limits the rate of return of your loaned RRSP amount to the mortgage rate you pay yourself, which at current rates means your RRSP could earn only five or six per cent annually for five or 10 or 25 years.

Furthermore, there is up to $1,500 in legal and financial costs in setting up such a plan, as well as yearly administration fees.

Q: A client withdrew RSP money several years ago to buy his first home. Last year he lost his job, and his income dropped significantly.

We understand that if he does not make a repayment in a year, the required repayment amount is added to taxable income.

Our question: Is there any mechanism to take the entire outstanding amount into income all at once and complete the homebuyer’s obligation?

— J.S.

A: You can only include as income the amount you were supposed to repay each year (1/15th of the original withdrawal) minus any RRSP contribution made that year.

Here’s the wording from the Canada Revenue Agency’s Home Buyers’ Plan Guide. Note the last sentence:

“If you repay and designate less than the amount you have to repay for the year, you will have to include the difference as RRSP income, on line 129 of your return.

“The amount you include on line 129 is the amount you have to repay for the year, minus the amount you repay and designate as an HBP repayment. You cannot include in income an amount that is more than the result of this calculation.”

Q: I would like to know how I could go about purchasing an income-producing real-estate property (outright) using my RRSPs. I am not interested in purchasing the shares of a company nor real-estate-based mutual funds.

— E. F.

A: Generally, real estate cannot be held within an RRSP.

I quote from Gordon Pape’s Buyer’s Guide to RRSPs: “You may not hold any type of real estate directly in an RRSP under most circumstances. This includes both residential and commercial property as well as vacant land.

“You can, however, own real estate indirectly, either by purchasing shares in real estate companies or through units in a real estate mutual fund or real estate investment trust (REIT). You may also hold mortgages in your RRSP.

“The one exception to the no-real-estate rule is a case in which your RRSP has foreclosed on a mortgage and taken possession of the property.

“In such circumstances, your RRSP may temporarily hold the property, provided it is promptly offered for sale at a reasonable price and sold within a year.”

© The Vancouver Province 2005

Cash taken out must be repaid on schedule

Ray Turchansky
Province

With the housing market booming during recent years, I’ve received a number of inquiries about registered retirement accounts and real estate.

Here are a few:

Q: Is there a method of taking money out of or transferring an RRSP and using the funds for a mortgage or down payment, without tax consequences? Previously the government had a RHOSP program for this very instance.

— M.D.

A: The RHOSP was eliminated some years ago, and we now have the RRSP Home Buyers Plan. It allows a first-time homebuyer to take up to $20,000 out of his or her RRSP tax-free and use it toward purchasing a home, but the amount must be repaid over a 15-year period.

If spouses are co-tenants of the house, they may each withdraw up to $20,000 from their own RRSP.

If the yearly amount is not repaid, it is treated as fully taxable income. And you lose that RRSP contribution room.

You can also have your RRSP make you a loan secured by a mortgage on your home, but it must be insured by Canada Mortgage and Housing Corp. or public mortgage insurer GE Capital.

When you hold your own mortgage within your own self-directed RRSP, you must pay yourself principal and interest at the going rate. Also, this limits the rate of return of your loaned RRSP amount to the mortgage rate you pay yourself, which at current rates means your RRSP could earn only five or six per cent annually for five or 10 or 25 years.

Furthermore, there is up to $1,500 in legal and financial costs in setting up such a plan, as well as yearly administration fees.

Q: A client withdrew RSP money several years ago to buy his first home. Last year he lost his job, and his income dropped significantly.

We understand that if he does not make a repayment in a year, the required repayment amount is added to taxable income.

Our question: Is there any mechanism to take the entire outstanding amount into income all at once and complete the homebuyer’s obligation?

— J.S.

A: You can only include as income the amount you were supposed to repay each year (1/15th of the original withdrawal) minus any RRSP contribution made that year.

Here’s the wording from the Canada Revenue Agency’s Home Buyers’ Plan Guide. Note the last sentence:

“If you repay and designate less than the amount you have to repay for the year, you will have to include the difference as RRSP income, on line 129 of your return.

