FRANCES BULA
Other

Vancouver will never go back to being a beautiful but sleepy – and relatively inexpensive – town on the West Coast.

It has become one of the new landing sites on the continent for global capital and immigrants, say experts who specialize in what are called “emerging gateway cities.”

Vancouver was ranked fifth in the Americas in attractiveness for foreign direct investment last year by FDI Intelligence, a division of the Financial Times that deals with issues related to the movement of global capital. According to a Thomson Reuters report, the city has brought in $2-billion in foreign-investment venture capital between 1997 and 2011.

It is being highlighted as one of the new global hot spots, along with Houston and Miami, at a massive international gathering of investors, developers, planners and politicians in Vancouver this week.

The top 10 cities that FDI Intelligence identified as landing spots for foreign capital were, in order: New York, Sao Paulo, Toronto, Montreal, Vancouver, Houston, Atlanta, San Francisco, Miami and Chicago.

Like other gateway cities, Vancouver is benefiting from the energy and diversity that brings, said speakers at the Urban Land Institute’s spring meeting, where a focus of many workshops is figuring out where international money is flowing.

But this city has a unique situation that causes international money to have an outsize impact here.

Vancouver’s restricted space for growth, a function of being surrounded by mountains, sea and the American border, means foreign investors are willing to pay higher prices to get part of a limited resource.

“Vancouver is somewhat constrained, unlike Houston, which is on a giant tabletop flat plain,” said Mark Cover, a Houston-based senior managing director at Hines, an international real-estate investment firm. “So capital would look at Vancouver, and whatever piece of the pie it can get becomes more valuable.”

And that creates a downside to the investment benefits, said Vancouver’s deputy city manager.

“We’re seeing a lot of overseas investment buying up real estate – that is creating affordability problems,” Sadhu Johnston told the convention.

Mayor Gregor Robertson acknowledged that it means the city has to put extra effort into trying to funnel foreign money into other sectors besides real estate.

“We’ve got to remain vigilant in directing waves of investment to keep the city livable and to respect the character of the city,” said Mr. Robertson.

The mayor has had to deal with mounting resident opposition to offshore buyers of real estate in his two terms. But those in the condo industry, who are big supporters of his party, insisting that there aren’t that many foreign investors.

Mr. Robertson said he hopes that, as investors get more familiar with Vancouver, they will start to put their money into the city’s tech and other sectors.

“Real estate is a reflexive new-immigrant investment” that will change over time, he believes.

Being a gateway city creates other problems, as well.

For one, there’s a lot of pressure on Vancouver to become a major transfer point for fossil fuels.

“That doesn’t align well with our brand,” said Mr. Johnston.

Secondly, although the city’s huge population of relatively new immigrants is an asset to the city, not all of those new immigrants buy into the city’s brand, he said.

“The ‘greenest city’ does not translate very well to Chinese,” said Mr. Johnston. “Some people come from farms and they don’t want to start farming in their yards. It’s a struggle to translate that green city to different cultures.”

Like other gateway cities, Vancouver has a very high immigrant population, with 44 per cent of the city’s population born outside of Canada and half of that group having arrived in the city in just the past 20 years.

© Copyright 2014 The Globe and Mail Inc.

Daniel Tencer
Other

Canadian cities top the world for the real estate markets that make the best bet for long-term investment, according to a study from U.K. property developer Grosvenor — but they may not be such a great investment in the short term.

Toronto, Vancouver and Calgary took the top three spots, respectively, on the survey that aims to measure which real estate markets are the most resilient, and therefore make the best long-term investment.

“Canada, as a whole, is doing exceptionally well in developing resiliency,” Richard Barkham, group research director at Grosvenor, said in a statement.

“The top three most-resilient cities in Grosvenor’s Resiliency index are Toronto, Vancouver and Calgary. For investors in property and real estate, it makes Canada a very sound long-term investment.”

Barkham singled out Toronto for praise, saying the city’s long-term commitment to developing and upgrading infrastructure placed it at the top of the rankings.

The three top-ranking cities were the only Canadian ones surveyed in the study. Chicago came in fourth place.

But the study doesn’t put to rest the argument that Canada may be facing a housing bubble, as it doesn’t look at what could happen to real estate markets in the short term. Of the rankings’ top 20 markets, eight are in the U.S., whose housing markets are just now recovering from the bursting of last decade’s bubble.

In fact, in the short term, Canada’s real estate markets are more prone to ups and downs than average, Grosvenor suggested.

