Derrick Penner
Sun

A major real estate company is predicting that housing prices in major British Columbia markets will continue to increase at a higher rate than the national average.

The prediction, released Tuesday by Re/Max, matches similar forecasts by Canada Mortgage and Housing Corp. and Credit Union Central B.C. chief economist Helmut Pastrick.

Re/Max’s outlook found that “the vast majority of major Canadian markets surveyed are expecting modest price appreciation ranging from two to five per cent.”

“The only exceptions are Vancouver, Kelowna and Calgary,” the report said, where the firm expects prices to rise in the range of 10 per cent. Victoria home prices are also expected to appreciate five per cent.

For Greater Vancouver, Re/Max’s estimate is for the average price for a home to reach $462,000 in 2006. In Kelowna, the projected 10-per-cent gain translates to an average selling price of $284,500.

In Victoria, where there is expected to be some easing of price pressures, the estimated five-per-cent increase should still see average prices reach up to $395,000, the company said.

Arlene Butler, general manager of Re/Max Select Properties in Vancouver, who surveyed Greater Vancouver agents for the report, said job growth, strong spending on infrastructure for projects such as the 2010 Winter Olympics, port expansion and continued low interest rates, have helped fuel demand.

Butler added that for the first time, Re/Max offices across the Greater Vancouver region reported a lack of listings “across the board.”

“People ask, ‘Why are people paying these prices? Where is it coming from,’ ” she said. “I think its a fact that demand will remain strong, supply will remain scarce, and that pushes prices up.”

Butler added that Re/Max expects sales across the Lower Mainland to remain stable at 41,000 transactions in 2006 — the same number expected this year. However, that will be due to lack of supply.

Tsur Somerville, director of the centre for urban economics and real estate at UBC’s Sauder School of Business, said the fundamentals behind Greater Vancouver’s price increases leave room for further gains.

However, he added that the market conditions do not preclude a flattening or downturn in sales, but it would take a significant, unforeseen negative event, such as a flu pandemic or a significant downturn in the U.S. economy to do it.

Interest rates, which could edge up through 2006 as the Bank of Canada is expected to increase its key overnight rate to four per cent, could help stall price increases, though not necessarily put a dent in the market.

“It doesn’t mean you can’t buy a house. It means [the rate increase] is going to shut off your ability to have price increases,” Somerville said.

Wayne Schrader, owner of Re/Max Camosun realty in Victoria said limited supply has been a key factor in pushing up prices in that city. “There’s only so much product here; it’s very beautiful,” Schrader said. “There’s only so much waterfront; it’s very expensive. It’s a limited supply that drives the price up.”

Schrader added that Victoria‘s real estate prices have gone up about 50 per cent in the last five years.

TECHNOLOGY I They

Derrick Penner
Sun

Greater Vancouver recorded 2,009 housing starts in October, a 75-per-cent jump over the same month last year and the highest number of starts for an October in 25 years, Canada Mortgage and Housing Corp. reported Tuesday.

Multiple-unit starts — apartments and townhouses — were the sole reason for the gain, said Cam-eron Muir, CM-HC’s housing market analyst for the Lower Mainland. Multiple-unit starts acc-ounted for three out of every four homes being built in the region.

There were 1,573 multiple units started in October, a 121-per-cent increase from the same month a year ago. Single-family home starts, however, slipped by a percentage point to 436 units.

For the year-to-date, Muir said housing starts hit 15,942 at the end of October, down three per cent from 2004. The CMHC is forecasting the region will see 18,000 new starts for all of 2005, seven per cent below starts in 2004.

The 2005 decline up to October was all in single-detached starts, which fell 14 per cent to 4,147 units compared with a year ago. Multi-family starts increased 2.5 per cent to hit 11,795 compared with the first 10 months of 2004.

“We’re seeing single-detached starts wane, and that’s the result of probably two issues,” Muir said. “One is on the price side. On the other side, more importantly, is the availability of land.”

The large tracts of land needed for single-family homes aren’t available, Muir said, adding more of the land left for development is zoned for multi-family.

He said planning pressure to create “complete, livable communities” is one of the factors driving the push toward higher densities of multi-family housing.

Muir said affordability is becoming an issue for some buyers, mainly due to the rapidly rising housing prices in the Lower Mainland. He predicted that by the end of the year, housing prices will have risen by about 14 per cent during 2005.

Multi-family units, he added, give buyers housing options they can afford.

Muir is quick to add that when he adjusts to account for inflation, new-home prices today are just catching up to prices people were paying in 1995, “and mortgage rates are half what they were then.”

However, Peter Simpson, CEO of the Greater Vancouver Home Builder’s Association, said he believes affordability is a bigger factor behind the shift to multi-family construction.

Simpson said that five to 10 years ago, almost all first-time home buyers “aspired to own a single-family home. That has changed.”

CMHC is forecasting that 2006 housing starts in the region will dip three per cent to 17,500 units.

But last month saw increases in Vancouver, Victoria

Derrick Penner
Sun

The value of building permits taken out in B.C. dropped off by 6.1 per cent to $906 million in September compared with August, Statistics Canada reported Monday, although an industry expert doubts the one-month change hints at any decline.

“We need [to see] a longer-term trend,” said Philip Hochstein, executive vice-president of the Independent Contractors and Business Association, which represents a large segment of B.C.’s construction industry. “Month up and month down doesn’t mean very much.

