BC Apartment Buildings

By Emma Crawford Hampel | Jan. 18, 2017

Vancouver had Canada’s highest average rent for a two-bedroom apartment in January, with Toronto in a very distant second place.

The average rent for a two-bedroom apartment in Vancouver increased 4% to $3,150 in the month. This is almost 60% higher than the average rent for this home type in Toronto, which grew 3.7% to $1,970 in the month.

For one-bedroom apartments, Vancouver still takes top spot in the country, with an average rent of $1,870 – up 3.9% compared with December. Toronto is once again in second place with an average rent of $1,550, making Vancouver 20% more expensive for this home type.

One-bedroom apartment rents increased 4.1% in Victoria in January, reaching $1,270. For a two-bedroom apartment in that city, the average price declined 2% in the month to $1,490.

Top 10 highest rents across Canada in January (source: Padmapper):

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@EmmaHampelBIV

By Glen Korstrom | Jan. 3, 2017

Rezoning to allow a 30-storey tower next to East Vancouver’s Joyce-Collingwood SkyTrain station is set to accelerate redevelopment in the area.

The December rezoning of properties by Vancouver city council follows the city’s approval in June of a new precinct plan that hiked density guidelines for the neighbourhood, particularly for sites close to the SkyTrain station.

Westbank Projects Corp. achieved council’s blessing to build a tower with up to 30 storeys at 5050 through 5080 Joyce Street, where single-storey and two-storey buildings now sit.

The tower will have to meet a host of conditions before getting a development permit, but critics are concerned that the site is eligible for a floor-space ratio of 15.37 square feet of building area for every square foot of the lot, which is higher than anything else outside the downtown core.

Saint Mary’s Parish is another landowner in the neighbourhood that is putting plans together to build a tower on its three-acre site about a block south of Westbank’s site.

The parish’s site houses Saint Mary’s elementary school, the church, a playground, parking lots and the Columbus Tower seniors’ home.

“The school desperately needs some upgrades,” Ong said. “Density provides an opportunity for us to investigate the potential of using housing to fund services.”

Couns. Geoff Meggs and George Affleck told Business in Vancouver that they saw much less opposition to density in the Joyce-Collingwood area than in the Grandview-Woodland neighbourhood, where council increased density for certain sites in August.

That is why the vote passed unanimously, they said. They both also lauded council’s requirements that there be plenty of “family housing,” or larger suites, in Westbank’s tower.

“We added requirements for a better pedestrian streetscape as part of the strategy and a daycare and all that stuff,” Affleck said.

“We don’t know how much money we will get from community amenity contributions [CACs] for all of the developments in the neighbourhood combined but [it will be significant].”

Some residents, however, view as inadequate the $4.72 million in CACs that Westbank has to pay to develop its tower.

“[Councillors] say that CACs are great for communities because we can build community centres, move libraries and improve parks,” said Arielle Yip, a member of the Joyce Area Residents Association.

“About the only thing we can do with $4 million is to create a dog park.”

She estimated that a new library would cost at least $10 million while a community centre would cost upwards of $15 million.

Even if sufficient CAC funding were included in the area’s revitalization, many residents do not want new tall towers to be built because they are concerned about traffic congestion and construction noise, Yip said.

The biggest concern, however, is that a slew of new towers will gentrify the area, push up rents and displace longtime residents and small-business owners – much like what is happening in Burnaby’s Metrotown neighbourhood.

Ong said the plan being developed by Saint Mary’s Parish reflects those community concerns.

“We want to be part of the solution by building 100% rental housing instead of more market condos,” he said.

"Anything we build will be rental units. We won’t be able to stratify the tower and sell it off.”•

gkorstrom@biv.com 

@GlenKorstrom 

By Andrew Duffy, Times Colonist | Jan. 5, 2017

As in Vancouver, homeowners in the Victoria region have seen double-digit increases in assessed property values, according to figures released this week by BC Assessment, with condos and townhouse owners seeing a significant jump.

Two of the three most expensive condos are in Songhees, with a suite at the top of Bosa Properties’ Promontory — 2101 83 Saghalie Rd. — coming in at $6.86 million, up from $5.91 million last year. The second-most-valuable condo jumped more than $1 million in value. It is in the Shoal Point development at 921 21 Dallas Rd. and is now assessed at $5.27 million, up from $4.23 million a year ago. Third on the list is at unit in Bayview One — 1006 100 Saghalie Rd. — at Songhees, which is assessed at $4.86 million, up from $4.12 million.

