Sun

Rules of game have changed over time; eligibility now simpler

Michael Kane
Sun

When it comes to mortgages, the rules of the game were brutally simple for young, single women.

“It was get a guy, get a house,” says Katannya Kayler, 43, a real estate investor who is contemplating semi-retirement in just two years.

Kayler, who is single, discovered the rules were changing 14 years ago when she had the choice of borrowing enough to buy an investment property or replacing her old car. She kept the old beater and bought a townhouse in Nanaimo for $50,000 and rented it out.

Fast forward to 2001 and she had traded up to a detached house on Vancouver Island that she rented out while self-employed in Vancouver as a sales marketing demonstrator.

“I didn’t think I was eligible to buy anything in Vancouver,” she said. “The banks wouldn’t look at me without a steady income.”

With the help of a mortgage broker, however, she qualified to buy a two-bedroom apartment in Richmond where she now lives.

“I bought this place and thought, well that’s it, and then I will retire on the Island when I am 45,” she said. “I didn’t think I could buy anything else because I had borrowed to my limit.”

Then Kayler found a job with a steady income as a dispatcher and driver for a limousine service. Last month she was able to buy another apartment across the hall, which she plans to rent out and she is considering buying another place.

“I am amazed, but I can borrow more,” she says. “I never thought it was possible.”

Welcome to the new world of mortgages, in which character and credit history, combined with historically low interest rates, can influence borrowing capacity as much as income.

It is also a world in which more people are turning to mortgage brokers to find the right deal for their circumstances.

That usually means a better interest rate than those posted by the banks and credit unions but it is not just about rates, says Kayler’s mortgage broker, Rob Regan-Pollock of Invis Financial in Vancouver.

Chasing the best rate can backfire if you subsequently want to refinance, perhaps to take advantage of still lower rates, or to pay off other debts, or to buy an investment or recreational property.

The hidden cost of the very best available rate may be the maximum penalty for breaking your contract, usually the greater of loss of interest until maturity — also known as the interest-rate differential — or three months interest.

Another lender may charge marginally more interest but be willing to waive or significantly reduce penalties if you refinance with them and are borrowing more money.

“I had one client who decided to go with another broker instead of us to save three basis points — a basis point is 100th of a percentage point — which was worth about $1.67 per month,” Regan-Pollock says.

“When they wanted to sell their apartment to buy a house, they had to pay an $8,000 loss-of-interest penalty. Had they taken the lender we recommended, it would have cost them $1.67 more every month but saved them $8,000 when the time came to trade up.”

Industry surveys suggest about one quarter of home buyers rely on mortgage brokers to arrange their financing, an increase of five per cent in 2003.

Regan-Pollock says brokers are able to synchronize the long-term needs of clients with the best-available lenders.

“We start with the rate but it is also important to consider the management of the debt and to understand their long-term plans.”

For example, buyers prepared to live with the fluctuations of variable-rate mortgages may be well advised to opt for a contract that becomes open after three years rather than locking in for five years for a slightly better interest rate.

“Prime minus .75 per cent is the best deal if you stay with the lender for five years but not if you might want to get out of the mortgage and will face a penalty,” Regan-Pollock said.

“Then you would be better off going with a lender who offers a low introductory rate of 1.74 per cent for three months, followed by prime minus .4 per cent. You will pay a bit more over five years but it is not all about price. Flexibility is important, too.”

Home owners are increasingly refinancing to consolidate debt or to buy another property. However, while mortgage brokers can help maximize your borrowing at the lowest cost, they are not financial advisers trained to determine if you have the temperament, time and financial resources to leverage your home equity for investment purposes.

“The risk when you are borrowing to invest is that you could end up borrowing at a higher rate than your return,” Regan-Pollock said. “You need enough money to make your payments when investments under-perform.”

In some scenarios, Regan-Pollock favours “all-indebtedness mortgages” where lenders will finance up to 75 per cent of the value of a home, split into a mortgage portion and a line of credit portion.

