Houses are bounded by forest on three sides and beach and strait on the fourth

Douglas Cowell
Sun

QUALICUM LANDING

Project location: Qualicum Beach, Vancouver Island

Project size: 62 detached beach homes

Residence size: 1,180 sq. ft. – 2,000 sq. ft., 3 bed

Prices: $399,000 — $1,249,000

Telephone: 604-220-6249

E-mail: [email protected]

Web: qualicumlanding.com

Developer: Qualicum Developments Ltd.

Design: John Larsen, CA Design

Tentative occupancy: From December

– – –

The east coast of Vancouver Island is one of Canada‘s most beautiful and enjoyable geographies. Located in the lee of the Vancouver Island Ranges, the climate is warm and dry in the summer and cool and moist the rest of the year. Located on the Strait of Georgia with the mainland’s Coast Range across the way, the views and prospects are inevitably arresting and changing.

Of course this isn’t news. People have been living — indeed, flourishing — along the Island‘s east coast for at least 9,000 years.

So it was quite a surprise to discover some waterfront for sale while poking along the old Island Highway, a little housing development hidden from the highway and opening onto the ocean, 10 minutes north of Qualicum Beach. How could this be?

It turns out that developers David Steele and Pat Delesalle had been dreaming of just such a property. They could find nothing that would work, however, until one of their contacts in the building industry tipped them off about a new possibility coming on the market. They didn’t waste time.

“Right from the beginning it was a very spectacular piece of property,” Steele explains, and seemed to demand something special. “We’re really excited about what we’ve designed, and I think it fits what the property should do.”

Qualicum Landing’s 62 beach homes will be located on almost 16 acres. On one side, buffered by a line of trees, is Oceanside Drive. Another boundary is forested, the third is a small stream up which salmon still run and finally, to the northwest, the Strait of Georgia gives the whole area its wonderful character.

It’s a strata arrangement, with each owner holding title to his or her building, but the property will be owned by the strata council and managed by a management company. That includes all maintenance and repairs.

Jim Ferrie, the construction manager on the project has nicknamed the homes’ architecture Westcoast Cape Cod. He’s been a builder for decades. He’s an old hand. And yet on this project you can tell that he’s excited.

“It’s such a unique project. There’s very little property like it available in all of western Canada: level waterfront land. Then add in luxury, stand-alone beach homes. We’re selling a different property!

“As a contractor I can assure you it’s all of the highest quality in both materials and craftsmanship right from the foundation to the finish. It’s what you’ll find in West Vancouver.”

His excitement has been rubbing off, it seems. “My mother just bought one of the units here; I think she wants to have a place where all the grandchildren will come and get together.” Then he adds “I expect to see it passed down within the family over the years,” he predicts.

“In this business, you know, you build a condo; you build a house. That’s the job. But with this project we’re building a community.”

And he’s right. At least that’s the intention of both the developers and their designer, John Larsen of Island-based CA Design.

They have done as much as possible to encourage eventual owners and occupants to interact and get to know each other. There will be lots of common areas: lawn, trails, a sports court for basketball and tennis. There is even a community garden going in where residents can have their own plots.

There will also be a central clubhouse with a members’ lounge and two hot tubs. Ferrie explains that they did some research about how hot tubs were used in other resort communities.

“First, we found that people wanted to be sure that children were able to enjoy the water, too, but then we discovered that adults and children seem to have different ideas of what sort of behavior was appropriate in a spa. Thus: two hot tubs.

They also discovered that while people loved to spend time in the hot tub, they tended to spend more time lounging around it. Thus Ferrie built an expansive deck.

Although one home has been finished for several months now, to serve as a sales office, site prep and underground-services installation are just finishing up. The start of construction of the first homes is imminent.

If the attention to detail and careful, thoughtful planning evident in site work and sales centre are carried forward into the homes, the results should be a stunning and comfortable community in which to live.

The whole development is designed to be as environmentally benign as possible and to be self-sufficient.

