Archive for November, 2018

No, detached home prices in Vancouver aren?t collapsing, according to this infographic

Friday, November 30th, 2018

The market peaked in May 2017 not 2016

Josh Sherman
other

To get a handle on how detached home values in Vancouver have evolved since 2016, the year the province started taxing foreign buyers, Glacier Media analyzed median prices — and the results may come as a surprise.

Contrary to what some might believe, the market did not peak in the spring of 2016, just before BC slapped a 15-percent levy on non-resident homebuyers in Metro Vancouver, the study from the business info and media company suggests.

The market instead reached a new high of $1.5 million in May of 2017, according to Glacier Media’s analysis presented in a new infographic. And as recently as this summer, pricing had returned to around the $1.4-million level, before cooling slightly in the fall.

“We chose to use median prices rather than averages, as median prices are not skewed by extremes at either end of the market,” writes Joannah Connolly of Glacier Media Real Estate in the Vancouver Courier.

“The same infographic for average prices would show a larger price decline since the market peak, as there have been relatively fewer sales of very high-end homes,” Connolly continues.

Connolly notes that north of the $3-million mark, there are substantial price drops. “The same infographic for that market alone would tell a very different story.”

The Glacier Media analysis differs from a recent National Bank report, which explored when home prices peaked in 26 housing markets across the country.

According to National Bank, Vancouver’s market hit a new high this May.

But the bank’s calculations included all housing types, and it was based off the Teranet-National Bank House Price Index, which relies on sale prices in public land registries, meaning there is a lag of one to two months from the time the transaction is recorded.

© 2018 BuzzBuzzHome Corp

Stack office tower by Oxford Properties stands 161.5 metres

Thursday, November 29th, 2018

Vancouver’s tallest commercial tower to pilot green standard

Ephraim Vecina
Mortgage Broker News

Slated to be the tallest commercial building in Vancouver by far, the 161.5-metre Stack office tower by Oxford Properties Group will be among Canada’s very first buildings to be erected to the “net zero carbon” emissions standard, the developer announced.

The 36-storey Stack will be offering 540,000 square feet of office space, and it is promising to showcase Canada’s status as a world leader in green development.

“This has never been done in an office tower in Canada before,” Daniel O’Donnell of Oxford Properties told The Globe and Mail.

The building is scheduled for completion by 2022.

Canada is certainly no slouch in offering high-class commercial spaces that exceed global environment-friendliness standards. The Canada Green Building Council estimated that in the past 14 years, it has certified over 3,600 LEED buildings nationwide and registered over 7,600.

“Overall, Canada ranks very high in terms of green building construction,” Starlight Investments building automation and energy specialist Trevor McLeod said. “More than ever, sustainability is now in the conversation with regard to building design or retrofits, so things are moving in the right direction.”

The implementation and further refinement of such standards is especially important, considering the future impact of global climate change.

“There’s a convergence of interests in sustainable building. Some are altruistic and some are just good, old-fashioned capitalism,” Oxford Properties Group head of real estate management Andrew McAllan stated.

He argued that a green office building with amenities like readily accessible bicycle storage and parking for shared vehicles is certain to attract more, and higher quality, investment.

Limited common property bylaws quite often misunderstood

Thursday, November 29th, 2018

Strata corporations has to maintain decks

Tony Gioventu
The Province

Dear Tony:

Our strata corporation has a bylaw that says the owners must maintain and repair limited common property.

Our balconies are designated as limited common property, and this summer, the strata hired a company that washed our siding and then power washed every balcony, deck and patio area. Now several owners are concerned about the damage caused by the power washing, and several leaks have shown up from torn deck covers to the units below.

The strata council said it’s our problem to get the deck membranes repaired or replaced as the bylaws require owners to maintain and repair common property.

The decision of council to have decks power washed was challenged by several owners who were threatened with a police complaint at the time if they interfered with the contractors. Our strata president and treasurer are both bullies and have virtually no experience.

Because the damage was obviously caused by the carelessness of the contractor and the council, why should owners do these repairs? 

Lynn R.

Dear Lynn:

This is a common misunderstanding of how limited common property bylaws are applied.

Like the Standard Bylaws of the Strata Property Act, your bylaws require owners to maintain and repair limited common property (LCP) that occurs once a year or more frequently. It also requires the strata corporation to maintain and repair all decks and balconies on the building for those items that occur less than once a year. 

