New market rental housing project breaks ground in Coquitlam

Sean Boynton
other

Developers and city officials in Coquitlam celebrated the start of construction of a long-awaited market rental housing project Saturday.

The development, dubbed Residences at The Heights, is being built in the Austin Heights neighbourhood on Charland Avenue near Blue Mountain Street, and will include 41 rental units.

The project is the first to be built under Coquitlam’s housing affordability strategy, which was passed in December 2015, and is the first market rental development to be built in the city in roughly 40 years.

“For a number of reasons economically, market rental housing wasn’t being built,” Mayor Richard Stewart said at the ground-breaking event.

“Being able to bring market rental back in and see some actual [development] is vitally important, as our current stock is all 40 or 50 or sometimes 60 years old, nearing the end of its life.”

Abdul Jiwan of Redbrick Properties, the project’s developer, said the long wait for new rental housing in Coquitlam has been broken thanks to fresh incentives from the city.

“Decades ago there was a tax incentive for developers to produce rental housing,” he said, adding zoning bylaws had favoured condos in the meantime.

“More recently, some cities like Coquitlam, Vancouver, New Westminster, have offered flexibility from zoning bylaws to accommodate the unique needs of rental housing so developers can economically justify rental housing.”

Construction is set to be completed by August 2019.

A report released in January by the city claimed roughly 2,475 new market rental units have either applied, or been approved since the housing strategy was adopted, with another 166 below-market units also on the way.

© 2018 Global News

What you need to know to navigate the housing market in Metro Vancouver

G. MARION JOHNSON
The Vancouver Sun

The real estate market is always changing, but Metro Vancouver is currently experiencing a somewhat unusual scenario: a tale of two markets.

These days, it’s a sellers’ market for condos and townhomes and a buyers’ market for detached homes.

“Condos and townhomes are very busy,” says Jill Oudil, president of the Real Estate Board of Greater Vancouver (REBGV). “We’re seeing multiple offers. There’s low supply in the market right now compared to the number of buyers who want to purchase. With detached homes, there’s a lower sales-to-active-listings ratio. Buyers in the detached market are facing less competition and have more to choose from.

“The price gap between the two markets is getting smaller,” she adds. “It’s an ever-changing market, for sure.”

Sales of detached homes last month were down 39.4 per cent over the 10-year February sales average, according to the REBGV. Apartment sales were 5.5 per cent above it. Sales of all types of properties were 14.4 per cent below the 10-year February sales average.

Rising interest rates and stricter mortgage requirements are affecting people’s purchasing power, especially that of first-time buyers.

New lending guidelines require borrowers to pass a “stress test”, showing they could handle mortgage payments should interest rates continue to increase.

Even without the new rules, purchasing a home for the first time can be as stressful as it is exciting. Oudil recommends working with a qualified Realtor from the get go.

“This is likely the biggest financial decision anybody will make in their life,” she says. “A Realtor will guide you through the process. Nervousness dissipates when you’ve got a plan and a goal and someone to help you understand how the process works.”

Realtor Phil Moore, REBGV’s president-elect, describes the current market as price conscious. “It’s driven by first-time buyers and by ‘move-up’ buyers — second-generation buyers going from a condo to a townhouse or trying to make the leap from a condo to a house,” he says. “Homes that are priced under $750,000 are very active. And for the first time in a long time, detached-house prices are starting to come down a bit.”

He says Realtors can help buyers determine how much mortgage they can comfortably afford, a figure that may be different than what a bank pre-qualifies them for.

He will sit down with clients to go over considerations such as household and entertainment expenses and regular RRSP contributions, costs that are over and above monthly mortgage and home-insurance costs.

“We work with buyers to keep them working within their budget,” Moore says. “You don’t want them to get in over their heads.”

Realtors also help buyers with the multitude of other factors that come into play with a purchase. Depending on the situation, those could include condominium depreciation reports and special assessments, home inspections and land surveys, the age of a roof or elevator, and more.

“When I’m representing buyers, I go to city hall to get the building plan,” Moore says. “We can see if there are any outstanding issues and if the house was ever a growop. We can find records of oil tanks or oil-tank removals. That’s a defect that people are sometimes not aware of, but your Realtor will research it.

