Economic Drivers of Real Estate in Vancouver – DELOITTE

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Real estate market overview and current challenges

October, 2016
Stepping into 2017

Come join me as we learn from Jennifer Podmore-Russell of Deloitte, and her take on where is Vancouver’s real estate marketing heading as we step into 2017. This presentation brought to us courtesy of Wealthminds!

Click here for the full presentation.

I’ve also highlighted below some notable changes in our market which may affect you! Give us a call at (604) 629-7515 or fill out the form below if you’d like to learn more.

Changes in the market – BC’s Foreign Buyer Property Transfer Tax

On July 25, 2016, the BC government introduced legislative changes directed at BC’s residential housing market. The key changes include the introduction of an additional 15% property transfer tax (PTT), effective August 2, 2016, on transfers of residential properties within the Greater Vancouver Regional District (GVRD) to foreign entities or taxable trustees

Government Responses – Preventative Measures for a “Healthy, Competitive and Stable Housing Market”

Legislation release on October 3, 2016 included a “Mortgage rate stress test” for all insured borrowers and closing loopholes for the Principal Residence Exemption.

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Metro Vancouver home buyers set a record pace in February

Last month was the highest selling February on record for the Metro Vancouver housing market.

Residential property sales in the region totalled 4,172 in February 2016, an increase of 36.3 per cent from the 3,061 sales recorded in February 2015 and an increase of 65.6 per cent compared to January 2016 when 2,519 home sales occurred.

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Last month’s sales were 56.3 per cent above the 10-year sales average for the month and ranks as the highest February sales total on record.

“We’re in a competitive, fast-moving market cycle that favours home sellers,” Darcy McLeod, REBGV president said. “Sustained home buyer competition is keeping upward pressure on home prices across the region.”

New listings for detached, attached and apartment properties in Metro Vancouver totalled 5,812 in February 2016. This represents an increase of 7.1 per cent compared to the 5,425 units listed in February 2015 and a 30.8 per cent increase compared to January 2016 when 4,442 properties were listed.

“We’re beginning to see home listings increase as we head toward the spring market, however, additional supply is still needed to meet today’s demand,” McLeod said.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 7,299, a 38.7 per cent decline compared to February 2015 (11,898) and a 10 per cent increase compared to January 2016 (6,635).

The sales-to-active listings ratio for February 2016 is 57.2 per cent. This is indicative of a seller’s market.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark, while home prices often experience upward pressure when it reaches the 20 to 22 per cent range in a particular community for a sustained period of time.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $795,500. This represents a 22.2 per cent increase compared to February 2015.

Sales of detached properties in February 2016 reached 1,778, an increase of 37.2 per cent from the 1,296 detached sales recorded in February 2015. The benchmark price for detached properties increased 27 per cent from February 2015 to $1,305,600.

Sales of apartment properties reached 1,790 in February 2016, an increase of 43.9 per cent compared to the 1,244 sales in February 2015.The benchmark price of an apartment property increased 17.7 per cent from February 2015 to $454,600.

Attached property sales in February 2016 totalled 604, an increase of 15.9 per cent compared to the 521 sales in February 2015. The benchmark price of an attached unit increased 17 per cent from February 2015 to $569,600.

BC’s New PTT (Property Transfer Tax)

The new rules on BC’s Property Transfer Tax have been released with the potential to save up to $13,000 for some, and rate increases for others. The goal of the province’s 2016 budget to help put home ownership within the reach of more people, but you can weigh in – does BC’s New PTT achieve its stated goals?

Highlights

  • Exemption for buyers of new homes that priced at up to $750,000;
  • PTT increase to 3% from 2% for properties valued at more than $2 million;
  • Requirement that property buyers self-report their nationality when they register their property.

Let’s go back and recognize the PTT as a major source of BC’s revenue, Vancouver accounting for nearly one-quarter of the government’s $1.15-billion windfall from B.C.’s property transfer tax in the past fiscal year.

The property transfer tax was introduced in 1987 as a “luxury tax,” however thresholds have not changed since then, meaning it has turned into a revenue generator for the province.

