Posted on
September 30, 2018
by
Paul Liberatore
A data access deal between the Toronto Real Estate Board and a neighbouring board will for the first time expand the geographic reach of new competition rules that have allowed Canadian house hunters more access to such critical data as sold prices, expired listings and agent performance.
In August, the Supreme Court ruled that TREB must comply with a 2016 Competition Tribunal ruling that ordered the real estate board to end a practice of blocking members from publishing online such disputed data as sold prices. The order only applied to TREB and its 52,000 members, but the data restrictions the tribunal banned are common across other local real estate boards around the country, with the exception of the Maritimes.
The Oakville, Milton and District Real Estate Board (OMDREB) deal with TREB for the first time brings agents outside of TREB’s membership into the more open data-sharing environment.
Other realtor boards across the nation have said they are watching TREB’s compliance effort, but as yet none has gone so far as to implement rule updates of their own.
“I don’t want to put a timeline on it, but we can substantiate we are making efforts, we can learn from [TREB’s] adjustments and employ them here,” said John Barbisan, president of the Fraser Valley Real Estate Board in British Columbia.
His board shares its Multiple Listing System with the Real Estate Board of Greater Vancouver and the Chilliwack Real Estate Board (which in total represent more than 18,000 agents) and the groups are working together on a combined response to the new rules. “We’ve been watching it closely of course, there’s going to be unintended consequences and growing pains,” he said.
TREB president Garry Bhaura announced the deal Thursday, describing it in a statement as “a win-win not only for members of TREB and OMDREB but also for our members’ clients.” The data will include all active, sold, cancelled and suspended listings dating back to January, 2018, and should roll out to members before the end of the year.
“This is the first agreement of this kind that TREB has entered into,” said OMDREB president Rick Kedzior. “I leveraged a personal friendship with John DiMichele [TREB’s CEO]. It’s hopefully a start … I know John will consider doing it with other boards. Kitchener for instance has a lot of TREB members listing in that area.”
The primary purpose of the data-swap is to address a blind spot in the two different listing software systems the boards use to operate their markets. Although registered agents can list a property anywhere in the province, they will typically use the software of their home board to manage the sale. OMDREB is already part of a data-sharing partnership called ORTIS that sweeps up Guelph and Simcoe listings, among others.
Until now, TREB has had no data-sharing deals with other boards. OMDREB has 1,800 members covering the towns of Oakville, Milton and parts of Halton Hills, but in recent years about half of Milton’s real estate listings were being handled by TREB members. That put both boards in the position of having agents operate with an incomplete picture of the market. “Sometimes, the listing price would be off, because they didn’t know about recent activity,” Mr. Kedzior said.
Mr. Kedzior said the boards had been negotiating the deal to address these blind spots for about a year, and that the issue of sold prices or virtual office website (VOW) rules played almost no role in the decision; there are no VOWs being operated by any of his members, he says.
He also said OMDREB is planning to adopt TREB’s updated VOW data rules as soon as it’s clear the Competition Bureau has signed off on TREB’s approach, and he believes other boards may follow suit.
Mr. Kedzior believes the deal could someday lead to a province-wide system of data-sharing listings. “There’s more openness, people have changed their vision and see how it would be beneficial for their membership.”
In a recent interview, Mr. DiMichele said TREB was working collaboratively with the bureau to comply with the order, but did suggest there were might still be areas of disagreement to be hammered out.
“I’m sure we’re not done with respect to privacy … we’re still hearing it from consumers, still hearing it from members,” Mr. DiMichele said, particularly as it relates to the display of prices from conditionally sold properties that have not yet closed. TREB’s position is that, if a deal falls through, the sold price should be expunged so as not to harm the market for that property, although the order makes no such requirement. “The tribunal’s decision said this was a very close call … this is a very complex matter and we’re trying to transition to comply with the order.”
Posted on
September 25, 2018
by
Paul Liberatore
Vancouver startup aims to open real estate investing to the masses
IMBY founder and CEO Michael Stephenson
Online platform IMBY lets members buy shares in properties for as little as $1
Tech entrepreneur Michael Stephenson’s latest venture sprang from a chat with an employee at one of his companies. Asked about his financial plan, Stephenson explained that he invests in real estate developments as a limited partner. When the employee learned that such investments can yield an 18- to 23-percent internal rate of return (IRR), he wanted in. Stephenson told him that the minimum cheque most general partners will take is $250,000.
“And he goes, ‘Why is that?’” Stephenson recalls. “‘Why am I stuck investing in a GIC at 1 percent?’ It really galled me. I felt really guilty about that.”
Vancouver-based Stephenson and his business partner, Stephen Jagger, have been through seven companies over the past 18 years, he says. In 2013 the pair sold Ubertor, now Canada’s top provider of real estate websites. Their newest business, IMBY, aims to open the property market to people who don’t have the hundreds of thousands of dollars typically required to enter it in cities like Vancouver.
“What’s wrong with real estate is it hasn’t changed,” Stephenson says. “Current real estate is established to be binary: either you’re all in or you’re all out.”
That leaves the average person missing out on a key asset class, Stephenson notes, pointing to a 2018 paper by five economists at institutions including the University of California–Davis and Germany’s central bank. The authors found that from 1870 to 2015 in 16 now-wealthy countries, housing posted an average annual return of 7.05 percent, adjusted for inflation, versus 6.89 percent for equities.
“Bar none, real estate has been the world’s best investment over the last 150 years,” Stephenson says. “It’s an amazing investment class that most of the public doesn’t have access to because the barriers to entry are so high.”
Stephenson and Jagger’s answer to this problem is IMBY, a crowd-sharing platform whose name stands for In My Backyard. Users can sign up for an account on their mobile phone, search for a home to invest in and buy shares alongside other members for as little as $1.
“Traditionally when you buy or invest in real estate, it’s a very cumbersome process,” IMBY chief executive Stephenson says. “We digitized all of it, and what it allows us to do is keep everything on your phone and keep it simple, but it also allows us to share the costs, because they’re generally extremely high, and it allows everyone to participate.”
As far as Stephenson knows, IMBY is the first such online enterprise to have purchased property. Its first home is a real estate development in Vancouver’s Trout Lake neighbourhood. The company is taking a 2,000-square-foot house and turning it into three homes with a total area of 6,000 square feet, Stephenson explains.
Usually, a small group of people would invest in such a project, he adds. “But long story short, there’s now over 200 owners participating in the returns,” Stephenson says. “There’s an anticipated 35-percent return on this Trout Lake development, which is really great considering that if you look at the underlying asset, it’s a $1.6-million house, of which $1.5 million is land value.”
Although densification is one way to combat the Vancouver housing crisis, only a minority group has been benefiting financially from it, Stephenson says. IMBY “allows the 99 percent to truly participate in these densification opportunities,” he maintains.
IMBY is looking at properties in high-growth regions of B.C. as well as the Seattle and Bellingham, Washington, areas, Stephenson says. For its second project, the platform is working with a local family that has done well in real estate. The father, who grew up with a single mother in Kamloops, wants to create opportunities for single moms to own property.
“With IMBY, a single mom can rent an apartment in Vernon at the market rate, and by acting as a great tenant, paying the rent on time, taking care of the minor issues on their own, they can be awarded shares in the property they live in,” Stephenson says. “What it’s allowing to do for the first time is change the typical angst between landlord and tenant, allowing the tenant to be investors in the real estate they’re consuming.”
Posted on
September 19, 2018
by
Paul Liberatore
Dozens of speakers have addressed Vancouver city council on a proposal to allow duplexes in every part of the city. Ted Chernecki has the story.
The City of Vancouver has approved a new zoning policy that will permit the construction of duplexes in 99 per cent of single-family neighbourhoods.
The seven to four vote saw Mayor Gregor Robertson, all five Vision Vancouver councillors and Hector Bremner support the policy, while three Non-Partisan Association (NPA) councillors and Green Coun. Adriane Carr voted against.
“The decision by Council to make it legal to build duplexes in single family neighbourhoods across Vancouver is one more step we’re taking to boost the right supply of housing for people who live and work in Vancouver,” said Robertson in a statement.
“This is not a silver bullet for Vancouver’s housing challenges, but we have to deal with the fact that more than half of the City’s land base is zoned exclusively for single family homes – homes that are out of reach for the overwhelming majority of residents.”
The vote came after two days of contentious public hearings. More than 70 people signed up to speak to council, while close to 500 people submitted written comments. More than 300 of those were opposed, while 186 were in support.
The zoning change grew out of the city’s Making Room program, announced back in June, which seeks to address the affordable “missing middle” in the city’s housing options.
The city is hoping to add 10,000 new housing units for middle-income residents in the next decade.
However, many speakers attending Wednesday’s meeting said they felt that council was trying to fast-track a contentious policy just weeks before an election that many of them would not be standing in.
“This vote pretty much sums up Vision Vancouver’s 10 years in power,” tweeted NPA Coun. George Affleck after the the policy was approved.
“Why listen when they can just ram things through.”
