Archive for March, 2015

Mainland Chinese buyers are really driving markets from Sydney through New York to London, and Canadian cities like Vancouver

Tuesday, March 31st, 2015

Mulroney: Canada must get creative with foreign ownership in Vancouver

Jordan Maxwell

Canada’s former ambassador to China, David Mulroney, has jumped into the debate surrounding foreign ownership in Vancouver’s real estate market and how it affects affordability in his new book, Middle Power, Middle Kingdom. “Mainland Chinese buyers are really driving markets from Sydney through New York to London, and Canadian cities like Vancouver — particularly Vancouver — are no exception,” Mulroney, who served as Canada’s ambassador to China from 2009 to 2012, told The Early Edition’s Rick Cluff. According to the CBC, he said it’s difficult to track the actual number of foreign owners — and their impact on the housing market — but he believes it has been huge force in the lack of affordable housing in Vancouver. “Is it having an impact on price? I know there’s a lively debate in Vancouver about that. I’m on the side of those who think it is having an impact on price, but that debate should continue,” he said. “Really smart policy makers are thinking about ways to deal with this in ways that keep their cities welcoming — and, gosh, we want that above all — but also protect people on fixed incomes or think thoughtfully about vacancies.”

GDP falls; real estate industry partly to blame #LesTwarog

Tuesday, March 31st, 2015

Justin da Rosa

Canada’s real gross domestic product (GDP) fell 0.1 per cent in January due in part to sagging construction and diminishing output from real estate professionals.

“Construction fell 0.4 per cent in January. Both residential and non-residential building construction were down, while engineering construction was up,” an official Stats Canada release states. “The output of real estate agents and brokers decreased 5.7 per cent in January, a fifth consecutive monthly decline. The decline was mainly the result of weakness in the home resale market in Alberta and Saskatchewan.”

January’s slight decline follows an uptick of 0.3 per cent in December.

The banking sector, meanwhile, enjoyed a slight increase.

“The finance and insurance sector was up 0.2 per cent in January following a 1.3 per cent gain in December,” the release states. “Both banking and insurance services increased while financial investment services declined.”

Interestingly, oil and gas extraction rose in in January to 2.6 per cent after a notable (2.1 per cent) decline in December.

“Non-conventional oil extraction posted a notable gain, following two consecutive monthly declines, as production rose following maintenance in the fourth quarter at some oil sands facilities,” the release states. “However, both conventional crude petroleum and natural gas extraction were down in January.”

Crude oil prices continued to decline in January, following a downward trend started in July 2014.

Copyright © 2015 Key Media Pty Ltd

Alberta’s new budget spares real estate market

Monday, March 30th, 2015

Jordan Maxwell

Alberta’s new provincial budget was rife with tax increases, including those relating to real estate, but agents on the ground say those fee increases aren’t likely to really impact the market. “Alberta right now is an interesting time,” says Duane Ritter, a sales rep in Edmonton. “I don’t really believe the budget will have any effect on real estate… It’s just going to take more money out of our pockets.” The budget, announced last Thursday, called for increases to many of the province’s taxes. Most notably, Alberta has done away with a flat 10 per cent tax, instead adding two brackets for those earning more than $100,000 in taxable income. The greatest potential impact to real estate, however, is an increase to the land title and mortgage registration fees. As the Calgary Herald reports, those are expected to spike to $1,230 on a $500,000 property. That’s a four-fold increase from the previous fees of $290. “I don’t think there’s anything major that came into the budget that’s going to deter real estate sales,” says George Bamber, a broker/owner in Calgary. “It’s another expense that people don’t really want to incur, but it’s going to be the cost of doing business.” Read more here

Copyright © 2015 Key Media Pty Ltd

“Stacked Towns” an Emerging Form of Housing for Vancouver #LesTwarog

Monday, March 30th, 2015

With detached homes now unattainable for many, there are innovative alternatives such as this housing form found in Toronto and Montreal, says Michael Geller

Michael Geller Vancouver planner,

My parents’ first home purchase was a detached single-family house in Toronto. My first home purchase was a detached single-family house in Ottawa. However, I do not expect either of my either of my daughters to buy a detached single-family house as their first home. Indeed, it is possible they may never be able to afford a detached single-family house in Vancouver.