The homes are well insulated and although electric heating is an option, the more expensive units come with heat pumps. Ferrie reports that so far everyone who has committed has selected the optional heat pumps.

Rain water will be collected from the roofs and stored for landscape watering. Much of the lumber is recycled. Although as many trees as possible are being left standing a number of large Douglas firs had to be cut.

Rather than buy the exposed beams used in everyhuset, the company is bringing in a portable sawmill to mill them from the logs they already have.

The small Fletcher Creek that forms one boundary still supports a few spawning salmon every year, but it is something of a miracle that that is so.

Qualicum Developments, with the advice and encouragement of the federal fisheries department, will soon begin restoring the creek, pulling out blackberries and other invasive species, cleaning out garbage and removing logjams. The banks will be restored and replanted with native species.

Such attention to environmental concerns has become common with many developments in the province recently, and are demanded by many municipalities. So it’s no surprise to see such features at Qualicum Landing. But one gets a hint that there’s more to the story by the fact that David Steele this spring visited Machu Picchu in the Andes.

“They’re very ingenious how they’ve lived and adapted to the area and how they’ve modified it to better support them,” Steele says of the Andean villages he passed through on his way up to the UNESCO World Heritage Site. ”They’ve been totally self sufficient for hundreds of years. I found it quite inspirational and it reinforced in me that the path we’re on here is really good. You don’t have to give up the luxuries, but with a little more thought and attention you can produce a very special project.”

One of the very special things about Qualicum Landing is that the prices have been reduced over the winter – with the cuts ranging from $150,000 to $250,000. How was it even possible to offer such massive price cuts?

Steele replies that over the winter, when they were reminded that the country was in difficult financial times and perhaps they should put off launching the project:

“We just decided we weren’t going to take part in the recession and carried on.”

It wasn’t quite as cavalier as he makes it sound. With construction on hold everywhere the company was able to go back to its suppliers and contractors and reduce costs. “We passed all of these savings on to our customers and pared down our own profit expectations, too.”

Moreover, while buyers put down deposits and lock in the current prices, construction will proceed in phases over the next couple of years. The company is gambling that the market will go up over that time and that they’ll be able to raise their prices on units built later. If that happens, those who buy now with investment values in mind will be looking pretty good.

© Copyright (c) The Vancouver Sun

‘We jumped at the opportunity,’ young buyer says of half-million-dollar townhouse

Michael Sasges
Sun

RICHARDS

Project location: Richards and Helmcken Streets, downtown Vancouver

Project size: 226 apartments and townhouses, two detached heritage homes

Residence size: Apartments, 553 sq. ft. to 885 sq. ft.; townhouses and penthouses, 900 sq. ft. to 1,315 sq. ft.

Prices: From $317,900

Sales centre address: 1066 Richards St.

Hours: Noon to 5 p.m.

Telephone: 604-688-2875

E-mail: [email protected]

Web: richardsliving.com

Developer: Aquilini Development

Architect: LDA

Interior design: Sheffield Design

Tentative occupancy: Fall 2011

– – –

When the Richards developer, Francesco Aquilini, and his broker, Bob Rennie, began to sell homes in the to-be-constructed downtown tower last September, their average asking price was just under $800 a square foot. Buyers were few.

Today their asking price is $585 and buyers are plentiful — about 160, as of this week.

One of them is Chris Breikss, 33. Owner of a downtown apartment and a downtown Internet-marketing business, the North Shore native recently bought a Richards townhouse for $499,900, plus another $3,000 for hardwood on the floors.

“My girlfriend [Kyla MacKinnon] and I looked a number of different places at Richards before deciding on a one-bedroom townhouse,” he said in an interview. “The townhouse is two levels and 900 square feet and features a layout that met our current and future needs.

“Downstairs, the living area provides enough space for a dining room table, which we currently don’t have. The downstairs also has a patio with space for a large barbecue and gated access to a shared green space that a potential pet dog could have easy access to for short walks or play time.