“I’m concerned that the city is trying to rezone all of the single family lots in Vancouver with minimal consultation with the existing communities,” said one speaker on Wednesday.
“The manner in which this was undertaken has been, as I said, haphazard, last minute, and there are just, again, a whole spectrum of opportunities for public participation in the planning process that have been entirely overlooked,” said another.
WATCH: City of Vancouver investigating 13 bedroom rental house
Others argued that the change is a supply-side attempt by the city to keep up with insatiable global demand, and warned it would spark a speculation frenzy.
That’s something housing experts like Tom Davidoff, with UBC’s Sauder School of Business dispute.
Davidoff argued increasing supply a crucial part of the formula to begin reining in prices. He said the rezoning will finally take away some the control which has allowed single family homeowners to block changes neighbourhood that might otherwise evolve into denser housing.
“You’re not helping people in need with half duplexes, let’s not kid ourselves,” said Davidoff.
“What you are doing is setting a precedent and saying single family homes are never going to be affordable to middle class households in Vancouver again, so don’t try. Lets recognize that we need greater density.
“If the neighbours aren’t crazy about it they can make a profit and sell, but they don’t get to dictate what happens next door.”
The city says that about 67,000 single family lots comprising 52 per cent of Vancouver’s landmass are now eligible for duplexes
Neighbourhoods like Strathcona, Kitsilano and Grandview Woodland had already permitted duplexes. They are now joined by west side neighbourhoods such as Dunbar, Kerrisdale and West Point Grey.
Aside from permitting duplexes, the new zoning does not allow for any increase in height or density on a property.
A report on the potential of allowing row houses, townhouses and low-rise apartments in low-density neighbourhoods is due to come before council next summer.
Posted on
September 3, 2018
by
Paul Liberatore
Mortgage eligibility rules now require borrowers to prove they would be able to still afford to pay their mortgages if their approved rate went up by two per cent.
Maple Ridge home prices still going up, but fewer buying
Double the inventory for people house hunting
The number of residential real estate deals being made in Maple Ridge has dropped, but the same hasn’t happened to prices.
When it comes to the price of a single family home, they’ve jumped by 10 per cent in Maple Ridge, when July 2017 is compared to July 2018, said Macdonald Realty manager Tom Garvey.
When it comes to condos, it’s the same scenario.
Garvey said the average price for a condo in Maple Ridge is now $324,400 – a jump of 37 per cent from July 2017 to July 2018, according to numbers from the Real Estate Board of Greater Vancouver.
At the same time, the number of actual sales of condos has dropped by the same amount – 37 per cent – while the amount of housing inventory has more than doubled.
However, the comparatively lower prices in Maple Ridge are keeping up local prices, he added.
The average price of a townhouse in the city has jumped 13 per cent – to $567,600 in the same time period, although the number of sales have also dropped.
And there are twice as many townhomes now on the market compared to a year ago.
“So there’s a lot more product on the market,” said Garvey.
“Prices are not dropping for the simple reason, the cost of building these things.”
Maple Ridge is also a more active market compared to Coquitlam because prices here are lower than the rest of Metro Vancouver, making housing more affordable to more people.
Garvey said the 20 per cent foreign buyer’s and speculation taxes have had an effect at the top end of the market. But as a result, foreign money is now going into commercial and agricultural real estate around Metro Vancouver.
He added that the financial stress announced last fall by the Office of the Superintendent of Financial Institutions is one of the major reasons the market has slowed down.
Mortgage eligibility rules now require borrowers to prove they would be able to still afford to pay their mortgages if their approved rate went up by two per cent. That’s particularly harsh for first-time buyers, he added.
But instead of stiffening borrowing requirements, the government should have started taxing condo pre-sales, to discourage flipping of properties.
Last May, condos were selling for 50 per cent more than they were the year before.
Garvey doesn’t see any big crashes in those prices coming, adding there is a summertime lull, as there is every year.
Still, he said he’s starting to see price reductions.
“But right now, prices are fairly stable.”
People keep wanting to move here because of the environment, he added, noting Metro Vancouver is an international urban area.
“If there was going to be a big crash, it would happen elsewhere, as well. I don’t expect a massive downturn to happen. If it is, it’s not just going to be in this market, it will be all across North America.”
Philip Edge, a realtor in Maple Ridge since 1971, said the housing market has normalized and balanced this year. He said there’s now a 12- to 20-per-cent sales-to-active-listings ratio, meaning those percentages of homes are being sold of the total inventory on the market.
He said higher interest rates and government taxes are all affecting the number of buyers. A condo is going for about $400,000 and townhomes $600,000 in Maple Ridge, making this area attractive to buyers moving out from closer to Vancouver.
“We’re still doing good,” he said.
His office did more than $16 million in real estate sales last July.
He compared Maple Ridge and Pitt Meadows to an island, separated by the Pitt, Fraser and Stave rivers from the rest of the region.
Edge maintains that interest rates are still lower than they should be and that rates could rise gradually to six per cent within six or seven years.
He said the financial stress test could be the government’s way of ensuring against a spike in interest rates. A five-year mortgage is now at about 3.3 per cent.
“A year ago, we had some crazy prices.”
Now, it’s a more realistic housing market and buyers now are more qualified, Edge added.
Posted on
September 1, 2018
by
Paul Liberatore
Before you list, tweak your home decor and finishes to up your odds of attracting a sale.
When you’re putting your home on the market, you want it looking its best. You know you’ll need to clean and declutter, but what about making cosmetic updates?
Investing in a new look for your home might be well worth the effort. Zillow reports that certain paint colors in specific rooms can impact a home’s sale price. And many buyers perk up when they see terms like granite countertops, stainless steel appliances and subway tile in a home’s listing.
Let’s take a look at ways to work these trends into your home for maximum impact.
More natural, less fussy
Today’s buyer is looking for fresh and natural design elements that easily blend between varying styles, from tailored and traditional to ultra-cool and modern.
Zillow discovered that shades of cool blue speak to home buyers, because they offer a semi-blank canvas for a personal touch. A natural blue tone also looks best in listing photos and videos.
 Photo from Zillow listing.
Many elements impact a home’s value
While Zillow’s research shows that applying a fresh coat of paint to your home helps boost its value, there are many more components that impact a buyer’s willingness to pull out their checkbook.
In addition to paint, other elements of the kitchen and bath are important to keep in mind. Updating the countertop or flooring often breathes new life into a space.
If you don’t want to dip into construction territory, smaller projects, like swapping out hardware, adding artwork or installing stylish storage, are all great fixes that signal your home’s been well cared for.
 Photo from Zillow listing.
Dip your toe
We always tell clients who are nervous to jump into a new color or pattern this simple piece of advice: Dip your toe in and try it out.
As Zillow found, shades of blue are the go-to for home buyers today. However, that doesn’t mean you have to splash navy blue paint across your walls.
If you’re staging your home to sell or just want to see what the color looks like in it, start small with throw pillows, an area rug or window coverings. These decorative accents are small but mighty, and they may offer just the right amount of impact to boost your home’s value.
 Photo from Zillow listing.
Now that homeowners are gravitating toward fresh, bright and clean coloration, we can expect hues of blue and gray to offer the tranquility potential buyers are looking for.
Paired with classic white countertops and cabinets, these shades complement nearly every kitchen and bathroom, making your next home sale a slam dunk — especially if sky blue or periwinkle is involved!
Posted on
August 29, 2018
by
Paul Liberatore
Buying a condo in Metro Vancouver may get harder in 2019
Posted Aug 26, 2018 10:05 am PDT
BC Real Estate Association is predicting prices will climb nearly two per cent this year
Condo prices and sales still stronger than single family homes
VANCOUVER (NEWS 1130) – Rising prices and dropping sales have prompted more speculation about what’s in store for Greater Vancouver real estate.
The BC Real Estate Association is predicting prices will climb nearly two per cent this year, but UBC Sauder School of Business professor Tom Davidoff says that might change next year.
“Single family is quite weak, particularly at the higher end. We’ve seen actual reduction in what homes are worth,” Davidoff says.
“We haven’t seen that kind of weakness in condo yet. There’s a possibility of a significant correction there, as well. A weakening of ‘incredibly strong’ is not yet to weak, so you’re starting from a very, very strong point. I don’t think the sales-to-listing ratios for apartments have even hit buyers’ market yet.”
He says while condo sales are still stronger than single family homes, a “significant correction” is possible.
“Apartments have gone from very hot to a sort of balanced market situation, so good time to be a buyer,” says Davidoff, adding that, conversely, it could be a frightening time for sellers because of increased financial stress tests and high apartment prices and inventory. “A lot of the people who wanted to buy already have bought, so that’ll be very interesting to watch.”
Jason Turcotte with Cressey Developments says their latest condo tower near Queen Elizabeth Park is already more than 80 per cent sold, but he agrees changes are on the horizon.
“It’s very challenging to produce housing right now. I mean, the marketplace is showing some signs of cooling, but the cost side of the equation certainly hasn’t,” Turcotte says.
