Thursday, July 19, 2018

Airbnb renters could face fines of $1000 a day in BC rule change

British Columbia is taking action to curb the reduction of available rental homes caused by owners opting for the surging short-term rental market.
The popularity of services including Airbnb has been blamed for tightening availability of rental homes and the government has now announced a change to its Strata Property Regulation.
It will mean that strata corporations will be supported in enforcing short-term rental bylaws.
Currently strata corporations can restrict or ban short-term rentals and impose fines of a maximum $200 a week. With the high returns available from these rentals, that is not a strong deterrent.
But the new rules will hike fines to a hefty $1000 per day – 35 times the current limit!
“We’ve all heard the stories of renters losing their homes when units are pulled out of the rental market to be used as short-term rentals. With this change, we can ensure there is long-term rental stock for people and families who need them,” said Selina Robinson, Minister of Municipal Affairs and Housing. “As part of our 30-point plan to improve housing affordability in B.C., we are supporting strata corporations to both deal with the noise and security issues that can sometimes come with short-term rentals, and also preserve rentals for the long term.”
The change will take effect on Nov. 30, 2018, in order to allow short-term rental hosts time to adjust bookings and comply with a strata’s short-term rental bylaws.
“The new regulations will help define short-term commercial use as a different function than rentals, and provides some very real consequences for the violators,” said Tony Gioventu, executive director, Condominium Home Owners Association of B.C. “For those strata corporations who prohibit short-term use, this is a valuable amendment. It will require strata corporations to amend their bylaws at a general meeting to permit the higher penalties, which in turn will provide the strata with a great opportunity to make sure the strata’s bylaw complies with provincial legislation.”

Wednesday, July 18, 2018

Greater Vancouver’s pre-sale market expected to shift from “hyperactive” to balanced in 2018

Greater Vancouver’s pre-sale market was off to a strong start in 2018 but sales are expected to ease for the rest of the year, due to housing policy changes and escalating home prices.
In the first six months of the year, 81 new multi-family projects and 7,753 units came to the market across Greater Vancouver and the Fraser Valley, according to MLA Advisory’s 2018 Mid-Year Market Review, released Wednesday
Although the pre-sale market remains active and strong, MLA says the pace of residential sales is experiencing a slowdown.
[W]e’ve come off of an incredibly, incredibly strong market where in 2017, all the homes that were being released were being being consumed within the month of being released,” Cameron McNeill, Executive Director of MLA Canada tells Livabl.
“Now we’re seeing a movement towards a slightly more balanced and more normalized situation,” he adds.
The Vancouver-based real estate marketing company used internal data to compile its mid-year report.
In January, Greater Vancouver and Fraser Valley’s pre-sale market had a very high absorption rate of 94 per cent for new units entering the marketplace. However, six months later, the absorption rate dropped to 48.9 per cent in June.
McNeill says this downward trend in absorptions indicates a shift from hyperactive levels over the past two years to more normalized market conditions.
He attributes the slowdown to stricter mortgage regulations introduced in January, along with rising interest rates and the impact of new BC housing policies.
“I believe that it’s less about the government intervention as it is about people’s perception. And therefore there’s short-term uncertainty that the consumer has, they’re waiting and watching,” says McNeill.
MLA defines normalized pre-sale activity as projects experiencing 50 to 60 per cent sales absorptions within the first six to nine months and sell-out periods of 12 to 24 months.
Although the pre-sale market in Greater Vancouver and the Fraser Valley is expected to see slower activity in the second half of the year, McNeill says sales are still relatively strong.
“MLA predicts that we’re going to level off to a balanced market where projects take anywhere from three to 12 months to sell out versus selling out in a matter of weeks,” he says.
From July to December 2018, MLA is forecasting 67 project launches and over 7,700 new homes to be released in the market.
North Vancouver is slated to be the most active market during the rest of 2018 as approximately 11 projects and nearly 1,500 homes are scheduled to be released.