“If a previous home owner constructed any unauthorized accommodation, the city could force you to remove it,” he adds. “You can find surprises. When you’re getting guided through the process by a Realtor, it helps take away risk.”

Realtors also have exclusive resources to help buyers find a suitable home, including use of the Multiple Listing Service (MLS®), the most extensive real estate listing database in Canada. While the public has access to www.REALTOR.ca (formerly mls.ca) to view basic property information for any MLS®-listed property in the country, only Realtors have access to MLS® and the comprehensive information it contains.

The MLS® generates market comparison reports, allowing Realtors to make up-to-the-minute assessments of market conditions within specific communities.

The real estate profession is one of the most highly regulated in the country. The Real Estate Council of B.C. is a regulatory agency established by the provincial government to protect consumers through the licensing of all individuals who practise real estate in the province.

As members of their local real estate board, Realtors are also required to adhere to the Canadian Real Estate Association’s Realtor Code and Standards of Business Practice.

For first-time home buyers, having a Realtor walk you through the steps of the home-buying process in an everchanging market is invaluable. To find one, ask for referrals from friends and family or even go for coffee with a potential Realtor to see they seem like a good fit.

“You need to feel comfortable with them,” Oudil says. “If you’ve established an area you wish to purchase in, make sure you have a Realtor who’s knowledgeable in that area.

“Realtors love helping people,” she adds. “It’s wonderful to be able to guide someone through this process and see the excitement on their faces when they’re successful.”

REALTOR® and the MLS® are registered trademarks owned by the Canadian Real Estate Association.

© 2018 Postmedia Network Inc.

Ad warning homeowners to sell before tax kicks in fails

Kevin Griffin
The Province

A Victoria realtor who wants people to sell their homes now, in order to avoid a proposed NDP speculation tax that would come into effect this taxation year, said he’s had a tepid response so far.

Ron Bahrey said he’s only received “a couple of calls” since an ad appeared in the Times Colonist on Wednesday.

“I thought I’d get more calls,” Bahrey said in a phone interview Thursday.

“It hasn’t turned out the way I thought it would.”

The ad included a photo of the realtor along with the following text and his phone number: “Sell now and avoid the new B.C. ‘Speculation Tax’ Get top dollar for your Home or Investment property.” 

Bahrey, a realtor since 1983, said he was basing his expected response on the number of online comments to various stories about public reaction to the speculation tax, including Vaughn Palmer’s columns in The Vancouver Sun.

“I know there are lots of people upset,” he said.

A friend suggested that maybe Bahrey’s ad appeared too soon. The friend said he might receive more calls should it become law later this year.

Bahrey said he was personally against the proposed tax, which he described as oppressive and punitive.

“It’s a terrible tax on Albertans and people who live in Canada who have come here to retire,” he said.

Bahrey cited as an example an older physician from Alberta who bought a condo in Oak Bay for around $250,000 about 20 years ago. He expects the property’s value has increased to $350,000.

Homeowners such as the physician in Oak Bay, Bahrey said, constitute the bulk of his clients.

“They never bought that for speculation,” he said. “They bought it for use when they come from Calgary.”

Bahrey said he didn’t have a problem with people speculating on property.

“I think people should be allowed to speculate,” he said.

“They’re still being taxed on everything they do.”

The provincial government, in its February budget, proposed a new speculation tax to target absentee investor homeowners who declared little or no income in B.C. The tax would be based on assessed value: $5 per $1,000 of assessed value this year, rising to $20 in 2019.

The tax would be effective for the 2018 taxation year.

A Ministry of Finance tax information sheet says that principle residences and homes rented out for the long term will be exempt.

“A non-refundable income tax credit will help offset the tax for B.C. residents,” it says.

“This will leave the bulk of the tax levied on vacant and short-term properties owned by individuals who do not live in B.C., as well as satellite families.”

The information sheet defines satellite families as households with high worldwide income that pay little income tax in B.C.

In the budget, the province also proposed to increase the foreign buyers tax to 20 per cent from 15 per cent and expand the levy to Victoria, Nanaimo, the Fraser Valley and Kelowna.

