Metro Vancouver home price decline will bottom in 2019, then reverse: forecastersPanel of developers predict housing trends for coming year with cautious optimism; one says single-family price correction was “necessary”
Home prices in Metro Vancouver may slide further in 2019 but then will recover as demand continues and supply remains constrained, according to a panel of developers at a 2019 forecast event.
Speaking at the Urban Development Institute’s annual Forecast Luncheon on January 17, Neil Chrystal, president and CEO of Polygon Homes, said, “This year, the single-family home market will remain slow, and experience further price corrections…. In order for prices in the multi-family market to stabilize, we must first find the bottom of the single-family market, and I believe this will happen in 2019. 2019 will be the year of a reset in the multi-family sector. Developers will have to offer new homes at reset prices.”
Chrystal added, “I honestly believe this is a good thing. If any market was overshot it was the high-end single-family sector, and these price adjustments are long overdue, and quite frankly necessary, before the market can move forward again. But I think we’re near the bottom, because people will need to get on with their lives.”
Eric Carlson, founder and CEO of Anthem Properties, said, “Many are eager for the [home price] bubble to burst. But there is no bubble. This is just a slight adjustment. More expensive single-family homes will adjust more, and as you move towards the middle and lower end, prices will also adjust a little, stop, and then reverse. I expect these price declines to dissipate over the next year, even reverse by the end of the year, and here’s why. Once the market adjusts to whatever foreign buyers and [those affected by the speculation tax] leave it because of the taxes, new investor demand will take its place and prices will grow from there.”
Carlson agreed with Chrystal that a market slowdown can only last so long. “There’s still a push on the market. We still have these 15 to 20,000 new households forming every year, no matter what – and they need housing. And people can temporarily stay in their parents’ basement suites or double up, but at some point they’ll stop waiting and buy, and I think that ‘some point’ is some months away. And that’s happening no matter what’s going on in Shaughnessy or the British Properties.”
Carslon said that he also expected average rents to continue to rise by well above the rate of inflation, despite new rent control measures that tie rental price increases to inflation on occupied units.
Todd Yuen, president of industrial at Beedie Development Group, pointed to the influx of many thousands of new workers from companies such as Amazon as having an effect on demand in the housing market (known as the “Amazon effect”). He cited an anonymous source close to Amazon’s deal to occupy the former Canada Post building in downtown Vancouver, who told Yuen that with Amazon’s employees earning around US80K-$120 a year (CAD $106-$160K), the company was not concerned about finding housing for those workers.
“We’re expecting Amazon to bring in about 5,300 employees [to the Canada Post building]… Amazon’s workers want to be in a world-class city like Vancouver. There was no concern about availability of homes or pricing… Most of all, [Amazon values] Vancouver’s post-secondary education [as a source of new employees]. So they want to be here, and they’ll figure out the rest later.”
In response to moderator Jon Stovell’s question of whether such companies are “just going to stare down the housing market,” Yuen noted Microsoft’s recent announcement that the company is spending $500 million in Seattle on affordable housing, for its own workers and for the homeless, as an example of a possible solution.
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B.C. housing market shows signs of moderation as some property values drop by 10 per cent
Vancouver’s housing market is looking more fragile than Toronto a year after policy makers tightened mortgage lending to slow a boom.
While the country’s two most expensive real estate markets have both been hit hard by higher interest rates and tougher mortgage regulations, the data suggest Toronto is faring better and showing signs of stabilizing, while Vancouver continues its slide.
Sales in the west coast city plunged 32 per cent last year, driving benchmark prices down 6.5 per cent over the past six months, according to Canadian Real Estate Association data released Tuesday. Toronto also saw sales fall sharply, but by half as much as Vancouver and with prices in Canada’s biggest city little changed in recent months.
Home sales in Vancouver plunged 32 per cent last year, according to Canadian Real Estate Association data released Tuesday.Gerry Kahrmann/PNG staff photo/Postmedia News files
“I’m not worried about Toronto, I’m worried more about Vancouver at this stage,” said Sebastien Lavoie, chief economist at Laurentian Bank Securities in Montreal. “The biggest worry I have for Vancouver really is the expectations that could turn a lot more downbeat because of the downward trend we are seeing now.”
I'm not worried about Toronto, I'm worried more about Vancouver at this stage
Sebastien Lavoie, chief economist at Laurentian Bank Securities
The relative performance reflects in part a bigger surge in prices during the boom in Vancouver, where they gained 68 per cent over the last five years. That’s ahead of Toronto’s 58 per cent increase.
“Vancouver is in full-blown correction mode,” Royal Bank of Canada economist Robert Hogue said in a research note Tuesday. “Prices are poised to depreciate more — potentially a lot more considering the degree to which they are still unaffordable to average buyers.”
Prices are plummeting, taxes are up and the foreign money has run dry. Are the crazy times finished in the city’s real estate market?
January 15, 2019
By Kerry Gold / Photo: Graham Roumieu
Every good party reaches that stage where the bottles are empty, the one really drunk guy just won’t go home, and the reality of the morning’s looming cleanup has started to sink in.
That pretty much sums up Vancouver’s housing situation for 2019, which is looking a lot like the aftermath of a prolonged frenzy, during which some people made a fortune while affordability for the average income-earner tanked. The party raged from about 2012 to 2016 in the detached house market. And the condo market picked up steam from late 2016 to early 2018, with average downtown condos spiking at $1,124 per square foot last January. And then, by summer, everything went quiet. Inventory started climbing and sales started dropping. Detached house sales sunk some 32 percent in October 2018, to 146 houses, making it the third worst October on record, according to realtor Steve Saretsky, writer of the Saretsky Report.
Sales of condo units in Vancouver proper dropped 28 percent, the lowest since 2012. As of the fall of 2018, prices were just starting to follow, with $1-million price drops in West Vancouver properties becoming routine. Throughout Vancouver, sellers were slashing prices by several hundred thousand dollars.
(Illustration by Graham Roumieu)
“Price adjustments generally lag sales volumes by about two years,” says Saretsky. That’s because sellers need to get their heads around the fact that those astronomical prices have passed them by. “As sales drop, inventory begins to rise and the market adjusts to the changes.”
Saretsky says there are outside influences adding to Vancouver’s own changing market. “There is tightening of global liquidity as interest rates move higher and central banks remove stimulus. This is affecting interest rate-sensitive assets, such as real estate, across the world.”
Kevin Skipworth at Dexter Associates says the high-end detached market was hit hard first. “We have seen prices come off 15 to 20 percent in the prime market for detached homes. The sales volumes have come off quite dramatically,” he said in an email. “While some sellers are willing to sell at the lower prices, some are holding tight and not coming on the market. Buying opportunities are there, and some buyers are jumping on properties that have come off the highs.”
Considering that Vancouver has a median household income of $65,327, according to 2016 Statistics Canada data, the market was clearly driven by a combination of foreign money and speculative buying. At the peak, some developers set up sales centres in Singapore and Hong Kong, attempting to lure investors. However, in the third quarter of 2018, real estate marketing giant Knight Frank released its Prime Global Cities Index report, which ranked Vancouver at the very bottom of a list of 43 cities. In terms of luxury properties, prices had dropped by 11.2 percent in Vancouver. Other cities feeling affordability pressures hadn’t seen the same drop-off in the high end. San Francisco held strong at fourth place and Toronto took seventh. What happened, Vancouver?
“The market is in a corrective phase, and that’s exposing the weakness in our economy,” he says, referring to the low household incomes that can’t afford house prices.
The report cited the “raft of [tax] measures introduced in February’s budget” by the NDP government, including an increased foreign buyer tax of 20 percent as the culprit. The province’s speculation and vacancy tax, which will tax foreign owners at two percent beginning in 2019, and the city’s new one-percent empty homes tax are also curtailing any speculative profits. “We are going to be down for many years,” says long-time west-side realtor Bryan Yan.
Yan also cites the requirement for buyers to pass the new “stress test,” which is their ability to service a mortgage of two percent more than that offered by their lender, or the Bank of Canada’s five-year fixed rate of 5.34 percent (as of November). “The market is in a corrective phase, and that’s exposing the weakness in our economy,” he says, referring to the low household incomes that can’t afford house prices.
“With all these taxes, and the lack of foreign money coming in, prices for more expensive properties are going to drop more than 10 percent. Anything currently under $1 million will drop five percent,” he forecasts. “That’s why I’m telling all my clients not to buy until the 2019 assessments come out. They will be lower, and all price reductions will come after that.”
If you do have to sell then, do it as soon as you can, he advises.
Realtor Ian Watt, who specializes in downtown condos, sees an even steeper drop—about 30 to 40 percent for 2019.
“We have to come back down to earth,” he says. “Real estate in Vancouver is always going to go up a couple percent every year because we have no land and a lot of people moving to the city. But condos went up 93 percent in 36 months, so it’s got to go back down to where a two to three percent gain will make sense. That’s normal growth.”
Stress test to blame as B.C. home sales decline 25% in 2018, BCREA says
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Province now below 10-year average for units sold
CBC News · Posted: Jan 15, 2019 12:36 PM PT | Last Updated: 6 hours ago
Total value of real estate sales in B.C. also declined by a quarter in 2018, with the figure of $55.8 billion 24.2 per cent less than the 2017 total. (Jonathan Hayward/Canadian Press)
Residential property sales in B.C. dipped by a quarter in 2018, putting the province below the 10-year average for units sold.
The B.C. Real Estate Association (BCREA) reported Tuesday that sales declined 24.5 per cent in 2018, compared to the previous year.
The sales of 78,345 residential properties were recorded by the Multiple Listing Service in 2018. That compared to 103,758 reported sold in 2017.
The province's 10-year average stands at 84,800 units sold per year.
BCREA chief economist Cameron Muir said the sharp decline was caused by the mortgage "stress test" introduced in January 2017, which made qualifying for credit more difficult, especially for new home buyers.
The new rules meant banks were required to test finances to ensure those applying for a mortgage would be able to pay higher rates.
That's blocked some buyers and cooled off some markets, as more potential buyers struggle to meet the test, said Muir — who added that sellers are now having to price their property more conservatively.
"The impact for [B.C.] consumers is that most markets now are either in balanced conditions or, in some segments in Vancouver, in buyers territory. So, home sellers have to have a very sharp pencil now around pricing their homes," said Muir.
The average price of a residential property sold in B.C. last December also decreased, according to the BCREA.
A chart showing the number of home sales in B.C. per year since 1998, and the most recent 10-year average.(BCREA)
The average price listed in December 2018 was $695,647, a 5.2 per cent decrease from the average in December 2017.
The total value of sales was also down significantly in the last month of the year, at $2.4 billion — a 42.3 per cent decline compared to December 2017.
Over the year, real estate sales in B.C. hit a total of $55.8 billion — a 24.2 per cent decline compared to 2017.
On the other hand, the number of active listings increased.
Some 27,615 properties or units were listed in December 2018 — a 33 per cent increase over 2017 — giving last month the highest property inventory available in the province since 2014.
