Stopping renovictions tops B.C.’s rental housing recommendations

Dan Fumano
The Province

A call to stop renovictions was first among 23 recommendations in a B.C. government task force report issued Wednesday and described as the first comprehensive review of the province’s tenancy legislation in 16 years.

Renoviction is the practice of landlords evicting long-term tenants from their homes to renovate and then find new residents at significantly higher rents. The word, not in use 16 years ago when B.C.’s Residential Tenancy Act was last overhauled, has become commonplace in many B.C. municipalities, especially in cities like Vancouver and Victoria with low vacancy rates and soaring rents.

In recent years, tenants’ advocates have called for putting a stop to renovictions, and last week, Vancouver city council passed a motion to that end. But on Wednesday, some of those advocates questioned if changes proposed by the B.C. government’s report were strong enough.

At the same time, many landlords likely breathed a sigh of relief that the province recommended that rent controls continue to be tied to the tenant, and not the unit, meaning there is no limit on what rent a landlord can charge a new tenant, other than what the market will bear.

Vancouver Mayor Kennedy Stewart said Wednesday that the task force “hit the nail on the head when they said renovictions was the core of what they wanted to address.”

“There were actually not just concerns from renters, but also from the development community and landlords themselves, who are very worried that the reputation of their industry is being tarnished by some bad apples,” Stewart said.

The task force was appointed in April by Premier John Horgan. It was chaired by Spencer Chandra Herbert, NDP MLA for Vancouver-West End, and included Adam Olsen, Green MLA for Saanich North and the Islands, and Ronna-Rae Leonard, NDP MLA for Courtenay-Comox.

Wednesday’s report states that a lack of clear guidance around renovations “has left rental housing providers and renters vulnerable to misinterpretation or abuse of the Act.”

The report recommends changes to the Residential Tenancy Act to allow tenants to remain in their homes during renovations, if they’re willing to live with construction disruption, and notes: “Evictions for renovations should be reserved for the rare instance of serious, major and long-term renovations, such as seismic upgrades, which extend the life of a building considerably, where it is impossible to keep tenants in the building due to health and safety risks.”

David Hutniak, CEO of LandlordBC, which represents the rental housing industry, said Wednesday: “This is largely how our members operate currently, so additional clarification within the Act will likely have value for both landlords and renters.”

Hutniak also praised the recommendation against tying rent controls to the unit, also known as “vacancy control,” calling it “a very positive outcome,” citing “the negative consequences to both renters and landlords alike if vacancy control were enacted.”

“The task force clearly wishes to see continued investment in existing rental stock and new building of rental with this recommendation,” Hutniak said.

But Vancouver Coun. Jean Swanson, a longtime advocate for renters, said the proposed anti-renoviction measures were “too weak,” adding “it’s a crime they didn’t go for vacancy control.”

Several groups representing low- and moderate-income renters around B.C. also issued statements Wednesday following the report’s release, urging the provincial government “to implement vacancy control immediately despite today’s announcement.”

Liam McClure of the Vancouver Tenants Union said: “Unfortunately, the (task force)’s proposal to ‘stop renovictions’ does so in name only.”

“What is proposed is a framework by which some renovations are grounds for eviction and others are not,” McClure said.

The motion passed last week by Vancouver’s council, introduced by Swanson, sought changes to city policy to “require landlords to offer displaced tenants the opportunity to temporarily move out for the necessary duration of the renovations without their leases ending or rent increasing.”

However, the provincial task force stopped short of making that recommendation.

Renters’ advocates and landlords are now awaiting a decision in a B.C. Court of Appeal case heard last month, which could provide more clarity on whether a landlord can end a tenancy — and increase rent — if the tenant wants to temporarily vacate a unit during renovations and then return.

The Ministry of Municipal Affairs and Housing will review the task force’s recommendations in the coming weeks to consider how they might be implemented.

