Archive for June, 2007

US Banks to foreclose on One Million Homes this year & Canfor lumber producer will lose $200M

Saturday, June 30th, 2007

New president asks company’s suppliers to cut costs to share pain

Gordon Hamilton

The subprime mortgage crisis in the U.S. is ready to send the Canadian lumber industry into an even deeper financial trough likely to last another 18 months, Canfor Corp.’s new president forecast Friday.

Veteran business leader Jim Shepard, who took over the reins of Canfor only seven weeks ago, said in an interview that the company is facing a $200-million loss in 2007, largely because he believes banks will foreclose on one million American homes this year.

“This is the worst I have ever seen,” he said of Canfor’s financial situation.

The company’s balance sheet is sound, thanks to a $551 million softwood lumber refund at the end of 2006 but it is bleeding cash and has asked its suppliers to share the pain by cutting their own costs by 15 per cent.

Further, Canfor announced Friday that its senior vice-president of operations, Patch Bonkemeyer, has left the company. Bonkemeyer had only been with Canfor since last August.

In an interview with The Vancouver Sun, Shepard outlined his thoughts on what he sees as a deepening financial crisis that is causing the Canadian forest giant to hemorrhage money with every carload of lumber it ships south.

The subprime crisis is depressing housing starts even further than would be the case in a cyclical downturn as banks foreclose on homeowners and put their houses on the market.

The crisis stems from banks approving mortgages at rates below prime to people who would not otherwise qualify during the period when housing prices were going up. Those mortgages are now coming due at a time of higher interest rates, resulting in a growing number of homeowners unable to meet their payments.

“The projection is — and this is the really scary one — that by the end of the year there will have been one million home repossessed in the United States,” Shepard said.

“One million homes will go back on the market. That’s one million homes that will not be built.”

U.S. housing starts have already plummeted from a 2005 high of more than two million to 1.48 million in 2007. Lumber prices have followed starts down, closing Friday at $311 US a thousand board feet.

The crisis for B.C. sawmills has been building for the last nine months. Canfor lost $42.7 million in the first quarter of the year and there’s no relief in sight, Shepard said.

“We are on a trajectory to lose the best part of $200 million this year.”

The growing subprime crisis, coupled with other domestic issues — softwood lumber taxes, increased costs associated with the pine beetle infestation and a rapidly escalating Canadian dollar — means Canfor might as well be stapling $100 bills to every carload of lumber it ships into the United States, said investment analyst Paul Quinn of Salman Partners.

Quinn agreed the Canfor president has correctly sized up the the industry outlook.

To stem the bleeding Canfor has taken the drastic step of asking suppliers to cut their own costs and has approached unions about cost-cutting. Shepard sent out a letter dated June 20 to suppliers seeking the 15-per-cent saving.

“I am doing the best I can to be fair and at the same time to be as efficient as we can to get our costs down so that we can survive in the difficult 18 months ahead,” he said of the letter.

Rick Publicover, executive director of the Central Interior Logging Association, said if the savings can be made by better programs to improve delivery of products and services, then it is a positive move.

But for those suppliers who have fixed costs, options are limited.

“If they just come to them and say we are going to take 15 per cent off the top of your price, that’s definitely not going to work.”

Publicover also noted that suppliers feel Canfor “always wants to share the pain but not the gain.”

If the company intends to reward those who make the cuts when markets improve, Publicover said the promise needs to be formalized.

Shepard is sharing the pain personally. Along with all other salaried employees, he has taken a 25-per-cent salary cut himself, dropping his pay from $650,000 a year to $495,000.

Quinn said that’s a positive goodwill sign, but wondered what the reaction to the drive to reduce costs would be from workers.

“It’s just not the same as the guys working in the mill who have taken out a large mortgage themselves,” he said.

Shepard is not the first to sound the alarm about the impact of the housing crisis on B.C. lumber companies.

Hank Ketcham, president of West Fraser Timber Co., the country’s largest lumber producer, said April 24 that the industry downturn is the worst he can remember in his 34-year career.

Shepard acknowledged that he is a newcomer to the forest sector. But he has considerable business acumen — including nine years as president of heavy equipment distributor Finning International — and was brought on by the Canfor board as interim president to steer the company through the downturn.

“I have only been in this business seven weeks. My disadvantage is I don’t know anything about this business. My advantage is that I am not carrying any baggage, preconceived notions or thoughts that I have seen it all happen before because I don’t know what is going to happen. I am just listening,” he said.

© The Vancouver Sun 2007


Hong Kong’s economy gets its sparkle back

Saturday, June 30th, 2007

Capitalism is alive and well, despite dire predictions to the contrary

Miro Cernetig

The hypnotizing skyline of modern Hong Kong is dominated by the imposing and symbolic Bank of China building. Photograph by : Reuters

Boats pass by Shanghai’s skyscrapers in the showcase Pudong financial district. Photograph by : Reuters

HONG KONG – If anything symbolized the jitters surrounding China taking over Hong Kong a decade ago (on July 1, 1997), it was the urban legend surrounding the 369-metre, silver phalanx constructed by the Bank of China.

It was said the austere skyscraper, with its windows of silver mercury that let Chinese bankers see out but nobody in, had been deviously designed by a Communist-friendly feng-shui master. Its dagger-shaped corners would supposedly rain negative energy down upon British-ruled Government House, the epicentre of colonial power, a sort of invisible Chinese death ray to neutralize Hong Kong’s colonial overseers and their evil capitalist ways.

