Archive for February, 2008

Chandler H & H project in receivership by Bowra Group – David Bowra says project will be finished with the vast majority of pre sale buyers getting their homes at the price they paid

Friday, February 29th, 2008

Glenda Luymes

Builders group advises presale condo-buyers not to panic

The Greater Vancouver Home Builders Association is urging presale condo-buyers not to panic as condominium projects go into receivership.

“The sky is not falling,” Greater Vancouver Home Builders Association president Peter Simpson said yesterday.

“It’s an unfortunate situation, but it’s still a very rare occurrence.”

Last week, the Eden Group’s 81-unit Sophia went into receivership, leaving pre-sale buyers wondering what will happen to their investment. The Mount Pleasant condo was about 85-per-cent complete.

It’s at least the sixth presale development to run into problems in recent months.

Last November, the Eden Group cancelled two condo projects before construction began, providing refunds to a small number of presale buyers. And last summer, CB Development’s Riverbend project in Coquitlam was cancelled, with buyers forced to pay market value when another developer was contracted to complete their homes.

Now The Province has learned that in November two projects by the Chandler Development Group were placed in the hands of a receiver. About 250 condos in the H+H building at Homer and Helmcken streets in Vancouver and the Garden City building in Richmond had been presold.

David Bowra, president of the receiver, the Bowra Group, said the Chandler projects will be finished with the “vast majority” of presale buyers getting their homes at the price they paid. The same may not be true for “inside” buyers of about 20 units that were allegedly sold at prices below market value.

Bowra, who is also receiver for the Sophia project, said he didn’t want to speculate on what will happen in that project because court proceedings are under way.

“The market is still fairly strong,” he said.

“I think project management is the main concern in cases like this. I don’t personally think it’s a trend . . . There’s a lot of development out there and these are just a few isolated cases that are basically a function of poor management.”

© The Vancouver Province 2008

More Americans using credit cards to stay afloat

Friday, February 29th, 2008

Kathy Chu
USA Today

Christie Carlson swipes her credit card at a gas station in Tomah, Wis. It’s “just impossible” not to use credit cards, the 34-year-old single mom says.

Seven years in the credit-counseling business didn’t prepare Ann Estes for the alarming trend she began noticing last fall: As her clients’ mortgage bills became unaffordable, a growing number of them began paying their credit card bills before — and sometimes instead of — their mortgages.

“We’ve never seen anything like this,” says Estes, who counsels clients by phone from her office in Richmond, Va. “Their homes are at risk, and they know it. But people say, ‘I don’t want to let my credit cards go because that’s my cash flow.’ “

Across the nation, credit counselors are reporting the same trend. Credit bureau analyses of consumer payment data show that financially squeezed borrowers have begun paying their credit card and car bills before their mortgages. That’s a striking reversal from the norm, one that reflects rising desperation. It suggests that some people essentially have given up trying to stay current with their mortgages and instead are focused on using credit cards to squeak by.

If the trend persists, many economists say, it could accelerate mortgage losses and further drag down the economy.

Rising living costs, along with cheap and plentiful credit, have led consumers to rely more on plastic to pay for necessities they can’t live without — and luxuries they don’t want to do without. But as the economy weakens, consumers are starting to spend less on discretionary items, such as furniture and electronics, and more on such necessities as groceries and gas, according to government data. Such items increasingly are showing up on credit card bills.

“Everything’s going up — dairy, gas, home taxes,” says Christie Carlson, 34, a single mother of five children, ages 5 to 14, in Tomah, Wis., who enrolled in a debt-management program after racking up $20,000 in card debt. “I’m trying to pay more for everything in cash, but it’s just impossible. It’s not feasible right now to stop spending on the credit card.”

During the past year, credit card debt has ballooned most rapidly in parts of the nation where the economy is particularly weak, including California, Florida, Arizona and Nevada, says Mark Zandi, chief economist for Moody’s

“That suggests that people are turning to their cards in times of financial need,” Zandi says. “They’re losing jobs and overtime hours and other income and trying to supplement their lower incomes with more spending on credit cards.”

Magnifying the problem has been the shrinking availability of a major alternative to credit cards: home equity loans. As home values have sunk, homeowners have found it tougher to qualify for such loans. So they’ve turned elsewhere, especially to credit cards, to cover daily expenses.