Both measures would generate an expected $602 million in revenue for the provincial government by 2021.

The foreign buyers tax was introduced in August 2016 by then-premier Christy Clark.

The Real Estate Council of B.C., the provincial regulator of realtors, said in an email that its advice to consumers and real estate professionals “is to obtain independent legal or accounting advice about how any applicable tax may affect their real estate transaction.”

For more information, the council directed the public to the Ministry of Finance and its Tax Information Sheet about the proposed speculation tax.

© 2018 Postmedia Network Inc.

Speculation tax backlash spreads

Jennifer Saltman
The Province

The provincial government’s controversial real estate speculation tax is facing increasing opposition as elected officials in affected municipalities and regions across B.C. field hundreds of angry calls flowing in from a broad swath of affected individuals and groups such as the construction industry and developers.

Local politicians across the province are reacting by appealing to the NDP government to exempt their regions — or cancel the tax outright — because it has such significant unintended consequences that it could cause what some term a “potential financial crisis.” 

“We know that there are serious issues in our community and we want to work with the provincial government to help rectify this situation, but we don’t think the speculation tax as proposed will necessarily have the positive impact and, in fact, could potentially have some very serious negative impacts,” said Kelowna Mayor Colin Basran.

The speculation tax was announced in last month’s provincial budget and will apply to any homeowners in six specific regions who don’t live in a property or rent it out long term. They will be taxed $5 per $1,000 of assessed value for 2018, increasing to $20 per $1,000 of assessed value in 2019.

The areas affected are the Metro Vancouver, Fraser Valley, Capital and Nanaimo regional districts, along with the municipalities of Kelowna and West Kelowna.

A non-refundable tax credit will be available to help offset the tax for B.C. residents, but in many cases it will not cover the full amount of the tax.

Basran said Kelowna is not happy with the tax in its current form, which will operate more like a vacant home tax and won’t be as effective as a “flipping” tax aimed directly at those who buy and quickly sell properties.

Basran said he is hearing “in droves” from Albertans who own vacation homes in Kelowna that they see the speculation tax as a warning from the province that they shouldn’t be spending their money in his city.

“They’re taking real offence to this on the heels of the oil and wine dispute,” he said. “They feel this is an indication from our provincial government that they are not welcome in this province.”

As more information has emerged about the tax, Basran said British Columbians who own homes in the area are contacting him as well.

Another concern is the impact on the construction industry. Basran said there are two projects worth a total of about $300 million — one has been approved by council and one is going through the approval process — that could be in jeopardy because the developers have said they will put them on hold until the tax is clarified.

“More than anything, it’s the uncertainty that’s raising a lot of concerns and is damaging our economy, because when people don’t know, they’ll just sit and wait, and that’s not a good thing,” he said.

A staff report will be presented at Monday’s council meeting, and after it is received council will take an official position on the tax and decide on its next steps.

Basran’s comments come after the District of West Kelowna and the Regional District of Nanaimo, two of the six areas covered by the speculation tax, told the province that they want to be exempted or see the tax cancelled altogether.

On Tuesday, West Kelowna voted for the mayor to meet with Premier John Horgan and B.C. Green party leader Andrew Weaver to put pressure on the province to exclude West Kelowna from the tax.

“We’re very concerned about the overall economic impact,” said Mayor Doug Findlater. “We are fundamentally concerned this would push property values below the amount of equity people have in their homes. It’s a potential financial crisis.”

The Kelowna Chamber of Commerce and Greater Westside Board of Trade have asked that both Kelowna and West Kelowna be exempted from the tax.

Last week, the Regional District of Nanaimo board sent a letter to Finance Minister Carole James that said it appreciates the province’s goal of addressing the cost of housing in B.C., but pointed out that the speculation tax has unintended consequences that outweigh the benefits.

James said that the government is listening to communities across the province, but also read out notes in the legislature from people who are struggling to find housing. She did not commit to exemptions, saying instead that the government is working on the specific details of the tax, which will be out within months.