He adds not all properties are created equal.
“We have to price appropriately to the market of the day and it is changing right now,” Turcotte says. “But I think, where you can demonstrate that the value is there, that the marketplace responds very well and not taking for granted that it’s just going to be this robust market that will buy it no matter what.”
He says investments are still being made where buyers see good price and quality.
“We are still seeing some investment-oriented purchasers on some of the smaller homes because we did have a mix of homes from one-bedrooms all the way up to more than two thousand sq-foot, two and three-bedroom homes, so a real broad mix.”
Prices for the Chelsea project on Cambie Street and West 31st Avenue, which is slated to break ground this fall, range from $650,000 for a studio to almost $3 million for larger suites
Posted on
August 27, 2018
by
Paul Liberatore
Many are seeking work in the fast-growing high-tech sector, which is hungry for young people.
Moving to Kelowna not only gave Pamela Kuiper a bigger house for less money, it allows her to indulge in her passion for gardening.
Marko Bosnjak is proud that he has put a deposit down on his first condo, a 600-square-foot one-bedroom suite just 10 minutes outside of Kelowna’s bustling downtown. That wouldn’t be so remarkable but for the fact the fledgling digital marketer just turned 21 in January and managed to save more than $40,000 for his $234,900 condo—all with no help from the Bank of Mom and Pop.
Marko Bosnjak is a proud homeowner at just 21. SUBMITTED
He is just one of hundreds of millennials who are flowing into Kelowna with its relatively affordable home prices and enviable lifestyle. Many are seeking work in the fast-growing high-tech sector, which is hungry for young people, especially those born between 1982 and 2000.
While there are no hard figures on how many millennials have moved to Kelowna in the last five years, a 2015 survey conducted by Accelerate Okanagan, a local organization that promotes the high-tech industry, found that of the 7,600 people working at 650 companies in Kelowna, about 52 per cent of those workers were under the age of 35.
“This is not an industry which hires senior and seasoned older people,” says CEO Raghwa Gopal. “These tech companies take a risk on younger people, creating more opportunities for them.”
High tech, he said, now surpasses the wine industry and tourism as the region’s chief economic engine, generating about $1.3 billion annually and showing no sign of slowing down.
Born in Mexico in 1997, Bosnjak came to Canada with his parents three years later, settling in Oliver, about a 90-minute drive south of Kelowna. He attended high school, and in what he calls “a blessing,” the school helped him get a job at Valley First credit union. “It opened my eyes to what it means to save money and get ahead in life,” he says.
While still working at the credit union by day, Bosnjak and a buddy—“a nerdy techy guy, super smart”—worked nights to form, in January, a website service company called Eureka. “Last month, we hit just under $10,000 in sales and we want to keep the momentum going.”
Digital marketer Alison Roach found new opportunities in Kelowna. SUBMITTED
Meanwhile, in Vancouver, Alison Roach, 25, an SFU grad who flirted with journalism before taking a job in digital marketing, was contemplating moving to Kelowna with her boyfriend, Norbert.
“I wasn’t really finding the opportunities I wanted in Vancouver,” she says, having worked in coordinator positions while yearning to do more writing. “I felt sort of stuck and stagnant.”
Responding to an online ad, Roach scored a job at Strawhouse, a fast-growing digital marketing firm in Kelowna, and the pair were off to the Okanagan. It helped that Norbert is a pilot for Air Canada’s Jazz, which allows him to commute daily by air to his YVR-based job.
Roach’s change of job wasn’t the only benefit that came with the move: the couple more than doubled their living space, going from a 500-square-foot “shoebox” off The Drive for $1,500 a month to a 1,100-square-foot two-bedroom, two-bathroom apartment in Kelowna for $1,750 a month. As well, she is just a five-minute bike ride from the office.
For 29-year-old accountant Pamela Kuiper and her husband, Andrew, the tipping point was the ridiculously high prices of homes surrounding their rented 650-square-foot one-bedroom condo in downtown Vancouver. That, and the dismal alternative of a 90-minute daily commute from, say, an affordable Fraser Valley townhome, prompted them to look at getting out of the city.
“It was fun, and we loved it, but we couldn’t see ourselves settling down there [in Vancouver],” she said. Then a job opportunity came up for Andrew, an environmental consultant, starting up a Kelowna office at a small firm. He interviewed and got the job. Around the same time, Pamela moved from a small North Shore accounting firm to the Kelowna office of Grant Thornton.
The couple now live in a carriage house in Lower Mission, a neighbourhood about 20 minutes from downtown Kelowna. It is significantly roomier than their former condo, with two bedrooms and two bathrooms and a good-sized backyard where Kuiper has indulged her passion for cultivating a veggie garden. They also enjoy hiking and camping outside the city.
“We are just renting now, but want to buy a house at some point,” she says. “Most importantly, we are not feeling the pressure as much to buy a home. That pressure really takes over everything in your mind, and it’s very hard to remember you like to do other things than look at real estate online.”
Amy Matejcek, a real estate agent who specializes in helping millennials relocate to Kelowna, says the downtown scene with its new restaurants and cafes, sports and cultural events, combined with nearby skiing in the winter and boating and biking in the summer, is a giant magnet for millennials. That, and high rents—Kelowna has one of the lowest vacancy rates in Canada—have led many in the age group to leap into home ownership.
A millennial with a $50,000-to-$60,000 annual income and some money saved up could buy a condo for $350,000, about the average condo selling price in Kelowna last June, she says, and significantly cheaper than what you would pay in Metro Vancouver.
Kelowna Quick Facts
- Average June 2018 price of a single-family home: $716,274
- Average June price of a townhouse: $455,749
- Gross median household income: $71,127 (Vancouver: $72,662)
- Number of kilometres of on-street bike lanes: 300
- Average annual precipitation: 345 millimetres (Vancouver: 1,457 mm)
- Average summer temperature: 27°C (Vancouver: 23°C)
- Number of annual visitors to the region’s 240 vineyards: 500,000
MICHAEL BERNARD
Updated: August 27, 2018
Posted on
August 20, 2018
by
Paul Liberatore
New Zealand government has imposed a ban on non-resident buyers for resale homes – but will it help curb runaway prices?
Wellington, New Zealand, where residential real estate prices have soared over the past decade
New Zealand’s Prime Minister, Jacinda Ardern, is fulfilling her early promise to tackle the country’s soaring property prices.
Ardern – who seems to be taking over from Justin Trudeau as the global media’s latest, youngest, hippest nation leader du jour – promised last fall after her election that non-resident buyers would not be permitted to purchase existing homes anywhere in New Zealand (while also announcing a crackdown on immigration). It has just been confirmed, on August 14, that this policy will go ahead.
Just like in Canada, New Zealand’s larger cities have seen a severe housing supply shortage and home prices have soared in the past decade, rising around 18 per cent year over year in its capital, Wellington. The largest city, Auckland, was recently named by The Economist as the world’s second most overvalued city for real estate, with New Zealand the world’s most overvalued country. Only a quarter of adults in New Zealand own their own home, compared with half in 1991, according to an August 15 Guardian report (and compared with 63.7 per cent in Metro Vancouver and 66.5 per cent in Toronto, according to Canada’s 2016 Census).
And, just like in B.C.’s provincial election, affordability, lack of supply and foreign ownership and speculation (particularly from China) were key issues in the country’s general election last September. So Ardern was duty-bound to make a big move once in office.
The policy is bound to be popular among New Zealanders, many of whom feel they have been pushed out of the housing market. But the question is, will the ban make a difference?
The Guardian report says, “According to the latest figures from statistics New Zealand, 3.3 per cent of homes sold in the last quarter were to foreigners, with the bulk of the buyers Chinese, followed by Australians.”
This suggests that an outright ban would remove only three per cent of New Zealand’s property buyers, which is hardly likely to make a huge difference to the overall market.
Potential policy shock
What might make more of a difference to New Zealand’s housing market – at least in the short term – is a “policy shock” just like the one seen in Metro Vancouver following 2016’s introduction of the 15 per cent overseas buyer tax. Which is to say that, rather than only overseas buyers pulling out of the market, the entire system freezes temporarily as locals and non-locals alike wait to see what effect the new policy will have on prices. This has the self-fulfilling effect of halting sales, and price growth, until people get used to the “new normal” and the system unfreezes, as it is bound to do. After all, people still have to buy and sell homes.
It's also worth noting that overseas buyers will still be able to buy New Zealand presale homes off-plan, as the government doesn’t want to halt construction of new homes, with supply already so limited. What’s more, the ban doesn’t apply to residents of either Australia (which make up the second-largest group of New Zealand's overseas buyers) or Singapore.
Exemptions aside, it’s disconcertingly easy to get around these kinds of bans. Overseas buyers who still want in on New Zealand resale real estate can find loopholes such as using resident proxy buyers, New Zealand-based shell companies, and so on.
So it’s reasonable to expect that a large proportion of those three per cent of overseas buyers will still find a way to invest, whether it’s by reallocating their funds to presale real estate, or to commercial real estate, or simply by being exempt.
