Institute argues against foreign buyer tax

Justin da Rosa
REP

Vancouver’s tax influenced a 40% drop in transactions – but it wasn’t just foreigners who accounted for that cooling, according to one research institute

The C.D. Howe Institute is imploring Ontario to avoid implementing its own foreign buyer tax, arguing Vancouver’s was detrimental to that market. 

“We observed a clear and significant decrease in volume of transactions for Greater Vancouver vis-à-vis surrounding regions following the implementation of the tax,” C.D. Howe authors Benjamin Dachis, Hamza Mhadi, and Jairo Pinto said in a study. “After controlling for a variety of factors that affect housing prices and demand, our preliminary results suggest that the foreign-buyer tax has led to nearly 40% less transactions than would have occurred without it, accompanied by average prices that are 4.5% lower than otherwise.”

The institute shared its findings in a letter Ontario Finance Minister Charles Sousa.

It argued the tax had a greater impact on lower buyers than the intended target: Foreign speculators.

“As foreign buyers were estimated to comprise a mere 7% of total transactions in Metro Vancouver, it is clear the tax interfered more with local buyers,” the authors said. “Many locals in need of moving homes were left in a harder position to sell – from families moving to neighbourhoods with better schools to retirees downsizing. And who bore the economic cost of lower home prices? People who own homes now – not foreign buyers – are seeing the value of their investment fall.”

As Ontario continues to deliberate what housing policies to implement – with action expected to appear in the province’s budget later this month – the institute is imploring the province to avoid targeting foreign buyers.

“The BC government’s intent was to lower prices and stabilize the market, but the drop in prices and number of sales shows that locals looking to move feel the harm of the tax,” the authors said. “The attention now turns to Toronto’s housing market where, as of February 2017, prices increased by nearly 24% compared to the year prior. The government of Ontario should take a close look at the harm of Vancouver’s foreign buyer tax and not follow suit.”

Copyright © 2017 Key Media Pty Ltd

Steve Randall
REP

Canada’s high house prices and larger mortgages could make the next recession problematic, CIBC Capital Markets has warned.

The report does not believe that a sharp downturn in house prices will trigger an economic downturn or that the conditions are similar to those seen before the US housing crash. This is because of the quality of the mortgages on lenders’ books.

However, when a recession does come it could be made worse by the state of the housing market.

“Given larger average mortgage principals that have been needed to pay for more expensive housing, the Bank of Canada’s ability to raise rates during the upswing of the cycle will be severely constrained,” says Avery Shenfeld, Chief Economist, CIBC Capital Markets, who co-authored the report, Would We Fear or Cheer a House Price Correction? with senior economists Andrew Grantham and Nick Exarhos.

“A two per cent rise in mortgage rates would be fairly gentle by past tightening cycles, but would raise monthly payments by roughly 25 per cent on a conventional five-year mortgage,” Shenfeld added.

Shenfeld believes that it would be a good idea for the Bank of Canada to begin increasing interest rates soon alongside policies to encourage more construction to help dampen rising prices and rents.

Copyright © 2017 Key Media Pty Ltd

Options abound at Thind Properties’ Lumina Brentwood

Michael Bernard
The Vancouver Sun

Lumina Brentwood

Project Address: 2425 Beta Ave., Burnaby

Project Scope: Lumina will bring almost 1,000 new homes to the Brentwood neighbourhood. Its first tower, Waterfall, features one-, two-, and three-bedroom suites. Close to rapid transit, a revamped Brentwood Mall, grocery stores and restaurants, parks and schools.

Prices: Starting in the $380,000s

Developer: Thind Properties Ltd.

Architect: Chris Dikeakos Architects Inc.

Interior Designer: Bob’s Your Uncle Ltd.

Sales centre: 2463 Beta Ave., Burnaby

Centre hours: Coming soon

Sales phone: 604-435-8088

Website: www.luminabrentwood.com

Occupancy: Completion of the first tower, Waterfall, expected in late 2020

With some new developments, coming up with a design theme for a project can be a challenge.

