Archive for the ‘Real Estate Related’ Category

BC home sales are “firming around long-term averages”

Friday, December 13th, 2019

Home sales in British Columbia are strengthening

Steve Randall
REP

Home sales in British Columbia are strengthening according to the latest stats from the province’s real estate association.

BCREA says that MLS sales in November rose 27.5% year-over-year to a total of 6,616 and the average price rise 5.5% to $746,939. Total dollar sales volume was $4.94 billion, a 34.4% increase from the same month last year.

“After several months of strong gains, home sales are now firming around long-run averages,” said BCREA Chief Economist Brendon Ogmundson. “We expect 2020 will be a much more typical year for markets compared to the volatility of recent years.”

Buyers had fewer choices though as active listings fell 6.6% year-over-year to 33,310 units, down for the 7th consecutive month (seasonally adjusted). Sales-to-listings ratio was 21%.

Year-to-date, BC residential sales dollar volume fell 6% to $50.23 billion, compared with the same period in 2018. Residential unit sales were 3.9% lower at 72,106 units, while the average MLS® residential price was down 2.2% year-to date at $696,574.

Recent data showed a significant pull-back for new homebuilding intentions in October.

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BC speculation tax set to rise

Thursday, December 12th, 2019

Speculation and Vacancy Tax increased to 2 percent

Gerv Tacadena
Canadian Real Estate Wealth

British Columbia’s Speculation and Vacancy Tax will increase from 0.5% to 2% starting 31 December, according to the Ministry of Finance.

The new tax rate will be applied to all foreign owners and satellite families and will be due by July next year.

“Based on the data from the first year, we see the tax is working as it was designed to: capturing speculators, foreign owners and people who own vacant homes, while exempting more than 99.8% of British Columbians,” said Finance Minister Carole James.

The tax was introduced last year, with the aim to target homes in the most populated areas in BC that were not declared as a primary residence or were not rented out for at least three months annually.

Since the implementation of the tax, the government has collected $115m, which was used to fund affordable housing projects.

Aside from the tax rate, the changes will provide an exemption for property owners who are members of the Canadian Armed Forces while in active service. Canadians who own properties accessible only through water will also be waived from paying the tax.

Meanwhile, the exemption for rental-restricted strata will now end by 31 December 2021.

On the other hand, the exemption for foreign owners of vacant land will be lifted starting next year.

Copyright © 2019 Key Media Pty Ltd

Vancouver firm claims a world first for real estate AI platform

Thursday, December 12th, 2019

EIi Technologies uses AI to review real estate documents

Steve Randall
REP

The use of technology to review contracts is already rising fast in the legal services industry but a Vancouver firm hopes to find traction in the real estate industry.

Eli Technologies has claimed a world first with its artificial intelligence (AI) powered condo and strata document review platform which helps real estate professionals to review and uncover potential issues.

Using machine learning, the Eli Report platform can review years of documents and data within minutes.

“We recognize that buying a condo is one of the largest and most important purchases an individual can make, especially first-time home buyers,” says Jamie Hankinson, CEO of Eli Technologies. “A proper review of the strata documents can be very time consuming and complex, but is an essential part of the condo purchase process. We are excited to launch Eli Report in B.C. so real estate professionals can use the platform as a second set of eyes to identify potential concerns, allowing them to elevate their level of service, and better inform their clients.”

The platform has been in beta testing since last year but now has over 500 realtors across 75+ brokerages in Metro Vancouver and Victoria registered and is now available to all realtors, mortgage brokers and property managers throughout British Columbia.

Copyright © 2019 Key Media Pty Ltd

Home Sales Firming Across the Province BCREA Statistics December 2019

Thursday, December 12th, 2019

BCREA December 2019 Report

BCREA

The British Columbia Real Estate Association (BCREA) reports that a total of 6,616 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in November, an increase of 27.5 per cent from the same month last year. The average MLS® residential price in the province was $746,939, an increase of 5.5 per cent from November 2018. Total sales dollar volume was $4.94 billion, a 34.4 per cent increase from the same month last year. 