Could B.C. follow suit?
Naturally, leaders and industry insiders in B.C. are watching New Zealand with interest, to see if it will “work” in terms of making homes more affordable. According to a Global BC report published when the New Zealand ban was proposed in fall 2017, Green Party leader Andrew Weaver said he admired the policy and hoped B.C. would impose a similar ban. “It’s not about stopping people from owning homes who live here and pay taxes,” he said. “It’s about ensuring British Columbians can live in homes in British Columbia.”
But the same 2017 Global story also reported UBC Sauder School of Business professor Tom Davidoff as saying that he doubts the ban will be effective. “I tend to believe restrictions [and] bans are hard to enforce at times. We had it here in British Columbia even with the foreign buyer tax.” And in January this year, B.C. Premier John Horgan poured cold water on the idea of imposing a similar ban in B.C., instead widening and increasing the foreign buyer tax.
My guess as to whether the New Zealand ban will help with housing affordability? I agree with Davidoff on this one. I think that, like in Vancouver, and once any potential policy shock is out of the way, New Zealand’s desirability and convenient Pacific Rim location will mean that buyers will just keep on buying. If anything, Ardern’s immigration crackdown may have more of a long-term effect on the housing market, if population growth stalls and local demand softens.
In the meantime, the popular young Prime Minister will earn some kudos from her adoring voters for addressing the housing crisis. We’ll see…
C/O Vancouver Courrior
Posted on
August 19, 2018
by
Paul Liberatore
Avoid common landscaping disasters and learn how to fix them.
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14 Secret Landscaper Tips and Tricks
These tools and techniques are used by professional landscapers to make quick work of yard and garden tasks. Steal their ideas and make more efficient use of your gardening time and money.
Posted on
August 7, 2018
by
Paul Liberatore
Joannah Connolly / Glacier Media Real Estate
Foreign buyers, population growth, shadow flipping and money laundering are mainly to blame for the Metro Vancouver housing crisis, according to respondents of an Insights West poll released August 2.
Nine in 10 agree (with 64 per cent strongly agreeing) that the region is in a major housing crunch – rising to 98 per cent among residents earning less than $40,000 a year and 97 per cent among those renting their home (97%). No matter what the income level, respondents had strong opinions about what was the cause of this problem.
Foreign buyers were cited by a whopping 84 per cent of the respondents as a key cause, followed by population growth in the region (80 per cent), shadow flipping (76 per cent) and money laundering (73 per cent).
There were other factors cited as key reasons for the housing crisis, although to a lesser degree. These included municipal zoning bylaws restricting housing supply (63 per cent), immigration (58 per cent), lack of available land due to the natural geography (53 per cent) and interprovincial migration (46 per cent).
Steve Mossop, president of Insights West, said, “There is no doubt that Metro Vancouver residents believe that we are in a major crisis when it comes to housing, and the issue is dominating public opinion and the public agenda.
“What is surprising, though, are the misconceptions that exist with respect to the culprits and causes of this crisis. As the housing situation reaches crisis proportions, there is no shortage of scapegoats to blame, despite studies that show foreign buyers and money laundering are minor factors in the equation.”
Housing affordability is seen as the number one issue currently facing British Columbia by 48 per cent of Metro Vancouver residents, with those aged 18-34 notably more concerned (72 per cent) about the issue than older respondents (41 per cent of those aged 35-54 and 33 per cent of those aged 55 and above).
However, despite many homeowners benefitting from rising home prices, only 26 per cent feel that the housing situation has had a positive impact on them, with 33 per cent saying there is no impact at all, and the remaining 41 per cent believing it has impacted them in a negative way.
Posted on
August 1, 2018
by
Paul Liberatore
Burnaby is nation's fourth most out-of-reach market, while West Vancouver takes the longest in Canada
Joannah Connolly / Glacier Media Real Estate
For Millennial would-be homebuyers who don’t have the luxury of a Bank of Mom and Dad, the hurdle of saving for a down payment in B.C.’s pricey real estate markets can often be insurmountable.
This is borne out by a new national study by real estate website Point2Homes, released July 31, which examined how long it takes the average Millennial to save for a down payment in cities across Canada.
The study found that Metro Vancouver is home to four of the country’s five most out-of-reach housing markets, with West Vancouver at the top and Vancouver proper in second place.
For a Millennial in West Vancouver saving 20 per cent of their income each month (based on household income per Millennial couple for that city), it would take a whopping 35 years to save a minimum down payment on the median price of a West Vancouver home. However, this study does assume that the Millennial couple is buying a $2.54 million home.
Vancouver follows in second place, with a mimimum down payment on a median-priced Vancouver home taking 20 years to save on an average Millennial couple's income.
Burnaby and North Vancouver are in joint fourth place in the country, both at 16 years, and Richmond is in seventh place at 14 years.
The survey also found that, despite a minimum down payment on a median-priced home in Vancouver coming to $283,346, would-be homebuyer Millennials in Vancouver who were surveyed said they typically expect to save under $100,000.
Point2Homes said that these were “unrealistic expectations” and that unless Millennials were counting on parents to make up the shortfall, they were in for a “rude awakening.”
However, the study does not take into consideration that most Millennial couples in Vancouver would be unlikely to spend $1.4 million on their first home, which being over $1 million requires a minimum 20 per cent down payment. For context, a minimum five per cent down payment on a $500,000 starter condo would be $25,000 (although with a five per cent down payment, another $19K would be required for mortgage default insurance, which is added to the mortgage.)
If a Millennial couple were saving 20 per cent of their $72,390 annual income, it would take just 1.7 years to save a $25,000 down payment. However, strict mortgage qualification rules mean that a couple on this income would not qualify for a $475K mortgage – no matter how much they saved as a down payment, they would still only qualify for a mortgage around $283K.
Moreover, most Millennials surveyed said they were not saving as much as 20 per cent of their income. Across all the national respondents, 35 per cent said they were putting aside less than 10 per cent of their gross earnings, 30 per cent said they were saving 11-20 per cent, and just 35 per cent said they were saving more than 20 per cent.
Point2Homes listed 40 Canadian cities that are affordable for Millennials looking to get into homeownership. Timmins, Ontario, was at the top of the list, at just five months to save a down payment. Trois-Rivières, QC, and Cape Breton, NS, follow suit, with only six months needed to save for a down payment, followed by Edmonton, AB, and Québec City, QC.
Avis Devine, associate professor of real estate at the Brookfield Centre for Real Estate and Infrastructure, said, “The greatest hurdle to homeownership – for Millennials as well as all generations – is affordability. In many urban cases, this is rooted in limited supply in desirable locations, leading to price increases.”
Posted on
July 24, 2018
by
Paul Liberatore
Oregon, Washington, British Columbia All On Board Bullet Train Business Case Study
By TOM BANSE • JUL 23, 2018
The push for a bullet train between Portland, Seattle and Vancouver, BC, is getting additional backing. The state of Oregon and Microsoft Corporation are putting money into an in-depth "business case analysis" previously launched by Washington and British Columbia.
Oregon's Department of Transportation chipped in $200,000 and Microsoft added $300,000 to what began as a roughly $1 million consultant-led study using $750,000 approved by the Washington Legislature and CA$300,000 ($229,000) committed by British Columbia.
Charles Knutson is a transportation policy advisory to Washington Gov. Jay Inslee. He said, like the new study, the envisioned high speed train could be a public-private partnership.
"Whether it is real estate plays or on the operations side, we could see an opportunity for the private sector to be involved,” Knutson said. “So we see this business case analysis as a way to potentially attract an investor base and help take this to the next level."
Knutson outlined the study goals at a cross-border public policy summit underway this week in Spokane under the auspices of the Pacific NorthWest Economic Region. He said "ultra-high speed" rail service could cut travel times from Seattle to either Portland or Vancouver, BC, to one hour—down from the current three hours by car.
The upcoming business case analysis will build on a feasibility study completed by a different consultant for Washington state in December. Neither the states nor the province are committed to actually building a high speed train at this point.
That first study assumed the dedicated railway or tube to enable travel speeds of 250 miles per hour would require a substantial amount of tunneling. Depending how much tunneling took place, the study authors estimated a ballpark cost to acquire right-of-way and build a system at between $24 billion to $42 billion.
The initial feasibility study found a Cascadia bullet train could attract 1.8 million annual riders within a few years after launching and potentially cover its operating and maintenance costs, depending on which train technology was chosen.
Knutson said this new follow-up study will take "a deeper dive" into the ridership and revenue numbers. A WSDOT spokesperson said the new analysis has a due date of July 2019.
During a joint press conference in March, Inslee and British Columbia Premier John Horgan said they were aware of the large cost overruns and construction delays on California's high speed rail project.
"Any mistake they’ve made, we’re going to put in the bank and learn from it," Inslee said this past spring.
Speaking in Spokane on Monday, Knutson said population growth in the Cascadia corridor and traffic problems justify the embrace of faster Amtrak service.
