Archive for March, 2014

Vancouver’s housing boom could head south along with Chinese rich

Friday, March 28th, 2014

The nixing of Ottawa’s immigrant visa scheme has led to concerns that wealthy individuals could inflate prices in US

Massoud Hayoun
Other

A housing price boom in Vancouver fueled by the arrival of wealthy Chinese investors could be heading south of the border after the Ottawa government rescinded its immigrant investor scheme – and not everyone is happy about it.

The cost of property in the city have soared recently, with average home prices climbing by 23.5 percent in just five years, according to the Real Estate Board of Greater Vancouver’s Home Price Index.

Spurred in large part by an influx of overseas investors, U.S.-Chinese business experts say, rich internationals – now shut out from investing in Vancouver in return for citizenship – may look toward the U.S. and its analogous EB-5 visa program. It could potentially drive up the cost of housing in major American cities, prompting fears that it could also push out low-wage workers and make it harder for prospective first-time buyers and young renters alike.

New York and Vancouver are both major North American hubs for Single Resident Occupancies, or SROs – local-government-subsidized, sometimes closet-size apartments that anti-gentrification advocates have characterized as a last-ditch effort to house low-wage labour in cities.

In the coming years, however, U.S. cities may experience another surge in housing prices analogous to the one experienced by Vancouver in recent years, EB-5 analysts say.

President of the U.S.-China Chamber of Commerce Siva Yam said the end of Canada’s investor visa in February, which chucked some 65,000 applications, mostly from Chinese nationals, “will draw some Chinese investors to America” who would otherwise have made a bid for Canadian residency.

The Canadian Immigrant Investor program was simpler than its U.S. counterpart: A foreign investor worth at least $1.6 million had to lend the Canadian government $800,000 without interest for a period of five years.

Under the U.S. system, EB-5-seekers must invest $1 million, or $500,000 in state-designated “Targeted Employment Areas,” and prove they created at least 10 jobs for American residents for a minimum of two years.

The draw of a shot at a green card is attracting a steady stream of wealthy Chinese applicants, a group coming under increasing scrutiny as Chinese President Xi Jinping attempts to weed out corruption in the economy of the People’s Republic.

Canada’s losing game

But the experience of Canada’s Immigrant Investor may pose a warning to the U.S.

The program was originally designed to invite wealthy internationals to pump their assets into the economy. Ottawa says that in practice, this wasn’t the case. 

“Research shows that immigrant investors pay less in taxes than other economic immigrants, are less likely to stay in Canada over the medium to long term and often lack the skills, including official language proficiency, to integrate as well as other immigrants from the same countries,” Canadian Immigration Department spokeswoman Nancy Caron told Al Jazeera.

China was Canada’s “top source country” for overall new permanent residents in 2012, Caron said. Many were part of a wave of wealthy newcomers to Vancouver. Real estate analysts say a surge in housing prices came largely on the back of wealthy Chinese individuals attempting to move some of their assets into property.

But that didn’t affect Canadian immigration’s decision to end its program, Caron says.

As Immigration Minister Christopher Alexander recently told reporters: ”We don’t take our cue from the housing market.’”

University of British Columbia real estate professor Tsur Somerville told Al Jazeera that the hike was due to an influx of wealthy immigrants, mostly from mainland China, although statistics verifying who is buying up high-end Vancouver real estate remain unavailable.

And many in Canada’s West Coast metropolis seem to agree.

“I think it’s safe to say that this has become somewhat of a truism” that wealthy mainland Chinese bought up a considerable amount of Vancouver real estate, said Wes Regan, director of the sustainable local Vancouver business development group Hastings Crossing BIA.  

“We all hear the stories of real estate agents driving around wealthy Chinese investors or Chinese hoping to buy property to aid in immigrating to Canada, or real estate companies and developers making concerted efforts to market Vancouver properties to wealthy Chinese buyers,” Regan said.

Though more than 60 percent of condo sales are identified as investor sales, the median income and median housing prices are “just not adding up,” he said, meaning that average income is nowhere near that which could support the average house price. As such, Regan said, it’s “universally accepted in Vancouver that money from outside the city is driving much of our real estate development and pushing up housing prices.”

Still, Regan did say that some “caution racist overtones in this truism.”

Parking cash in property

If Chinese immigrants did indeed drive Vancouver’s recent real estate price boom, “you are looking at people looking to park cash out of places that are riskier,” Somerville said, adding that real estate is often an attractive option.

“If you’re living in a world where U.S. Treasuries are paying 1 percent [interest], there’s something to be said for wanting to park cash in an asset that holds value. Real estate at some level is less traceable and subject to being frozen than bank accounts,” he said.

Somerville emphasized that real estate salespeople are also complicit in driving up rents when a population of moneyed newcomers arrives.

