Air-con now standard in many new residential buildings ? but is it really because of rising mercury levels?

Joannah Connolly
Western Investor

If (like this writer) you’re sweltering at home in the summer heat, chances are that you’re in an older building that was constructed when developers didn’t even think about adding central air-conditioning.

Going back 30, 20, even 10 years ago, summer temperatures didn’t often get to extremes – and when they did, the occurrences were rare enough that installing central air-con wasn’t worth the time or cost. But look at any heat map or temperature graph for Canada (and indeed, the rest of the globe), and you’ll see a dramatic rise in mercury levels in recent years.

“We’ve all noticed the climate change – in the last five to seven years, the weather has more peaks in terms of hotter summers and colder winters,” said Kush Panatch, principal of development company Panatch Group, formerly Centro Development.

The company is building condo project 50 Electronic Avenue in Port Moody, which will have air-conditioning throughout. Panatch said his customers are beginning to expect this feature more and more – starting from when the company built the Terra West condo building in Richmond around five years ago.

But he added that a bigger variation in local temperature peaks and troughs was not the only reason for customer demand for forced-air heating and cooling.

“In the Richmond project, a lot of our buyers were Asian, and coming from a hotter climate they were accustomed to having air-conditioning. The buyers were looking for air-conditioning and finding that not every building in Richmond had it, and as a result we picked up buyers.”

Panatch added, “At the time, we were also looking to differentiate from other projects in Richmond, and give it more of a luxury feel. That’s why we did it the first time. Then in our OneWest townhouse project in Richmond, a year ago, we found that older buyers liked the climate control when downsizing from single-family homes.”

Falling costs of incorporating cooling

Jason Turcotte, vice-president of development at Cressey Group, concurs that it’s not just the rising mercury that has led his company to include air-conditioning as standard in all new projects over the past five years. But Cressey also has other reasons, in addition to demand from overseas buyers, for including this feature in their homes.

“One reason is a change in policy in the engineering department of municipalities. We’ve seen the development of neighbourhood energy utilities, which are essentially small, localized plants that serve to heat spaces. And buildings are required to use it as a source of heat, which pushes the design of buildings away from traditional baseboard heating and into more complicated heating systems. So when you get into those systems, it became a far less expensive venture to incorporate cooling into the building.

He added, “Of course, we were at the same time seeing longer, hotter summers, which helped to rationalize it. But really, the incremental costs to go to cooling systems became much more palatable.”

Another factor that drastically brought down the relative cost to the developer of incorporating cooling systems was the overheating of the real estate market, Turcotte explained.

“As a percentage of the unit cost, it became even further justifiable because of skyrocketing real estate prices,” he said. “So, it seems like a response to the weather, but I think it’s more a response to other factors. There’s also the element of ‘keeping up with the Joneses’ where other developers are including air-conditioning and it’s been well-received. So where it was unusual to see air-conditioning 15 years ago, it’s unusual not to see it today.”

Rising costs to the homeowner

So the developers may be able to absorb those costs, but what about the buyer?

Turcotte acknowledged that the cost of a unit in an air-conditioned building would likely be around $25,000-$30,000 more than in a baseboard-heated standard building – although, he added, “you’re aren’t able to start at that baseline [as all new buildings are including air-con].” However, Panatch conceded, forced-air cooling and heating is also a higher daily operating costs to the homeowner than baseboard heating.

Cressey is working on two new condo buildings, both of which have very different systems but both offering units that are climate-controlled by the buyer. At Chelsea, a condo project at 31st and Cambie, which has a heat-pump system with a compressor inside the units, where owners have control over their heating and cooling. In the Bellevue building in West Vancouver, which has large suites marketed at wealthy downsizers, the company has gone with a multi-zoned fan-coil system, which allows for different zones within suites, also controllable by the owner and privately metered for each unit. “It’s two different ways of doing it, both giving you that same end result,” Turcotte added.

The new normal

Real estate marketing firm MLA Canada has also recently launched developments of varying size that have air-conditioning, including luxury high-rise The Smithe by Boffo in downtown Vancouver, Coromandel Properties’ eight-storey building Winston on South Oak, and Hensley by Cressey, a 33-storey tower in West Coquitlam.