“After several months of strong gains, home sales are now firming around long-run averages,” said BCREA Chief Economist Brendon Ogmundson. “We expect 2020 will be a much more typical year for markets compared to the volatility of recent years.”

MLS® residential active listings in the province were down 6.6 per cent from November 2018 to 31,310 units, and down for a seventh straight month on a seasonally adjusted basis. Overall market conditions remain balanced with a sales-to-active listings ratio of 21 per cent.

Year-to-date, BC residential sales dollar volume was down 6 per cent to $50.23 billion, compared with the same period in 2018. Residential unit sales were 3.9 per cent lower at 72,106 units, while the average MLS® residential price was down 2.2 per cent year-to date at $696,574.

Commercial real estate activity remains below the pace of recent years

Thursday, December 12th, 2019

Sales activity in the Lower Mainland?s commercial real estate market continued to decline in the third quarter

REBGV

Sales activity in the Lower Mainland’s commercial real estate market continued to decline in the third quarter (Q3) of 2019 compared to recent years.

 

There were 405 commercial real estate sales in the Lower Mainland in Q3 2019, a 32 per cent decrease over the 596 sales in Q3 2018 and a 42.3 per cent decline compared to Q3 2017, according to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV).

 

The total dollar value of commercial real estate sales in the Lower Mainland was $1.886 billion in Q3 2019, a 59.8 per cent decrease from the $4.694 billion in Q3 2018.

 

“Activity in our commercial market this year is trailing the pace we’ve experienced over the last five years,” Ashley Smith, REBGV president said. “We’ve seen activity pickup in our residential market over the last few months and we’ll watch to see if conditions strengthen on the commercial real estate side in the last quarter of 2019 or the first quarter of next year.”

 

Q3 2019 activity by category

 

Land: There were 114 commercial land sales in Q3 2019, which is a 44.9 per cent decrease from the 207 land sales in Q3 2018. The dollar value of land sales was $821 million in Q3 2019, a 61.7 per cent decrease from $2.142 billion in Q3 2018.

 

Office and Retail: There were 155 office and retail sales in the Lower Mainland in Q3 2019, which is down 37.2 per cent from the 247 sales in Q3 2018. The dollar value of office and retail sales was $433 million in Q3 2019, a 78.4 per cent decrease from $2.005 billion in Q3 2018.

 

Industrial: There were 124 industrial land sales in the Lower Mainland in Q3 2019, which is a 4.2 per cent increase from the 119 sales in Q3 2018. The dollar value of industrial sales was $415 million in Q3 2019, a 41.7 per cent increase from $293 million in Q3 2018.

 

Multi-Family: There were 12 multi-family land sales in the Lower Mainland in Q3 2019, which is down 47.8 per cent from 23 sales in Q3 2018. The dollar value of multi-family sales was $217 million in Q3 2019, a 14.3 per cent decrease from $253 million in Q3 2018.

Natura 73 one, two and three bedroom homes at 3182 Gladwin Abbotsford by Naturbana Properties and Kerkhoff Construction

Thursday, December 12th, 2019

Natura to offer parkside residency

Michael Bernard
The Province

Bruno Jury isn’t your garden-variety developer. His mission encompasses much more than building homes to put up for sale. He says he wants create happy places where the residents not only spend more time getting to know each other, but also look outwards to making their environment a better place.

And to do that, Jury, a Mexican attracted to Vancouver eight years ago by the city’s goal of becoming the greenest place on the planet, is using his first development — the 73-unit Natura, which overlooks Abbotsford’s Horn Creek Park— to put his mission in motion.

“We’re not selling condos, we are selling a lifestyle that everyone can identify with. I am not really selling you a particular unit, I am selling you a community that you will be happy to live in.”