New social-housing project opens in Vancouver

Rich Coleman, minister of natural gas development and housing, tours the Budzey Building, a newly completed structure providing 147 apartments for women or women with kids who are homeless or at risk of homelessness, in Vancouver on Thursday. Photograph by: NICK PROCAYLO , PNG

Rich Coleman, minister of natural gas development and housing, tours the Budzey Building, a newly completed structure providing 147 apartments for women or women with kids who are homeless or at risk of homelessness, in Vancouver on Thursday.
Photograph by: NICK PROCAYLO , PNG

Minister Rich Coleman tours the Budzey Building, near Oppenheimer Park

Reblogged from STEPHANIE IP | POSTMEDIA NEWS

VANCOUVER — Women and children first is the key to the province’s latest social-housing project, the success of which will hopefully draw more federal support for other projects in B.C.

On Thursday, minister Rich Coleman toured the Budzey Building, near Oppenheimer Park in Vancouver’s Downtown Eastside. The building provides long-term permanent housing for women (including transgender and cisgender) and women-led families.

The Budzey was opened in July 2015 and was gradually tenanted throughout the fall. Only just recently did the building finally reach capacity.

According to Amelia Ridgeway, an associate director at RainCity Housing, the organization partnered with B.C. Housing to interview prospective tenants, ensuring that the residents being moved into the Budzey are from the surrounding community. As well, there was a focus on women who had been longtimetenants at nearby SROs (single-room occupancy) facilities.

Read 354 more words here

Tourists are back Buying Vancouver Waterfront Condos

Tourists Return To Buying Vancouver Coal Harbour Condos

The dropping Canadian dollar, along with Vancouver’s natural beauty, is bringing impromptu foreign buyers back to the Coal Harbour area, says one realtor.

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“It happened a long time ago and now it seems to be happening again,” Shaun Kimmins with Sotheby’s International Realty told The Huffington Post B.C. in an interview. He said his office fielded dozens of daily inquiries from tourists this summer.

Reblogged from The Huffington Post Canada | Andree Lau

“People walk in and with no previous intention of setting out to buy property, end up just falling in love with the area on a sunny day, walking into our office and end up writing offers.”

While Chinese visitors buying property remains consistent, it’s the American clients that have returned, he said.

Kimmins has sold several waterfront condos ranging between $2 million and $4 million this year to U.S.-based clients who use them as vacation properties.

When the towers in Coal Harbour were going up around 2001, the low dollar attracted many Americans. But as it swung up to $1.05, many cashed in.

“They have to be objects of desire but they also have to represent a safe or secure investment,” said Kimmins. “Now that we’ve seen a reversal in the depression of the [Canadian] dollar versus the U.S. dollar, we’re sensing that there’s more money coming back and buying back in.”

One of Kimmins’ clients from Mexico, who already owns in the area, bought a $5.5 million waterfront property this summer.

Meanwhile, Canadians who left Vancouver to work in Hong Kong after obtaining citizenship appear to be moving back to Vancouver, realtor Winfield Yan told the Georgia Straight.

The cost of living in Hong Kong is high, with rich mainland Chinese pushing locals there out of the real estate market, he said.

Read the original article here

VIFF features on Chinatown and Japantown raise questions about Vancouver’s urban changes

TWO SELECTIONS AT this year’s Vancouver International Film Festival cast their gaze upon historical neighbourhoods in Vancouver: Chinatown and Japantown. Together, they raise interesting questions for discussion about not only the past, present, and future of these areas, but also about what is becoming of our entire city as urban change and development overtake us.

Although Chinatown and Japantown were distinct from one another, they shared many parallels.

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Both areas neighboured one another on the edges of the Downtown Eastside, and both were formed by ethnic groups as a result of numerous historical social factors, including language barriers and racial discrimination.

Julia Kwan‘s documentary Everything Will Be takes an intimate and sensitive look at how current changes in Chinatown are affecting citizens who live and work in the area. Meanwhile, The Vancouver Asahi, which tells the story of a legendary local baseball team of Japanese Canadians, recreates life in Japantown during the 1930s.

Reblogged from The Georgia Straight | Craig Takeuchi

Chinatown, past and present

UBC planning professor Andy Yan was one of the people Kwan chatted with while conducting research for her film. Like Kwan, Yan has ties to the neighbourhood—his family owned businesses there. His great-grandfather owned Most Modern Cleaners while his father owned the Kwong Chow Restaurant. His grandmother also raised him in the area.

