White Rock, B.C., 31-unit multi-family rental trades at $8.5 million

Western Investor Staff
Western Investor

Built in 1976 on a 19,395-square-foot lot, the four-storey apartment building sold at $288,710 per door at a 3 per cent capitalization rate.

 

Goodman Commercial Inc., Vancouver, for Western Investor

 

Property type: Multi-family rental

Location: 1558 Fir Street, White Rock, B.C.

Number of units: 31

Size of land: 19,395 square feetSize of land in acres: 0.44 acres

Zoning: RM-2

List price: $8.95 million

Sale price: $8.55 million

Brokerage: Goodman Commercial Inc., Vancouver

Brokers: Ian Brackett, Mark Goodman and Cynthia Jagger

 

© 2022 Western Investor

Rentals dominate Metro Vancouver housing starts

Frank O’Brien
Western Investor

Condo starts, in comparison, have fallen 36 per cent so far in 2022 from a year earlier

Rendering of new project with 200 rentals planned for East Vancouver. | GBL Architects

Housing supply has been top-of-mind across Vancouver for many months as housing advocates, politicians and experts look to meet the demand for affordable housing. 

New data from the Canada Mortgage and Housing Corporation (CMHC) shows that in the long-term, housing starts in Metro Vancouver have declined. However, the month of September is showing promise with the seasonally adjusted annual rate (SAAR) being the highest in Canada since November 2021.

All of the increase is in rental apartments, which reached 1,481 units in the month.

According to CMHC, total housing starts for Metro Vancouver declined 23 per cent in the first half of 2022 compared with the same period in 2021. The decline was most pronounced in the condominium market.

As of September, total starts of strata properties (condo apartments and townhouses) in Metro Vancouver were down 36 per cent compared to the first 10 months of 2023, at 8,480 units.

Eric Bond, senior specialist for market analysis with CMHC, said it is important to bear in mind that last year saw a period of heightened construction. 

“Nonetheless, we note the important decline in condominium construction that flows from the higher interest rate environment, the higher inflation environment, the difficulty in obtaining construction materials and labour, all of which is leading developers to take a more cautious approach to condominium construction,” he said. 

In contrast to condos, rental starts reached a multi-decade high. Starts increased by 18 per cent for the first half of 2022 when compared with the same period last year. 

“August and September were quite strong months, meaning the third quarter was strong overall as well. And, so, we’ve actually seen a further increase in construction of both rentals and condos in Metro Vancouver during that time, which has narrowed that year-to-date gap to 10 per cent for the first nine months of the year compared with the first nine months of the year last year,” Bond said. 

Bond noted that this period is seeing the highest amount of rental construction since the 1970s, when a lot of the rental stock was built across Canada. This is renewing Vancouver’s rental stock and providing more opportunities for affordable housing. 

CMHC also said that, while construction costs are still increasing, the pace of increases appeared to have stalled in the second quarter of 2022. This is due to a turnaround in the supply of construction labour which is offering more choices to builders and reduces the upward pressure on wages, according to housing agency’s report.  

“In terms of the outlook, we are projecting a slight contraction in housing starts next year for 2023. But the level of construction would still be at a level above the 10-year average,” Bond said. 

 

© 2022 Western Investor

Blueberry River FN launches new resource business in B.C’s north

Frank O’ Brien
Western Investor

Armed with $65 million awarded following court victory on land claim, small First Nations has formed Blueberry River Resources

 Blueberry First Nations’ successful land claim overlaps part of the Montney gas basin near Dawson Creek, B.C. | Canada’s ARC Resources Ltd.

One year after winning a landmark legal case that gave it $65 million and control over 38,000 square kilometres (14,670 square miles) overlappng much of B.C.’s nascent natural gas fields and infrastructure, a small First Nation in northern B.C. is getting down to business.

The Blueberry River First Nations (BRFN) has established a new enterprise, Blueberry River Resources. The idea is to create economic growth for the community, including outside of its boundaries.

“BRFN was rewarded $35 million dollars for land restoration from the Cumulative Damages Claim,” said a statement from its Chief and council.

“We believe the best way to invest this money is through creating a restoration business outside of the nation.”

On October 19, it announced the appointment of outgoing Fort St. John mayor Lori Ackerman as the company’s CEO.

“Lori is the ideal candidate to help launch Blueberry River Resources into a successful business for our lands, water, wildlife, and people,” said the statement.

As part of the plan, the First Nation has already purchased a building in the city.

“We expect this venture to grow quickly and look forward to creating more job opportunities for BRFN members within our nation as well as in the City of Fort St. John.”

