Archive for June, 2016

Flying the flag on unit may not be allowed

Thursday, June 30th, 2016

Tony Gioventu
The Province

Dear Tony:

Every year when we have Canada Day, our strata council goes through the same problem with the same owners. They start a petition to amend the bylaws to allow owners to install flagpoles on their units. Every year we have the meeting, and every year the amendment gets defeated. We are now in year five, and they never manage to get enough support for the amendment.

This year, they have advised that they will use the Civil Resolution Tribunal to enforce the strata to permit the installation of the Canadian flag. We are a bit concerned because we do not want owners attaching holders or poles to our buildings and causing long-term damage, even though one owner has already attached a flagpole to the side of his townhouse. We are mostly concerned about the jurisdiction of the Civil Resolution Tribunal and whether it could order something like this.

JVW, Nanaimo

Dear JVW:

Many owners still have the perception that their home is their castle. In a strata, your home is not your castle, you simply reside in a part of the castle.

Even in bare-land developments where owners have more control over their individual homes, a strata may adopt bylaws that regulate use and appearance of strata lots, including the buildings on the strata lots. For all other strata corporations, such as townhouses, apartment-style or highrise buildings, the bylaws of the strata corporation will apply to the strata lots, and the use and enjoyment of common property. Anyone who alters common property without written permission will be subject to those bylaw applications.

The Civil Resolution Tribunal will come into effect later this year and most strata-type disputes that relate to the collection of money, enforcement of bylaws, strata compliance with the Strata Property Act, Strata Regulations and bylaws of the strata, and owner or tenants requirements to comply with the bylaws will be potential disputes that may be resolved through the tribunal.

In your situation, where an owner installed a flagpole attached to a building that has altered the common property without the permission required in the bylaws, the strata corporation may enforce the bylaws, impose fines and remove the alteration and seek damages for the repairs back against that owner.

A successful decision from the tribunal may include an order for the owner to pay those fines, any damages to the common property that had to be repaired, an order to comply with the bylaws and an order to cease altering common property without written permission. The same type of orders to comply with the act or other enactments of law could apply against a strata corporation. There are no laws that permit owners to install flags and override strata legislation.

If you would like to test drive the new CRT system, go to

© Copyright (c) The Province

Mahogany at Mill Lake 2180 Gladwin Road, Abbotsford 266 homes in a 26-storey tower by Quantum Properties

Thursday, June 30th, 2016


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Woodland Park 8570 204 Street Langley 106 townhouses by Infinity Properties

Thursday, June 30th, 2016

Touches such as a record collection or books transcends the ?staged? setting

Mary Frances Hill
The Province

Woodland Park

Where: 8570 204th St., Langley

What: 106 townhouses

Residence sizes and prices: Two beds, two-beds-and-dens, three beds, three-beds-and-dens, and four-beds; 1,263-1,825 square feet; priced from the $400,000s

Developer and builder: Infinity Properties

Sales centre address: 1 – 8570 204th St., Langley

Hours: noon-5 p.m., Saturday-Thursday

At Woodland Park, Infinity Properties’ new townhouse community in Langley, Gannon Ross Design principal Jen Gannon injected signs of life that might be familiar to all of us.

A record collection, books and everyday useful items can be found throughout these light, airy spaces for a look that transcends the “staged” setting. Tchotchkes of everyday life add a personality that appeals to visitors, Gannon says.

“We took this route because there is a general trend these days to really personalize your space by showcasing personal collections or hobbies like photography or record collecting.

“I think sites such as Pinterest really show people how to showcase their personalized space. I also think there is a trend to make your home comfortable, authentic and a reflection of you.”

One of the two display homes opens to a doorless den adjacent to the front hall, where Gannon Ross used a white and grey palette for a clean office. In one living room, she chose to decorate in a light Scandinavian tone. A neutral white ‘brick’ wall — an uncanny effect, thanks to wallpaper — offsets a long table, offering a perfect backdrop for an infusion of character.

