March 30, 2012
Help is at hand for property virgins
Buying a home is a big decision - and buying your first home can be downright daunting.
It's easy to get swept up in the excitement of it all, and even easier to lose sight of why you're jumping into the real estate game in the first place.
Chances are you've got MLS bookmarked on the iPad, you've popped into more than a few open houses, and spent many weekends checking out the latest new home developments.
But whether you start your search online or peruse your favourite neighbourhoods in search of For Sale signs, it is important to stay focused. This purchase, as you've heard many times, will likely be your single largest investment.
Fortunately, there are many great resources for homebuyers, including a 38-page guide from the Homeowner Protection Office entitled Buying a Home in British Columbia: A Consumer Protection Guide. It's designed to help steer B.C. residents through the purchase of their next home. You can find the guide, and more valuable information, at www.hpo.bc.ca
The home-buying process for first-time buyers can be so con-fusing that it's even spawned an HGTV show, called Property Virgins, which aims to help newbies understand the process.
You'll also find practical advice on HGTV.ca., where writer Claire Sibonney has put together the following list to help with your house hunt:
Do you dream of a place to really call your own? Before you start picking out colour schemes and kitchen cabinets, there are many practical factors to consider first.
MAKE A WISH LIST
Before shopping for a home, you need to determine your needs and wants. Develop a predetermined shopping list of features you are willing to compromise on and ones you aren't. To properly pre-pare a home-buying strategy, you must examine your lifestyle and budgeting priorities. The decision between a condo or house, detached or semi-detached could have just as much to do with personal preference as it does with expense. Once you have figured out exactly what you want in a new home, your next important step is to ensure that you are financially qualified to make such a substantial purchase.
Particularly for a first-time homebuyer, it's absolutely critical to find out what kind of mortgage you can afford, even before you start looking. Too often, arranging a mortgage is left to the very end, forcing borrowers to scramble for financing.
THE DOWN PAYMENT
The first question to ask yourself is how much of a down payment can you afford. Depending on the interest rate environment, you may be able to spend a lot more (or less) than you imagined. But it's vital to remember what you have saved isn't necessarily what you want to use, as there are extra costs that come in to play as you go through the entire purchase, including emergency funding. A conventional mortgage down payment is 20 per cent of the value of the home.
After you've considered how much you can afford for a down payment, the next step is contacting a bank or mortgage broker about getting qualified. Based on personal information you pro-vide such as your income, debt and assets, you can receive a pre-approved mortgage, including an interest rate commitment for a set length of time.
Don't forget to work with the lender to find the right type of mortgage that suits your needs. You'd be surprised to discover what's negotiable. Once you receive a pre-approved mortgage, you can confidently negotiate the purchase of a home. It's a no-cost, no-obligation deal that lets you know before you go house hunting how much you can afford to buy based on how much you can afford to borrow.
FINDING THE RIGHT AGENT
When looking for a home, one of the most important factors you'll have to consider is location. Once you've determined a few options for where you want to live, the next step is finding the right real estate agent.
Real estate agents are like matchmakers; bringing buyers, sellers and homes together. Agents must be on top of the market - in terms of sales, listings and house prices in the area. But most importantly, real estate agents need to make their clients feel at ease.
To find a good agent, let the referrals speak for themselves. Ask friends and family to recommend agents they've dealt with.
MAKING AN OFFER
A good real estate agent will also be an experienced negotiator, with an understanding of how flexible a certain seller will be. But before making an offer, do your research. Find out how long the property has been on the market. If it's a new development, find out how much others have been selling for.
In many cases, a deposit is made and you may be advised to sign a "conditional" offer. When buyers and sellers strike a deal, loose ends often need tidying up before the buyer will proceed, such as financing or selling your existing home. For resale homes, you should never make the offer final without a proper home inspection, conducted by a licensed engineer to look for any major problems with the house that could end up costing you down the road.
Once these conditions are met, you should be prepared to make the offer "firm and binding." If not, the deal is off and you get your deposit back.
Finding the right lawyer/notary Don't wait until after the deal is struck before choosing a lawyer/ notary. Then you lose the valuable input he or she can provide scrutinizing the offer before you sign the deal. When looking for a lawyer/notary, make sure he or she is a real estate specialist. To find the right one, remember that quality and experience are the key, not just the price. Since a lawyer/ notary's role is part adviser and part confidant, a good rapport with him or her is a must. As with finding a good real estate agent, ask friends and family if they have anyone to recommend.
CLOSING THE TRANSACTION
Unfortunately for first-time home buyers, closing costs are often an unwelcome surprise. Besides the basic purchase price, you will face a long list of expenses before taking possession of your new home: legal fees, land transfer tax, title insurance, disbursements, adjustments and insurance policies, to name a few.
For a resale home, these "extras" can easily add two per cent on to the basic purchase price. For brand new homes, that figure can easily reach 2-1/2 per cent. The time to check out these charges is before the offer is signed, not afterward.
When it comes to buying a house in Metro Vancouver, where prices often leave first-time buyers struggling to get a foothold in the property market, it pays to get some expert advice.