TORONTO — Canadian home prices fell in December for the third consecutive month, led by weakness in Edmonton and Vancouver, data showed on Monday.
The Teranet-National Bank Composite House Price Index, which measures changes for repeat sales of single-family homes, showed prices fell 0.3 per cent last month from November.
Prices fell in seven of the 11 markets surveyed, Teranet said. Edmonton prices fell 1.4 per cent, while prices in Vancouver were down 1.2 per cent. It was the fifth straight month without an index rise for the most populous metropolitan area in British Columbia.
“The recent trend of home prices is clearly downward in most metropolitan markets,” Teranet said in the report.
Canada’s once-hot housing market has softened this year, weighed by tighter mortgage rules and five interest rate hikes from the Bank of Canada since July 2017.
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Iain Reeve and his wife moved from rental home to rental home in Vancouver but their final solution for secure housing was to move to Ottawa and buy two houses – one for them and another for his parents.
He and his wife, Cassandra Sclauzero, are professionals in their mid-30s who wanted to start a family, but they couldn’t afford to buy in Vancouver.
“We wanted to own a home to have stability, and peace of mind and flexibility,” Mr. Reeve said.
“The rental market didn’t have stability. We both had settled into pretty good first jobs. But as much as we loved the city and had these connections, it wasn’t worth it.”
They were “kicked out” of a few places in three years through no fault of their own, he said, adding that it was because people were selling or flipping properties.
Mr. Reeve grew up and went to university in Vancouver.
“I also have parents who live in the Vancouver area who don’t own a home and are working class and not a ton of money saved for retirement, and I’m an only child,” he said. We just couldn’t even get our foot in the door in terms of stable housing.”
Mr. Reeve said he knows a number of people who are thinking of moving out of the city simply because of the housing market.
“Life is challenging enough, it’s so hard when you have [housing] insecurity all the time.”
Statistics show that Vancouver, and British Columbia more generally, is losing skilled workers to other parts of the country.
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CMHC spokesman Leonard Catling said one of the main reasons people between the ages of 21 and 25 come to Metro Vancouver is for university, but they move out as they get older.
A December news release from Statistics Canada shows that B.C.’s population crossed the five-million mark for the first time because of international migration.
However, it lost about 1,200 people to other provinces in the third quarter of 2018 after 21 quarters of gains. Ontario, Alberta and Nova Scotia had the largest gains in population from other provinces.
Andy Yan, director of the City Program at Simon Fraser University, said Vancouver is mostly able to attract people early in their careers, whether they come for education or a job, but it has a problem retaining talent.
Even if they earn a relatively high wage, he said, they can’t afford anything except condominiums.
“In a world like that, the labour pool has options,” he said, noting that other provinces offer much more housing for their salaries.
Finance Minister Carole James said in an interview “there’s no question that Vancouver is facing a brain drain.”
“Crisis is not too strong a word to describe the challenges we are facing, not just in Vancouver, but other urban settings around our province,” she said.
In her budget speech last year, she said young professionals are moving out of the province because they can’t find housing.
Mr. Yan said Vancouver is losing people in certain age groups. Those between 35 and 45 are usually at the apex of their careers and thinking about their first or second child. But they might find themselves still having to share housing if they stay in Vancouver, he said.
“It doesn’t become cool when you’re 37 and have a roommate.”
In its December report on the housing market, the Real Estate Board of Greater Vancouver pegged the average price of a detached home at a little more than $1-million. An apartment was about $664,100 and an attached home stood at about $809,700.
Figures from BC Assessment, the Crown agency that develops and maintains property assessments in the province, show the housing market is moderating, with the estimated value of some homes in Metro Vancouver dropping about 10 per cent.
Nationally, experts have said higher interest rates and a new mortgage stress test have also had an impact on property prices across the country.
But Mr. Yan said despite those changes, housing in the Vancouver area remains unaffordable.
Kevin Olenick, who is in his mid 40s, moved back to Vancouver earlier this year. He grew up in Calgary and spent about six months in Kamloops.
“I’m one of the minority who would say moving back here makes sense,” he said, adding that the creative field he works in provides for more opportunities in Vancouver than in other places.
But he said he understands the challenges of living in the city.
“You wouldn’t want to move here if you have a family. It’s especially tough to find a home and buy a home,” he said. “I’m renting … but if you’re looking to start a family I can certainly understand why you’re moving out of Vancouver.”
B.C. Ministry of Housing spokeswoman Melanie Kilpatrick said the government has announced measures that are helping to cool the real estate market and moderate prices with a 30-point housing plan.
Mr. Yan said that a study he did in 2018 shows that while home prices in Metro Vancouver were still the highest in Canada, median household income was the lowest. The study also showed that Vancouver remained the least affordable city in the country.
Since both ownership and rental is becoming more and more difficult, other problems with the labour force are becoming clearer, he said.
Ms. James said the government is aware of the problem and working on it.
Jas Johal, the jobs critic for the BC Liberal party, said the NDP government needs to focus on increasing the supply of housing, not taxes.
The NDP government has limited rent increases to 2.5 per cent a year starting this month. A speculation and vacancy tax was also introduced, aimed at moderating the housing market and creating more homes for renters.
But Mr. Yan said neither the speculation tax nor the vacancy tax will make much of a difference, and if the city continues to lose workers, it will lose its competitive edge. “And I think that one of the biggest challenges is that how do you build an economy – one that’s knowledge based – when that population seems to be leaving the city?”
Arthur Erickson classic in West Vancouver on market for three times assessed value
What's interesting about this listing — particularly in light of recent B.C. Assessment figures that show detached homes in West Vancouver fell on average 12 per cent between July 1, 2017 and July 1, 2018 — is its assessed value.
A West Vancouver home described as famed architect Arthur Erickson’s “most complete work” is on the market for $16.8 million.
The big price and stunning features of this curved steel and glass home, completed in 1988 for fabricator Hugo Eppich and his wife Brigitte, were of enough interest internationally that the Daily Mail published a story on the home on Sunday.
The article gushes about the home as a “three-tier masterpiece” and a “waterfall of steel and glass”. The home also contains several pieces of furniture and other features designed by Erickson and comes with a carriage house and — naturally — a pool. It has been in the Eppich family since it was completed.
The pool at 1056 Groveland Road, West Vancouver.MLS.COM
Erickson, a Second World War veteran who died in 2009, had as his trademark the ability to create designs that fit into the natural environment and climate of the building lot. His notable accomplishments include the Simon Fraser University campus in Burnaby and the Museum of Anthropology at UBC in Vancouver. But he also designed many fine homes, including some in West Vancouver.
What’s interesting about this listing — particularly in light of recent B.C. Assessment figures that show detached homes in West Vancouver fell on average 12 per cent between July 1, 2017 and July 1, 2018 — is its assessed value.
According to B.C. Assessment the home is 6,257 square feet — though the real estate listing states it’s 5,887 square feet — and sits on a 1.18 acre lot (the listing can be seen here.)
The assessment authority, as of July 1, 2018, valued the home at $5.258 million, which is comprised of $4.14 million for the land and $1.118 million for the house itself. That’s a $1.6 million drop in assessed value from July 1, 2017, when it was considered by the Crown agency to be worth $6.861 million.
In the current falling real estate market, where homes are being advertised as “below assessed value”, that makes this an unusual listing, not just for the artistic and stunning home that it is, but for the markup based on the fame and noted architectural value that is placed on Arthur Erickson.
Construction cranes along the skyline in Toronto, Dec. 6, 2012. The slowdown in Canada's housing market will get worse before it gets any better, a new analysis predicts, because the country is about to be flooded with a "huge amount" of new homes.
The slowdown in Canada's housing market will get worse before it gets any better, a new analysis predicts, because the country is about to be flooded with a "huge amount" of new homes.
"Canada has been undergoing a construction boom," Capital Economics senior economist Stephen Brown wrote in the report issued last week. "As has been typical of historic real estate cycles around the world, new supply will reach the market just as demand is falling."
Watch: Historic Eppich House 2 for sale in Vancouver. Story continues below.
Indeed, home sales in Toronto in 2018 were 15 per cent below their historical norm in 2018, while in Vancouver they ran 40 per cent below the long-run average.
If the percentage of unsold new homes in Vancouver remains what it is, the number of unsold houses on the market will double in the metro area over the next two years as 40,000 new homes come on the market, Brown predicted.
CAPITAL ECONOMICSUnsold units in Vancouver will pile up over the next two years, even if developers cut new construction to zero.
The situation isn't quite so dire in Toronto — yet. Just one per cent of new homes in the area sits unsold, compared to 7 per cent in Vancouver. But Brown expects Toronto to follow in Vancouver's footsteps this year.
Developers will react by cutting back on new housing starts. But the lag between start and completion means the problem will happen regardless of what developers do now, Brown suggested. Even if Vancouver stopped building new homes entirely, the oversupply in the next two years would be nearly as large as if construction continued.
All of which could have a negative effect on the economy, starting with falling house prices.
"That, in turn, is likely to feed through to weaker consumer spending. Even more significantly, an end of the construction boom will weigh heavily on investment," Brown wrote.
But not everyone is convinced that the elevated levels of home construction mean there is an oversupply.
In a report last year, Bank of Montreal noted that Canada's population growth has accelerated in the past few years, thanks to higher immigration levels, and is now growing at the fastest pace in decades. That means we may be underestimating just what the "right" amount of new housing in Canada is, the bank's economists suggested.
"As has been typical of historic real estate cycles around the world, new supply will reach the market just as demand is falling."Stephen Brown, Capital Economics
That's also the view of many in the industry, who see a higher chance of housing shortages than oversupply in the coming years.
"With an increasing number of gainfully employed people looking to put a roof over their heads, and the scarce availability of rental accommodation, policy makers in our major markets will once again be struggling with housing shortages," said Phil Soper, president of realtor Royal LePage, in a market forecast in December.
"More than an affordable housing problem, we will once again be facing an overall housing supply crisis," Soper said.
"The future for Canadian housing remains bright, perhaps too bright."
Opinion: When is the best time to buy in a down market?Many first-time buyers are taking a wait-and-see approach, in case home prices drop further - is that the best strategy?
Recently I was asked to guest live on CityTV’s BT Vancouver morning news show to recap a range of industry predictions for real estate in 2019. During the interview, I was asked what strategy first-time buyers should adopt if they’re hoping to get into the market but are waiting to see what will happen.
This question, of trying to time the market, is one that comes up time and time again — no matter whether we’re in a rising market, in a down market, or in a steady market (which, in fact, we have now, in terms of prices for entry-level homes). People have a terror of buying a home at the “peak” of the market, or at another point where prices will drop after they’ve bought the home — but I don’t think this is something to fear.
To make my interests clear: I’m not a real estate agent or adviser, I’m a writer and editor who specializes in real estate and spends her days analyzing and reporting on market statistics. I have nothing to gain from advising anyone to buy homes, and I am not paid by anyone other than the media company for which I work, which gives me free rein to share my views as I see fit. I own a condo (my home) plus a long-term investment studio in Vancouver. I don’t offer advice to try to buoy the market, but simply because I’ve been lucky enough to get into this position (largely by ignoring those who told me not to buy yet) and I want to share what I’ve learned.