BRFN Chief Judy Desjarlais, former president of Top Notch Oilfield Contracting Ltd., called Ackerman a community champion.

“She brings a wealth of expertise in the areas of business management, resource development, community infrastructure, and stakeholder engagement.”

 “I am honoured to have this opportunity,” said Ackerman.

The 17-year political veteran begins her new role November 1, just one day after chairing her last council meeting as mayor.

In a landmark ruling June 29, 2021, the BC Supreme Court found that the province had breached its treaty obligations by allowing forestry, natural gas extraction and other development in the area covered by a treaty without the approval of Blueberry River First Nations.

The province was given six months to work out an arrangement with BRFN to improve provincial land management and permitting processes to recognize and respect BRFN’s treaty rights.

The undisputed ruling came into force on January 1, 2022.

In an agreement signed in October 2021, which allowed 195 resource projects to proceed in its territory, the 200-member BRFN was awarded $65 million by the province of B.C., including $35 million for land restoration and “cultural areas.”

© 2022 Western Investor

Despite Rate Hikes, 60% of Potential Buyers Are Still Planning to Buy: Survey

Patti Cosgarea
other

Inventory and sales activity is down in many markets across the country. According to the Canadian Real Estate Association (CREA), 60% of local markets saw sales fall month-over-month in September, with some of the largest markets including Greater Vancouver, Calgary, and the Greater Toronto Area (GTA) experiencing the biggest dip in sales. So, where are all the buyers? We asked and you answered. According to a recent survey of more than 1800 Zoocasa readers, Canadians still want to buy, but not until spring or summer of next year.

Interest Rates are Giving Buyers Cold Feet

Historically, Canadian markets do slow down in the fall and early winter, but in many cities, the year-over-year slowdown has been substantial. According to CREA, sales in Fraser Valley are down 52.3% year-over-year. London and St. Thomas, and the GTA aren’t far behind, with declines in sales of 40.6% and 44.3% respectively. Our survey results indicate that the interest rate hikes are giving buyers cold feet, with 35.8% of respondents strongly agreeing that the increase in rates has had a negative impact on their interest in the real estate market.

 

 

Demand Will Grow, Especially for Detached Suburban Homes

Aside from the rate hikes, those surveyed indicated that they do have plans to buy, and big ones! 60% of respondents said that they plan to buy a home in the near future, 61.8% of which are planning to buy a detached house and 40.3% of readers are looking to buy in the suburbs. It seems that the trend for larger homes outside of city centres hasn’t fully fizzled out since the pandemic. 35.3% of those surveyed are looking to buy a bigger house and  they may be crossing their fingers that affordability will improve so they can secure their dream detached home. Detached properties have experienced some of the biggest price drops. In Toronto, average prices are down 11% year-over-year, currently hovering around $1,585,589. Detached homes in the GTA are following suit, with average prices declining 9.5% year-over-year to an average of $1,310,639. However, even though home prices are coming down in certain cities and experts are predicting they may continue to do so, increased rates will put downward pressure on buying power. Read more on that impact here. 

 

 

 

 

Despite rate hikes and historically high inflation numbers, the demand for housing continues at a rapid pace in Canada. Year-over-year rental prices have grown significantly in Canada’s major markets. Rent prices have grown by 21% year-over-year in Toronto and the GTA. Read more about the rental strain here. Canada has also set a target and aims to welcome over 1.3 million new immigrants to the country between 2022-2024, according to Statistics Canada. Most of these newcomers will need housing and push demand higher, especially in larger city centres.

 

 

16.4% of readers said they were looking to buy a condo/apartment. In Toronto, condo apartments have seen the highest number of sales each month this year and are holding their value better than any other property type. Many other cities, including Edmonton, are seeing the same demand for condo apartments, ultimately being driven by the fact that this property type is generally more affordable than detached, semi-detached, or townhouses.

 

Zoocasa © 2007–2022.

Sicamous, B.C., 41-pad manufactured home park sells for $3.3 million

Western Investor Staff
Western Investor

The park is on 6.56 acres and close to two lakes in the Okanagan, about a 4.5-hour drive from Vancouver.

 

William Wright Commercial, Langley, B.C., for Western Investor

 

Property type: Manufactured Home Park

Location: 501 Kappel Street, Sicamous, B.C.

Number of units (pads): 41

Land size: 6.56 acres (approx.)

Potential: Six more pads could be added

Sale price: $3.35 million

Brokerage: William Wright Commercial Real Estate Services, Langley, B.C.