It was just a matter of time the condo market felt the kind of value surge the single-family home market has been seeing over the past year, said outgoing Victoria Real Estate Board president Mike Nugent.

“The pressure this year turned to condos. We had a lot of condo inventory built up through the 2008-2013 financial crisis, and in the first half of 2016 that inventory was getting sold down, and because there was selection there was not as much pressure on price,” he said.

Nugent said by mid-year that excess inventory was gone, which continues to push up the values of condos. Despite plenty of building in the city, there remains plenty of demand and little inventory, so there’s a good chance values will continue to rise.

Nugent noted at the end of 2015 there were 500 condo listings on the multiple listings service, and at the end of 2016 that number was just 186.

The residential housing market also had an effect on commercial properties, though not to the same extent. B.C. Assessment said commercial properties saw an increase in value between five and 15 per cent in the past year.

Nine of the top-10 commercial properties are shopping malls, with Uptown leading the way at an assessed value of nearly $370million, up from $310 million last year.

Randy Holt, partner at Newmark Knight Frank Devencore Victoria, said the reason commercial properties lag behind residential in value increases is the two markets have different drivers.

“It was an extraordinary year for residential real estate,” he said. “I’ve been in Victoria 37 years and I’ve never seen price movement like there was last spring and summer.”

Holt said that was driven by low inventory, little new supply and high demand. He said there was some bleeding of the residential market’s heat into the commercial market as development sites were snapped up.

“The value of developable land downtown has probably gone up by 50 per cent in some cases,” he said, adding with demand for condos and still little supply there’s no sign of that slowing down.

Holt said as far as office and commercial space is concerned, because buildings usually have tenants in five-year leases, there’s little turnover and few sales.

Anne Tanner, managing director with Cushman & Wakefield, said emotion also plays a role in the difference between the two markets. “Houses are bought and sold and emotion is involved, whereas commercial buildings are typically owned for strictly investment’s sake,” she said. “Commercial buildings are primarily valued on the net operating income of the building, the location of the building and the age of the building systems.”

But there could be more significant increases in value coming in the next few years.

“We may see an uptick in commercial and industrial values and maybe some reduction in vacancy over the next couple of years in response to ultra-tight market conditions and soaring values in Vancouver,” said Holt.

Times Colonist

By Emma Crawford Hampel | Jan. 3, 2017

BC Assessment has published its 2017 property value data online, and homeowners across Greater Vancouver have found their residences are being assessed at rates that are considerably higher than they were a year ago.

How much a property’s assessment has increased depends on the home type and its location.

“The majority of residential homeowners within the region can expect a significant increase compared with last year’s assessment,” said Jason Grant, an assessor with BC Assessment. “Increases of 30-50% will be typical for single-family homes in Vancouver, North and West Vancouver, Burnaby, Tri-Cities, New Westminster and Squamish.

“Typical strata residential increases throughout these areas will be in the 15-30% range.”

On the other side of the coin, the smallest increases were found in apartments and townhomes. For example, strata high rises in the Metrotown area of Burnaby saw increases of 19%, with the average value reaching $608,000.

Chart: Summary of estimates of assessment increases. Source: BC Assessment press release

Commercial and industrial properties also increased, with average values up 15-40% in the year.

“Commercial properties being purchased for eventual redevelopment will often exceed these ranges,” Grant said.

Assessments are in the mail. Property taxes payable for 2017 will be based on these assessed values at a tax rate to be set in spring by each municipality.

Homeowners are encouraged to contact BC Assessment as soon as possible if they have concerns about the assessed values of their properties.

To appeal, they must submit a Notice of Complaint by January 31.

Homeowners can find more information about the assessments at BCAssessment.ca.

ecrawford@biv.com

@EmmaHampelBIV

Real estate activity in Vancouver is spilling over into the commercial sector which saw sales activity jump 34 per cent in just one quarter.

Real estate activity in Vancouver is spilling over into the commercial sector

Garry Marr | Financial Post | September 14, 2016 4:55 PM ET

Real estate activity in Vancouver is spilling over into the commercial sector which saw sales activity jump 34 per cent in just one quarter, easily eclipsing the previous high, according to a new report.

Commercial real estate service provider Altus Group said Wednesday that there were $3.75 billion in real estate transactions in the second quarter of 2016 — the sixth straight quarter of growth in British Columbia’s largest city. There were 875 transactions of more $1 million in the quarter.