The Greater Vancouver Home Builders' Association will hold its 18th Annual Seminar for First-Time Home Buyers next Tues-day, April 3 at the Bell Performing Arts Centre in Surrey, where housing experts - from bankers to lawyers - will discuss a range of topics, including information about B.C.'s recently announced $10,000 first-time new-home buyers' bonus.
The seminar is free, but pre-registration is required. Visit www. gvhba.org for more information.
Buying a home for the first time can be one of the most unnerving - yet thrilling - experiences of your life. But if you do your homework, you'll be making the right move.
March 29, 2012
No rule changes on budget blotter: Association head
Mortgage Broker News, March 27, 2012
It’s likely what all brokers want to hear, and something they may have helped to bring about, with CAAMP President Jim Murphy suggesting the government has heard the industry’s concerns and will leave mortgage rules alone Thursday.
In terms of mortgage insurance rule changes, given his announcement last week, I believe the Minister will continue to monitor,” Jim Murphy, CEO of the Canadian Association of Acredited Mortgage Professionals, told MortgageBrokerNews.ca. “There are unlikely to be changes in the budget, however, this does not prevent the government from acting in the future if they feel tightening is required.”
The comments comes after weeks of industry lobbying in Ottawa, largely led by CAAMP, and focused on encouraging Finance Minister Jim Flaherty to leave the mortgage rules around amortization, down payments and other key areas unchanged.
Murphy argues that those efforts have had a tangible effect, despite the number of bank economists asking for tighter rules.
“CAAMP’s overall message of not instituting changes that cause a housing downfall or that adversely affect job creation are being well received,” said Murphy, who’ll be in Ottawa for Thursday’s budget announcement.
Exactly a week prior to the scheduled communiqué, Flaherty used a media scrum to suggest he would resist calls for stricter rules, namely, a reduction of the maximum amortization to 25 years and an increase in the minimum down payment to 7 per cent or 10 percent. He also criticized the banks for creating the kind of ultra-low rate environment driving up household debt levels and, possibly, the need for tighter mortgage rules.
“I find it a bit off that some of the bank executives are taking the position that the Minister of Finance or the government somehow should tell them how to run their business,” Jim Flaherty told reporters just outside Ottawa Thursday. “They decide what they want to charge in interest rates.
“The new housing market produces a lot of jobs in Canada so there’s a balance that needs to be addressed.”
Still, Murphy is anticipating the minister will introduce some new rules to clamp down on mortgage growth.
“I’m expecting there to be legislation on covered bonds,” he told MortgageBrokerNews.ca. “This is a relatively new funding source in Canada and the question will be whether these products can be insured.
“Given current messaging out of Ottawa, I expect them not be eligible for mortgage insurance coverage.”
March 29, 2012
Five ways to file your taxes on time with technology
Financial Post, March 19, 2012
Filing your taxes has never been easier. No more having to spend an evening with complicated tax forms, pencils and a calculator. By simply installing software, visiting a website or scanning a T4 slip with a cellphone and then electronically submitting the files through the Canada Revenue Agency’s NetFile service, filing taxes is a snap. Here are five software options to help get your taxes filed by the April 30 deadline.
Owners of Apple Inc.’s iPhone rejoice: SnapTax is a little app that installs on your device and allows you to complete a simple tax return by taking a picture of your T4 slip. For people who have more complex returns, SnapTax will capture all of your T4 information and then upload it to the company’s online TurboTax software. No more entering information manually into dozens of boxes on tax sheets. Filing a return with SnapTax is $9.99.
More than five million Canadians filed their returns with TurboTax last year. The program is available online and for purchase if you want to install it on your home computer. TurboTax walks Canadians step by step through their taxes, pointing out possible deductions and offering money-saving tips along the way. Filing a return starts at $17.99 at TurboTax.ca. The price goes up depending on the complexity of the tax return. Buying the software costs $38 for the standard version; $60 for the premier version, which is targeted at people with more complicated returns.
Here is why you need to pay off your debt now
Canadian household debt declines as disposable income increases
3. H&R Block
The name that seems to blanket every shopping mall during tax season also offers an online tax preparation service. For as little as $15.95, Canadians can tap into the company’s tax expertise at hrblock.ca without ever leaving home. The company also offers desktop software for $30, which allows users to do their taxes on their home PCs without an Internet connection.
For users of Mac computers who may not want to file using an online service, either because they are filing multiple returns or have concerns about security, there is AceTax software. For as little as $9 (or $7 for returning users) AceTax’s easy-to-follow steps enable you to file a return in minutes.
TaxFreeway offers software for Mac and PC users, but it also has an iPad version. Simply download the company’s app from Apple’s App Store to get started. Completing your return with the software is free, but users have to pay to file returns to Canada Revenue Agency. It costs $20 to file up to 20 returns using the software.
Did you know . . .
You can claim your child’s art, music or drama classes — and other artistic and cultural courses — on your 2011 income tax return? Under the new Children’s Arts Tax Credit, up to $500 of the costs of honing your budding, under-16 artist’s talents are eligib
March 29, 2012
Real estate in Metro Vancouver: Is spring a good time to buy?
