Archive for January, 2014

Property boom in Vancouver’s east side yields calls to rein in speculation

Thursday, January 30th, 2014

FRANCES BULA
Other

A decade ago, Vancouver planning director Larry Beasley sent out a message to developers: Go east.

It appears they have, along with business owners and home buyers.

An analysis of the change in Vancouver property values between 2013 and 2014 shows assessments have risen in key spots in the east, with Chinatown, the Downtown Eastside, Main Street, Kingsway and lower Commercial Drive showing up as distinct hot spots.

Values in many single-family areas in southeast and southwest Vancouver have declined as prices have dropped from a previous high.

The escalation of east-side property values is raising fears that speculators are buying land at inflated prices.

An industrial part of Mount Pleasant near Main Street and Broadway had the highest increase – about 30 per cent, as calculated by the B.C. Assessment Authority on the basis of recent sales.

“It could be a new demand for light industrial in the city. Or it could be speculation,” said Andy Yan, a planner with Bing Thom Architects who mapped the change in property values across the city.

Vancouver recently rezoned narrow strips of land on either side of lower Main Street and a prominent lot at Kingsway and Broadway to allow greater density, which likely prompted developer interest.

Mr. Yan said the city needs to move aggressively to stop speculation and preserve a part of the city that is an incubator for businesses. The area, which has about 8,000 jobs in it at companies ranging from auto-repair shops to architectural model builders, recently became home to the booming tech firm HootSuite and the brewpub 33 Acres.

“We need to not only save the offices in downtown Vancouver, but safeguard the economic nursery found in these light industrial areas that create firms that could some day fill these offices,” Mr. Yan said.

Former city planner Ray Spaxman, who has been working with communities in the Downtown Eastside and Strathcona, said the signs of price increases in those lower-income areas is worrying.

“We know there is speculation going on,” he said. “The biggest issue is the pressure from all the bulldozers that are running in the area and council policies that are focused on densification.”

He said he hopes a new city plan for the area will help reduce the speculation. The plan, on which council will vote on March 12, spells out height limits and restricts the amount of condo housing that can be built in some parts of the area.

Century 21 realtor Mike Stewart, who advertises condos in the Downtown Eastside and Chinatown on his website, said there is no doubt developers are moving into the area and paying higher prices for land as younger buyers show they are willing to live there.

“It’s been going for a few years now, but it’s reaching critical mass. The developers have run out of land in the western portions of the downtown. They’re buying up the land in the east but being quiet about it so their competitors don’t know.”

The city’s assistant planning director Kevin McNaney said the department is working hard to stop speculation by spelling out new policies that say exactly where new development will – and will not – go.

Mr. McNaney said a new city guideline removed the option for buildings that include a residential component in the Mount Pleasant industrial area.

Although likely some speculative buyers thought the land might be converted, he believes the city’s new policy for Mount Pleasant is encouraging people who want to build commercial space.

“It’s people interested in investing in and intensifying the area. It’s a very cool industrial area and one of the rare ones close to transit.”

Mr. McNaney also said the increase in values in Chinatown and the Downtown Eastside is relatively small but looks large because the prices used to be the lowest in the city.

He says the new city plans will, as in Mount Pleasant, bring clarity about what is allowed and actually reduce speculation.

“We are starting to send some signals about that.”

© Copyright 2014 The Globe and Mail Inc.

B.C. Real Estate Sales To Jump 4.8 Per Cent This Year

Thursday, January 30th, 2014

Other

B.C.’s real estate market is set to see slower sales growth this year compared to 2013.

So says the first quarter housing forecast update from the B.C. Real Estate Association (BCREA), which predicts that the province will see sales grow by 4.8 per cent in 2014, compared to 7.8 per cent last year.

The market may be seeing slower growth because last year represented a rebound year. The housing market is just now recovering from that downturn, the update said.

A sluggish economy and weak employment growth are likely to stifle housing activity through the next few quarters of 2014, but the BCREA foresees an “upward trajectory” taking hold in the second half of the year.

The average price of a home in B.C. is set to level off somewhat with a 1.8 per cent increase to $547,300. That’s less than the increase seen in 2013, when prices jumped 4.4 per cent to $537,414.

Vancouver‘s average home price is also expected to grow more slowly. It jumped 5.2 per cent to $767,765 last year and will grow only 1.3 per cent to $778,000 in 2014, the report said.

The statistics come as realtors see brisk housing activity around the Lunar New Year, with purchases are coming from a mix of overseas and local buyers.

Realtor Tom Grdecak has sold three houses on Vancouver’s west side in the past three weeks, all of them for more than the asking price, CBC News reported on Thursday.

He said one of the houses had nine competing offers, while another had five.

Claire Rockel, another Vancouver realtor, is seeing similar activity. She said momentum from buyers during the Chinese New Year usually kick-starts the market and keeps it going for the rest of the year.