The number of deals in the quarter jumped from just 596 in the first quarter, a 44 per cent increase and the first time since Altus began recording data that deal levels were over 600 in a quarter. Just two years ago, the dollar volume of quarterly deals was hovering around $1 million.

“The record-setting first half of 2016 has been fuelled by a combination of both high value asset trades as well as a sharp uptick in the deal velocity,” said Paul Richter, director of Altus Data Solutions Canada. “The diversity in the market in terms of asset-by-asset contribution at all price levels, will remain key in maintaining momentum going forward.”

Office deals were up 110 per cent from the previous quarter and accounted for 11.4 per cent of all transactions in the second quarter. Retail deals jumped by 114 per cent from the previous quarter and accounted for 13.8 per cent of all transactions in the second quarter. Residential land acquisitions accounted for 37.3 per cent of all deals in the quarter and were up 36 per cent from the first quarter.

Large deals are also taking place with 19 transactions for more than $25 million accounting for 28 per cent of all capital flow in the quarter. Greater Vancouver has had between 11 to 14 transactions worth more than $25 million since the third quarter of 2015.

Mark Goodman, a principal at HQ Commercial, which sells apartment buildings in Vancouver, said sales have exploded in his sector with overseas money driving much of the investment activity.

He calculates that over the first eight months of the year there were 145 apartment transactions, up 44 per cent from 2015. Dollar volume during the same period climbed 93 per cent to $1.3 billion.

“What is happening now is unprecedented,” Goodman said. “The numbers are just staggering. Something is shifting. In my 15 years, we’ve never had this many proposals (to sell) on the go. Twice a day, every day for three weeks we have been getting calls for apartment owners, land owners. There is a rush to get apartments on the market.”

Apartments are impacted by a 15 per cent additional property transfer tax on foreign owners in the Metro Vancouver but Goodman said the buyers are local residents or permanent residents who are getting injections of capital from offshore. “Is that a foreign investor (who has to pay the tax)? I don’t know,” he said.

CBRE Canada, a real estate service company, is expecting record investment from China in Vancouver in 2016 at all-time highs for prices.

“Canadian real estate should be the beneficiary of continued flight capital from China and increasingly Europe, in light of the turmoil surrounding the Brexit and the perception of the U.S. being late in the cycle,” the company said in a report.

Metro Vancouver staff currently anticipate annual housing demand at 18,000 new units

By Peter Mitham | BIV | Sept. 13, 2016, midnight

Growth forecasts revisited

There have been repeated calls this year for someone to show leadership when it comes to planning for growth, particularly around housing affordability. This past January, at the Urban Development Institute’s annual forecast luncheon, Reliance Properties Ltd. president Jon Stovell called for immediate amendments to Metro Vancouver’s Metro 2040 regional growth strategy to mandate residential development targets.

“We need targets set by regional government to say, ‘You have to grow,’” Stovell said at the time. “Until that happens, municipal governments are just going to keep under-entitling land.”

Responding to an item in this space two weeks ago that mentioned Vancouver’s apparent ignorance of its own residential development capacity, a reader pointed out that Metro Vancouver is soliciting feedback on Metro 2040 through October 1.

Provincial laws require review of the document every five years, something Metro Vancouver says it does constantly (eight amendments have occurred since 2011), alongside ongoing work to review the region’s housing demand estimates. Metro Vancouver staff currently anticipate annual housing demand at 18,000 new units, significantly below the 25,400 housing starts the Canada Mortgage and Housing Corp. (CMHC) forecasts for 2016.
But even then, starts need to address affordability. RBC Economics recently declared Vancouver to be “in uncharted territory” as the benchmark home purchase requires 90.3% of household income. At the other end of the market, CMHC pointed out in a media call last week regarding Ottawa’s proposed national housing strategy that 1.6 million Canadians face “core housing need.”

Metro Vancouver staff report that of the 5,500 new rental units the region requires annually, 3,500 must meet the needs of households earning less than $50,000 a year.

“It has not been possible to achieve this level of new affordable rental supply in recent years due to lack of senior government funding,” the report said.

However, CMHC president and CEO Evan Siddall told media last week that expectations for the national housing strategy concerned him – in large measure because they’re legion. To meet them all would take a lot of money, or as he put it, “we would have an irresponsible budget request.”

Steady demand

With all the talk about slack supplies of affordable rental housing and the struggle tenants have to make ends meet as rents rise through the use of fixed-term leases, one might assume growing demand at the Vancouver rental bank.