“The old-time residents of Vancouver’s West Side complained of foreigners with wealth coming in, driving up prices so their kids couldn’t live in their neighbourhoods,” he said, “but they were more than happy to sell their property at twice the price to wealthy immigrants.”

Yam spoke to the phenomenon of Chinese émigrés buying up unused real estate.  

“They immigrate here, and sometimes don’t live in the U.S,” Yam said of wealthy Chinese who have already sought U.S. immigration status.

That appears to have been the case in Vancouver, where Somerville says many wealthy Chinese bought high-end condos in Coal Harbour. Somerville cited data indicating that close to 25 percent of Coal Harbour residences remained uninhabited in recent years. Meanwhile, some Vancouverites struggle to find more modest accommodations.

“I think it’d be impossible for a busboy at a restaurant in Vancouver to live in Vancouver on his or her own. They would need to live in a basement with someone else,” Somerville said.

While an influx of rich Chinese might be good in aggregate, it may pose a problem for individuals, according to Yam.

“When they come here, they buy real estate and drive real estate values up — that’s good. That makes the economy strong. But local people will have difficulties finding affordable housing,” Yam said.

And what Yam called a taste for luxury brands among China’s rich may breed resentment among lower-income Americans.

“The Chinese like to show their wealth,” Yam said. “They buy name brands and like to show their wealth. Sometimes it creates more tension.”

That too appears to have been the case in Vancouver, according to Somerville.

“Everyone wants to have poor immigrants who come and work really, really hard,” he said, adding, “Wealthy immigrants lead to resentment.”

© 2014 Al Jazeera America, LLC. All rights reserved.

Open houses and identity theft

Thursday, March 27th, 2014

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Storybrook at 7131 Stride Avenue Burnaby 71 homes in a four storey building by Ledingham McAllister

Thursday, March 27th, 2014

Find your happy ending at Storybrook in South Burnaby

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Forget about a crash, Conference Board gives housing market clean bill of health

Monday, March 24th, 2014

Julian Beltrame
Other

The Conference Board isn’t buying the notion that Canada’s housing market will suddenly crumble, saying the most likely outlook is for a modest decline nationally and in some specific markets.

The Ottawa-based think-tank argues in a comprehensive new look at real estate in Canada that the conditions for a crash simply don’t exist, despite numerous reports that the market is overbuilt and overvalued.

Rather, the report argues that with the possible exception of Toronto, housing starts the past three years have been roughly in line with the 20-year average.

Even in Toronto, there is only a “borderline” case that it could be overbuilt.

“At this point in the housing cycle, there is a risk that Canadian housing prices in some market segments are due for a modest correction,” the report states.

“Nevertheless, we believe that continued population growth, additional employment gains and modest mortgage rate increases will limit potential price declines in 2014 and 2015.”

There is a case for more dramatic price adjustment further out if higher mortgage rates start crimping affordability, the Conference Board says, but even then it is likely to be a soft rather than a hard landing.

In recent years, some economists and international organizations such as the OECD, the IMF, Deutsche Bank and The Economist magazine have described Canada’s housing market in stark terms, characterizing it as among the priciest in the world based on historical averages and other metrics.

But the consensus of economists within Canada has tended to be more subdued. Last week, the Canadian Real Estate Association also predicted a slowdown as mortgage rates start edging up later in the year, but it still saw the market over all growing in 2014 and 2015.

The Conference Board says fears of a housing bubble about to burst in Canada are exaggerated.

It says some of the evidence cited by correction hawks, including comparing home prices as a multiple of rental costs, don’t take into account historically low mortgage rates that keeps affordability steady. Citing Toronto, it notes that in 2013 mortgage payments consumed less than 20 per cent of average household income, the same as in 1993.

“Mortgage costs, not just house prices, are the principal deciding factor for potential home buyers,” says Robin Wiebe, the think-tank’s senior economist.

Even when mortgage rates do start rising, the Conference Board believes it will happen gradually and over an extended period. For instance, it forecasts rates with only a gain of 200 basis points – two percentage points – by 2017 or 2018.

But at current low rates, the typical homeowner on a posted five-year rate will have paid down $42,104 principal on a $100,000 in mortgage debt, so affordability won’t be seriously affected once it comes time to renew at a higher rate.

The Conference Board provides an outlook on six major cities:

- Vancouver: Moved back into balance last spring. Recent price gains will give way to slower advances in 2014.

- Calgary: Approaching seller’s conditions, noting strong price gains last year.

- Edmonton: Balanced, with brisk resale and price growth activity last year.

- Toronto: Balanced with healthy price growth. A major correction is difficult to see given solid employment and population growth.

- Ottawa: Market cooling due to falling employment from the government sector, flatter sales and tempered prices.

- Montreal: Flirting with buyer’s market conditions with sales and average prices having dropped somewhat last year.

© Copyright 2014 The Globe and Mail Inc.