“The amount you include on line 129 is the amount you have to repay for the year, minus the amount you repay and designate as an HBP repayment. You cannot include in income an amount that is more than the result of this calculation.”

Q: I would like to know how I could go about purchasing an income-producing real-estate property (outright) using my RRSPs. I am not interested in purchasing the shares of a company nor real-estate-based mutual funds.

— E. F.

A: Generally, real estate cannot be held within an RRSP.

I quote from Gordon Pape’s Buyer’s Guide to RRSPs: “You may not hold any type of real estate directly in an RRSP under most circumstances. This includes both residential and commercial property as well as vacant land.

“You can, however, own real estate indirectly, either by purchasing shares in real estate companies or through units in a real estate mutual fund or real estate investment trust (REIT). You may also hold mortgages in your RRSP.

“The one exception to the no-real-estate rule is a case in which your RRSP has foreclosed on a mortgage and taken possession of the property.

“In such circumstances, your RRSP may temporarily hold the property, provided it is promptly offered for sale at a reasonable price and sold within a year.”

© The Vancouver Province 2005

Material and labour charges surge as voracious demand in the province pushes costs up nearly eight per cent in the second quarter

Gillian Shaw
Sun

British Columbia‘s building boom coupled with higher fuel prices combined to push Vancouver‘s non-residential building costs up almost eight per cent in the second quarter of this year over the same period a year ago, the biggest hike of any city across Canada.

According to figures released Friday by Statistics Canada, the composite price index for non-resident construction in Canada reached 132.6 in the second quarter, an increase of 1.7 per cent over the previous quarter and a jump of 5.9 per cent over the second quarter of last year.

Vancouver led the year-over-year increase, followed by Edmonton and Calgary, both tallying a 7.1-per-cent increase over the same quarter a year ago, Montreal at 5.5 per cent, the Ottawa area at 4.4 per cent and Halifax at 3.8 per cent.

The news comes as no surprise to B.C.’s building sector, which has watched materials and labour costs trend upward as a voracious demand drives the construction market.

“What this does is it verifies what the industry has been experiencing, not only in Vancouver but across the province,” said Manley McLachlan, president of the British Columbia Construction Association. “We are hearing from our members that the level of activity has increased substantially.

“They have been busy for a long time but their rate of activity has been growing substantially.”

Increasing demand in non-residential building construction has been pushing up costs for labour and rising fuel bills in the second quarter of this year have exacerbated that.

With skilled construction workers the new stars of the employment picture, builders have to up the ante to attract and keep staff.

Chris Erb, whose company SubErb Construction on Vancouver Island operates in both residential and commercial construction, said for the first time in his career as a contractor, he has had to add a benefits package to his workers’ pay.

“The only way you are going to keep people on the job right now is that you have to go the extra mile for employees,” he said. “What’s driving it now is demand — there are no trades period, residential or commercial, and to get the people you have to pay more money.”

Erb said his employees now have a full benefits package including extended health, insurance and dental.

“It is the only way I feel right now that you are going to be able to separate yourself from everybody else and keep your employees,” he said.

Employers pass along the increased labour costs to their customers, said Erb, who is also second vice-president of the Canadian Homebuilders’ Association of B.C. and president of the association’s local chapter.

But while billions of dollars in non-residential construction are slated or underway in Vancouver and the rest of the province, McLachlan said project estimates would have taken into account rising construction costs.

“We’ve been in this heated market for some time now,” he said. “People who are involved in planning projects have taken this into consideration. It is a not a one-off event, it is a reality and if you haven’t done your budgeting to include some escalation in those areas, you haven’t done a very good job in costing your work out.”

Keith Sashaw, president of the Vancouver Regional Construction Association, said while owners of construction companies are looking at estimates to see what can be done to mitigate the cost increases, no projects have been slowed or stopped due to rising costs.

“A lot of the anticipated increases have been factored in as projects have been tendered and go forward,” he said.

Kerry Jothen, human resources analyst and chief executive officer of Human Capital Strategies, said the labour shortage has put upward pressure on wages.

“The starting wage even just for labourers and people in entry level positions in construction has gone up in the past six months,” he said. “People who are delivering the training programs are getting calls from the construction industry and employers are saying they need somebody today, or yesterday.”