Even as mortgage growth slowed from April 2006 through December 2007, card debt accelerated, according to an analysis by the Center for American Progress, a liberal think tank in Washington, D.C.

“As people get squeezed, they still have the credit demand,” says Christian Weller, a senior fellow at the center. “For a few years, mortgages and home equity lines replaced credit card debt. Now, we’re swinging back to the credit cards.”

Like ‘broke college students’

Allen Lisowe and his wife, Jennifer, both 33, say they’re living like “broke college students,” relying on their credit cards to buy the “stuff we need every day,” such as groceries and gas.

The Lisowes, of New Holstein, Wis., racked up about $20,000 in credit card debt in recent years, most of it from daily expenses such as gas and food. Two years ago, the couple used a home equity loan to pay credit card and auto loan bills. They say they’d consider borrowing from their home equity again, but there’s little equity left to tap.

The growing reliance on plastic may explain why revolving debt — most of which is on credit cards — rose at a seasonally adjusted annual rate of 7.8%, to a record $943.5 billion, in 2007 compared with a 6.1% adjusted rate the year before, according to the Federal Reserve.

Eventually, a worsening economy could limit the rise in card debt. If the current slowdown turns into a full-fledged recession, many analysts say, lenders could clamp down further on credit. And consumers would cut back so much on discretionary purchases that, despite their increasing use of credit cards for daily necessities, the rise in overall card debt would likely slow.

There’s some sign this may be occurring already: After two months of rapid increases, the growth of revolving debt slowed in December, preliminary data from the Federal Reserve indicate. Credit card figures, though, normally are volatile from month to month. It’ll be three to six months before it’s clear whether consumers are indeed cutting back on plastic.

The danger is that “The economy has relied on the consumer to keep it afloat for the last seven years, and there’s no more gas in the tank of the consumer,” says Howard Dvorkin of Consolidated Credit Counseling Services in Fort Lauderdale. “They’ve got nothing to give.”

James Chessen, chief economist at the American Bankers Association, a trade group, predicts that “credit card debt is going to slow, but not as much” as in previous economic downturns.

During the housing boom, too many people took out mortgages they couldn’t afford. Many now owe more on their houses than they’re worth. Some are defaulting on their mortgages — figuring they’ll lose their homes anyway — even as they keep paying credit card and auto bills, credit counselors say.

“A lot of people are exhibiting a kind of fatalistic behavior to their mortgages,” says Douglas Hammond, outreach programs director at Alliance Credit Counseling. “They can’t make their mortgage payment, so why (try to) make it at all? ‘Let’s keep my car, make my payment on my credit card, so I have some way of feeding my family.’ “

When consumers are “pushed to the wall” and forced to choose between paying the mortgage or credit card bill, Chessen says, those who are likely to lose their homes may choose their credit cards, because “They still need to heat their homes, put food on their tables and fill their cars with gas.”

Allowing your house to be foreclosed on is “not a smart strategy,” Hammond says, “because foreclosure does horrible things to your credit score, and you’ll pay high interest rates” on future loans.

Because it takes months to foreclose on a home, some consumers likely are hoping to stave off foreclosure if their finances improve, says Linda Haran, senior director of Experian Decision Analytics.

A study by Experian found that consumers with weak credit scores — but not necessarily those with strong ones — are paying their credit card bills before their mortgage payments.

The study didn’t examine car loans. But an Equifax analysis shows that 38% of delinquent mortgage borrowers had kept all their credit card bills current, and 62% had kept all their auto loans current in the two-year period ending in July 2007. In the past, most people would pay late on their credit cards and auto loans before doing so on their mortgages.

This reversal in payment priorities helps explain why the rise in credit card and auto loan defaults — which occur when lenders give up trying to recover a debt — hasn’t matched the pace of mortgage defaults. Credit card defaults, while rising fast, are still in line with historic averages.

As the economy has worsened, card issuers have become more selective about offering credit to new customers, and in a growing number of cases, are shrinking card holders’ credit limits. Yet they’re still sending more solicitations to existing credit card customers. In 2007, issuers increased their solicitations to existing customers by 15.6%, advertising rewards and other perks to promote spending, according to Mintel, a firm that tracks such mailings.

Subprime customers — among the most profitable for banks because of the high rates and fees on their cards — saw a 41% jump in direct-mail credit card offers in the first half of 2007, the latest period for which figures were available, compared with the same period the year before, Mintel found.