Metro Vancouver residents are split this year over whether spring is a good time to buy real estate, according to a new consumer confidence survey.
Metro Vancouver residents are split this year over whether spring is a good time to buy real estate, according to a new consumer confidence survey.
“What’s really interesting is how definitive it’s become,” said Ian Martin, general manager of REW.ca, the online real estate search site that commissioned the survey. “It’s polarized. Split right down the middle.”
Traditionally, spring is the busiest time for buying and selling residential properties, but this year’s record-low interest rates — the Bank of Montreal has been offering 2.99 per cent — combined with record-high prices is splitting consumer sentiment.
Forty six per cent of metro Vancouver and Fraser Valley residents surveyed think it’s a good time to buy over the next three months and 42 per cent disagree, Martin said, citing a REW.ca commissioned Mustel Group telephone survey of 278 metro Vancouver and Fraser Valley adults from March 5-19.
Only 13 per cent of respondents said they didn’t know. The number of “Don’t know” responses would normally be in the 20 per cent range, Martin said.
Of those that said it’s a good time to buy, 28 per cent cited low interest rates followed by 17 per cent citing the buyer’s market with many properties for sale as the key reason.
Of those who said it’s a poor time to buy, half cited high prices and 17 per cent expect a market correction with falling prices, and 15 per cent are concerned about the economy.
This consumer uncertainty is reflected in this year’s sales figures, Martin said. Sales volume of detached homes dropped 21.5 per cent February 2012 over February last year, according to Real Estate Board of Greater Vancouver figures. Apartment sales dropped 15.4 per cent and townhomes dropped 13.3 per cent in the same period. In both Greater Vancouver and the Fraser Valley, to date, sales volumes are below the 10-year average. Sale prices, however, continue to rise. Pricing in Feburary 2012 was six per cent up over the same month last year.
March 28, 2012
Mortgage-free sooner with accelerated payments
Many Canadian homeowners are putting compound interest in its place by accelerating their mortgage payments, potentially knocking years off their repayment schedules.
A report issued in November by the Canadian Association of Accredited Mortgage Professionals indicates that about 36 per cent of 5.8 million mort-gage holders accelerated mortgage payments during the previous year. That includes 16 per cent who increased their monthly payments, 17 per cent who made lump-sum payments and five per cent who increased the frequency of their payments. About six per cent of mortgage holders used more than one of these approaches to whittle down their mortgage. "It's the most recent buyers - those who purchased from 2006 and 2011 - who are making the most additional efforts to speed up the repayment of their mortgages," says Jim Murphy, president and CEO of CAAMP.
Reduction efforts made early in the history of the mortgage will have far greater effect than those made closer to the end. A case in point: a property owner with a $200,000 mortgage amortized over 30 years at four per cent interest can pay off that mortgage four years sooner simply by switching from monthly to bi-weekly payments.
Murphy notes, however, that not all mortgages are created equal.
"Most mortgages will let you pay down 20 per cent of the principle on an annual basis without a penalty, which is great if you expect a windfall of cash that can be applied to the mortgage," he says. "Some of the newer mortgage packages offer a low interest rate but also limit lump-sum payments to 10 per cent of the principle. Be careful of the mortgage features you choose."
With the days of double-digit interest rates relegated to the past, the focus of many mortgage holders has been on faster repayment and mortgage flexibility, notes David Stafford, managing director real estate secured lending, at Scotiabank. "Canadians are really creative at paying down their mortgages, and with the advent of online mortgage calculator tools, it's become easy to see how even small efforts can accelerate mortgage freedom," he says.
Some property owners simply use a bonus or tax refund to pay down mort-gage principal, or keep payments the same if interest rates drop, but others attack their mortgage with death by a thousand cuts.
"You can lop 10 years off your mort-gage without breaking a sweat," says Stafford. "Some people are going online and rounding off the pocket change they see after the decimal place every chance they get, or rounding their mortgages down to the nearest $10 or $100 increments. - It's all part of chipping away at the base of that mountain."
March 26, 2012
Solving Vancouver's growing pains
What a breath of fresh air. Gordon Gibson's piece is timely and important. And yet no one up until now has seemed to want to address it. Growth is great for developers and city hall with the growing tax base and revenue from developers' cost charges.
It's no surprise given the contribution figures from the last civic election and the list of developers supporting Vision.
Everything is hidden behind the guise of densification with-out looking at loss of identity of our neighbourhoods.
It's great if you can afford to own real estate, but unfortunate if you can't, and have to leave your own city.
As I have asked many longtime residents, do you enjoy the way the city is today or the way it was a few years ago? It is unanimous that our quality of living has dropped in recent years.
Growth has its costs. Thanks for speaking up and starting the debate!
Brian Abs, North Vancouver
March 23, 2012
Fixed replaces variable as favoured mortgage
As the federal government warned it may again tighten mortgage rules, a Bank of Montreal economist says fixed mortgages "clearly trump" variable mortgages in today's economy.