Sunday, July 15, 2018

BC housing markets return to balanced territory thanks to softer demand

As a result of the stricter mortgage regulations that rolled out nationwide six months ago, housing demand in British Columbia continued to soften in June, pushing most markets into balanced territory.
Last month, a total of 7,884 homes changed hands across the province — a 32.5 per cent decrease from 11,672 units sold a year ago, according to the latest data from the British Columbia Real Estate Association (BCREA), published Friday.
“What we’re seeing in the market right now is almost purely the impact of new mortgage rules,” Brendon Ogmundson, BCREA deputy chief economist, tells Livabl.
On January 1, the Office of the Superintendent of Financial Institutions (OSFI) implemented a new stress test for uninsured mortgages, to ensure buyers can withstand rising interest rates. Since the new policy came into effect, it has been linked to a slowdown in activity both across BC and the country.
In June, declining sales persisted in BC’s priciest housing region, Greater Vancouver, which had 2,467 home sales last month, down roughly 38 per cent from 3,953 homes sold in June 2017.
As demand continues to decline, Ogmundson says that most of BC’s housing markets are returning to balanced territory.
“What we’re seeing in the market is that the level of listings is up a little, so supply is starting to accumulate but from historically low standards, while demand is off a fair amount. And therefore, markets are somewhat balanced on a supply and demand basis.”
Last month, there were a total of 35,932 homes listed for sale across the province, up 21 per cent from a year ago.
As most markets are sitting in balanced territory, there was less upward pressure on prices last month. In June, the average price of a home in BC was $716,326 — a 1.3 per cent decline from the same time last year.
In Greater Vancouver, the average price of a home hit $1,068,559 in June, up 1.4 per cent from a year ago.
Looking ahead, Ogmundson says the impact of the stress test should start to fade away, allowing BC housing markets to recover over the next six to 12 months. The economist forecasts that sales will pick up across the province in the coming months and prices will continue to experience moderate growth.

Sunday, July 8, 2018

Metro Vancouver price drops unlikely to help housing affordability, real estate experts say

While there may be more signs of cooling in Metro Vancouver's housing market, experts say significant relief is unlikely for shoppers at the market's lower end.
Sales are well below the 10-year average, according to figures released this morning by the Real Estate Board of Greater Vancouver, and the price of a detached home actually dropped marginally last month in half of the areas tracked.
Some of the biggest price drops have been in the most expensive neighbourhoods, including the West Side of Vancouver and West Vancouver, which have shown four per cent decreases in prices over the past six months.
That's not surprising to Cameron Muir, chief economist for the B.C. Real Estate Association, who says the top of the market is always the most volatile part.
Along with new taxes on foreign buyers, speculators and empty homes, for a detached home costing more than $3 million owners will also pay both the new school tax and the extra property transfer tax if they sell, Muir notes — and all that is cooling sales in the upper price range.
But he says the effect of those taxes will be limited since "only three per cent of homes sell for over $3 million."

Price drop not trickling down

While overall prices are pretty flat across the market, Muir cautions that anyone looking for significant price relief at the lower end is likely to be disappointed.
That's because the unintended consequences of other factors designed to cool the market are actually continuing to push up prices at the lower end.
In fact, while sales of apartments dropped 29 per cent over the last year, the benchmark price has continued to go up over 20 per cent over the same period.
Phil Moore, the president of the Real Estate Board of Greater Vancouver, agrees the new mortgage stress test and rising interest rates are driving up prices at the lower end, where supply remains limited.
He says an average couple making $120,000 annually is limited by the new rules to prices of up to $750,000 — and that's driving up competition for apartments and townhomes.
"First time buyers are so frustrated," Moore says.

Demand forecast to outpace supply

Even with a record 42,000 homes under construction across the region, immigration and changing demographics will mean demand will continue to out strip supply.
"The selection of homes for sale in Metro Vancouver has risen to the highest levels we've seen in the last two years, yet supply is still below our long-term historical averages," says Moore.
Muir agrees that demographics will continue to put pressure on the market's affordable end.
"Underpinning the market we have the millennials, the baby boomers' children which are a huge demographic cohort, now entering their house-forming years. So, they are going to help underpin demand over the next several years, particularly in big cities where young people tend to flock."
If there are any bargains to be had, they will likely be limited to the higher end of the market, says Moore.
However, taking history as a guide, Muir forecasts the negative impact of the new taxes is only likely to last three to four months before prices start to tick up again.
CBC News