“If you are investing with a short-term perspective, a portfolio of the resilient cities won’t necessarily be less volatile; in fact you would have a more volatile portfolio if you only invested in the top five cities,” Barkham said.

To determine a real estate market’s long-term strength, the study looked at “environmental and social vulnerability and adaptive capacity,” covering areas such as infrastructure, environment and climate.

“In our view, environmental sustainability, community liveability and economic prosperity are all necessary components of long-term city resiliency,” Urban Land Institute CEO Patrick Phillips said.

Copyright © 2014 TheHuffingtonPost.com, Inc.

All 3 tops for ‘resilience’ and growth potential, says U.K. report

Susan Pigg
Other

Toronto, Vancouver and Calgary have been ranked as the three best places out of 50 cities around the world in terms of where best to invest in real estate for the long term, according to a centuries-old London real estate firm.

Their star ranking doesn’t come so much from short-term metrics like return on investment, but their longer term “resilience” — a stellar combination of “low vulnerability and high adaptive capacity,” says the unusual report, more than three years in the making, by the U.K.-based Grosvenor Group.

Adding to that ability to rise above the cyclical ups and downs of the real estate market is the fact all three Canadian cities have a “high level of resource availability” and “are well governed and well planned.”

In fact, they beat out London, New York and even Chicago, ranked as No. 4, for their strong investment potential over the coming decades.

“These Canadian cities have a great deal of economic dynamism,” said group research director and economist Richard Barkham, in a telephone interview from Vancouver where he’ll be discussing the research findings later this week at an Urban Land Institute conference.

“A lot of people just look at real estate investments in terms of short-term risk and return on investment. But we believe you need to look beyond that — to look at cities holistically in terms of their ability to adapt and improve.

“In the round, Canadian cities — and Toronto in particular — are exceptionally good real estate destinations in the long term.”

Cities currently the most popular with investors, such as New York and London, “are not necessarily those that will protect capital in the long term, the report notes.

Grosvenor, a privately-owned company with investment and development offices in 19 world cities, including Vancouver, has heard the talk about a Canadian housing bubble, concerns about condo overbuilding and Toronto Mayor Rob Ford’s ongoing extracurricular activities, Barkham said.

Researchers are aware of the challenges around transit in the GTA, a transportation system they still rate as great compared to many other cities in the world.

“We’re taking a longer term view of cities. You can clearly get local issues and characters that can create problems in a very short-term sense.”

And while Toronto house prices continue to climb out of sight, they lag well behind cities like London, which came in 18th in the resiliency rankings, in part because it’s now so prohibitively expensive.

New York was 14th: While it topped all 50 cities at “adaptive capacity” — for its sheer comeback ability in the face of major disasters like 9/11 and Hurricane Sandy — it suffered because of crime, lack of infrastructure investment, its vulnerability to extreme weather and “social exclusion.”

Grosvenor’s team of researchers has spent the last three to four years, said Barkham, assessing cities based on 10 parameters, from climate to governance, to planning, technology/learning, funding and “community” — access to affordable housing, education, health care, religious and cultural freedom, honest government and “reasonably crime-free living conditions.”

The “weakest 20 cities” are in emerging markets, eight of them in the so-called BRIC countries.

“Their vulnerability derives from inequality, poor infrastructure provision and environmental degradation, and, to a less extent, climate vulnerability,” says the report.

It adds: “In ranking cities we fully recognize that each is on a journey, some moving more rapidly than others towards prosperity and livability and each with their own constraints.”

© Copyright Toronto Star Newspapers Ltd.

Garry Marr
Other

New home construction plummeted in March, prompting at least one real estate doomsayer to predict an even larger decline is in the cards for the Canadian housing market.

Capital Economics, which has been predicting a housing decline for more than two years, jumped on the drop as evidence the long-waited decline in the market may finally be happening.

“The recent slowdown in housing starts is just the beginning of a long-term correction that will dampen economic growth this year and next. If, as we expect, new home sales soften further, in response to tighter credit conditions and softening investor sentiment, then the glut of newly completed unoccupied housing units will only get worse,” said David Madani, an economist with Capital Economics.

He’s now predicting after 187,000 starts last year, the figure will drop to 175,000 in 2014 and 150,000 by 2015.

The naysayer argument was bolstered by new evidence from Statistics Canada that building permits, which are applied for much earlier in the housing cycle, are already dropping.

The agency said municipalities approved the construction of 14,011 new dwellings in February but that was down from 23.8% from January. The biggest chunk of the decline was in multi-family dwelling units which were off 29.3% in February from a month earlier. Single family dwelling permits only dropped 14.3% from February to January.