There are two reasons for the change of heart by Douglas Porter, deputy chief economist at BMO: the intense com-petition among lenders and the economic recovery in the U.S.
"While we have in the past supported going variable, and even though short-term rates are likely to remain low this year, current offers on long-term mortgage rates and the recent shift in bond market sentiment tilt the balance heavily in favour of locking in at this stage," wrote Porter in a report, Time to Say Goodbye to Variable.
The report coincides with BMO offering two low-rate mortgage options, a 2.99 five-year rate and a 3.99 10-year rate, both of which are limited to 25-year amortization and limited prepayment options. Many other lenders have followed suit, offering low-rate mortgages, sometimes with more flexibility.
Porter said in his report that historically, 84 per cent of the time since 1975, borrowers with variable rates saved money over those who took fixed rate mortgages. The late-'70s were the exception, with higher variable rates than fixed rates, followed by skyrocketing interest rates in the early 1980s. When asked if he is predicting some-thing similar might happen in the coming years, Porter said, "No, but there might be a very pale imitation of that."
In Vancouver, because real estate prices are so high, a fixed-rate mortgage can help people sleep at night, said Jennifer Muench, BMO's vice-president of personal banking in Vancouver.
"When you go from variable to fixed, what it really does is give you peace of mind," she said. "If you are in a situation where you have high costs for your mortgage payments, knowing exactly what your payments will be over a five or 10-year period is huge."
Banks have also reduced the discount offered on variable rates in recent months, which means variable and fixed rates are very similar. Porter said it's "next to impossible to predict" what will happen with those discounts if and when interest rates go up.
The Bank of Canada is unlikely to raise rates until next year, Porter said, but added he expects the overnight rate, which is one per cent now, to rise to about four per cent within four years.
Meanwhile, the federal government, dealing with signs of an overheated property market, is ready to tighten mortgage insurance rules again if necessary, Finance Minister Jim Flaherty said Thursday.
Flaherty also chided bank executives for asking the government to impose more restrictions, noting the banks are the entities that offer mortgages.
Canada's banking regulator, trying to curb risks posed by record-high levels of household debt, said this week it wanted lenders to be more trans-parent about their mortgage businesses.
Flaherty has imposed tougher requirements for government-backed mortgages three times since 2008.
"With respect to tightening up the mortgage insurance market we've done it three times ... and we watch, we monitor the market, and if we have to tighten it some more we will," he told reporters.
"The new housing market produces a lot of jobs in Canada so there's a balance that needs to be addressed. I'd like the market to correct itself, quite frankly, if it can."
Since 2008, Flaherty has lowered the maximum amortization period for new mortgages to 30 years from 40 years, raised minimum down payments required to qualify for government insurance, and required all borrowers to qualify for a five-year fixed-rate mortgage to get insurance.
Statistics Canada is set to release a fresh report on house-hold indebtedness on Friday, while recent reports show that Canadians continue to pile on more debt, surpassing levels reached in the United States before the financial crisis of 2008.
The risk, says Queen's University finance professor Louis Gagnon, is that a sudden rate shock will send the housing market into sharp retreat and drag the Canadian economy down with it.
"If we keep going this way and there's an interest rate shock, the larger the shock, the larger the number of homeowners that will be put in a tight spot and have to sell their homes in a market that has become illiquid because other people are doing the same thing," he said.
March 23, 2012
Canada home prices rise in February, but pace slows
Canadian housing prices rose for a second straight month in February, but the size of the increase from year-earlier levels continued to shrink, the Canadian Real Estate Association said on Friday.
The recently launched MLS Home Price Index, which monitors housing prices in five major urban markets, rose 1.1 percent in February from January, and was up 5.1 percent from February 2011, the smallest year-over-year increase since last June. In January, prices were up 5.2 percent year-over-year.
“MLS HPI trends for February show that home price growth is generally slowing,” Gary Morse, the industry group’s president, said in a statement.
March 22, 2012
BCREA ECONOMICS NOW REPORTS
Retail Sales - March 22, 2012
Canadian retail sales grew for the fifth time in sixth months in January, edging 0.5 per cent higher. However, gains at the National level were due to motor-vehicle sales with non-motor vehicle sales actually falling 0.5 per cent. Overall, gains were reported in just 5 of 11 retail sectors.
In BC, retail sales rose 0.3 per cent from a weak December 2011 and were up 4.8 per cent from January 2011. After underperforming for much of 2011, we anticipate that retail sales growth will pick up from last year’s anemic 2 per cent pace, though will remain somewhat constrained by continued weakness in labour markets and high household debt burdens.
March 22, 2012
Affordable housing in Vancouver? Why bother?
The Vancouver real estate market continues to soar.
Photograph by: Mark van Manen , Vancouver Sun
When I moved to Vancouver 36 years ago, I blanched at the cost of housing. Buying a home inside the city was impossible.
It was marginally less so when my wife and I got married. But the houses we looked at came with big prices and small promise.