Instead of refinancing when they want to make a down payment on a revenue property, or purchase investments, borrowers such as Kayler have the ability to draw on their line of credit.

The difference between an all-indebtedness mortgage and a home equity line of credit is that borrowing on the former can be locked in as a fixed-rate mortgage when interest rates start to climb, whereas interest on a line of credit typically floats with prime. An all-indebtedness mortgage is insurance for the day when interest rates inch higher and real estate prices plateau or dip.

For now interest rates are close to rock bottom and home values are at record highs. That means a wealth of opportunity for home owners who want to refinance to reduce the carrying cost of their debt or to build an investment portfolio like Kayler.

Her rental properties are generating positive cash flow and helping her toward her dream of buying acreage on Vancouver Island and building an animal shelter.

“I have borrowing power beyond anything I ever imagined,” she said.

© Copyright 2004 Vancouver Sun

Twin deficits in the U.S. make for a challenging second half of the year

Brian Lewis
Province

This is going to be a year when individual investors and tight-rope walkers share a fundamental requirement for survival — namely, the ability to balance.

For investors, says Scotiabank portfolio advisory-group director Frances Horodelski, that means don’t blindly rush into equities will all your investment dollars just because stock markets in Canada and the U.S. gained more than 20 per cent in value during 2003.

“This time last year, investors were running away from equities in droves because of poor market performance and clearly that was the wrong thing to do,” she said during an interview while in Vancouver last week for her bank’s Economic and Market Outlook 2004 conference.

“But this year, you don’t want to be running totally towards equities either. You’ll need balance in your portfolio.” To build that balance as the annual RRSP seasons hits its stride, investors should focus on areas such as interest rates, the Canadian dollar, the economy and corporate profits, Horodelski suggests.

“We think the Toronto Stock Exchange and the S&P 500 could appreciate by 10 per cent this year which is about half of last year’s performance,” she adds. “However, we also think that these targets may be reached sooner rather than later so I expect that the second half of this year will be tougher on investors than the first.”

Earl Bederman, president of Toronto-based Investor Economics Inc., agrees that the past year’s market performance won’t be duplicated in 2004. “It’s my belief that the easy gains are behind us and that investors are in for a bumpy ride,” he said recently.

“While I still strongly believe that we are in the early stages of an extended bull market, I am feeling somewhat queasy about market prospects over the next several quarters.”

Horodelski, meanwhile, bases her forecast for a weaker second half in 2004 on several factors. She says in the U.S. it’s likely that consumer spending will begin to loose some steam later in the year as benefits from tax cuts and mortgage refinancing diminish. The massive U.S. twin deficits — trade and fiscal — will also put upward pressure on borrowing costs.

“We’re now in the sweet spot of the current economic cycle and that should last until near year-end, but equity markets tend to anticipate changes like this and that’s why I think the second half of 2004 will be more challenging for investors than the first half.”

Horodelski also says last week’s quarter-point cut in interest rates by the Bank of Canada — and the likelihood of another quarter-point cut in March — is a “double-edged sword” for investors.

“Lower interest rates are the bane of investors because it means that keeping your money in the bank or in GICs isn’t very attractive. But, on the positive side, low interest rates stimulate the economy,” she explains. “That’s good for corporate profits which in turn is good for equity markets.

“Corporate profits are rising again,” she adds, “and companies are also spending again. They’re re-investing in their businesses and that’s positive.”

In fact, a recent economic study by the Conference Board of Canada shows that growth in machinery and equipment investment will lead all categories of business investment in 2004, weighing in at a hefty increase of 9.5 per cent.

She says sectors such as industrial products, technology, telecommunications and software are all expected to see strong market growth this year. Health care and consumer staples are also worth watching.

“With reference to bonds and cash, our forecast for modestly higher interest rates later in 2004 supports our view that investors should position the fixed income portion of their portfolio in the five-year segment of the market where the highest return is expected,” she adds.