The very smart senior analyst of the Real Estate Investment Network, Don Campbell, once said to me, “The past two decades are littered with the bones of those who stayed on the sidelines of the real estate market.” That phrase stayed with me, as I see it all the time — friends in their 50s and 60s who are still renting, and will now likely pay rent throughout their retirement years. They all tell me, “I wish I’d bought when I was younger. Homes seemed so expensive, even back then - but that’s nothing compared with what they are now.”
Exactly. The £182,000 (British pounds) I paid for my tiny first flat in South London, a 50-minute commute from work, seemed astronomical 15 years ago. I could only raise a 5 per cent down payment and take out an interest-only mortgage. And everyone told me not to buy it, as “we’re at the peak of the market.” They said the same thing when I moved up to a larger place even further out of town, for £240,000, in 2008. That really was the then-peak of the market, as immediately after I bought it, the recession hit and its value dropped by 15 per cent.
But no matter. I was still above water, as my mortgage was still only £175,000, and over the next few years the value more than recovered. I sold it for £280K in 2014, and that’s how I had a down payment to buy a condo in downtown Vancouver.
That’s how real estate works. There is no price “peak,” only a fluctuating, but generally upward, line. If you’re looking at holding onto a home for a reasonable length of time, if you can afford the mortgage and if you have a decent down payment, just go for it — trying to time the market is a fool’s errand. Those price predictions I spoke about last week differ considerably, so nobody really knows what will happen this year, or next. Sure, the general consensus is that here in Metro Vancouver, average home prices might dip by a couple of per cent this year. But even if that happens, interest rates are rising. So a lower average home price a) doesn’t mean the specific home you want to buy will be any cheaper and b) even if it is, it doesn’t mean it’s more affordable, if mortgage costs are going up.
The only buyers I’d recommend to wait are speculators looking for a quick flip. For everyone else, if you hold on to your home for long enough, it will always end up higher than you bought it for.
Now we are facing an influx of one million additional people in Metro Vancouver by 2050. Political migration, climate migration, our relatively stable economy, our Pacific Rim position, and many other factors will, in my opinion, mean that even if prices dip in the next year or so, they will at some point over the next decade exceed their previous peak.And by the time we get to 2050, I predict that today’s Millennials will be wishing they had bought 30 years previously, when the average cost of a condo was “only” $600,000 and they could’ve gotten a great little pad in Surrey for $250K.
You really don’t want to be on the wrong side of the price rises that could be ahead of us over the next 10 or 20 years. So if you're lucky enough to be able to buy a home — whichever location you can afford, and in whatever size home — just go for it. I did, and I’ve never regretted it.
NEWS: B.C. HOME SALES IN NOVEMBER DOWN 18% FROM OCTOBERX
WATCH: At the height of Metro Vancouver's real estate price craze some homeowners have banded together. They hope to get big bucks from developers wanting to build condos. But as Kristen Robinson reports, at this stage it's a long shot for those looking to cash in.
There are 43 homes on East Broadway between Nanaimo and Rupert Street currently for sale for well over their assessed value – some as high as $3.4 million for a 33-foot lot.
It’s all because a group of residents are trying to put together a land assembly deal.
“The realtor told me I could get $3.4 million,” Rose Bautista, one of the homeowners, said. Her home is listed at over $2 million above its assessed value.
Another homeowner, Barbara Alexandris, has owned her home for 30 years but says if the right offer came she would sell.
“I love the house… But you get me good money and I’ll help my kids and sell the house,” Alexandris said.
But Michael Geller, a Vancouver planner and architect, says there is no way a developer could build affordable rental housing – what Vancouver so desperately needs – with a land value that high.
“Just the cost of the land alone for a one-bedroom apartment would be $200,000, then you add in the cost of construction.”
He says no developer interested in creating affordable housing would be interested in buying these properties.
“These are 33-foot lots in this location, and people are trying to sell them for more than 33-foot lots in Dunbar, one of the best neighbourhoods in Canada,” Geller said.
More importantly, the area is only zoned for building rental housing or ownership condominiums priced at 20 per cent below market value.
“So far to the best of my knowledge, no one has built condominiums at 20 per cent below market value.”
Geller believes the realtors are trying to target a foreign buyer who is looking for land to develop and may not be familiar with the city policies.
“The realtors are encouraging the owners to band together, offer their properties for sale, and then they’re hoping to find some buyer who isn’t as familiar with the economics of developing in Vancouver who will buy these properties and hold them, hoping that some time in the future there will be a zoning change where they’ll be able to do something else with the properties,” Geller said.
He calls anyone who would pay these prices for the homes on East Broadway “a fool”, but even if someone does snap them up, Geller says there won’t be any development on this stretch of East Broadway for several years because of zoning.
A land assembly is simply the joining of adjacent lands to make a larger parcel. This is normally done so that the larger parcel can accommodate the building of more living units (be they houses, townhouses, low rise or high rise condominiums). Selling as part of a land assembly usually means that the vendor will get a much higher price than he or she would on a one off sale to an individual buyer.
A realtor knocks on your door and says that he or she is representing a buyer or developer who is interested in purchasing your property as part of a land assembly.
What should you do?
– Find out as much as you can from the realtor about the assembly including who is behind it (i.e. developer, city hall, school board or other government authority or other), how much land is being assembled, what is going to be built on the property (i.e. townhouses, low rise, high rise or other), what is permitted by the current Community Plan for your neighborhood, who else has signed a sale agreement in your area for this assembly, the time frame for the development, whether the realtor wants to represent you or the buyer (dual agency where the realtor represents both the buyer and the seller is now forbidden in BC except in unusual circumstances). Link.
– Ask the realtor to leave copies of all documentation with you for your review including marketing materials, listing agreement and proposed contract.
– Before you sign any listing agreement or contract of purchase, take it you your lawyer for review. Don’t ask the lawyer to “have a peak at the documents” because you don’t want to spend much money. These are complex documents and the lawyer has to take the time to read and understand them in order to properly advise you. I have had clients who have inadvertently signed two year listing agreements for land assemblies, assuming that they could cancel them if the realtor was not performing to their satisfaction. Unfortunately that is NOT the case. In a recent scenario, a school board presented an offer to a client of mine which had an open ended subject removal date (meaning that it would have tied my client’s property up indefinitely). The offer was drafted by a large Vancouver law firm, so one would have to assume that was not a drafting error. Unscrupulous developers, realtors or others often seek to hide unreasonable clauses in the fine print. Don’t assume that you can void a contract because you didn’t read it before signing (you will have an uphill battle in court on that front). Don’t rely on the buyer’s realtor or other third party to explain it to you, in place of your actually reading it or having your lawyer review it and explain it to you.
– THE DEVELOPER’S GOAL: is to tie up your property for as long as possible without paying you anything unless the proposed development goes ahead. The carrot which is dangled in front of you is the potential to get a lot more money for your home than its normal market value. The developer accomplishes this slight-of-hand by the use of “subject conditions,” which are terms which make the contract binding on him only when they are removed.
Typical subject conditions are: • A certain number of neighborhood owners signing on; • Satisfactory Phase I environmental site assessment; • Satisfactory Feasibility Study; • Other due diligence searches and investigations such as title review, soil sampling, site assessment etc.
– Often it can take a half a year or more to complete these matters. In the meantime, your property is effectively tied up. It can’t be sold to someone else and it’s unlikely that you would want to renovate or upgrade it with the possibility of a sale on the horizon. On occasion, the developer will want an Option registered on your property as well.
– THE SELLER’S GOAL: is to have your property under contract for as short a time as possible and to get some non-refundable compensation from the developer if the property is going to be tied up for more than three or four months. Options cost money and there is no reason to grant one to a developer and not get paid something if the sale never materializes. I have had clients who have had their property tied up for eighteen months only to have the development cancelled at the last minute. In such a case, keeping $20,000 or more for your trouble makes the situation somewhat more palatable. Beware the Listing Agreement also. These are very complex, one sided standard agreements drafted by the real estate board’s lawyers. Once they are signed, unless modified by you or your lawyer first, they can lock a seller into a long term relationship with the listing realtor –again effectively tying up your home without compensation.
Other considerations are:
– Payment of the deposit on the subject removal date. That deposit should be minimally 5-10% of the ultimate purchase price, non-refundable and preferably, released to the seller forthwith upon subject removal. If not, it’s held in the real estate brokerage’s or developer’s lawyer’s trust account. Stipulate that it be held in an interest bearing account and that the interest accrues to you if the completion date is more than three or four months down the road. If the deposit is to be held in trust, add a clause requiring the developer’s brokerage or lawyer to release the deposit to you or your lawyer forthwith, if the developer fails to close on the completion date (otherwise, you may have to go to court to get it, as the Real Estate Services Act requires either mutual consent or a court order to have a deposit released. Link.
– Rent back. Often, the development may not be built for a year or more after the completion date. In such case the house may be livable during that period and the seller should negotiate for free rent for a year or more, while he or she finds somewhere else to live. Make sure that there is a sub-lease clause so that if the seller finds another property to buy or rent that he can sublease the property to someone else and keep the rent as part of his remuneration.
– VIP or Friends & Relatives status on developer’s other projects. If the developer is a large one like BOSA, Polygon, Pinnacle, West Bank, Onni, etc., you may be able to obtain preferred status on their other developments, if you see something in their other offerings which is appealing.
– Capital gains and other tax implications. Even before your lawyer reviews the documents, a call to your accountant is in order to understand what the tax implications are of your possible sale. In the case of a single family dwelling on a normal sized lot which has been used for residential purposes, it is almost certainly a non-taxable transaction. However if the property was an acre or two and/or used for commercial activities there may be capital gains or GST consequences. In real estate, all surprises are bad as a rule, so it’s best to find out in advance.
– What is out there for you to acquire? Ask your own realtor to advise you about what you could buy for the suggested sale price in the area that you want to re-purchase in. Often people are shocked to find out just how little they can buy for a million dollars these days (particularly if they bought a long time ago for a hundred thousand dollars or less!)
– Never make a rushed decision. Developers and realtors are always pushing for a signature NOW. Take your time and assess the situation in consultation with your lawyer, accountant and your own realtor. In most instances, it’s the land assembler that is coming to you, not the other way around, so you are in the driver’s seat as long as you don’t give in to fear or greed.
Conclusion
Land assemblies are here to stay. With 40-50,000 people moving to the Lower Mainland yearly and every politician and his dog in favor of increasing density (although how that is either “green” or “sustainable” is a mystery to me), it’s wise to at least be aware of the basics if you find someone knocking on your door to buy your property for this purpose.
If you have any questions, or want to share your land assembly story we would love to hear from you! Feel free to contact Kenneth Pazder or Melissa Valana at 604-682-1509.
Disclaimer: The foregoing is not intended as legal advice. It is presented for information purposes only. Always consult legal counsel before signing a land assembly contract or listing agreement for same.