Other economists may not have the same fears as Capital Economics but most seem to agree that a decline in the housing market is on the horizon.

Laura Cooper, an economist with Royal Bank of Canada, cautioned not to read too much into monthly statistics which can be exaggerated by the condo sector. She also pointed out extreme weather may have hit starts because some construction was simply delayed by the elements even though the demand was still there.

“As the weather impact eases, we expect housing starts activity to retrace this recent weakness,” she said, pointing out the six-month average for starts only went down slightly to 183,500. “Overall, our forecast for 2014 of 182,000 does represent a slowing from 188,000 in 2013. The monthly report for March likely represents an outlier on an otherwise moderating trend.”

Meanwhile, the real estate industry continues to paint a fairly bright picture for the housing sector with Royal LePage producing a somewhat optimistic first-quarter report.

“Suggestions of an overheated real estate market and bubble continue within the mainstream dialogue, but are becoming less frequent,” said Phil Soper, chief executive of LePage. “Of the core housing types, the condominium segment remains the most vulnerable to short-term price softness in light of increased inventory, but the situation is limited to only a few cities. The medium to longer term prognosis for this housing sector remains very positive.”

Royal LePage says in the first-quarter what it calls a standard two-storey house sold for $428,943 across the country, a 5.4% increase from a year ago. Bungalows rose 4.4% in value to $380,765 and condominiums were up 2.5% to $252,174.

Genworth Canada, the largest private mortgage default insurer, weighed in yesterday with its own survey on the housing market.

One of its findings was a population that still feels there is room for prices to grow. Genworth found 64% of respondents feel that prices will rise in the next 12 months, up from 58% when the same poll was done a year ago.

© 2014 National Post

Garry Marr
Other

“Suggestions of an overheated real estate market and bubble continue within the mainstream dialogue, but are becoming less frequent,” said Phil Soper, chief executive of LePage, in a release. “Of the core housing types, the condominium segment remains the most vulnerable to short-term price softness in light of increased inventory, but the situation is limited to only a few cities. The medium to longer term prognosis for this housing sector remains very positive.”

LePage says the spring market picked up in the final weeks of the first quarter after showing some slowness.

“It appears that it took only the slightest hint of spring to bring home-sellers out of hibernation,” said Mr. Soper, in the release. “We are finally seeing the arrival of housing inventory in seasonally appropriate quantities across the nation. When combined with pent-up demand following a particularly long and harsh winter, the stage is set for a robust 2014 spring market. This is particularly good news for buyers, as the home price spikes we have seen in a number of cities should be alleviated by this additional supply.”

Meanwhile, home building data released Tuesday suggests the construction end of the market is stablizing.

© 2014 National Post

Peter Meiszner
Other

Home prices are up for all types of homes across Metro Vancouver, according to the latest survey by Royal LePage.

The real estate company finds the average cost of a detached bungalow is up nearly five per cent to $1,062,318, while the price of a standard two-storey home jumped almost three per cent to more than $1,148,473.

The next most expensive housing market in Canada is Toronto, where the price of a detached bungalow rose 4.1 per cent to $589,250.

The most affordable major city for detached housing in Canada was Moncton, where the price of a detached bungalow declined 3.2 per cent to $153,000.

The price of the average condo in Vancouver nudged up only 0.3 per cent to $482,800, a figure Royal Lepage calls “relatively flat.”

View the Royal LePage quarterly house price survey for Q1 2014:

© Shaw Media Inc.

Airbnb users share tips … and the wealth

Heather Long
Other

Airbnb may soon be worth more than all but three of America’s largest hotel chains.

The website that lets you rent people’s homes and apartments is reportedly finalizing a deal to raise about $500 million more from private equity firm TPG Capital and other investors, bringing the company’s valuation to $10 billion.

That would vault Airbnb ahead of Hyatt (H), Wyndham Worldwide (WYN) and Holiday Inn owner InterContinental (IHG).

All this from a site that’s only been around since 2008.

Staying in a stranger’s place is not only acceptable now, but for an increasing number of people, it’s the preferred way to book a vacation rental. It helps tourists feel more like locals.

The trend has been dubbed the “sharing economy.” And as that name suggests, investors and corporate executives aren’t the only ones sharing the wealth. Airbnb is also making “hosts” — people who list their properties up for rent on the site — a lot of money.

Related: Airbnb cozies up to cities

We asked three of Airbnb’s top hosts about their experiences and whether they think Airbnb lives up to its reputation – and valuation – especially in light of recent news about tax issues and questionable activities taking place in rentals, including an X-rated “freak fest.”

