Archive for July, 2014

The next urban hot spot

Thursday, July 31st, 2014


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Solo District soars high in North Burnaby

Thursday, July 31st, 2014


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Vancouver rents seen rising faster than home prices

Thursday, July 31st, 2014

Tara Perkins

Rents are poised to grow faster than home prices in Vancouver, rating agency DBRS predicts.

In the long run, the rental market should move along with the housing market in any given city, DBRS suggests.

But, as you can see in the chart below, home prices have grown much more quickly than the cost of renting in Vancouver over the past decade or so.

The second chart shows that the same thing happened – though more quickly – in the United States before the market there crashed, bringing prices back in line.

But DBRS does not foresee a crash occurring in Vancouver. Rather, it expects that a growing number of people will choose to rent rather than buy, driving rents up and softening the outlook for house prices. “It is more than likely that rental rates will increase at a faster rate than that of home prices going forward,” the rating agency says in a report. “Furthermore, a major correction seems unlikely given the long-term stability of the Vancouver market.”

It points out that Vancouver is Canada’s most expensive city, with prices having almost doubled since 2005. But, in DBRS’s opinion, the lack of available land to develop homes on, coupled with population growth, should help insulate the housing market from shocks. Vancouver’s population has grown 47.8 per cent since 1981, while New York’s has grown 17.8 per cent, it points out.

Vancouver home prices recently went through a slowdown, growing by only about 1.7 per cent per year for the post-recessionary period between 2008 and 2013, DBRS says. But they have rebounded recently.

© Copyright 2014 The Globe and Mail Inc.

Airbnb – be carefull when renting on this site for over 30 days

Wednesday, July 30th, 2014

Part-time landlords warned about using Airbnb


From capitalizing on world-class events to wanting help with monthly mortgages, more homeowners are embracing short-term rentals through third party service providers.

And while it’s a good income generator, such part-time landlords are being warned once again that their welcome and hospitality could prove very costly in the end. 

This call is being made in light of the “Airbnb squatter” tale in San Francisco. Cory Tschogl rented her condo for 44 days on the service, and two weeks after the checkout date, the guest is refusing to leave.  According to Californian law, landlords cannot evict tenants once they have been in place past 30 days so the unruly guest can stay (rent-free, as he is doing) for a while.

“This shows, once again, the risks associated with renting out accommodation on a short-term,” warns Davelle Morrisson from Bosley Real Estate in Toronto. “It’s a great service but you really have to be very careful of who you rent to. Most guests do not stay past two weeks, so anything past that should be an immediate red flag.”

While Airbnb is growing in popularity amongst travellers, the accommodation site is still in legal limbo in Quebec following years of controversy and months of formal consultations.

The law there requires anybody renting out accommodation for less than 31 days to obtain a $250 permit from la Corporation de l’industrie touristique du Québec. Renters must also be covered by civil liability insurance totalling at least $2 million per claim, and must pay a host tax (usually between $2 and $3 a night) to Revenue Quebec.

Many operators, according to officials, are illegal in that they do not have such government approval. Such homeowners could face fines ranging from $750 to $2,250.

Copyright ©2009 KMI Pty Ltd

Canada’s most expensive housing market not headed for crash, says credit agency DBRS

Wednesday, July 30th, 2014

Garry Marr

A leading credit rating agency says Canada’s most expensive housing market may not be all that affordable for the average family, but despite that no major correction is coming Vancouver’s way.

DBRS  looked at 39 markets in Canada, the United States and Australia, releasing its focus feature on Vancouver Wednesday.

“Based on historical data, the Vancouver market does not appear to be significantly overheated,” said DBRS, in the report. “Therefore, a correction of any magnitude may not be justified given the strong fundamentals in the market.”

This month the real estate board of Greater Vancouver said June competition among homebuyers was as strong as it had been since  2011.

Property sales in the region were up 28.9% in June from a year ago while the average sale price of detached home reached $1,200,539.

DBRS acknowledged there are affordability issues and said home prices continue to rise faster than disposable income, “threatening the affordability of housing for many Canadian families” in the market.

DBRS says given the stable economy and the low interest rate environment that could persist for the foreseeable future, it’s hard to envision a correction.

“It is difficult to foresee catalyst that could create a significant price correction in the Vancouver housing market over the medium term,” said DBRS.

In its study, DBRS noted from 1994-1998, Vancouver did have a correction and prices dropped 9% from peak to trough. From 2008-2013, prices increased 1.7% annually through this post recession period. It is over the last year that prices have rebounded with a 9% gain, said DBRS.