Your council obviously tried to take the cheap route and does not understand your bylaws. It was the responsibility of each owner to wash their LCP surface, clear drains and ensure the area is not damaged by their use. The strata corporation is responsible to replace the deck membranes when their life cycle is finished, as well as replacing them if they were damaged by the contractor hired to wash down your building. 

It is possible to amend the bylaws to make owners responsible for the LCP areas, such as the decking. However, every time a strata corporation attempts to download the responsibility and authority to repair and maintain outdoor components is disastrous.

We live in condos so we don’t have to clean the gutters, cut the grass, paint the siding, wash the windows, shovel the snow. Condo owners don’t do exterior repairs, and if they try, the results are generally improper or insufficient.

If your owners are maintaining their decks, provide them with instructions to ensure they are not damaging the property. Power washers, if managed with the correct pressure and proper skills, may be safely used to clean building surfaces. However, soft membranes with waterproof seams,and caulking around doors, windows and deck membrane flashings are extremely vulnerable to damages. The spray from a garden hose is often more than sufficient with soft brushing.

Before you aggressively wash your building surfaces, contact the manufacturer or installer of the deck membranes. They should be able to provide you with maintenance instructions, along with a list of cleaning products or chemicals that may be safe to use on the deck surfaces and safe for the environment. Before exterior maintenance is downloaded to your owners, check your bylaws to determine who is responsible.  

© 2018 Postmedia Network Inc.

Tsawwassen Landing 30 townhomes at 4738 Hemlock Way by Onni Group

Thursday, November 29th, 2018

Three-bedroom townhomes represent the first component in Onni?s Tsawwassen Landing community

Simon Briault
The Province

Tsawwassen Landing

What: first release of 30 townhomes

Where: 4738 Hemlock Way, Tsawwassen

Residence size and prices: 1,335 to 1,530 square feet; $659,900 — $785,900

Developer: Onni Group

Sales centre: 4789 Fisherman Way

Hours: noon — 6 p.m., Sat — Thurs

Phone: 604-638-3500

Tsawwassen is somewhat of a “hidden gem” in Metro Vancouver, observes the Onni Group’s Andrew Joblin, but odds are, it will be far less hidden in the years ahead.

Work has begun on residential development on a 270-acre piece of land just west of the huge new Tsawwassen Mills mall, and Onni has almost half that property — 120 acres — for its new master-planned community, Tsawwassen Landing. The company is beginning the development with 30 three-bedroom townhomes, with future townhome phases to come, as well as single-family homes and low-rise condominium buildings. There will eventually be more than 1,000 residences.

Tsawwassen, says Joblin, is “kind of tucked away from the rest of Metro Vancouver. A lot of people who grow up in Tsawwassen end up staying there, so it’s a very well-connected and close-knit community because of that. There are lots of great schools, it’s very family-oriented and there are quite a few parks in the area.”

The development will be across the street from Tsawwassen Mills, which features 1.2 million square feet of retail space. There’s also Tsawwassen Commons mall nearby, which has big-box stores like Walmart, Canadian Tire, Rona and PetSmart.

“There are lots of buyers from the local area because there is definitely a shortage of new townhomes around there,” Joblin said. “But we’re also seeing people coming from other areas of Metro Vancouver that are looking for some more affordable housing options.”

“A lot of times, you’ll be hard-pressed to find a townhome that is under $800,000 in Metro Vancouver,” Joblin added. “This is an excellent option, especially because you can be in downtown Vancouver in about 30 minutes. That’s why we’ve got people coming from Vancouver, Richmond and Burnaby, where you’re often looking at $1 million and over for a townhome.”

First-phase townhomes have three bedrooms and either side-by-side or tandem garages.

Kitchens feature include quartz countertops, kitchen islands, built-in pantries, marble backsplashes, overhead pot lighting and a choice of either walnut veneer flat panel or shaker-style cabinetry. The appliance packages are by KitchenAid.

Main bathrooms have soaker tubs or frameless glass showers, quartz countertops, ceramic tiles and shower niches. Master ensuite bathrooms have floor-to-ceiling tiled walls, frameless glass showers and/or soaker tubs with pressure-balanced rain shower heads.

One of the biggest draws of the homes at Tsawwassen Landing is sure to be the gargantuan common amenity space that comes with them. This will include a swimming pool and hot tub, a gym, squash courts, a steam room and sauna, a lounge and entertainment suite, a children’s play area and an outdoor sports court.