Cameron McNeill, MLA’s executive director, agrees that central cooling is the new normal for new residential buildings – especially in pricier markets.

“Over the last few years, we are seeing a majority of high rises and luxury condos include air-conditioning. It will also vary by market but it is becoming a standard for presale developments in Vancouver’s West Side,” he said. “Our local homebuyers are well researched, and air-conditioning that cools the home during the warmer season offers comfort – while also providing a great value-add for developers marketing their new project.”

Copyright © 2018 Western Investor

B.C. cabin prices rise 19 per cent overall led by island and ski resorts, as Kelowna prices drop

Joannah Connolly
Western Investor

The deep pockets of Canadian baby boomers are “driving and inflating” the price of recreational real estate in vacation hotspots across Canada, not least in B.C., according to the latest Re/Max Recreational Property Report.

A survey of Re/Max agents in popular recreational areas showed that retirees are driving the demand for vacation cabins in 91 per cent of the regions examined, and that 78 per cent of those are seeing recreation property price rises.

Across British Columbia, recreational properties saw an annual price increase of 19 per cent. But this varies hugely within different regions.

The median price of a waterfront cabin in Tofino, where no speculation tax will be payable, increasing by a staggering 112 per cent, more than doubling from spring 2017’s $659,000 to $1.4 million in 2018 (see chart below).

However, local Re/Max agent Judy Gray was quick to point out that Tofino is such a small market, “the numbers get skewed.”

Gray said in a phone interview, “Prices are up, but not by those extremes. It’s because of a lack of high-end inventory a year ago – there was nothing to sell – but this year we’ve had some high-end waterfront inventory.”

She added, “I don’t think Tofino’s rising prices are related to being free of speculation tax, as in my experience, most buyers don’t realize that it is. Most buyers that come to us think the speculation tax is province-wide. That’s not a good thing. It’s going to hurt the provincial coffers, as [the B.C. government] won’t have the Property Transfer Tax that they like to grab onto.”

Ski cabins in Sun Peaks, which is also unaffected by B.C.’s speculation tax, saw a year-over-year increase of 34 per cent, “due to available services and schooling attracting retirees as well as families,” according to the report.

Speculation tax or inventory?

On the flip side, in Kelowna, where B.C.’s speculation tax will apply, the median cost of a waterfront property fell by a full 25 per cent from last year’s $980,000 to $735,000 this year. But according to a local agent, this is little to do with the planned tax.

Jerry Redman, the owner of Re/Max Kelowna who supplied the local stats for the report, said in an interview, “It’s a misleading figure, unfortunately. The speculation tax probably played a small part in this, but that [median price] figure is mostly to do with a higher number of waterfront condos being sold versus detached houses the previous year. A lot of condo inventory that was new and sold 10 or so years ago is coming back on the market. In fact, we’ve seen higher sales figures this year, since the speculation tax was announced, which was the reverse of what we expected.”

He added, “However, the speculation tax has caused angst to a lot of existing owners, who may be motivated to sell now, if it was the time to move on anyways.”

Elton Ash, regional executive vice-president of Re/Max Western Canada, said, “Overall, British Columbia continues to be a favourite destination for Canadians to invest in Recreational property, especially with the Baby Boomer demographic.

“The only dark cloud hanging over this segment of the real estate market is the proposed ‘speculation tax.’ It has introduced uncertainty to the marketplace in B.C. as people question the overall motivation of this particular government and whether this tax may broaden to more areas within the province. However, at this time, we have not witnessed any strong negative response to the tax.”

Looking ahead, the report said, “In the next two to five years, brokers in B.C. speculate the market will see a shift from retirees to younger buyers driving demand for recreational properties, as the latter accumulate more purchasing power.”

Copyright © 2018 Western Investor

Owners aged 65 and over believe it is important to live in their current homes

Ephraim Vecina
REP

93% of Canadian home owners aged 65 and over expressed a belief that it is important for them to live in their current homes in their retirement years, according to a recent poll conducted by Ipsos on behalf of HomeEquity Bank.

The survey – which was conducted between June 15 and June 18, 2018 – also found that in stark contrast to Canadian seniors’ preferences, only 55% of respondents aged 25-34 said that it’s important for them to stay in their homes when retired.