Wednesday, June 27, 2018

B.C., federal governments sign 10-year deal worth nearly $1bln

The British Columbia government has signed a deal with Ottawa that will see nearly a billion dollars injected into affordable housing across the province over the next decade.
The provincial and federal governments say more than $990 million will be spent on building, repairing and expanding social housing and supporting housing affordability.
A joint news release says both levels of governments will share the costs, and the agreement will be supported by funding that starts on April 1, 2019.
The deal is part of a $40-billion national housing strategy unveiled by the federal government last year, which includes funding from the provinces and territories.
Federal Social Development Minister Jean-Yves Duclos has previously said the strategy will reduce homelessness and take 500,000 Canadians out of housing that is either unaffordable or inadequate.
B.C. introduced a 30-point plan earlier this year that will spend more than $6 billion on affordable housing over the next decade.
``This agreement will help more British Columbians find homes they can afford,'' B.C. Housing Minister Selina Robinson said in a news release.
Duclos said the agreement is part of the federal government's national goal.
``The government of Canada is committed to ensuring that every Canadian has a safe and affordable place to call home,'' he said in the release.
``Long-term, predictable funding for housing has been needed for more than a decade.''

The Canadian Press

Friday, June 22, 2018

Bank of Canada decision could go either way

OTTAWA _ A pair of unexpectedly soft economic reports are creating fresh doubts about the timing of the Bank of Canada's next interest rate hike.
For months, experts have been predicting Bank of Canada governor Stephen Poloz to raise his benchmark rate at next month's meeting. But broadening economic unknowns _ mostly linked to trade concerns around U.S. President Donald Trump's protectionist agenda _ have begun to lead some analysts to wonder if Poloz will stand pat on July 11.
And on Friday two reports from Statistics Canada added more uncertainty to the interest rate outlook.
One release by the agency found Canada's annual inflation rose at a pace of 2.2 per cent in May for the second straight month. The number, however, was cooler than market expectations of 2.6 per cent.
In the second report, Statistics Canada found that retail sales contracted in April by 1.2 per cent for the reading's first month-to-month decline since December.
``These reports kind of highlight an economy that has slowed pretty significantly from the last year or two,'' Robert Kavcic, senior economist for BMO Capital Markets, said in an interview.
``Given a lot of the uncertainty out there, and a little bit of a softer tone to this data, I think expectations for a July rate hike have probably come down a little bit.''
Royce Mendes of CIBC Capital Markets wrote in a report that Friday's ``bad data'' make it even more difficult for the Bank of Canada to hike rates in July. Mendes noted, however, that things could improve before Poloz's July 11 meeting because more important numbers on gross domestic product and employment are still on the way.
Nathan Janzen, RBC senior economist, said the combination of Friday's figures, somewhat slower economic growth and a deteriorating tone in trade discussions with the U.S. ``aren't all that encouraging'' and will make the Bank of Canada's rate decision closer than previously thought.
Ranko Berich, head analyst at Monex Canada and Monex Europe, said the central bank's July rate decision is ``now an unknown factor.''
The hunt for clues into Poloz's thinking will continue next Wednesday when he gives a speech to the chamber of commerce in Victoria, B.C.
The May annual inflation number in Friday's report followed the 2.2 per cent reading for April and 2.3 per cent for March.
The main contributors to inflation last month were led by gasoline prices. Compared to a year earlier, they climbed 22.9 per cent in May and helped drive overall energy prices for the month 11.6 per cent higher.
Inflation also received a lift because Canadians paid more last month for restaurants, airline tickets and mortgage interest costs.
Consumers, however, paid less in May for telephone services, natural gas and digital devices and computers.
The report also found the average of the Bank of Canada's three measures of core inflation, which leave out more-volatile numbers like pump prices, slowed to 1.9 per cent last month.
The core readings, which are closely monitored by the central bank, averaged 2.03 per cent in April, which was the strongest pace in six years.
On retail trade, the April contraction of 1.2 per cent pulled total sales down to $49.5 billion.
The April decrease was mostly due to a 4.3 per cent decline in sales by motor vehicle and parts dealers _ with new car dealerships reporting a 5.1 per cent drop and used car lots seeing a contraction of 4.1 per cent.
Statistics Canada said April's unusually cool temperatures and bad weather in many parts of the country may have been to blame for the overall decline.
The decrease was concentrated in the largest provinces. Sales fell 2.3 per cent in Ontario, while Quebec saw a 2.7 per cent drop.
Statistics Canada, however, did release an upward revision to its retail sales data for March. The updated reading shows a 0.8 per cent increase, compared to its preliminary 0.6 per cent estimate.
Friday's reports will help feed the Bank of Canada's deliberations as its governing council considers its next interest rate decision.
For inflation, the bank can use interest rate hikes as a tool to help prevent it from climbing too high. The Bank of Canada tries to keep inflation from moving outside a range of between one and three per cent.
Recent inflation readings _ including Friday's _ have been hovering just above the two per cent mid-point of the bank's target range.
It's unlikely, however, to have a significant impact on upcoming rate decisions because governor Poloz has predicted inflation to stay above two per cent for all of 2018. He's predicted inflation to average 2.3 per cent this year before settling back down to 2.1 per cent in 2019 _ in large part due to the temporary effects of higher gas prices and the introduction of minimum wage increases in some provinces.
He's raised the trend-setting interest rate three times since last July, but he hasn't touched the rate since January. It's been at 1.25 per cent ever since.\
 The Canadian Press