"The No. 1 question we get when we're talking to folks about this is, 'What took you so long?'" Knutson said. "There is a lot of momentum for this."
Posted on
July 19, 2018
by
Paul Liberatore
Year-over-year declines in home sales across the province, combined with a jump in listings inventory, have put most of B.C. regions back into balanced-market territory, according to the B.C. Real Estate Association.
However, Victoria and Vancouver Island are the biggest exceptions to that rule, the association observed.
There were 7,884 home sales were recorded by the Multiple Listing Service® (MLS®) across B.C. in June, which is a 32.5 per cent decrease from June 2017.
The total number of active home listings across the province correspondingly rose 21.2 per cent year over year, taking the overall B.C. sales-to-active listings ratio down to 21.9 per cent, with many of the individual board areas now falling below the 20 per cent mark.
“The impact of the [mortgage] stress test is still being felt across the province,” said Brendon Ogmundson, BCREA deputy chief economist. “Lower demand as the result of higher mortgage rates and stringent mortgage qualification rules are bringing most markets around the province back into balanced conditions.”
Although 11 of B.C.'s 12 real estate boards posted average resale price increases compared with a year ago, those rises have slowed significantly – and overall, B.C.’s average home price in June was down 1.3 per cent from June 2017, at $716,326.
Market outliers
Not all of B.C.’s real estate board regions followed the same trends. In Victoria, the sales-to-active-listings ratio is 34 per cent, which is still a strong seller’s market – as is Vancouver Island’s 31.2 per cent.
Although Victoria’s ratio has eased dramatically from its unsustainable 68.8 per cent a year ago, and it was the area to see the biggest annual jump in available listings, market conditions are still tight with not enough home inventory for buyer demand.
Chilliwack was the province's region to see the biggest year-over-year sale price in June, at a rise of 8.4 per cent.
Aside from Northern Lights, where sales totals are low and therefore average prices fluctuate greatly, the B.C. regions with the weakest annual price growth were the Fraser Valley (up 1 per cent) and Greater Vancouver (up 1.4 per cent).
Posted on
July 14, 2018
by
Paul Liberatore
Condo construction in Burnaby | Shutterstock
Burnaby’s feverish pace of development is set to smash a billion-dollar record set last year.
The city granted $1 billion in building permits in 2017, breaking its 2015 record of $879 million. By the end of June, only halfway through 2018, the city had already handed out 786 permits with a total value of $704 million – putting it on track to hit $1.4 billion in by year’s end.
“Looking at the figures, it looks like we are heading for another record year,” said Coun. Pietro Calendino at Monday’s council meeting. “So that’s good news and it outdoes, by far, the Kinder Morgan project.”
Much of the construction is concentrated in the city’s four town centres – Brentwood, Lougheed, Edmonds and Metrotown.
The Metrotown Downtown Plan, adopted by council in 2016, calls for mass densification in the area surrounding the Metropolis at Metrotown mall. Council has since given the greenlight for many developers to bulldoze lowrise rental apartment buildings to make room for highrise condo towers in the area.
The strategy has drawn harsh criticism from citizens and advocacy groups, who say Mayor Derek Corrigan and city council is allowing for the displacement of some of Burnaby’s most vulnerable low-income residents.
Burnaby saw a net loss of 712 rental units between 2010 and 2017, while much of Metro Vancouver saw increases, according to the Canada Mortgage and Housing Corporation.
The towers erected to replace those rentals are providing much-needed new homes, according to Corrigan.
He said the new construction is needed to keep pace with Burnaby’s obligation to welcome new residents under Metro Vancouver’s Regional Growth Strategy 2011 agreement between the region’s municipalities.
The plan anticipates an annual population growth of 25,000 to 30,000.
“So as much as we make, people are coming in at an even more rapid rate and if we don’t house them in places like Burnaby, it means they’re moving out to the valley and occupying probably agricultural land in the future,” Corrigan said.
“So it’s a tough set of compromises to accommodate all those people coming here – but we invited the world and they’re coming.”
Posted on
July 7, 2018
by
Paul Liberatore
Photo: James Bombales
Open houses aren’t all schmoozing and sandwich platters. If you’re serious about buying a home, you need to know exactly what to look for in a potential property when touring it for the first time. While a bland beige paint job and dated floral window treatments are nothing to fret about, there are a number of red flags to watch out for that could end up costing you much more than you anticipated. We interviewed three real estate professionals to find out which warning signs could be cause for concern.
1. Cracks in the bricks
Photo: James Bombales
“Most red flags for structural issues can actually be seen on the exterior of a home,” says broker Marianne Miles of Chestnut Park Real Estate Limited. “Assuming the house is brick, take the time to walk around it and look closely at the bricks. Are they straight? Are they bowing away from the house? Are there cracks that run diagonally along the mortar lines of the brick?” Asking yourself these important questions can help to identify structural problems within the home. “Also check for recent brick repair work that may be masking these issues,” says Miles.
2. An imposing tree in the yard
“If there’s a fairly large tree that’s close to the home, the roots can cause a lot of foundation issues and damage the water management system if they’re penetrating the weeping tile system,” says Ara Mamourian, Team Leader at TheSpringTeam.ca. “That can become very, very expensive to deal with so you might want to have additional inspections done around the foundation.”
3. Obnoxious neighbors
Photo: James Bombales
“Always look at the condition of the neighboring properties and get a sense of the owners or tenants,” says Kori Marin, broker and managing partner at Fox Marin Associates. The neighbor’s unkempt yard could diminish the value of your newly-purchased property, even if the grass is much greener on the other side. Other bad-neighbor warning signs to look out for? Rambunctious party animals, potential-meth-lab-level-shadiness, an abundance of foreclosed properties and dogs that howl well into the night.
4. Building work completed without a permit
“Look for clues that work was done without a permit and not to code,” says Miles. “Are there missing handrails on the staircase to the basement or on the rooftop patio? Does that new bathroom reno not have Ground Fault Circuit Interrupters as plugs?” When purchasing a home that has undergone significant renovations, it’s essential to verify that permits were taken out, the work was approved by an inspector, and that the permit itself was finalized and closed.
5. Scented candles galore
Photo: James Bombales
“A big red flag when you’re walking into an open house as a buyer is if there are a lot of scented candles or plug-in fresheners,” says Mamourian. The overpowering smell of Ocean Breeze (whatever that means), could be an indication that the homeowner is trying to “mask some sort of smell,” such as pet urine or cigarette smoke.
6. An overworked dehumidifier
“If there’s a dehumidifier consistently going in the basement, that could be a sign of moisture that’s being covered up or managed,” says Mamourian. While humidity in the basement is not necessarily a deal-breaker, Mamourian says it’s worth taking note of. “You can then decide how a moisture problem would affect you down the road.”
7. A shoddy party wall
Photo: James Bomables
“Many of Toronto’s vibrant downtown neighborhoods offer century-old semi-detached houses, and it’s important to understand the construction of the party wall between you and your neighbor,” says Miles. “Is it brick? Is it double brick? Is it wood frame? Is it double brick on the main floor, and then wood frame on the second floor (which can often be deceiving)?” The construction of the party wall will ultimately dictate how much sound travels between the band practice next door and your baby’s nursery. “This is not common knowledge for a typical buyer, so don’t be afraid to ask the experts for help,” suggests Miles.
8. Fresh paint in an unfinished basement
“If you’re in a basement and you see a fresh coat of paint on the unfinished foundation, it could mean that they’re trying to cover up signs of water penetration,” notes Mamourian. “When there’s water penetration on a foundation wall, it dries and leaves a white powdery substance.” So if it smells like the painters have just packed up and left, the issue may be worth investigating further.
9. Elevator issues
Photo: James Bombales
“If you’re attending a condo open house, note the wait times for the elevators and how many elevators there are to service the building,” says Marin. While no one likes waiting 15 minutes for a ride to the ground level when they’re running late for work, a building with one or more out-of-service elevators may signal that the lifts are due to be replaced — which can send condo fees soaring.
Posted on
June 30, 2018
by
Paul Liberatore
WATCH: A Nanaimo woman is sharing her family’s living nightmare in hopes of saving another first-time buyer from their fate. The hotter than ever real estate market is making it more and more common for buyers to waive conditions and forego home inspections. Skye Ryan reports.
Wendy Ettinger and her son Matthew Noel’s dream home has turned into their nightmare.
“It looked immaculate on the outside. They made it look that way,” said Mathew Noel. “It said beautiful brand new 1-year-old, fully authorized home.”
“It’s just sad,” said Wendy Ettinger. “This house is ruining our lives.”
These first time home buyers bought in 2016, amid this still burning hot housing market.
With multiple offers on the table for the house, they decided to offer over its $440,000 asking price and waive the home inspection, on advice they say their real estate agent gave them.
“There was another offer and what we should do is maybe raise the price and drop the inspection,” said Ettinger.
What this family says they didn’t know then was how long their so-called “new build” had been sitting incomplete. It turns out that construction began on it all the way back in 2009 when the recession shuttered so many projects.