But for architect Richard Bernstein, the design theme for Lumina, a four-tower development to join the Brentwood town centre neighbourhood in Burnaby, the answer was literally right in front of him.

“Our site just happens to look over a future 13.3-acre park and we are taking advantage of that,” said Bernstein, who is with Chris Dikeakos Architects. “Nature has generated a lot of the theme for our design.“

The Thind Properties development, initially of three highrise towers ranging from 28 to 39 storeys on five acres facing Beta Avenue, and a fourth tower on Alpha Avenue, will add almost 1,000 suites and townhouses to a cumulative six-acre site located about a seven-minute walk from the Brentwood SkyTrain station.

The ambitious all-residential development will replace an area of low-level industrial offices with a highly livable complex that includes an indoor-outdoor open space podium above an underground parking area.

 The podium will also serve as the base for a great hall dining and lounge area with landscaping that will lead the eye to the parkland beyond, he said. On the podium will be space for barbecues for the residents, plus room for garden plots where homeowners can tend their vegetable gardens.

 The nature theme has also been incorporated into the design of the first tower, dubbed Waterfall because of a three-storey-high structure of mullioned panels and blue-tinted glass adjoining the lobby over which water will continually flow, he said. In later phases, some of the 61 townhouses will have rooftop spaces that will access the podium.

 The first tower has a mix of different-sized suites unusual in the area five years ago, he said. Waterfall has a total of 67 studios, 65 one-bedroom-and dens, 131 two-bedrooms, seven two-bedroom-and-dens, 17 three-bedroom units and two three-bedroom-and-den homes.

 “I would say there is a higher percentage of bigger units. For a while, all the developers were embracing the small units, but I think they are finding there is a good market for larger two-bedroom-and-den and three-bedroom homes.

 “People moving out of downtown Vancouver want a little bit of a larger unit. We are seeing a stack in these buildings of three-bedroom units, which is interesting. You would have thought the price point would have been too high, but there seems to be a market for larger units.”

 Bonnie Leung, sales and marketing manager for Thind Properties, confirmed that the mix of suite sizes is changing, especially with new developments outside Vancouver’s downtown core.

“A lot of people are either downsizing or starting families in today’s market,” she said. “You do need larger spaces for newlyweds or couples trying to start a family, we do have quite a number of two-bedrooms and three-bedrooms. We are definitely trying to hit a family market.”

 Nature also influenced the thinking of the development’s interior designers, Bob’s Your Uncle Ltd.

 “When we first approached the design for the interiors of Lumina, we were inspired by the architect’s core concept of nature driving the design of the project,” said company principal Cheryl Broadhead. “Both the suites and the common areas of the project have natural palettes and nature-inspired finishes. In the common areas of the Waterfall building, the rippling organic flow of water is reflected in the finishes from the natural stone and patterned carpets to the artwork.”

 Broadhead noted styles have changed over the last five years, with much more emphasis on sustainability and energy efficiency today. “We are using Euro-inspired cabinetry with internal drawers, and integrated appliances such as the dishwasher and fridge helping kitchens appear seamless.”

The presentation centre features three show suites: a two-bedroom unit measuring 783 square feet with a 113-square-foot balcony; a 648-square-foot two-bedroom junior suite with a 119-square-foot exterior space; and a one-bedroom unit of 582 square feet with 125 square feet of exterior space. A giant podium-mounted model gives potential buyers a clear idea of the development’s layout and future buildings and the location of the park. They can also get a precise idea of the views from particular suites by checking a special wall-mounted screen.

 All homes have durable laminate flooring throughout the entry, kitchen, living rooms, bedrooms and dining rooms with custom-milled baseboards throughout. Heat pumps provide both heating and air conditioning. Space is emphasized with nine-foot ceilings and balconies measuring at least 100 square feet, enough for a table and chairs. Homes also come with energy-efficient LG front-load washer and dryer.