It’s a matter of time, some analysts say, before financially squeezed consumers max out their credit cards and start defaulting in larger numbers.

“My guess is that you’ll see increasing numbers of people walking away from credit card debt the same way that they’re walking away from the mortgages,” says Ken McEldowney, an executive director at Consumer Action, a consumer advocacy group.

When Phyllis Coleman’s mortgage payment jumped 26% last year, she began withdrawing cash from her credit cards to pay the mortgage. That worked for a few months, until Coleman, 50, of Fairfield, Calif., maxed out on the cards’ credit limit. She defaulted on her mortgage and now faces foreclosure on her home.

Eventually, she also had to stop paying her credit cards, which she’d been relying on to cover daily expenses. “It became too much,” Coleman says, “when gas started going up. I just got deeper and deeper” in debt.

Using credit cards for gas

Consumers with the least financial resources are pressured the most by a deteriorating economy and rising living costs. For this group, credit cards are simply a way to delay the financial pain.

In recent years, banks have ramped up card rewards, enticing more people to charge their purchases. As gas costs rise to levels many people can’t afford — the national average for regular gas this week was $3.16 a gallon, up 32% from the same time last year — the number of consumers buying gas with credit cards instead of cash is accelerating, says Sonja Hubbard, CEO of E-Z Mart Stores, which has 307 locations in five states.

“People have less cash in their pocket, and if you have a $10 bill, that doesn’t get you a lot of gas anymore,” says Hubbard, who notes that most of her customers now charge gas to credit cards.

The move toward using credit cards for daily needs is occurring among blue-collar and white-collar professionals, credit counselors say.

“I put three doctors on debt-management plans and thought, ‘Wow, it’s getting tough,’ ” says Anissa Lipscomb, a credit counselor in Gaston, N.C. The doctors had sought counseling, Lipscomb says, because of surging insurance rates, high credit card debt and patients who had defaulted on medical bills.

For years, rising health care costs have cut into families’ discretionary income. But if the economy worsens, employers are likely to pass along higher health care costs to workers. That, in turn, could force more people of all income levels to boost their use of credit cards.

“Your typical American household is very vulnerable, and they’ve been vulnerable for a long time,” says Tamara Draut of Demos, a think tank in New York. “Now that energy costs are going up, health care (costs) are going up, people are turning to credit cards.”

Annie Edwards, a credit counselor in Rapid City, S.D., says a growing number of clients are charging health care expenses. Financial firms are encouraging them to do so with the rollout of cards and lines of credit designed specifically for health care, she notes.

In October, Republic Bank  and Humana introduced the HumanaAdvance health care credit card, which can be used at hospitals and doctors’ and dentists’ offices.

The card, says Steve Trager, CEO of Republic Bank, assures users that they “will have a means to pay for unexpected health care expenses.” Citigroup, Capital One and General Electric’s CareCredit division also offer loans for medical costs.

Diane Drew, a credit counselor in Menasha, Wis., says people “want to make sure they can get the health care they need for them and their families,” even if it means going into debt.

Maria Fernandez, a real estate agent in Rodeo, Calif., says the weak housing market has cut deeply into her commissions and made it harder to pay her own mortgage. Worse, the payment on her adjustable-rate mortgage jumped 17% in October. Fernandez, 40, asked her lender to modify the loan to reduce her monthly payment. She was rejected. So she’s resigned to losing her house in foreclosure this year.

Meanwhile, she says she’s committed to paying her credit card debts — which she’s consolidated with a debt-management agency — while she has the money. “It’s really stressful. I can only afford to pay my credit cards.”


Sophia condo project falls into receivership

Friday, February 29th, 2008

Developer cites municipal strike, labour costs, contractors who abandoned job

Derrick Penner

CONSTRUCTION HALTED: The Sophia, an upscale condominium project in Mount Pleasant near 11th and Main, is in financial difficulties even thought it is 85 per cent complete. The receiver plans to persuade backers to see the project to completion. Photograph by : Steve Bosch, Vancouver Sun

Bill Eden, head of the company developing the upscale Sophia condominium project in Mount Pleasant, said municipal strike delays, labour costs and contractors who abandoned the job contributed to about $4 million in cost overruns that pushed the development into receivership.

Eden, in an interview Thursday, said that while construction has halted on the 81-unit, eight-storey building, pre-sale buyers “are not at risk at all” of losing their units.