“The neutral background allows us to pop in fun colour, pattern and texture. By building in a banquette and having the dining table run lengthwise, it makes the space feel more open.”

Strong design and character can be seen throughout the suites: in one bedroom’s unique wire chandelier, in kitchen millwork and in an open-concept space with minimalist touches of light wood, blue and red. Gannon says this combination appeals to first-time buyers open to new ideas and fresh takes on decorating. That demographic has taken a shine to these suites, thanks in part to her work.

“I think the colour palettes for the two schemes appeal to first-time buyers because they are contemporary yet neutral, and give first-time buyers a good canvas to start with. The two model homes gave ideas for two very different looks purchasers could work toward.”

No doubt, new homebuyers impressed with Gannon Ross’ style might want to use some of Gannon’s ideas when they move in. Gannon advises that they invest in a few good pieces of furniture or millwork and then, if they’re on a tight budget, add some fun pieces to add personality.

“Second-hand stores, Etsy purchases, Ikea or craft markets can help add a lot to a space.”

© Copyright (c) The Province

B.C. real estate loses self-governance as Christy Clark shakes up industry

Thursday, June 30th, 2016

Cassidy Olivier & Joanne Lee-Young
The Province

The days of self-regulation are over for B.C.’s real estate industry following a series of changes outlined Wednesday by Premier Christy Clark.

The changes — aimed at restoring the public’s confidence in the sector battered by allegations of misconduct, weak reporting mechanisms and governance issues — include the creation of a dedicated superintendent of real estate and go beyond the 28 recommendations offered in a report released Tuesday by an independent advisory group.

Finance Minister Mike de Jong, who joined Clark in announcing the changes, said the report’s findings demonstrated the real estate industry’s self-regulatory structure has “not met the standard” expected in terms of protecting the public interest, a point furthered by Clark.

“Self regulation is very much a privilege that is granted on behalf of the public by government to professions that say they can do the job and prove that they can do the job,” said Clark.

“Well, the real estate sector has had 10 years to get it right on self-regulation and they haven’t.”

Clark said her government will work on all seven recommendations directed at government, including increasing the maximum fines for realtors and brokerages to $250,00 and $500,000, respectively.

Clark also said dual agency transactions — in which the agent acts as both the agent and seller of a property — will come to an end.

All authority to regulate, discipline and make and enforce rules will be taken away from the Real Estate Council of B.C. and given to the strengthened office of the superintendent.

Current superintendent Carolyn Rogers, who had previously said she will step down next month, is also responsible for overseeing all credit unions and pension and mortgage brokering industries. 

Further changes will see a “majority” of the council made up non-industry members. At present, the council is made up of 13 real estate agents elected by their peers, three government appointees, and one member chosen by the council to represent strata owners.

Housing critic David Eby said the removal of the industry’s ability to self-police was a “common sense response” to a “scathing report” that clearly demonstrated that self-regulation had failed. The main question was whether the government will adequately fund the new superintendent’s office, he said.

“I think it is a critical first step. But if the government doesn’t adequately staff the new office, then we will be right back where we are today in no time.”

Eby also said the announcement did little to address the issue of affordability.

Tom Davidoff, a professor of economics at the University of B.C.’s Sauder School of Business, agreed, saying the announcement failed to account for other factors that are fuelling the area’s housing prices, including foreign capital.

“What I’m pretty confident of is the reason we have high prices isn’t because we are an unusually sleazy market,” he said. “And this does nothing about supply and does nothing about that surge in overseas demand. So it’s not going to do anything to make Vancouver more affordable, however if you are buying and selling a house, it might give you more confidence that you can trust the guy selling.”

Clark said her government will unveil additional measures that will address the issues of affordability, increasing housing supply and helping first-time buyers enter the market — the later in addition to the steps unveiled in the February budget.

As for her government’s seeming unwillingness to address the impact foreign capital is believed to be having on the market, Clark said: “Everything is on the table.”

“We are considering all the suggestions that have come from citizens, local governments, [what] we’ve learned from other jurisdictions — all of those things are on the table,” she said. “You will see more action on affordability and keeping that dream of home ownership alive for the middle class in the coming weeks and months.”