Those consequences include taxing recreation properties — some of which are in zones that prohibit year-round residence — penalizing those who are buying retirement properties a few years in advance, unfairly applying the tax to Nanaimo but not its neighbouring regional districts, and a lack of clarity about what will happen in homes with secondary suites.

On Tuesday, the Nanaimo board unanimously objected to the tax in any form, in any region or municipality in B.C.

“It should be eliminated altogether,” said board chair Bill Veenhof.

The board of the Capital Regional District — which covers southern Vancouver Island, from the Juan de Fuca Electoral Area to the Southern Gulf Islands, including Victoria — has not come out with a consensus position on the speculation tax.

However, the directors of two electoral areas included in the Capital Regional District said they are asking the province for exemptions.

Mike Hicks, the Capital Regional District director for the Juan de Fuca Electoral Area, is most concerned about the community of Port Renfrew. He said the Albertans and British Columbians who own vacation homes in the area bring in important tourist dollars and pay taxes that support services such as the volunteer fire department.

Hicks said the province’s speculation tax will cripple the area.

“We have a beautiful little economy going,” he said. “I feel that Port Renfrew is just on its feet and really rocking and doing really well, and this is going to be devastating.”

Hicks said he feels that the province is attempting to curb prices in the Victoria area, but has mistakenly applied the tax to rural areas. Horgan is his MLA, and he doesn’t believe that the intention is to hurt places like Port Renfrew.

“I’ve expressed my thoughts to him and have asked for an exemption for the Juan de Fuca Electoral Area from this tax for those reasons,” he said.

Wayne McIntyre, director of the Salt Spring Island Electoral Area, said he has written to his MLA, Adam Olsen, about having his area exempted from the tax, and expects the Southern Gulf Islands Electoral Area to ask for the same.

“We’re really rural communities,” McIntyre said. “We’re entirely different from the urban environment, and yet for a lot of the programs that exist we’re considered urban simply because of our relationship with the Capital Regional District.”

Metro Vancouver board of directors chair Greg Moore said the speculation tax has not been discussed at the regional district board.

A request for comment from the Fraser Valley Regional District did not receive a response.

On Thursday, Liberal MLA Michelle Stilwell, who represents Parksville-Qualicum, said in the legislature that the tax is causing chaos in her community and asked James if she would accede to requests from communities, like Nanaimo Regional District, that want to be exempted from the speculation tax.

Liberal MLA Ben Stewart, whose represents Kelowna West, called the tax “half baked” and asked whether there would be an exemption for West Kelowna.

© 2018 Postmedia Network Inc.

Condos for bitcoins? One man is determined to make it work

Naomi Powell
The Vancouver Sun

Derryn Shrosbree’s ideal real estate deal involves no agents, no lawyers or other intermediaries. In his mind’s eye, there is just a buyer, a seller and a lot of Bitcoin.

So in February, Shrosbree listed his two-bedroom Mississauga condominium for 35 bitcoins – about CDN$445,000 at the time — on the Multiple Listing Service (MLS).

Within a week, he got an offer. But to his disappointment, the buyer – who was completely unfamiliar with cryptocurrencies — wanted to pay the old fashioned way, in Canadian dollars.

“The settlement is unfortunately in cash,” said Shrosbree, who has nevertheless arranged to have the payment converted to Bitcoin before he receives it. “As per every new technology and every new thing that comes down the pipe there’s going to be various stages where it’s still a bit clunky.”

 

Though Shrosbree hasn’t given up – he says he’ll soon list two more properties for Bitcoin — his experience demonstrates some of the current challenges to using cryptocurrencies in real estate transactions.

For one thing, cryptocurrencies like Bitcoin are wildly volatile. The value of a single Bitcoin sometimes fluctuates by 10 per cent or more within days or even hours, adding significant complexity to a standard property transaction.

To ensure Shrosbree’s listing reflected the value he wanted for his property, for example, his real estate agent Brett Starke had to change the Bitcoin price on MLS every day, with Shrosbree signing off on the moves. A separate condition on the sale was that the bitcoin payment had to be equivalent to the value in Canadian dollars on the day the sale closed.