Other recommendations in the task force report include:

• Work with local governments to develop tenant compensation and relocation guidelines in the case of demolition of purpose-built rental to reduce dislocation and homelessness of affected tenants.
• Investigate other options to increase the repayment rate for damages, nonpayment of rent and other storage costs if ordered by the Residential Tenancy Branch.
• Increase the availability of currently empty strata housing by eliminating a strata corporation’s ability to ban owners from renting their own strata units.
• Work with local governments to develop, implement and enforce short-term rental rules to better protect long-term rental stock.

© 2018 Postmedia Network Inc.

Mexico?s Pacific seaboard ripe for investors

Clayton Jarvis
Canadian Real Estate Wealth

Investors looking for opportunities in Mexico have no shortage of choices, but an unconventionally located option on the country’s left coast is one of the most exciting to come along in some time.

With Acapulco a ghost of its former self and Puerto Vallarta forever struggling to achieve something more than third- or fourth-option status from travellers, investors looking for upscale vacation rentals south of the Rio Grande can be forgiven for ignoring Mexico’s west coast. But the country’s Pacific seaboard is dotted with charming and culturally rich resort towns, many of which are a short flight from Mexico City.

400 km south of Acapulco lies Puerto Escondido, one of western Mexico’s most popular destinations for both surfers, who flock year-round to the hulking turquoise waves; foodies, who have come to regard the region as one of Mexico’s culinary holy grails; and families, who can locate some form of enjoyment around every corner.

But Canadians, investors and travellers alike, have come to expect levels of service, class and comfort from their Mexican digs that most Puerto Escondido-based hotels and resorts simply can’t deliver. To find the amenities, style and attention to detail that are the hallmarks of a prime vacation rental opportunity, a short drive up the Emerald Coast to Vivo Resorts will most definitely be in order.

Vivo Resorts, the brainchild of Canadian Olympic skier Cary Mullen, is a 75-acre gated community of luxury condos and private homes facing the endless blue of the Pacific. By early 2019, Vivo Resorts will be home to 200 condo units and 14 sprawling private homes, but that’s just the beginning. At full build-out, Vivo is projected to consist of 600 condos, 114 private homes, a pedestrian esplanade and a broad mix of shopping options.

It’s an ambitious project for an area of Mexico that is just starting to garner wider appreciation, but confidence runs high at Vivo. And why shouldn’t it? Most of the completed units have already been sold (construction on new buildings doesn’t begin until 75% of the units have been spoken for) and occupancy rates during peak season are delectably high.

It’s not hard to see why. Vivo Resorts provides guests an exquisite resort experience. Mouth-watering meals are lovingly assembled using locally-sourced ingredients. Two immaculate pools, one for the kids, one for the grown-ups, provide ample relief from the heat. The sunsets are hallucinogenic; the beach endless. The on-site activities range from relaxing (yoga sessions, spa treatments, children’s cooking classes) to the life-changing (releasing baby sea turtles into the wild) and those taking place nearby, including sport fishing excursions, sea safaris and nighttime visits to bioluminescent lagoons, add a dose of wonder to any vacation.

Getting in Investors have a range of options for capitalizing on the growing interest in Vivo Resorts. Condos range from spacious studios to astonishing two-storey units, all fully furnished and impeccably decorated. Prices start at a mere USD $219,000, but those looking for more space should prepare to spend at least $375,900 for just under 1,100 square feet.

Vivo Resorts’ private villas should also be attractive to Canadians tired of paying exorbitant prices for sub-optimal detached homes. Custom-built beach homes at Vivo start at USD $140 per square foot. A the upper end of the spectrum, investors can land a fully furnished 3,000 sq. ft. palace with a pool, parking, UV water treatment system and fresh water cistern for USD $478,000 (plus the price for the home site). But options are available for almost any budget.

Vivo Resorts offers owners who place their units into the rental pool a generous 70-30 split, taking over all marketing, maintenance and cleaning burdens. Nightly rates range from $140 (mountain view studio) to $380 (private villa) a night during the regular season, but they skyrocket to a range of $225 to $1,200 around New Year. If a 1-bedroom ocean view unit that rents for $172 a night in regular season was occupied for 60 days out of the year – a fairly low threshold to cross – its owner would be looking at approximately $7,200 in rental income.