For his master’s thesis, Yan took an in-depth look into Chinatown and issues about revitalizing degenerating neighbourhoods.

What’s interesting to note is that prior to Chinatown, the area was an Italian and southern European enclave. As Kwan’s documentary reveals, one Italian family-run business in that area remains, Tosi & Company (current proprietor Angelo Tosi is featured as an interviewee in the film).

This shift in ethnic dominance in various areas is one that has repeatedly occurred throughout the city’s history. Both local, national, and international economics and politics have determined not only waves of immigration from different countries but also what types of class and professionals the city has attracted. As but one example, Robson Street used to be known as Robsonstrasse, due to the growth of German immigration in the area.

Yan explained by phone that Chinatown began as a bachelor’s society, but grew as women arrived and families began to grow, particularly after the Second World War.

“The completion of the [Canadian Pacific] railway in 1886 certainly helped increase the population of Chinese Canadians to concentrate and move to cities like Vancouver and Victoria and begin in neighbourhoods like Chinatown, but also the kind of ongoing relationships to Chinese settlements throughout the province was in part connected and coordinated out of the neighbourhood.”

Both Chinatown and Japantown were also hit by the Anti-Asian Riots of 1907. The Asiatic Exclusion League, formed by local labourers concerned about their jobs being taken away by cheaper Asian labour, became upset by Asian immigration. In reaction, they marched through downtown Vancouver and continued into Chinatown and Japantown (also known as Little Tokyo) where they smashed businesses and looted stores.

The attacks did not deter the communities, however. While Japantown blossomed up until 1941, Chinatown particularly boomed in the 1960s and ’70s.

Read 1287 more words here…

Empty homes not the issue in Vancouver, Urban Futures think-tank says

A THINK-TANK THAT looks into demographic and economic issues has had enough of some of the talk around unoccupied homes in Vancouver.

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Noting that “with recent headlines speculating on the share of the City’[s] unoccupied housing stock ranging between 25 and 50 percent”, Urban Futures thinks it might be helpful to give out again its previous report on vacant dwellings in Canada.

Reblogged from The Georgia Straight | Carlito Pablo

In a media release today (September 26) providing a link to the paper “Much Ado About Nothing: What the Census data say, and don’t say, about foreign & temporary residents and unoccupied dwellings”, Urban Futures states that “discussions around this issue have suffered from, at best, misrepresentation of the available data to consider the issue”.

“At worst they are further entrenching misconceptions about housing occupancy in the region,” the group adds.

The Urban Futures study notes that an average of 4.8 percent of dwelling units in 33 major metropolitan areas across Canada was unoccupied during the 2011 census.

“With a 5.4 percent level of unoccupied units, the Vancouver CMA [census metropolitan area] was above the CMA average, but the difference was slight compared to other CMAs, such as the Victoria (7.5 percent), London and Windsor (6.9 percent), St. Catherines/Niagara and Sherbrooke (both at 6.8 percent) regions,” the paper states.

Zeroing in on apartments, Metro Vancouver had 6.2 percent vacant, which is “below the 7.0 percent average for all 33 of the CMAs in Canada”.

“The average of 5.4 percent of all private dwellings in the Vancouver CMA being unoccupied at the time of the Census represented underlying levels of 3.2 percent of the single detached stock, 6.2 percent of apartments, and 6.8 percent of attached ground oriented units. Single detached units accounted for 20 percent of the unoccupied units in the region on Census day, perhaps reflective of 2011’s active real estate sales market,” the paper notes.

It goes on: “Within the Vancouver region, with an overall average of 6.2 percent, unoccupied apartments accounted for a slightly above average share in the City of Vancouver (6.7 percent) and West Vancouver (6.9 percent), and well above average shares in Pitt Meadows (8.7 percent), Surrey (9.2 percent), and in the UBC/UEL area (10.1 percent). The spatial pattern of unoccupied apartment units throughout the region is driven by a wide range of factors, from the prominence of student populations within each municipality to sales activity.”

The authors note that there are no census data on foreign ownership or investment in housing.

Their conclusion: “There are significant housing issues in this region—the levels of occupancy by foreign and/or temporary residents and level of unoccupied units are not among them.”