© The Vancouver Sun 2005

Sun

The Timberline Hotel in Whistler received its first John Evans transformation more than a decade ago. Now, it’s undergoing another by the veteran real estate developer and owner and manager of Vancouver‘s Opus Hotel.

Evans announced this week his Trilogy Properties Corp. will spend $2 million on a renovation of the 41-room condominium hotel. It will also manage the property on reopening, scheduled for American Thanksgiving in November.

His goal and the owners’ goal, the announcement says, is a “boutique” property that can compete with the bigger hotels in Whistler by offering the services that international visitors expect, such as a fully staffed front desk and 24-hour room service.

“What we want to provide our guests is a contemporary-resort experience with all the warmth and glamour you would expect of a luxury Alpine resort, plus some unexpected yet luxurious touches that will be unique to Whistler,” his news release says.

HOT NEWS, 1

Last week on these pages columnist Bob Ransford reported that when he hears from people these days who need help with employment, they’re inevitably people looking to hire, not people looking to be hired.

This week, in a note to Greater Vancouver Home Builders’ Association members, Peter Simpson provided another illumination of the labour shortages real estate and construction employers are enduring.

“Surrey, like all high-growth municipalities, is struggling with the unprecedented volume of construction.

“The building department is currently processing residential permit applications in six weeks, much longer than usual. Staffing is a challenge. John McKenzie, Surrey‘s manager of the residential section, says he is looking for staff to assist with the processing of permit applications. To help the city in its efforts to better serve the homebuilding industry, we are spreading the word.

“If you know any job-seekers who have a BCIT diploma, or clerical-type construction experience, ask them to call John at 604-591-4184.”

HOT NEWS, 2

Can’t get enough summer reading? The folks at CMHC Housing Research have a suggestion. The government agency’s latest “Brownfield Redevelopment” case study is a local project, London Landing, in Richmond.

“Located on a former mixed industrial site, site remediation involved digging up and aerating contaminated soils and re-using the soils as on-site fill. Design features incorporated in the homes and on the property have created a heritage-sensitive residential community,” the announcement says.

Visit www.cmhc.ca

© The Vancouver Sun 2005

Features: ‘Spa’ bathrooms, concierge, small park

Michael Sasges
Sun

CORUS

Show home location: Off Wesbrook Mall, between Chancellor and University boulevards, University of B.C.

Hours: Noon – 5 p.m. Sat – Thu.

Telephone: 604-222-8439

Web: www.ubchigherliving.com

Project size: 47 apartments and 14 townhouses, 14-storey building

Residence size: 1 bedroom and den, 2 and 3 bedrooms, 782 – 2,867 sq. ft.

Prices: From $429,900

Developer: Bastion Chancellor Homes Ltd.

Architect: Hancock Bruckner Eng + Wright Architects

Interior design: BBA Design

Warranty: St. Paul Guarantee

Why would I ask any young woman to pose in a bathroom, let alone an accomplished sales and marketing executive such as Patricia Glass? Because without a body, a picture of the bathroom in the Corus show home represents only one of the two sensibilities her boss at Platinum Project Marketing Group, George Wong, has inserted into the marketing mix of the new-home project.

The Corus apartments and townhouses on the University of B.C. campus will be expansive and they will be splendidly finished.

But without the cooperative Glass, the Corus show home bathroom is another luxury bathroom in a neighbourhood of luxury homes. With her in the picture, that bathroom is luxurious and big, the ultimate “spa bathroom” to date from a local developer.

How luxurious? The millwork flanking the vanity mirror across from Patricia in the photograph on this week’s Westcoast Homes cover will be made for this project only. The tub is a six-foot-long soaker. The toilet is a one-piece, dual-flush water-saver. The shower behind will run wall to wall and will be enclosed on the bathroom side and the exterior wall in glass. (Every apartment will come with roller blinds, Patricia reports.)

How big? The “G” apartment whose floor plan is reproduced on this page will measure up at 1,425 square feet. Its ensuite, Patricia reports, will come in at 80.5 square feet. Although the “G” apartment will be the largest apartment in Corus, the 10 “G” homes will not be the largest homes in Corus. Four of the townhouse plans and both penthouse plans are larger.