Investors with experience casing the Mexican market know that owning properties near the shoreline can be tricky for non-Mexicans. But recent changes to Mexican law allows foreigners to purchase properties through a Mexican Corporate Trust. Purchasing property through a Corporate Trust not only allows a foreign owner to use, improve, lease and sell the property, it also results in lower closing costs and frees the owner from having to obtain an FM3 work visa in order to legally collect rental income.

And as Vivo Resorts increases its profile, that rental income is sure to increase as well. Mexico is still a first-choice for many North and South American travellers, and those wanting something more than a noisy, crowded week in Cancun are sure to find in Vivo the idyllic escape they spend the year dreaming of.

 “We have people living here full time. I see their lives and I envy them,” says Paris Cendejas Villar, Vivo Resorts’ director of sales and marketing. “They wake up in the morning, they’re having a coffee on their terrace, they go down to the pool with their computers and they’re running their businesses. They’re making money in paradise, and I’m like, ‘That’s what I call a life.’”

Related stories:

• U.S. financing from Canadian bank offsets purchase
• Investors set sights elsewhere amid low cap rates

 

Copyright © 2018 Key Media Pty Ltd

A balanced real estate market has returned

Neil Sharma
Canadian Real Estate Wealth

According to the REMAX 2019 Housing Market Outlook, the country’s average sale prices will get a 1.7% boost, an indication that the balance has finally returned to Canada.

The report notes that markets throughout the country stabilized this year after the 2017 aberration that saw prices in markets like Toronto’s surge beyond reasonable levels. Stabilization is expected to continue through 2019, a likely consequence of interest rate hikes that are believed will increase as the year goes on.

Thirty-one percent of REMAX survey respondents don’t believe interest rates have hitherto affected their ability to afford a mortgage, but that optimism doesn’t extend beyond December. Another REMAX survey of its brokers and agents revealed 83% expect interest rates to make Canadians’ home purchases cumbersome next year.

The report also expects sale prices in Vancouver to decline 3% in 2019 because obtaining a mortgage in the Metro region is becoming well-nigh impossible.

“The drop in sales in key markets across British Columbia can be partially attributed to Canadians’ increasing difficulty in getting an affordable mortgage in the region,” says Elton Ash, REMAX of Western Canada’s regional executive vice president. “The situation created by the introduction of the mortgage stress test this year, as well as continually increasing interest rates, means more Canadians will be priced out of the market.”

The Greater Toronto Area, on the other hand, is expected to fare better next year as REMAX predicts sale prices will rise 2%, thanks to high demand for homes priced below $1 million. Demand will be weaker for homes above $1.5m, though. According to Christopher Alexander, REMAX’s vice president and regional director for Ontario-Atlantic Region, looming rate hikes might be spurring the restraint.

“People are a little more cautious than they were in the past because interest rates are starting to rise,” he said. “Government said it would be more aggressive with interest rates and people are waiting to see how it will all shake out.”

Alexander added that Toronto remains a popular destination, which should balance out weaknesses in its market.

“It’s not surprising [November sales in the GTA] were down year-over-year, but because Toronto is such a big destination, both domestically and globally, there will be good pockets of the city that balance everything gout.”

Copyright © 2018 Key Media Pty Ltd

The Fraser Valley, east of Metro Vancouver, has long been considered a more affordable haven for first-time homebuyers

Laura Kane
Canadian Real Estate Wealth

A tempting bright-red advertisement for a new condo development in a Vancouver suburb circulated online this fall, sparking excitement from first-time homebuyers and concern among long-standing real estate observers.

The developers of The Landing, a 78-unit complex in Langley, were offering to pay the mortgages for a year of the first 20 buyers and give remaining buyers a $10,000 discount.