Scotiabank is recommending an asset mix of roughly 60 per cent equities and 40 per cent bonds and other fixed income securities. Because interest rates are low, keep your cash level at a minimum.

Scotiabank economists also forecast that the slight rise in interest rates will be accompanied by a reduction in the spread between Canadian and U.S. rates (see chart) which will in turn put some downward pressure on the soaring dollar.

That will will help Canadian exporters to generate improved profits. Equity investors should also concentrate on high-quality, relatively stable stocks, companies that have strong business models, earnings growth and growing dividends.

“Overall we remain constructive on 2004 with many opportunities available to achieve attractive returns,” Horodelski says.

“But as the tide raised almost all ships through 2003, this year will require a greater amount of selectivity.”

That goes for mutual funds as well.

Horodelski says if you’ve got just a small portfolio then a balanced fund is best, but larger portfolios can accommodate pure equity and specialty funds.

“The important thing in the mutual fund arena is to make sure you’re not overly-diversified,” she cautions. “Too many people have way too many mutual funds.

“And, of course, don’t buy a fund based on last year’s performance.”

© Copyright 2004 The Province

Lower interest rates help, but also we’re living in hope of an exonomic boost from the Winter Olympics that are still six years away

Bob Ransford
Sun

Greater Vancouver’s growth occurring mostly in its more affordable suburbs

Nicholas Read
Sun

If you live in Surrey, Burnaby, Maple Ridge, Port Moody, New Westminster or almost anywhere else immediately outside Vancouver, and you think things are getting more crowded where you are, it’s not your imagination.

According to new statistics from B.C. Stats, Greater Vancouver is getting to be a busier place. But all the growth is concentrated in the suburbs.

While Vancouver‘s population declined between 2002 and 2003 — to 568,442 from 568,807 — the population of Greater Vancouver increased to 2,126,806 from 2,103,179 thanks to growth in all of its suburbs except West Vancouver, Lions Bay and Delta.

But that also fits a trend, says David Baxter, executive director of the Urban Futures Institute. By and large, wealthier neighbourhoods — and that includes Tsawwassen in Delta — are experiencing population declines, he says, because fewer people can afford to live in them.

For example, Baxter says, Vancouver and its more expensive neighbourhoods, such as Dunbar, Point Grey and Kerrisdale, are rapidly becoming communities of very wealthy people or older people who bought properties many years ago. Younger people with young families to raise have to move elsewhere.

“In richer communities, there are literally more bedrooms than there are people to sleep in them,” Baxter said Tuesday. “Grandma and Grandpa live in Point Grey because they always have and don’t want to move. But their kids have to live in Maple Ridge.”

And the proliferation of new condominiums, particularly in the city’s Yaletown district, has failed to offset the city’s population decline, Baxter says, because they’re occupied by one or two residents at most, and they’re often bought by people who were renting before. The result is more empty rental accommodation in the city, but not necessarily more people to rent those suites.

The situation is the same in Greater Victoria. While the populations of Victoria, Oak Bay and Esquimalt dropped between 2002 and 2003, the populations of more affordable suburbs rose.

But overall Greater Victoria is not attracting new residents.

Baxter says that’s because for its size, the so-called Capital region has one of the least diverse economies in Canada.

“Is government growing? No. Is the military growing? No. How was tourism last year? Poor.”

New population in the province came from three sources: births, international migration and interprovincial migration.

In fact, for the first time in six years, between July and September of 2003, more people moved from Alberta to B.C. than moved from B.C. to Alberta. This is due, Baxter says, to B.C.’s gradual economic recovery and the slowing of Alberta‘s.

It’s also noteworthy, said Baxter, that almost without exception population increases occurred in B.C.’s southwest corner, including the Okanagan. Everywhere else, he says, the place is emptying and dying.

And that’s bad news for resource communities everywhere, even in the oil- and gas-rich northeast. As resource industries either decline or become more productive, fewer and fewer people are hired to work in them, and that means cities and towns like Prince George, Prince Rupert, Williams Lake, Revelstoke and Quesnel are shrinking.