The Real Estate Council of B.C. responded to the announcement with a two-sentence statement on its website: “Today the B.C. Government announced their intention to end self-regulation in the real estate industry and to establish a dedicated Superintendent of Real Estate. The Council is ready, willing, and able to work with Government to implement the steps announced today.”

© Copyright (c) The Province

Foreign owners do impact Vancouver home prices say academics

Thursday, June 30th, 2016

Steve Randall
Mortgage Broker News

While government agencies are trying to assess the whether foreign ownership of homes has a real impact on the market, a study by the Simon Fraser University in BC says that it has proof that it does.

Business professor Andrey Pavlov and this team looked at data from a now-closed scheme to encourage foreign investors to Canada and how things changed when it was scrapped.

The Canadian Immigrant Investment Program ended in 2014 and for around a year after that house prices dropped in neighbourhoods popular with Chinese buyers.

“This is as good evidence as we can get on the impact of foreign ownership on the real estate market. And the conclusion is: yes, there is an impact,” Pavlov told the CBC.

Copyright © 2016 Key Media Pty Ltd

Metro board condemns proposal to swap Massey tunnel for bridge

Thursday, June 30th, 2016

?No justification? for Liberal plan, alternatives needed: regional district

The Vancouver Sun

Metro Vancouver directors are raising concerns about the planned $3.5-billion bridge to replace the George Massey Tunnel, saying the proposed 10-lane crossing will negatively affect everything from transit ridership to salmon and birds in the Fraser River estuary.

Port Coquitlam Mayor Greg Moore, chairman of the Metro board, said there’s no justification for the bridge, which was proposed by the B.C. government.

He called on the province and TransLink to find other mutually acceptable solutions to reduce congestion on the Highway 99 corridor, saying “you can’t reduce congestion by simply building more roads.

“This project represents an expansion of car-oriented infrastructure and diverts crucial funds from transportation projects that support the regional growth strategy,” he said.

The regional district plans to send a letter outlining its concerns to the B.C. minister of transportation and infrastructure, the B.C. Environmental Assessment Office, Premier Christy Clark, and the federal ministry of environment and climate change. The move follows an earlier request by the Metro board that the federal minister of environment and climate change order an environmental assessment review process in which the regional district can participate.

Metro is already involved in the provincial environmental assessment review. However, a report from Metro Vancouver released Wednesday argues the province hasn’t considered alternatives to a 10-lane bridge, or the potential ecological disruption to the Fraser River estuary and Deas Island Regional Park, or financial impacts to moving Metro water and sewer lines, which could affect $500 million to $1 billon worth of regional infrastructure once the tunnel is removed and the area dredged.

The mayors have also raised concerns with the lack of transparency and consultation regarding the bridge’s design and business case, which was only released last December — two years after the project was announced.

“We know there’s a congestion problem on that corridor,” Moore said, but noted the regional district believes it should have a say in the scope of the project to ensure it doesn’t have massive effects on issues such as air quality, climate change, utilities, parks and the environment.

“It is our job to comment on the aspects of (the project) that will affect those areas we do have responsibility for. We have to look at this with a regional perspective.”

However, Delta Mayor Lois Jackson, the lone supporter of the bridge, said Metro is not considering all regional views, noting that a larger bridge is needed to handle the increased traffic volumes now clogging up the four-lane tunnel. She maintains Metro has been debating the merits of the bridge in secret and not giving her any chance to rebut their claims.

More than 40 per cent of traffic going through the tunnel in the morning comes from Surrey and White Rock, she said, while 60 per cent of those drivers go to jobs in Richmond. Yet those cities aren’t in support of the bridge.

“They’re not looking regionally anymore. The province understands what’s at stake here with goods movement and getting people to and fro and not sitting for two hours in a lineup,” Jackson said. “This is all about politics and all about money. I don’t like going through that tunnel at any time, day or night.”