It looked like a sign of the times: had provincial and federal government measures to cool the market been too successful? Were developers stuck with a glut of inventory as sales and prices dropped off a cliff?

Not really, according to the marketer behind the promotion.

“The way we run our sales programs is we run basically a different promotion almost every week. I’ve been working in suburban markets for a long time and honestly, what I’m seeing right now is it’s not even at a normal market. It’s still a lot better,” said Trevor Street, CEO of the Partners Marketing Group.

“What’s normal for me is having four or five other sites that are active, that are open, that buyers can go to and shop around. I remember a time marketing developments when I ran out of registers to call in our database and started cold-calling rental buildings.”

That was back in 2013 or 2014, he said, before Vancouver’s real estate market exploded and a ripple effect moved through its suburbs and the rest of British Columbia. By 2016, Street definitely didn’t have to run any promotions _ he even told developers not to bother building sales centres.

The Fraser Valley, east of Metro Vancouver, has long been considered a more affordable haven for first-time homebuyers.

After prices and sales climbed across the Lower Mainland in 2015 and 2016, the B.C. and federal governments stepped in to attempt to cool the market. In the past nine months, sales have slowed and prices have curbed their meteoric rise. But while the market is softening, it’s not over-correcting, just returning to a more normal state after a wild few years, experts say.

Street said he realized about six months ago that suburban developers needed to bring back promotions to entice buyers. But while amateur investors are sitting out, professional investors are jumping on board, he said.

“They’re coming in right now and it’s a feeding frenzy,” he said. “These guys know this isn’t going to last. These downturns last nine months to a year, and we’re already nine months into it.”

The average price of an apartment in the Fraser Valley Real Estate Board coverage area, which includes Surrey, White Rock, Langley and other communities, was $383,204 last month, still up from $359,053 in November 2017. In the same month in 2014, it was $200,952.

As for detached housing, the average price was $1,017,754 last month, up from $1,011,787 in November 2017 and considerably higher than $653,426 in November 2014.

The real estate board prefers to use a “benchmark” price, which adjusts for the high and low ends of the markets, and that figure was $976,200 for a detached house last month and $422,500 for an apartment.

The market started really heating up in the beginning of 2015, said board president John Barbisan.

Barbisan said he uses the sales-to-active-listings ratio, referring to the number of sales compared to active listings, as a thermometer. In a balanced market, the ratio sits around 18 per cent, meaning almost two in 10 homes are selling. The higher the ratio gets, the more advantage to the seller, and in 2016 it was 60 per cent, he said.

Things began to cool in the spring of this year, he said, and now the sales-to-active-listings ratio is 14 per cent.

“It was like a tap turned off,” he said. “It’s as if all the buyers got together in a hall one night and decided nobody’s going to make an offer anymore.”

The federal mortgage stress test initiated in January appears to be a major factor, he said. The stress test requires mortgage-seekers to prove they would be able to make payments even if interest rates rose substantially, reducing borrowing power by as much as 20 per cent.

“That has to come out somewhere. They’re either buying cheaper homes or they’re not making the offers they would be,” he said.

Provincial government measures, including a 0.5 per cent speculation tax on secondary homes left vacant and a 20 per cent foreign buyers tax, have had a “negligible” effect compared with the stress test, Barbisan said.

But he said he’s “not at all” concerned about the slowdown, noting that he has spoken with mortgage brokers who say relatively similar numbers of people are still coming to get pre-approved. People still want to buy homes, but they may not be finding what they’re looking for or are waiting for prices to decrease further, he said.

“I’m not sure what they’re waiting for, but when you want to buy a home you’re only putting it off for so long,” he said.

Barbisan added he hasn’t heard of anyone being underwater on their mortgage, as prices have still risen so much that owners have a fair bit of equity in their homes.

Steve Saretsky, a Vancouver real estate agent, said the market across the region is going through a downturn but it’s not “major,” and it’s to be expected after the run-ups of the past few years.