Last year, the Straight spoke with one of the authors of the report, economist Ryan Berlin, who said at that time: “We were just trying to reframe the debate in terms of the actual numbers and in terms of the definitions.”

Read original article and more here…

Real-estate analyst says Lower Mainland elections could influence housing prices

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DON CAMPBELL LIKES to say that he doesn’t sell real estate. “I’m just a researcher,” insists the author of several books on property investing.

Campbell also likes to say that because he’s not selling property, he can be counted on to offer an unbiased perspective. He’s the founding partner of the Real Estate Investment Network, a Langley-based company that provides market analysis to clients.

Reached by the Georgia Straight on his cellphone for an interview about the fall municipal elections, he was forthcoming about which cities he’s watching.

Reblogged from The Georgia Straight | Carlito Pablo

Surrey is number one on his shortlist of three. According to Campbell, B.C.’s second-largest municipality has been “excellent” on a number of fronts. One is the development of its town centres. Another is the protection of farmland. Third is its ability to provide more affordable housing than Vancouver.

“And now that Dianne Watts is no longer going to be the mayor and heading up that focus, it’s going to be very interesting to see (a) who gets in next, and (b) what their policies are,” Campbell said. “They need to keep very similar policies that they’ve got now. They’re growing at such a rapid rate that if they start changing policy now, they’ll get caught in a lot of problems.”

Earlier this year, REIN released its latest report on the top B.C. towns in which to invest in real estate, and Surrey topped the list.

Former Surrey mayor Doug McCallum and councillor Linda Hepner have announced that they’re running for the city’s top post. Councillor Barinder Rasode is widely expected to join the fray.

Campbell said that he’s also looking at what happens in Abbotsford. In REIN’s latest report on the top towns in B.C. for real-estate investment, Abbotsford placed third after Maple Ridge and Pitt Meadows, which came second.

Underscoring that he’s not siding with anyone in particular, Campbell said that he’d like to see that the next Abbotsford council “understands that the Surrey model is a sustainable model”. Another concern he has regarding Abbotsford is the need for the municipality to attract jobs.

Vancouver is third on Campbell’s list of cities to watch. “The next mayor, whether it’s the current one or a different one, is really going to have to tap into us being that high-tech hub, and attracting that millennial-aged, well-paid employee because they can, you know, afford to live in Vancouver.”

Asked about New Westminster, Campbell admitted that he’s not familiar with its politics.

But there’s one thing he has observed about the Royal City: “What they need is a new economic-development focus that right now hasn’t been communicated very well.”

Campbell explained that while the city has transit and jobs, it “seems to have missed the majority of the real-estate demand curve that you saw in Surrey, Richmond, Burnaby, [and] Coquitlam”.

It’s mostly “reputational”, according to Campbell, pointing out that New Westminster needs a brand that is attractive to young people and families.

“What it needs is a new message by the city put out to the world of, ‘Hi, we’re New Westminster, here are our positives,’ and a new, young, fresh mayor might do that,” Campbell said.

He emphasized that he doesn’t know much about Jonathan Cote, a young councillor who declared in June that he wants to become the next mayor. Incumbent four-term mayor Wayne Wright hasn’t announced his plans. According to Campbell, “The mayor is just one of many moving parts in a city’s reputation.”

Campbell also mentioned one other thing in connection with civic elections: the impact on real estate of decisions made by mayors and councils on public transportation. According to him, every time a new rapid-transit system like the Evergreen Line in the Tri-Cities area is developed, demand for real estate shoots up along its corridor.

Surrey council has been pushing for a three-pronged, street-level light-rail system that would connect Surrey Centre with Guildford, Newton, and Langley. For its part, Vancouver wants a subway along Broadway to UBC.

Read original article here

Green incentives a must for developers, says report

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NOT SURPRISINGLY, RESIDENTS in areas well served by public transit drive less.

Reblogged from The Georgia Straight | Carlito Pablo

Driving less means fewer greenhouse-gas (GHG) emissions, which is good for a warming planet. But what if there’s a way to boost this benefit to mitigate climate change?

An information item included in the agenda for the meeting on Friday (September 12) of Metro Vancouver’s housing committee gives some direction. It’s a summary of a report with a self-explanatory title: “Why Creating and Preserving Affordable Homes Near Transit Is a Highly Effective Climate Protection Strategy”.