Karen Nicolay learned her family’s rental home had been sold for $6 million as part of a land assembly. Photo Google Street View
For the second time in two years, Karen Nicolay and her family find themselves in search of a home.
A year-and-a-half ago, Nicolay, her husband Nigel Pike and their two high school-aged sons had to move because the townhouse they were renting for the past seven years had been sold. Now, the modest 1950 house they’ve been renting on West 49th has been snapped up as part of a land assembly. Nicolay learned the purchase price was a breath-taking $6 million for the property, which B.C. Assessment valued at $3,629,800 last July.
Nicolay and Pike are co-owners of the family-run Cascade Company, which owns and operates Main Street restaurants the Cascade Room, the Union and El Camino’s. Pike is also a co-owner of Main Street Brewing Co. So it’s particularly sobering to consider that a couple who are part of three successful restaurants, with a share in a brewery and deep roots in the community can’t even get a secure foothold in Vancouver’s out-of-control housing market.
“We rented this house thinking it was great,” Nicolay told the Courier. “The owners of the house, a brother and sister — it was their parents’ house since the 1950s — had no interest in selling it. We figured we’d have a few years, while we figured out what we were doing as well. So we felt fairly secure coming into it.”
But Nicolay started to suspect their days were numbered a few months ago when the two houses beside them sold and men driving Land Rovers and Mercedes began “sniffing around” one day.
“And I was like, ‘Hmm, I’m not digging that.’”
Nicolay says she doesn’t begrudge her landlords for selling — $6 million is tough to turn down, afterall — but she does worry about the tenuous state of housing in the city.
“Obviously it’s super upsetting for us. This is one house we’ve really loved. But I get it — I understand completely. But it’s just outrageous. What bothers me is what happens to the next generation… Yeah it’s a pain in the ass because we have to move, but I worry about the next time and the time after that. I worry about the family down the street.”
Situated across from Langara College and near the Cambie corridor, Nicolay’s single-family home is red meat for developers, same goes for the 1944-built house next door swept up in the same land assembly. But what’s more alarming, says Nicolay, is the other house that’s part of the three-house package was only built in 2010 and has an assessed value of $4,268,000.
“I understand we’re on a great bus route and we’re right across from the college… I just think it’s very unfair and unnecessary to continue to put up these condo developments that aren’t even going to be accessible to the average person.”
She added, “I wouldn’t be surprised if they have their eye on the whole block. There’s a sweet old 90-year-old woman down the block and I want to make sure she knows how much these people are getting to make sure she gets her money’s worth.”
In the meantime, Nicolay and family have a year to find new digs. And although she’s noticed a number of rental homes in nearby neighbourhoods, Nicolay is hesitant.
“This isn’t my dream neighbourhood by any stretch, but there are nice little homes and you can see that their days are numbered. Anything in the Oakridge area? Forget it, it’s going to go… They’re just offering more and more money.”
BC Assessment (BCA) sent home owners their 2019 assessment notices last week, which reflect your home's market value as of July 1, 2018.
In Greater Vancouver, strata units saw overall increases, with Whistler leading the way (23 per cent and more), followed by Squamish (19 per cent and more), and Port Coquitlam (16 per cent).
In contrast, assessments for detached homes were mixed and ranged from a 14 per cent increase in Pemberton to a 12 per cent decrease in West Vancouver.
If your home had a significant increase or decrease, you would have received a warning assessment in early December 2018.
For new construction or substantially renovated homes, the estimate is based on the physical condition as of October 31, 2018.
Viewing the assessment notice
You can also see a property’s assessment by inputting your address on e-valueBC on BCA’s website.
Details include a photo, a property description (land and buildings), the total assessed value, the previous year’s value, the legal description and property ID.
If property details are incorrect, you can complete and submit an e-valueBCData Validation Form.
You can also compare neighbouring properties and sample sold properties to decide whether your property has been correctly assessed.
What if I disagree with my assessment?
If you disagree with your assessment, you should do your homework by:
comparing their assessment with neighbouring properties; and
contacting BCA at 1-866-valueBC (1-866-825-8322), talking with staff who can make adjustments if there’s an obvious error, for example if BCA included a complete renovation when there was only a spruce-up or an upgrade for plumbing or electrical.
The deadline to appeal your assessment is January 31, 2019.
Sample assessment value changes by neighbourhood
Source: BC Assessment
Location
2018 assessment roll
(valuation date of July 1, 2017)
2019 assessment roll
(valuation date of July 1, 2018)
$ change
% change
Burnaby detached
$1,578,000
$1,531,000
-$65,000
-4%
Burnaby strata
$558,000
$624,000
$66,000
+12%
Coquitlam detached
$1,251,000
$1,254,000
$3,000
+0.2%
Coquitlam strata
$521,000
$591,000
$70,000
+13%
Maple Ridge detached
$757,000
$820,000
$63,000
+8%
Maple Ridge strata
$394,000
$464,000
$70,000
+18%
New Westminster detached
$1,133,000
$1,147,000
$14,000
+1%
New Westminster strata
$478,000
$547,000
$69,000
+14%
North Vancouver, District detached
$1,668,000
$1,668,000
N/A
+/-0%
North Vancouver, District strata
$709,000
$758,000
$49,000
+7%
Pemberton detached
$727,000
$828,500
$101,500
+15%
Pitt Meadows detached
$804,000
$871,000
$67,000
+8%
Port Coquitlam detached
$936,000
$969,000
$33,000
+4%
Port Coquitlam strata
$461,000
$534,000
$73,000
+16%
Port Moody detached
$1,284,000
$1,342,000
$58,000
+5%
Port Moody strata
$583,000
$648,000
$65,000
+11%
Richmond detached
$1,570,000
$1,532,000
-$38,000
-2%
Richmond strata
$598,000
$654,000
$56,000
+9%
Squamish detached
$875,000
$927,000
$52,000
+6%
Squamish strata
$492,000
$583,000
$91,000
+19%
Vancouver detached
$1,832,000
$1,756,000
-$76,000
-4%
Vancouver strata
$700,000
$740,000
$40,000
+6%
West Vancouver detached
$3,184,000
$2,806,000
-$378,000
-12%
West Vancouver strata
$1,211,000
$1,285,000
$74,000
+6%
Whistler detached
$1,743,000
$1,935,000
$192,000
+11%
Whistler strata
$781,000
$962,000
$181,000
+23%
Did you know?
BCA is a provincial Crown corporation. Since 1974, it’s been responsible for determining and reporting property value estimates.
For 2018 BCA reported 2,067,479 properties in its database, an increase of 1.07 per cent from 2018.
Total value of real estate on the 2019 BC assessment roll is $1.99 trillion, an increase of 7.45 per cent from 2018.
In BC, 88 per cent of all properties are classified as residential (class 1).
BCA’s assessment roll provides the foundation for local and provincial taxing authorities to levy property taxes each year which fund community services including the school system.
Property tax notices are sent to home owners and businesses in June and are due the first or second business day in July, depending on the municipality.
The Home Owner Grant reduces the amount of property tax you have to pay on your home as long as its your primary residence. Province-wide, 91 per cent of homes will remain below the threshold. Is your home one of them?
Metro Vancouver home sales decline below historical averages in 2018
2017
35,993
Sold
2018
24,619
Sold
(-31.6)
Residential property sales in Metro Vancouver
Metro Vancouver* home sales in 2018 were the lowest annual total in the region since 2000.
The Real Estate Board of Greater Vancouver (REBGV) reports that sales of detached, attached and apartment properties reached 24,619 on the Multiple Listing Service® (MLS®) in 2018, a 31.6 per cent decrease from the 35,993 sales recorded in 2017, and a 38.4 per cent decrease compared to the 39,943 residential sales in 2016.
Last year’s sales total was 25 per cent below the region’s 10-year sales average.
"This past year has been a transition period for the Metro Vancouver housing market away from the sellers’ market conditions we experienced in previous years. High home prices, rising interest rates and new mortgage requirements and taxes all contributed to the market conditions we saw in 2018."
Phil Moore, REBGV president
Home listings in Metro Vancouver reached 53,614 in 2018. This is a 1.9 per cent decrease compared to 54,655 homes listed in 2017 and a 6.9 per cent decrease compared to the 57,596 homes listed in 2016.
“The supply of homes for sale will be an important indicator to follow in 2019. We’ve had record building activity in recent years and many projects will complete soon. This will provide additional housing options for home buyers across the region,” Moore said.
The MLS® HPI composite benchmark price for all residential homes in Metro Vancouver ends the year at $1,032,400. This is a 2.7 per cent decrease compared to December 2017.
“As the total supply of homes for sale began to accumulate in the spring, we began to see downward pressure on prices across all home types throughout the latter half of the year,” Moore said.
The benchmark price of detached homes in the region declined 7.8 per cent over the last 12 months and 7.3 per cent since June 2018. Apartment homes increased 0.6 per cent over the last 12 months and have declined 6.4 per cent since June 2018. The benchmark price for townhomes in Metro Vancouver have increased 1.3 per cent since December 2017 and have decreased 5.3 per cent over the last six months.
December summary
December 2017
2,016
Sold
December 2018
1,072
Sold
(-46.8)
Residential property sales in Metro Vancouver
REBGV reports that residential home sales in the region totalled 1,072 in December 2018, a 46.8 per cent decrease from the 2,016 sales recorded in December 2017, and a 33.3 per cent decrease from November 2018 when 1,608 homes sold.
Last month’s sales were 43.3 per cent below the 10-year December sales average.
There were 1,407 detached, attached and apartment homes newly listed for sale on the MLS® in Metro Vancouver in December 2018. This represents a 25.6 per cent decrease compared to the 1,891 homes listed in December 2017 and a 59.3 per cent decrease compared to November 2018 when 3,461 homes were listed.
The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 10,275, a 47.7 per cent increase compared to December 2017 (6,958) and a 16.5 per cent decrease compared to November 2018 (12,307).
For all property types, the sales-to-active listings ratio for December 2018 is 10.4 per cent. By property type, the ratio is 7.1 per cent for detached homes, 12 per cent for townhomes, and 14.2 per cent for apartments.
Generally, analysts say that downward pressure on home prices occurs when the ratio dips below the 12 per cent mark for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.
Sales of detached homes in December 2018 reached 348, a 43.6 per cent decrease from the 617 detached sales recorded in December 2017. The benchmark price for a detached home is $1,479,000. This represents a 7.8 per cent decrease from December 2017 and a 1.4 per cent decrease compared to November 2018.
Sales of apartment homes reached 535 in December 2018, a 34 per cent decrease compared to the 1,028 sales in December 2017. The benchmark price of an apartment home is $664,100. This represents a 0.6 per cent increase from December 2017 and a 0.6 per cent decrease compared to November 2018.
Attached home sales in December 2018 totalled 189, a 49.1 per cent decrease compared to the 371 sales in December 2017. The benchmark price of an attached home is $809,700. This represents a 1.3 per cent increase from December 2017 and a 1.1 per cent decrease compared to November 2018.
* Areas covered by the Real Estate Board of Greater Vancouver include: Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, Pitt Meadows, Maple Ridge, and South Delta.