One of Jury’s prime goals is to get Natura homeowners  – many of them downsizers — to take ownership of the 3.3-acre Horn Creek Park that surrounds the development on three sides.

“These are people who are retired and have free time. Why not organize them and make them feel proud of the park? I’ve already been in contact with the Fraser Valley Conservancy, an organization that takes care of green spaces in the valley. They want to provide tours for kids to learn about the kinds of plants that grow in the forests and to keep the park clean.”

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Greg Lowe, whose firm rareEarth Project Marketing Ltd. is selling the homes at Natura, said the development has been designed to take full advantage of the park view, but also to encourage interaction among homeowners. “As you come in the front lobby, you look through an interactive lounge area to see the park,” he said. “The lobby opens on to a lounge with comfortable seating where people can share workspace, as well as meet at a coffee bar.”

Outside the indoor lobby/lounge will be a terrace with firepits, loungers and a gazebo with eating tables. Similar interactive space has been created upstairs on the fifth floor, where the “sky lounge” will be built.

Jury, who is also a strong advocate of green technology, is proud that the development being built by his partner, Kerkhoff Construction, is also adopting Step Code Level 3, an accelerated program for upgrading building standards designed to achieve a 50-per-cent increase in efficiency.

Inside, all homes will have nine-foot-high ceilings with the level-five penthouses having 14-foot ceilings in the living and dining rooms.

Kitchens feature a dining peninsula or island topped with durable quartz stone and porcelain tile backsplashes. Buyers can choose a KitchenAid package with a 30-inch or 36-inch refrigerator with ice dispenser, a stainless steel range with induction cooktop, a Faber stainless steel slide-out fan and a stainless steel dishwasher or an optional package is by Fisher & Paykel.

The ensuite bathroom has quartz countertops and vanities with dual sinks in select homes. It is also equipped with a frameless 10-mm glass shower, while the main bathroom has a shower and tub combination with porcelain tile surround.

Natura 

What: 73 one-, two- and three-bedroom homes in a five-storey wood-frame building overlooking Horn Creek Park

Where: 3182 Gladwin, Abbotsford

Residence size and prices: Starting at $259,900 for homes ranging from 444 to 1,458 square feet

Developer: Naturbana Properties and Kerkhoff Construction

Sales centre: 33338 South Fraser Way, Abbotsford

Sales phone: 604-776-4588

Hours: noon — 5 p.m., Mon — Sat

© 2019 Postmedia Network Inc.

Squamish Nation approves $3-billion housing project in Kitsilano

Thursday, December 12th, 2019

Squamish Nation approves highrises

Joanne Lee-Young
The Province

The Squamish Nation has approved going ahead in partnership with Westbank Development to build a $3-billion housing project with 6,000 new units in 11 towers on reserve land in Vancouver’s Kitsilano neighbourhood.

Khelsilem, a Squamish Nation councillor and spokesperson who goes by one name, described a vote on Tuesday as a “resounding mandate” in a process that required simple majority of votes cast by eligible nation members.

He said 87 per cent of voting members, or 718 out of 827, said Yes to three plots of reserve land at Sen̓áḵw being leased for 120 years. A slightly smaller number of voting members, 665 out of 826, or 81 per cent, approved of the partnership with Westbank Development whereby the parties will split the revenue equally.

The estimated construction cost of the project, in a prime location next to the Burrard Bridge and Vanier Park, is $3 billion.

The Squamish Nation is hoping to make between $8 billion to $10 billion in revenue from rent and condo sales over the project’s 120-year life, said Khelsilem. With Westbank making an equivalent amount, total revenue estimates rise to as much as $20 billion.

Money from provincial property transfer taxes and others for condo sales will flow to the nation and it also has the authority to levy its own taxes as municipalities do.

Khelsilem said the nation will be contributing the land to the partnership, and take on half the debt, but Westbank will be responsible for securing the $3 billion in construction financing.