We had a family to raise. We moved to the suburbs.
We rented for eight years, raising our three kids in that time. It was only with the help of my in-laws that we could afford our first house, and then only after cashing in all our assets, including all our RRSPs. Then we borrowed big from the bank.
Ours was a typical middle-class story, and still is: help from the parents, an outward move, a mortgage.
And then as now, Vancouver’s real estate was unaffordable. Nothing in that regard has changed.
What has changed are expectations. There are those who feel that the lack of cheap housing in Vancouver is an abomination. They feel that the convenience of a short commute or the proximity to a really good Ethiopian restaurant should be the natural order of things.
That feeling is often expressed in tandem with a loathing for the suburbs, and for the cultural vacuum that, for them, the suburbs represent.
What has also changed is that these feelings have been politicized. They are now an Issue; witness the Mayor’s Task Force on Housing Affordability. And as an Issue, reasons that are ostensibly sociological in nature have been made to propel it.
Affordable housing makes for healthier neighbourhoods. Affordable housing makes for more diversity. Affordable housing provides housing for middle-class families with children.
These reasons, it should be said, are also urban-centric.
That is, they continue to make the distinction between urban and suburban, as if the “real” city stops at the Vancouver border and the rest is overflow.
But that doesn’t apply any more, especially here. More than three-quarters of Metro Vancouver’s population growth is now taking place outside of Vancouver proper, and with that population growth has come more jobs and businesses than Vancouver has been able to produce lately.
It has also rejuvenated once-moribund suburban neighbourhoods. Even in my own neighbourhood in Delta, scores of young families have moved in, bought old-stock housing and updated it. Those young families have also brought with them more cosmopolitan tastes. The suburbs are filling up, and feeling less and less suburban with each passing year.
Conversely, in many respects, the city of Vancouver is feeling more and more like the suburbs. There’s been a steady conversion of industrial land into housing. The major growth in the downtown core has been in condominium construction. And the central political issue preoccupying Vancouverites is not jobs or taxes. It’s housing — the tension between densification and affordability. Vancouver has become its own bedroom community.
Vancouver, of course, will always be the centre of things in the Metro area. It has history and critical mass on its side.
And by its very nature, it is going to attract people who want to come here and live in the city.
But should that be a concern of government? Should there even be a task force? And can it have any effect on affordability?
I doubt it: without government subsidies, the market will propel any kind of property here into the stratosphere.
But task force member Michael Geller, who is both a developer and an adjunct professor with Simon Fraser University’s Centre for Sustainable Community Development, believes the task force could usher in a greater selection of housing types than what Vancouver has now.
“One of the more affordable forms of housing being built in Toronto, for example,” Geller said, “is stacked townhomes — a two-storey townhouse being built above another.”
Those Toronto townhouses, Geller said, start at $309,000. In Vancouver, Geller admits, they would be much more.
“There’s nothing that this task force can do to make Vancouver as inexpensive as Toronto or Edmonton. But I do believe it will mean changes in the processing of building permits, and in the wording of zoning bylaws that ultimately will lead to increased competition and more affordable housing choices.”
It would also mean densification.
Geller thinks there is an appetite for it; I’m not so sure.
University of B.C. professor Tsur Somerville, director of UBC’s Centre for Urban Economics and Real Estate, agreed with Geller that the task force could give rise to new forms of housing.
“But I haven’t seen anything,” Somerville said, “that won’t anger the neighbourhoods of the city that don’t want densification.”
As for affordability:
“The only thing that’s going to make housing in Vancouver cheaper,” he said, “is a collapse in housing prices.”
Hands up, you well-meaning social engineers, who want that.
March 20, 2012
Condo Culture: Heads up! Good advice for next winter
Q: I know the weather is great now, but still, I’ve always been curious: If ice falls off a condo tower and hurts someone, who is liable? Is the condo corporation responsible for making sure people passing by are safe?
A: Once a snowstorm ends, the condo corporation must remove any snow and ice that poses a danger to pedestrians. Snow and overhanging ice can accumulate very quickly without warning during the cold winter months. If the corporation cannot remove the ice and snow in a timely manner, then danger signs and bright cones should be placed on the sidewalk until the maintenance crew is able to push the snow and ice to the street below.
March 20, 2012
US Housing Starts - March 20, 2012
US housing starts declined slightly in February, though January new construction was revised higher. Total housing starts were at a seasonally adjusted annual rate (SAAR) of 698,000 last month, down 1 per cent from 706,000 (SAAR) in January. Building permits, an indicator of future home construction, were 717,000 (SAAR) in February, a 5 per cent increase from January and 3 per cent higher than February 2011.
While this morning's report is not overly positive, it does reinforce that the housing sector in the US has bottomed and that the construction sector is healing, if only gradually. That said, any sustained increase in US housing starts is good for the BC economy, particularly those regions exposed to forestry and forestry products. We anticipate a continued slow recovery in US housing starts through 2012.
March 19, 2012
Ladner and Tsawwassen's list to sell ratio just 17.8% of the past 30 days
According to MLS® statistics there are currently 182 detached homes, 22 townhouses and 81 condo’s for sale in South Delta (Ladner and Tsawwassen).