It was a good story, and a perfect metaphor capturing the zeitgeist of “The Handover” — when the People’s Liberation Army was about to roll in from across the Chinese border to take over Hong Kong 160 years after China’s rulers lost the Opium War.

This tiny capitalist city-state of seven million was doomed, the conventional wisdom held, to become just another Chinese city. The old, British Hong Kong, with its ultra-rich tycoons and impeccably connected British bureaucrats and bankers clad in Saville Row suits, could not survive for long under the vengeful grip of a nation whose ethos was created by Chairman Mao.

Some heavy hitters staked their reputations on that theory, including Fortune magazine. Its doomsday article, “The Death of Hong Kong,” is still not forgotten here.

Oh, the old British colony might remain a regional business hub, a convenient shipping and business port into China, Fortune sniffed. But its ambitions as a world financial centre? Kaput. It would surely shrivel under the Communist regime’s authoritarian grip.

“What’s indisputably dying,” declared Fortune, “is Hong Kong’s role as a vibrant international commercial and financial hub — home to the world’s eighth-largest stock market, 500 banks from 43 nations, and the busiest container port on Earth. What will change after midnight on June 30, 1997? Everything.

“Within months of the transition to Chinese rule, the now dominant use of English, the universal language of business, will give way to far more extensive reliance on Cantonese and Mandarin,” Fortune decided. “Troops of the People’s Liberation Army, which has already formed links with the powerful local criminal gangs known as ‘triads,’ will stroll the streets. From Beijing, whichever faction emerges on top in the post-Deng Xiaoping struggle for power will control every branch of Hong Kong’s government — replacing elected legislators with compliant members, selecting cooperative judges, and appointing the chief executive.”

Scary stuff, some of which also prompted hundreds of thousands of Hong Kong residents to seek other passports, many of them to get into Canada. But a decade later, Fortune’s crystal ball-gazing seems hopelessly inept.

“Fortune was wrong,” says James Tien, the leader of Hong Kong’s pro-business Liberal Party, who serves as an elected member in the former colony’s legislative council. “Look around you. Things still work. Hong Kong is still here.”

Indeed, as the Brits might say.

On a macroeconomics level, Hong Kong’s bottom line looks pretty good: The Hang Seng, the stock exchange that is now a bellwether of both China and Asia’s financial health has been booming. It hit above 22,000 points earlier this week, a record that many predict will be broken again.

The local real estate market is once again nearing the stratosphere. And the international bankers and financiers haven’t been in as festive a mood since before the handover. Last year, more IPOs were done in Hong Kong than Wall Street, meaning lots of big bonuses and a run on luxury cars.

The only downside in terms of figures, notes Tien, is that the per-capita income is still about $27,000 US, roughly what it was a decade ago. It is largely high-end real estate, owned by the foreign bankers and those of the tycoon class and their ilk, that is booming.

“Still,” says Tien, “Fortune was wrong. Hong Kong is doing pretty well.”

That is also the conclusion of James Forder, the Oxford economist and author of Hong Kong, Ten Years On, a report commissioned by the powerful business group John Swire & Sons Ltd.

“For many businesses, Hong Kong is now a more attractive place than it was when under British control,” Forder concludes in his independent study. “The old business conditions have largely been retained, but the Hong Kong economy is now better integrated with the Chinese, and the rapid development of that country makes for a huge additional opportunity.

“The ‘One Country, Two Systems’ approach to maintaining the capitalist system in Hong Kong has been almost completely successful. Despite the reversion to Chinese sovereignty, in Hong Kong it is business as usual.

“Capitalism remains alive and well, and just as welcoming to the foreigner as it has ever been. . . . Hong Kong is blessed with just the right separateness from China to maintain strikingly superior institutions, but just the right kind of integration to make use of them to the full.”

The question, of course, is what happened to Shanghai? Another theory that reigned supreme a decade ago was that the Communist regime was intent on eclipsing Hong Kong as the star of high finance in southeast Asia.

Billions off dollars had been pumped into Shanghai, to bring it back to its glory days before the 1949 Communist revolution. There were new elevated roadways, a profusion of five-star hotels, a massive new stock exchange and, most tellingly, Pudong. Almost overnight, central planners had turned the rice paddies and villages on the other side of the Huangpu River into a massive real estate development that was to be China’s gleaming version of Manhattan.

Shanghai’s destiny to replace Hong Kong seemed further assured by the events that rocked the former British colony to its core after the handover.

Within days of the Union Jack coming down, the Asian currency crisis hit, causing the Hang Seng to plummet. Then there was the worldwide burst of the tech bubble. Then came a plunge in real estate, a bird flu scare, and then the deadly Severe Acute Respiratory Syndrome (SARS), which started just across the border in Guangdong and spread to Hong Kong, causing foreigners to stay away. At one point, the famous Peninsula Hotel had only six guests.

“It was like something out of the Bible,” recalls Mike Rowse, Hong Kong’s director-general of investment promotion. “It seemed we were being hit with everything that could possibly happen.”

But Rowse now says Hong Kong — positioned on China’s edge at a time when that country is booming, and sitting on $1.2 trillion US in foreign reserves that grow by the day — is joining London and New York as one of the world key financial centers.

It’s a view that is heard often these days in Hong Kong, and it’s largely fueled by one fact: Shanghai, despite its ambitions, has profound limitations. While it may have begun to look a lot like Hong Kong on the surface, it still remains Chinese: Its financial system is based on the renminbi, meaning it lacks a fully convertible currency; the city still has a paucity of English speakers; and, perhaps most troubling of all, it suffers from endemic corruption that seems to go to the highest levels.