 Amenities also include a dog walk and an outdoor theatre, a fitness facility including yoga room, kids play area, meeting rooms, 24-hour concierge and library-study area.

 Kitchens have full-sized stainless steel Bosch appliance packages, including a four-burner gas range, integrated fridge and dishwasher, Venmar hood fan, Panasonic microwave, quartz countertops and matching backsplash, and a single bowl stainless steel undermount sink.

 Bathrooms have a ‘floating’ mirror cabinet with ample storage for all bathroom essentials, quartz countertops, wood grain cabinets with undermount lighting, oversized porcelain tiling and frameless glass showers in all master ensuites.

© 2017 Postmedia Network Inc

Mill District blends traditional with contemporary

Mary Frances Hill
The Province

Mill District

What: A total of 82 homes, 41 units in each of two six-storey-high wood-frame buildings in Abbotsford’s Mill Lake neighbourhood

Where: 2555 Ware St., Abbotsford

Residence sizes and prices:  Remaining homes range from one-bedrooms to three-bedrooms, 684 — 1,404 sq. ft.; one-bedrooms start from $299,900; $489,900 for three-bedrooms

Developer and builder: Heinrichs Developments

Sales centre: 33323 South Fraser Way, Abbotsford

Hours: noon —5 p.m., Sat — Thurs

In Abbotsford, where Heinrichs Developments is building its new Mill District community of condominiums, traditional tastes that have long defined the market of homebuyers meet a touch of contemporary interior design. Lisa Perry of i3 Design took on the challenge of creating a display space that would appeal to a diverse group of of home-hunters by embracing contrast, the formal and casual, warmth and luxury decor.

Perry has a taste for authentic, handmade goods, and it shows in the “harder” details of the space, such as the sculptural base of a coffee table and kitchen island chairs in an open-concept area. She added velvets, silks, and luxury touches of gold and glass. “We like that those elements add an industrial touch to the spaces,” she says. To contrast those pieces, i3 Design used distressed finishes and soft textures like wools and cottons throughout the suite, “like your coziest sweater or favourite jeans,” she says. “We wanted visitors to walk into the suite and feel they could plop down on the sofa, put their feet up on the coffee table and make themselves at home.”

In a living room, i3 Design created another great contrast with the light sofa against the brightness streaming through the window. The effect looks even brighter compared to the dark millwork housing the TV and fireplace, and a set of darker chairs and the dark coffee table.
She says she used this variation of light and dark to balance the masculine and feminine esthetic in the space. At the same time, it presents a blend of moods and uses to downsizers who may need one room to function in the same way two spaces might have, in their former homes, says Perry.
“It was important to mix elements of a formal living room with a casual family room or basement or man cave. We also imagined that there would be some items buyers would absolutely want to bring from their homes that would need to be combined with some new ones. In order to have this work, there has to be a balance of light and dark as well as curves and geometry.”
Abbotsford is sometimes deemed a “traditional” market, though new buyers and young families often lean toward the contemporary décor. With a mind to appealing to every visitor, i3 Design introduced two cabinet colour schemes.

 “The white cabinets will appeal to those buyers wanting a total change. The dark-stained wood cabinet has a grey/brown cast and will appeal to buyers with more traditional taste.”
She has crafted a rustic-looking wall with wooden panels  out of reclaimed barn board covered in a whitewash finish, in one bedroom. It’s an artistic centrepiece, responding to Perry’s desire for a look that is at once upmarket and casual.

 “We liked the juxtaposition of the casual rough texture of the wood with the formality of the velvet bed. It felt inviting and timeless.”

© 2017 Postmedia Network Inc.

REP

The Bank of Canada held its trendsetting interest rate unchanged on Wednesday, despite a recent run of stronger-than-expected data, saying it believes the economy has yet to show it can stick to the higher growth trajectory.