Over the past 30 days there have been 39 detached homes sold (just over 21% of inventory), 5 townhouses sold (almost 23% of inventory) and 7 condo’s sold (just 9% of inventory) in South Delta. The current list to sell ratio for South Delta over the past 30 days is just 17.8%, but if you only take detached houses and townhouses into consideration the list to sell ratio is 21.5%, which is almost a balance market. For more up to date real estate market conditions contact firstname.lastname@example.org at anytime.
March 19, 2012
Low-to middle-income housing still a challenge
Jake Fry of Smallworks is a pioneer of laneway housing in Vancouver.
Photograph by: Mark Van Manen, PNG , Special to The Sun
The Mayor's Task Force on Housing Affordability in Vancouver has begun to tackle the challenge of finding ways to provide more housing for low-to middle-income households in the city.
Barely a month after being appointed, the 16-member task force this week issued its first progress report containing a few key "quick start" recommendations that are focused on spurring the approval of some new housing supply.
The task force is focusing its efforts on low-to middle-income earners - those with individual household incomes of $21,500 to those with combined household incomes of up to $86,500 annually.
They believe this will capture a number of different market segments, including lower-income singles and couples looking for rental accommodation they can afford, modest income couples struggling to buy their first home, families with children who want to live in the city rather than have to move to the suburbs, and seniors wanting to downsize while remaining in their neighbourhoods.
It is interesting to look at what a couple earning a combined $86,500 can afford to buy with today's current interest rates. Assuming they would have saved enough to be able to make a down payment of 10 per cent and that they would qualify for a mort-gage where the mortgage payments and taxes would not exceed one-third of their income, they would be able to afford a home priced around $500,000.
The February Real Estate Board's benchmark selling price for all residential properties in Greater Vancouver was $670,900. For detached housing, that price was $1,042,900. Supplying homes for those households that earn up to $86,500 is not an easy challenge.
The task force's first set of recommendations focus on expediting applications for new market housing development targeted to low-to middle-income earner.
The quick start recommendations also focus on bringing some more clarity to policies in the Cambie Corridor Plan to ensure that they trans-late into actual new development. The city's land-use plan for the stretch of Cambie from 16th Avenue to Marine Drive has opened up new areas of the city for a fair amount of transit-oriented development, including rental housing required as a part of the new zonings. However, 10 months after the plan was adopted, not a single project has been approved.
These recommendations came rather quickly, but they only brush the surface of the issue in terms of increasing housing supply to a level where the supply-demand curve will actually start to permanently warp in favour of buyers looking for afford-able housing options in Vancouver. It was encouraging to see task force co-chair Olga Ilich quoted as saying that the task force would be talking a lot about "gently densifying neighbourhoods." This is where the work of the task force can make a real difference.
Making housing affordable for modest income earners will require much more housing supply and a diversity of housing types. Not everyone wants to live in a highrise condominium apartment or in an apartment above retail on a busy main street.
Gentle density needs to be introduced to Vancouver's single-family neighbourhoods. Laneway housing was the beginning of a creative approach to small density increases in residential neighbourhoods. Other even more creative ideas are now being looked at, just in time to perhaps be considered during the next stage of work by the Mayor's Task Force.
Smallworks' Jake Fry, who is the pioneer of laneway housing in Vancouver, recently convened a group of architects, developers, builders and residents to explore some ideas that might one day allow homeowners to redevelop their own residential lots, introducing some additional housing units with a form and character that could be compatible within the single-family neighbourhood pattern.
With this kind of flexibility, homeowners become the developer; they use their own equity in their home as financial leverage and they create some additional "gentle" density that might be in the form of housing types that are in short supply - housing types that would be in the reach of modest income earners - and housing types that are what's called "ground-oriented", with their own outdoor entrances like a house.
One idea that is being explored is either permitting the conversion of an existing home on a standard 33-foot lot or building a new structure that would accommodate two basement suites of 560 square feet each, two two-storey duplex homes of 1,120 square feet each and a laneway building with a small 400-square-foot studio on the main floor and a townhouse in two storeys above with 1,290 square feet. That means doubling the dwelling count to six homes from three homes on a single-family lot, which is currently per-mitted with a primary residence a secondary suite and a laneway house. This would bring affordable housing and housing choice through land-use efficiency and creative design.
Another design idea that is being explored would see eight units on a 50-foot-wide single-family lot, all in a form not that much different than the massing of the typical house plus a laneway house, with the addition of another laneway house.
These ideas and others require creative design and some compromises, such as reductions in front and rear yard setbacks, parking reductions and some modest height reductions. They aren't ideas that will work in every block and every neighbourhood. Adding density to corner lots is easier, for example, than adding density to a mid-block single-family lot.
These are all ideas that need to be explored, refined and adopted for the gentle transformation of our single-family neighbourhoods if we are going to supply the housing that is needed to make Vancouver an affordable and livable city.