UBC real estate expert Tsur Somerville cautioned, however, that a recent spike in sales isn’t exactly an indicator of a trend.

Copyright © 2014 TheHuffingtonPost.com, Inc.

Vancouver realtors report micro-boom pre-Lunar New Year

Thursday, January 30th, 2014

Is it the Year of the Horse, or something else, that’s triggered a bump in real estate demand?

Annie Ellison
Other

Realtors in Metro Vancouver usually experience a bump in real estate activity around Lunar New Year, which begins on Friday this year.

Some realtors say they already have seen a mix of overseas buyers and Vancouver locals making big purchases this month — echoing the real estate boom that Vancouver’s market saw eight years ago. But several say this year’s spike is different because local buyers are also driving sales. 

Realtor Tom Gradecak said he has sold three west side houses in the last two weeks, and all of them for more than the asking price. None of the homes stayed on the market for more than a week.

“It’s not unusual to see a competing offer on a place if it’s well-priced, but we’re seeing more of them,” he said. “One house that we sold last week had nine competing offers. Another one we sold had five.” 

Another realtor, Clair Rockel, said she’s noticed the same urgency, or eagerness.

“This year is better than I’ve seen in the last two or three years,” she said. 

She’s sold two houses well over asking price in less than a week, but she doesn’t think it’s related to the upcoming holiday.

Rockel thinks people are trying to buy ahead of what they predict will be higher prices in the spring.

“This year is different because of the local buyers and the confidence in the market values right now,” she said. “The buyers are not just Chinese New Year buyers.”

But Rockel said the momentum from buyers during the Chinese New Year usually kick-starts the market and carries it forward for the rest of the year.

If the local demand keeps up, instead of just a blip coming from the overseas or investor buyer, “that’s going to keep our housing market good and high in Vancouver,” she said.

But Tsur Sommerville, Director of UBC’s Centre for Economics and Real Estate, says the recent spike in sales isn’t necessarily a pattern or an indicator of a trend.

“My general feeling about anything that happens in a real estate market on any given week or month is ‘let’s see if it happens again and then we’ll start to think about it,'” he said.

But early indications from the Real Estate Board of Greater Vancouver do suggest this month will end with more sales than in January of 2012 or 2013.

Copyright © CBC 2014

Office space returning to pricey Vancouver market

Wednesday, January 29th, 2014

Home ownership remains unaffordable for many, mayor acknowledges

Mike Howell
Van. Courier

The same week a study was released saying Vancouver has the second least affordable housing market in the world, Mayor Gregor Robertson was boasting that downtown is experiencing a building boom in office space.

Which begs the question: If developers build the offices and towers, will people searching for a job want to move to such an expensive city?

“It remains a challenge for companies when workers on average wages have a difficult time affording to live in the city,” acknowledged Robertson at a press conference last Thursday to announce the construction of The Exchange tower on Howe Street. “That’s why council’s focus has been on creating more rental housing, ensuring we’re dealing with low to middle income people and that we’re creating space alongside the market that is booming, as well.”

Home ownership, however, is a different matter. Vancouver ranks second to Hong Kong for having the least affordable housing, according to the study released by Demographia, which examined 360 housing markets in nine countries, including Canada, the United States and New Zealand.

The study said homes in Vancouver cost 10.3 times the median income compared with 14.9 times in Hong Kong. Three times the median income or lower is considered affordable. Canada’s most affordable market was Moncton, N.B. at a median of 2.3.

Robertson said the market is driving the cost of home ownership but that council will continue to “look at ways to temper that.” He pointed to Hong Kong government’s decision to slap a 15 per cent tax on property purchases made by foreigners in an effort to slow down the pace of rising housing prices.

But, the mayor cautioned, council doesn’t want to impose or lobby for any initiatives that would deflate the economy, although he recognized Vancouver has become expensive because of immigration and investment in a city with a confined amount of real estate. That investment is literally being seen downtown, with 17 office projects, including six towers, under construction for a total of 2.1 million square feet.

Robertson said his ruling Vision Vancouver council has approved as much new office space in four years as occurred in the previous decade.

“We’ve come along way in the last five years,” he said. “A few years ago, our economy was being held back by a lack of that office space. We had a critical shortage emerging and it’s wonderful to see the market respond.”

Robertson was joined at the press conference by Credit Suisse, one of the top private real estate investors in the world, which is behind the construction of the $200-million, 31-storey Exchange tower.

Mark Renzoni, president and CEO of CBRE Canada, whose company will handle leases for prospective tenants of the Exchange, said downtown is in a building boom because companies are looking for “new product alternatives” such as more control over heating, ventilation and air conditioning systems, better lighting and more amenities. “Vancouver has had probably over 10 to 12 years of a break from new construction,” Renzoni said. “So when you look at older buildings versus new buildings, the demand for new buildings is rising very quickly.”