“Oh we were just shocked right away,” said Ettinger. “We had no idea.”
The family’s investigator, James Craig, said he’s learned that over the years the house filled with water, which likely led to the mold evidenced in reports they’ve now paid for.
Mold that makes it impossible for Matthew Noel to live in the home now.
“The whole house is filled with penicillin and stachybotrys which are both toxic molds,” said Noel. “Life-threatening molds and I can’t breathe in there.”
So even the interview with CHEK took place outside.
President of the Vancouver Island Real Estate Board Don McClintock says this case is why inspections are so crucial, and why buyers shouldn’t be tempted to pass on them.
Without any conditions then they have unconditionally purchased the home,” said McClintock. “They have no further recourse.”
Wendy Ettinger and her son have been told it will cost as much as $100,000 to repair their new home. They’ve now hired a lawyer to take their case against the home’s builder and real estate agent to court.
Posted on
June 27, 2018
by
Paul Liberatore
 Akin Oyedele/Business Insider
- CMHC did a survey to find out why real estate in Toronto and Vancouver is so hot.
- More than half of properties saw bidding wars.
Have you ever woke up after a night of drinking, and only had a vague recollection of what happened? Then your responsible friend sets off a chain of text messages, trying to figure out where you went wrong? Well that's what the Canadian real estate industry just did, and man-o-man did people screw up. The Canada Mortgage and Housing Corporation (CMHC), the Crown corporation in charge of mortgage liquidity, conducted a massive survey of recent buyers in Toronto, Vancouver, and Montreal. After getting drunk on exuberance, buyers indulged in a little too much borrowing, blaming everything from land scarcity to foreign buyers for the street fights bidding wars they entered.
About The Survey
The CMHC designed a massive survey to try and figure out where buyer exuberance started. Buyers in Toronto and Vancouver saw a quick rise in home prices, and adopted "excessive" expectations of price growth. To determine where the disconnect between fundamentals and price growth started, they took a novel approach - they asked the buyers. 30,000 recent buyers were sent surveys, asking questions ranging from what their budgets were, to why they didn't stick to their budget.
The majority of price movements were driven by exuberance in Toronto and Vancouver. Yes, fundamentals played a part - but a small part. Instead, the survey focuses on finding out which data points buyers felt drove their FOMO. The fear of being "locked out" is always a powerful motivator, which tends to amplify the read on fundamentals.
Now, issues like foreign buyers are important, and need to be tracked and dealt with. However, no one forced anyone to buy in the small window of exuberance. The homeowner life didn't choose these buyers, buyers chose the homeowner life. Despite what you may have heard, not all renters are poor and struggling to eat. Actually, a surprising number of bank executives are now renters, but I digress. Let's find out what these people were thinking.
55% Of Toronto And Vancouver Real Estate Buyers Entered A Bidding War
First up, the CMHC found that buyers use "rule of thumb mechanisms" to determine home prices. "It's a hot market," "I can't miss out," and "it's really tight right now" are phrases analysts cited as examples of this mechanism. According to the CMHC, these were "phrases pushing homebuyers to overvalue an investment." FOMO helps to build an overreaction to data, which resulted in a lack of self-control. The best example of this is a buyer's willingness to engage in a bidding war.
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The majority of buyers entered a bidding war in Toronto and Vancouver. 55% of survey respondents in both cities said they entered a bidding war to buy their current home. To contrast, just 17% of Montreal's buyers experienced a bidding war.
The Discipline Was Not Strong With These Ones
Buyers that accelerated their buy, tended to break their budget according to the CMHC. Vancouver saw 47.91% of buyers pay more than they had planned. Toronto saw similar levels, with 47.79% of buyers paying more than budgeted. To contrast, Montreal only saw 23.67% of buyers pay more than they budgeted.
FOMO was the primary driver of breaching, with most of these homeowners buying sooner or later than expected. CMHC analysts believe that those that bought sooner likely lacked market information, pushing budgets higher. Those that bought later couldn't find what they wanted in their budget, driving them to an upward budget revision.
Canadian Real Estate Buyer Budgets
CMHC survey of recent buyer budgets, and whether they stuck to them.
 CMHC
The Foreign Buyers Made Me Do It
If Canadian real estate markets had a phrase of the year, "foreign buyer" would have been it in 2017. In Vancouver, 67.8% of buyers said foreign buyers had "a lot of influence" on home prices. Toronto was a little further behind, but not much at 47.88%. To contrast, 42.31% of Montreal buyers felt foreign buyers had a strong influence. Foreign buying is actually a part of the development strategy in cities like Vancouver, but they always tend to show up in droves when local credit expands - just like in the late 1980s. Funny how that works.
Perceived Impact Of Foreign Buyers On Prices
CMHC survey responses from recent buyers, on the perceived impact of foreign buyers on real estate prices.
 CMHC
Who Needs A Job When You've Got Credit?
Employment growth is normally an important fundamental factor, but buyers didn't agree. In Vancouver, only 17.03% of buyers felt it had a lot of influence. Toronto buyers felt it was a little more important, with 26.24% of people thinking it had a lot of influence. To contrast, 35.05% of Montreal buyers felt it had a lot of influence on home prices. The bulk of respondents in all cities felt it had some influence on prices.
Perceived Impact Of Employment Growth On Prices
CMHC survey responses from recent buyers, on the perceived impact of employment growth on real estate prices.
 CMHC
There's Too Many People!
None of these locations are growing like they used to, but population growth was still a perceived factor. Toronto had 54.56% of respondents claim population growth had a lot of influence on prices. Vancouver came in just under that, with 51.39% of buyers feeling the same way. Montreal only had 38.94% of buyers that felt population growth had a lot of influence on prices. For context, Montreal has the fastest growing population of the three regions.
Perceived Impact Of Population Growth On Prices
CMHC survey responses from recent buyers, on the perceived impact of population growth on real estate prices.
 CMHC
We're Running Out Of Land!
My favorite narrative, we're running out of land - a.k.a. land scarcity. Vancouver had the most buyers that felt land scarcity had a lot of influence, with 52.94% of buyers agreeing. In Toronto that dropped to 44.22% of buyers. Montreal was just under that, with 43.06% of buyers agreeing it had a lot of influence.
Perceived Impact Of Land Scarcity On Prices
CMHC survey responses from recent buyers, on the perceived impact of land scarcity on real estate prices.
 CMHC
Those Darn Rich Locals!
Locals seem to underestimate the impact of domestic investors in all three regions. Toronto had the highest ratio of people that felt they had a strong influence, at 48.11% of buyers. In Vancouver, that number dropped to 46.33% of people feeling they had a lot of influence. Montreal only had 25.9% of buyers that felt domestic investors were a contributor to prices. I'm guessing not a lot of people in Toronto know the city's domestic investor numbers, or that agents in Vancouver are sometimes paid with condos. Ah well, another article for another day.
Perceived Impact Of Domestic Investors On Prices
CMHC survey responses from recent buyers, on the perceived impact of domestic investors on real estate prices.
 CMHC
These factors did contribute to higher prices, but buyers added emotional premiums. During the peak of a real estate cycle, buyers will always become exuberant as prices accelerate. Speculators, both international and domestic, can usually smell the blood and begin circling. Did people line up, and are foreign buyers accumulating massive portfolios of homes? Or were people paid to stand in linefor condo assignments, with employees posing as Mainland Chinese buyers? Probably a little of both. However, it often doesn't matter if the narrative is true or not, it just matters if you're willing to max out your credit. As my favorite real estate agent once posted on her Instagram, "anything is possible if you belief [sic] it is."
Posted on
June 6, 2018
by
Paul Liberatore
Posted on
June 6, 2018
by
Paul Liberatore
Shutterstock
Three hundred dollars isn’t much but the mandatory cost for an electric vehicle (EV) charging station is the latest ding in government fees and regulations that now add more than $220,000 to the cost of a typical new Vancouver condominium, according to industry studies.
Last year electric vehicle represented 0.9% of total vehicle sales in British Columbia and they make up just 0.2% of vehicles on B.C. roads, according to Statistics Canada and Fleetcarma data. Yet, starting in 2019, 100% of new condo buyers in Vancouver will pay to have an electric car charging station installed in their parking garage.
Anne McMullin, president and CEO of the Urban Development Institute Pacific Region wonders why condo buyers should pay for something that benefits a utility, and electric vehicle manufacturers.
The answer is apparently blowing in the hurricane of add-on costs buffeting buyers in Canada’s most expensive housing market.
Government taxes and fees now total more than 26%, or $220,256 of the total $840,000 cost of a typical new 700-square-foot-Vancouver condo apartment, said appraisal and tax expert Paul Sullivan, a senior partner at Burgess, Cawley, Sullivan and Associates Ltd.
Sullivan presented his analysis to the Greater Vancouver Board of Trade’s Housing Forum 2018, held May 25.
A separate CD Howe Report in May found that government regulations and charges add an extra $644,000 to the cost of building a single-family house in Metro Vancouver.