They do, however, face some uncertainty over whether they might be asked to shoulder some of the additional costs to bring the project to completion.

The court-appointed receiver, David Bowra of the Bowra Group, said he has just begun his assessment of the Sophia project and it is premature to speculate on whether pre-sale buyers will be asked to shoulder any additional costs.

He added that his intent is to convince the project’s financiers that it makes more sense to bring the project — which is 85 per cent built — to completion rather than liquidating it as is.

However, if there’s a gap between the financing and sales revenue, “We’re going to have to find [the money] somewhere.”

“My advice to purchasers would be to sit tight for the next week or so,” Bowra said. He is due to make his recommendations to B.C. Supreme Court in the next week to 10 days.

Eden said he is cooperating with Bowra and hopes to come up with a proposal that “meets everybody’s needs.

“[Buyers] can either get their deposit back or work with the ruling of the court.”

Eden said advance sales on the Sophia project started in the fall of 2005, and 78 were sold relatively quickly at prices of about $400 to $425 per square foot.

Since then, Eden said market prices in the neighbourhood around Main St. and Sophia St. have risen, and on paper at least, the value of the units is up between $100,000 and $200,000.

“Everybody’s made a lot of money on these units,” he added.

As far as the Sophia’s costs go, Eden said the problems started last October when he was hit with cost overruns totalling $2.2 million. He put up additional securities then, which he believed would get the project to the end of April.

However, within 60 days Eden said the project was hit with another $2 million in additional costs “we just couldn’t handle. That’s what put us into receivership.”

A “variety of issues” pushed costs up, he added. Last summer’s municipal strike caused delays that added to his interest costs on financing. In September, he told The Sun that interest was racking up at a rate of $300,000 per month.

He also faced extra inspection fees during the strike, lost a couple of his trade contractors, and had difficulty securing skilled workers.

In November, Eden blamed strike delays for cancelling two other condo projects before construction started.

The Sophia situation follows from another developer, Chandler Development Group Inc., being pushed into receivership on two high-profile projects, the 192-unit H+H project in Yaletown and the 108-unit Garden City building in Richmond.

Bowra is also the receiver in those cases, and said that while they faced some cost overruns, the receivership had more to do with the project financiers losing confidence in management of the development.

In his most recent report to B.C. Supreme Court, Bowra said the lenders on both buildings have agreed to finance completion of the projects, and the pre-sale buyers will be able to complete the purchases of their units at contract prices.

“Given the market conditions and the fact these people are in the money, I suspect the majority, if not all, will want to complete those transactions,” he added.

However, in an interview Thursday, Bowra said about 22 units appear to have been pre-sold at prices significantly below prevailing market prices at the time, and he is seeking some direction from the court on how to handle those. He said some of the buyers were “related parties” to the developer.

Bowra was also the receiver appointed to last spring’s high-profile failure of the Riverbend condominium project in Coquitlam, where the developer attempted to cancel pre-sale contracts to re-sell them at higher prices when construction costs exceeded the revenue from the contract prices.

But Bowra doesn’t see a trend developing, noting that “there haven’t been too many [failures].”

Peter Simpson, CEO of the Greater Vancouver Home Builders’ Association, added that while the industry has strained under labour shortages and inflation of costs, the failures are still isolated cases.

“Over the last four years, there were 78,000 new homes and condominiums delivered a the price agreed upon without incident,” he said.


Project: Sophia, Mount Pleasant,


Units: 81

Developer: Eden Group of Companies

Status: Being evaluated by the receiver.

Project: H+H Yaletown

Units: 192

Developer: Chandler Development Group Inc.

Status: Financing committed to complete, new disclosure statement being finalized.

Project: Garden City, Richmond

Developer: Chandler Development Group Inc.

Status: Financing committed to complete, new disclosure statement being finalized.

Source: Bowra Group receiver manager

© The Vancouver Sun 2008

Construction boom ‘winded’

Friday, February 29th, 2008

Longest post-war success story now ‘out of breath’

John Morrissy

The Conference Board of Canada is warning of “a lengthy slowdown” in Canada’s residential construction industry.

It’s forecasting that profits –already off 22 per cent in 2007 — will fall still further over the next two years.

The longest housing boom in the post-war era is now “out of breath,” following spectacular growth in the number of homes built and the prices paid for them, the board said in a report released yesterday.