Bob Ransford is a public affairs consultant with COUNTERPOINT Communications Inc. He is a former real estate developer who specializes in urban land-use issues. Email: ransford@ counterpoint.ca or Twitter @BobRansford
March 16, 2012
Vancouver Eastside's detached houses & townhouses list to sell ratio balanced
According to MLS® statistics there are currently 474 detached homes, 74 townhouses and 537 condo’s for sale in Vancouver Eastside.
Over the past 30 days there have been 101 detached homes sold (21% of inventory), 19 townhouses sold (26% of inventory) and 56 condo’s sold (10% of inventory) in the east side of Vancouver. The current list to sell ratio for Vancouver Eastside over the past 30 days is 16%, but if you only take into account the detached house sales and townhouse sales (exclude the condos) the list to sell ratio is almost 22% which would be considered a balanced market. For more up to date real estate market conditions contact email@example.com at anytime.
March 16, 2012
Setting the stage for sale
Rented furnishings from Dekora are piled high in preparation for staging this home for selling.
Photograph by: Jenelle Schneider, PNG , Times Colonist
The old sales aphorism, "Sell the sizzle, not the steak," per-haps explains the increasing use of home staging for new developments.
Home staging refers to the art of preparing a property with furniture and other items to create a welcoming and appealing atmosphere.
Some people are convinced the trend toward staging homes started soon after October 1997. It was on that date that HGTV started broadcasting home-improvement programs about homes and gardens.
The generation that watched the show - and the others that followed it - have become accustomed to images portraying well-designed residences.
"People have become spoiled," says Tracy Menzies, a real estate agent with Pemberton Holmes. "They like to see how the home fits their lifestyle. If they can't picture themselves in the home, they leave" and keep looking until they find a place that lets them feel at home.
Menzies says developers would rather not stage a property. But they skip this step at their peril. Real estate agents agree that a well-staged home can reduce a listing's time on the market. It can also fetch a better price than a home that is empty or with dated or unappealing furnishings.
She says the services of a professional stager isn't cheap. A suite can cost $2,500 (or much more) to be staged, and a monthly rental fee for all the props the staging company provides for the suite - right down to the soap in the bathroom - adds up. On average, a suite may have up to 500 items to give it its particular look.
Brent Melnychuk, the senior designer at Dekora Staging in Vancouver, won't go into how much he charges to stage a listing, only to say it depends on the project.
"My job is to make the prospective buyer picture themselves living there," says Melnychuk, who has been staging for more than a decade.
"Stagers walk a fine line. The displays have to create a utopian lifestyle for the buyer, but can't be too specific. I try to shoot for a design that shows how a person can live in a space now - and also in a decade."
A home stager gets important information from the developer or sales agent: What is the age of the target buyer? Are they single or married? What is their net worth? Is the development low, middle or high-end?
Once the target demographic is identified, the home stager tries to find emotional "hot buttons" that resonate with the buyer.
"Sometimes, as I am showing a suite, a client notices an item on display and says, 'Oh, my goodness, where did you get this?' and will ask where they can buy one," says Menzies.
That's music to the ears of Melny-chuk, who staged four suites in 601 Herald St., a recently completed development near Chinatown.
While the goal is a feel of what he calls "tasteful and timeless" for the four suites, each individual suite gets a tweaking for the target demographic. A small, 450-square-foot one-bedroom suite is designed to evoke the feel of a boutique hotel room that emphasizes cool functionality and youthful appeal. The larger two-bedroom has a balcony and is targeted toward empty nesters with warmer, softer tones.
The building's architecture and its location also have an influence on how a room is presented.
Sometimes the décor is so attractive that buyers have been known to ask for the furnishings to be included in the sale. Melnychuk says that's not a problem and his staff will itemize the objects used in the staged suite - right down to the aforementioned soap in the bathroom.
"People buy on emotion," says Menzies, a 15-year sales veteran. "But people these days also have less time. They typically don't want to take the time to fix up a place. A staged home is appealing because it means they can have it all - and have it right now."
Melnychuk says home-stagers come from the same family as interior designers. An interior designer might be involved with a project earlier to set the over-all tone. The stager comes later, to give a show suite the finishing touches.
"We don't create a fantasy, we just make a home look more desirable by altering reality."
March 15, 2012
Home Sales in Interior/North Outpace Province
Vancouver, BC – March 15, 2012. The British Columbia Real Estate Association (BCREA) reports that the dollar volume of homes sold through Multiple Listing Service® (MLS®) in BC declined 9.6 per cent to $3.4 billion in February compared to the same month last year. A total of 5,923 MLS® residential unit sales were recorded over the same period, a decline of 7.6 per cent. The average MLS® residential price was $574,975 in February, 2.1 per cent lower than in February 2011.
"Sales gains in the interior and the north were offset again in February by less robust demand on the south coast," said Cameron Muir, BCREA Chief Economist. Improving economic conditions in both BC and Alberta are positively influencing consumer demand outside of large urban areas, closing the gap between regional housing markets."