Everything you need to know about BC's Speculation and Vacancy Tax
Updated Tuesday, January 8, 2019
Bill 45: Budget Measures Implementation (Speculation and Vacancy Tax Act) was introduced in the legislature on October 16, 2018. The name of the tax has changed since it was first proposed in the February 2018 provincial budget. Legislation is in place and received royal assent (became law) on November 27, 2018.
The tax is a part of the BC government’s 30-Point Plan to address BC's housing needs.
Residential property owners in the designated taxable regions will have to complete an annual declaration to claim exemptions. If there are multiple owners of a home, each owner must complete a declaration.
In February 2019 information on how to declare will be mailed to residential property owners within the taxable regions.
Are there exemptions?
More than 99 per cent of British Columbians will be exempt from the tax.
There are exemptions for principal residences and long-term rentals.
An owner is exempt on their principal residence. Owners with multiple homes must determine which home is their principal residence. Couples are deemed to have one principal residence for the purposes of the tax. To be eligible for this exemption an owner must be a Canadian citizen or permanent resident who is a BC resident for income tax purposes and isn’t part of a satellite family.
Others eligible for the principal residence exemption:
Residential care facility exemption – an owner is exempt from the tax for up to two years if they’re away from their home residing in a residential care facility due to age, disability, addiction, illness or frailty. The care facility must provide services such as meals, housekeeping or nursing care.
Medical absence from principal residence – an owner is exempt from the tax if they’re away from their home and ineligible to claim the principal residence exemption because of medical treatment for themselves, their spouse or minor child. The medical condition must be certified by a medical practitioner. The owner must show that the treatment isn’t offered close to the principal residence of the person receiving the medical treatment. To be eligible, the property must have been the owner’s principal residence in the previous tax year. This exemption is available for up to two years for the same medical condition.
Principal residence of a person with a disability – owners of a property are exempt if the property is the principal residence of a person with a disability as determined under the Canada Pension Plan, Employment and Assistance for Persons with Disabilities Act, or the federal Disability Tax Credit under the Income Tax Act.
Spousal separation for work exemption – spouses who live apart for work reasons may be able to claim a principal residence exemption on an additional home. Owners will only qualify if one of the following two conditions apply:
One principal residence is at least 100 kilometres closer to the workplace than the distance between the other principal residence and the workplace; or
One principal residence is on Vancouver Island and the other residence is not on Vancouver Island.
Spousal separation for medical reasons – spouses who live apart for a medical reason may be able to claim principal residence exemptions on an additional home. To qualify, a medical practitioner must certify that an individual has a health condition. The owner must provide information as to why the condition prevents them from residing in their spouse’s principal residence.
Principal residence exemption for residents departing BC – an individual who moves out of the province before the end of the year can still claim a principal residence exemption if the individual was not a BC resident for tax purposes at the end of the year.
Additional one-time principal residence exemption – a B.C. resident can claim a one-time principal residence exemption if they’re away from their principal residence for an extended time or no longer living in it. To be eligible, the property must have been the owner’s principal residence in the tax year immediately before the year they make the claim. This exemption can only be used if it hasn't been used in the last 10 years.
Rental exemptions
Rental exemptions are available for homes occupied by tenants. To qualify, the home must be occupied for at least six months of the year in increments of one month or longer. For 2018, tenants need to occupy for only three months in increments of one month or longer for the owner to qualify for this exemption. Only one residence must be rented for the property to be exempt.
Arm’s-length rentals – all owners are eligible for a rental exemption for an arm’s-length tenant, as long as there is a written tenancy agreement in place under the Residential Tenancy Act and the tenant resides at the property. An arm’s-length tenant is a business-only relationship: anyone other than a non-arm’s tenant.
Non-arm’s-length rental exemption – owners who are Canadian citizens or permanent residents of Canada, but not satellite families, will also be eligible for the rental exemption for a non-arm's length tenant as long as the residence is the tenant’s principal residence. Non-Canadians may be able to claim an exemption in respect of a non-arm’s length tenant in very limited circumstances.
Exemption for hazardous or damaged property
Owners of a property may claim an exemption if a residence is uninhabitable due to a hazardous condition or the property has been substantially damaged or destroyed. The property must have been uninhabitable for at least 60 days in the year. This exemption is available in the year the property became uninhabitable, and in the following year if the property remains uninhabitable for at least 60 days in the second year.
Medical exemption for second home
Owners are exempt for a calendar year on a secondary residence if it is periodically occupied by the owner (or owner’s spouse or child) to obtain treatment needed in the opinion of a medical practitioner, and the treatment facility is in close proximity to that second home.
Transfer of land by Public Guardian and Trustee; or
Transfer to a veteran or veteran's spouse;
In the year they acquire a property through the disposition of assets under the terms of a will.
Spousal separation exemption
Married couples, or common-law spouses living together in a marriage-like relationship for at least two years, are eligible for an exemption on family property if they have separated and live apart (due to a breakdown in a spousal relationship) for at least 90 days in a tax year.
Couples are eligible for the exemption in the year they separate and live apart for at least 90 days that year and they don’t reconcile;
Couples who separate less than 90 days from the end of the year will be eligible for an exemption the following year if they don’t reconcile; and
Couples can claim the exemption for a second year if they have not finalized their division of family property by the end of the first year that they claimed the exemption.
Bankruptcy exemption
An owner or a trustee in bankruptcy is exempt from the speculation and vacancy tax if the owner’s property has vested with the trustee for at least 60 consecutive days in the year, or is vested with the trustee in bankruptcy on December 31.
Exemption upon death
If an owner of a property dies in a taxation year, all owners of the property at the time of death are exempt in the year of death and the immediately following tax year. The owner’s personal representative is also exempt, even if they weren’t on title at the time of the death.
All owners of a property where a covenant or a strata bylaw prevents the property from being rented out in a manner that would allow a rental exemption are exempt for the 2018 and 2019 tax years, if the rental restriction was in place on or before October 16, 2018.
Property owned by not-for-profit corporations using the property for specific purposes;
Property owned by municipalities;
Property owned by Indigenous Nations, or held in trust for an indigenous Nation;
Property owned by governments and related entities;
Property owned by regional districts;
Property owned by similar bodies as defined in legislation; and
Property with an assessed value under $150,000.
Exemptions for land under development
Owners of property under construction or substantial renovation are exempt if reasonable steps are taken without undue delay to develop or renovate the property. These exemptions cover phased developments, vacant new inventory (unsold units in a building) and heritage properties undergoing conservation work. To be eligible for the exemption, the owner must be carrying out eligible building activity. “Building activity” is defined to include the following types of activities:
applying for financing
applying for a permit or other necessary approval, including community consultations
entering into contracts for designing, building or engineering
demolishing or removing existing improvements
clearing or excavating the site
constructing or placing the residence on the property or substantially renovating the residence
“Substantial renovation” is defined as the renovation of an existing residence that is part of a residential property to such an extent that the residence must be vacant.
The following exemptions are available to eligible owners who own land that’s under development:
Unoccupiable residence – owners are exempt if a residence on the property can’t be occupied for a period of 90 days in the calendar year due to construction or renovation OR if there is not yet a residence on the property due to the stage of building activity, if reasonable steps are being taken without undue delay to develop or renovate the property.
Conservation of heritage property – owners are exempt if a residence in a heritage property is unoccupied for a period of 90 days in the calendar year due to the owner’s conservation of the heritage property, if reasonable steps are being taken without undue delay to complete the conservation renovations.
Phased residential developments – owners are exempt where specific multi-unit residential developments are being built in phases on two or more residential properties, if reasonable steps are being taken without undue delay to develop or renovate the property. The exemption does not apply if any residences on the properties could have been occupied as a home for a period of 180 days in the year.
Vacant new inventory – owners are exempt where the owner is the developer of five or more residences and at least one newly-built or newly-placed residence in the development has been offered for sale to the public this year but hasn't been occupied as a home.
The speculation and vacancy tax will not be levied for the 2018 tax year for land that contains no residential property.
Exemptions for Corporations, Trustees and Partners
Corporations, trustees, and parters that own residential property may be exempt. To be eligible for a principal residence exemption, a corporation, trustee or partner must take account of its corporate interest holders, beneficial owners or partnership interest holders:
corporate interest holders are individuals who have significant ownership and/or control of the corporation;
beneficial owners are individuals who have a direct or indirect interest in the trust’s stake in a residential property;
a partnership interest holder is an individual who has an interest in the partnership’s residential property as a partner or as a corporate interest holder of a partner that’s a corporation.
If a property is the principal residence of a corporate interest holder, beneficial owner or partnership interest holder, then the corporation, trustee or partner can apply for the principal residence exemption if their corporate interest holders, beneficial interest holders or partnership interest holders all meet the same requirements that individual owners would need to meet when applying for the principal residence exemption – that is, they are Canadian citizens or permanent residents and are resident in B.C. for income tax purposes, and are not members of satellite families.
Generally, corporations, trustees or partners can also claim other exemptions in a similar manner, providing their corporate interest holders, beneficial owners or partnership interest holders meet the same requirements that individual owners would need to meet.
Tax credits
Tax credits include:
a tax credit of $2,000 for British Columbians who own secondary properties; and
tax credits for other Canadians and foreign owners.
Revenues
All revenues will be directed to affordable housing projects in the impacted regions.
Amendments expected
Amendments to the legislation from the Green party are expected.
BC Real Estate Association lobbied for exemptions to this legislation. Thanks to their work, the exemptions listed were enacted as part of the legislation.
Gladys Rivas (and her son Kevin) are owners in the east-side Gardenia Villa complex at Broadway and Nanaimo where condo owners are being told they will have to pay to fix their leaky building. MARK VAN MANEN / VANCOUVER SUN
A judge has ordered a Vancouver strata to impose on the owners a $16.8 million special levy to repair long-standing leaky condo problems.
Owners first noticed water issues at Gardenia Villa, a 250-unit complex located at Broadway and Nanaimo, shortly after it was built in 1994.
Drywall and carpets were soaked, walls and ceilings stained and condensation collected on window interiors. In some cases there was mould growth and failed window and door seals.
In 2005, the City of Vancouver ordered the strata corporation to take steps to remediate its failed building envelope after finding significant decay of structural members, water leaking out and algae growing extensively on the exterior stucco.
The strata did not implement an engineer’s report recommending a comprehensive remediation program, prompting a group of owners to go to court seeking an order for an administrator with powers to impose a special levy.
The judge in that first court case dismissed the petition after concluding that the complex’s salvage value — its expected sale price if bought by a developer for demolition and redevelopment — might be less than the then-estimated price of $40 million for repairs. He left open the possibility a similar application might succeed on new evidence.
“Notably, almost ten years have elapsed since that petition and Gardenia Villa continues to face serious water ingress problems,” said B.C. Supreme Court Justice Maria Morellato in her ruling ordering the $16 million levy.
Court heard that in March, 2008, following the dismissal of the petition, the strata approved a $10 million levy. Some repair work was done but the funds ran out in 2012 and a resolution for another levy to finish the work was defeated.