“Satiated pent-up [sic] demand and slower economic growth is leading to what is expected will be a long slowdown in the housing market,” the report says.

After years of “relentless” house-price increases, declining affordability will be one of the primary factors weighing on the market, board economist Valerie Poulin said in an interview.

As prices continue to edge upward by a forecast 5.3 per cent in 2008 — far outstripping the 1.3-per-cent rate at which general consumer prices will rise — affordability will be further eroded.

Demographics are playing a role, too, as baby boomers have passed the “household-formation” stage of their lives, which is when people leave home, rent or buy a home and form families.

Young people today, conversely, are slowing down that process — the main driver of residential construction — as they remain in or return to their parental homes.

Recent census information shows that more than 43 per cent of Canada’s four million young adults –those aged 20 to 29 — lived with their parents in 2006, up from 32.1 per cent in 1986.

The effect will be more strongly felt in Central Canada, where the manufacturing sector is suffering at the hand of the high dollar and a flailing U.S. economy, Poulin said.

Housing markets in the West, particularly in Saskatchewan, will be supported by continued strength in the mining, agriculture and energy sectors, she predicted.

In 2007, profits in the industry fell by almost $1 billion to $3.4 billion and will fall further to $3.3 billion in the year ahead, she said.

Rising costs of building materials will squeeze builders’ margins in coming years, Poulin said, as softening demand will make if difficult to pass on those costs.

While profitability will remain above historical averages, “profits will slowly decline, falling to $3.1 billion in 2009 before improving modestly in the outlying years of the forecast.”

The renovations industry, which constitutes 42 per cent of the residential-construction business, will remain strong as a result of the buoyant resale market, with existing home sales hitting 520,000 in 2007, Poulin forecast.

Housing starts crested in the third quarter of 2007, with 247,000 units built.

© The Vancouver Province 2008


Liquer to food ratios permitted in BC restaurants

Thursday, February 28th, 2008


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Ramen man knows his noodles

Thursday, February 28th, 2008

Kyoto native’s new West End restaurant promises to heat up competition among Japanese soups spots

Mia Stainsby

Benkei Noodle Shop customers Edward Matsuyama and son Tomoki, age 3, enjoy bowls of ramen at the Robson Street restaurant. Photograph by : Glenn Baglo, Vancouver Sun

To most North Americans, ramen, the noodle with a curly perm, is, like Mr. Noodle, processed and instant.

Considering how many college students have weaned themselves on ramen, it’s not surprising that whenever a ramen shop opens, there are line-ups out the door. Ramen noodle shop customers are graduates of Mr. Noodle and frankly, I’m surprised fresh ramen isn’t fiercely duelling with sushi for the hearts and minds of the masses.

In a way, that’s exactly what’s going on in an enclave around Denman and Robson. Kintaro Ramen opened a few years ago with a permanent queue of people noodling out the door onto Denman. The same owner opened Motomachi Shokudo a block away recently. There, on the menu, I found an unusual ramen in a grey broth, coloured by the pinch of charcoal thrown in for good digestion and toxin cleansing.

Most recently, Benkei Noodle Shop opened on Robson, just around the corner from the other two. When I went to this small shop a couple of weeks after it opened, I thought it was still under the radar. Hah! I went in and stepped into a pudding of people, waiting for tables and — a good sign — most were of Japanese background. There were 12 people wilting in a tiny wait area. But one thing about ramen shops, it’s to-the-point eating. You order from a simple menu, slurp voraciously, and then take your leave. So we were seated quickly enough.

The owner, Mistuaki Inoue, is from Kyoto where his father owned a noodle factory and helped people open ramen shops.

When I talk to his assistant Yuki Nakazawa, it’s Tampopo all over again. “It’s secret,” she says, when I ask about the broth. “It’s secret,” she says, when I ask about the noodles. She does say that so far, the noodles are made for them according to Inoue’s exact specifications. Soon he wants to make his own.

I would say his competitor had better watch his back, not because Benkei is the name of a famous samurai but because the ramen is very good. There are the three broths, typical of ramen shops — shoyu (consommé style), shio (pork bones and meat-based) and miso (miso, shoyu and shio combo).

Toppings (green onion, pickled bamboo shoots, boiled egg slices, corn, butter, spinach, bean sprouts, kim chi) all cost 50 cents extra. Butter seems un-Japanese like but it’s actually a common ramen addition in Japan and most often combined with corn as a topping.