The development of will include the renovation and restoration of the neighbouring old stock exchange building, which was built in 1929.

The project promises to create 400 construction jobs and have 1,700 permanent job spaces when completed in 2016. The Exchange will be built to achieve LEED Platinum status, the highest sustainability rating from the Canada Green Building Council. Energy consumption will be half the load of traditional office buildings.

© Vancouver Courier

Vancouver Real Estate Shows Thriving Luxury Market

Tuesday, January 28th, 2014

Other

The luxury home market powered ahead in Vancouver last year, fuelled in part by redevelopment of teardowns by builders in prime, or upcoming neighbourhoods, according to a new study by RE/MAX looking at upper-end real estate trends across Canada.

Defining luxury properties as those listed over $2 million, the study found that 1,609 Vancouver properties sold at that or above in 2013, making it the second-best year for that category of property ever. Sales of both luxury, single-family homes and condos outperformed the market overall, the study notes, with gains of 38 and 19 per cent respectively.

Prices in certain neighbourhoods — including those on the edges of traditionally “blue-chip” areas — were pushed up by the increasing number of smaller, older properties bought up by builders before being demolished. These were then developed into “substantial residences — sporting price tags between $5 million and $10 million.”

The study reiterates the findings of a report into luxury trends by Sotheby’s International Realty Canada released earlier this month. Though they define the luxury market as beginning at the $4 million price tag, Sotheby’s told The Huffington Post B.C. that category is seeing sales growth of 50 per cent, year over year.

Copyright © 2014 TheHuffingtonPost.com, Inc

The FINTRAC Charade – Realtors Have to collect the data and store it

Monday, January 27th, 2014

Marty Douglas
Other

February – when every young man’s fancy turns to thoughts of, “How can I escape this dreary winter?” Then I opened an email from my real estate board. There, buried between the President’s Message – yawn – and the 2013 Sales and Summary Stats was an important update from CREA – the mother ship has called!

The update had three headline links. Nestled in the cleavage between the CREA Board of Directors for 2014-2015 and a no doubt riveting article on the enforcement of trademarks, was the teaser – FINTRAC Update.

Hold me back. (For those of you who are relatively new to the business, there hasn’t been a FINTRAC update since 2008 so you can imagine why the thought of an update was like the first tasting of this year’s Beaujolais Nouveau to an oenophile.)

So I followed the link and read CREA’s blurb promising “to help members more easily meet their obligations”. Now I wanted to believe the two pages of clarification would indeed make our paper shuffling “easier”. (Okay, so I was really hoping for “lazier”.) Paragraph #1 was encouraging. It allows the substitution of the client’s work description rather than the client’s employer. In other words, instead of entering “Financial Transactions and Reports Analysis Centre of Canada” I can put “bureaucrat”. If I can spell it.

Paragraph #2 stunned me with the news that Realtors can list a client’s occupation as “retired” if they are “retired”. Interestingly enough, I think a case could be made Paragraph #2 is uncertain as to whether the client or the Realtor needs to be “retired”. But I wouldn’t plan your entire defence around that fundamental principle!

And from there the update went downhill. One of the promised new forms was illegibly blurry on the screen and the printer. The links promising me new forms led to old forms. Even the “help” email link on the old form led me to an “undeliverable email” alert in my in-box later in the day.

It’s probably my fault. Months ago I asked for updates and I suppose someone in Ottawa scurried around, sent a few emails, read the replies and pressed a button. But if they corrected/amended the forms they forgot to update the footnote date on several.

Here’s where it turns into an episode from the X Files. You remember – “Just because I’m paranoid doesn’t mean there isn’t a conspiracy!”

I emailed my concerns.

And got an immediate response.

From a lawyer.

A high rate-per-hour lawyer because he signed his title as “Legal Counsel”. Who insisted everything would be okay if I just calmed down, took a breath and refreshed my browser. I also got a pat on the head for innovation, a lesson in “older browsers” and the meaning of “cached”. The only remedy missing was to have my eyesight checked as a possible cause of the blurring.

This, of course, gave them time to scurry through the back door access and replace the widgets and rearrange bits and bytes amid the knobs and tubes of HAL, CREA’s computer.

Needless to say, by the time I re-visited the site, all was hunky dory and I was left wondering if I had imagined the whole thing, if the theory of jet contrails had any substance and just where else Jimmy Hoffa’s body might be found.

If someone would only show the value in the paper we collect but never submit. Is it a barrier so formidable that terrorists and drug dealers are kept at bay? Please let us know. The number of FINTRAC audits I’m aware of in our real estate community in B.C. wouldn’t require my thumb, among the fingers of one hand. The updates – or complete lack – show our leadership isn’t interested or too concerned, merely doing what we do in the field – cover our butt with paper and move on.