Instead, they will likely live in various forms of multi-family housing for most, if not all of their lives. In so doing, they will become like the residents of most world cities outside of North America where multi-family living is the norm.

Today, most Vancouver area first-time buyers chose to purchase an apartment in a low-, mid-, or highrise building. While they may not like having to enter their suite from a shared corridor, they really do not have a lot of choice since Vancouver seems to be a city of detached houses or apartments, with little in between.

However, those living in other Canadian cities often have a greater variety of choices. These include Montreal-style maisonettes, which place single- or two-storey units stacked above another, accessed by exterior staircases. In Toronto they can buy stacked townhouses, or “stacked towns” as they are often called. What distinguishes these units from traditional apartments is that everyone has their own entrance from the street via a front porch.

Another distinguishing feature is the stairs – often lots of stairs, which can be challenging for those with baby strollers, luggage and grocery buggies, and a real obstacle for those in wheelchairs. However the experience in other cities demonstrates that many first-time and move-up buyers are willing to trade off the additional stairs for direct access from the street.

Essentially, stacked townhouses are two or three separate dwellings stacked on top of each other, but all contained in a single structure resembling traditional row houses. They all have separate entrances, but only the ground-level unit can enjoy any private yard space. However, the upper units often have outdoor space on the roof.

In Toronto, stacked townhouses tend to be infill developments on land that is zoned for residential development, but not for high-density buildings.

As a result, stacked townhouses can often be found in neighbourhoods with established schools, parks and community centres.

While stacked townhouses are not common in Metro Vancouver, there are still some examples around the region. Both cooperative and market condominium units were built in the 1970s and 1980s within the City of Vancouver’s innovative community development along the south shore of False Creek. There are also many creative examples in the nearby Fairview Slopes neighbourhood.

More recently, Adera Homes has built some very fine examples in Burnaby and North Vancouver. Adera president Norm Couttie often jokes that their name is a misnomer since nothing really stacks, especially the plumbing. However many first-time buyers have been attracted to Adera’s communities and the company is to be congratulated for its willingness to experiment with this type of housing.

One of the design challenges for architects and builders is how best to accommodate the parking. While the easiest solution is to put it underground, this can be costly. Furthermore many homebuyers would prefer not to have to park in an underground garage if they can avoid it.

While these developments have “through units” with windows at both front and back, similar to a conventional townhouse, some higher-density stacked townhouse developments are sometimes built in a back-to-back configuration. The resulting suites are not unlike apartments in that their windows generally face in only one direction, except for corner units.

The advantages of this arrangement are even lower prices and the potential to achieve densities in a four-level building equal to a highrise apartment building.

Another key design challenge is achieving adequate sound separation between the suites, since there are often living spaces above or beside bedrooms, and bathrooms all over the place.

When comparing a stacked townhouse to an apartment it is important to note that the stairs can consume a fair amount of area so that a 900- square-foot stacked unit may have less usable space than a 900-square-foot apartment.

Notwithstanding all these shortcomings, I believe stacked townhouses could offer another housing choice, especially as small infill developments in established neighbourhoods. They are not for everyone, but they may be just right for you.

© 2015 Real Estate Weekly

Housing co-ops face tough decisions as subsidies end

Thursday, March 26th, 2015

Frank O’Brien
Van. Courier

Aging B.C. housing co-operatives are in limbo as federal government subsidies end and restrictions limit their options. Ironically, for some of Vancouver’s 108 non-profit housing co-ops, real estate speculation could be the saviour.

There are 264 housing co-operatives in B.C., mostly in Metro Vancouver. About 6,000 Vancouver residents live in co-ops, some of which are located on prime West Side real estate.

The Government of Canada started building co-operative housing in the 1970s and ’80s to provide housing during a crisis in the rental sector, explained Thom Armstrong, executive director of the Co-operative Housing Federation of BC (CHF-BC).

Under the agreement, Canada Mortgage and Housing Corp. provided co-ops with a subsidy for the entire life of the mortgage, which allowed co-ops to keep rents below market value. For a percentage of members, the subsidy kept rents at 30 per cent of their income. Those people, an estimated 1,600 in Vancouver, include single mothers, new immigrants, people with disabilities and the elderly.

All of the federally-funded co-ops signed operating agreements with CMHC that ran for either 30 or 35 years. Starting this year, those agreements — and the subsidies —  are ending. About 70 per cent will have expired before 2020 and 2017 will be the peak year for agreements to end.