And it’s mainly young people that they’re losing, adds Baxter.

“Who’s leaving are the young people. Who’s staying are the older people.

“Three, four, five years out, if we don’t get a robust growth of that [resource] economy, we’ll see huge demands on the health-care services in those places and a decline in educational services.”

The oil and gas region isn’t benefitting from increased revenues because oil and gas exploration don’t generate many jobs.

“It’ll do okay as long as people are there exploring. But once you stop exploring, you only need a couple of maintenance guys to turn the valves on and off.”

– – –

TEN TRENDS: HOW BRITISH COLUMBIANS ARE CHOOSING WHERE TO LIVE

Mainland/Southwest: 2,445,465

Van. Island/Coast: 719,914

The rest: 981,201

British Columbia‘s population stood at 4,146,580 last year according to new estimates. Bar above shows distribution into three main regions.

Below, 10 trends observable in latest data, starting with the most significant shift in which growth is restricted to the suburbs:

1. Runaway suburbs

Growth in Greater Vancouver is restricted to its suburbs, whose collective population has risen by more than 20,000.

2. So long, city

Despite a boom in downtown residential construction, land in Vancouver is just too expensive to compete with cheaper suburbs, so the city lost almost 400 residents.

3. Thinning ranks of the rich

While the wealthier suburbs of Lions Bay, West Vancouver and Tsawwassen in the Lower Mainland and Oak Bay in Great Victoria lost residents, less expensive suburbs attracted them.

4. Golden years

Victoria is no longer the retirement destination it once was. Instead retirees are moving to smaller communities on southern Vancouver Island, the Okanagan, and the Sunshine Coast.

5. Population falls in the forest

Pick a community anywhere in B.C. that depends heavily on forestry and it lost residents last year thanks both to a decline in the industry and an increase in the productivity of mills and falling operations.

6. Net loss

Coastal communities have been hit hard by the decline in fishing as well as forestry. Port Alice, Port Hardy and Port McNeill all experienced population loss, as did other towns and villages along the coast.

7. A resort bonus

Tourist towns and communities close to them are flourishing. Tofino, Radium Hot Springs, Harrison Hot Springs, Pemberton not only grew, all were among the province’s fastest growing places.

8. The small are getting smaller

Some of the tiniest places got tinier last year. Tahsis (pop. 559) on the west coast of Vancouver Island shrunk, Lytton (pop. 343) and Hazelton (pop. 348) all lost residents.

9. What gas boom?

Despite delivering massive royalties to the province, B.C.’s oil and gas region isn’t attracting more residents. Fewer people live in Dawson Creek, Fort St. John and Chetwynd, while many Albertans are finding work in the area.

10. Wine country charms

The Okanagan continues to attract newcomers, which, in turn, means a more diverse and more appealing economy.

© Copyright  2004 Vancouver Sun

Mayor expects city to surpass Vancouver’s population in a decade

Damian Inwood
Province

Surrey is the big winner in the B.C. population sweepstakes.

Although it didn’t notch the highest percentage increase in B.C. in 2003, the city grew by a whopping 11,972 people, or a healthy 3.2 per cent, according to B.C. Stats.

Surrey, along with the Fraser Valley communities of Maple Ridge and Abbotsford, plus the suburbs east of Vancouver, accounted for 87 per cent of growth in B.C.

“The really interesting statistic is that Vancouver is losing population at the same time as it is building all those highrises,” said David Baxter of the Urban Futures Institute. “If you take the Lower Mainland, Kelowna and then roll in Nanaimo, and Squamish-Lillooet, that’s basically B.C.’s growth. The rest is just people swapping around.”

According to figures released by B.C. Stats, Victoria and Vancouver were the two biggest losers.

Victoria‘s population dropped by 600 to 76,387, while Vancouver slumped by 365 to 568,442.