“Upstairs is a large bedroom and a big walk-in closet, which was a major selling feature for my girlfriend. The upstairs also has space that will be used for a computer room at first but could morph into an extra bedroom down the road.” As well, “there are two bathrooms, which is one more than our current 607-square-foot condo has, and that is an important upgrade.”

When a 100-per-cent increase in bathroom numbers and a 50-per-cent increase in floor space is the gain, something has to be given up, of course.

“We are using a line of credit at a very favourable rate for part of the down payment and plan to save over the next two-and-a-half years to pay as much down as we can before we move into the place.

“We are selling the sportscar for perhaps a more practical vehicle to help reduce current living expenses, too. In 2 1/2 years we plan to move into the new condo and live in it for at least a year while renting out our existing condo to help build equity.”

The couple currently live one block north of the Richards site and had been “keeping an eye on the development,” Breikss reports.

“When the price drop was announced, we jumped at the opportunity and visited the sales centre.

“We had been casually exploring other options for a bigger condo and wanted to move out of our starter home. We were having a difficult time finding something that met our needs in terms of location, size, layout and price, and Richards hit all [of these].

“The building design and finishings met our style and the common areas and amenities were particularly attractive, as well.”

The developer and broker also figured in Breikss‘ decision.

“Francesco Aquilini’s involvement in the development is important to us, as we are big Canucks fans and season ticket holders and believe in what he and his family have done in and for this city.

“Also, we trust Bob Rennie. He has a solid reputation for involving his company in quality real estate projects.

“Between Rennie and Aquilini, we feel they will meet, if not exceed, our expectations.”

Breikss did not volunteer his comments about Aquilini and Rennie unprompted.

He was responding to an observation by the latter about the former, offered in September when the sales centre first opened.

Rennie said Aquilini’s involvement means Richards buyers are buying not only from “a developer who’s been around, but a developer who’s going to be around” and, further, a developer “with a brand to protect, and we’ve seen developers in this market who have no brand to protect.”

When he and Rennie started to sell Richards units last fall, the retreat in the availability of credit in the United States was a year old.

The cause was hundreds of billions in mortgage investments gone bad. The consequences included Wall Street’s biggest crisis since the Depression; the nationalization of some U.S. banks and the failure of others; a $700-billion US credit-restoration program from the Bush administration and, in October, coordinated interest-rate cuts by the world’s leading central banks. (See the article “Credit Crisis — The Essentials” on the New York Times website.)

This month the OECD said the economies of Canada, the United Kingdom, France and Italy seem to have turned away from deterioration in April, while the U.S. economy and those of Germany, Japan, China and India have shown that the arrival of similar turning points is imminent.

Speaking about the aborted September launch in an interview last week, Rennie said: “As we came into the summer of 2008, everybody was pricing their building just a little bit higher than what sold last. And it showed that no building was going to sell for that price. They sold less than 30 units. The market just couldn’t take it.

“I don’t know if the value was ever there, but the market couldn’t take it because the world was rapidly changing as Richards opened.”

The September buyers all received their deposits back. All but one have recently re-purchased.

Rennie attributes June’s purchases to two causes — one regional, one specific to downtown. Construction costs have declined since the fall, enough at Richards to permit its developer to drop the average asking price by more than 25 per cent.

“I think that just as much as the developers had higher prices on their buildings, their construction costs were at an all-time high in the first half of ’08, and those were the prices everybody was relying on,” Rennie says.

“So he really, really got his construction costs in line.”

Second, the demand for a downtown Vancouver address, at least in the first years of the next decade, will be greater than the supply.

Also, new additions to the downtown residential inventory will probably be more expensive to develop because of a recent city council decision that limits the amount of downtown that can be used for residential purposes, a job-protection measure.

Rennie thinks value appreciation downtown is inevitable, even during construction of the Richards homes.

“Because downtown has such a short supply of inventory coming and inventory on the market during that two years of construction … if your life gets richer or poorer, you know you’ve got a great investment on your hands.”