“Any time you have that kind of growth, eventually it’s going to swing the other way,” he said. “Has it gone too far? I think a lot of people who are complaining about housing affordability would probably tell you it hasn’t gone far enough.”

Government policies have helped move the pendulum, but it was more or less inevitable, and global housing markets are also slowing down, Saretsky said. People are quick to criticize the stress test and new provincial taxes while forgetting how easy regulators have gone on the housing market for years, he added.

“Everyone in the world talks about how indebted Canadian households are. There’s no question that it’s definitely been a pretty lenient borrowing spree over

the last 15, 20 years,” he said. “Now, all of a sudden everybody’s upset because the punch bowl’s been taken away. But parties don’t go on forever.”

He acknowledged that it’s hard on real estate agents because sales volumes are down and they’re making less money.

“But, again, I think we’ve had it pretty good for a number of years.”

 The Canadian Press

Copyright © 2018 Key Media Pty Ltd

CRA can freeze assets of tax evaders including property

Duffie Osental
Canadian Real Estate Wealth

If you want to keep your real estate assets, you better think twice about dodging your taxes. The Canadian Revenue Agency (CRA) recently started freezing assets of tax evaders – and yes, that includes property.

According to CBC News, CRA has used proceeds-of-crime provisions under the Criminal Code to seize the rental properties of a tax-evading couple in Ottawa. The couple are accused of under-reporting their income between January 2008 and December 2013.

“The schemes included appropriating funds from multiple corporations under their control for personal purposes, appropriating corporate rental income and manipulation of supplier invoices,” CRA told CBC News.

This is the first time that CRA has used proceeds-of-crime provisions on tax evaders. The provisions are normally applied on terrorist financing or money laundering.

However, you can be sure that CRA are more than willing to use the provisions on tax evaders again.

“That is a tool that we have not used in the past,” Stéphane Bonin of CRA’s criminal investigations division told CBC News.

“I can say that this is indeed the first time, but I can promise you that this is not the last time that we [will use] those provisions of the Criminal Code to restrain or seize assets that tax evaders have acquired through their illegal behaviours.”

Copyright © 2018 Key Media Pty Ltd

Influential business journal suggests that arrest could chill Chinese migration

Glen Korstrom
Western Investor

Canadian authorities’ arrest of Chinese telecom executive Meng Wanzhou could depress Vancouver home prices, influential business journal Barron’s reported December 10, citing a recent report from Hong Kong-based Smartkarma Insight Provider analyst Charles De Trenck.

The report is significant because Barron’s has a significant global reach among investors. Smartkarma, meanwhile, is a digital platform that offers investment insight into Asian markets.

Huawei CFO Wanzhou’s arrest aroused anger in Chinese government circles because she is not charged with any crime. RCMP officers nabbed Wanzhou at Vancouver International Airport on December 1 while she was on a layover. They were acting at the behest of the U.S. government, whch alleges that Wanzhou misled financial institutions into providing money for corporate dealings that broke U.S. sanctions against Iran.

B.C. Supreme Court judge William Ehrcke on December 11 granted Wanzhou’s release on $10 million bail (including $7 million in cash) on the condition that she wear an electronic ankle bracelet, surrender passports, stay in Vancouver and its suburbs and confine herself to one of her family’s two Vancouver homes between 11 p.m. and 6 a.m.

Those restrictions are better than being placed in detention until extradition hearings end, but they are unlikely to please China, which has threatened “significant” consequences if Wanzhou is not released.

“China property investors and economic migrants flowing into Canada and North America got a loud message this week with the arrest,” De Trenck said, according to Barron’s.

“This is coming when property transactions continue to roll over in the formerly overheated Vancouver property market…. Price data are likely to be a little softer already, with new political drivers not yet reflected.”

Vancouver real estate prices have soared in the past five years, and the Real Estate Board of Greater Vancouver pinned the benchmark price for all homes in the region at $1,042,100 in November. That’s 72.8 per cent more than the benchmark price of $603,000 for all homes in November 2013.