Chasu (slices of pork belly) is the signature meat in the ramen. One of the three side dishes is a rice ball with chasu sandwiched inside and wrapped with nori.

Nakazawa says the newest entry on the menu is the “special” ramen, with all the toppings flung in. “Looks great,” she says. “All in the same bowl. It’s huge.”

Should you find yourself belly-aching and hungry on a cold evening, there’s nothing like ramen to fill and warm you.

Restaurant visits are conducted anonymously and interviews are done by phone. Restaurants are rated out of five stars. ([email protected])

© The Vancouver Sun 2008


Lineup at Bhavan equals good food, great price

Thursday, February 28th, 2008

Vegetarian Heaven. For really great value order the Saravanaa special meal, a platter of curries, pickles and breads

Mia Stainsby

Jim and Tara Travis of Vancouver enjoy paper dosas served to them by chef Veera Pondy at Saravanaa Bhavan on West Broadway. Photograph by : Stuart Davis, Vancouver Sun

Experience tells me to be wary of a lineup out a restaurant door and to enter fully aware that lineups mean one of two things: either you’ll find good food for a great price or you’ll eat 10 pounds of fuel food for the price of a bottle of Pepto Bismol.

At Saravanaa Bhavan, the lineup on weekends is for the good food. Not fantastic food mind you, but decent, very well-priced South Indian vegetarian food. The dosas (the melodramatic diva of South Indian dishes) are especially good and there are a lot to choose from. The baseball bat-sized crispy south Indian crepes, with a filling in the mid-portion are light, crispy and delicate — a meal for under $10.

Saravanaa Bhavan is part of an international chain of vegetarian South Chennai-based restaurants. (Chennai is the former city of Madrid, population 7.5 million.) The restaurant locations cover the globe, from India to Oman, Singapore, Malaysia, United Arab Emirates, the U.S.A. and the U.K.; in Canada, there are two in Ontario and this is the first for B.C.

Part of the reason for the attractive prices is the owners haven’t sunk a lot into looks; it’s a bare-bones, brightly lit room. However, there’s no shortage of servers. They seem to be bent on good service but some need more training, or the system is flawed — the runners seem lost and a couple of times we saw our dishes go sailing by before the guy stopped in his tracks and looked perplexed, even with numbers on tables. Over here! we beckoned.

Going back to the dosa, I’ve gone about eating it by mauling with knife and fork and Roto-tilling my way through the gargantuan crispy crepe. Saravanaa manager Mano Jayaramen set me straight. (Did I sense him rolling his eyes at the other end of the phone?) “Take a bit in your hand, then dip in chutney,” he says, “then in sambar. It comes with two, three chutneys but all have to go with sambar.”

So, get that? Break off a piece, dip, dip, dip and eat. The sambar is a soupy lentil dip.

As well as dosa, there are other typically South Indian dishes — vada (like lenti doughnuts) and idli (steamed rice and lentil dumplings). Utthappam is more like a dense pancake with various toppings. The idli are often served in hospitals because they are healthy, Jayaramen says.

But I’m fixated on dosas. In India, they’re breakfast. “We eat a lot,” Jayaramen laughs.

For really great value, order the “Saravanaa special meal,” a platter of curries and pickles and breads. For $8.95, it’s worth the wait in a line. A separate menu features some vegetarian dishes from Northern India, dishes we’re more accustomed to in Vancouver — aloo gobi, mutter paneer and the like.

In case you’re curious about the sign that says “HSB”, Jayaramen says that the “H” is for hotel, explaining that when the restaurants first opened, there was little distinction between “hotel” and “restaurant” in India. He adds with pride that in Delhi, Sonia and Rajiv Gandhi’s son Rahul stood in a queue to eat. Once recognized, he was offered a VIP queue-jump but he graciously opted to be democratic.

And if you’re wondering what the name of the restaurant is about, Saravanaa is one of Hindu god Shiva’s sons, a name often used in businesses. Bhavan can be translated as house or store.

– – –



Overall: Rating 3 1/2

Food: Rating 3 1/2

Ambience: Rating 2 1/2

Service: Rating 3

Price: $

955 West Broadway, 604-732-7700. Open for lunch and dinner, daily.

Restaurant visits are conducted anonymously and interviews are done by phone. Restaurants are rated out of five stars.