Premier Christy Clark maintains the tunnel needs to be replaced, saying in 10 years time it will no longer be safe to navigate. If there were an earthquake of more than magnitude 7.0, she said, the tunnel “risks failing completely, which means Tsawwassen and Delta and communities on the other side of the river would be completely cut off.”

Transportation Minister Todd Stone added a bridge will remove “the worst traffic bottle neck in B.C .” and include 200 lane-kilometres of new, improved and rehabilitated highway to relieve congestion.

© 2016 Postmedia Network Inc.

The 19 countries with the highest standard of life

Thursday, June 30th, 2016

? Matthew Nitch Smith

The countries with the highest quality of life have been announced by the not-for-profit organisation Social Progress Imperative.

Scandinavian nations scored highly in the “Social Progress Index,” but more surprising are the very large countries which came lower down the list — suggesting that a strong GDP per capita is not the only gauge for a high standard of living.

Despite this, all of the top 19 countries are developed nations — so having a strong economy clear has an impact.

The “Social Progress Index” collates the scores of three main indexes:

  • Basic Human Needs, which includes medical care, sanitation, and shelter.
  • Foundations of Wellbeing, which covers education, access to technology, and life expectancy.
  • Opportunity, which looks at personal rights, freedom of choice, and general tolerance.

The index then adds the three different factors together, before giving each nation a score out of 100. You can see the countries with the highest quality of life below.

19. United States — 84.62. The US scraping into the top 20 may surprise some, and the report does call it a “disappointment,” saying the country’s huge economy does not translate into social progress for many of its citizens.

18. France — 84.79. For many France is a liberal bastion, but it scored low on “tolerance and inclusion” in the report, while a poor score in “opportunity” keeps it further down the list than it perhaps should be.

17. Spain — 85.88. One of the most popular holiday destinations in Europe, Spain has a strong welfare system and work life balance, but high youth unemployment has hurt the standard of life for many of its citizens.

16. Belgium — 86.19. The HQ of the European Union scores highly on social progress and demonstrates that sometimes being a smaller country makes it easier to look after all your inhabitants.

15. Germany — 86.42. Another country which might be a bit lower down than some people would expect, Germany scores highly for inclusiveness after taking in more than a million refugees over the past few months, but some wonder if the infrastructure can handle it.

14. Japan — 86.54. The ‘Land of the Rising Sun’ has made great strides in social progress in the last decade, particularly in women entering the workforce. It still has a very small immigrant population, though, and suicide rates for under-30s remain high.

13. Austria — 86.60. Vienna is a cultural capital of Europe and Austrian ski slopes attract people from all over the world. Having the 14th biggest economy in the world, according to the IMF, does not hurt standard of living either.

12. Ireland — 87.94. Brits scrambling for Irish passports in the wake of the vote for a Brexit may be pleased to discover it scores very high on meeting “basic human needs,” and the potential investment of companies moving from the UK will only make things better.

T-10. New Zealand — 88.45. New Zealand’s tourist board calls it “the youngest country in the world,” and it is certainly one of the most beautiful. “Opportunity” is where it scores really high, as a low population means jobs are in abundance.

T-10. Iceland — 88.45. Speaking of beautiful countries, Iceland scores very well in social progress, particularly in the “basic human needs” index and GDP per capita. Its football team has proven itself a force to be reckoned with too.

9. United Kingdom — 88.58. The NHS is big part of the UK’s high placing, with “basic medical care” scoring almost 100% on the report. Education scores almost as highly, with free access to quality schools.

8. Netherlands — 88.65. The Netherlands is famously one of the most tolerant countries in the world, so its position in the top ten should be no surprise. It is one of the highest-scoring countries on “personal freedom and choice.”

7. Norway — 88.70. Get used to seeing Scandinavian nations in the top ten. Norway is big on “nutrition and basic medical care,” and its “access to basic knowledge” is strong too. Many have said the Norway model is one to follow for a non-EU UK.

6. Sweden — 88.80. “Water and sanitation” may be taken for granted in developed economies, but it is not enjoyed everywhere. Luckily it is an area Sweden nails, scoring 99.77. The country also picks up high scores in “nutrition” and “personal rights.”