A 2013 engineer’s report that recommended further work was not acted upon and in 2014 a third report was prepared setting out various options for a levy, but the owners defeated each of five special resolutions, failing to get the needed 75 per cent support for approval.
Frustrated by the delays, a group of owners filed another petition in B.C. Supreme Court against the strata corporation.
The strata admitted there was a dispute between factions that led to an inability to manage and govern the necessary repairs to common property and conceded that an administrator should be appointed to oversee the repairs, but they opposed the levy.
The petitioners argued that the “democratic deadlock” could not be resolved only by the appointment of an administrator due to the continuing conflict among competing groups of owners.
The judge agreed that it wasn’t enough to just appoint an administrator and that a court-ordered levy was necessary.
“Further delay and further votes will not remedy the deadlock and may serve to exacerbate an already untenable situation,” she said.
“In the context of this case, without the issuance of a special levy order, even the appointment of a very able administrator is, in my view, unlikely to remedy the deadlock. The administrator will most probably be dealing with the same owners, the same factions and the same dynamic of conflict among them.”
The judge determined that a special levy of more than $16.8 million was needed to do the repairs. She also appointed Tony Gioventu, the executive director of the Condominium Homeowners Association, as an administrator to ensure that the strata discharges its obligations.
Welcome to this completely renovated suite at the uber exclusive Shaughnessy Place! Enjoy views of the mountains, city & beautiful Van Dusen Botanical Gardens' pond from an extra large patio with huge sliding doors. A true open concept marvel, this 1 bedroom & 2 bath home features over 1,200 sqft with custom cabinetry, quartz countertops, engineered hardwood, Frigidaire professional series stainless steel appliances, Bosch washer/dryer, Call to book your viewing now!
Megan Scraper and Alexey Lyakh were two of three young adults who tragically died at Shannon Falls, near Squamish, on July 3, 2018,
It has no doubt been a big year in news in Vancouver. Stories centered around the city hall election overhaul, growing homelessness, an ongoing rental affordability crisis, the legalization of marijuana and an extreme wildfire season... just to name some of the hot topics.
But it was these 10 stories that Courier readers were most interested in online in 2018.
1) Vancouver High on Life vloggers die in Shannon Falls tragedy
It was a sad day for Vancouver when news broke that three young video bloggers had tragically died at Shannon Falls. Vancouverites Ryker Gamble, Alexey Lyakh, and Megan Scraper were known for creating adventure videos for the YouTube channel High on Life. Their followers, friends and family took to social media to share how the group had inspired many to chase their dreams and travel the world. It was truly a heartbreaking accident that shocked readers and sparked debate about the risks adventure bloggers take. This was the Courier’s most read story by a long shot.
Ryker Gamble shared his love of adventure and travel on his YouTube channel, High on Life. - Facebook
2) Everyone is loving the new plant based beyond meat burger at A&W, except vegans
Next it was all about burgers, but not just any burger, the A&W Beyond Meat burger. It was touted as the next best thing for vegans, but they had a different view and were more than happy to point out the flaws – cheese and mayo (to name a couple) – in the burger everyone else was raving about. Despite the qualms by vegans, there’s no doubt it was a popular choice – it sold out pretty quickly. The hype surrounding this new meal gave the story a big boost.
“You don’t need animals to make meat," says Beyond Meat CEO. - Erin Ireland
3) Minimum wage increases go into effect June 1 across B.C.
When wages go up, everyone wants to know the details, so it's no surprise this was the Courier's third most read story of the year. B.C.’s minimum wage increased by $1.30 on June 1. The new wage – from $11.35/hour to $12.65/hour – was a result of the recommendations made by the independent Fair Wages Commission. This story continued to be popular throughout the year.
4) This is what a Vancouver rental scam looks like
Nobody wants to be the victim of a scam. For this reason, the Courier’s in-depth, first-person account on what a rental scam looks like in Vancouver was popular with readers.
The story follows the experience of a Courier reporter who came across a Craigslist scam, and the ways scammers tried to bait him into renting a suite in Olympic Village.
Money up front, not one viewing and an impossibly cheap rental rate were all too good to be true for this Olympic village rental property. - Dan Toulgoet
5) These are the Vancouver locations used in To All the Boys I’ve Loved Before
Vancouver is home to the film locations of many movies and TV series, but this story on the spots where To All the Boys I’ve Loved Before were filmed was particularly popular.
The film is "smart and sweet, and hits a lot of notes that are appealing to a vast audience. And for viewers, there’s a lot that might look familiar."
This scene with Peter and Lara Jane in Netflix's To All the Boys I've Loved Before was shot at Point Grey Elementary School in Vancouver. - Netflix
6) Why this woman walked nine hours straight in downtown Vancouver
Sometimes, people live and work in a city for years without exploring it properly. Jenna Mazur’s is not one of those people. Her tale of walking for nine hours straight in downtown Vancouver sparked a lot of curiosity amongst readers. She walked 43.3km of downtown in a single day and learnt a lot along the way...
Jenna Mazur walked for nine hours in Downtown Vancouver. - Human app
7) The most over the top description of a Vancouver real estate development we’ve ever read
We had to mention at least one more real estate story. So here’s one that made readers laugh and question the strategies used by big developers to sell properties. This Kudos and Kvetches column takes a look at the ways developers “sink their meat hooks into prospective buyers with elaborate branding, promotional hype and poetic ad copy.”
8) Tessa Virtue’s hilarious response to Ryan Reynolds tweet goes viral
There’s no doubt Vancouverites love a story about Ryan Reynolds – but when a Canadian Olympian tweets back a clever response to him, it’s even better. Reynolds, who is known for his social media antics, tweeted out praise for Team Canada, freestyle skier Cassie Sharpe, and Virtue and Moir. “Go @TeamCanada!! @CassieSharpe is a legend — makin’ it look easy. And thank you @tessavirtue & @ScottMoir for agreeing to raise my children as your own.” Virtue, who along with her partner had announced a retirement from the sport, had an even funnier response, tweeting: “And here I’ve been wracking my brain to come up with a post-competition career path… Scott, get the mini van!” The tweet went viral and readers couldn’t get enough of the story.
The tweet that went viral. - Canadian Olympic Committee
9) Controversial climate change activists stick it to Vancouver trucks and SUVs
The topic of climate change can easily ignite a fierce debate, but these activists added fuel to the fire earlier this year with stickers. Yes, stickers. The anonymous group of climate change activists weren't too pleased with truck and SUV owners and they made a very visual and public point of voicing that disdain. Known as CO2alitionBC, the group went around Metro Vancouver tagging large private vehicles with bumper stickers that read, “My car doesn’t care about your climate.” The bizarre protest was quick to grab peoples' attention on social media.
This is one of the vehicles targeted by climate change activists known as the CO2alitionBC. After putting the “My car doesn't care about your climate” bumper sticker on the car, the group posted the photo online.
10) How we won't miss you, Gregor Robertson, let me count the ways
Last but not least, this opinion piece on outgoing Vancouver mayor Gregor Roberston had the clicks coming in. It seems a lot of people just wanted to read about Roberston’s “failures.” He wasn’t the most popular of mayors amongst the Courier’s readers towards the end…
KORET LOFTS - GORGEOUS MODERN LOFT with 11' ceilings, exposed brick, original fir beams and polished concrete floors. 1 bedroom w/ built in office nook. Fantastic, open plan living space with sleek, fully integrated kitchen. BEAUTIFULLY RENOVATED with extensive, custom millwork throughout and tons of in suite storage. ULTRA MODERN renovation by Michael Green Architecture & SMD Interiors. Huge garden courtyard with BBQs, lounge area and fireplace. Extremely well run building with full-time Caretaker & low maintenance fees. PRIME LOCATION steps to Gastown's best restaurants & boutique shops. Also listed on CLS C8022334. PETS & RENTALS ALLOWED. Commercial & Residential Zoned.
Townhouse/potential apartment development opportunity. Maybe sold together with 2295 East 1st Ave. Potential for further assembly. New zoning RM-12N which allows 1.45 FSR for Townhouse Development or 1.7 FSR for apartment development. Close to Downtown and also Commercial Drive. All measurements subject to verification.
Affordable 1 bdrm home, w/ great layout, is walking distance to Gastown, Chinatown, Strathcona & Tinseltown. This new home comes with 5-10 New Home Warranty as this 97 unit condo + commercial units was completed in December 2015. Features incl integrated blomberg stainless steel fridge, washer/dryer, stove & m/w hoodfan combo, 9ft ceilings, high gloss European style cabinetry & modern laminate floors. There is a garden/farm area where you can rent a plot & grow vegetables. Also, there is a courtyard w/harvest table & the open exterior walkways give this property a unique look & feel. Low maintenance & property taxes. 1 parking incl. There is a tenant, please give 24 hours notice for appointment. Call Listing Agent for appt.
This is the fourth feature in our series written by residents who love their neighbourhoods (Mt Pleasant, The West End and Yaletown preceded it). Want to pitch your own story about what makes yours awesome? We’d love to hear from you. Email contact@vancouverisawesome.com.
Choosing a neighbourhood in Vancouver is so easy but so hard all at the same time. There are a million and one reasons to choose any of them – the North Shore gives you quick and easy access to the mountains and their trails; Kits puts you close to the beaches; Downtown feels so close to everything; and on and on. I’ve lived in many neighbourhoods in my time in Vancouver but none have captivated me as much as Hastings-Sunrise. The high ratio of single-family homes in the ‘hood make me feel a bit like I’m back home in my Northern Ontario roots. The plethora of small grocers within a 2km radius allows my Euro habits to show with multiple shopping trips per week to grab a few things for dinner. Here are a few of my favourite things about it:
Best Brunch: Roundel Cafe
While most people will wait in the line up around the block for Red Wagon (I must admit, I’ve never been), I prefer to loiter around the front windows for a table at Roundel Cafe. The menu is delicious, they make all their own condiments from ketchup to jam and hot sauce, and the staff are an eclectic mix that you quickly fall in love with.
Shout out to the amazing bakery two doors down that always suckers me into buying a half dozen Portuguese buns and a sweet treat on my way home even though I’m stuffed from breakfast.
Best Nachos: Jackalope’s
Ever since Foundation closed up shop, I’ve been searching for a go-to place for when all you want is a mountain of chips and cheese. I’ve tried many places and while there are some close contenders, when I ordered my first slab of nachos at Jackalope’s I knew I’d never look back.
This self-professed neighbourhood dive bar offers four different combinations of chip, cheese, and toppings depending on your proclivities plus add-on such as my favourite – smoked jackfruit. They come in three different sizes depending on how many people you’ve brought and how hungry you are.
Bonus points – it’s owned by Kristy (and her friend Alexis), who also owns Black Rider Tattoo next door and Long Live Cats and Dogs pet food and supply store up the street. They’re a supporter of Neuterhead: Ace of Spays, a local non-profit that uses rock and roll to raise funds to support local and responsible pet rescue groups with the cost of spaying and neutering.