Set up in 2012 through the Network of Inner City Community Services (NICCS) with $150,000 from the Streetohome Foundation as well as support from the city and the Vancouver Foundation, tenants facing tough times can access interest-free, short-term loans to tide them over.

While the latest numbers for the year ended August 31 show that just 130 loans were made in the past 12 months, down from 142 in 2015, they don’t tell the whole story.

Amanda Pollicino, director of community programs with NICCS, said there’s been an increase in the number of loan applications the bank has denied – typically because monthly rent outstrips monthly income. The most recent stats indicate that 75% of applications were denied on this basis, up from about 45% in the initial three years of the bank’s existence.

Put another way, just 25% of applicants are approved while nearly 400 applications draw disappointment.

The good news is that 65% of loans are repaid within the two-year period required, only slightly less than the 70% repayment rate originally anticipated.

The average loan amount over the past four years has been just $888, well below the maximum loans amounts of $1,300 for individuals and $1,800 for families.

Pollicino said approximately 660 people, including 195 children, have benefited from the loans since 2012.

A rendering of U-One by Mission Group Homes near the UBC campus in Kelowna, B.C.

“There’s been a lot of changes and it is impacting. And most of it is the direct result of the incredible market in Vancouver.”

KERRY GOLD | The Globe and Mail | Friday, Sep. 02, 2016 4:28PM EDT

For many years, a condo site in downtown Kelowna, B.C., had sat unfinished – an eyesore and reminder of the 2008 recession and collapse of a formerly booming market.

The developer fell into receivership and halted construction on the luxury project. In 2012, Chinese developer Jingon, based in Richmond, bought the property for $3.8-million and announced plans to build a tower called Grace. Plans changed again when Jingon partnered with Chilliwack-based Kerkhoff Construction to build 1151 Sunset Drive, a 124-luxury tower of one-, two- and three-bedroom condos and townhouses at ground level. They’ve just opened the presentation centre – a sign of the times for Canada’s fastest-growing metropolitan area.

There’s been a major turnaround in Kelowna, which is currently booming from increased housing sales owing to residents from the Lower Mainland relocating there, as well as students attending the postsecondary schools there and deciding to stay.

“Over the last couple of years, it’s really picked up,” company vice president Leonard Kerkhoff says. “There are a lot of opportunities coming to town. We’re getting the relocation of retirees from Vancouver and Calgary, selling their homes for a good price. And we’re getting more of the millennial purchaser – the younger professionals from Vancouver are relocating for a cheaper lifestyle. Vancouver has just become too unaffordable.”

After years of on-again, off-again progress, the development at 1151 Sunset Drive, Kelowna is finally on the market. Exterior rendering.

Communities such as Kelowna are reaping the rewards of Vancouver’s affordability crisis and transforming as a result. Over all, Metro Vancouver housing sales were down 26 per cent compared with August, 2015, according to just-released Real Estate Board of Greater Vancouver data. Meanwhile, desirable regions such as Kelowna are experiencing unprecedented growth. As of July, there had been a 51-per-cent increase in sales volume year-to-date over the previous year-to-date in Central Okanagan. Prices for houses have gone up by about $100,000 this year over last, there have been more multifamily dwelling starts than ever before and jobs are on the rise.

“There has been an air of optimism in this city that hasn’t been felt in a long time – maybe if ever,” Kelowna Mayor Colin Basran says.

At 38 years old, Mr. Basran, born and raised in Kelowna, represents the younger cohort. He says it’s not just the spillover from Vancouver that’s creating their boom, but efforts to build Kelowna’s tech and animation industry, as well as the growth of Okanagan College and UBC Okanagan.

“For the longest time, we lost young people because of opportunities elsewhere. Now, we are seeing more young people stay here. Obviously, tourism and agriculture continue to be the main pillars of our economy. But now, we are the third-largest tech hub behind Vancouver and Victoria, and it’s my hope in the coming years we surpass Victoria,” Mr. Basran says. “And I know that increasing the number of foreign students is something the university would like to do. For us, it increases our diversity. I don’t know the politically correct way to say it, but we haven’t had that.”

It’s too early to say if the growth is connected to the introduction of the 15-per-cent home-buyer’s tax on non-Canadian citizens and non-permanent residents living in the Lower Mainland. The province is set to release its next batch of foreign buying data in mid-September. Those numbers will be of particular interest because they could indicate the immediate effect of the new tax in Vancouver and the 21 communities where it applies.