“What caused the reversal of fortunes? Shanghai wasn’t ready for the big-time,” concluded a recent analysis by the Wharton business school. “Its financial services companies — typically state-run — and stock brokerages were unsophisticated. Shanghai stock brokerages went bankrupt after promising returns on stocks that tanked. Big-money investors weren’t comfortable with weak accounting rules and Chinese market regulation.”

Also, Shanghai fared poorly in the shift in Beijing’s national power structure. Former President Jiang Zemin and Premier Zhu Rongji — both previously Shanghai mayors — had a sweet spot for the city and a desire to see it restored to its status before the revolution as China’s financial hub.

But current President Hu Jintao has no such political powerbase there, and many think he seeks to reduce the influence of Shanghai’s top officials as he consolidates his rule. In fact, China’s leader seems to be taking a deep interest in anti-corruption measures in Shanghai.

“A political backlash in the form of an investigation into local corruption has snared local political bosses,” notes the Wharton analysis. “In September, [2006], the central government fired Shanghai Party Secretary Chen Liangyu for his alleged involvement in the mismanagement of the city’s social security fund. Many others are being investigated.”

That scandal has set Shanghai’s international reputation back, and helped Hong Kong cement its status as one of the world’s best and most-regulated places to raise capital.

Even China’s “red chip” companies seem to agree. Last October, the Industrial and Commercial Bank of China floated the largest IPO of the year, raising $19 billion. Hong Kong’s share of that pot was $13.9 billion; Shanghai raised just $5.1 billion.

That trend is likely to continue for years to come. In 2003, foreign direct investment into Hong Kong was $13.6 billion. Last year, it was $42.9 billion. And in the first quarter of 2007, $15.4 billion has already flowed in, suggesting another record year ahead.

Positioned on the edge of China, between the west and east, Hong Kong is also likely to be further bolstered by the mainland’s desire to become a more aggressive player on the world stock exchanges. Just this week it announced that a new investment agency would be getting $200 billon US to invest in foreign ventures, much of which will likely flow through Hong Kong.

Canada’s man on the ground in Hong Kong is Consul General Gerry Campbell, a veteran diplomat who came to the colony 30 years ago and is now on his third posting here. He reckons that, aside from Hong Kong’s deeply ingrained culture as an international financial centre, what the doomsayers missed when they predicted its eclipse by Shanghai was the nature of China’s economic transformation.

“Hong Kong is riding on the China wave economically,” he said, sitting in an office that overlooks Hong Kong’s busy harbour. “That’s what few people foresaw.”

Canada, while certainly not in the league of the biggest players in Hong Kong, seems to be holding its own.

The latest figures show Canada received $6.3 billion in foreign investment from Hong Kong in 2005, while Canadian companies invested $3.8 billion into the city. The Canadian consulate estimates 15 Canadian companies have regional headquarters in Hong Kong, another 29 have regional office, and that there are about 150 Canadian companies with some sort of offices.

But Campbell, who is from Vancouver and sits in front of a painting that shows our city’s harbour, agrees that more inroads could be made by Canadian business. There are, according to recent estimates, about a quarter-million Hong Kong residents with Canadian passports. They form a network of potential business partners, about 3.4 per cent of Hong Kong’s population, yet to be fully explored.

“That’s where I think we haven’t made the link,” said Campbell, although he added more efforts are underway to connect Canadian businessmen with their compatriots.

Bernard Pouliot, the chairman of the Canadian Chamber of Commerce in Hong Kong, whose 1,000 members make it the largest outside of Canada, has spent 29 years in Hong Kong. He agrees the former British colony has emerged as China’s business capital, and urges Canadian small- and medium-size businesses to look to Hong Kong as the launching point into China. That, he says, is easier than before 1997, because 10 years after the handover, after enduring their repeated crises, Hong Kong’s business players are more down to earth and open to joint ventures with outsiders.

“In the 1990s, these guys were rolling in gold,” said Pouliot, who runs the financial services company Quam. “They thought, ‘Why do I need China? Why do I need anyone else? We’re doing great.’ But the Asian financial crisis and SARS, well, it humbled them.”

“Hong Kong is New York, it’s the place to be,” he said. “Shanghai is okay, too, but is more like Chicago or Los Angeles.”

But he offers a caveat: “This will change in time. Shanghai will become China’s New York. Hong Kong more like Chicago or L.A.”

How much time?

“Ten, maybe 15 years,” he estimates. “Hard to say. But it will happen. That is what the Chinese want.”

One thing that won’t be disputed, is that if China’s boom continues there will be enough wealth and financial deals for both Hong Kong’s and Shanghai’s financiers to share.

Hong Kong’s destiny may be to be another Chinese city, but it will be one of the richest.


Fortune magazine, writing just prior to the July 1, 1997 handover of Hong Kong to Chinese sovereignty, warned of calamity. How wrong it was.

“Within months of the transition to Chinese rule, the now dominant use of English, the universal language of business, will give way to far more extensive reliance on Cantonese and Mandarin. Troops of the People’s Liberation Army, which has already formed links with the powerful local criminal gangs known as ‘triads,’ will stroll the streets. From Beijing, whichever faction emerges on top in the post-Deng Xiaoping struggle for power will control every branch of Hong Kong’s government — replacing elected legislators with compliant members, selecting cooperative judges, and appointing the chief executive.”

The city, in fact, suffered far more in the coming years from the Asian currency crisis, the tech-bubble collapse, and the SARS outbreak. But Hong Kong has recovered, and is again a leading engine of economic growth for the entire Asia-Pacific region.