Each of these hosts rents his or her place more than 100 days a year and makes over $15,000, enough to pay most, if not all, of their rent or mortgage.

Perry Hoffman, a host in California, has even had his home featured on Airbnb’s Top 40 “wish list” of neatest places to stay in the world.

What are the benefits to being an Airbnb host? I got married and I moved. I had this house in this beautiful place. It made sense to rent it out. For one, I would like to share it with people because everyone who has ever stayed there comes away with such a great experience. It’s so different in the desert. The house is in the middle of nowhere. It’s a beautiful setting. Part of this is just wanting to share that experience with people. And it’s a good source of income.

How did you get started? About a year ago, I was on another site, but I kept hearing people talk about Airbnb. Every time I turned around, someone was talking about it. Plus, it’s nice because they don’t ask for a yearly fee. So it’s very attractive for hosts. 

Any bad experiences? I don’t care as long as they don’t hurt anything. Really, I think there was only one [bad] time, and this was absolutely before Airbnb a couple of years ago. There were six people. Now I don’t do that anymore. Four is the max because I feel like once you get to six, you’re possibly asking for trouble. Then it’s a party. I had to clean up so many cigarette butts. They didn’t steal anything, but man they made a mess.

How do you screen people? The people that write me become like my friends. They tell me their life story. They really want to communicate who they are to me. That’s mostly a positive thing. When they walk into the house, they immediately communicate with me. They say, ‘Wow, we’re so happy to be here. We love your home.’ And if there’s anything they can’t figure out, it’s easy to communicate back with me.

What’s your biggest issue with Airbnb? Not allowing us to communicate until you reserve. I find that a bit annoying, but I understand where they are coming from because then you could just make arrangements outside and PayPal each other. The taxes have been pretty easy. I contacted the county where my house is and they send me a form every three months, and I pay my percent.

 Is Airbnb worth $10 billion? I had never thought about it, but maybe I would buy some stock if I could. They only seem to be going forward. It’s just more interesting to stay in someone’s unique home than to stay in a hotel. I don’t know if things will change the bigger [Airbnb] gets or the more popular they get, but I imagine it will just benefit me to get more people.

What are the benefits to being an Airbnb host? I made $15,000 last year through Airbnb. I charge about $125 on average. If I go away for a weekend, I rent my apartment.

How did you get started? In 2008, Obama had just been elected and I was living in Washington DC, and I thought I should really take advantage of this moment. I rented out my apartment for more than a month’s rent for inauguration weekend. That was the world to me, an entire month’s rent.

Any bad experiences? No. When I travel, I bring my laptop and iPod with me. I hide my jewelry. I figure if you’re going to walk out of my apartment with my TV or sofa, you’re probably paying me more than my sofa or TV is worth.

How do you screen people? To be honest, if someone shoots me an email, I don’t just say yes. I have an exchange with them. I ask them questions about what they want to do in my neighborhood. It’s part of your responsibility to get someone that you trust. Just because Airbnb verifies [someone’s identity] doesn’t meant anything. That’s why I have a conversation with everyone and poke around. I’ve probably had 2 or 3 different people where the conversation was getting weird and so I didn’t let them stay.

What’s your biggest issue with Airbnb? I don’t think they’re clear about taxes and regulations. They host conference calls every now and then and they ask all New Yorkers to call in. I have emailed back multiple times saying giving me 24 hours’[ notice isn’t possible for me to be on the call. They also post blog posts here and there saying everything is OK and ‘we’re working on it’, but this is my apartment and it’s part of my livelihood.

Is Airbnb worth $10 billion? I’ve been doing this for six years now. It has grown in so many ways. I can’t explain it. In very beginning when I was talking about doing it, my parents were like, ‘you are crazy!’ Even my friends had similar thoughts. Now, it’s normal amongst people my age [in their 20s] where you go on vacation to no longer stay in a hotel. As more people hear about it and hear different people’s stories, everyone is feeling more and more comfortable.

What are the benefits to being an Airbnb host? How compelling the economics can be for someone in my position, a young professional who travels a lot. I spent 50% of my time (about 180 nights) last year away from San Francisco, yet I basically was able to pay for my rent by renting my apartment out on Airbnb. That’s super compelling economics and can change other economic decisions I make in my life. I’m more willing to travel now because I’ll make a few hundred dollars on Airbnb and that will pay for my flight or hotel.