© The Vancouver Sun 2008


Don’t listen to the gloomers

Thursday, February 28th, 2008

Ozzie Jurock

Ten years ago, I wrote a story with a similar headline to the one above. Condominiums in False Creek were going down in value and the gloomers were out in force. In 1999, I wrote about the gloomers and five years ago I wrote a story preaching “faith.” We had come through 9/11 and the “deflationists” and “depressionists” reigned.

Today, not a week goes by without someone sending me questions about this or that guru (“The depression/ deflation is going to come this time for sure…”). It makes me wonder, who are these people who forever preach doom in real estate?

Probably the same misguided souls who forecast the end of the world in 1974 when the Dow Jones average collapsed by 40 per cent and Vancouver house prices tumbled by 20 per cent. Or perhaps it was the crowd of the ’80s as Toronto’s real estate prices soared and we bemoaned our stumbling ways. Perhaps it was the crowd of 1990, who fearful of the 13.3 per cent five-year mortgage term told us to move out of real estate. The trouble is, of course, that they are always greatly respected gurus and seem so convincing at the time – and that makes them so dangerous.

So, beware your personal “It is a depression/deflation” gurus of 2008.

Probably the most distinguished gurus were the Club of Rome, which in 1972 issued the study “Limits To Growth”. This “club,” a collection of distinguished industrialists, scientists, economists, sociologists and government officials from 25 countries, was widely regarded as the top forecasting agency in the world. The study – in the making for some three years – produced a 197-page report that shocked the globe. The world would run out of gold by 1981, mercury by 1985, tin by 1987, petroleum by 1992 and copper, lead and natural gas by 1993. Growth was not sustainable.

The study had a phenomenal impact, yet while the world fretted, in reality growth came back bigger than ever. In fact, energy reserves, which were predicted to run out, increased by more than 50 per cent during the next 20 years (and as a result of enhanced recovery methods may increase by another 200 per cent by 2010) and oil reserves are now expected to last another 90 years. The price of oil, forecast to be in the hundreds of dollars per barrel, actually fell from $40 a barrel at the end of the ’70s to $15, the price of agricultural products halved and in some cases fell by 75 per cent (adjusted for inflation). Natural gas reserves, estimated by the club in 1972 to be 1,500 trillion cubic feet, revised the estimate upward in 1987 (15 years later!) to 4,000 trillion cubic feet. Global reserves of copper doubled between 1970 and 1987, silver reserves climbed by more than 60 per cent, gold reserves actually rose by 50 per cent, and bauxite reserves were up by more than 35 per cent. In fact, all forecasts about dwindling supply were so spectacularly wrong that one might impugn malicious intent. Enough said.

So, beware your own personal gurus. Anyone wanting to project a future of doom, a future of less growth, should remember this fine club, because they were listened to, they were esteemed, they made sense at the time and they were wrong. Today’s demographic gurus (“We will no longer want to live in houses”) will also be proved wrong.

As far as we real estate investors are concerned, look back, go to the library and read the real estate gurus over the last 50 years. I mean the “now it is over” type of gurus, the “bubble gurus” and you will find out they were always wrong in the end. Owning real estate ended up outperforming most investments for the average family.

Owning your own home is the major and defining difference between North Americans and other countries of the world. Real estate has been the foundation of all wealth since Roman (Chinese?) times. It is the ONLY true wealth creator over time. The aspect of leverage (low down payments) allows a family to create an asset – an asset that can be inherited by the children. And that will continue throughout our lifetime.

This doesn’t exclude the fact that you must do some research, some reading, some learning and some nail biting, but look at your Vancouver friends and relatives over the last 40 years – 20 years – 10 years – even two years. We could not have had a more volatile market and yet had you bought, at any time, you would have outperformed all others.

Ozzie Jurock is a Canadian real estate adviser and author of Forget About Location, Location, Location. He is featured in Donald Trump’s latest book, Trump: The Best Real Estate Advice I Ever Received. Your can reach him by email at [email protected] or at

© The Vancouver Sun 2008

Bernanke not afraid to trim interest rates

Thursday, February 28th, 2008

Rising inflation among risks to further growth


WASHINGTON — U.S. Federal Reserve chairman Ben Bernanke yesterday signaled a readiness to cut interest rates again to prevent further damage to the weak U.S. economy, even as he took note of rising inflation risks.

Delivering the Fed’s semiannual report on the economy to Congress, Bernanke made clear the central bank was worried a deepening housing slump, softening jobs market and tighter credit could dim an already bleak economic outlook.