Baxter says people moving into downtown Vancouver highrise apartments are mostly kids leaving home, people upgrading from basement suites or people who’ve grown tired of shared accommodation.

“Older, single, detached areas are losing population because the kids are moving into the highrises,” he added. “It’s interesting to see emptying out of communities like Vancouver, West Vancouver, Victoria and Delta, where the population is aging.”

He said the main population growth is in places like Abbotsford, Maple Ridge, Port Moody and Surrey, where family housing is being built.

“It’s a tale of two lifestyles,” he said. “There are the urbanites in the towers downtown and the new families with kids in the new suburbs. People who want to have a Mr. Turtle pool in the back yard, and a dog, have to have it on the periphery, because the older suburbs are more expensive.”

B.C.’s population growth kept pace with the rest of Canada, growing by 31,599 to 4.15 million, a jump of .8 per cent.

The growth was third highest in Canada, behind Alberta, up 1.3 per cent and Ontario, up 1.2 per cent.

In terms of percentage, the fastest growing municipalities were Radium Hot Springs (8.1 per cent), Pemberton (7.3 per cent) and Tofino (6.2 per cent).

Radium Hot Springs residents aren’t surprised by the statistics. They’ve watched five new condominium projects go up in the last year and a half.

“A lot of it is vacation homes for people from Alberta,” said Patricia Kilback, general manager of Radium Hot Springs Lodge. “It’s a small community, very friendly, and there’s lots of work in the tourist industry.”

Baxter said Radium is part of an East Kootenay trend which sees the area becoming the playground for people from Calgary.

Pemberton’s main draw is its proximity to Whistler, according to Pemberton Community Centre employee Adam Savard.

“If you can’t live in Whistler because it’s so expensive, you come to Pemberton,” said Savard, who moved to the area two months ago from Saskatchewan.

Percentage-wise, the biggest losers were the small, resource-based communities of Chetwynd (-4.8) and Port Alice (-4.6).

“But Surrey is the big winner in terms of number of people,” he said.

“You could probably write that headline for the next five years. Surrey is so far ahead of everyone else.”

Surrey Mayor Doug McCallum, said Surrey will likely overtake Vancouver as the biggest city in B.C. in the next 10 to 15 years.

“If anything, it’s starting to accelerate,” he added. “Last year our building permits were very close to $1 billion compared to an average of $650 million. We know this year we will be over $1 billion.”

20 BIGGEST CITIES

Based on estimated 2003 population in B.C.

Vancouver 568,442

Surrey 390,145

Burnaby 205,261

Richmond 174,201

Abbotsford 127,451

Coquitlam 122,696

Saanich 107,964

Kelowna 103,421

Delta 100,571

Langley Township 91,359

North Vancouver 85,839

Kamloops 80,416

Nanaimo 76,736

Victoria 76,387

Prince George 75,609

Maple Ridge 71,399

Chilliwack 66,618

New Westminster 59,426

Port Coquitlam 57,308

N. Vancouver City 48,136

B.C.’S FASTEST GROWING CITIES

Surrey 390,145 +11,972 (+3.2%)

Abbotsford 127,451 +2,824 (+2.3%)

Maple Ridge 71,399 +2,575 (+3.7%)

New Westminster 59,426 +1,897 (+3.3%)

Kelowna 103,421 +1,713 (+1.7%)

Burnaby 205,261 +1,596 (+0.8%)

Port Coquitlam 57,308 +1,525 (+2.7%)

Coquitlam 122,696 +1,355 (+1.1%)

Courtenay 20,340 +1,104 (+5.7%)

Port Moody 26,690 +1,016 (+4.0%)

B.C.’S FASTEST SHRINKING CITIES

Victoria 76,387 -600 (-0.8%)

Vancouver 568,442 -365 (-0.1%)

Kamloops 80,416 -333 (-0.4%)

Delta 100,571 -330 (-0.3%)

Prince Rupert 14,760 -289 (-1.9%)

Oak Bay 18,207 -221 (-1.2%)

West Vancouver 42,867 -175 (-0.4%)

Quesnel 10,198 -149 (-1.4%)

Port Hardy 4,551 -148 (-3.1%)

Cranbrook 19,327 -147 (-0.8%)

— Source: BC Stats

© Copyright 2004 The Province

 

Stuart Hunter
Province

B.C. realtors are calling for changes that will make it easier for home buyers to know if they’re about to purchase a house used as a marijuana grow operation or chemical drug lab.