How did you get started? I’ve been a host and a guest on Airbnb for the last 18 months. I originally decided to list my place because I was interested in learning more about the company and participating in the “sharing economy” first-hand. The same part of me wants to practice being an Uber driver was the same part of me driving me to join Airbnb. (Note: I haven’t been Uber driver yet because I don’t have a car and they don’t work with scooters yet.)

 Any bad experiences? No. I’ve had 30 to 40 guests. The worst thing that happened was that someone smoked in my apartment. It was annoying, but it worked out.

How do you screen potential guests? I typically trust Airbnb to do the screening. I have enabled this feature called Instant Book, so anyone with positive reviews can book my apartment. I know something could happen. I guess I don’t really have possessions that are super-duper important to me. And Airbnb has stepped up and done the right thing when really bad things have happened. 

What’s your biggest issue with Airbnb? Airbnb has a couple of things to do to improve the host experience. The biggest thing is continuing to convince people that it’s a safe and normal thing to do. When I tell people I rent my apartment out on Airbnb, they sort of wonder ‘Wow…why? What do you do with your stuff?’ There’s more user education that Airbnb has to do. There’s also some stuff they have to do to make it easier to manage [your property]. I wrote a recent blog post on this, especially pricing issues.

Airbnb also has a lot to improve on the guest experience. It’s still a little bit too hard to book. I find that often when I’m traveling, I’ll still book a hotel because you know exactly what you’re going to get.

Is Airbnb worth $10 billion? I think the economics for Airbnb’s business is very attractive because they don’t have any of the major capital costs that a normal hotel chain has and they can grow to the extent that people want to become hosts and stay at Airbnb. So Airbnb just has to focus on making it a really awesome experience for their customers.

We’re shifting from an ownership society to a sharing economy. I think the idea is that you know, historically, people buy houses and they buy cars and they buy power tools and they buy golf clubs they use three times of year. And it’s actually a pretty inefficient way of using those goods.

© 2014 Cable News Network

Other

Lower Lonsdale is one of the most popular neighbourhoods on the North Shore, with everything you could want at your doorstep from shopping to parks and recreation and transit. The community is almost complete with Fairborne’s boutique Capstone development as the icing on the area’s cake. These 71 homes in a six-storey concrete and glass building by the award-winning Buttjes Architecture Inc. are the symbolic completion of this established neighbourhood and will be ready for buyers to move in as early as this summer.

“This is definitely the best location in North Vancouver for walkability, amenities, and shops,” said Capstone Sales Manager Kimberly Gabrielson. “John Braithwaite Community Centre is right across the street; and it’s a short walk across the pedestrian overpass to the Seabus terminal, while the specialty shops and fresh food grocers at Lonsdale Quay are only two blocks away.”

Capstone offers a mix of one bedroom and dens and two-bedroom homes with 700-square-foot one bedroom and dens starting from $399,900. “We still have an excellent selection of homes,” said Gabrielson, “and, for a limited time, we’re offering $8,000 off the purchase of a west-facing one bedroom and den. You only need five per cent down to make your dream of being a homeowner come true.”

Capstone residents will enjoy generous outdoor space with decks intentionally positioned to optimize sunlight. The warm, bright interiors are designed with thoughtful, efficient floor plans and include laminate oak flooring throughout the entry, kitchen, living and dining rooms, premium stainless steel appliances, double-thick granite countertops in the kitchen with tile and glass backsplash, natural stone countertops in the bathroom with porcelain floor tiles and marble and limestone wall tiles.

Nine-foot ceilings and oversized windows make this concrete building stand out from the competition and several remaining homes offer views of the ocean and mountains.

First-time buyers are not the only group to find Capstone irresistible,” said Gabrielson. “The full-sized Fisher & Paykel appliances and washer/dryer are hot buttons with buyers looking to downsize but not downgrade. Many of the people who have already purchased a Capstone home are local residents who understand the value of this location and recognize what a quality product this is.”

Fairborne has been active in the mid and lower Lonsdale areas for almost two decades and has seen the area transform from a mish-mash of parking lots into today’s truly vibrant community. The company’s commitment to developing some of the Lower Mainland’s most memorable homes in this neighbourhood has not gone unnoticed. Its Time development, for instance, won the Urban Land Institute’s prestigious Award of Excellence in Urban Development and was named one of 10 noteworthy transit-oriented projects worldwide.

Capstone’s sales centre is open daily from noon to 5 p.m. (except Fridays) at 135 West 1st Street in Lower Lonsdale. For more information:

© 2014 Real Estate Weekly

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