I don’t mind the ID requirements – although they are redundant – because I have to show ID every time I check into even the seediest of motels. (P.S. – haven’t done that for years!) It’s the charade of the required manual and training the brokerage has to maintain. Money Laundering 101 – are you kidding me? The full name is Money Laundering and Terrorism Financing Training Course. Here’s an excerpt from CREA’s compliance centre on RealtorLink. For many of you, it will be your first and last glimpse:

“The training section provides a variety of materials relevant to the training requirements of a Compliance Regime. Information is presented in a number of concise and easy-to-follow formats, including a number of documents that are conducive to being printed off and kept as a quick reference in your briefcase or desk drawer. The [Act] requires Realtors . . . to undertake and maintain a training program that covers both existing and new content areas relevant to the understanding and control of money laundering and terrorist financing.”

Shoot me now!

In brokerages across Canada there are dusty manuals, perhaps with revisions dated August 2008, May 2009 and Summer 2013 supported by an email trail of instruction from the brokerage requiring all sales staff, as a part of their Independent Contractor Agreement, to be compliant with all appropriate federal, provincial and municipal legislation.

There – you’ve been warned.

REM online.com

Vancouver Airport releases drawings of luxury outlet mall

Monday, January 27th, 2014

Martha Perkins
Other

Construction has begun on the new McArthurGlen Designer Outlet at the Vancouver Airport.

The 35,000 square-metre luxury, designer and lifestyle retail outlet centre is on the northeast corner of Sea Island near the Templeton Canada Line station.

“Vancouver’s Sea Island is an emerging aerotropolis,” said John Kasarda, a business professor at the University of North Carolina’s Kenan-Flager Business School, told Business in Vancouver in 2012.

The Vancouver Airport Authority expects that the outlet mall will add an additional 1,000 jobs to the 23,600 already in place at YVR.

©  2014  Copyright   Black Press, Inc.

Zoocasa & Redpin – Canadian Discount Real Estate Brokerages have not penetrated the market as originally perceived

Saturday, January 25th, 2014

How Canada’s housing downturn threatens to shake up real estate commissions

TARA PERKINS
Other

The power of the Internet was going to shatter the grip that realtors have on house sales in Canada, driving down commissions and empowering consumers.

The Internet failed.

The Competition Bureau waded in to overcome the industry’s stasis, attempting to create a market where consumers pick which services they want and data are more widely available.

But, so far, it’s accomplished little.

In a country where grousing about bank fees is a national pastime, where a 5-cent rise in gasoline prices sparks outrage, one fee remains remarkably static: the thousands in commissions paid to real estate brokers. Technology has failed to snap consumers out of their complacency, and regulatory efforts to force the industry to make it easier for new Web-based firms to compete have been abortive.

But there is a new threat to the status quo that could be the catalyst for industry-rattling change: the housing slowdown.

Canadian house prices were generally on a tear from the turn of the century until last year, with most sellers still netting a tidy profit even after paying commissions. But that growth has now begun to taper off, with year-over-year price increases slowing from more than 6 per cent at the outset of last year to less than 3 per cent at the outset of this year (and some markets, such as Vancouver, seeing outright declines).

Economists suggest that the market could be entering a lengthy period in which house prices remain essentially flat. Toronto-Dominion Bank’s economists recently estimated that the nominal annual rate of return on real estate will be about 2 per cent over the next decade. In other words, the rise in home prices will just keep pace with inflation.

And that means that homeowners who buy and sell homes in the next 10 years will not be making the profits that homeowners who bought and sold in the past decade got used to. More commonly, sellers will be accepting prices that are much closer to what they paid.

John Andrew, a professor at Queen’s University, suggests the following analogy: When the stock market is rising and you’re making money, then you don’t mind paying a broker a fee, but if you lose money on your investment, then the charges will be upsetting.

The market dynamics are changing at a time when new real estate startups, which are largely Internet based, are becoming more innovative. “There is no question that commissions are very high, and there is a big consumer pushback against that,” Mr. Andrew says. “It doesn’t make sense to me that it be a fixed per cent, and perhaps it’s time to begin to look at more of a sliding scale like we have for the land transfer tax, like we have for the income tax.”

Realtors’ commissions are negotiable, and industry sources say the current average commission in the Greater Toronto Area, as an example, is between 4 and 5 per cent. Commissions tend to be higher in rural areas than in major cities, and in many parts of Canada they are often lower. In Western Canada, sellers often pay a two-tiered rate that is closer to what Mr. Andrew would like to see, such as 7 per cent on the first $100,000 of sales value, and 1.5 per cent on the balance.