Year-to-date, BC residential sales dollar volume declined 9.2 per cent to $5.5 billion, compared to the same period last year. Residential unit sales dipped 6.8 per cent to 9,828 units, while the average MLS® residential price edged back 2.5 per cent to $557,732 over the same period
March 14, 2012
Vancouver's Westside list to sell ratio currently at 17%
According to MLS® statistics there are currently 838 detached homes, 245 townhouses and 1864 condo’s for sale in the west side of Vancouver.
Over the past 30 days there have been 151 detached homes sold (18% of inventory), 43 townhouses sold (17.5% of inventory) and 312 condo’s sold (17% of inventory) in the west side of Vancouver. The current list to sell ratio for Vancouver West Side over the past 30 days is 17% which is considered below a balanced market of 22%. For more up to date real estate market conditions contact firstname.lastname@example.org at anytime.
March 14, 2012
Century Group could move head office from Tsawwassen to Surrey
For almost 60 years the Century Group has been headquartered in Tsawwassen. The real estate firm was started by George Hodgins (top left), credited as being the most important figure to shape the community. The company is now run by his son Sean (bottom left), who plans to eventually move the head office to a proposed development in Surrey.
Photograph by: submitted , for Delta Optimist
A local company that has played an integral role in the development of Tsawwassen for more than half a century could soon be leaving the community.
The Century Group plans to relocate its headquarters to a major new development it's involved with in Surrey.
"That would be about four years from now. We are still in the approval process and moving ahead with it. I think what it came down to was being more central in the Lower Mainland," said president Sean Hodgins.
Formerly known as Century Holdings, the firm, in partnership with the Surrey City Development Corporation and Cotter Architects, wants to build a 54-storey residential tower with a 160-room hotel and ground level restaurant "that will set the tone for future growth in Surrey's City Centre."
The 104th Avenue development would be located next to the Gateway SkyTrain station.
The application was submitted last year.
On its website, Century Group says it plans to engage Surrey residents this spring in understanding the design and amenities of the building and surrounding public space.
"To show the company's commitment to the future of Surrey, Century Group and Cotter Architects plan to relocate their head offices to downtown Surrey in this iconic new building," the company stated on its website.
That reference about the relocation has since been removed.
Hodgins later explained his company has been looking at a more central location for a variety or reasons. including difficulty recruiting staff.
If approved and the Century Group does relocate, a major part of the identity of South Delta will also be gone.
Founded by his father, the late George Hodgins, before even the George Massey Tunnel was a reality, the real estate firm literally built half of Tsawwassen.
In a 2004 interview, George Hodgins remembered the potential he saw in the area prior to the tunnel being completed in 1959.
"I used to take the ferry, and at the time they were building the tunnel, I used to see those sections of the tunnel at the end of No. 5 Road. I decided when that tunnel is completed, they're going to have an influx of people, so I started buying more land," Hodgins said.
In a 1970 interview at his Tsawwassen office, Hodgins said when his development spirit descended upon Tsawwassen 15 years earlier, the area consisted mainly of summer cottages, some farms and a few permanent homes.
"Over the years we have been responsible in one way or another for 90 per cent of the Tsawwassen subdivisions put on the market," he said.
Hodgins was president of Century Holdings Ltd. as well as all its numerous affiliates and subsidiaries.
Over the subsequent years, the Century Group not only built key housing developments such as Pebble Hill, Centennial Tides and Imperial Village, it also constructed over 1,000 rental units in Ladner and Tsawwassen, including Century Village.
The company also owns the Tsawwassen Town Centre Mall, Harbourside Plaza, Coast Tsawwassen Inn and Century Square, although it didn't build the latter.
George Hodgins was 81 when he passed away in 2007. By then, his son Sean, now 45, had already taken over as president.
A disciple of the new urbanism movement, Sean Hodgins has been pitching an innovative proposal for the company's Southlands property that combines different forms of housing with small-scale agriculture.
His latest scaled-down proposal, which includes 950 housing units and a large segment of the land donated to Delta for agricultural purposes, is to be presented at series of open houses in the coming weeks.
The Southlands has been one of the most contentious issues in South Delta over the years and some see the latest proposal as a comprise that could finally bring closure.
Another current application by the company is a commercial/residential proposal on 56th Street on the site formerly occupied by Southpointe Academy.
Sean Hodgins, a Tsawwassen resident, has also followed in his father's footsteps when it comes to Century Group being the most philanthropic company operating in South Delta. Over the years the contributions have been many and significant.
Just one example was George Hodgins' purchase of a gravel pit, owned by the Kirkland brothers, and donating it to the municipality as a park, now known as Diefenbaker Park.
The Hodgins family is also well known for its major contributions to Delta Hospital.
March 13, 2012
Richmond B.C. real estate market activity
According to MLS® statistics currently there are 889 detached homes for sale in Richmond, combined with 374 townhouses and 859 condos actively selling in the Richmond market.
During the week of February 27 to March 4th Richmond experienced 15 detached homes, 11 townhouses and 21 condos sell firm. For more up to date real estate market conditions contact email@example.com at anytime.