In holding the rate at 0.5 per cent, the central bank said it also considered significant uncertainties still weighing on its outlook, including the potentially adverse impacts of the U.S. economic agenda.

Canadian growth exceeded the bank’s expectations and it now predicts real gross domestic product will expand at an annual rate of 2.6 per cent in 2017 _ up from its January forecast of 2.1 per cent.

The recent improvement, it said, was largely fuelled by unexpectedly robust residential investment as well as temporary factors such as the resumption of expenditures in the energy sector and the consumer-spending lift from bigger child-benefit cheques.

However, the bank noted export growth was uneven and that there were signs of weakness in areas like business investment and within underlying employment indicators such as hours worked and wages.

“While the recent rebound in GDP is encouraging, it is too early to conclude that the economy is on a sustainable growth path,” the bank said in a news release that explained its interest rate decision.

TD Bank senior economist Brian DePratto said the bank is attempting to “throw cold water” on discussion that the economy has been improving.

“The growth outlook may be sunnier, but it seems to be all about the negatives for Governor Poloz,” DePratto said in a research note.

“Poloz remains focused on the soft spots in Canadian labour markets and exports, and is not yet ready to declare Canada ‘out of the woods’ when it comes to unevenness in economic growth.”

Beyond 2017, the bank predicted growth will moderate and become more balanced.

It anticipates greater contributions from exports and business investment. The bank also expects the powerful pace of household spending _ particularly in residential investment _ to eventually slow next year as debt levels and borrowing costs rise.

For this year, however, the bank believes hot housing markets in cities like Toronto will help residential investment deliver a “significantly higher” contribution to Canada’s growth performance than it had anticipated in January.

The bank also warned that climbing real estate prices in the Toronto area appear to now be driven, in part, by speculation.

Economic growth, it said, is now expected to expand by 1.9 per cent in 2018, down from the bank’s January forecast of 2.1 per cent, and to hit 1.8 per cent in 2019.

The future, however, looks murky.

The statement said the bank’s governing council was “mindful of the significant uncertainties” faced by the Canadian economy.

In its quarterly monetary policy report, which was also released Wednesday, the bank said its outlook once again factored in some of the effects caused by ongoing unknowns around the potential introduction of U.S. changes, especially in relation to trade and fiscal policies.

With the timing of any U.S. policy changes still unclear, the bank said its base-case projection includes only the estimated impact of “prolonged and elevated trade policy uncertainty” on trade and investment in Canada and internationally.

Changes under discussion in the U.S. include the renegotiation of the North American Free Trade Agreement, corporate and personal tax cuts, regulatory easing and a potential border tariff.

The bank said Canadian firms “remain wary” over potential U.S.-related developments that could increase protectionism and reduce competitiveness in the event of corporate tax reductions and regulatory changes.

Due to an expected additional drag on global investment connected to U.S. trade policy uncertainty, the report included slightly lower projections for export growth in 2017 and 2018 compared to the bank’s earlier predictions.

The bank also pointed to the U.S. trade-policy unknowns, and the fact it now expects them to drag on longer than expected, in its decision to revise down its prediction for business investment in 2017.

“A notable increase in global protectionism remains the most-important source of uncertainty facing the Canadian economy,” the bank said.

Copyright © 2017 Key Media Pty Ltd

Steve Randall
REP

The trend measure of Canadian housing starts was higher again in March, the third consecutive month of increases.

The rise to 211,342 units – up from 205,521 in February – was the highest level since September 2007 CMHC reported Monday. However, there were some clear regional differences.

“Stronger residential construction at the national level is reflected by a rising trend in single-detached and multi-unit starts in Ontario and continued growth of new rental apartments in Québec,” commented CMHC chief economist Bob Dugan.

While Toronto showed an increase across all housing types, Vancouver saw fewer starts for the fourth straight month. However, Vancouver starts remained above the five-year average and hit their highest level for the month since 1972.

Hamilton saw a decline in townhouses, especially popular with first-time buyers in the market, although other housing types saw stronger starts.