The ratings agency also stressed Vancouver has natural barriers that limit development in the city and controlled supply.

At the same time, DBRS says the quality of living in Vancouver is not a factor to be ignored in continued long-term demand.

“Vancouver’s status as one of the Canadian cities with the highest quality of living helps ensure continual population growth, says DBRS. “The city’s diversity and year-round mild weather help attract immigrants, thus keeping demand for housing high.

The agency offered shorter comment on other Canadian cities.

In Calgary, it says a well-paid work force has kept the housing market strong as the city has avoided a worldwide economic recession with its oil and gas economy. DBRS said continued development of new home supply has keep prices stable and it expects more of the same even if the Alberta economy slows down.

In Montreal, DBRS noted its housing price index saw declines from 1990-99 but is up 150% since then. “Housing prices haven’t been strongly impacted by the financial crisis and exhibit a stable, upward trend,” the agency said.

In Toronto, DBRS say restrictions on development allowing it to “expand up but not out” have helped maintain upward pressure on prices.

© 2014 National Post

Zillow announces acquisition of Trulia for $3.5 Billion in Stock

Tuesday, July 29th, 2014


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Concord goes to court over False Creek park site

Tuesday, July 29th, 2014

Developer wants to be involved in court action launched by residents over False Creek property

Mike Howell
Van. Courier

Developer Concord Pacific is heading to court in an attempt to stop The False Creek Residents Association from having the company’s sales centre removed from a piece of property long destined to have a park built on it.

In an affidavit filed July 24 in B.C. Supreme Court by Concord, the company said losing the centre would be costly and negatively impact its ability to sell and market condominiums on its False Creek lands.

“If Concord were required to move the presentation centre, it would cost in the range of two to three million dollars and result in the presentation centre being closed for approximately six to nine months,” said the affidavit filed by Matthew Meehan, Concord’s senior vice-president of planning. “A closure of the presentation centre would result in a loss of business and revenue to Concord.”

The sales centre sits on a largely vacant nine-acre property between the Telus World of Science and Rogers Arena. The property was recently used by the Cirque du Soleil.

Concord wants to be “a party” to the residents’ legal action rather than an intervenor – an important distinction, the company says, because party designation gives Concord the ability to appeal a decision given by the court.

“It is abundantly clear that Concord has a direct interest in the outcome,” the affidavit said. “Concord owns [the park site]. A granting of the relief sought would eliminate Concord’s ability to operate its presentation centre, or other commercial activities, in the area.”

The company is making its case under the so-called “hardship provision” of a city bylaw, which allows for temporary uses on a property planned for a permanent development.

At issue for the residents’ association is that Concord long promised to build a park on the property. Since that promise was made almost 30 years ago, Concord has used the property for its sales or presentation centre and earned money from leasing it to Cirque du Soleil, the Molson Indy and other commercial interests. As the Courier previously reported, the Quebec government paid $1.3 million to set up the Maison du Quebec on the property during the 2010 Winter Games.

Added to the interest for the residents’ association is the fact the property was assessed at $192,000 in 2009, then $400,000 in 2010. The residents’ association appealed the assessment, only to have the Property Assessment Appeal Board reduce the property’s value to one dollar. The board said Concord’s cost of completing the seawall at $7.3 million and creating the park for $9.8 million were reasons for the low assessment.

In May, the residents’ association filed a petition in B.C. Supreme Court to challenge the city and Concord over inconsistencies with zoning of the park site and the official development plan for the area.

“Both clearly stipulate that [the park site] is to be used strictly for public park and recreation purposes,” the residents’ association said in a release Tuesday. “Even the relaxation provisions available under the Vancouver Charter stipulate that interim uses must be compatible with the permanent intended use of the property.”

The City of Vancouver granted Concord a temporary permit in 2005 to build its sales centre on the property and has continued to extend the permit, although the most recent permit expired May 16, 2014.

 The extension comes as the city is considering the demolition of the Georgia and Dunsmuir viaducts, which back on to the property. Council is expected to make a decision next year on the fate of the viaducts and Concord says in its affidavit that is one of “the key steps” that must occur before the park – or Creekside Park Extension as it is referred to in planning documents – can be built.

Also, the company and the city agree that another piece of Concord property near Rogers Arena first has to be developed before the park can go ahead. That’s because potentially contaminated soil from that site – from the area’s industrial past – would be dumped on the park property.

Concord’s application to be a party in the residents’ legal action will be heard Aug. 26. The residents’ case is scheduled to be heard Sept. 11.