5. Switzerland — 88.87. Switzerland may have some of the most expensive cities in the world to live in, but its citizens get value for money. According to the Social Progress Report, “medical”, “nutritional” and “access to basic knowledge” is where the country shines.

4. Australia — 89.13. There is a good reason so many people want to start a new life “down under.” Austrailia has fantastic education, job opportunities and a strong sense of personal freedom. Its “tolerance and inclusion” score could be higher though.

3. Denmark — 89.39. Denmark has one of the best social mobility and income equality rates in the world, so no surprise it makes it into the top three on this list. “Basic human needs” is where the country scores particularly highly, though its “health and wellness” stats such as life expectancy could be higher.

2. Canada — 89.49. For such a huge nation, Canada only has 35 million citizens, and they are some of the best looked after in the world. Canada’s healthcare is what stands it above the rest. Education and opportunity in the country are also impressively strong.

1. Finland — 90.09. Everyone says Nordic nations have the highest standard of living, and now Finland has made it official. It scores highly on almost every index on the report, from basic needs, foundations of wellbeing and personal freedoms. If you move there just make sure to bring warm coat — temperatures can reach minus 50 celsius​ in the winter!

Copyright © 2016 Business Insider Inc.

BC Government Ends Real Estate Industry Self-Regulation Following Report

Thursday, June 30th, 2016

Going further than Independent Advisory Group recommendations, Premier announces that real estate council will be overhauled and governed by new superintendent

Joannah Connolly

The self-regulation of the real estate industry will scrapped, with the industry governed by a new BC superintendent of real estate who will oversee a radically overhauled Real Estate Council of BC, Premier Christy Clark announced June 29.

The announcement was in response to recommendations issued June 28 by the Independent Advisory Group (IAG), which was appointed to look into real estate misconduct and the handling of such matters by the RECBC.

Clark’s radical changes go even further than the strong recommendations set out by the IAG, which suggested dramatically increasing misconduct fines for agents and brokerages.

In addition to implementing these much stricter fines, the province will establish a new superintendent of real estate who will “take over the council’s regulation- and rule-making authority.”

The RECBC will continue to exist, but it will be restructured to ensure most of its members come from outside the industry. Currently, 14 of the council’s 17 members are from within the real estate or property management industries.

“After reading the report, our conclusion is that the privilege of self-regulation in the real estate industry must end,” said Clark in a statement.

“This report examines shady practices and challenges plaguing the real estate market, particularly in the Lower Mainland, putting consumers at risk and tarnishing the reputations of honest professionals in the sector. We will act to protect British Columbians when they are making one of their most important family investments – purchasing a home.”

The BC government announced that it fully accepts the recommendations of the IAG and will:

  • Establish a dedicated superintendent of real estate, who will take over the council’s regulation- and rule-making authority to carry out the changes required to restore public confidence.
  • Reconstitute the Real Estate Council with a majority of public-interest, non-industry members.
  • Implement the recommended penalties, as well as increased fines for unlicensed activity and other offences.
  • Allow for commissions from licensees engaging in misconduct to be taken back to the council.
  • Make the managing broker responsible for ensuring the owner of the brokerage does not engage in the business of the brokerage if the owner is not a licensee.
  • No longer permit licensees to offer dual agency representation.

Clark told a media conference June 29 that the provincial government will start overhauling the system in the forthcoming weeks.

Finance minister Michael de Jong said, “Government is assessing the best and fastest way to enhance transparency and consumer protection in the real estate industry.

“We are working on legislation that will expand the powers of the superintendent of real estate to address these issues, ensure appropriate public representation on the board, and implement higher disciplinary and administrative penalties.”


The Real Estate Council of BC issued this statement Wednesday afternoon:

“Today the BC Government announced their intention to end self-regulation in the real estate industry and to establish a dedicated Superintendent of Real Estate.

“The Council is ready, willing, and able to work with Government to implement the steps announced today.