69% of senior home owners in Canada wish not to move away during retirement to maintain a sense of independence. Meanwhile, 51% said that they want to stay close to family, friends, or their communities, and 40% pointed at emotional attachments and memories as their motivation for staying put.

In addition, Ipsos observed a positive correlation between age and the perceived importance of home comforts, progressively strengthening among Canadians aged 35-44 (68%), 45-54 (74%), and 55-64 (79%).

Real estate professionals were among the leading sources of inquiries among senior home owners, with 17% of Canadians aged 55 and over (and 24% of those aged 75+) saying that realtors have approached them to gauge interest in selling and downsizing. Other sources of inquiries were friends and/or other family members (6%), adult children (3%), banks and/or financial advisors (1%), and neighbors (1%).

However, a majority of homeowners aged 55 and over (76%) said that they haven’t been approached for inquiries yet.

Copyright © 2018 Key Media Pty Ltd

Overvaluation and price acceleration in four markets is leaving Canada?s overall housing market vulnerable

Steve Randall
REP

Overvaluation and price acceleration in four markets in particular is leaving Canada’s overall housing market vulnerable.

That’s the warning from the CMHC which has issued its Housing Market Assessment based on data from the first quarter and market intelligence from the second quarter of 2018.

The housing market’s “early warning system” flags that Toronto, Vancouver, Victoria, and Hamilton, are the markets CMHC is most concerned about.

“At the national level a high degree of vulnerability continues due to moderate levels of price acceleration and overvaluation. Regionally, we are seeing a fair amount of differences, for instance in major centres in Ontario and British Columbia a high degree of vulnerability remains while in the Prairie and Atlantic markets range from moderate to low,” said chief economist Bob Duggan.

The report’s main highlights Vancouver – moderate evidence of overheating although there has been moderation over the last two quarters. Declining prices for detached properties in some areas, particularly Vancouver’s Westside and West Vancouver, are due to high inventories that have accumulated due to sustained falling sales volumes.

Toronto – although price growth has slowed, CMHC says it would have to see longer-term lower prices to discount potential price acceleration.

Calgary – evidence of overbuilding but oversupply of condos has eased since the end of 2017.

Winnipeg – evidence of overvaluation increased in Q1 2018. Real disposable income levels have declined while mortgage rates have increased.

Hamilton – moderate overvaluation evidence despite decline on average. Prices still higher than some market fundamentals can support.

“Policy changes to the housing market over the past 12 months have dampened home buying demand and softened price growth. However, our assessment continues to indicate a high degree of vulnerability in the Toronto CMA housing market as price growth persists above rates justified by economic and demographic fundamentals such as income and population,” said Dana Senagama, Manager, Market Analysis, Ontario.

Copyright © 2018 Key Media Pty Ltd

Overvaluation and price increase causing instability

REP

The Canada Mortgage and Housing Corporation says the country’s housing sector is facing a high degree of vulnerability to market instability for the eighth straight quarter.

The Crown corporation attributes the vulnerability to overvaluation and price acceleration in Toronto, Vancouver, Victoria, and Hamilton.

It rated Edmonton, Calgary, Saskatoon, Regina as having moderate levels of vulnerability and Winnipeg, Montreal and Halifax among those with low risks.

CMHC says it is seeing signs of moderate overheating in Vancouver although price growth has been slowing over the last two quarters and detached properties in some areas are seeing declining prices.

In Toronto, CMHC says sales continued to trend lower in the first quarter of 2018, well below the threshold for overheating.

CMHC’s quarterly report uses overheating, acceleration of home prices, overvaluations and overbuilding to assess the country’s real estate markets. 

The Canadian Press

Copyright © 2018 Key Media Pty Ltd

Your home inspection isn’t foolproof

Mike Holmes
The Province

I hear the horror stories all the time. People email me saying their home inspector missed this, or that. But the truth is, a home inspector can’t catch every single little thing that’s not right with the house. Imagine the size of the report after THAT inspection! Inspections are an exercise in risk reduction, but risk can’t be completely eliminated when it comes to buying a home. It can alert you to some big-ticket issues that the home has — and can keep you from buying a money pit.

I will still always recommend getting an inspection before buying a home. It’s some of the smartest money you can spend — even if it’s not a diagnostic of every nook and cranny of your home.