Construction on the first phase is expected to begin in 2021.

Reserve land cannot be used as collateral for bank financing because it can’t be seized for nonpayment. Under the Indian Act, it is deemed to be owned by the federal government and cannot taken away from the Squamish Nation. Also, the city of Vancouver has no power to regulate what is built on it.

So the new partnership intends to ask for a 120-year lease from the federal government and Westbank will present that lease as collateral to potential financiers, which Khelsilem said will include the Canada Mortgage and Housing Corporation.

Khelsilem said all major decisions will be made jointly by the two partners. He brushed aside questions about the developer’s reputation for building and selling luxury condos to overseas buyers as being at odds with the Squamish Nation’s desire for this to be “an economic development project with intended revenue to pay for social services and housing.”

The currently targeted mix for the approximately 6,000 new units at this project will include between 70 to 90 per cent of market rental units and the rest will be strata condos, with the ratio varying depending on market conditions, said Khelsilem.

If the market changes and there is a need to raise revenue more quickly, the number of strata condos could increase, said Toby Baker, the CEO of Nch’kay Development Corporation, which is the Squamish Nation’s economic development company.

There will also be several hundred affordable rental housing and other units for Squamish nation members.

The nation’s experience working in a 50-50 partnership with another large, powerful developer on a project for 1,400 homes at Porteau Cove, off the Sea to Sky-Highway in Howe Sound, ended with Concord Pacific using an option to buy out the Squamish nation for $1 after the project got caught in the credit crisis of 2008. Court documents showed that the Squamish Nation tried to retain its stake.

Khelsilem described the deal with Westbank as being much better and more sophisticated with the biggest difference being that the Sen̓áḵw lands “can’t be lost to the Squamish Nation,” whereas the Porteau Cove deal involved fee-simple land that was jointly owned.

“With the value of the lands as our contribution, we have a strong negotiating position.”

© 2019 Postmedia Network Inc.

First-Time Home Buyer Incentive (FTHBI)

Wednesday, December 11th, 2019

Federal government incentive plan for first-time home buyers

other

The First-Time Home Buyer Incentive (FTHBI) was launched on September 2, 2019 by the federal government and offers a 5% or 10% contribution towards your down payment in the form of a shared equity mortgage. The program aims to improve affordability by reducing the monthly mortgage payments for buyers.

There is no interest charged on the FTHBI amount nor is there an ongoing repayment schedule, instead the government will share in the upside and downside of the property value. The FTHBI offers the following down payment contributions:

  • 5% for a first-time buyer’s purchase of a re-sale home
  • 5% or 10% for a first-time buyer’s purchase of a new construction
  • 5% for new and re-sale mobile/manufactured homes

Property Types Eligible for the FTHBI

Only residential properties in Canada that are suitable for full-time, year-round occupancy are eligible. The property must be intended for the homebuyers’ own occupancy and investment properties are not permitted.

Examples of residential properties include:

  • detached houses
  • semi-detached houses
  • duplexes
  • triplexes
  • fourplexes
  • townhouses
  • condominiums

Home Buyer, Down Payment and Mortgage Requirements

Buyers who wish to participate in the First-Time Home Buyer Incentive program must meet the following criteria:

  • Be Canadian citizens, permanent residents, and non-permanent residents who are legally authorized to work in Canada
  • Buyers’ combined qualifying income cannot exceed $120,000; this includes the income of guarantors co-signing on the mortgage
  • At least one buyer must be a first-time home buyer
  • Buyer(s) must have the minimum down payment

For the purpose of the FTHBI, you are considered a first-time home buyer if you meet any of these qualifications:

  • You have never owned a home
  • You experienced a breakdown of a marriage or common-law partnership (even if you don’t meet the other first-time home buyer requirements)
  • In the last 4 years, you did not occupy a home that you or your current spouse or common-law partner owned