Hong Kong’s economy, especially its financial services industry and role as a regional corporate centre, rivals that of most countries:

– GDP: $189 billion US in 2006 (6.8% growth over 2005)

– Per-capita GDP: $27,500 US in 2006 (compared to $38,888 in Canada)

– Total exports: $315 billion US in 2006 (up 9.4% over 2005)

– Total exports to Canada: $1.59 billion in 2006 (up 11.1% over 2005)

– 15th-largest Canadian export market ($1.59 billion in 2006)

– In 2007, Hong Kong will raise more money through IPOs than London or New York

– Second largest stock market in Asia (after Tokyo)

– Largest investor in mainland China

– Ranked as world’s freest economy every year since 1970

– World’s busiest airport (in terms of international cargo)

– World’s second-busiest container port

© The Vancouver Sun 2007


Apple’s iPhone stirs frenzy in United States

Saturday, June 30th, 2007

Thousands of fans line up for latest gadget


Surrounded by cheering Apple Store employees, one of the first buyers of the Apple’s iPhone leaves the packed store on Fifth Avenue in New York on Friday. JEFF ZELEVANSKY/ REUTERS

SAN FRANCISCO/ NEW YORK — Thousands of U. S. gadget fans made an orderly pilgrimage to stores on Friday to be among the first buyers of Apple’s iPhone, a music- and video- playing device expected to reshape the mobile industry.

Crowds outside some Apple outlets cheered as the doors opened at 6 p. m. local time, while smaller groups waited outside AT& T stores. AT& T Inc. is the phone’s exclusive wireless carrier for the first two years.

“ It’s the best day of my life. It’s Christmas, birthday, New Year’s all rolled into one,” said Kristian Gundersen, a 23- yearold graphic designer from Norway who flew to New York just to buy an iPhone.

Gundersen was one of the first to walk out of Apple’s Fifth Avenue store with a device. Within two hours of opening, several hundred people had made purchases at the outlet.

The iPhone melds a phone, web browser and media player, and costs $ 500 to $ 600 ( all figures US). It is seen as a test of wider U. S. demand for advanced phones, which have already caught on in parts of Asia and elsewhere.

It has already whipped technology lovers into the sort of frenzy usually associated with a new video- game console.

Judging by its f irst customers, the iPhone drew an older generation of gadget geeks rather than young fans who may have been put off by the price, including a required service contract that starts at about $ 1,400 for two years.

“ The phones out there are just garbage. I’ve gone through several phones, even the expensive ones. This is different,” said Albert Livingstone, in Chicago. “ It’s the newest toy. I’m 62. I don’t have much time left to buy toys.”

Some aimed to make a profit on the iPhone by selling it or getting paid to wait.

“ I’m definitely a mercenary,” said Kyle Laurentine, outside a San Francisco Apple outlet, where the doors had yet to open and about 200 people were waiting. “ I am 17 years old and I don’t need an iPhone. I have an iPod and a cell phone.”

The phones quickly popped up for sale online at inflated prices. At online classifieds site Craigslist, most listings ranged between $ 750 and $ 1,500, with one optimist asking for $ 10,000. One iPhone offered on auction website eBay had 23 bids and a price of $ 1,325.

Apple’s online store posted a message reading, “ We’ll be back soon. We a re busy updating the store for you and will be back by 6 p. m. PDT.”

Apple is expected to sell the iPhone in Europe later this year in the run up to the holiday season. It has not disclosed the price or carrier, though speculation has mounted it may reach a deal with Britain’s Vodafone Group Plc.

Sales in Asia are expected to begin in 2008.

However, the iPhone’s effect has rippled through the wireless industry before even a single unit has been sold.

Rival Palm Inc. has said the iPhone could hurt demand for its Treo smartphone, at least in the short term.

“ It’s likely that as people try [ the iPhone] out. There may be some stall in our sellthrough,” Palm chief executive Ed Colligan told Reuters on Thursday.


Tobiano 18 hole Golf Course in the Kootenays forms part of the 735 -acre “The Rise” resort 3.5KM from Vernon overlooking Okanagan Lake

Saturday, June 30th, 2007

From the West Coast to the Kootenays, luscious fairways await swingers of all levels


The Tabiano golf course

A year-round resident

For many people, the appeal of the recreational getaway is exactly that: the recreation. Golf enthusiasts are not simply looking for a place to stretch out in a hammock, but also for a spot where they can hit the links in style.

In B.C., there’s no shortage of resort communities that offer high-end amenities, including professionally designed golf courses.

Here’s a sampling:

Wyndansea is sure to appeal to golfers, with its Jack Nicklaus course — the only golf course on the open Pacific of B.C.’s West Coast.

The resort is located on a lush, 370-acre peninsula that faces both the shores of the Pacific Ocean and the tranquillity of Ucluelet Inlet.

Sales have just begun for the first phase of the project, which incorporates the design of the 18-hole course and an enclave of 30 oceanfront and semi-oceanfront lots that vary in size from one-half an acre to three-quarters of an acre.

The “signature circle” surrounds an eight-acre park with lake and its own putting green.

In order to preserve the natural features of the land, the course is being built with the natural aesthetics of the site as the main design consideration, with no residential crowding of the fairways.

The entire multi-phased project will have a projected value of $650 million, take place in stages over the next five years, and include a condo-hotel. Homes here start at $1.5 million. More info. at

The Rise is a master-planned resort community that includes a winery, vineyards, hotels, village centre, tennis centre, private lakeside beach club and several neighbourhoods interwined around a Fred Couples 18-hole signature golf course.