“When expressing their deep concerns over housing affordability, why haven’t governments taken a long hard look in the mirror?” Sullivan asked.
He noted that along the Broadway corridor, where the new SkyTrain extension will be built, the City of Vancouver recently proposed a new development charge of between $330 to $425 per square foot above existing zoning for every new condo built.
Already, Sullivan told the forum, government costs and fees account for $312 of the average $1,200 per-square-foot cost of a new Vancouver condominium.
“One of the biggest factors behind our housing affordability problem is government piling on more taxes and fees,” Sullivan said.
Sullivan’s analysis includes City of Vancouver municipal fees, charges and taxes, the new and increased provincial tax measures on home sales, Metro Vancouver’s increased regional water and sewer charges, TransLink’s new regional development cost charge for transit, delays in getting permit approvals and the federal GST.
Fees and charges can range depending on where a project is located, with downtown Vancouver projects facing even higher charges. For the purpose of the analysis, the announced provincial Speculation Tax was included, pending details of the specific legislation expected later in 2018.
The foreign-buyer tax, payroll taxes on labour and taxes on materials were not included in the breakdown.
Rod Yeoh, a principal with Dialog, which has designed many low-energy buildings, told a Buildex 2017 meeting that Vancouver’s new zero emissions bylaw, that came into effect last May and is now being rolled out, will add at least 15% to the cost of a new concrete condominium when fully implemented.
McMullin noted that while the mandatory charging stations aren’t included until January 1, 2019, she is concerned that condo buyers are again expected to foot the bill.
“If electric vehicles are expected to increase in popularity as predicted, then it would certainly make sense to have BC Hydro provide the infrastructure to residents recouped through the rate, much like a gas station company would,” she suggested.
Posted on
June 6, 2018
by
Paul Liberatore
Deplorable conditions are routine in many rental buildings in the city, including those owned by the Sahota family. While officials have issued fines and court injunctions to force necessary repairs, a steady stream of bylaw violations continues
WENDY STUECK AND MIKE HAGER
PUBLISHED MAY 28, 2018UPDATED MAY 29, 2018
Open this photo in gallery/arc-anglerfish-tgam-prod-tgam.s3.amazonaws.com/public/ZBCFAW7RBBDJBBBJZV2JPK4ODA.JPG)
A security guard checks the run-down shared bathroom at the Sahota-owned Regent Hotel.
DARRYL DYCK/THE GLOBE AND MAIL
Shelly Ingram says she never gets used to the sound of mice falling through the gaping hole in her bathroom ceiling and landing with a thump in her empty bathtub.
When one drops, her partner, John, will rush across their tiny bachelor suite to try to catch the creature, but most times the rodent has already bounded up over the side of the aging clawfoot tub and scurried into a hole in the wall at the base of the sink.
Thankfully, they’ve never been hit by a mouse while taking a bath, perhaps because they rarely wait the three hours it takes to draw enough tepid water to fill the tub from the aging hot water pipe.
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“We’re supposed to be able to use it,” says Ms. Ingram, who moved into the dingy suite in Vancouver’s Regent Hotel last summer after a months-long search for affordable accommodation. But water comes out of the tap “sporadically,” she says, and some days, not at all.
Still, she and her partner consider themselves lucky: They don’t have to use the communal washrooms down the hall, where the toilets are often jammed with paper and feces or discarded needles. Shower drains also get blocked and tubs are unavailable, taken over by residents washing dishes or people sneaking in off the street in search of a few hours of sleep in relative warmth and safety.
Bathrooms aren’t the only problem at the Regent, a single-room occupancy (SRO) hotel on Vancouver’s Downtown Eastside owned by the Sahota family, three reclusive, elderly siblings who own and operate some of the city’s most derelict housing. Bedbugs and rats are constant concerns. In some rooms, walls are damp to the touch, hinting at leaks behind them.
MINI-DOC: INSIDE THE REGENT HOTEL
Watch: Residents of this Downtown Eastside hotel show The Globe and Mail the decrepit conditions they live in, amid the stench of sewage, black mold and bathrooms in disrepair.
Such decrepit, unsanitary housing might seem in stark contrast with the image of Vancouver, which routinely tops global livability rankings and is known for its verdant parks and majestic mountain views. But these deplorable conditions are routine in many SROs – particularly those owned by the Sahota family, some housing advocates say – and are well known to city officials. Last December, citing its continuing efforts to step-up enforcement in SROs, the city flagged 426 bylaw violations against the owners of the Regent.
Yet it’s unlikely the citations will change much. In a pattern dating back decades, the family, who own five Vancouver SROs, tends to respond slowly to violation notices, if at all. Many repair orders are followed by fines for bylaw violations. City officials have touted various efforts to bring the Sahota-owned buildings into line over the past 20 years, including fines and court injunctions to force necessary repairs. More recently, the city has stepped up the frequency of inspections in an attempt to identify problems early and address them. But the steady stream of bylaw violations has continued.
“It’s a travesty that they [SROs] have been allowed to continue to rot ... for at least four or five decades,” says John Shayler, who worked with the Downtown Eastside Residents’ Association, a housing advocacy group, in the 1970s and 80s.
Mr. Shayler says that owners get away with providing reprehensible living conditions because the city ultimately doesn’t want to shut down their buildings, potentially displacing hundreds of residents who would otherwise be on the street.
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With support from housing advocates, tenants of two Sahota-owned SROs, the Regent and the Balmoral, have launched proposed class-action lawsuits that name the Sahotas and the City of Vancouver as defendants and allege that municipal officials have ignored problems with properties owned by the family. (The Sahotas have challenged the suits, arguing that the proper venue to hear such disputes is B.C.’s Residential Tenancy Branch and a decision on that jurisdictional matter is pending.)
A non-profit housing organization struck a deal with the Sahotas in February to manage the Regent and, given its dilapidated condition, has been boarding up rooms and quietly moving tenants out of the building.
Ms. Ingram and her partner don’t know when – or whether – they’ll be asked to move. All they know is that, for now, living conditions at the Regent remain grim, as they do at other Sahota properties in Vancouver. And the Sahotas, who keep a low profile in Vancouver and who refused to talk to The Globe and Mail for this piece, show no sign of loosening their grip on the city’s SRO market.
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A woman sits on a window terrace at the Sahota-owned Regal Hotel.
BEN NELMS/THE GLOBE AND MAIL
“This is a Sahota building”
Parkash, Gurdyal and Pal Sahota aren’t the city’s only landlords with problem buildings. Other SRO owners, as well as non-profit agencies and the province’s own rental units, show up on the city’s database of bylaw violations for issues such as blocked fire escapes, rats and missing smoke alarms.
But the number of SRO units the Sahota family controls – nearly 500, or about 16 per cent of the roughly 3,000 privately held units in the city’s stock – and the volume of violations, make the Sahotas stand out. A large portion of Vancouver’s poorest residents live cheek-to-jowl in these rooming houses, many of which were built a century ago for single loggers and fishermen – blue-collar workers who adorn either side of the city’s official coat of arms.
The Sahota family entered the SRO business in the 1970s, at a time when single-resident units were emerging as one of the few housing options available to the city’s most vulnerable residents: pensioners, people on social assistance and individuals living with mental illness or substance-abuse issues. (A 2013 study of about 3,000 SRO tenants in the Downtown Eastside found 95 per cent had substance dependence and nearly half suffered from psychosis.)
Family patriarch Ranjit Sahota, who died in 1999, launched the business by buying distressed assets and renting them to tenants at the lowest rung of the market.
In addition to five SRO hotels – composed primarily of three-meter by three-meter units that typically feature a sink, a table and a bed – the Sahotas have accumulated a portfolio of single-family homes and apartment blocks over the years, all of which have skyrocketed in value as Vancouver housing has turned into a global commodity.
SAHOTA FAMILY’S RENTAL PROPERTIES IN VANCOUVER
Assessed value in millions of dollars, 2018
Top five properties by assessed value
MAP: MURAT YÜKSELIR, RESEARCH: STEPHANIE CHAMBERS / THE GLOBE AND MAIL,
SOURCE: TILEZEN; OPENSTREETMAP CONTRIBUTORS; HIU; GOOGLE STREET VIEW
The family’s holdings – about 40 properties in and around the city, worth an estimated $218-million – are controlled by a network of companies that all trace back to the address of the home shared by siblings Parkash, 88, Gurdyal, 80 and Pal, 79.
As their portfolio has grown, the Sahotas have embraced the buy-and-hold philosophy. To cite two examples, The Regent, which the family bought in 1989 for $1.5-million, today has an assessed value of $12.2-million; another property, Rosemary Mansion in tony Shaughnessy, was acquired for $2.1-million in 1999 and sold five years later for $11-million. Yet, despite the value of their holdings, they appear to spend little on their properties.
At City Hall, where records document hundreds of complaints against Sahota properties, the family’s name has become entwined with problems.
“As you are well aware, we have been dealing with the 140-unit Balmoral for quite some time,” city manager Sadhu Johnston wrote in a May 26, 2017, e-mail to Mayor and Council. “This is a Sahota building.”