Barron’s explained to its readers that “Vancouver real estate prices have been buoyed by Chinese buyers for 20 years, as it became a favourite destination after Britain handed Hong Kong back to the People’s Republic of China in 1997. Chinese buying surged, and then waned in the past two years as Beijing has tried to limit capital flight and Vancouver imposed a 15 per cent foreign-buyers tax. Recently as the market slowed, Chinese interest in Vancouver homes rose again.”

It then quoted De Trenck as saying that Chinese migrants may “reconsider their overall commitment to a Canada move for the extended family, as well as encouraging potential new China migrants to consider shifting migration patterns to more friendly climates – or perhaps even to consider that rising nationalism requires them to keep closer to home.”

De Trenck’s conclusion is that Canadian “property price corrections in key markets” might gain momentum.

Some former bulls on Vancouver real estate have already turned into bears.

Lululemon founder and billionaire Chip Wilson, for example, had been loading up on Vancouver properties for years.

His own home at 3085 Point Grey Road is the priciest in the province, with an assessed value of more than $78.8 million – up more than 124 per cent in the past five years. Wilson also owns rental-apartment buildings through his Low Tide Properties.

When Business in Vancouver asked Wilson on October 24 whether it is a good time to buy Vancouver real estate, he did not skip a beat before answering, “Absolutely not.”

His comment came four days after the most recent civic elections and he did not sound pleased with the result.

“We have three levels of left-wing government,” he said. “Money will go to where it is most loved, and investment here is very, very, very difficult right now.”

Canada Mortgage and Housing Corp. is also projecting that prices for real estate in Vancouver will soften.

“We expect the average MLS [Multiple Listing Service] price to decline 7 per cent in 2019, and then a further 4 per cent in 2020,” said CMHC economist Eric Bond.

Copyright © 2018 Western Investor

Investment sales in both Edmonton and Calgary increased during the third quarter, bolstered by major office and multi-family sales in Edmonton

Tanya Commisso
Western Investor

Alberta real estate is reaping the benefits of a recovering economy, with both of the province’s major cities posting investment transaction increases during the year’s third quarter.

Large-scale transaction in Edmonton’s office market bolstered year-to-date investment sales 38 per cent over the first three quarters of 2017 and an impressive 86 percent over same period in 2016, according to a new quarterly report by real estate advisory company Altus Group. 

Investment volumes in Edmonton, through 2018, have been boosted by large institutional investors making single purchases bringing overall investment levels past the $1 billion mark for two consecutive quarters,” the report reads. 

The office sector posted the most drastic increase, with 16 office transactions valued at $456.4 million recorded in the year’s third quarter – a 165 per cent increase over the same quarter last year. Office sales accounted for 40 per cent of all investment activity in Edmonton, led by the $400-million sale of the Edmonton Tower to Alberta Investment Management Corporation (AIMCo) in July. 

Apartment sales totaled 570.3 million so far this year, increasing 35 per cent over the same period last year and 87 per cent over the third quarter of 2017. 

Residential and retail sales posted the quarter’s only mild decreases, down 15 per cent and 3 per cent over last year, respectively. 

In Calgary, overall investment sales increased 11 per cent year-over-year, supported major sales in the residential and industrial, commercial and institutional (ICI) land sectors. Meanwhile, all remaining asset classes posted declines, with multi-family sales dropping the most (33 per cent) over the course of a year.  

“With an eye to the choppy results of two struggling asset classes, office and apartment, the rise in overall commercial investment from this time last year is a positive note, particularly in the land and industrial markets,” noted Ben Tatterton, manager of Data Solutions at Altus Group.

© Copyright 2018 Western Investor

Two separate brokerage surveys predict home values will stay virtually flat or decrease only slightly

Joannah Connolly
Western Investor

The Metro Vancouver housing market may look to many like it is heading for a major correction, but two separate brokerage forecasts, both published December 11, assert that this is not the case.