The 735-acre resort overlooks Okanagan Lake and is on the south-facing slope, 3.5 km. west of the Vernon city centre.

Construction is under way on road infrastructure, home sites, the vineyards and the golf course, which has been integrated into the rugged natural topography of the Vernon highlands with stunning lake views.

The first phase of The Rise, in a neighbourhood called Clearview, has been sold out, but the nine fully finished model homes have now gone on the market, with a starting price of $709,000.

There are also 15 home sites available in a neighbourhood called Sagecroft, starting at $219,900 and five villas starting at $516,950. There are also 19 home sites available in Watermark, starting at $429,000. More info. at

Tobiano A championship golf course is not the only draw at Tobiano development. Horse-lovers will also be pleased to know they can live close to where they ride, as Tobiano recently released new equestrian building lots. The lots overlook Kamloops Lake. The 1,000-acre community is set in a landscape of rolling grasslands, fragrant hills of sagebrush, ponderosa pines and pristine lakes. Forty-two lots, ranging in size from .22 to .56 acres, will be released in Phase 1, with prices starting at $249,900. Tobiano is located on Six Mile Ranch, a century-old working cattle farm just 15 minutes west of Kamloops. It borders 17,000 acres of wilderness — perfect for exploring on horseback. Besides the equestrian opportunities, there is also a 100-slip marina, and a shopping village and hotels are in future plans.

More info. at

Wildstone The first 76 mountain home lots out of an eventual 3,000 were snapped up earlier this month in one day after being offered for sale in the first phase of this 900-acre resort development in Cranbrook. Home lots that range from 6,500 to 12,000 sq. ft. are priced from $140,000. No lot in this first phase is more than $200,000 and all will be situated along the 36-hole Gary Player Design Championship Golf Course.

Features of the resort will include a golf clubhouse, pedestrian village with a variety of galleries, cafes, boutique shops, restaurants, a recreation centre with fitness facilities, indoor-outdoor pool, multi-use courts and an upscale hotel with conference facilities and wellness spa.

More info. at

© The Vancouver Sun 2007


Resort life beckons at 3 Okanagan properties

Saturday, June 30th, 2007

High-end lakeside projects offer buyers everything from poolside wine bar to valet boat service


Concord Pacific, the Greata Ranch Vineyard Estates developer, knows how to build and shorline projects, tested and not found wanting on the north shore of False Creek.

The Okanagan has long been synonymous with resort living — in large part because of the expansive vineyards, the sandy beaches and the warm lakes that dot the region’s landscape.

Some lakeside recreational properties in the Okanagan have moved decidedly high-end, offering homebuyers not only spectacular lake views, but everything from a poolside wine bar to valet boat service.

The projects include:

Greata Ranch Vineyard Estates: Concord Pacific has found a great location for its latest recreational project on the Greata Ranch Vineyard Estates, so buyers will find themselves not only close to a sandy beachfront, but also surrounded by 40 acres of working vineyard. There are many building choices, as well, from townhomes of approximately 1,800 sq. ft. in the hillside collection, to detached homes sized from 2,400 sq. ft. to 3,300 sq. ft., in either the lakeside or grand lakeside collection. Prices start at $500,000 to $2 million-plus. All have Mediterranean-inspired architecture where indoor/outdoor living is key. An on-site marina and pool are just some of the features of this resort on Okanagan Lake, 25 minutes south of Kelowna.

More info at:

Indigo: This is such an exclusive resort property that owners entering the resort will gain entry by finger and iris security scanning. Another not-often-seen feature is the amenity of valet boat service at Indigo — the first concrete recreational condominium project on Osoyoos Lake. Located on four acres of beachfront, this is one of the last available lots like it left to be developed on the lake.

When the project is completed there will be an additional 140 homes, and 80 per cent of the homes will have unobstructed water views. Homes range in size from 800 to 1,300 square feet. There will be dockside access for jet ski and small craft users and an on-site pool exclusively for homeowners. The building itself is leaving a minimum environmental footprint and will have geo-thermal heating.

Other features include an NHL-quality gym designed by former NHL’er Ray Ferraro. And for sport buffs, four golf courses are located within minutes from the development. There are also more than 25 wineries within an hour’s drive. More info at:

Watermark Beach Resort Construction has begun on the $75-million Watermark Beach Resort in Osoyoos. The resort is located along 1,000 feet of sandy beach on the shoreline of Osoyoos Lake, a popular vacation destination, judging by how quickly suites sold in Phase 1. When sales began last October, more than 70 per cent of the available suites sold in one day and the remaining 30 per cent are expected to sell out before the end of summer.

The resort’s amenities include a 1,800-sq.-ft. pool, two hot spa pools, a kiddie waterslide, poolside wine bar, restaurant and event space for the town’s festivals, such as the “Christmas Light-up” and local wine tour events.

The average price for a furnished one-bedroom suite runs from the mid-$300,000s to mid-$500,000s.

The four-storey resort is scheduled for completion in 2009.

More info at: www. ownwatermark. com

© The Vancouver Sun 2007

Ocean-front living offers luxurious recreational lifestyle

Saturday, June 30th, 2007

Harbours, tide pools and sandcastles lie steps away from waterfront homes


Located in Pender Harbour on the Sunshine Coast, 25 Whittakers residences offer spectacular views and restricted views – of the homes.

In British Columbia, resort living often means oceanfront living.

Upscale recreational residences on the coast provide homeowners with the opportunity to explore tide pools, build sandcastles — and kick back in luxury.