The full report can be found on the website of the two U.S. nonprofits behind it, the California Housing Partnership Corporation and TransForm. The paper cites analysis of data provided by 36,000 households in three types of locations in California: transit-oriented, areas with less frequent transit, and not transit-oriented (those more than a half-mile away from transit or that don’t get as much transit service as the first two categories).

It also uses five income categories: extremely low income, very low income, low income, moderate income, and higher income.

The 16-page report notes that households in transit-oriented areas use transit three to four times more than those in other areas.

Although that is to be expected, the paper points to a much higher “transit trip bonus” from extremely low income and very low income households in transit-oriented neighbourhoods. That is, they take transit 50 percent more than their neighbours in the higher income brackets. This finding has implications for how policy should be geared toward residential development in transit nodes.

The paper notes soaring demand from high-income households for luxury apartments near public transit in California. However, there is little private interest in developing homes for low-income families in transit-oriented areas.

The situation may be similar here in Metro Vancouver. Although current and future transit locations are attractive sites for development, housing prices in general are beyond the reach of many working families.

The report also draws a model wherein public investments are made in affordable homes in transit-oriented locations. With 10 percent of revenues from California’s auction of GHG cap-and-trade allowances, the state could build—over a period of three fiscal years—“15,000 transit-connected homes that would remove 105,000,000 miles of vehicle travel per year”.

“Over the 55-year estimated life of these buildings, this equates to eliminating 5.7 billion miles of driving off of California roads,” the paper states. “That equates to over 1.58 million metric tons of GHG reductions, even with cleaner cars and fuels anticipated.”

The paper also suggests providing additional incentives to developers for more GHG-reducing measures in projects in transit-oriented locations. Topping these measures is housing more extremely and very low income families. Another is for developers to provide free transit passes.

According to the report, developers can also be encouraged to create space for bike-sharing and provide amenities like bicycle-repair stations and “pedestrian trunks to support walking to shopping”.

Relaxation of parking requirements for developments in transit-oriented areas may also be a good incentive for developers.

The report cites a prototypical example of an approximately three-hectare site with an original plan to build 875 units in six-storey buildings and a parking requirement of 1.65 spaces per unit. By designating the entire development as “affordable” for extremely low income households, the parking can be reduced to less than one space per unit, allowing the developer to add 146 units. The paper also notes an interesting detail, which is that “contrary to popular perception, lower-income households have relatively high car ownership when they lack access to transit.”

“This finding is significant because it indicates the large financial savings that lower income households can accrue by being able to avoid vehicle ownership by living near transit,” the report notes. “Transportation costs, primarily those associated with vehicle purchase, maintenance and operations, are the second highest household cost after housing.”

Read original article here

Vancouver city council to vote on referring downtown tower application to a public hearing

A new highrise tower proposed in the Downtown Vancouver core – is being referred to a public hearing. The 31-storey building will be the same height as the Harbour Centre building (not including the UFO shaped revolving restaurant portion) and replaces the current 8 storey high-rise parking structure.

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Reblogged from The Georgia Straight | Charlie Smith

A Vancouver staff report recommends that council refer an application for a 31-storey building on the southeast corner of Granville Street and Cordova Street to a public hearing.

VIA Architecture submitted the documents to the city on behalf of Granco Holdings Ltd. (Carrera Management Corporation) to increase the floor-space ratio from 9.0 to 24.24. The proposal includes retail space at street level.

In the report, city manager Penny Ballem comments that the application “aligns with the Metro Core Jobs Strategy, the Vancouver Economic Action Strategy, and the Transportation 2040 Plan in that it involves the creation of significant job space adjacent to a major transit hub”.

Waterfront Station is across the street from the parkade.

According to CityHallWatch, there’s been speculation that the super-secretive owner of the Vancouver Whitecaps, Greg Kerfoot, owns the site.

The senior property manager at Carrera Management Corp., Trish Knight, has not returned a call from the Straight to confirm this.

Carrera’s office is in The Landing at 375 Water Street, which is the same building occupied by Vancouver Whitecaps office staff.

From Cordova Street, the proposed tower is roughly the same height as Harbour Centre minus the rooftop restaurant.

Read original article here