Vancouver’s real estate bubble in no hurry to burst: report

Monday, March 24th, 2014

Matt Kieltyka
Other

The Conference Board of Canada says fears of the real estate market bursting its bubble in Vancouver are overblown.

The board’s initial housing briefing, released Monday, shows that the sales-to-new-listings ratio rose sharply throughout 2013, with housing prices growing at an “unsustainable” rate.

But the chance of a market crash, and subsequent pricing correction, are slim.

Instead, the report suggests prices will continue to grow at a slower rate.

“The housing market may be undergoing a correction in some regions and market segments, but it is more likely to be a soft landing than a bubble bursting,” said Robin Wiebe, senior economist for the Centre of Municipal Studies, in a statement.

The board’s report says most of the housing bubble fears centre around the price of homes, while it believes comparing mortgage to rent payments are a better indicator of affordability.

“Mortgage costs, not just house prices, are the principal deciding factor for potential homebuyers,” said Wiebe. “Mortgage rates are expected to rise this year, but not dramatically, because the Canadian economy remains in a slow-growth mode.”

Copyright 2001-2014, Free Daily News Group Inc.

China has big influence on Vancouver housing market: report

Monday, March 24th, 2014

Richard Dettman
Other

VANCOUVER (NEWS1130) – If you want to gauge the Vancouver housing market, look at the Chinese economy; that’s according to an analysis by the Conference Board of Canada.

The think tank says “Vancouver housing markets cannot fully escape the Chinese dragon.”

It says China’s influence on the local housing market rivals domestic factors such as mortgage rates, employment, and population growth.

Economist Robin Wiebe with the group says China has “strongly affected housing markets around the Pacific Rim,” including Vancouver’s.

“The Chinese GDP growth was more closely related to price changes in the Vancouver housing market than were employment conditions in Vancouver, or interest rates across the country.”

Wiebe says the correlation with China goes back to at least the 1990s. He adds other housing markets around the Pacific Rim have also been affected by China.

“Sydney, Australia is one and I’m told that Los Angeles has also been boosted by Chinese investment,” he says.

Wiebe thinks this “could mean that a substantial portion of Vancouver real estate purchasers do not need local jobs to buy any new home” or even need a mortgage.

He concludes that an improving Chinese economy “could help rekindle both new and resale demand in the Lower Mainland.”

The Conference Board says Vancouver and the rest of Canada are headed for a “soft landing” in the housing market rather than sharp drops in sales and prices.

© 1996-2014 Rogers Media. All rights reserved.

West End heritage house faces demolition

Monday, March 24th, 2014

Vancouver Heritage Society says the orange fencing is up at the Legg Residence, built in 1899 on Harwood near Bute. It’s urging people to lobby city council for new development plan

Martha Perkins
Other

The end appears nigh for the Gordon T. Legg residence on Harwood at Bute, but the Heritage Vancouver Society is making a last-ditch effort to urge city council to place a moratorium on its demolition.

Built in 1899 for the manager of Union Steamships of BC — Legg was also one of the founders of the Royal Vancouver Yacht Club —, the West End mansion is an “A” (primary significant) building on the City of Vancouver’s Heritage Register. “Designed in the British Arts and Crafts style, the house – with its broad overhanging jerkin-headed roof – typifies the style and grace of the late Victorian era and the patriotic connections to the Mother Country of many of Vancouver’s elite Heritage Vancouver says on its website.

A plan to restore and conserve it was agreed to by the city’s Heritage Commission in exchange for permission to build an 18-storey residential tower on the site. However, the society says city council turned down the proposal and requested that the developer create a new plan that would retain what’s believed to be the oldest tulip tree in Western Canada on the property. The developer’s new plan saved the tree, reduced the height of the Bing Thom Architects-designed building by one storey and included the demolition of the building. Since it met the West End zoning requirements, council’s permission was not required.

Now the orange fencing is up on the site, making Heritage Vancouver fearful that demolition is about to take place.

“The owner attempted for five years to find a way to save the house, yet all attempts were rejected by City Council,” Heritage Vancouver says. “We believe that this owner would be open to finding ways to retain the mansion. It is our strong belief that new developments in the City’s Heritage Conservation policies over the past two years since the proposal was approved give the city the opportunity to revisit the decision to demolish this building. Demolition now flies in the face of heritage recommendations outlined in the recently approved West End Plan and in the City’s Heritage Action Plan.”

Heritage Vancouver, which placed the mansion on its “most endangered” list in 2011, is encouraging people to lobby city councillors to stop the demolition until a new development plan can be put in place. Both a development and building application have been submitted to the City, but not yet issued. Once issued, a demolition permit would follow, Heritage Vancouver says.

If the demolition goes ahead, Heritage Vancouver says it will be the second time that this city council allowed the demolition of an “A” listed property. The first was Marpole Safeway in 2012.