 “It’s great for a rainy day with the kids,” Joblin added. “You don’t even have to get in the car and drive to a community centre. It’s the kind of place where I would want to live if, for example, I wanted to have a workout either before or after work. I wouldn’t have to worry about driving to a gym – it’s right there at my doorstep.”

© 2018 Postmedia Network Inc.

Metro’s 2018 vacancy rate remains tight while rents continue to soar

Thursday, November 29th, 2018

Rental rates in Vancouver remain the highest in the country, and they just went up

Derrick Penner
The Province

Metro Vancouver’s rental vacancy rate edged up slightly in 2018, but it wasn’t enough to keep average rents from soaring 6.2 per cent, the Canada Mortgage and Housing Corp. said Wednesday.

Some 793 new purpose-built rental apartments were added in Metro in 2018, enough to help increase the overall vacancy rate by a slim 0.1 of a percentage point to one per cent.

However, after five consecutive years at or below one-per-cent vacancy, with increasing employment in Metro and many young buyers priced out of home ownership, CMHC analyst Eric Bond said the pressure on rents remains high.

“It is really only in the last three years that we’ve seen substantial new supply added to the purpose-built rental market for the first time in decades,” said Bond, CMHC’s principal analyst for Vancouver.

And even with about 8,000 new rental units under construction, Bond said the housing agency’s outlook is for vacancy rate to increase to only 1.3 per cent in the next couple of years. “The market remains tight,” Bond said.

Surrey had the lowest vacancy rate at 0.4 per cent and the District of North Vancouver had the highest vacancy rate at 1.7 per cent, according to the report, which is based on an annual survey. The City of Vancouver’s vacancy rate was below the regional average at 0.8 per cent with lows of 0.2 per cent in south Vancouver and a high of 1.2 per cent downtown.

The result is that, for the fourth year, rents have risen more than the provincially allowable increase, indicating that landlords have been able to charge rents during turnover that were much higher than previous rents.

The turnover rate of rental properties remained stable in 2018 with 14 per cent of units changing tenants, Bond said.

The survey found a considerable difference between rents that tenants pay in occupied units and the rents landlords are asking for vacant units.

The average rent in October for a two-bedroom apartment was $1,649 a month across Metro Vancouver.

But in the city of Vancouver, the average rent for a two-bedroom apartment was $1,960 a month, and landlords were asking $2,593 from new move-ins. That’s a gap of 32 per cent, the biggest differential among five selected municipalities.

For all apartment sizes across Metro Vancouver, the average asking rent for vacant units in October was 14 per cent higher at $1,578 a month than the average rent of $1,383 for existing tenants.

“It depends on when a unit first turned over, but the increase a landlord can achieve is, in some cases, several hundred dollars,” Bond said.

The 793 new units were not evenly distributed. The city of Vancouver got 571 new units, while the Tri-Cities had a net loss of 339 purpose-built rental apartments, while Burnaby had a net loss of 177 units as the result of renovations and demolitions.

And although the province and municipalities have introduced tax measures aimed at increasing the number of investor-held properties made available for long-term rent, the CMHC’s report found that there were 1,081 fewer condominiums available for rent in Metro Vancouver than in October of last year.

That might be because some investor-owners took advantage of steep price increases for condominiums to sell their units, which took them off the market, Bond said.

For other investors, Bond said it might have been more attractive to convert units to short-term rental units — such as through Airbnb — though CMHC doesn’t have data on that.

Across Canada, demand for rental housing continued to outpace supply, ratcheting the national vacancy rate down to 2.4 per cent in October 2018 from three per cent in the same month a year ago.

Alberta, Saskatchewan, Quebec and the Atlantic provinces all had vacancy rates declines, while B.C., Ontario and Manitoba experienced increases, though B.C.’s change was barely noticeable.

“The decrease in the vacancy rate was attributable in part to the strong increase in international migration,” said Aled ab Iorwerth, CMHC’s deputy chief economist. “This factor, combined with the growth in youth employment and the aging of the population, drove up demand for rental housing.”

The agency said international immigration climbed by 23 per cent in the first half of the year, compared with the same period a year earlier, tightening vacancy rates because newcomers often rent when they first arrive.

Real estate analyst Ben Myers said the introduction of a stricter mortgage stress test, along with rising interest rates, can also be blamed for the decline in vacancy rates and rising rents in the country’s biggest cities as more people opt to rent.