© Vancouver Courier

CMHC turns up scrutiny of condo investors as concerns of overheated market grow

Monday, July 28th, 2014

Katia Dmitrieva

Canada’s housing agency is set to publish results of a Toronto and Vancouver condominium-owner survey as it seeks to address economist and policy maker concern that not enough is known about what’s driving price gains, documents show.

Canada Mortgage & Housing Corp. surveyed condo investors – those who purchased at least one condo that isn’t the owner’s primary residence – in August and September 2013, according to documents obtained by Bloomberg through an Access to Information request. Most of the content, including the number of people Ottawa-based CMHC contacted, the survey questions and the results, was redacted.

Calls are growing louder for more detail about who’s investing in the nation’s condo market, including how much is owned by foreigners, and what the risks are. Policy makers have warned for the past half decade a bubble may be forming in Canadian real estate, and some analysts have said prices are as much as 20% overvalued.

The lack of condo-ownership data in Canada “is a shortcoming,” Sal Guatieri, senior economist in Toronto for Bank of Montreal, said by phone July 22. “The more data, the better the quality of the data, the better the policy making.”

CMHC’s Condominium Owners Survey will be “factual and provides a descriptive profile of condominium investors,” the documents show. The agency expects to release the results of its survey, which doesn’t give an estimate of the share of foreign and corporate investors, in early August, according to a July 25 e-mail from spokesman Charles Sauriol.

Lowest Rates

National home sales reached the highest level in four years in June and prices in Toronto and Vancouver are up 12% and 29% on the year, a realtor report this month showed. Historically-low mortgage rates are adding momentum, and the Bank of Canada has kept its benchmark policy rate at 1% since 2010.

The survey to be released in August is CMHC’s second attempt. The agency conducted a telephone survey of Toronto and Vancouver condo investors in August 2012 in response to “industry concerns about the extent and nature of condominium investment and its sustainability,” according to a mostly- redacted August 2012 CMHC board presentation. The survey intended to determine what investors planned to do with their units, how long they intended to hold them, what would motivate them to sell, how much they put down and the source of the down-payment.

That survey wasn’t publicly released because it “didn’t produce results that were reliable enough,” CMHC’s Sauriol said in his July 25 e-mail.

Foreign Investment

The housing agency is monitoring foreign investment in real estate by tracking land registry data, hosting investor round tables and conducting surveys into vacancy rates and rents, according to the 2012 board presentation.

“There is no comprehensive data source of foreign investors in the Canadian housing market,” CMHC Interim Chief Executive Officer Douglas Stewart said in an Aug. 21, 2013 memo to Canada’s Employment Minister Jason Kenney. “Although some estimates can be gleaned from some municipal land registries, those estimates are not reliable.”

Stewart’s memo was in response to Kenney’s questions from a CMHC briefing about foreign investment in the Canadian housing market, the documents show. Kenney also asked about the impacts of changes to the Immigrant Investor Program in Vancouver and Australia’s foreign investment policy.

Investor Roundtable

Participants at a Toronto condo investor roundtable that CMHC hosted in March 2012 cited unidentified brokers who estimated foreigners with no ties to Toronto account for about 2% to 3% of total condo purchases in the city, according to meeting minutes that don’t include participant names or affiliations. The minutes, included with the other documents obtained by Bloomberg, had already been made public.

Fifteen percent of the stock managed by rental management companies is owned by foreigners, based on filings of non-resident tax forms, according to the roundtable minutes.

Demand for Toronto condominiums pushed prices to new highs in the second quarter. The average price rose 2.8% from a year earlier to a record $554 per square foot, even as the number of high-rise homes in the pre-construction, under construction and occupancy phases reached a high of 105,027 units in the city, Urbanation Inc., a Toronto-based consulting company, reported July 25.

Condominiums account for more than 1.6 million Canadian households, or about 12%, and more than half of those are located in the three largest markets Toronto, Vancouver and Montreal, according to Statistics Canada data.

“The gap between the importance of the real-estate market to the economy and the lack of publicly available information on it is mind-boggling,” Benjamin Tal, deputy chief economist at Canadian Imperial Bank of Commerce, wrote in an April note to clients. “What is the share of foreign investors in the condominium market?”

© 2014 National Post

Rumors Now Widely Reported: Zillow in Talks to Acqure Trulia

Friday, July 25th, 2014


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Tsawwassen Springs brings resort living to the Lower Mainland

Thursday, July 24th, 2014


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