“Yesterday the Real Estate Council of BC released its Independent Advisory Group’s Final Report. This report details 28 far-reaching recommendations to enhance consumer protection, all of which the Council fully supports.” 

On July 30, British Columbia Real Estate Association president Deanna Horn said in a statement, “The vast majority of the 20,000 REALTORS® in BC do the right thing and we welcome a dedicated Superintendent of Real Estate to improve consumer protection in real estate transactions.

“Our livelihoods depend on our reputations and I know that almost every REALTOR® in the province will be happy to see stronger penalties and enforcement for rule-breakers.”

© 2016 Real Estate Weekly

Smaller businesses driving ‘condo office’ market to curb high leasing costs

Wednesday, June 29th, 2016

?Evolving? demand means more firms looking to own rather than lease

Evan B Duggan
The Vancouver Sun

Demand and investment are mounting in Metro Vancouver for strata office units as values for those assets reach levels comparable with residential condos in the region, say local experts and investors.

In the past two years there has been roughly $280 million worth of sales in strata offices in Metro Vancouver — also known as office condos — according to a report by Colliers International. The report revealed that strata office sales reached $120 million by the third quarter of last year — nearly twice the total from 2010.

“Although the 2015 office condo market recorded lower sales volume in comparison to 2014, it is more an indication of a lack of quality product than a lack of demand,” the report said, which highlighted Downtown Vancouver and the West Broadway corridor as locations with the highest purchase prices.

Demand for office space in the region has been “evolving,” with small- and medium-sized companies looking to acquire their own spaces as owners, said Kirk Kuester, Colliers’ executive managing director in Vancouver.

“Lease rates are high, especially for new, high-quality office space,” he said last week. “If you look at all the new office buildings that have been built, they’ve leased up quickly and they’ve achieved relatively high rents in relation to the rest of the market.”

He said the economics now make sense for many smaller firms to own their office space.

“You have no idea how many calls we get from people looking to buy a small office building downtown,” he said. “They say ‘show us a small office building downtown that we can buy and own and we’ll occupy some space and rent out the rest of the space.’ But it doesn’t happen. You can’t find that.”

Kuester said smaller financial, legal, engineering and insurance firms seem to be driving the demand. “There are all the little guys who are saying ‘hey, we’d love to have 2,500-square-feet, 3,000 feet.’”

Vancouver-based Chard Development is hoping to tap into that demand with plans to break ground in January on a four-storey office strata building at 34 West 7th Ave. in Vancouver’s Mount Pleasant neighbourhood.

Chard Development has been active in the commercial and residential market in Victoria and Vancouver for about 20 years. The firm is motivated by Mount Pleasant’s emergence as a tech hub with a relatively young workforce, said Dave Chard, the firm’s president and CEO.

“We are quite familiar with the area,” he said. “We did the MEC head office about 20 years ago down on 4th Avenue.”

Chardsaidthenew54,000-square foot building is being designed by Proscenium Architecture and Interiors. The zoning allows for service, retail and light-industrial use on the main floor, with strata offices above, he said.

“It’s very difficult for smaller businesses to acquire their own office space,” he said. “Traditionally you’ve got to lease it, and what we’re trying to do is provide the opportunity for small- and mediumsized businesses to be able to acquire their own real estate.”

Chard said they’re aiming to start building in January 2017 with an 18-month construction period. The building would likely end up with about eight owners in units of 5,000-10,000 square feet.

The building will have two levels of underground parking as well as bike storage and end of trip facilities in the building, he said. “We anticipate a lot of people will bike to work.”

Similar to the residential market, the cost of commercial space is also pricing a lot of people out of the Metro Vancouver market, said Brady Fleguel, a real estate appraiser with Burgess, Cawley, Sullivan & Associates.

“The barrier for entry is so high to actually own an office building,” he said. “We’re talking $10 millionplus for an entry-level office building, but if the building is stratified you can buy your unit for $500,000, or $1 million.”