Waterfront offerings include three on Pender Harbour and Vancouver Island: the Whittakers, Painted Boat and Tanglewood Beach Homes.

The Whittakers is an oceanfront community of 25 architect-designed detached luxury residences, located in Pender Harbour on the Sunshine Coast, 30 minutes north of Sechelt. The residences are low-bank waterfront homes with views of the harbour and the Malaspina Strait.

Thanks to the topography in the area, the site is visually protected from neighbours on all sides, creating a greater feeling of getting away from it all. There’s 1,000 feet of scenic cove shoreline for homeowners to explore and a grassy meadow in front of a grove of old-growth forest.

Prices for the 13 finished homes that remain range from $875,000 to $1.75 million. Each comes with its own boat slip and 50 feet of ocean frontage.

Homeowners have access to all amenities at Rockwater Secret Cove, an eight-acre oceanside retreat, 25 minutes south of the project. These include a swimming pool, beach, massage spa, and concierge who will provide property management and rental management services if needed.

More info. at

Painted Boat is a 31-condominium resort on a forested 4.5-acre waterfront site in Pender Harbour. Fractional quarter-share ownership makes this development more affordable for many. Prices range from $199,900 to $274,900 per quarter. The condos, varying in size from 1,114 to 1,760 sq. ft., are fully furnished with natural, custom-made furnishings. The resort features a restaurant and convention facility, a 60-slip deepwater marina, a grotto-style, infinity-edge pool, as well as a jacuzzi and exercise facility. The two vacation villa buildings were recently released for sale with occupancy scheduled for Spring 2008. More info. at

Tanglewood Beach Homes is designed by the award-winning architectural firm Blue Sky Architecture. These 46 homes make up the final two phases of the development, three kilometres south of Parksville. The project sits beside Rathtrevor Beach Provincial Park, which has a sandy beach that goes out one-quarter of a mile at low tide. Homes start at $389,000 to $650,000, and all have vaulted ceilings and face the park.

More info. at

© The Vancouver Sun 2007


Watermark Beach Resort on Osoyoos Lake

Saturday, June 30th, 2007

Demand for top-dollar recreation listings will only go up as supply dwindles

Bill Morrison

The homes in the Watermark Beach Resort, on Osoyoos Lake, were mostly bought in one day of selling

What happens when $41 trillion in demand meets a two-per-cent supply? What happens when the No. 1 objective of North America’s baby-boom generation is to own a second home?

What happens when investors begin to shift their attention away from traditional residential markets and focus instead on the virtually untapped “upside” of recreational real estate? The answers may astound you.

During the last few years, we’ve seen an incredible spike in demand for recreational property. This is only the beginning.

The cost of purchasing a recreational property is going to go up like nothing we have ever experienced before for one simple reason — never before in our history has more wealth been created or inherited.

According to the landmark Boston College study Millionaires and the Millennium, more than $41 trillion US will pass from parent to child between the last decade of the previous century and the middle decades of this, give or take a year or two.

As this money changes hands, it’s being delivered to the baby boomers at an older age. These boomers already lead a comfortable life with comfortable homes, cars and savings plans.

So, what will they do with the “found” money? They will buy recreational property and pay nearly any price for the good stuff.

The parents of these boomers used to be savers or purchasers of equities or savings bonds. The new generation would much rather “sit on their dock than sit on their stock!”

There are three reasons why people buy recreational real estate: lifestyle, capital appreciation and extra income via property rental. (Although this comes in a distant third.)

We know that A+ recreational real estate satisfies the need for lifestyle concerns and typically is located in areas of strong appreciation and liquidity. It also stands to reason then, that rental opportunities would be strong. This has put unprecedented pressure on waterfront, water view and select golf course property.

So, will all recreational property be snapped up by the baby boomers? Not so fast. Last year, a lot of developers tried to offer recreational property in sub-par locations, only to be sent packing by disinterested buyers.

Why do some of these developments sing while others sink? The main difference is still the old adage: location. To be exact, A+ location versus B can make all the difference to your investment outcome. This will present sub-par locations with a huge challenge.

But before you jump out and buy, keep in mind these key components:

1. You have to focus on only A+ property; it’s insulated from downturns and will remain at the top of all lists.

2. Avoid water views when waterfront is available.

3. Make sure there is sufficient infrastructure to support four-season sustainability. Or, at the very least, three seasons.

4. Look for buildings that have a full menu of amenities as they outsell those that don’t.

5. Look at the historic pricing of the area. Based on the statistics, everything in an A+ location is a great buy. But look for the hidden gems that linger behind in price.

6. Avoid areas that have experienced recent spikes in pricing and look for other unknown factors. For instance, do local regulations allow new construction?

Every year, young urban professionals enter the recreational market in search of that dream waterfront property and chase the prices up — but some only end up purchasing in the back row with the rest of the kids from the wrong end of the gene pool whose parents pre-spent their inheritance. Those back row properties can still be fun, but challenge the second fundamental rule of liquidity and appreciation. That means, when extra money gets tight, second-rate second homes are the first asset put up for sale and prices often plummet with oversupply.

So, is the A+ property easy to buy? Think again. Eighty-three per cent of Canadians who own recreational property say they are unlikely to sell within the next three years. Only 15 per cent of owners are even contemplating selling. And of those, 41 per cent — almost half — intend to upgrade into a better recreational property.

Even worse, many of these second homes are regarded by owners as legacy properties that will never be sold outside the family. So that leaves only a tiny percentage of the current recreational product available for purchase.