The CMHC report, which looked at purpose-built rental units and leased condo apartments, found the average national rent for a two-bedroom apartment jumped by 3.5 per cent to $987 from October 2017 to October 2018. This increase was higher than the inflation rate during this period.

© 2018 Postmedia Network Inc.

Vancouver’s empty homes tax revenue higher than expected

Thursday, November 29th, 2018

City anticipates collecting $38 million ? $8 million higher than predicted

Western Investor

The City of Vancouver estimates it will bring in $38 million from the first year of the empty homes tax — $8 million more than initially predicted.

So far, about $21 million has been collected. Most of the revenue will be used for affordable housing initiatives — $8 million has already been allocated — but it will also cover one-time implementation costs ($7.5 million) and first-year operating costs ($2.5 million).

The latest numbers were revealed in the city’s first empty homes tax annual report, which was released Nov. 29. In the first year, close to 184,000 declarations were submitted, representing 99 per cent of all residential property owners in Vancouver.

Out of the total 186,043 properties, 178,120 were occupied, 5,385 were exempt and 2,538 were vacant.

Under the empty homes tax program, which was approved in late 2016, owners are required to rent out their empty or under-utilized, non-principal properties for at least six months of the year. The six months don’t have to be consecutive, but must be in periods of 30 or more consecutive days.

The goal is to motivate homeowners to rent out homes they don’t live in full time. Vancouver’s current vacancy rate sits at .8 per cent. The empty homes tax is implemented at a rate of one per cent of a property’s assessed taxable value.

Measuring the success of the tax is difficult, according to the City, but it will continue to monitor the impact of the tax on housing supply and affordability, including the empty homes tax property status declarations data year over year.

“Isolating the effect of a single policy like the EHT in a rental market as dynamic as the City of Vancouver is challenging,” the first-year report states. “With the first year of the declarations complete, staff will begin monitoring the changes in the number of vacant properties on an annual basis.”

In 2017, 2,132 property owners failed to file declarations and were initially deemed vacant. They were required to submit a notice of complaint with supporting evidence for consideration and potentially to have the tax rescinded. Complaints were also triggered when a property owner was selected for an audit and disagreed with the determination or declined to provide supporting documents and other information at the audit stage.

The total complaints the vacancy tax officer received, including those related to properties that were deemed vacant because owners didn’t make a declaration, to Nov. 18, were:

  • Complaints: 1,459
  • Accepted: 1,207
  • Rejected: 252
  • In progress: 82

The declaration period for the second year of the tax is now open. The deadline is Feb. 4, 2019. Property owners who have yet to receive their advance property tax notice in the mail can still make their declaration online using the folio and account numbers from their previous tax notice.

Those who need help to make their declaration online can visit city hall or any Vancouver Public Library branch for in-person guidance, connect with the city using the VanConnect app or call 3-1-1, which offers translation services. Instructions for how to declare are also available in multiple languages online.

Copyright © 2018 Western Investor

Canada’s reverse mortgage load continues to grow

Wednesday, November 28th, 2018

Reverse mortgages will continue to grow over next few years

Ephraim Vecina
Mortgage Broker News

Updated numbers from the Office of the Superintendent of Financial Institutions showed that Canada’s total reverse mortgage debt load steadily went up from $3.035 billion in August to approximately $3.07 billion as of September.

OSFI noted that this can be partly attributed to National Bank’s accrual of over $427 million in reverse mortgage debt in November 2017.

The agency added that if senior borrowing rates hold true, reverse mortgages will continue to see growth over the next few years.

September’s level was 43.98% higher compared to the same time last year. While still quite high, however, a downward trend from the 46.32% peak reached in February 2017 has been apparent.

An analysis by TransUnion released last September reported that during the first quarter of this year, the volume of mortgages issued to Canadians age 73 years and older increased by 63% year-over-year.

To compare, activity among baby boomers (54-72 years old) grew by a relatively timid 18%. Meanwhile, originations fell by 19% in the 24-38 age bracket and 22% in the 18-23 demographic.

Housing-backed cryptocurrencies could change homebuying

Wednesday, November 28th, 2018

Blockchain could disrupt real estate

Steve Randall
REP

The current slump in the value of cryptocurrencies may be giving investors cause for concern but the underlying technology could change the face of homebuying.

Blockchain could disrupt real estate according to Brandon Frere, whose Frere Enterprises helps businesses with their digital transformation.

“Blockchain is more than cryptocurrencies and ICOs,” Frere Enterprises CEO Brandon Frere explained. “Really, it’s a technology that could have so many applications that we’ve only scratched the surface of what it can do.”