At 14 storeys, the Corus tower will not be a tall tower, by Coal Harbour or False Creek North standards.

(Additionally, it is not a waterfront tower.)

But it will be a tall tower absolutely because it will be the first residential tower to be constructed in the four-year-old Theological Neighbourhood at the University of B.C., a neighbourhood of luxury homes that takes its name from the theological colleges nearby.

“We looked at the fact that Corus will be a high-rise and we had the vision, why don’t we import the Coal Harbour phenomena to UBC for the first high-rise in the neighbourhood of the theological schools?” Wong said.

He organized the marketing of one of the unequivocal Coal Harbour successes, the Harbour Green towers that will contain some of the most expensive residences in greater Vancouver.

“We saw the heights and the views and we said, you know, Coal Harbour is height and view.”

But for the Corus tower, the best views may not be of water and mountain and city but of a small park and Corus’s 80-year-old neighbour to the north, the Vancouver School of Theology’s Iona Building. If Corus is the new neighbourhood’s first tower, it is also the neighbourhood’s first residential building to be located south of the Iona Building, away from the cliffs.

“Parks sell condos and townhouses every day, all day,” Wong said. Townhouses have also proven to be a popular product in Coal Harbour, he reports.

That park and that school building, in his opinion, is one of the primary reasons Corus after six weeks of sales is two-thirds sold.

“That’s a half-acre of green space, of park space, surrounding the building. It will be really great not only for the residents who live in the townhomes and lower floors, but for people on the upper floors, who will look down and see park. It’s quite an attraction.”

The greenery of the park and of the rest of the tree-studded campus is what attracted Corus buyer Ken Knott.

“Beautiful full grown forests will surround me,” he observes. “There are great biking and jogging trails and quick and easy access to many beautiful beaches in the area. Even the air is fresher! Sometimes when there is only one area of sunshine in Vancouver, it’s the UBC campus. I get all this and it’s not even a 15-minute drive to downtown.”

A resident of an apartment in a tower on the eastern shore of False Creek for eight years, Ken reports he is tired of waiting for the responsible agencies to fulfil a “long overdue promise” and build a new park in that neighbourhood.

The unfulfilled promise, however, is only one of the irritants pushing him away. “In addition I have had to deal with squeegee kids, drunks, bums going through my garbage and who could forget the summer the homeless lived in tents at Science World! I will not have to wait for parks and other desirable amenities to be put in place at Corus. They’ve been there for decades.”

The Corus location is only one of the tower’s attractions pulling him to Point Grey. “The Corus itself is a remarkably beautiful complex.”

The apartments will be entered through double doors. Their entries will be floored with large limestone tiling, as will the kitchens and bathrooms. The floor-to-ceiling runs will be nine feet. Miele will supply the appliances. The decks will be “incredibly large” in Ken Knott’s opinion.

“I happened to luck out with my particular unit. A few of the homes will have additional, very spacious outdoor, landscaped terraces.The combined outdoor space of the two decks in my unite provides me with over 1,150 square feet of entertaining space.”

The building will be entered through a double-height lobby presided over by a concierge.

“My monthly condo fees are estimated to be a low $270.00 with a concierge,” Knott reports. “The building does not have a gym or pool. These items would normally increase your strata fees and I find from experience that these amenities are rarely used by most residents. Although my present condo has a gym and pool, I still maintain my gym membership elsewhere as the facilities are generally far superior than what you would get in a condo complex.”

About the concierge, Wong says: “We looked at what’s been done in the neighbourhood and we raised the bar.”

Knott expects to retire in four years and become immersed in the “peace and quiet, the tranquillity, of the UBC area” in about 18 months. “I’ll be ready to really start enjoying life . . . more,” he anticipates.

Let’s end where we started, with Patricia Glass in the show home bathroom. I had not noticed the one-sink vanity during my visit to the show home and I should have because I am accustomed to seeing two sinks in the ensuite vanities in new-home projects.

Patricia reports developer and marketer think toiletry management will be more important to Corus residents than time management.