Minimum down payment and mortgage requirements for the FHTBI:

  • The minimum down payment the buyer must have through their own sources is 5% of the first $500,000 of the home value and 10% of any value above $500,000
  • Mortgages must be eligible for mortgage loan insurance through either Canada Guaranty, CMHC or Genworth, which means the total down payment including the FTHBI amount must be 19.99% or less
  • For a 5% FTHBI, the maximum down payment the buyer can provide is 14.99%; for a 10% FTHBI, the maximum down payment the buyer can provide is 9.99%
  • Total amount borrowed (including the FTHBI amount) is limited to 4 times the qualifying income

In addition, the closing date for a re-sale home must be within 6 months from the application approval. The closing date for new a construction home must be within 18 months from the application approval.

Maximum Home Price Allowed Under the FTHBI

The maximum price you could buy a home for under the FTHBI depends on your qualifying income as well as your down payment.

Here is a sample maximum home price calculation:

Suppose your annual qualifying income is $120,000/year (the maximum allowable when using the FTHBI). The FTHBI stipulates the maximum amount you can borrow, including the FTHBI amount, is four times your income, thus you can borrow up to $480,000 to purchase a home.

  1. Maximum home price if you have the minimum down payment of 5%

The minimum down payment required from the home buyer is 5%, thus the maximum price of a re-sale home you could purchase is $505,263 (calculated as $480,000 divided by 0.95).

  1. Maximum home price if you have a down payment of 14.99%

With a down payment of 14.99%, the maximum price of a re-sale home you could purchase is $564,639 (calculated as $480,000 divided by 0.8501).

Repaying the FTHBI

The home buyer must repay the FTHBI amount in full after 25 years or when the property is sold, whichever comes first. The full amount can be repaid in full anytime, without a pre-payment penalty; however, partial repayments are not permitted.

The amount due to be repaid is calculated as the percentage of the FTHBI times the home’s value at the time of repayment. For example, if a homebuyer received 5% of the down payment through the FTHBI at the time of purchase, the homebuyer will repay 5% of the home’s fair market value at the time of the repayment.

Here is a sample repayment calculation:

You purchase a property for $400,000 and receive a 5% for your down payment through the FTHBI in the amount of $20,000. When you sell your home within 25 years, the home value has increased to $600,000. The repayment amount due would be 5% of $600,000, or $30,000.

Applying for FTHBI

To apply for the FTHBI, complete the application documents found on the official First-Time Home Buyer Incentive Plan website, speak to your mortgage lender and notify the lawyer who will be managing your home closing.

Additional Resources

Visit the official website for the First-Time Home Buyer Incentive Plan for additional details and resources, including a maximum home purchase price & eligibility calculator.

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Government extends speculation tax exemptions for some strata owners

Wednesday, December 11th, 2019

Multiple condo owners exempt from speculation tax

Rob Shaw
The Province

Owners of multiple condos and apartments who can’t rent their units due to strata restrictions will get an extended exemption from the province’s speculation tax, under changes announced Tuesday.

Finance Minister Carole James said people who own a unit that falls under a strata rental ban will be exempt from paying the speculation tax until Dec. 31, 2021. That exemption had been set to expire this year. But the relief only applies to people who bought before the tax came into effect on Oct. 16, 2018. Anyone who bought since then doesn’t qualify, even if their strata forbids rentals.

“The minister of housing is doing a lot of work around rental properties, and those are things that need more discussion,” said James. “So we felt it was only fair to look at an extension.”

The government introduced the tax in 2018 to crack down on properties left vacant during a rental- and affordable-housing crisis.

Although initially described as a tax that targeted foreign residents, B.C. and Canadian owners of multiple homes face a 0.5 per cent surcharge on the assessed value of their properties in certain areas if those residences aren’t rented at least six months of the year. The rate for foreign owners and satellite families increases to two per cent this coming year.