“It’s very hard for a price denominated in Bitcoin to be sticky for long periods of time,” said Stephen McKeon, a professor of finance at the University of Oregon who studies the intersection of digital currencies and real estate. “It’s very volatile and presumably the cost will be in whatever the native currency is. That’s the number one problem.”

Another obvious problem is finding a buyer comfortable with a Bitcoin arrangement, McKeon adds. Despite all the attention they receive, cryptocurrencies aren’t widely understood or held by mainstream consumers.

And there remain concerns about their use in criminal activities. The Real Estate Council of British Columbia and the Real Estate Council of Ontario have both noted that cryptocurrencies cannot be held in trust and have advised buyers using them to seek legal advice.

In a statement, the B.C. regulator said that while there were many legitimate purposes for cryptocurrencies, there are also “significant risks associated with them, including the risk that the currency may be used to disguise the source of money derived from criminal activities – commonly known as money laundering.”

But for all the fear and hype surrounding Bitcoin, technology experts say the real opportunity for innovation in the real estate industry rests not with digital coins but with the technology that underlies them: blockchains. These decentralized public ledgers verify and record transactions across many computers. Supporters of the technology say they have the potential to make property transactions faster, less expensive and more resistant — though not immune — to fraud.

“Buying a property in Bitcoin is equivalent to buying it in one fiat-backed currency and switching it to another,” said Simone Brunozzi, chief executive of San Francisco-based Fabrica.city, which is developing a software platform for property transactions. “Blockchain is a global registry. When you record a transaction, it’s there forever. It’s a trusted public record.”

The Republic of Georgia, Honduras and the city of South Burlington, Vermont have all either tested or are experimenting with storing transaction records or land titles on a blockchain. And Sweden’s Lantmäteriet, or land registration authority, is months away from testing its first property transaction on a newly developed blockchain system.

While property titles will continue to be held digitally in the Swedish land registry office, transactions will be recorded into digital blocks on the blockchain, said Jörgen Moden, chief solutions architect at ChromaWay AB, the technology firm leading the project. Any information related to the deal cannot be altered without the approval of all parties involved, cutting back the opportunities for fraudulent practices. And though currently it can take several months for a property to change hands in Sweden, the new system could see the timeline reduced to mere hours, Moden said.

“All the signatures are right there and all parties can see them, including the banks, who can then issue loans. We construct a chain of evidence that enables more trust and much faster turnover of property.”

The project has had its challenges. Digital signatures aren’t permitted in land sales in Sweden, though Moden hopes that will change. And while many hope that blockchain could remove all intermediaries from the process, the Swedish experiment suggests there will still be a role for many of the current players in property deals. For instance, a real estate agent will still be present to verify the seller’s possession of the house and her identity when a digital signature is created, he said.

“Ultimately we are trying to cut down on the number of intermediaries but right now the focus is on increasing speed and trust in the system,” he said.

Nevertheless, the ability of blockchains to create transparent, secure records of transaction could prove immediately disruptive, said Brunozzi of Fabrica.city.

“In the U.S., any time you buy a house, you have to get the title insured to make sure there are no outstanding claims against it and that’s a multibillion dollar industry,” he said. “The blockchain creates a trusted public record. So title insurance isn’t as important.”

Though much development still remains, Shrosbree – a former Wall Street derivatives trader now working on an insurance business that accepts bitcoin as payment — believes a seamless transaction between buyer and seller could happen sooner than many think.

The sale of his Mississauga condominium closes in April. He plans to list the next two properties soon.

“We’re hoping the second and third sales will truly be a 100 per cent fiat free transaction where we can start to disintermediate the chain,” he said.

© 2018 Financial Post

REP

A new tipline is being set up to allow for anonymous complaints about suspicious real estate activities in British Columbia.

Finance Minister Carole James says the tipline launched by the Real Estate Council of British Columbia will help improve consumer protection.

Trained investigators will review each tip.

They will then ensure appropriate action is taken to maintain professional standards.

An independent advisory group created to better protect consumers in the real estate market recommended establishing a tipline, which is in addition to the council’s existing complaints process.

The council is mandated to protect the public and enforce the Real Estate Services Act.