“We recognize that extra counter space is more desirable [than less]. There has yet to be any objection to just one sink. Buyers are generally not interested in using their vanities at the same time.”

© The Vancouver Sun 2005

John Bermingham
Province

A realtor has been disciplined for his role in the sale of a house that was resold six weeks later for $154,000 more.

And the elderly man who watched the profit slip out of his hands said yesterday the realtor, Geoffrey Reginald Davis of Sutton Group-West Coast Realty, should have received a heftier penalty.

Davis, a realtor for 20 years, was ordered to pay $1,355 and retake the ethics portion of his real-estate course, which will cost him $150.

“I’m really angry,” said George Winchcombe, 80, the vendor, who now lives in an old folks’ home.

Winchcombe hired Davis to sell his property at 842-844 Dunlevy Ave. in Strathcona, two back-to-back lots that contained a century-old house that’s now on the heritage list.

The two lots were listed as one property at $339,000 and sold on May 4 last year for $337,000. The following month, the buyer relisted the properties separately and sold the house for $301,000 and the adjoining lot for $190,001 — a profit of $154,000.

Winchcombe said he’s since talked with the current owner of the house.

“He paid $300,000, that’s just for the one lot,” he said. “All I got for both bloody lots and a house is $337,000.”

The Real Estate Council of B.C., in finding Davis negligent, said he “failed to adequately advise or recommend to [Winchcombe] that the said property should be listed and sold as two separate lots.”

It ordered him to pay $1,355 in enforcement expenses and retake the ethics course. An allegation that he failed to adequately advise Winchcombe of the fair-market value of his property was dismissed.

Davis said he advised Winchcombe to sell the lots separately.

“I felt we could get more net into his pocket if the properties were listed separately,” he said yesterday. “He said, ‘Oh, no, no.’

“At that point, you say, ‘Well, OK, I follow what the seller wants.'” Winchcombe may have been trying to avoid paying a double commission, said Davis.

He said the property’s condition was so bad, it was “out of a Charles Dickens horror movie, literally beyond your wildest imagination.”

The two couples who bought the property together tried to clean it up and fix it, but instead decided to sell it as two lots.

In January, the B.C. government gave the real-estate industry the power to police itself. The new rules include increased fines on individual realtors, up to a maximum of $10,000, but the fines can’t be imposed on cases from last year.

In a hot market, Robert Fawcett, the real estate council’s executive officer, said he’s getting calls from people caught up in bidding wars or from people who feel they sold for too little.

“There are two sides to every story,” he said. “I’m convinced there’s more protection now.”

Veteran realtor Bob Rennie said fines for realtors should be higher.

“I’ve always felt the penalties for wrongful acts in our industry are far too low,” he said. “If the penalties are high, the incidents are a lot lower. We’re not dealing with $39,000 acquisitions any more.”

© The Vancouver Province 2005

Simon Doyle
Sun

New housing prices stayed flat in Vancouver in June while they rose 0.9 per cent in Victoria, Statistics Canada said Wednesday.

The price of new houses nationally rose by 0.8 per cent during June, following a similar increase of 0.5 per cent in May and continuing a steady rise since 1998. “It’s a good increase for one month. It’s not huge,” said Randy Sterns, an analyst at Statistics Canada. “I’ve read articles that there’s a building bubble and things are just going to die all of a sudden, but we haven’t seen that. It’s been pretty steady, and if there’s been any decreases it’s been moderate.”

The last time the price of new houses dropped, month over month, was in September 1998, and then only slightly, he said.

The steady rise in prices is part of an overall demand for houses in the midst of a favourable labour market and low mortgage rates, Sterns said. A contributing factor in the price increases, he added, is a shortage of land in some cities, such as Winnipeg, where prices for new houses increased three per cent during June.

June prices increased significantly in Edmonton (1.6 per cent), Calgary (1.3 per cent) and Toronto and Oshawa (1.2 per cent), which Statistics Canada attributed to the high cost of building materials, labour and land. Prices over the year, since June 2004, have increased 4.7 per cent. The June price changes were lowest in Hamilton, where prices dropped by 0.2 per cent because buyers negotiated prices on a number of new, unsold houses on the market, Sterns said.

© The Vancouver Sun 2005