Chris Breikss shares that hope. “We anticipate that the building will appreciate during the construction, but this was not a motivating factor. We hope it appreciates at a conservative rate — perhaps four per cent per year during the two-and-a-half years of construction.”

Rennie expects Aquilini to begin demolition of the existing buildings on the Richards property next month. The Richard’s on Richards nightclub has occupied one of the buildings for years.

“I think we will miss Richard’s on Richards, but the lustre had worn off the place in recent years,” Breikss says.

“We hope to find some memorabilia from the place and somehow incorporate it into the interior design of our new place.

“Our condo will be located literally where the shooter bar currently exists. Richard’s on Richards will be gone but not forgotten.”

© Copyright (c) The Vancouver Sun

Think hard about easy money

Kim Pemberton
Sun

What a difference a year makes when it comes to real estate in B.C. where declining housing prices and historically low interest rates turned a seller’s market into one favouring the buyer.

In an effort to jumpstart the economy after the worldwide credit crisis, the Bank of Canada cut interest rates making the cost of a mortgage the most affordable in years. Five-year mortgage rates with interest rates under four per cent are available from most financial institutions.

It certainly helped Reed Harris to buy a second home. And it helped Holly McCallum to start looking for her first owned home. But it’s not “easy” money; it demands, especially of first-time buyers, close attention to loan details.

Reed Harris is a Vancouver mortgage broker who bought a two-bedroom apartment in Kitsilano recently for $323,000. (That price was $35,000 less than the list price, illustrating the contribution of price cuts by sellers and lower interest rates to the recent increase in the number of real estate transactions locally.)

Harris financed the purchase with a convertible mortgage with a one-year term and with a rate of 3.95 per cent rate.

The 29-year-old isn’t new to the housing market. He already owns a Vancouver residence which he rents out, but until the Kitsilano purchase never resided in a home he owned. He financed the earlier purchase with a mortgage with a five-year term and a fixed rate of 51/4 per cent.

“I own a rental property downtown, but with these rates it’s silly to rent,” the owner of Verico Mortgage Manifest said in an interview. “The cost of money has come down and with some properties the monthly mortgage payments are less than rent.”

This spring he was offered 2.9-per-cent money, but he found features of the more expensive mortgage useful.

“It’s a one year-term; at any time I can switch it to a variable,” he says.

“I don’t intend to sell. The equity I’ve created with the place I’m living in means I could use the equity in one year from now as a down payment [on a third property].”

Prospective home buyer Holly McCallum, 48, has been looking to buy her first place for the past year. The reason she didn’t buy earlier was the fact her current suite – a two bedroom condo in a Burnaby high-rise – is such a reasonable rent. In fact, the landlord has never raised the rent in the 10 years she has lived there.

She recently made some money in stock options and decided given the strong buyers’ market it would be foolish to not invest in her own property.

“This is the right time,” she says. “The only reason I’m waffling now is deciding whether to go to the banks myself [to negotiate an interest rate] or use a mortgage broker.”

McCallum says she was pre-approved for a mortgage and is looking for a condo no more than $350,000.

“It really comes down to price and what’s available,” she says.

Mortgage broker Alyson Thiessen, owner of Geterdone Girls of Mortgage Intelligence in Nanoose Bay says buyers like McCallum are right to fully understand what they are buying before leaping into the market but she strongly believes its best to go with an experienced mortgage broker and understand the different mortgage options.

“There’s a lot of great rates but you need to know what you are buying. Read your mortgage commitment,” she says.

Review the terms of the mortgage, such as what are the payout penalties if you were able to pay it off early? What are the prepayment privileges?

Another tip is to ensure you are pre-approved before going shopping.

“Ninety per cent of clients are pre-approved properly. You are only pre-approved when all your documents are in and verified. An offer can be made and it will go through. Most banks just run the numbers and say you’re good for that amount but that’s not pre-approval.”