Through the process of checking the major areas of concern, the inspector may come across some smaller items that they’ll include in the report to aid the homeowner.

Remember, your home inspector has health and safety standards to follow. They won’t perform inspections that put their personal safety at risk — and they shouldn’t be expected to.

Here are a few things to be aware of when you get a home inspection:

They won’t do a full electrical inspection

Your inspector will take a look at your electrical panel, and scope out whether the work that has been performed seems up to code. If it looks like it was tampered with by an amateur, or there appear to be any issues with the electrical panel, the inspector will make note of that in a report — and recommend you follow up with a licensed electrical contractor. As your inspector goes room by room, they’ll test your light switches and electrical outlets — but they may not test every single one. Typically, they’ll test a representative number of them, so for example, if a room has five outlets, they may test two or three of them. If those test fine, they’ll move on to the next room. Any outlets that are obscured by furniture won’t get tested.

They don’t get down and dirty

Not every section of your home may be easily accessible. An inspector will check your attic, but they won’t disturb insulation to check behind it, and for areas with a low pitch — they’re not going to crawl through it corner to corner. A home inspector won’t move or climb on pieces of furniture so they can check out every window or power outlet. Anything that’s not accessible to the inspector won’t be inspected. Depending on how the home is currently staged, that could lead to some blind spots. For example, old furniture in the basement could be obscuring a foundation crack, or a problematic window.

They need to take their health and safety seriously. They’ll only inspect the home as far as conditions will allow. What does that mean? If your crawl space is wet, it could be contaminated with animal waste, mould, or mildew, and they won’t expose themselves to it. While most inspectors will check your roof — if you’re inspecting in the dead of winter and it’s covered by three feet of snow, they’re not going to climb up there to take a look. Inspectors can only inspect a home according to the conditions that allow them to do so safely.

They don’t automatically assess your air

A home inspector won’t automatically check your air quality for toxins like Volatile Organic Compounds (VOCs), mould, and radon. Many inspectors out there will be able to collect air samples from your home and send them off to a lab that will test for these pollutants.

If your indoor air quality is a concern, make sure to ask your home inspector to add this to their list of services. This goes for radon, especially. It’s a colourless, odourless gas, so the only way to know if this harmful substance is in your home, is to test for it.

I’ll say it again: a home inspection is some of the smartest money you can spend when buying a home. It’s designed to give you a better picture of the home beyond the lipstick and mascara. But I’m all about making sure you’re informed as homeowners — and that includes knowing what an inspector WON’T check.

© 2018 National Post

Linea to pose a striking presence in Surrey

Mary Frances Hill
The Province

Linea

What: 236 homes

Where: 13318 104 Ave, Surrey

Residence sizes and prices: From 474 to 1,491 sq. ft; prices start from the high $300,000s for one-bedroom homes, the high $400,000s for two-bedroom homes and the low $600,000s for three-bedroom units

Developer and builder: Rize

Sales centre: 10249 King George Boulevard, Surrey

Hours: noon — 5 p.m., Sat — Thurs or by appointment

Telephone: 778-395-1126

You might say that Linea was designed from the outside in. When Louise Noon saw the undulating curves that will grace Linea’s exterior, she knew that she and IBI Architects shared an appreciation for bold design and intelligent use of space. “The architecture of Linea is both dynamic and efficient,” says the False Creek Design Group interior designer, who worked with developer Rize and IBI on the 236 homes at Linea, a condo community planned for Surrey City Centre.

“From the start, we wanted this focus on unique expression and detail carried through to the interior.”

The designers, developer and architect set out to embrace beauty with a purpose, and shared the goal of offering efficient indoor spaces. They succeeded, with special features like kitchens on the exterior wall to welcome natural light and take advantage of the view, says Steven Cox, head of creative at Rize. “The biggest challenge we face when producing a building with a unique form is being able to deliver well-functioning interior suites,” he says. “To Rize, that means that all the different spaces of the home need to work well in isolation and together as a well-considered design.”

Cox says the serene interiors were fashioned to present a subtle counterpoint to the more striking look of the building’s exterior, which is reminiscent of mid-century modern design. “For this reason, it was very important that the interior design responded with a calm and sophisticated palette,” he says.