Frere says that the cost savings that blockchain brings will be a boom for homebuyers, especially millennials who may be deterred by transaction costs.

Blockchain enables transparent, immediate, and secure transactions, which Frere says could mean investors potentially using cryptos backed by housing assets to invest in real estate without the necessary closing costs of a traditional home purchase.

Blockchain to remain Even with the current weakness in cryptos, Frere says blockchain is set to be part of real estate’s future.

“Everybody is waiting to see where cryptos go and what they do … but we all know blockchain technology is here to stay,” Frere commented, “and changing the housing market sounds like a great way for blockchain to continue as a disruptive technology.”

Copyright © 2018 Key Media Pty Ltd

BCREA welcomes provincial crackdown on money laundering

Wednesday, November 28th, 2018

BCREA backs government anti-laundering program

Steve Randall
REP

The drive to tackle money laundering by criminal networks using British Columbia’s real estate sector is being fully supported by the province’s real estate association.

BCREA continues to work with the authorities to ensure that its members are keeping on top of compliance and will deal robustly with any real estate agent found to be complicit in money laundering.

“Since we learned earlier this summer that BC’s real estate sector may be used in money laundering activities, we’ve been working aggressively with government and other partners to help support investigations into organized crime,” said BCREA’s Chief Executive Officer Darlene Hyde.

A police report made public this week put the extent of real estate-related money laundering by crime gangs at $1 billion for 2016.

BCREA says that it became aware in July this year that some brokerages were struggling with FINTRAC reporting compliance and has been quick to support those who needed help.

“As the report says, money laundering is a complex problem and recognizing when sophisticated international crime syndicates – who are experts at fraud and deception – are at work behind the scenes takes significant resources,” noted Hyde. “At BCREA, we are ready to make our contribution to keeping BC’s economy safe from organized crime and we have committed to assisting the government.”

What the association has done

BCREA has taken several steps in support of the province’s crackdown on money laundering including:

  • Invited FINTRAC to speak to more than 250 brokers and Realtors about understanding and meeting their compliance obligations at our first ever managing brokers conference.
  • Updated the BCREA course on real estate transactions and FINTRAC reporting.
  • Created targeted communications to Realtors addressing issues around FINTRAC reporting and compliance.
  • Proactively approached the provincial government to assist in their inquiry into real estate’s vulnerabilities to organized crime.
  • Requested the opportunity to participate in the Ministry of Finance’s Expert Panel on Money Laundering in Real Estate.
  • Encouraged BC’s 23,000 Realtors to participate in the government’s money laundering investigations through their online and telephone hotlines.
  • Promoted the government’s request for public participation into its inquiries through our own social media platforms.

Copyright © 2018 Key Media Pty Ltd

GTA new home sales post best month of 2018 so far

Wednesday, November 28th, 2018

Home sales in October improved

Steve Randall
REP

October brought some positives for the new homes market in the Greater Toronto Area with sales and openings gaining.

A report from the Building Industry and Land Development Association (BILD) shows that there were 2,805 condominium apartments in low, medium and high-rise buildings, stacked townhouses and loft units sold in October (Altus Group data). Although down 44% from October 2017 the figure was only 1% below the ten-year average.

For single-family homes, there was no change from a year ago and sales were 64% below the 10-year average.

“The pickup in interest from builders and home buyers that started to emerge in the GTA new home market in September gained momentum in October,” said Patricia Arsenault, Altus Group’s Executive Vice President, Data Solutions. “October was the best month we’ve seen this year not only in terms of sales—for both single-family homes and condominium apartments—but also new project openings. And for both sales and new openings, the increases from last month were stronger than the typical seasonal pattern.”

Condo prices gain year-over-year The benchmark price of new homes in the GTA in October eased slightly month-over-month but for condo apartments there was a year-over-year gain of 14.5% to $775,537.

The benchmark for single-family homes was down 8.4% year-over-year to $1,115,824, although this can be explained by the smaller benchmark size of units available for sale.

David Wilkes, president and CEO of BILD says the market is returning to more typical activity levels, an encouraging sign.

“It’s clear that when we are able to bring on more supply and give new home buyers more product to choose from, they get excited and motivated about making that choice,” he said. “That’s why we are especially heartened by the new provincial government’s commitment to increasing housing supply through its Housing Supply Action Plan,” he said.

Copyright © 2018 Key Media Pty Ltd