Over the course of the past 12 years, a period in which house prices rose at an astonishing clip, the average resale price of a house in Toronto roughly doubled, while commissions remained around 5 per cent (that commission gets split between the buyer’s agent and the seller’s agent). That means the average total commission rose from about $12,160 in the year 2000 to $24,950 last year. Price increases have been steeper in some other parts of the country. If you take 5 per cent as a basic commission, Calgary saw commissions on an average sale rise to $20,620 from about $8,820 during the same period and Vancouver saw them increase to $36,500 from $14,800.

Change comes slowly

The stakes are high. Real estate agents took in an estimated $8.26-billion in commissions across the country last year (based on a 5-per-cent rate), up from $3.96-billion 10 years ago, reflecting both an increase in the value of home prices and the number of sales.

“Real estate agents used to have to sell quite a few houses to make a living, and in cities where the prices are really high, they don’t any more,” Mr. Andrew says.

But he and others are quick to point out that the life of a realtor is not a life of leisure. A lot of work goes on behind the scenes, and since the number of homes changing hands in most areas of the country has shrunk significantly since last summer, agents have had to work harder in recent months to keep business up.

Canada lacks data on the exact amount of commissions that are paid to realtors each year.

“There are no set commissions,” says Gary Simonsen, the chief executive officer of the Canadian Real Estate Association, which represents about 100 real estate boards and associations. “They are purely negotiable between buyer and seller and the agent involved, and it’s not something that we track nor do our boards and associations.”

Canada also lacks data on how many consumers buy or sell a house without a realtor.

Mr. Simonsen says the number of transactions that are occurring over the MLS has remained remarkably constant over the past decade. “I think people will certainly try various and sundry things depending upon their own personal circumstances, but at the end of the day we still see that people are relying upon a realtor ultimately to assist them in the transaction, whether it’s on the buying or the selling side.”

Amid the market turmoil, CREA launched a new TV ad campaign this spring. Its amusing commercials are based on the theme of Internet overconfidence. One spot shows scenarios such as a man searching “how to be your own lawyer” online and winding up strip-searched by police; a guy checking relationship advice on his smartphone only to find his date storming out of dinner, smashing the dishes on the restaurant table and popping her middle finger on the way; and a cheat sheet on edible mushrooms followed by footage of a naked man laughing like a lunatic and spinning around the woods. Cue the announcer: “Why do we think if we can look it up we can do it? When it comes to your home, get help, get a realtor.”

Home sales have been in a slump since last summer, creating a situation where a realtor’s help is generally more valuable to sellers. But economists expect the declines to dissipate and give way to a period of more stable, but moderate, sales. “The market has to swing a bit more in favour of the seller, and sales have to pick up, for these alternatives to really have the opportunity to compete,” Mr. Andrew says. The companies that cater to do-it-yourselfers argue that sellers without a realtor have an advantage in this market, because they can afford to reduce their asking price by the amount of commission they stand to save.

The Competition Bureau recently noted that, at least when it comes to Toronto, the top five agencies have cornered the market, taking in more than 70 per cent of commissions in recent years. Re/Max and Royal LePage combined are responsible for more than 40 per cent of commissions.

Walter Melanson, director of partnerships at PropertyGuys.com, is hoping that the market dynamics will loosen the grip that the big brokerages have on the market. “We anticipate that an increasing number of sellers will abandon the high cost of using a traditional agent because they won’t want to give up what little equity they do have,” he says. But he’s been wrong before.

PropertyGuys.com has been up and running since the dot-com era was in its heyday. The company sells advertising services to people who want to sell their home without a realtor, and is rolling out a new product it calls “Pro Approach” where online experts, real estate lawyers, appraisers and others are made available for a cost that Mr. Melanson says still amounts to a small fraction of a realtor.

Not long after starting out, PropertyGuys.com had thousands of customers a year. But in the early days those customers couldn’t get their houses onto the all-important Multiple Listing Service and the industry’s realtor.ca website without paying to use a realtor’s full services. That changed in 2010 as a result of prodding by the Competition Bureau. The Canadian Real Estate Association, which represents realtors from coast to coast and owns MLS and realtor.ca, agreed to change the rules so that brokers could post a listing on those sites for a flat fee.

It was supposed to be a game changer. Sellers could get their listings on the most important website in Canadian real estate for a relatively small amount. Overnight, PropertyGuys.com saw the number of customers it was dealing with rise from between 7,000 and 8,000 a year to about 10,000, Mr. Melanson says. But growth stalled at that level.

“The market is right where the bureau left it, it’s in the same state almost that it was then,” he says with a sigh, calling the failure of technology to upend the industry “the non-existent revolution.”

Fighting against lower fees

One of the highest hurdles new entrants say they have to clear is access to data that are controlled by the realtors’ association. While it’s possible to sell a home through MLS without an agent, it’s still largely impossible for those outside the system to access the vast trove of market intelligence and sales figures assembled by local real estate boards.