In other words, the architecture takes centre stage, while the interiors play a supporting, but significant role. Cox says the developer expects that many Linea buyers, already attracted to the building architecture, will possess their own strong sense of style and design sensibility. Usually, these owners prefer interiors to offer a calm background, or a clean, minimalist space that gives them the freedom and efficient space to express their own taste in decor and personal items. “Too often, interiors try too hard, and by the time a collection of interesting furniture, art and collectibles are added to a home, it becomes overwhelming. Linea was designed with this idea in mind,” he says.

Noon has a keen eye for resilient, attractive finishes, so she concentrated on the kitchens and bathrooms, which she says were detailed “both to maximize counter space, storage and livability,” she says.

The powder rooms, bathrooms and ensuites are lined with 24-by-24-inch porcelain wall tiles and 12-by-24-inch floor tiles. In the bathrooms, homeowners will find resilient Caesarstone quartz countertops and rectangular under-mount sinks.

“The large-format tile has the effect of making the rooms appear more spa-like and larger,” says Noon.

© 2018 Postmedia Network Inc.

Starting September 17 new property transfer tax needs more info

Canadian Real Estate Wealth

The British Columbia government is closing a loophole in an effort to avoid tax evasion in real estate.

It says buyers, including real estate speculators, will have to disclose more complete information when they purchase a property through a corporation or trust.

Starting Sept. 17, the new property transfer tax will require people to report additional information, including their name, citizenship and social insurance number, if they purchase through a corporation or trust.

Finance Minister Carole James says the government wants to prevent people from skirting tax laws and hiding property ownership behind numbered companies and trusts.

The new reporting requirements will apply to all types of property, with exemptions for charitable trusts and certain corporations, such as hospitals and schools.

The changes are part of a series of steps the government is taking to address tax fraud in the real estate market that includes tracking pre-sale condos, sharing homeowner grant information with the federal government and boosting the ability of auditors to act on tax evasion.

“These changes give authorities another tool to make sure people are paying the taxes they owe,” James says in a news release. 

The Canadian Press

Copyright © 2018 Key Media Pty Ltd

Consumers have a negative outlook on the Canadian housing market

Steve Randall
Canadian Real Estate Wealth

Consumers have a more negative outlook on the Canadian housing market and it’s the government’s fault.

That’s a key finding of Mortgage Professionals Canada for its Report on Housing and Mortgage Market in Canada, which reveals that the effects of policy changes including the mortgage stress-test combined with higher interest rates, are denting sentiment.

“We are still seeing a high level of desire in homebuying, especially among young people aged 25-34,” said Paul Taylor, President and CEO of Mortgage Professionals Canada. “Whether they will be able to make that purchase may be an entirely different matter.”

First-time buyers are struggling to save a down payment, even with help from parents, and many are giving up on the idea of ever owning their own home, the survey shows.

But while the MPC supports some of the government policy changes, the cumulative effect is where they really impact buyers.

“We support a stress test, albeit at a reduced rate of 0.75%, as it is a useful tool to test a borrower’s ability to make future payments,” commented Taylor. “However, the cumulative impact of rising rates, a 2% or greater stress test, provincial government rules in Ontario and British Columbia, and further lending restrictions are negatively supressing housing activity not just in Toronto and Vancouver, but throughout the country.”

Falling prices aren’t the answer Although falling prices could be expected to add a spark to the market, MPC says this is not shown to be the case historically.

“We have seen historically that this can actually reduce demand,” explained Will Dunning, Chief Economist for Mortgage Professionals Canada and author of the report. “Significant price drops put into question the reliability of the market as a whole, causing prospective buyers to fear that values will fall further.”

The report shows that the market is responding typically to actual economic conditions but this is being disrupted by the impact of the stress tests and, while the hottest markets may have seen some positives, others have been negatively affected.

“The effects of these policies are especially concerning in areas that are already dealing with economic instability, notably Alberta, Saskatchewan and Newfoundland and Labrador, which are struggling to recover from the oil price shock,” said Dunning. “The worsening divide between housing supply and housing demand is further degrading the confidence consumers have in the economy and in housing.”

Copyright © 2018 Key Media Pty Ltd