Of the 90 per cent of clients who come to her initially with a rough idea of what they can afford about 10 per cent will later learn the estimate was wrong, she says.

“I see them every day. The result is they don’t get the property they want, some get discouraged and won’t even buy,” she says.

“It’s worthwhile for everyone to get as much information as possible. Everyone’s situation is incredibly different but it helps to have someone (like a mortgage broker) to hold your hand and point things out.”

According to a recent survey by the Canada Mortgage and Housing Corporation Survey during the past twelve months about one-quarter of all mortgage transactions were arranged through the mortgage broker channel. Most notably, broker share among first-time buyers had increased to 44 per cent, up from 35 per cent in 2007.

Demographically, brokers tend to do better among younger purchasers aged 25 to 34 years (42 per cent share), and female purchasers (43 per cent share).

Harris says a mortgage broker will understand all the rates on the market, whereas a bank lender will only show you what the one bank is offering.

Harris says his top tip is geared towards the first-time buyer who he advises not to get a car loan.

“A $500 car loan per month payment reduces your mortgage purchasing power by $100,000. It’s a dramatic difference in terms of quality of (housing) product.”

He also suggests being properly pre-approved and becoming an expert in the area you want to buy.

“Start the search soon so you become an expert and be willing to take action quickly.

“There’s a large number of people looking for good deals so you have to be pro-active.”

With his own place he made an offer the day after it was listed, and made sure his offer had all the necessary protections like subject to inspection, subject to financing and confirmation of strata documents, in the case of an apartment or townhouse.

To determine how much you can afford for a maximum home price visit the Canada Mortgage and Housing Corporation website at cmhc.ca and use the “mortgage calculator” there.

© Copyright (c) The Vancouver Sun

 

B.C. government says drop in revenue from construction slowdown has forced changes

Jonathan Fowlie
Sun

The provincial government said Friday it has put the brakes on leaky-condo repair loans because the revenue stream from new construction used to finance the loans has dried up.

Housing Minister Rich Coleman’s office confirmed that the home-building slowdown and the resulting drop in revenue have “limited” the government’s ability to make repair loans, but gave no details.

The confirmation came after some owners of leaky condos said they are being shut out by a provincial program set up specifically to help them, and that they’re having to resort to extraordinary means to finance expensive repairs.

The Homeowner Protection Office (HPO), which was established in the late 1990s following two public inquiries, offers interest-free loans to owners of leaky condos to do repairs, and on Friday, the government said it has approved more than $670 million in loans since it was formed.

But owners said the program has stopped handing out money, seemingly because B.C.’s recession has left it with little to give.

“I don’t understand. It’s a government program to help people in this time of need,” said Randy Barnes, 35, who lives in a leaky condo building in Victoria that needs $1.6 million in repairs.

“What are you paying your taxes for?” he asked.

Barnes, a military avionics technician, said he needs to come up with just under $40,000 to pay for his share of repairs to his 39-unit building, and that he contacted the HPO months ago about arranging a loan.

Barnes said the HPO stopped returning his calls in the last couple of months, and he has had to piece together the funds through a combination of a line of credit, his personal savings and a $25,000 military distress loan.

Barnes’ strata council president, Linda Soloshy, said Friday this is a common complaint from other people in the building.

She said of the 39 units, owners of 17 have applied for HPO loans to get the money needed for repairs.

She said some, like Barnes, have found other sources, but others have been turned down by banks and other traditional lenders and don’t know where else to go.

“Many have no other alternative,” she said. “They’ve exhausted all their other resources and I don’t know how they are going to come up with this money.”

Soloshy added that some residents are having extra problems because the HPO has not officially turned them down, but instead is keeping their applications in limbo.

She said this makes it difficult to re-approach other lenders, who will generally consider helping only after someone has been officially turned down by the HPO.

“I had a lot of difficulty proving to the military that HPO wasn’t returning my calls,” Barnes said of getting his military distress loan.