Friday, June 15, 2018

Towers proposed for Coquitlam Centre Eleven new highrises could go up near Lincoln Station

Plans to build 11 towers next to the Lincoln SkyTrain station as the first phase of the Coquitlam Centre mall redevelopment are in the works at city hall.

But putting a shovel in the ground is going to take a while.
Morguard Investments, which manages the mall, has four applications on file for the property. One is for a development permit for the first phase of the project which proposes "approximately 11 towers." The highrises would be constructed on the northeast corner of the mall property's footprint along the west side of Pinetree Way. They would be between Atlantic and Northern avenues to the north and the former Sears building to the south, said Jeff Denney, the city's major project planner.

Morguard is also applying to change the official community plan to add more commercial and office space and a higher density to the project. Denney emphasized the process is in the very early stages.
"There's a lot of work ahead for this. It's more geared toward land use and site planning versus the towers at this stage," said Denney.

Morguard is also applying to have the city's official community plan amended from being general commercial and City Centre commercial to all City Centre commercial. It's so preliminary at this point, it's unlikely any of the applications will appear before council, let alone go to public hearing, before the fall. The city is also in the late stages of updating its City Centre area plan.
"It's difficult to estimate timelines at this point," said Denney. "There's just a lot of work ahead of us. We have to identify the parks and open space needs, school needs.
"Those are high level things we will consider in terms of the overall planning direction for the mall site… It's definitely exciting."
Morguard did not respond to an interview request from The Tri-City News. In November 2016, Morguard asset manager Ken Moffatt told the News there would be an expansion of retail, some commercial and "most probably the introduction of plenty of residential."
At the time, Morguard said they planned to develop a master plan to guide development in the area for the next 50 to 70 years.
Coquitlam Centre is close to three SkyTrain stations, which puts it in an even better situation than the massive development currently underway at Brentwood Town Centre in Burnaby and the ones in the works at Lougheed Town Centre in Burnaby and Oakridge Centre in Vancouver, all of which have rapid transit stations.
With a 57-acre footprint, the Coquitlam Centre project has a potential to be even bigger than the others. Brentwood will have 12 towers on a 28-acre site when it's completed, including one that was recently topped off in construction at 63 storeys. Lougheed is expected to have 23 towers on a 40-acre site. Oakridge's plans call for 10 towers on 28.5 acres.
Despite the long-term major redevelopment plans, a significant tenant for the mall signed on last week. According to two Canadian retail websites, Japanese fashion retailer Uniqlo announced plans to open three new outlets in the Toronto area and at Coquitlam Centre. Retail Insider said Uniqlo will take over a 12,000 square foot space on the second level of the Walmart wing where Old Navy used to be.
That gives Uniqlo nine stores in Canada and four in the Lower Mainland. It opened its first in B.C. in October 2017, a 20,000 sq. ft. outlet in Metropolis at Metrotown in Burnaby. Since then it has opened a 12,800 sq. ft. store in Guildford Town Centre in Surrey and an 8,000 sq. ft. outlet at Richmond 
Tri City News