“Housing co-ops face a horrible choice,” Armstrong said if the province, which is now responsible for housing, doesn’t step up with funding. “The co-ops either have to cover the rental subsidy themselves or stop maintaining the asset.”

Armstrong estimates “from $20,000 to $80,000 per door” is needed in upgrades to keep the decades-old structures liveable. “We estimate a total of $400 to $500 million in reinvestment is required,” he said.

Housing co-ops are able to borrow funds to cover such repairs and maintenance, Armstrong said, and realize they will have to raise rents. But, without government assistance, they cannot afford to also continue subsidies for the lowest-income residents, most of whom would be forced out.

© 2015 Vancouver Courier

Binning House excellent location and quality finishes

Thursday, March 26th, 2015


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How to protect secondary suites

Thursday, March 26th, 2015

Jennifer Paterson

A Hamilton city councillor has jump started a conversation about simplifying the application process for secondary suites in seeking to penalize those who add those units without the necessary go-ahead.

“Perhaps the process needs to be improved to reduce the processing time for this type of application or more education of the public is required,” wrote Doug Green, a former municipal employee and an investor, on the CREW Forum.

It has long been common practice for investors to convert a single-family home into a multi-unit building by adding in a basement suite, often by sidestepping the permit application process until after the work is done.

But is has also been a fantastic revenue stream for the average homebuyer who would not otherwise be able to afford their mortgage. “Closing down these suites will do nothing but put a squeeze on much needed affordable rental housing,” wrote investor and broker Omer Quenneville. 

“If this city councillor wants to shut it down, be prepared to offer an alternative.”

Hamilton councillor Matthew Green has filed a motion that would see the municipality allowed to amend the policy around the conversion of single-family homes so as “not to continue to reward those property owners.”

The councillor got involved in the discussion on the CREW Forum too, adding that the request is for future non-permit infractions and not a crackdown on pre-existing, non-conforming units.

“I find it curious that you are so shocked that I’d request that ‘investors’ follow the legal process for conversions in our neighbourhood,” he wrote. “I do appreciate the warning to anyone looking to develop in Hamilton centre illegally.”

Claire Morris, a Hamilton resident, also takes issue with investors taking advantage of the affordable housing market to buy single-family homes and convert them illegally into multi-unit dwellings.

“I am all for more development of affordable housing in Hamilton, we certainly can use it,” she said. “But that development needs to be legal and safe. Having prospective landlords submit requests for conversions ahead of time and have them approved before moving forward is hardly unreasonable.”

Another commenter wrote: “Blame past city councils/building departments for allowing this to happen; don’t blame the current council for having the courage to try to clean things up.

“Note to investors: if you buy unrecognized property, it will catch up to you. It’s only a matter of time.”

Copyright © 2015 Key Media Pty Ltd


Mortgage default insurer releases comprehensive condo study

Thursday, March 26th, 2015

Justin da Rosa

In a comprehensive study of condo markets across Canada, Genworth and the Conference Board of Canada are predicting a soft landing in most cities, with some expected to see more significant price drops. “From a national perspective, these findings support an overall balanced outlook on Canada’s condo market for 2015, with the exception of certain oil-exposed regions,” said Stuart Levings, president and CEO of Genworth Canada in an official release. “We continue to see evidence that population growth and employment remain key drivers of demand for condos in urban centres.” Toronto, oft thought of as one of Canada’s most at-risk markets, has not entered bubble territory, according to the study which points to expected population hikes, immigration rates, and empty nesters expected to flock to the market. “Resale volumes are solid and prices continue to rise,” the study, entitled Insights Into the Apartment Condominium Market in Eight Large Canadian Metropolitan Areas states. “A soft landing remains our call for this market segment, although brief periods of inflation-adjusted price drops are possible.” Things look slightly bleaker in Alberta, however. “Calgary’s economy will be hit in 2015 as declining oil prices lead to declines in GDP and employment. The soft economy will result in price and sales declines in 2015. Starts are also expected to retreat as the market adjusts to this rapidly shifting economic landscape,” the release states. “Edmonton’s condominium market will also experience declining sales and prices in 2015. As in Calgary, the depth and duration of the market’s downturn directly depend on oil prices.” Vancouver’s housing recovery is expected to continue; however housing starts are expected to remain low. High demand from offshore will continue, boosting prices and making it the country’s least affordable city.