Instead, foreign buyers might be drawn to the Kelowna region because of the schools. The number of international students at UBC Okanagan (UBCO) grew from 12.8 per cent of the student population last year to a projected 14.1 per cent this year. Sixty per cent of all graduates stay in the area, according to UBCO’s data. Part of that is because of the foreign students that end up settling.

Kelowna realtor Tony Zhao, who is from China, attended UBCO 11 years ago, when he was 18, and settled in Kelowna with his wife. He says about half his clientele are international buyers looking to invest or purchase houses and condos for their children attending school there. He networks directly with people in China looking to buy.

Mr. Zhao believes the 15-per-cent tax in the Lower Mainland could create more demand for Kelowna, where it doesn’t apply, but he says it would be small. Most people are adopting a wait-and-see approach, he says. Kelowna has its own appeal for foreign buyers and it’s got nothing to do with the tax.

“Right now, it’s very hard to apply to UBC in Vancouver, and here it’s a bit easier,” says Mr. Zhao, who is 29. “And because in Kelowna there aren’t many people from Asia or China, if you want to learn English, you go to Kelowna. If I went to [live in] Vancouver, I wouldn’t even need to speak English.”

The Kelowna market is a hot investment partly because of the low vacancy rate, too, which makes renting easy, he says. He estimates that more than half his clients want to make Kelowna their home. The others are investors.

Okanagan Mainline Real Estate Board president Anthony Bastiaanssen says the number of buyers from the Lower Mainland has doubled, going from 10 per cent to about 20 per cent in the past year. It has coincided with a drop of about the same number of Albertan buyers.

“We have the best market we’ve ever had,” Mr. Bastiaanssen says. “Last month, the average single family house price was over $600,000, which is an all-time record for the Central Okanagan. So, we are at peak levels of activity and average pricing.

“The real estate market has been benefiting from strong consumer confidence and low interest rates. People are happy.”

Communities such as Kelowna are reaping the rewards of Vancouver’s affordability crisis and transforming as a result.

Luxury sales have also gone up in the past year, he says. An entry-level price for a waterfront property is around $1.5-million, which would be 20 minutes away, in Peachland.

“The number of $1-million-plus sales is significantly higher than a year ago. This year, you might see a dozen. Last year, you might have had a couple.”

The Mission Group is Kelowna’s biggest developer of multiunit dwellings, averaging about 200 to 300 units a year. President Randy Shier says the market started recovering from the recession around 2014.

“And now 2016 has really gone on a tear,” Mr. Shier says. “It reminds me of what it was like from [20]04 to ’07. They were good years.”

But this cycle is different. The wealth moving into the market is bigger and the 20-to-34 age group is also driving the mid-market growth. Workers have made the shift from the old traditional mill-type jobs to occupations in which people can work at home, such as tech or consultancy jobs. The city is also a commercial hub for much of the province, offering jobs for engineers and lawyers.

Mr. Shier has tapped into the student market by providing housing with a series of condo buildings adjacent to UBCO, called U-One, U-Two and U-Three. By the time they are built out in August, 2018, his projects will house more than 1,600 students. His latest U-Three project is getting more investors, parents of international students who want to invest in their child’s accommodation.

His downtown condo project Central Green is also drawing young buyers, with prices between mid-$200,000 and mid-$400,000. One-bedrooms are about 550 square feet.

The boomtown effect isn’t all positive, however. It’s meant low-income residents are getting squeezed. With the market up, homeowners are cashing out and selling off their rental properties.

A rendering of a unit at 1151 Sunset Drive.

Royal LePage managing broker Francis Braam has been selling in the area since 1988 and says this is by far the busiest cycle yet.

“It’s not a cheap market to be in,” Mr. Braam says. “And certainly every time you go up thousands of dollars it becomes more difficult for people to buy. Are we priced out yet? I can’t answer that one.”

And if the boom is happening in a tiny community, such as Sechelt on the Sunshine Coast, the effect can be overwhelming, particularly for local workers. Rentals there are evaporating as people sell off their rental homes for big prices.

Sechelt deputy mayor Alice Lutes has lived in the community most of her life.

“It’s worrisome,” she says. “Right now for low-income earners looking for a place to rent, they are getting pushed out. A lot of them are squeezing in with family members, hoping it will be temporary. And I don’t know if that’s true at this point.

“There’s been a lot of changes and it is impacting. And most of it is the direct result of the incredible market in Vancouver.”