Best Grocery Store: Donald’s Market
Discovering Donald’s seems to be an East Van ritual. Everyone I know has a story about edging their way through the crowded and narrow aisles, grabbing bunches of kale or heads of cauliflower for a couple dollars, or finding their favourite food item that no one else seems to carry. Having it within walking distance is perfect for quick shops every few days for the things I need for meals but also for when I forgot something and can just quickly pop over to grab. More often than not, I run into someone I know in the aisles, which always makes me smile and feel more than ever that sense of this being my home and my community.
Best Way to Spend a Rainy Afternoon, Outdoor Edition: Neighbourhood Wanders
My favourite thing to do in Hasting-Sunrise, in East Van really, is to grab a coffee from one of my favourite three spots (Pallet, Far Out Coffee Post, or East Café) and walk around the neighbourhood, daydreaming about which house I’d like to live in, ducking into alleys to lurk on the amazing backyard gardens/see what kind of East Van Free Stuff has been put out, checking on the community gardens, and marvelling at the houses that still have their Christmas lights up in June.
Best Way to Spend a Rainy Afternoon, Indoor Edition: Record Hunting
Stepping into Red Cat Records almost feels like stepping into a library – it’s quiet, the records are neatly organized, and the person behind the counter is always helpful whether you’re looking for concert tickets or a special record request. There’s always a few boxes of records for under $10 by the door for those that want to start a record collection on the cheap.
Right up the street is the VGH Thrift Store. They’ve got stacks and stacks of donated records and if you have the time to sift through them, you might find some gems. You’ll run the risk of whether or not they’re too scratched to be worthwhile but at the prices you’re getting them for, that’s almost part of the fun.
More Canadian seniors are withdrawing real estate wealth to make ends meet. Office of the Superintendent of Financial Institutions (OSFI) filings show the balance of reverse mortgage debt soaring in October. The annualized pace of growth is now at the highest level it has been in at least 8 years.
Reverse Mortgages
Have all your money in your house, but you need some extra cash to hold you over until the sweet release of death? That’s exactly what reverse mortgages are for – house rich, cash poor seniors. The borrower borrows against the equity in their home, and receives either a lump sum or regular payment. They’re similar to a home equity line of credit (HELOC), but a reverse mortgage is for someone 65 or older, and the borrowing rates are generally higher than a HELOC. Oh yeah, and you don’t have to make payments on these loans.
A reverse mortgage might seem like a good idea, but consider the demographic it targets. Seniors aren’t likely to get a windfall of new income in their golden years. This makes it unlikely they’ll be able to pay back their loan in a timely manner. Since they don’t have to make payments, it may not seem like a problem. However, borrowing at a relatively high rate while not making payments is a quick way to vaporize your net-worth.
Canadian Reverse Mortgage Debt Tops $3.42 Billion
Canadians sent the balance of reverse mortgage debt soaring. There was $3.425 billion in outstanding reverse mortgage debt in October, up 11.57% from the month before. The balance represents a 57.46% annualized pace of growth, a huge jump from last year. Actually, it was a huge jump from any point – setting a new record.
Canadian Reverse Mortgage Debt
The total of reverse mortgage debt held by regulated finacial instituitions, in Canadian dollars.
Both the monthly and annual increase are record setting. The monthly increase is the second largest observed in 8 years of data available. It’s also 844% larger than the median monthly pace of growth. The annual increase is the largest in at least 8 years, and 274% larger than the median pace. It almost looked like Canadians were slowing down, but it made a massive increase instead.
Canadian Reverse Mortgage Debt Change
The annual percent change of reverse mortgage debt held by regulated finacial instituitions.
Reverse mortgage debt is soaring, at a record pace. This comes at a time while other segments of credit are seeing growth taper, and rates are climbing. All of this means reverse mortgages are likely to grow in cost upon renewal, eating equity at a faster rate.
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Large lot, cute, liveable house in an excellent, central location. Nearby great schools, convenient transit, shopping, and Rupert Park Pitch & Putt Golf Course. Close to local ski mountains, the highway for access to all locations, and 10 minutes from downtown Vancouver. 2 bedrooms up, 2 bedrooms down, living, dining, kitchen, pantry, laundry area, and full, unfinished basement. Great backyard with lane access, and very quiet yet very central location.
Prestigious, well-organized, and reputable ART GALLERY that includes the strata lot, good will, and over $500,000 in documented art, maps and prints right in the heart of Yaletown with street level access to Homer St & Hamilton St. Over-height 15-foot ceilings in this heritage loft building with exposed brick and wooden beams. This turnkey business is very easy to operate and profitable; there is tremendous upside to increase sales in this already lucrative gallery. The stock includes a wide variety of decorative engravings, Japanese Woodblock Prints, botanicals, architecturals and natural history with historical views of towns and cities, and cover the world in their range of maps. Operating house are currently Wednesday - Saturday 11am. to 4pm. only, so there is tremendous upside to increase income by expanding hours of operation, and also through Internet/eBay/Social Media & PayPal sales and marketing. This truly is a perfect opportunity to own a first-class business in a world-class location.
The cost of owning a single-family home in Canada is the highest on record.
As we close out 2018, the Royal Bank of Canada is leaving us with some unwelcome news: It's never been this expensive, relative to income, to own a detached home in Canada.
RBC's latest housing affordability report showed it now takes 59.2 per cent of an average household's income to afford an average single-family home. That's the highest in records going back to the mid-1980s, and miles above the long-run average of 44.7 per cent.
RBC ECONOMICSRoyal Bank of Canada's measure of housing affordability has reached its highest (worst) levels since 1990. For detached homes, the cost of ownership is at a record high.
For years, soaring house prices in many markets were behind the trend, but these days rising interest rates are "the main culprit" pushing home affordability out of reach, economists Craig Wright and Robert Hogue wrote.
For the housing market overall, including condos, affordability deteriorated to its worst levels since 1990, with an average-earning household now having to spend 53.9 per cent of its income to afford an average home.
That includes monthly mortgage payments, as well as property taxes and utilities. It assumes a 25-year mortgage with a five-year fixed rate and 25 per cent down.
Watch: Canada's most expensive condo got a serious price cut. Story continues below.
"Are only the rich able to buy a home these days?" Wright and Hogue asked in the report.
"That certainly looks like it in Canada's most expensive markets. Buyers in Vancouver, Toronto and Victoria needed between two and three times the median household income to qualify to purchase an average home."
But it's Montreal that has seen the fastest deterioration in home affordability, the RBC report showed.
"The area has been one of the stronger markets in Canada in the past year — another being Ottawa — that saw solid price gains amplify the effect of higher interest rates on ownership costs."
The economists noted that "despite some deterioration in the latest period, owning a home remains affordable in the majority of other markets in Canada."
Stress test's major impact
The report also showed the profound impact the new mortgage "stress tests" have had on the market, particularly in the priciest cities.
In Vancouver, the stress test added almost $36,000 to the qualifying income needed to buy an average priced home. You now need a household income of $211,000 to buy an average home at $1.1 million.
In Toronto, the stress test added $27,000 to the qualifying income for an average house, and households there need to earn $167,000 to afford an average home.
RBC ECONOMICSIncome needed to buy a home.
The RBC economists also noted that, unlike the price hikes that were concentrated in certain cities, the mortgage stress test affected the entire country.
"Thousands of dollars more in income are now needed to buy a home with a mortgage in every market across the country because of the stress test," they noted.
Looking forward to 2019, the RBC economists see little in the way of relief.
"We expect that further interest rate hikes will keep upward pressure on ownership costs in 2019. Softening prices in key markets and rising household income increases will provide some offset, however."
Here’s a look at their first Vancouver real Estate map:
Photo: EstateBlock
EstateBlock highlights that the 10 most expensive neighbourhoods for single-family homes are:
1. $5.66M – Shaughnessy, Vancouver West 2. $5.34M – Whitby Estates, West Vancouver 3. $5.25M – University VW, Vancouver West 4. $4.25M – Canterbury WV, West Vancouver 5. $3.83M – South Granville, Vancouver West 6. $3.71M – Westhill, West Vancouver 7. $3.69M – Chartwell, West Vancouver 8. $3.56M – West Bay, West Vancouver 9. $3.54M – Quilchena, Vancouver West 10. $3.49M – Southlands, Vancouver West
The 10 least expensive neighbourhoods for single-family homes are:
An artist's rendition of the three-storey stacked townhouses being proposed for Lea Avenue.
Photograph By CITY OF COQUITLAM REPORT
A stacked townhouse project in Burquitlam got the green light despite opposition from several area residents at a public hearing Monday.
Council approved second and third reading of the rezoning request by Adera Development to build three three-storey buildings containing 60 units on four lots in the 400 block of Lea Avenue because the proposal matched the type of housing council approved for the street in the Burquitlam neighbourhood plan adopted a couple of years ago.
The project, called Duet Two, will have ground-floor units ranging from 450 sq. ft. studios to two-bedrooms. Stacked on top of them will be townhouses on the second and third floors.
Adera vice-president of development Rocky Sethi told council it’s a concept it has done elsewhere in the Lower Mainland. He said it offers an alternative for families to living in cramped condos or buying more expensive detached homes or large townhouses. Although the concept is common in Burnaby, New Westminster and Vancouver, there are very few in Coquitlam.
Since the location is within walking distance — about 600 metres — of a SkyTrain station, the neighbourhood plan calls for medium and low-rise density.
Five people came forward at the public hearing to support the proposal because they said it was the type of housing they were looking for.
But after they had their say, several Lea Avenue residents attacked the project because it will create more traffic than a side street can handle and exacerbate parking problems on a street that’s already difficult to navigate. They also said cramming 60 units onto four lots goes against the character of the neighbourhood suggesting row houses and duplexes would be more appropriate.
Coun. Chris Wilson said the city went through an extended process that involved community consultation before adopting the neighbourhood plan and the concerns being expressed Monday were not raised back then.
“We spent two years so it would eventually fit in with the neighbourhood,” Wilson told the residents. “We created a plan, we asked the neighbourhood to get engaged, and the developer has followed that plan.”
Mayor Richard Stewart said during the consultation 33 speakers came forward to address the neighbourhood plan and 31 said the zoning wasn’t high enough.
“Nobody showed up to tell us they wanted their neighbourhood to be single-family density,” said Stewart.
He also didn’t know why the residents of the complex would park on the street when there are 80 spots plus visitor parking being made available underground for the residents.
Darryl Stickler, an unsuccessful council candidate in the Oct. 20 civic election, said he was alarmed the developer went against the city’s advice and did not include any three-bedroom units, while also proposing eight studio units.
“I’m not opposing density, I’m saying 450 sq. ft. is too small, and where are the three-bedroom units?” said Stickler. “Where is that range of housing options?”
Sehti pointed out the company’s nearby Duet One project on Como Lake Avenue had more than 10% three-bedroom units, but Duet Two provides “a different housing typology.”