Copyright 2014

10 Tips Home Buying & Selling Pitfalls

Thursday, March 20th, 2014

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Greater Vancouver Real Estate Market: February 2014

Thursday, March 20th, 2014

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Vancouver House at Howe and Beach a 52 storey highrise with 502 units by Westbank

Thursday, March 20th, 2014

Gesamtkunstwerk means “total design”. Westbank is planning to create an entirely new neighbourhood, Beach District, with its twisting condo tower and street-level housing, office and retail development

Martha Perkins
Other

It’s not often that a condo development gives us a new word. But Vancouver House doesn’t plan to be like any other condo development.

The word is gwerk, as in “Vancouver has to stop resting on its laurels; it’s got to gwerk it,” says Vancouver architect Trevor Boddy, the curator of an exhibition, Gesamtkunstwerk, which chronicles the evolution of what is hoped to be the next “special moment” in Vancouver’s architectural history.

Or here’s another example from Boddy: “’My office needs a real gwerk,’ which means a total redesign.”

Thank goodness the developers are giving us the new word because, otherwise, few of would be able to pronounce, let alone remember, gesamtkunstwerk. It’s a German word, popularized by the composer Richard Wagner, that translates into something like total work of art or synthesis of the arts.

Those are the words on the side of the building next to the Granville Bridge where the exhibit is being held. And while people have seen drawings of the gleaming twisting condo tower that will rise next to it, it’s what’s happening under the bridge that gives the concept a totally radical reputation.

Introducing the new Beach District, a new urban village that will run under the bridge along Beach Avenue. It’s going to be a collection of pie-shaped buildings that include rental apartments, offices and retail outlets. It will also be providing the nine o’clock gun a run for its time-keeping money. At nine o’clock every night, a spinning chandelier by artist Rodney Graham will twirl its way down over the street from its base underneath the bridge, dazzle the crowd and then twist back up into its perch for another day. But it won’t be the only time people walking under the bridge will want to look up. Westbank, the company behind Vancouver House, is commissioning a second installation of public art on the underside of the bridge. The light boxes will display a changing exhibit of photos produced with students from Emily Carr University.

People talk about the amazing planning that’s happening in Vancouver but they don’t talk about the moments that are very special,” Ian Gillespie, the principal at Westbank, said at a press conference moments after spring officially arrived in Vancouver. “What we lack are a few special moments and this is what Vancouver House will represent. It will be one of the lasting things that stays in [visitors'] minds…. Can we turn the Granville Street Bridge into a moment itself?”

James Cheng is the architect who nursed the concept from the time when it was a glint in Westbank’s eye seven years ago until last October, when the City of Vancouver gave it its blessing. Cheng, who worked with Arthur Erickson during the “mind-blowing” years of exciting development, has passed on the project to Bjarke Ingels whose Copenhagen- and New York-based firm, BIG, has been creating innovative and dynamic buildings around the world.

Cheng said the Vancouver we know today got its start in the 1970s when Mayor Art Phillips pulled together a team to think about what the city could be doing architecturally. The first projects centred on South False Creek, which blended the city’s talent pool. Then the federal government bought into a plan to turn its lands on Granville Island into a thriving food, arts and theatre district. After Expo 86 came Concord Pacific’s False Creek development, and then eyes turned to the downtown, with questions about how to turn Coal Harbour into a continuation of this waterside housing community.

But then we became a little complacent, a little too blasé about the accolades, Cheng said. We stopped creating special moments, which are like the punctuation marks of the city’s evolution. (Joo Kim Tiah, the CEO of Holborn, has a jump on the desire to create Vancouver’s iconic icon architectural image with his 63-storey Trump Tower and Hotel on West Georgia. Its slated to open in 2016.)

He noted there’s five decades between Erickson, whose Project 56 drawing of twisting buildings straddling English Bay is part of the exhibit, and Ingels.

Ingels said first knew of Vancouver as the home of two of his favourite writers, Douglas Coupland and William Gibson. He wanted to see the city the spawned such fabulous thinkers.

Vancouver House was born out of the need to figure out how to deal with the bridge and the odd-shaped pieces of land underneath it, he said. The bridge couldn’t be moved so the project had to work around it. The main condo tower starts on a 6,000 sq.ft. footprint at the base of Howe Street (where the Buster’s Towing lot used to be) to honour setback requirements but once it’s higher than the bridge, it starts to turn and add floor space until, at the top of its 52 storeys, its floorplate is 13,000 sq. ft.

We’re turning it into an urban village,” Ingels said, with the bridge’s underside becoming the canopy. It’s where all aspects of life — art, landscape, design, culture, human interaction — come together. It gwerks.

The exhibit, which is free at 1460 Howe Street, runs until May 18. Construction is to begin next year, with Rodney Graham’s spinning chandelier to be installed in 2017/2018.

Copyright 2014