“It is important to recognize that downside risks to growth remain,” Bernanke told the House of Representatives’ Financial Services Committee.

“The [Fed] will be carefully evaluating incoming information bearing on the economic outlook and will act in a timely manner as needed to support growth and to provide adequate insurance against downside risks,” he said.

The central bank has lowered overnight interest rates to three per cent from 5.25 per cent in five steps since mid-September.

Financial markets saw Bernanke’s testimony as validating bets on another half-percentage point cut at the Fed’s next meeting on March 18.

“They’re willing to inject more juice into the system, and that’s what they need to do,” said Firas Askari, head of currency trading at BMO Capital Markets in Toronto.

A majority of dealers expect rates to be cut to 2.5 per cent at the Fed’s next meeting. Meanwhile, the median forecast was for rates to fall as low as two per cent during this cycle.

The U.S. dollar hit a record low against the euro on Bernanke’s remarks, while bond prices bounced around in reaction to zig-zagging stocks.

Stocks traded in and out of negative territory, rallying at one point when a U.S. regulator gave the green light to home finance companies Fannie Mae and Freddie Mac to invest more in the mortgage market, but ending the day little changed.

© The Vancouver Province 2008

US Housing prices take biggest dive since 1991

Wednesday, February 27th, 2008

USA Today

U.S. home prices plummeted at the end of last year, and bank seizures of property nearly doubled in January, indicating that the housing slump is deepening.

Home prices suffered their biggest fourth-quarter drop since 1991, the Office of Federal Housing Enterprise Oversight said. The S&P/Case-Shiller home-price index showed prices in 20 metro areas fell in December by the most on record. Repossessions rose 90% to 45,327 last month from the same period a year ago, RealtyTrac reported.

“All the news we’re getting is pretty dark,” said Celia Chen, director of housing economics for Moody’s “Prices will continue to fall for the rest of this year because increasing foreclosures in turn increase inventories.”

The worst housing decline in more than two decades means that buyers are finding it tougher to get mortgages, and foreclosures expand the glut of unsold homes. Banks may sell up to 1 million repossessed properties this year, forcing prices down further, said Rick Sharga, RealtyTrac’s executive vice president.

President Bush’s proposal to help 1 million subprime borrowers avoid foreclosure with tax-exempt bonds is doing little to slow the increase in defaults.

State housing agencies are turning away applicants because their homes have lost too much value or they’ve piled up too much debt, according to estimates from Geoffrey Cooper, emerging markets director at a unit of MGIC Investment, the nation’s biggest mortgage insurer.

Total foreclosure filings in January, which include default and auction notices as well as bank seizures, rose 57%, RealtyTrac said. More than 233,000 properties were in default or foreclosure last month. Total filings were up 8% in January from December, RealtyTrac said. More than 1% of U.S. households were in some stage of foreclosure during 2007.

Seasonally adjusted prices for existing single-family homes in the quarter dropped 1.3% from the previous three months, OFHEO said. Prices fell 0.3% from the second to the third quarter of 2007, OFHEO said.

“A lot of buyers are simply locked out of the market because lending standards have really tightened in the past four months,” said Delores Conway, director of the Casden Economic Forecast at the University of Southern California Lusk Center for Real Estate. “The no-down payment loans have disappeared. People have to put money down now. It’s back to basics.”

California, with an index price decline of 6.6%, led all states, OFHEO said. It was followed by Nevada (-5.9%), Florida (-4.7%) and Michigan (-4.3%). All 20 metro areas with the greatest price declines in 2007 were in those four states. The seasonally adjusted price for existing single-family homes in December fell to $221,100, down 1% from a year earlier, OFHEO says.

The S&P/Case-Shiller home-price index dropped 9.1% from December 2006, after a 7.7% drop in November. Nationwide, home prices fell 8.9% in the fourth quarter from a year earlier, the biggest decline in 20 years of record keeping. December’s drop was the 12th in a row.

“It’s inevitable that prices will decline a lot more in 2008 because inventory is so high,” says Patrick Newport, an economist at Global Insight.


The S&P/Case-Shiller home price indexes show declines all over.

Metro area

Change from Q4 2006

















Las Vegas


Los Angeles






New York






San Diego


San Francisco








Composite-10 index


Composite-20 index


National index


Source: S&P/Case-Shiller