That makes competing real estate services and websites less attractive to people selling their homes.

“The Canadian Real Estate Association controls the listings, controls the MLS, nationally, and as a result nobody else has been able to make inroads into the buying-and-selling-property business with online tools and apps,” says Peter Zollman, founding principal of Aimgroup.com, a consultancy based near Orlando, Fla., that publishes a report on real estate websites around the world. “In our view, Canada is still very much an outlier, because there is so little competition among real estate sites.”

The Competition Bureau recently lost, and is now appealing, a case in which it was seeking to make data about the prices that have been paid for homes more accessible online. That case, against the Toronto Real Estate Board, which represents more than 35,000 agents, was seen as a test case for the whole country.

“As a practitioner with an interest in the field, I can say that the…decision bears close scrutiny and it raises important issues about the interplay between the statutory prohibitions in the [Competition] Act and conduct by those few firms in Canada that are truly dominant in their market,” says Melanie Aitken, who stepped down as Competition Bureau commissioner last fall.

PropertyGuys‘ Mr. Melanson argues that the dominant players are resisting change with all their might. “There are 100,000 real estate agents in this country that don’t want fees to drop,” he says. “We’re going to have to fight for every inch.”

Stories abound of consumers who have tried to sell their home on their own and thrown in the towel, but there is also a growing number of satisfied do-it-yourselfers.

Deryck Hatheway paid PropertyGuys $798 plus tax for their full-service package to sell his house in Bathurst, N.B., recently, as he sold his optometry practice there to move to Fredericton. He also paid $299 to have his house listed on the MLS, $39 for photos and $20 for an additional ad in the paper.

His house sold in December, two months after he listed it, for $146,000, a bit less than his asking price, and saved thousands of dollars by putting the extra effort in himself.

“We have a zinc mine that’s closing down, so it’s not booming real estate,” Mr. Hatheway says.

“So I found two months to be pretty good for Bathurst. And, having done that, I’d never go through a real estate agent again.”

Anecdotally, it’s believed that about 20 per cent of sellers in Quebec and 10 per cent in the rest of the country don’t use a realtor, says Phil Soper, CEO of Royal LePage and Brookfield Real Estate Services.

There’s no evidence that the sales-by-owner model and lower-commission alternatives are making significant headway; there is no evidence they aren’t. No one’s certain.

But Mr. Soper’s not worried. The threat from technology? He points to other technological revolutions that haven’t panned out: “Grocery Gateway, we were going to have intelligent fridges…” The Competition Bureau’s efforts? “I’d say in the aftermath of it all, nothing’s changed,” he says.

He adds that most of the new ventures aren’t turning much, if any, profit. Part of the reason is that real estate services have low profit margins, he says. In order to cut commissions, you need high volumes.

“While we’ve looked at it, and while there has been a lot of interest at the low end for four or five years now, I don’t see anybody making money,” he says. “The full-service brokerage remains the most preferred model in the country, or at least the model with the highest level of satisfaction. We’re not investing in the alternative brokerage model any time soon.”

While the proportion of people who want to use alternative models has remained the same, the number of companies catering to them has risen, says Gurinder Sandhu, executive vice-president at Re/Max Ontario-Atlantic.

“So there’s less and less to go around for each one of those players.”

Will the stagnation of house price growth be the catalyst that ultimately changes that? With the new players raising their game and the Competition Bureau not backing down, Queen’s University professor Mr. Andrew, for one, believes that the commission revolution is still likely to occur.

“I think the full-service real estate agent who is charging full commission and providing the full host of services is probably going to become few and far between.”

—————————————————

AGENTS OF CHANGE

In addition to companies such as Propertyguys, Comfree and Quebec-based DuProprio, which cater to people who want to sell without a real estate agent, firms have been popping up with a variety of business models. Here’s a sampling:

Realosophy

A Toronto brokerage whose agents charge sellers a 1.5-per-cent commission, which the agency boasts is “a savings of at least $5,000 on a $500,000 house.” Realosophy recommends sellers pay the buyer’s agent 2.5 per cent, because otherwise fewer agents might bring clients to see the house. “In urban centres, this is a generation that uses things like wedding planners,” Realosophy’s John Pasalis said. “At the end of the day, people still need help.”

Commission Pitch

A new startup focusing on southwestern Ontario that allows agents to compete for business in an auction-style process, which the company says can save thousands of dollars in commissions.

SundayBell.com

A Canadian online service that markets itself as being akin to an online dating service, matching consumers with real estate agents throughout North America.

TheRedPin.com

A Toronto-based service that employs real estate agents but it pays them differently. Rather than being commission-based, they are paid a salary plus a bonus that hinges on customer satisfaction as opposed to sales. TheRedPin.com still takes standard commissions from clients, but returns a portion in the form of rebates. It counts Onex Corp. founder Gerry Schwartz as a backer.