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Yet despite their poor conditions, demand for the Sahotas’ SROs has grown, largely owing to dwindling supply. Development in downtown Vancouver and rising real estate prices have been pushing SROs out of the market for decades, dating back to the lead-up to Expo 1986, when some owners evicted long-term tenants in the hope of landing higher-paying guests.
In 2003, with the 2010 Olympics on the horizon, the city passed a bylaw designed to prevent the loss of low-income housing by fining landlords $5,000 for each room taken out of existing SRO stock. In 2007, the city raised the fee to $15,000, then hiked it again in 2015 to $125,000.
But the fines haven’t prevented some landlords from quietly doing so-called “stealth” conversions and offering lightly improved units to students and young working people in Vancouver’s overheated rental market.
And rents in remaining SROs have edged up, reflecting tight vacancy rates in the city and the shortage of lower-cost affordable housing.
Wendy Pedersen, a long-time community activist who has fought to keep SROs affordable for people on social assistance – the monthly shelter allowance for a single person is currently set at $375 – feels the city has failed to use the tools at its disposal to hold landlords of problem buildings accountable and allowed them to profit at tenants’ expense.
“Decades and decades of … not taking people’s complaints seriously, not answering their police calls, their cries for help in every which way,” is how she described the city’s response to the continuing deterioration of housing in the low-income neighbourhood, home to about 15,000 people.
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June 1, 2017: A resident of the Balmoral Hotel tears up as she describes the hardships she faces after water damage in her room, which she says smelled like urine.
RAFAL GERSZAK/THE GLOBE AND MAIL
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June 2, 2017: Vancouver police guard the entrance to the Balmoral after the city issued residents an order to vacate the building, which had been deemed unsafe to life in.
RAFAL GERSZAK/THE GLOBE AND MAIL
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June 11, 2017: People gather on East Hastings Street to set up a barbecue in support of Balmoral Hotel residents facing eviction.
RAFAL GERSZAK/THE GLOBE AND MAIL
Maintenance on the cheap
Most days, the three elderly Sahota siblings can be found visiting their various rental buildings or working in the garden of the ramshackle home they share in Vancouver’s upscale Kerrisdale neighbourhood. Dressed in thrift-store clothes, they could easily be mistaken for their tenants.
Since they began amassing properties, the Sahotas have appeared to skimp on long-term maintenance. When they’ve done repairs to buildings, they’ve often relied on tenants or unqualified contractors to do the work.
A front-page story in the Vancouver Sun in 1987 reported that Pal Sahota had exploited refugees by hiring them to do repair and maintenance jobs at the Balmoral Hotel, another of the family’s SROs, for wages of 32 cents an hour. He pleaded guilty to five counts of violating the Immigration Act and was fined $2,500.
In 1999, a lawyer for the city recommended near-constant vigilance over repair and maintenance issues with three low-rent apartment buildings in East Vancouver that the Sahotas had owned since 1976. But she advised against revoking the Sahotas’ business licence because doing so could put “a large number of people out on the street.” In an inter-office memo, she referred to potential political fallout if enforcement were to result in buildings being closed and people losing their homes.
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In 2007, long-time residents of the 50-unit Sahota-owned Pandora SRO were forced to grab everything they could and flee their homes after the roof collapsed and flooded hallways and several rooms. The tenants were awarded $170,000 in total damages, which was upheld by a B.C. Supreme Court judge who found the Sahotas’ actions “transcended simple negligence and amounted to a reckless disregard for the welfare of the tenants.”
Ten years later, in June, 2017, city officials grew so alarmed by fire and structural problems at the Balmoral, they deemed it unsafe to occupy, giving tenants 12 days to vacate. That move triggered a scramble by city, non-profit housing groups and the province to find new homes for about 150 people who had been living in the crumbling building.
The Sahotas’ lack of responsiveness to maintenance concerns places city officials in a bind. Under Vancouver bylaws, the city could do the necessary repairs to their SROs and bill the family, but it has avoided doing so out of concern that the bills wouldn’t be paid. That would leave the city with a portfolio of aging, neglected buildings – and city taxpayers on the hook for repair bills.
City managers recognize Sahota-owned buildings are in poor shape and say they are trying to work with the owners to tackle the problems.
“We are on the ground, in the buildings, on a regular basis,” Kaye Krishna, Vancouver’s general manager of development, said in an April interview.
“Some buildings are worse than others and the two Sahota buildings are consistently at the top of the worst,” she said, adding that the Regent and Balmoral are “by far and away” the worst buildings in the city.
The city is conducting more inspections, filing more charges and ordered them to use qualified contractors, Ms. Krishna said.
“We are actively managing and trying to hold them accountable to actually deliver the work,” she added.
Ben Afful says the Sahotas hired him in November to make city-mandated repairs at the Regent. Mr. Afful’s company, Linea Construction, gave the family a quote of $1.6-million to repair the basement, main-floor bar and dozens of rooms at the shuttered Balmoral – vacated under city orders two months prior – but he never heard back.
Then, a month later, Gudy Sahota asked if he could do some work at the Regent two weeks before an inspector was scheduled to return to the premises. With his eyes on eventually winning the larger Balmoral contract, Mr. Afful agreed to do the work for $56,000 with a $12,000 deposit.
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Contractor Ben Afful got a closer look at the Sahotas’ maintenance practices when he was hired to make repairs at the Regent Hotel in November.
RAFAL GERSZAK/THE GLOBE AND MAIL
The odour of urine mixed with garbage on his first walk through the eight-storey hotel shocked Mr. Afful, who has renovated single-family homes and luxury condos in and around Vancouver for the past 19 years.
With only $4,000 of the promised $12,000 deposit in hand, Mr. Afful and an associate began replacing sinks and doors. Over two weeks, they fixed seven rooms.
One woman on the seventh floor told him she had felt sick for months from making tea in her room. “I said, ‘First of all, you [should] never drink hot water because it comes from a rusty boiler downstairs, but the other thing is the faucets are corroded so you get all this bacteria that loves to feed off the mould and you’re drinking this,’” he said. “So we replaced it with a new vanity and sink and faucet – she couldn’t stop talking about it any time we saw her in the hallways.
“They’re not asking for gold toilets - they’re just asking for fresh water.”
The night before the December city inspection, Pal Sahota asked Mr. Afful to accompany the official on their tour of the Regent – an odd request that is not an industry norm for contractors, Mr. Afful said.
As he walked through the building the next morning, he says he was surprised to see the inspector checking a list of deficiencies twice as large as the one the Sahotas had given him. Gudy was pointedly glaring at him, meanwhile, he says, as if he hadn’t bothered to do all the necessary work. When he left the property, Mr. Afful says he told the Sahotas he was going to double the cost of the job to cover the vastly expanded scope of work needed to be done.
He says never heard back from either Pal or Gudy and now feels as if he was used to create the impression of a “flurry of activity.”
That approach, he says, enables a landlord to suggest to city inspectors, “We are doing what we can. We’re trying to get the guys to do the work.”
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The Sahota-owned Astoria Hotel. The Astoria was one of the SROs targeted by Vancouver police’s Project Haven, in which undercover officers posing as drug users rented rooms with welfare cheques.
BEN NELMS/THE GLOBE AND MAIL
Problem buildings, troubled tenants
Poorly maintained buildings such as the Balmoral and Regent are just part of the story. Advocates say some private SRO owners, including the Sahotas, fuel a cycle of violence, poverty and addiction in the neighbourhood.
Back in 2005, the Vancouver Police Department (VPD) tried to disrupt that cycle with an undercover program they called Project Haven. The VPD said its project – in which undercover officers posed as drug users and used welfare cheques to rent rooms in three SROs, including one, the Astoria, owned by the Sahotas – determined that owners, managers or desk clerks at all of the sites were complicit in drug trafficking, the movement of stolen property and welfare fraud.
“The criminal networking in each premise was elaborate,” the VPD said at the time.
More than a decade later, similar concerns have emerged in the Regent class action suit and in a second suit launched on behalf of tenants of the Balmoral.
Ajantha “Sam” Dharmapala worked for the Sahotas as a desk clerk and bookkeeper from 2008 until 2016. Since then, he has been a vocal critic of his former employers and become a driving force behind the Vancouver Tenants’ Union. Mr. Dharmapala describes conditions in Sahota SROs as “third-world.”
In an affidavit filed as part of the proposed class-action suit by Regent tenants, Mr. Dharmapala alleged Gurdyal Sahota has been involved in “numerous” criminal activities in and around the Regent Hotel, including systemically receiving goods known to be stolen from Home Depot and local hospitals.
“Gurdyal Sahota would not directly tell people to steal these items … but he would ask the ‘right’ people whether they had any pillows or sheets to sell right now, and then those people would come back a few hours later with pillows or sheets,” Mr. Dharmapala alleged in the affidavit.
Records reviewed by The Globe include a receipt from Jan. 5, 2014, stamped with the Regent Hotel’s information and signed...
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Source: BCREA
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