GLOBAL BC: ANALYSIS ON NEW REPORT SUGGESTING B.C.'S HOUSING MARKET IS IN THE MIDST OF A RECESSIONX
A new report suggests B.C.'s housing market is in the midst of a recession that could last for at least three years. For analysis and a forecast of things to come, real estate analyst, author and mortgage investment adviser Peter Kinch joined Jennifer Palma on BC1.
But just how much of those riches are wrapped up in real estate? A sizable share, it turns out.
Coverage of Canadian real estate on Globalnews.ca:
Report: B.C. housing market is in recession
Report: B.C. housing market is in recession
Breaking down Saskatoon’s real estate numbers
Over-supply of real estate means slow sales for Edmonton sellers
B.C. home sales in November down 18% from October
More evidence of Metro Vancouver real estate slowdown
Statistics Canada released last week its third-quarter report on national wealth, which is the “value of non-financial assets in the Canadian economy.”
Total national wealth hit $11.415 trillion in the third quarter, and at $8.752 trillion, real estate made up a 76-per-cent share of that figure — nearly all but a quarter.
That was the highest that both figures had been, going back to the second quarter of 2007.
This graph shows real estate as a share of national wealth in Canada and the U.S.:
Analysis of data from the U.S. Federal Reserve indicates that this is a higher share of national wealth than real estate takes up in the United States.
But it wasn’t always this way.
Data from both countries shows that real estate as a share of U.S. national wealth was previously 75.3 per cent, compared to 67.6 per cent in Canada.
Real estate as a share of U.S. national wealth started to decline in the late aughts, going from 75.3 per cent in the second quarter of 2007 to 70.5 per cent in the fourth quarter of 2008.
This happened at the same time that real estate as a share of Canadian wealth was growing, reaching 74.3 per cent in the first quarter of 2009, while in the U.S. it was 70.2 per cent at that time.
This chart shows how real estate wealth trended in Canada and the U.S. from 2007 to 2018:
These trends come as Canada has seen real estate grow consistently as a share of national wealth over the past decade. In the U.S., meanwhile, real estate wealth dropped amid the Great Recession and started rebounding around 2012.
Canada’s growth has largely been driven by increases in land value, as the following chart demonstrates:
Canadian land values grew consistently from the first quarter of 2009 up to the first quarter of 2017, going from just over $2 trillion to about $4.2 trillion in that time frame.
But then values started to level off, dropping to $4.1 trillion in the third quarter of 2017. Values grew again, but the growth hasn’t been as consistent since then as it had been over the past decade.
The value of residential and non-residential structures has also grown over that time.
WATCH: More sub-$1,000,000 homes listed in Vancouver
BMO senior economist Sal Guatieri wasn’t surprised to see real estate make up such a heavy share of national wealth in Canada.
The share rose amid a “sharp rise in home values” that happened in a few Canadian cities over the decade, particularly Toronto and Vancouver, he told Global News.
He said the amount of real estate wealth could prove to be a concern amid a “sharp, sustained correction in house prices given the wealth effect on spending.”
Research by Moody’s earlier this year talked of the “wealth effect” — the effect of household wealth on consumer spending.
The credit rating agency looked at U.S. consumption and estimated the wealth effect at 4.5 cents, meaning that for every $1 change in household wealth, consumer spending could change by 4.5 cents.
A pullback in spending attributed to falling home prices could prove to be a drag on GDP growth.
Guatieri, for one, didn’t appear immediately concerned.
“Flat prices aren’t a big deal,” he said.
“It’s only if prices fall sharply that people would likely pull back spending.”
BMO has estimated that Canadian benchmark home prices will grow by less than one per cent next year and two per cent in 2020, dragged by “tougher mortgage rules and higher interest rates so the share should continue to trend modestly lower.”
The latest trends also come amid the implementation of measures meant to curb demand in Vancouver and Toronto, which, in recent years, have been Canada’s hottest housing markets.
B.C. has implemented a suite of measures since 2016, bringing in a 15-per-cent property transfer tax on foreign buyers that year that has shown a clear effect on price growth.
This chart shows Vancouver home prices started dropping pretty clearly after July 2016, which was the last month before B.C. instituted a property transfer tax on foreign buyers.
BMO
The province later introduced several new measures in the 2018 budget, including increasing the reach of the foreign buyers’ tax and implementing a speculation taxthat would charge 0.5 per cent on second homes that aren’t rented out for more than six months in a year.
Ontario, meanwhile, introduced in 2017 a series of housing measures, including a 15-per-cent tax on non-resident speculators in the Greater Golden Horseshoe as well as expanded rent controls and the ability for municipalities to level taxes on empty homes.
WATCH: B.C. mayors call for changes to speculation tax
Guatieri may not be concerned about the growth of real estate wealth, but economists at CIBC feel quite differently about the effects of a housing slowdown on Canada’s economy.
“For Canada, the housing market is more important to the overall economy than at any other time on record,” Benjamin Tal and Royce Mendes wrote.
They noted that residential investment makes up 7.5 per cent of Canada’s economy, which is just off a historic peak.
These charts show residential investment as a share of GDP and housing-related employment as a share of total just shy of historic peaks in a CIBC report.
CIBC
The authors noted the Bank of Canada’s (BoC) argument that the “worst is now behind us and that housing markets are stabilizing.”
But from their standpoint, “it’s difficult to agree.”
The BoC’s workhorse model says that six quarters can pass before a rate hike can be felt in the economy, they noted.
In this case, however, only five quarters have passed since the first move of this cycle, and “we’re already seeing a slowdown in housing-related indicators,” Tal and Mendes said.
“As a result, we’re not as optimistic as the Bank of Canada for the contribution to GDP growth from housing over the next few years,” they wrote.
Wanzhou Meng was released on bail Tuesday after a lengthy three-day bail hearing at B.C.'s Supreme Court.
Canadian authorities’ arrest of Chinese telecom executive Meng Wanzhou could depress Vancouver home prices, influential business journal Barron’sreported December 10, citing a recent report from Hong Kong-based Smartkarma Insight Provider analyst Charles De Trenck.
The report is significant because Barron’s has a significant global reach among investors. Smartkarma, meanwhile, is a digital platform that offers investment insight into Asian markets.
Huawei CFO Wanzhou’s arrest aroused anger in Chinese government circles because she is not charged with any crime. RCMP officers nabbed Wanzhou at Vancouver International Airport on December 1 while she was on a layover. They were acting at the behest of the U.S. government, whch alleges that Wanzhou misled financial institutions into providing money for corporate dealings that broke U.S. sanctions against Iran.
B.C. Supreme Court judge William Ehrcke on December 11 granted Wanzhou’s release on $10 million bail (including $7 million in cash) on the condition that she wear an electronic ankle bracelet, surrender passports, stay in Vancouver and its suburbs and confine herself to one of her family’s two Vancouver homes between 11 p.m. and 6 a.m.
Those restrictions are better than being placed in detention until extradition hearings end, but they are unlikely to please China, which has threatened “significant” consequences if Wanzhou is not released.
“China property investors and economic migrants flowing into Canada and North America got a loud message this week with the arrest,” De Trenck said, according to Barron’s.
“This is coming when property transactions continue to roll over in the formerly overheated Vancouver property market…. Price data are likely to be a little softer already, with new political drivers not yet reflected.”
Vancouver real estate prices have soared in the past five years, and the Real Estate Board of Greater Vancouver pinned the benchmark price for all homes in the region at $1,042,100 in November. That’s 72.8 per cent more than the benchmark price of $603,000 for all homes in November 2013.
Barron’s explained to its readers that “Vancouver real estate prices have been buoyed by Chinese buyers for 20 years, as it became a favourite destination after Britain handed Hong Kong back to the People’s Republic of China in 1997. Chinese buying surged, and then waned in the past two years as Beijing has tried to limit capital flight and Vancouver imposed a 15 per cent foreign buyers tax. Recently as the market slowed, Chinese interest in Vancouver homes rose again.”
It then quoted De Trenck as saying that Chinese migrants may “reconsider their overall commitment to a Canada move for the extended family, as well as encouraging potential new China migrants to consider shifting migration patterns to more friendly climates – or perhaps even to consider that rising nationalism requires them to keep closer to home.”
De Trenck’s conclusion is that Canadian “property price corrections in key markets” might gain momentum.
Some former bulls on Vancouver real estate have already turned into bears.
Lululemon founder and billionaire Chip Wilson, for example, had been loading up on Vancouver properties for years.
His own home at 3085 Point Grey Road is the priciest in the province, with an assessed value of more than $78.8 million – up more than 124 per cent in the past five years. Wilson also owns rental-apartment buildings through his Low Tide Properties.
When Business in Vancouver asked Wilson on October 24 whether it is a good time to buy Vancouver real estate, he did not skip a beat before answering, “Absolutely not.”
His comment came four days after the most recent civic elections and he did not sound pleased with the result.
“We have three levels of left-wing government,” he said. “Money will go to where it is most loved, and investment here is very, very, very difficult right now.”
Canada Mortgage and Housing Corp. is also projecting that prices for real estate in Vancouver will soften.
“We expect the average MLS [Multiple Listing Service] price to decline 7 per cent in 2019, and then a further 4 per cent in 2020,” said CMHC economist Eric Bond.
Sutton Group West Coast Realty
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(Illustration by Graham Roumieu)
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While most people will wait in the line up around the block for Red Wagon (I must admit, I’ve never been), I prefer to loiter around the front windows for a table at Roundel Cafe. The menu is delicious, they make all their own condiments from ketchup to jam and hot sauce, and the staff are an eclectic mix that you quickly fall in love with.
Ever since Foundation closed up shop, I’ve been searching for a go-to place for when all you want is a mountain of chips and cheese. I’ve tried many places and while there are some close contenders, when I ordered my first slab of nachos at Jackalope’s I knew I’d never look back.
Discovering Donald’s seems to be an East Van ritual. Everyone I know has a story about edging their way through the crowded and narrow aisles, grabbing bunches of kale or heads of cauliflower for a couple dollars, or finding their favourite food item that no one else seems to carry. Having it within walking distance is perfect for quick shops every few days for the things I need for meals but also for when I forgot something and can just quickly pop over to grab. More often than not, I run into someone I know in the aisles, which always makes me smile and feel more than ever that sense of this being my home and my community.
My favourite thing to do in Hasting-Sunrise, in East Van really, is to grab a coffee from one of my favourite three spots (Pallet, Far Out Coffee Post, or East Café) and walk around the neighbourhood, daydreaming about which house I’d like to live in, ducking into alleys to lurk on the amazing backyard gardens/see what kind of East Van Free Stuff has been put out, checking on the community gardens, and marvelling at the houses that still have their Christmas lights up in June.
Stepping into Red Cat Records almost feels like stepping into a library – it’s quiet, the records are neatly organized, and the person behind the counter is always helpful whether you’re looking for concert tickets or a special record request. There’s always a few boxes of records for under $10 by the door for those that want to start a record collection on the cheap.
Right up the street is the VGH Thrift Store. They’ve got stacks and stacks of donated records and if you have the time to sift through them, you might find some gems. You’ll run the risk of whether or not they’re too scratched to be worthwhile but at the prices you’re getting them for, that’s almost part of the fun.