Zoocasa

An online service for buyers and sellers, owned by Rogers Communications, that has recently obtained a brokerage licence, primarily so it can access more data. It is in the midst of rolling out its newest services across Canada, works with agents from all of the major brokerages, such as Royal LePage, but it is pressuring commissions by offering consumers a rebate of roughly 15 per cent of their commission. “This industry as a whole has been determined to control the speed of progress and innovation, and has been successful in slowing innovation,” said Lawrence Dale, group head of the real estate business at Zoocasa. “It’s as if progress is only permitted if it does not upset the status quo and is available to everyone.”

© Copyright 2014 The Globe and Mail Inc.

Critic calls Pearson proposal ‘ethically wrong’ – The 25-acre Pearson-Dogwood site is located at West 59th Avenue between Heather and Cambie streets.

Friday, January 24th, 2014

Naoibh O’Connor
Van. Courier

Concerns about “institutionalizing” people with disabilities dominated public feedback at city council Wednesday regarding the draft Pearson Dogwood Policy Statement, which is meant to guide redevelopment of the property.

The 25-acre Pearson-Dogwood site is located at West 59th Avenue between Heather and Cambie streets.

Two health care facilities are on the property. The George Pearson Centre has 120 beds for adults living with conditions including multiple sclerosis, spinal cord injuries and traumatic brain injuries. It has 114 residents.

Dogwood Lodge has 113 beds for seniors who need complex care and require 24-hour nursing care.

Vancouver Coastal Health owns 20 acres of the property, while the provincial government owns five acres (Dogwood Lodge.)

If council approves the policy statement, VCH can file a rezoning application.

VCH wants to leverage the site’s land value and reinvest money in health care. It envisions a mixed-use development, featuring healthcare housing and related services, housing, community amenities and park space. The vision includes a 150-bed complex care centre to replace George Pearson Centre and Dogwood Lodge.

The centre would house Dogwood Lodge’s 113 beds, along with 37 of the George Pearson beds. (The remaining 83 would be become independent living units.)

What happens with the 37 George Pearson beds is the main source of contention.

They would be organized along the lines of a “greenhouse model,” according to VCH. Residents have private rooms and baths in a greenhouse model, and can move freely. The concept is based on reversing the idea of enforced dependency.

Critics of the draft policy statement, such as Jill Weiss, chair of the city’s Persons with Disabilities Advisory Group, argue the complex care centre represents an institutional environment.

Weiss said people with disabilities have the right to live in the community – not in institutions. She called the proposal “ethically wrong.”

“This proposal is not acceptable because it includes institutions … do not approve a residential institution that in 10 or 20 years, you will have to apologize for,” she told council.

Speaker after speaker, many with disabilities of various types, said institutionalization contravenes the UN Convention on the Rights of People’s with Disabilities and that it leads to rapid mental and physical deterioration.

“Institutions are factories that turn people into furniture – it’s called a bed,” said one.

“Institutions should be relics of history,” added another. “The City of Vancouver should use all powers granted to it to reject institutionalization. Remember, we are all temporarily able-bodied. We could all find ourselves in one of those beds.”

Speakers described institutionalization as being forced to live with people you don’t know in order to get help, and losing control over one’s autonomy and basic rights such as when to eat, sleep or have visitors. Those who challenge the rules risk being deemed troublemakers, noted one speaker.

Based on the concerns raised, council deferred its decision on the policy statement until city staff can sort out various issues and concerns with the Ministry of Health.

“The number of people who spoke passionately and articulately about the issue of institutionalization of people with disabilities had, I think, an amazing effect on council and staff. As a result, we’re taking a look at the wording that’s been proposed in the draft [policy statement] to see what we can do, and what Vancouver Coastal Health can do, to strengthen the wording so that it better reflects the comments from the people who spoke,” the city’s manager of planning and development Brian Jackson said Thursday morning.

“To be honest, I’m not that sure they’re that far apart. I know the idea of the greenhouse model, in Jill Weiss’ mind, cannot take place in an institution – and they’re in favour of the greenhouse model. The province and Vancouver Coastal Health have said they support the greenhouse model, but they think it can work in an institutional setting. It’s that narrow kind of gap that we’re trying to bridge in coming up with the revised wording.”

Brad Foster, the real estate consultant for VCH who’s working on the project, said VCH understands it’s a complex issue for council.

“We obviously wanted to see the policy passed yesterday given we’ve been in discussions for about 15 months with lots of different stakeholders and city staff,” he said.

“But we also understand the people with disabilities rightly feel very strongly about their issues. What’s going to happen next is VCH will go back and do some thinking about how that care model they’re concerned with can be revised to bring the two parties closer together.”