B.C.’s two largest real-estate boards — the Real Estate Board of Greater Vancouver and Fraser Valley Real Estate Board — have each submitted proposals to the B.C. Real Estate Association calling for the standard seller’s disclosure statement to be altered to include reference to pot grow-ops and labs where drugs like crystal meth are produced.

“This is a real problem and we want to take a stand and be proactive,” said Vancouver board president Bill Binnie. “The real-estate community have concerns like, ‘Holy smokes, how can I protect my clients?’ and we’re talking about buyers and sellers.”

Association executive officer Robert Laing welcomed the proposals, adding that the disclosure form will be reviewed by a committee consisting of realtors and lawyers on Feb. 18.

“We want to deal with it right away — it’s certainly in our industry’s best interests to be seen as wanting to be on the right side of stopping this kind of problem,” Laing said.

“The grow-op issue is unique in that the stigmatization continues long after it has been a grow-op. There really is a dangerous situation that people need to be aware of.”

Laing said the committee’s biggest challenge will be choosing the right wording on the form.

“The issue they really are going to face is not whether to add it to the statement, but how do we put in a question that will generate an answer?” Laing said. “They have got to come up with wording that is actually significant and effective like, ‘Are you aware that this house has ever been a grow-op?'”

The disclosure statements must be completed for every property sold in B.C. Property owners are asked to reply to numerous questions about the home with a Yes or No or I-don’t-know answer.

Buyers can pursue legal action against any seller who knowingly lies on a statement.

Some realtors feel the price of drug homes will drop by as much as 10 per cent if the proposals are adopted but Binnie disagrees.

“We’re in a very active market and I don’t see it affecting the value of property at all,” said Binnie. “Disclosing it up front is just going to make the marketing process easier. There are not going to be any surprises and surprises always foil a deal.”

Some homes used as grow-ops have needed elaborate renovations costing in excess of $50,000 in order to make them livable again.

© Copyright 2004 The Province

Van. Courier

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DEVELOPMENT I To meet rising demand, major developers look at billion-dollar projects

Wyng Chow
Sun

Billions of dollars worth of residential projects are breaking ground this year in Greater Vancouver, particularly in the city’s downtown core, as developers try to keep up with a seemingly insatiable demand for new housing.

And development industry representatives say the construction boom would be even greater except for an acute shortage of available building sites and skilled workers.

“Land supply is definitely a limiting factor and skilled trades people are hard to come by,” said Cameron Muir, senior Vancouver market analyst for Canada Mortgage and Housing Corp.

“That’s slowing down development, but the Lower Mainland’s residential market will still be robust, posting solid gains in 2004.”

In releasing its year-end summary and forecast, CMHC projects new housing starts to hit 16,600 units this year, up 6.2 per cent from 15,626 actual starts in 2003.

Multi-family construction — mostly condominiums — now account for more than half of all new construction.

“Consumers are flocking to condos,” Muir said Friday. “The combination of affordability, location and lifestyle that a typical condominium offers is prompting significant interest among home buyers.

“While first-time buyers and investors are obvious purchasers, empty-nesters are increasingly trading in their big suburban homes for amenity-laden townhouses and apartments.”

Multiple Listing Service figures show 14,843 condo units totalling more than $3.2 billion sold in Greater Vancouver in 2003, compared to 11,967 units totalling $2.365 billion the previous year.

Meanwhile, the number of available units dropped to 2,358 at year-end, down 21 per cent from 3,007 active listings the year before.