To read the entire report click HERE.

Copyright © 2015 Key Media Pty Ltd

Quotes from Important people to inspire

Wednesday, March 25th, 2015


Jack Welch (Former chairman and CEO, General Electric)

Arrogance is a killer, and wearing ambition on one’s sleeve can have the same effect. There is a fine line between arrogance and self-confidence.” — Jack: Straight from the Gut, 2001. 


Henry Ford (Founder, The Ford Motor Company)

A business that makes nothing but money is a poor business.” — Quoted in News Journal, 1965. 


Virginia Rometty (Chairman and CEO, IBM)

Your value will be not what you know; it will be what you share.” — Council on Foreign Relations event, 2013. 


Walt Disney (Co-founder, The Walt Disney Company)

A person should set his goals as early as he can and devote all his energy and talent to getting there.” —  Quoted in Walt Disney, Magician of the Movies, 1966. 


Arianna Huffington (Co-founder and editor-in-chief, The Huffington Post)

We think, mistakenly, that success is the result of the amount of time we put in at work, instead of the quality of time we put in.” — Thrive: The Third Metric to Redefining Success and Creating a Life of Well-Being, Wisdom, and Wonder, 2014. 


Howard Schultz (CEO of Starbucks)

Risk more than others think is safe. Dream more than others think is practical.— Onward: How Starbucks Fought for Its Life without Losing Its Soul, 2007.


Steve Jobs (Co-founder, Apple)

Your time is limited, so don’t waste it living someone else’s life.— Stanford Commencement address, 2005


Sheryl Sandberg (CEO, Facebook)

Trying to do it all and expecting that it all can be done exactly right is a recipe for disappointment. Perfection is the enemy.— Lean In, 2013. 


Richard Branson (Founder and Chairman, Virgin Group)

Courage is what it takes to stand up and speak; courage is also what it takes to sit down and listen.” — The Virgin Way: Everything I Know About Leadership, 2014.


Warren Buffett (CEO, Berkshire Hathaway)

Someone is sitting in the shade today because someone planted a tree a long time ago. — Of Permanent Value: The Story of Warren Buffett by Andrew Kilpatrick, 2007


Landlords under fire for ‘reno-victions’

Wednesday, March 25th, 2015

Jennifer Paterson

The mayor of one of Canada’s largest cities wants his province to tackle so-called “reno-victions,” although landlord advocates say those evictions are all about protecting renter safety.

“Like the mayor, we are concerned about the few ‘marginal’ landlords employing ‘reno-viction’ tactics,” said David Hutniak, the CEO of LandlordBC. 

“At the same time, we need a fair and balanced approach to provide responsible landlords the necessary structure to address tenant dislocation when they are doing upgrades of aging rental stock.

“These upgrades are essential if we are going to be in a position to continue to deliver safe, sustainable, rental housing.”

In British Columbia, there has been a rise in ‘reno-victions,’ a move where renters in older properties are asked to leave so that landlords can renovate ageing buildings.

Vancouver’s mayor says that this practice doesn’t just temporarily displace tenants; the rents increase post-renovation so many are unable to afford to move back.

Hutniak says that tenant dislocation is an unfortunate reality when a building is undergoing a complete renovation, but that responsible landlords are not insensitive to this challenge.

“There is a cost involved to address tenant dislocation and, while we support the mayor’s concern, we feel that the City needs to be sensitive to these costs too when considering the approval of building permits for renovations,” he adds.

“The City cannot simply look at the construction costs in isolation because a landlord doesn’t have that luxury when considering a renovation.”

From the perspective of Vancouver’s rental industry, ending tenancies to invest in purpose-built rental units presents a huge challenge for landlords, continues Hutniak.

“While the [Rental Tenancy Act] technically allows this, the courts and, in turn, the Residential Tenancy Branch now say that owners are acting in bad faith if they wish to invest in our properties. 

“We have supported in the past and continue to support trading more compensation to tenants, more notice time, and the right of first refusal to return to the renovated building for current tenants in exchange for clear language that allows ending tenancies for permanent renovations.

“We want to ensure that tenants are treated professionally and appropriately. At the same time, there needs to be a clear, transparent and, balanced approach to this issue.”

Copyright © 2015 Key Media Pty Ltd