Broker: Marianne DeCotiis

 

© 2022 Western Investor

North Vancouver four-unit multi-family sells for $2.5 million

Western Investor Staff
Western Investor

Small townhouse rental complex near central Lonsdale Avenue has development potential under OCP approval for higher density

Colliers, Vancouver, for Western Investor

 

Property type: Multi-family rental

Location: 131-137 West 23rd Avenue, North Vancouver

Number of units: 4

Size of property: 4,176 square feet (rentable space).

Size of land: 4,400 square feet

Sale price: $2.56 million

Brokerage: Colliers, Vancouver

Brokers: Morgan Iannone and Casey Weeks.

 

© 2022 Western Investor

Vancouver’s luxury real estate market returns to balanced conditions

Claire Wilson
Western Investor

After two years of ‘over-exuberance,’ the luxury market is seeing a slow down that represents a return back to normal
According to Sotheby’s, Vancouver’s luxury home market is experiencing balanced conditions this fall.Photo by priceypads.com.
Vancouver’s luxury real estate market is seeing balanced conditions after an era of “pandemic over-exuberance” that saw the most acceleration over the past two years, according to Sotheby’s International Realty Canada. 
According to its recent report, inventory for Canada’s luxury market evaporated during the third quarter of 2022, leaving demand with little promise of supply. Luxury sales in Vancouver over $4 million continued to decrease from historic highs with a 51 per cent year-over-year decline in July and August, while numbers from September indicate a decrease of 58 per cent from the previous year’s levels.
Despite this decline, the market is returning to a balanced place after two years of what can only be described as an “anomaly,” says Don Kottick, President and CEO of Sotheby’s. The “anomaly” years combined with rising interest rates, inflation and general market volatility is causing many buyers and sellers to remain on the sidelines. 
“I think what we’re gonna see over the next little while is some of those buyers and sellers are going to have to come off the sidelines due to the need, probably personal. And as this happens, I think we’re going to start to see inventory levels grow,” Kottick said. 
The report says that price and activity stickiness will prevail as buyers and sellers adjust to the market, despite the greater financial ability for luxury and ultra-luxury consumers to absorb the impact of rising rates and inflationary pressures. 
Overall, sales over $1 million were down 37 per cent year-over-year to 512 properties. Sotheby’s says that this is representative of the normalization that the market is seeing. 
The report also notes that while multiple offers on a listing is now rare, the homes that were priced competitively for the market saw success in selling. However, those that were not prices according to market conditions needed price reductions in order to get buyer interest. 
“With top-tier inventory remaining low in relation to the city’s strong undercurrent of housing demand, competitively priced properties in premier neighbourhoods have continued [to] attract bids, and on rare occasion, bidding wars,” the report said. 
Kottick says that while rising interest rates certainly have an effect on the market, they aren’t as detrimental in the luxury and ultra-luxury real estate crowd. 
“The one thing about the interest rate increases is that they really impact the first time buyer. That’s where you really take away the spending power of the consumer,” he said. 
Sotheby’s report says that as more sellers price their homes in line with market conditions and inventory levels begin to rise, prospective buyers will be more inclined to re-enter the market and overall activity will resume.

© 2022 Western Investor

Home building slumps as construction costs soar up to 30%, says CMHC

Shantae Campbell
The Vancouver Sun

Rising costs threaten to make housing affordability even worse

A big part of the decline in home construction was apartment starts which fell nine per cent in the first half of the year. Photo by Tyler Anderson/National Post
Canada’s metropolitan areas experienced a five per cent decline in housing starts in the first half of 2022 as construction costs soared and concerns about supply and affordability dominated debate.
The Canada Mortgage and Housing Corporation’s semi-annual Housing Supply Report attributed the decline in large part to a nine per cent decrease in apartment starts (including condominiums), which have accounted for almost two thirds of all housing starts in census metropolitan areas (CMAs) since January 2022.
The slowdown, which followed strong growth in 2021, was not felt equally across the country, with Edmonton, Calgary and Toronto experiencing an uptick in starts and Vancouver, Ottawa and Montréal posting declines.
Increases in construction costs were widespread, but also varied by market.
“Depending on the CMA, the cost of constructing a residential building had increased anywhere from 15 per cent to 25 per cent over the same quarter in the previous year,” the report found. Some centres even experienced successive increases of around 30 per cent over previous quarters.