“The industry — and my guys do both [non-residential] and some high-rise residential — feels that the demand for construction services seems unabated and there’s no reason to foresee anything that would reduce the volume.

“If anything, it will be busier next year than this.”

Across the province, builders took out $661 million in residential building permits in September, which was 0.5 per cent less than they did in August. Firms taking on non-residential projects — hospitals, schools, commercial property or industrial plants — took out $245.1 million in permits, 18.5 per cent lower than in August.

For the year-to-date, however, the value of residential permits hit $5 billion at the end of September, 12 per cent over the same period in 2004. Non-residential permits topped $2.5 billion, a whopping 69 per cent above the level seen by the end of September last year.

Greater Vancouver saw a 13-per-cent increase in the value of building permits issued for construction projects to $4.2 billion by the end of September. Victoria, with $516 million in permits issued, experienced a 32.8-per-cent increase in activity.

In Abbotsford, while September’s permit activity dropped 14.1 per cent to $18.9 million compared with August, its year-to-date $234.8 million worth of permits issued is up 55.5 per cent from one year ago.

Statistics Canada said nationally in September municipalities issued $5.1 billion in building permits, which was 5.3 per cent less than August.

Ashley Ford
Province

B.C.’s vibrant house-building sector caught a minute breather in September with housing stars slowing marginally from August’s torrid pace.

According to Statistics Canada, housing permits worth $666.2 million were issued, a 0.5-per-cent decline from August’s $664.7 million.

But on an annual basis, residential permits worth $5.02 billion were issued to the end of September, a 12-per-cent increase from a year ago.

When non-residential permits are rolled in, values are running 26.2 per cent ahead of a year ago at $7.5 billion.

B.C. non-residential permits dipped by 18.5 per cent in September to $244.1 million, but on an annual basis, they are running a whopping 68.9 per cent ahead of a year ago at $2.5 billion.

It was the same across Canada as builders took out $5.1 billion worth of permits in September, down 5.3 per cent from the record $5.4 billion worth in August.

Despite that, the boom continued for single and multiple housing units with permits rising by 3.2 per cent to $3.3 billion.

The non-residential sector dragged down overall numbers.

The value of non-residential permits came in at $1.9 billion, down 17.1 per cent from August.

© The Vancouver Province 2005

Miro Cernetig
Sun

Villa Madrona, on .8 hectares of prime waterfront near Victoria, is up for grabs. It could be yours for $18.5 million ABOUT B.C.

LAND’S END, B.C. — This new, eye-popping fact should end any doubts that the West Coast is Canada’s most sought-after real estate: The three most expensive houses in the country today are all in B.C., with price-tags only the planet’s super-rich need even contemplate.

Canada‘s top-priced home is, according to Michel Tremblay of Sotheby’s International Realty, a mansion on the slopes of Whistler: price $20 million. Number two is The Villa Madrona, near Victoria‘s waterfront enclave of Land’s End: $18.5 million. Placing third is another Whistler mega-chalet: $17.5 million, with an indoor wave pool.

Toronto, the centre of Canada‘s economic engine and old money, offers the fourth-priciest home, a faux “French chateau” in nearby North York: $16.8 million.

Whether any of the homes will actually sell at such prices is anyone’s guess. Many analysts are openly talking about a real-estate bubble, with the Wall Street Journal suggesting it may already be bursting in some once-red-hot U.S. cities.

But what’s significant here is the broader trend: The West Coast’s best properties are now being bought up by the world’s wealthiest, at prices edging into the league of London, Los Angeles and New York real estate.

“It’s never happened before, that we’ve had the three most expensive homes in Canada all in B.C.,” said Tremblay, Sotheby’s vice president of sales and marketing, which has the listing for the Villa Madrona.

“Our target market is going to be your Microsoft executives or your dot-commer. Maybe someone working at Google right now.”

For a sense of what one gets in this range, a tour of the .8-hectare (two-acre) estate was arranged for The Vancouver Sun by veteran realtor Peter Nash, who shares the listing. He’s also a friend of the estate’s owners, Ralph Bodine, the former CEO of the Sunkist juice empire, and his wife Linda, who gave the tour.

A decade or so ago, the Bodines were on a cruise aboard the QE2 when another couple told them about Canada’s West Coast, then still an undiscovered secret for many in their social circle.

“They said, ‘Come and take a look,'” said Linda. “We did and we fell in love with Victoria and decided to make a home here.”

What they built, however, seems more like something harking back to America‘s gilded age. Finding one waterfront lot in Land’s End too limited for their dream home, they bought up four lots, which gave them two acres on the waterfront.

They then built a low-slung, 11,500-square-foot main home offering 180-degree views of the Pacific. They also installed antique wooden corner niches from the original Vanderbilt estate in New York, reassembled an authentic British pub in their living room to serve as a bar and built an indoor pool with an intricate Venetian mosaic featuring gold-gilded tiles.

The estate, with an electrical bill exceeding $20,000 a year, also features an orchid house, a greenhouse, a tea house, a glassed-in menagerie for parrots, a boat house and 10 English rose gardens, all under a canopy of cedar, redwood and madrona trees. While it was all being built, the Bodines lived in an original cottage that was later turned into a 3,500-square-foot guest and staff house, also with sweeping ocean views.