The tax applies to Greater Victoria, Nanaimo, Lantzville, Kelowna and West Kelowna, Metro Vancouver (excluding Bowen Island, Lions Bay and Electoral Area A), Abbotsford, Chilliwack and Mission. In Vancouver, the provincial surcharge is on top of the municipal empty homes tax.

James didn’t agree to any of the exemption requests from municipalities like Kelowna, Langford, Nanaimo or Belcarra, after a meeting in September. Instead, the province announced on Tuesday new exemptions for “water-access-only properties,” which the government defines as “owners who have residential properties that cannot be accessed by road and are not within a short walking distance to a public or private road.” The exemption will be retroactive to 2018.

“The (speculation) tax is working,” she said. “And I think that was the discussion with mayors that yes I understand not everyone is going to support the speculation and vacancy tax, but the purpose of the tax is to address the issue of affordable housing.”

Belcarra Mayor Neil Belenkie, whose tiny village of 300 homes was set to be particularly hard hit by the tax because many cabins are water-only access, said he was happy some properties will get the exemption but had “mixed emotions” overall.

“My concern remains for people who hand-built their cabins 50 or 60 years ago and who are being taxed as speculators,” he said.

Belenkie said James hasn’t wanted to listen to his arguments, and the local NDP MLA for Port Moody-Coquitlam, Rick Glumac, has only visited the area once since 2018 and hasn’t provided any answers for residents.

The exemptions to strata units is a sign that the government is backing off of plans to use legislation to forbid stratas from restricting rentals, said Tony Gioventu, executive director of the Condominium Home Owners Association. James confirmed such legislation is “not on the table” currently.

Although government had hoped that the speculation tax would pressure owners of multiple apartments or condos to sell them or put them up for rent to avoid the surcharge, Gioventu said that hasn’t happened.

“Most people who have vacant units with the speculation tax just pay the amount, they couldn’t care less,” he said.

“What we have seen, which is an interesting little flurry, is in months like June-July or July-August or August-September, we’ve seen individuals rent out units through Airbnb to basically offset the amount they pay in the speculation tax. Basically in one month they make enough money to pay the speculation tax.

“It hasn’t solved the problem. But the solution to the problem is a really good, accessible level of affordable rental housing, and the problem is the price of real estate has been so expensive and the local governments have been so overprocessed, overburdened and over-demanding on community-benefits charges that it wasn’t financially feasible for developers to build rental units.”

James said she hasn’t heard such stories, but hopes regular audits will capture such activity.

Government mailed out 1.62 million speculation tax forms this year. Roughly 98.9 per cent of people filled out declarations, though about 17,000 declarations still haven’t been completed. The tax made the government $155 million last year.

© 2019 Postmedia Network Inc.

Canadian housing starts were flat in November says CMHC

Tuesday, December 10th, 2019

Vancouver saw a significant decline in the trend of multi-unit starts for a second consecutive month

Steve Randall
Canadian Real Estate Wealth

The key measure of Canadian home construction showed little change last month.

CMHC reported that the 6-month housing starts trend was 219,047 units in November compared to 218,253 in October while the standalone monthly SAAR of housing starts for all areas in Canada was 201,318 units in November, a slight increase of 0.3% from 200,674 units in October.

“The national trend in housing starts was essentially unchanged in November, reflecting slight increases in the national trends of both multi-family and single-detached starts” said Bob Dugan, CMHC’s chief economist. “Vancouver saw a significant decline in the trend of multi-unit starts for a second consecutive month in November, following a period of elevated construction activity earlier in the year. However, this decline was offset by modest gains in the multi-unit trend in most other major markets, including Toronto.”

The monthly figure for urban starts (SAAR) was up 0.4% in November to 188,559 units. Multiple urban starts increased by 2.3% to 141,753 units in November while single-detached urban starts decreased by 5.1% to 46,806 units.

Rural starts were estimated at a seasonally adjusted annual rate of 12,759 units.

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