Rising costs can complicate efforts to improve affordability, the agency said, because they end up reflected in the cost of units coming to market and the rents owners demand.
“This lack of predictability or control over costs can reduce the number of housing starts or the speed with which new housing units come onto the market,” the CMHC noted.
Eric Bond, CMHC’s Vancouver senior specialist and economist, said rising rents were a problem in B.C. markets.
“There is rent control for existing tenants in British Columbia but if that tenant was to move to a new construction, they are facing quite a change in their housing expenditures because they are, of course, going to pay market rent,” Bond said in an interview.
In Toronto, the cost of building towers, which are generally cheaper than lower-density building, has been accelerating, the agency said.

“We’re seeing the rising cost to build is also likely pushing the asking rents for new projects higher and that’s also kind of eroding affordability,” CMHC economist Dana Senagama said.
Home prices have risen sharply in many parts of the country in recent years, and the Bank of Canada’s interest rate hikes have made homeownership more difficult. Even condominiums have moved further out of reach cost-wise.
The environment has stimulated the construction of rental units, one category that saw consistent growth in starts across the country.
In June, CMHC concluded that the country would need to build 3.5 million new homes by 2030 to reduce its shortfall and improve affordability. Canada is averaging only 200,000 to 300,000 new units per year.

CMHC said the impact of these challenges will be felt most by units currently under construction and will affect the construction cost and time.
“I think we should all be worried about affordability,” Senagama said.
“I don’t think there’s many options if you’re looking to enter into ownership or even rental for that matter right now. The concept is prohibitive for many, so affordability is a key factor.”
Housing start data for September that was released separately Tuesday was a bright spot.
The annualized rate of housing starts jumped 11 per cent to 299,589 units for the month from 267,443 in August, reaching its highest monthly level since November 2021.

© 2022 Vancouver Sun

Canada’s inflation rate falls again

Fergal McAlinden
other

September’s yearly price growth was still stronger than economists had expected

Canada’s annual rate of inflation was 6.9% in September, marking a third consecutive monthly decline but still coming in higher than most economists had anticipated.

The figure, reported by Statistics Canada on Wednesday, saw the consumer price index inch downwards from 7.0% in August, although economists had predicted ahead of the announcement that it would fall to 6.7% in September.

That surprisingly small decline seems to copper-fasten the likelihood of an oversized interest rate hike by the Bank of Canada next week, with the central bank having made no secret that reducing inflation is currently its overwhelming priority.

Read next: Scotiabank: Canada to see “technical recession” in 2023

Food prices continued to grow in September, jumping at an annual pace of 11.4% – the highest pace for over 40 years.

Gasoline prices are still around 13% higher than a year ago, although they continued to trend downwards, falling by over 7% in September and declining for a third consecutive month.

Inflation surged to a four-decade high of 8.1% in June, well above the Bank of Canada’s stated target rate of 2%. That’s been driven by a host of factors including supply chain snarls and geopolitical factors such as Russia’s ongoing invasion of Ukraine.

 

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Scotiabank: Canada to see “technical recession” in 2023

Ephraim Vecina
other

This will particularly affect the Bank of Canada’s rate-hike trajectory, Scotiabank says

A potent combination of internal and external factors is likely to trigger a “technical recession” in Canada next year, according to Jean-François Perrault, senior vice president and chief economist at Scotiabank.

“Lower commodity prices, elevated uncertainty, lower equity values, and a weaker US are all acting as brakes on growth,” Perrault said.

Scotiabank is now expecting growth to slow from 3.2% in 2022 to 0.6% in 2023.

Read more: Bank of Canada sees worst drop in business outlook since 2020

This has serious implications on the central bank’s rate-hike trajectory, Perrault said.

“The Bank of Canada will need to tighten rates to 4.25% by the end of this year and keep rates at that level through much of 2023,” Perrault said. “This, along with weaker US growth, largely accounts for the negative revision to the outlook.”

This level is significantly higher than Scotiabank’s previous terminal rate forecast of 3.75%, an adjustment that is a reflection of “the fiscal support measures being rolled out domestically, as well as the impact of a rapidly depreciating Canadian dollar.”

“Both developments will put upward pressure on inflation, though we take comfort from the fact that there are some signs that inflation is moderating in Canada, in contrast to the US,” Perrault said.

Scotiabank pegged Canadian inflation to average 6.9% in 2022 and slow to 3.9% in 2023.

“The BoC’s inflation target is unlikely to be reached until 2024 and should mildly undershoot the target in the second half of 2024,” Perrault said, while also warning that “the global outlook continues to hinge critically on inflation.”

“If inflation shows no signs of moderation in the coming months, policy makers would likely need to engineer a great slowdown in economic activity to bring inflation under control.”

 

Copyright © 1996-2022 KM Business Information Canada Ltd.