“All I needed was something saying they had run out of funding,” he said. “They wouldn’t even get back to me regarding that.”

HPO officials would not discuss the issue Friday, referring questions to Housing and Social Development Minister Rich Coleman.

Coleman was not available for comment, but his office sent an e-mail with general information about the situation.

The e-mail said the HPO gets its funds through a $750 levy charged on all new residential construction units in B.C.

“The combination of a recent slowing of residential construction with an ongoing program demand has limited the HPO’s ability to provide financial assistance to all applicants,” the e-mail said, adding that the office continues to take applications for loans.

It did not provide any further details.

New Democratic Party housing critic Shane Simpson responded that the government should either find other ways to help leaky condo owners or be clear about turning people away.

“I understand the problem the HPO has, I understand the revenue challenges they have, but they either need to tell people they’re not going to be available for the foreseeable future, or tell people, ‘We are going to find a way to identify another revenue stream,'” he said.

“What they are doing is leaving people in limbo.”

© Copyright (c) The Vancouver Sun

Looking to lock in today’s low rates? There are ways to save money, but no substitutes for advice, expert says

Derrick Penner
Sun

Homeowners looking to break their mortgages to save money should beware: It can be expensive.

Whether it is an attempt to take advantage of lower mortgage rates or financial stress forcing someone to get out of homeownership, terminating a mortgage during its term can trigger penalties, said John DeRose, director of mortgage development managers and brokerage at Vancity.

“Not every mortgage is going to come with a penalty,” DeRose said in an interview.

“There are products such as open mortgages that allow you to pay off [the loan] with no penalty, and many lines of credit are open that you can pay off with no penalty.”

However, borrowers who take out fixed-rate mortgages, depending on the interest rate and the length of term, can typically expect breaking the mortgage to cost them.

There is usually a penalty clause that states the borrower will pay a penalty that is equal to either three months’ interest on the loan, or the interest rate differential — that is, the difference between the rate in their current mortgage and the new, lower rate — for the balance of the mortgage’s term, whichever is greater.

If a borrower breaks a five-year mortgage taken out two years ago, that would mean paying a penalty equivalent to the interest rate difference for the remaining three years.

And as fixed-term mortgage rates dropped as low as 3.75 per cent for five years in recent weeks, more borrowers were running into cases where the interest rate differential was substantially higher than the three-month interest penalty.

For example, DeRose said, a borrower with a $300,000 mortgage on a five-year, 4.75-per-cent term may want to break it after two years to obtain a 3.75-per-cent rate.

That would trigger an interest-rate-differential penalty of some $9,000. The three-month penalty on that 4.75 per cent, however, would be $3,600.

“Once these five-year mortgages hit under four per cent, that’s when the [interest rate differential] hit for many of these mortgages,” DeRose said.

Those five-year rates have started to crawl back up. Regardless, DeRose said borrowers may have other options than chasing lower interest rates to reduce their mortgage costs.

DeRose said many mortgages come with options such as the ability to accelerate payments, or make bulk payments of up to 15 to 20 per cent of the principal per year without penalty, which helps reduce overall costs.

His biggest piece of advice is for borrowers to diversify their mortgages. Take out a portion at a fixed rate and a portion at the variable rate, so that you can still get the benefit of lower variable rates, but only a portion of the loan will be at risk in case rates rise.

He added that many financial institutions offer “blend and extend” options.

In these cases, the borrowers don’t get to break the mortgage, but can secure today’s low rates for a period of time without paying a penalty if they are willing to extend the term of their mortgages.

In other words, instead of breaking their mortgages after two years of a five-year term and paying a hefty penalty, the borrowers agree to extend the term back to five years, pay the old, higher interest rate over three years, then pay the new lower rate for two years.

However, when it comes to weighing options for dealing with a mortgage, “advice is No. 1,” DeRose said. “Get in there and look at your alternatives, discuss them. There are ways to minimize that payment.”

© Copyright (c) The Vancouver Sun