To meet the rising demand, various major developers are bringing on several billion dollars worth of new product in 2004.

Among them:

? Wall Financial Corp. is launching 880 residential units, called Yaletown Park, at 901 Mainland, comprising three towers of 34, 32 and 30 storeys, along with some retail space and a public park. While marketing isn’t due to start until late February, there are already more than 200 people on a waiting list.

? In partnership with Macdonald Development Corp., developer Peter Wall is also building 423 condos at the Hudson, at Granville and Dunsmuir.

? Concord Pacific Group has started construction on its mixed-use project at 651 Expo Boulevard, across from General Motors Place. The commercial component includes a 144,725-square-foot Costco retail outlet, while the residential portion is made up of four condo towers totalling 900 dwelling units.

? Henderson Development (Canada) Ltd. is launching the latest phase of its International Village development at Abbott and Keefer, consisting of residential towers of 31 and 25 storeys, along with a six-storey mid-rise building and some retail space.

? Amacon will be constructing a mixed-use project at 550 Bute, including a 40-storey residential tower with 270 condos, and a 12-storey “boutique” hotel of about 60 rooms, along with about 8,000 square feet of retail space.

? Bluetree Management is building a 25-storey condo tower at 1616 Bayshore Drive, along with an eight-storey non-market residential building and a 47-person daycare facility.

? Polygon Group is constructing its 150-unit condo tower, the Bentley, at Homer and Nelson, as well as 92 new townhomes and condos at its Marguerite House at Quilchena Park, Arbutus and West 33rd.

Meanwhile, Concert Properties is currently negotiating with the YMCA to be co-developers of the Y’s existing downtown site at Burrard and Nelson. The proposed redevelopment calls for a residential tower and new premises for the YMCA, including health and fitness facilities, expanded community meeting spaces, adult education centre, and improved space for rehabilitation programs.

“The sale of density for the [condo] tower to the developer, as well as a planned capital campaign, will provide the YMCA with the resources required for this community amenity,” said association general manager Richard Pass.

“The new YMCA will likely be built right away, while the capital campaign is underway.”

Among other downtown projects this year, Concord is planning to build a floating office building in False Creek to service a new marina at the foot of Homer.

Mohtadi Holdings is constructing a nine-storey, mixed-used building at 531 Beatty, containing 40 residential units, with retail and parking uses at street level.

Because of a shrinking land bank — especially in Vancouver’s popular downtown core — developers are now engaging in bidding wars for building lots, shelling out more than $100 per buildable square foot for land — double the prices from only a couple of years ago.

CMHC figures show new housing construction in Greater Vancouver in 2003 totalled 15,626 units, up 18.4 per cent over 13,197 units the previous year.

Using an industry multiplier of 2.8 equivalent fulltime jobs for one year for every new start, the year-over-year increase of 2,429 units resulted in 6,801 more construction jobs in 2003 than a year earlier.

“This generated an enormous economic boost in the region,” said Peter Simpson, chief operating officer for the Greater Vancouver Home Builders Association, which represents 410 companies in the Lower Mainland’s construction industry.

Of the 15,626 new starts last year, condos accounted for 10,244 units, up almost 25 per cent from 8,217 units in 2002.

“The more than 2,000-unit increase in condominium starts signals a healthy return of consumer confidence in this popular form of housing,” Simpson said. “With low interest rates and the impending release of a variety of new projects, we expect this trend to continue well into 2004.”

Simpson noted, however, that any significant increase in housing starts this year could be repressed by the shortage of skilled trades.

To minimize the potential for delayed completion dates, he urged developers to secure and schedule all necessary construction workers well in advance of starting any projects.

“We are working closely with educators to encourage students to consider career opportunities in construction,” Simpson said. “Carpentry, plumbing, electrical and other skills will be in great demand for home construction, as well as the many projects required for the 2010 Olympics.”

© Copyright  2004 Vancouver Sun