He said West Broadway has proven to be a vibrant market for strata office. Broadway recorded the highest sales volume with just over $90 million in 2014, according to the Colliers report, which attributed the total to Orca West Development’s Neelu Bachra Centre, which was completed in 2014. That project was one of the first new office condo developments to be completed in that area, and sold for an average price of $862 per square foot.

Fleguel said the area is driven by medical firms that want to be located around Vancouver General Hospital. “If you look up and down that corridor, the current vacancy for office is around three per cent because medical users tend to be stable tenants and they haven’t built a lot of new product in the area recently.”

He said prices for strata office units have occasionally rivalled residential condos, but residential is still king when it comes to strata, reaching the $1,000 per square foot range. “Would an office condo sell for that? I don’t think so. Not an average or across an entire project.”

© Copyright (c) The Vancouver Sun

No bubble here, says report from mortgage industry

Wednesday, June 29th, 2016

Organization warns of risks in changes to lending conditions

The Vancouver Sun

A Canadian mortgage industry group says there is no bubble in any Canadian housing markets and is warning the government against any changes in lending conditions that might derail the market.

Will Dunning, the chief economist for Mortgage Professionals Canada, which represents more than 11,000 members across the country, says everybody is waiting for the bubble to burst, but maintains there isn’t enough evidence to say it exists.

“There is a risk that changes in policies of lenders or mortgage insurers that reduce access to mortgages could cause an unnecessary drop in housing demand and housing prices, and bring consequent economic damage,” Dunning said, in a release out Tuesday that accompanies his group’s 38-page report on the state of the mortgage industry.

His comments come as federal finance minister Bill Morneau has called for a “deep dive” into the state of the housing market, including the impact of foreign ownership. Last week, Morneau announced a working group will be formed of federal officials, provincial representatives from Ontario and British Columbia and municipal counterparts in Toronto and Vancouver.

Morneau’s comments came after a torrid month for real estate in May for both Toronto and Vancouver. The composite index for all homes in Metro Vancouver rose almost 30 per cent last month from a year ago while average prices in the Toronto region were up almost 16 per cent during the same period from a year ago.

“At this time, we are hearing calls for more changes to macro-prudential regulation. The proponents want to make mortgage finance more difficult to obtain. That will result in reduced housing activity and, thereby, slow the growth rate for mortgage indebtedness,” writes Dunning, in his report.

He cautions about the importance to the housing sector and warns that some of the economic drivers out west are no longer present to propel those markets. In Calgary, the benchmark price for a home was down almost four per cent in May from a year ago, while prices in Saskatoon were off 2.3 per cent during the same period.

“Given the importance of housing activity to the national economy (especially since investment in energy projects is no longer a driver of growth), we are hopeful that any changes will be based on a careful consideration of the tradeoff between caution in the mortgage market versus overall economic growth,” Dunning writes.

Dunning says it is low mortgage rates — now as low as 2.15 per cent for a five-year fixed rate product, according to — that have caused the resale market to surge.

On the foreign buyer issue, he notes there is a gap between average prices produced by the Canadian Real Estate Association statistics and data on price increases from the Teranet/National Bank House Price Index. Dunning says a larger gap indicates sale of higher end homes, something he says is present in Toronto and Vancouver, but not in nine other markets.

“This is consistent with increased buying by affluent foreign investors, although it is not conclusive proof,” he writes. “Given the available data, it may be impossible to measure buying by foreign investors with any reasonable accuracy, and it would be even more difficult to measure the consequences.”

As for the bubble talk, the economist says it has been going on since 2008 without any real evidence.

“Those comments have generally assumed that rapid growth in house prices (or a rising ratio of house prices versus incomes or of house prices versus rents) is sufficient evidence of a bubble,” writes Dunning. “To the contrary, these supposedly strong indicators are not definitive proof. They may actually represent healthy outcomes within existing conditions.”

In order to prove a bubble exists, he says there must be “expectations of price growth that are self-fulfilling” and that the expectations lead to increased and excessive activity in the housing market. He also says prices must diverge significantly from what should be expected based on economic fundamentals. As far as Dunning is concerned, the current market does not meet these conditions.

© 2016 National Post