The Royal LePage Market Survey Forecast predicted that the median aggregate resale price of a home in Greater Vancouver would remain fairly level next year, rising a modest 0.6 per cent in 2019 compared with 2018, to $1,291,144.

The national real estate brokerage reported, “While British Columbia’s economy is expected to perform well in the new year, federal and provincial government intervention, low affordability and rising interest rates will continue to weigh on home prices.”

Randy Ryalls, broker and manager of Royal LePage Sterling Realty, elaborated on this point. “The [mortgage] stress test, coupled with provincial tax policies, will continue to affect the real estate market in 2019. The possibility of rising interest rates will also keep some potential buyers on the sidelines as they wait to see how higher rates impact the market. For potential buyers whose purchasing ability is not limited through mortgage regulation or financing, the buying opportunities in Vancouver are excellent.”

Ryalls added that the region’s “healthy economy, excellent lifestyle and beautiful natural surroundings will continue to support the real estate market in the long-term.”

Slight price declines

The RE/MAX 2019 Housing Market Outlook was a little less bullish, predicting that Metro Vancouver’s average home sale price would see a drop of three per cent in 2019 compared with this year, due to the “low absorption rate.” This, said the brokerage, will follow a slight increase in the average home sale price across 2018 of two per cent, compared with 2017, to $1,049,362. A subsequent three per cent decline in 2019 would take that average price down to $1,017,881, which is slightly lower than 2017’s average price but still well above 2016 prices.

RE/MAX also looked at Kelowna’s real estate market, and predicted that, following a six per cent annual increase in average prices in 2018, home values would shed half those gains in 2019. The brokerage predicted a drop of three per cent next year to take the average price just under the $700K mark, but still more than $20K above 2017’s average.

Any such average price drops are unlikely to make homes more affordable to most buyers, with interest rates rising and the stress test reducing purchasing power. “The drop in sales in key markets across British Columbia can be partially attributed to Canadians’ increasing difficulty in getting an affordable mortgage in the region,” said Elton Ash, regional executive vice-president, RE/MAX Western Canada. “The situation created by the introduction of the mortgage stress test this year, as well as continually increasing interest rates, means more Canadians will be priced out of the market.”

National picture hints at modest rises

RE/MAX said that, nationwide, it expected to see a “modest increase” in the average residential resale price next year of 1.7 per cent compared with 2018. However, it added that some “outlier” cities have seen significant price gains in 2018 – including Chilliwack, B.C., up 13 per cent this year – and may continue to buck the national trend.

Its report said, “It is anticipated that the market will continue to stabilize, as Canadians will start to feel the pinch of higher interest rates as they move forward with their home-buying plans in 2019… A survey of RE/MAX brokers and agents found 83 per cent predict rising interest rates will make it more difficult for Canadians to purchase a home next year.”

Royal LePage offered a similar national forecast for 2019, predicting annual gains in the median price of a Canadian home of 1.2 per cent, to $638,257.

Copyright © 2018 Western Investor

Buildings eliminate floors with unlucky numbers

Linda Nguyen
Mortgage Broker News

It’s an open secret among real estate agents that in certain communities, condo units on the fourth floor can take longer to sell.

“When I was younger, I didn’t believe any of these things. I thought it was just BS,” said Tina Mak, a Vancouver-area real estate agent who has been in the business for nearly 30 years.

“You don’t believe in it but when it keeps on repeating… then you cannot, not believe it.”

In some Asian cultures, including Mak’s, the number four is shunned as unlucky because the pronunciations closely resemble the word for death in Mandarin and Cantonese.

Mak, the founding president of the Vancouver chapter of the Asian Real Estate Association of America, says for many of her clients, this cultural preference is real, and plays a large part in driving their real estate decisions.

So much so that many municipalities across the country have specifically addressed the issue of tetraphobia, the fear of the number four, or the more commonly found triskaidekaphobia, the fear of number 13.