© Vancouver Courier

Vancouver agents, builders greet signs of a rebound with glee

Friday, January 24th, 2014

KERRY GOLD
Other

Last year marked a return of confidence to Vancouver’s real estate market, with a 14-per-cent increase in sales over the year before, according to the Real Estate Board of Greater Vancouver.

Another year-end report, this one by Landcor, showed the single family detached price up 6.39 per cent in 2013, with the average Metro Vancouver house price at $869,772. And in its fourth quarter housing analysis of 2013, the B.C. Real Estate Association predicted another 6.3-per-cent increase in sales for 2014, with residential price to go up by another 2.1 per cent in 2014.

It’s not staggering change, but it’s change in the right direction for brokers who worried about the downturn in sales in 2012.

“Halfway through last year, confidence returned to the market,” says Royal LePage managing broker Bill Binnie, who owns several Lower Mainland franchise offices.

Royal LePage recently released its house price survey that said the average price for a detached bungalow increased 4 per cent year over year to $1,041,300, while the two-storey house increased to $1,139,050, or 3.3 per cent in Vancouver.

Condo prices rose 2.3 per cent, to $492,500. The firm’s market survey forecast predicts the momentum will carry into 2014, with price increases of 4.4 per cent in 2014.

“We saw the number of transactions increase,” says Mr. Binnie. “Even though prices were up only marginally, it was a very different market than the last of half of 2012 – far more active.”

Canada Mortgage and Housing Corp.’s tightening of mortgage insurance rules had an impact on Vancouver’s 2012 and early 2013 market, he says.

“We had both buyers and sellers sitting on the sidelines for almost a whole year, largely as a result of changes to the CMHC – or at least the timing was the same. So I think the results that the government wanted to achieve as far as slowing the market down certainly worked. In other words, there were a lot less sales and a lot less listings coming on. However, that changed last summer and we are back to a normal market now.”

Slower activity in the higher end of the market shows that buyers aren’t willing to throw money at just anything – as they seemed to be doing in the boom times of 2007 – but prices are also staying firm.

Sotheby’s International Realty agents Gregg and Mackenzie Close just set a record on Vancouver’s East Side Wall Street neighbourhood with the sale of a waterfront property at $1.7-million. The house had been on the market for more than two years when it was priced at $1.950-million. It was relisted at $1.795 million and sold shortly after.

In West Vancouver, a 10-year-old, five-bedroom house that had been on the market since February at $4.2-million, recently sold for $3.55-million.

On Point Grey Road, Regent Park Realty agent Bryan Yan just completed the sale of an Arthur Erickson designed house that had sat on the market for nearly a year.

It was the first time the house had come up for sale since it was built in 1967, and the 2,300-square-foot house – small by new build standards – is in its original condition. It sits on a 33-by-130-foot lot that extends into the water, which is an unusual feature, says Mr. Yan. The house was listed high, he says, at $5.29-million. It sold for $4.7-million.

“It was a really tough sell. It’s tiny. If it were done up, I would have sold it on day one,” says Mr. Yan. “It was bought by a local buyer. I deal in lots in Point Grey, and a lot of them were bought by Asians before, and now it’s more locals who are buying.”

Mr. Yan, who’s been a real estate agent in Vancouver for 20 years, says he knows the cycles. Buyers from mainland China will return after Chinese New Year on Jan. 31 to consider house purchases in Vancouver, and so he expects a bit of an increase in west side sales in February.

“Lower-priced entry-level detached homes everywhere in the Lower Mainland should go up in price this year by at least five to 10 per cent,” he predicts. “Condo prices should remain flat for a long time because the local governments are letting developers rezone and build everywhere.”

In central Coquitlam, homeowner Ria Lawson was surprised when her five-bedroom house sold two weeks after it was listed, in a bidding war that resulted in $10,000 above asking, for $735,000.

“Is the market hot? Not sure. I do know that if we listed too high we could have ended up getting no bites,” she says.

“I was worried about that, especially going into December. If it ended up being too

high, we would have had to de-list and then try again in February.”

At the condo end of the market, which had softened the past couple of years, there’s industry hope of a sales increase there as well. Bosa Properties vice-president Daryl Simpson says that’s because of a shortage of new supply.

“The numbers we have show there are only 650 new concrete condo units in the inventory throughout Metro Vancouver,” he says. “Some people might think that’s a lot, but it’s actually a small number.

“Certainly, some markets have more supply than others. Richmond had a lot of inventory last year – that was a market that we thought was over-supplied. But there were about 900 units absorbed last year, so the logjam broke.

“So, for 2014 we feel good. We feel better than we did in 2013. I would say for the majority of large-scale concrete builders in this market, I think that we are feeling relatively strong. The idea of a bubble and soft landing and all that is behind us.”

© Copyright 2014 The Globe and Mail Inc.