Meanwhile, in Montreal there was a rise in multi-family units with new rental units hitting a 25-year high. A decrease in unsold condos also rebooted building in this sector.

Quebec has seen a notable decline in new rental apartment starts this year as the market falls back from two years of historically high building levels in this sector.

The standalone monthly SAAR for housing starts nationwide was 253,720, up from 214,253 in February. There was a 20 per cent jump for urban starts, driven by a 30 per cent surge in multi-family; rural starts were estimated at 18,046 units.

Copyright © 2017 Key Media Pty Ltd

 

Neil Mangan
REW

Do you have noisy neighbours disturbing your peace? Or perhaps you want to play music but are getting complaints? Strata law expert Neil Mangan has advice from all the angles

Of all the compromises that come with condo ownership, living with noise might be the biggest. Whether you have a neighbour with creaky hardwood floors or a penchant for practicing freestyle clarinet solos or late-night acrobatics, you know all too well how noise can affect your life.

Although most strata corporations have bylaws restricting noise and other forms of nuisance, it can be difficult for owners and strata councils to figure out when the noises of everyday life cross the line and become legitimate complaints.

Most noise complaints come down to a conflict between how owners wish to use their properties and how different noises travel in buildings. For example, one owner may want to use their spare bedroom as a 24-hour home gym while the person living below can hear every footstep above their bedroom. When both owners have a right to live and use their property, who is responsible to change their behavior or expectations?

From a legal perspective, making a noise that impacts another person’s quiet enjoyment of their property can be considered nuisance. The challenging comes down to figuring out what level or noise or interference is reasonable. We all experience life subjectively and what bothers one person may be entirely acceptable to another.

In British Columbia, the courts will normally try to establish whether the level of noise is objectively reasonable to the average person. The courts will look at the nature and frequency of the noise as well as the nature of the neighbourhood and the property. When a neighbourhood changes over time, this too must be taken into account.

If you believe that a neighbour’s noise is affecting your ability to enjoy your home, look for ways to create evidence in support of your noise complaint. Take recordings of the noise if you can. Keep a journal of the timing, frequency and nature of the disturbances. You may also want to hire an acoustic engineer to measure the level of the noise and compare it to normal levels, verify the source and propose modifications in behavior or building construction.

At the other end of the scale, if you receive noise complaints, ask for specific details about the type of noise and the timing of the incident. Your strata corporation has a statutory obligation to provide you with specific details about the alleged offence. If you want to challenge a noise complaint, remember that you will need to show the strata council, and potentially the courts, that you were not engaging in any unusually noisy activities given the time of the complaint. If the issue persists, consider working with your neighbour and strata corporation to come to an agreeable solution.

If you are a member of a strata council dealing with noise complaints, avoid jumping to conclusions and take the time to investigate the complaint. Your strata corporation has a statutory duty to enforce the bylaws, make reasonable decisions and provide owners with a fair adjudication process.

While a late-night party or barking dog are obvious problems, many persistent noise issues are structural in nature. Your strata corporation is responsible for the repair and maintenance of common property between strata lots, and if the common property is a contributing factor in the transmission of noise between strata lots, the strata corporation may have a duty to repair or minimize the transmission of sound.

The simplest and most cost-effective way to resolve noise disputes is to work with neighbours and strata council to determine whether the noise is normal and to look for ways to minimize the disturbance.

If extending an olive branch doesn’t work, you may have legal remedies. Most of the time, owners have a right to the quiet enjoyment of their property. If you believe that your neighbour or your strata corporation are failing to respect your rights, or are unfairly targeting you, speak with a strata lawyer to review your matter and provide you with qualified legal advice.

For additional information on this and other strata property topics, visit my free online strata law guide at www.stratalaw.ca. Finally, always remember that this article provides general reference information, not legal advice. If you have a legal problem, always speak with a lawyer.

© 2017 REW.ca