A few years ago, city officials in Vancouver began seeing a rise in special applications by commercial and residential developers asking for permission to skip any floor that contained the number four, in addition to the 13th floor.

As the city continued to build up, this meant that more buildings were shooting up without a fourth floor, a 13th floor, a 14th floor, 24th floor and so on.

What began as an accommodation soon became a bureaucratic headache for city staff and a glaring safety risk for emergency personnel.

“It happened with just one or two buildings at first and then spread rather rapidly. So before we knew it, it was being applied to most new applications coming in,” said Pat Ryan, Vancouver’s chief building official.

“It was starting to spiral out of control.”

In 2015, Vancouver announced it was banning the practice of leaving out floor numbers in new condo and office tower developments.

The biggest concern, says Ryan, was that fire crews and condo owners were being put at risk by the unpredictable numbering system, noting that firefighters climbing stairs in a smoke-filled environment could easily be off by a number of floors if they’re not in sequential order.

“On a fire truck, you also put the pressure of the water hose to match the floor of the building. If you’re off by 10 stories, that could create confusion,” he said. “Basically, it just wasn’t worth the risk of continuing.”

Vancouver buildings that were already missing floors were not required to re-number, but they had to add extra signage and lighting on the floors, in the stairwells and in the elevators to assist emergency personnel.

Ryan said the city didn’t want to continue to allow the long-held practice of doing away with the 13th floor, but not allow the same practice to be applied with any floors that contained the number four, for fear of being seen as favouring one cultural group over another.

“So we put all the numbers back. It just made our lives so much simpler,” he said. “We were expecting backlash, but it just didn’t happen.”

Edmonton says it also has a similar policy in place.

But just north of Toronto, which allows irregular address numbering, the town of Richmond Hill, Ont., approached this issue in a different way: it has banned outright the number 13 and four from any new housing developments.

The town was getting inundated with special requests from homeowners to add suffixes, like an A or B, to addresses containing the number four because they were having difficulty selling their homes.

Richmond Hill council passed a resolution in 2013 to disallow the number four to be used in any new ground-level housing developments. “ The number 13 had already been banned from addresses for at least 20 years, said Gus Galanis, director of development planning for the town.

“What really prompted the change was the frequency in requests,” he said. “They said it was basically for cultural reasons, they didn’t want to go into details but said it was because of bad luck.”

Galanis says it came down to the council providing good “customer service” to its constituents.

“We’ve been trying to work with the public to see where we can accommodate, and I think in my mind, we’ve been very flexible,” he said.

For real estate agent Tina Mak, she says cultural superstitions _ whether it be a property address or the way a front door is lined up with a backdoor _ can be an immediate deal breaker for her clients, and her.

“I’ve done it a million times… (I’ve told them) I don’t want you to buy this because I see that you will have a hard time selling it in the future,” she said.

“If you want to buy it, I’m not going to give you any advice because I don’t believe this is the right purchase for you.” 

The Canadian Press

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Stats Canada shows a 4% increase in housing permits

Steve Randall
REP

The value of residential building permits issued by Canadian municipalities in October was up 4.2% to $5.2 billion.

The increase, reported by Statistics Canada, shows that the number of units for which permits were issued was up by a similar share (4.1%) to 20,017.

Both single-family and multifamily units posted increases month-over-month although overall it was apartment condos that drove the increase.

For single-family dwellings, there was the first increase in five months in value terms; up 4.6% to $2.3 billion. In unit volume terms, the increase was 2.2% to 5,052.

For the multifamily sector, there was a rise of 3.8% to $2.9 billion; and a rise of 4.7% to 14,965 new units. Ontario ($222m) and BC ($115m) posted the largest gains while Quebec saw a sizeable decline (-$238m).

The value of non-residential building permits fell 7.0% in October to $2.9 billion. Eight provinces posted declines, most notably British Columbia.

The overall value of permits issued for residential and non-residential properties was $8.1 billion in October, down 0.2% from September. The decrease was mainly attributable to lower construction intentions for industrial and institutional buildings.

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