If you need further proof, compare 50 feet of Kelowna waterfront with a 1,500-square-foot home that is listed today at $2.2 million. Just a few years ago, it was worth $1.4 million. Is it actually worth $800,000 more than it was 30 months ago? Yes, because buyers will pay that price.

Why are areas like Vernon seeing prime waterfront property increases of 25 per cent or more each year? It is the same answer. Value is always set by buyers and, in this case, the buyers don’t care about price. They just want location.

Now, for all those nay-sayers waiting for the crash so they can pick up the prime waterfront locations: Sorry, it’s the back rows and the wounded waterfront that will be available — the stuff that will come back on the market and get hurt when the economy softens — not the ultra high-end A+ product. When the price of the “creating family memories”property goes up, the rich kids just dip a little deeper into the inheritance fund. After all, they didn’t earn this money, so it’s painless to spend.

So far, we have been talking about the recreational real estate market in general in B.C. We also have to account for the strength of the economy in Alberta, where the price of oil has doubled since 2000. Not only are the boomers awash in cash, so is the “average” Albertan who is heading for B.C. and looking for prime real estate.

There is one last factor to consider. Investors and speculators have started to realize that huge profits can be made in recreational real estate. Investors have quickly realized that recreational property is scarce and that buyers are plentiful. Investors are buying multiple homes in new projects, knowing full well that the money is changing hands more and more every day, and that whoever controls the land, controls the profit.

So, what does is all mean? Well, if you already have a superb second home, you are lucky. If you are trying to buy one, don’t wait. Because if you think the price is high now, just wait. I anticipate this headline any day now: “Insatiable recreational property buyers fight over a two-per-cent supply with $41 trillion in buying power.”

See you at the beach.

Bill Morrison has been selling North American residential and recreational properties for more than two decades. He is a principal in Pilothouse Real Estate Marketing.

© The Vancouver Sun 2007

Wakefield Beach in Sunshine Coast, new 2 phase development by Wakefield Homes, Phase 1, 31 homes, Phase 2, 15 homes

Saturday, June 30th, 2007

‘You never understand until you see it,’ impressed buyer says


The Wakefield Beach, developer, Lance Sparling, likes what he’s achieved – and what owners are saying – so much he formed a company to do it all over again.


LOCATION: Sunshine Coast

PROJECT SIZE: Phase 1, 31 residences; Phase 2 (now selling), 15

RESIDENCE SIZE: 1,431 sq. ft. — 1,790 sq. ft.

PRICES: $595,000 – $1.35 million

PRESENTATION CENTRE: 5370 Wakefield Beach Lane, off the 6500-block of the Sunshine Coast Highway

TELEPHONE: Toll free 1/888/741.9899

E-MAIL: [email protected]


DEVELOPER: Wakefield Homes

ARCHITECT: Blue Sky Architecture, Teryl Mullock Architects

PHASE 2 OCCUPANCY: Next summer

– – –

Ann Fransblow, owner of a recently constructed oceanfront property at Wakefield Beach in Sechelt, says the development’s sales literature and staff didn’t tell the whole story: Her home and its site are more spectacular than she anticipated.

“They told me how it was going to be once it was built, but you never understand until you see it,” she reports.

”What impressed me was it was going to be quite natural, using slate and granite, and also environmentally friendly. I’m just loving it. I can’t keep away.”

The West Vancouver resident and business-owner has enjoyed the second-home experience since she was a child, with regular visits to a cottage one of her grandfathers built on one of the Secret Cove islands, north of Sechelt.

There, little has changed over the years. The outhouse is as important a structure as the house. Water comes out of a pump; light, from propane lamps.

Her Wakefield home is not only closer to her principal residence, it is a “first-class home” with soaring vaulted ceilings and expansive glazing facilitating easy outdoor living and long views over the Strait of Georgia.

“It’s absolutely beautiful. I can’t keep away,” says Fransblow, who moved in this month.

A friend who visited was so impressed she and her husband bought at Wakefield days later.

The 46-residence development consists of a row of 2 1/2-storey triplexes at the top of the sloping property, 1 1/2-storey duplexes below them, and single-storey cottages along the beach.

Careful placement resulted in every upper-slope home having an unobstructed ocean view.

One of the two architectural practices involved in Wakefield, Blue Sky, is known for it felicitous bridging of the divide between inside and outside.

Their contemporary West Coast designs often incorporate a curved roof line, vaulted ceilings, exposed timber and lots of natural materials. Here, this winning formula was used to its best advantage.

The design had to match the topography of the site to ensure unrestricted views, says architect Kim Smith.

“It’s a beautiful south-sloping site. It’s perfect for natural light orientation and views — Georgia Strait and Vancouver Island in the background. It’s one of the best sites on the coast.”

Smith says the architects were also pleased with the final product because the developer, Lance Sparling, had a “very green agenda” and never wavered from that commitment.

Besides the green roofs, each home has geothermal heat pumps and forced air heating and the site lighting is all solar. Standard in each homes are environmentally friendly features such as energy efficient electrical appliances, low-flow plumbing fixtures, high-performance window glazing and wall and floor panelization to reduce wood waste. Panelization means the frames of the homes are pre-built off site.

This makes construction more precise than conventional methods and reduces wood waste.

The mantelpieces are made of wood reclaimed from Wakefield Inn, which once stood on the Wakefield Beach site.

“A lot of people talk green but he [Sparling] pushed the envelope. He has a strong green ethic. He wanted green roofs, got the landscaping that used indigenous planting and used water runoff,” architect Smith reports.

Sparling also consulted with his friend, architect Peter Busby, who is a well-known industry leader in green design.