Copyright © 2018 Key Media Pty Ltd

Andy Blatchford
REP

With a popular measure that shows Canadians’ soaring debt remains in record-breaking territory, the federal government has acknowledged internally there’s no way of knowing whether the burden has climbed too high.

A recently released federal analysis, prepared for Finance Minister Bill Morneau, said the country’s household-debt-to-disposable-income ratio has been steadily rising since 1990, when it was 90 per cent. That translates to 90 cents in debt for every dollar of household disposable income.

On Thursday, the latest figures showed the ratio hit 170.4 per cent in the final three months of 2017, just below its historical peak of 170. 5 per cent the previous quarter. That’s just over $1.70 in debt for every dollar of disposable income.

“While the debt ratio is high historically speaking, there is no way of precisely determining whether the current ratio is too high,” said the memo, which was written last August.

“There is no estimate of the exact ‘optimal’ level of household debt.”

The Finance Department document, labelled “secret,” was obtained by The Canadian Press under the Access to Information Act.

Policy-makers keep an eye on the debt ratio, which is one of several ways experts monitor household debt, in their efforts to gauge the severity _ and potential fallout _ of the country’s years-long borrowing binge.

The Bank of Canada, for one, has carefully assessed the economic risks of consumer debt in order to determine how quickly it can raise interest rates without piling on too many debt-servicing costs for over-stretched households. The central bank has called Canadians’ debt burdens an area of top concern.

Still, in response to the stronger national economy, the bank has increased its benchmark rate three times since last summer. When the economy is close to full capacity, the bank hikes its rate to keep inflation from rising above its two per cent ideal target.

Even if it is uncertain where the danger zones begin for the household-debt ratio, the briefing note to Morneau said there are “clear negative consequences” for the economy if the number gets too high or too low.

High household debt can lead to “deeper and more protracted recessions,” while levels too low among those who can afford it could push home-ownership rates down to sub-optimal levels, the memo said.

But the document notes that static calculations about debt fail to account for many other factors that can affect the entire picture, such as policy changes aimed at slowing debt accumulation.

“Ultimately, what drives the sustainability of debt is whether carrying it is affordable and whether the distribution of that debt poses any systemic financial risk,” said the memo, which was partially redacted.

The main theme of the document was to explore likely economic impacts from the Bank of Canada’s current rate-hiking path.

The memo presented two primary ways higher rates will affect the economy _ they will make existing debt loads costlier to service and they will make interest-sensitive spending, like expenditures for cars, housing and business investment, more expensive.

But given expectations the central bank will take a gradual approach to raising the rate, the briefing note said the economy is likely to steadily absorb the increases.

Some analysts said the fact this week’s debt-ratio reading was slightly lower than the previous number could suggest Canada’s debt growth may have turned a corner.

“That should be viewed as a positive development by the (Bank of Canada), though progress on reducing the ‘key vulnerability’ of elevated household debt will likely be very slow,” RBC economist Josh Nye wrote in a research note.

For several years, policy-makers have been introducing new regulations, such as restrictions on mortgage credit, to curb the build-up of household debt.

Earlier this week, Bank of Canada governor Stephen Poloz also said the federal government’s steps to add to the public debt in recent years has helped slow the rise in debt accumulated by Canadians.

Poloz, who acknowledged household burdens have still managed to reach historic highs, said Ottawa’s spending on programs such as enhanced child benefits and infrastructure have contributed to economic growth. As a consequence, the stimulus has pushed interest rates higher than they would have been without it, he said.

On the household-debt-to-disposable-income ratio, some experts see it as just one number out of many and insist that consideration must be given to the composition of the debt, such as how much of it is high risk.

“It’s masking more than it’s revealing,” Benjamin Tal, CIBC’s deputy chief economist, said of the ratio.

“Therefore, the fact that (Finance officials) are saying, ‘there’s no optimal level, we don’t know if it’s really very high,’ suggests that at least there is some rational thinking when it comes to this ratio, which is very refreshing.”

Copyright © 2018 Key Media Pty Ltd

other

The Real Estate Council of British Columbia is launching an anonymous tipline to enhance consumer protection in British Columbia’s real estate market.

other

Download Document