This is the first multi-family project for the Sechelt-based developer, whose previous experience was building single family homes.

But with the success of Wakefield Beach, Sparling now has created a company called Wakefield Homes, with more than 30 employees with plans to continue developing properties with green initiatives.

Sparling, who owns a cottage himself in Buccaneer Bay, wanted to create a community at Wakefield Beach where residents would get to know one another by taking part in activities like wiener roasts on the beach.

And now that Phase 1 is completed and owners have moved in, he’s pleased that has begun to happen.

“I have a lot of appreciation for those guys who bought in the first stage,” says Sparling, whose company is now two years old.

“It’s pretty exciting to have the homeowners blown away. They were pretty courageous to have bought a piece of land under construction and no idea of how it would all turn out.”

Sparling has also worked closely with the designers to ensure the larger community feels welcome on the beach with pathways and fire pits open to the public. The properties themselves sit along 215 metres (700 feet) of waterfront on a 2.1-hectare (5.2-acre) site.

“This [Wakefield Beach] is going to be a signature piece. I won’t see another site like this. It’s a great long stretch of beach with magical small rocks and driftwood,” he says.

[email protected]


The Wakefield Beach, developer, Lance Sparling, likes what he’s achieved – and what owners are saying — so much he formed a company to do it all over again.


“It’s pretty exciting to have the homeowners blown away,” Sparling says.

The long-time Sunshine Coast builder also shared an observation about pre-construction selling and buying that says much about the currency of the big-city, big-project-financing technique: “They [customers] were pretty courageous to have bought a piece of land under construction and no idea of how it would all turn out.”

© The Vancouver Sun 2007


Need to carry 200 movies in your pocket?

Saturday, June 30th, 2007

New player allows you to watch films, record TV shows, Net surf and more

Gillian Shaw

Bluetooth MBW-150 Bluetooth watches, Sony Ericsson

Coors Light Cold Certified Can

1. Gen 5 Portable Media Players, Archos, $170 to $500

In case you feel the need to carry 200 full-length moves in your pocket, you’ll be looking for the 160 GB version of these new Archos PMPs scheduled to hit the market this September. For movie viewers with a more modest budget the new players start with a two GB version good for two movies. The new generation 5 WiFi line also lets you download movies, TV shows and music from any wireless hotspot using the Archos content portal. Record TV shows, stream and watch videos from your PC – all this and surf the web on its high-resolution 4.3-inch touch screen.

2. Bluetooth MBW-150 Bluetooth watches, Sony Ericsson

For the true geek-at-heart, why operate your mobile phone from your phone – let your watch do the walking. Compatible with a number of Sony Ericsson phones including the new W580 Walkman phone, these watches come in three flavours – the MusicEdition, the ExecutiveEdition and the ClassicEdition. When a call or text message comes in, the watch vibrates on your wrist and you can reject or mute the call by touching a button. Great for meetings when you don’t want the boss to know your date is calling about plans for dinner. Or use it as a remote control for your music phone when it’s not in your pocket. Prices aren’t available yet for these watches, which are coming out in the fourth quarter of this year.

3. Coors Light Cold Certified Can

An indispensable innovation for those long hot days of summer, the beer can that tells you when your beer is the perfect temperature to drink. The Coors Light Mountain icon turns from white to ice blue, your clue that the beer has been chilled to four degrees Celsius or less. Comes in 355-ml and 473 ml-cans.

4. KEF Universal Wireless System, $700 for two receivers and a transmitter

Home theatre surround sound is great until you start tripping over all the wires that are strung out like a minefield in the TV room. KEF has come up with a wireless system that can transform an existing system into a wireless one. It works with any standard speaker system. If you want to completely redo your surround sound, the company also has a wireless kit that is tailor-made for its KHT5005.2 speakers system, which includes the HTB2 subwoofer. That speaker system is $2,500, with the add-on kit another $700.

© The Vancouver Sun 2007

Riverbend developer loses licence

Saturday, June 30th, 2007

Derrick Penner

The British Columbia Homeowner Protection Office has cancelled the builder’s licence of CB Development (2000) Ltd., developer of the troubled Riverbend housing project.

That decision means that the company and its director nominee Grayden Hayward cannot be relicensed, and Hayward cannot serve as the director of an HPO-licensed firm for five years.

HPO chief executive officer Ken Cameron said in an interview that CB Development’s home-warranty insurance provider informed his office that it had discontinued its coverage, which made them “no longer qualified to be licensed.”

“The [homeowner protection] legislation provides that when a person has had their licence cancelled, they’re not able to be a director of a company seeking a licence for a period of five years,” Cameron said.

CB Development ran into trouble earlier this year when it cancelled the pre-sale contracts of 32 homebuyers in the final phase of its Riverbend project of 148 strata-titled single family homes, citing skyrocketing construction costs and a need to sell them at current market prices.

Seventeen of those 32 buyers sued CB Development, trying to get the company to turn over the homes. The company’s main construction lender foreclosed on the project, which put CB Development into receivership.

Hayward, in an interview, said he was expecting the HPO’s cancellation ever since CB Development was put into receivership.

When a company goes into receivership, that breaches its contract with its homeowner warranty insurance provider, Hayward explained, and it loses warranty coverage.

“The regulation is quite clear,” Hayward added. “If you don’t have warranty coverage, you can’t have an HPO licence.”

And as a result of that cancellation, Hayward said he has resigned as a director and president of Island West Development (2006) Ltd., a company that has proposed to build a 94-unit luxury waterfront resort in Ucluelet.

© The Vancouver Sun 2007