Bob Ransford
Sun

In my last column, I predicted a continued boom in the construction sector would mean an increased demand for construction workers.

This means that people wanting a home built or renovated are likely going to have difficulties finding contractors and skilled trade workers and are likely going to have to pay more for their services.

Scrounging for skilled workers and keeping them on the job only makes the stressful experience of building or renovating that much worse.

How can you make life easier? Here are a few tips.

Plan ahead and share your plans with those who can help you get the job done.

Even if you haven’t lined up your financing or applied yet for your permits, the moment you are pretty certain you are proceeding with a construction or renovation project, contact the people who can do the job.

If you plan on using a general contractor, interview a number of them well ahead of time. In the interview you should ask the contractor to provide you with a history of past projects, including the various trade contractors that they used.

You are specifically looking for the repeated use of a common group of trades. That gives you some assurance the contractor is able to rely on these trades to show up at your job.

Don’t expect a contractor to be able to mobilize his trades people, secure all of the materials and start on the job all within a couple of weeks. Many contractors are booking jobs months ahead.

The more lead time you can give the contractor, the more time they have to work with the schedules of their main trades people to slot your work into their planning. If for some reason you don’t proceed with your project, as long as you haven’t signed a contract, you haven’t committed to anything.

If you are acting as your own contractor, start contacting trades contractors well ahead of time. Ask them to supply references and contact those customers: Interview them not only about qualifications and quality. Ask about reliability.

Did the trade contractor show up as promised? Did they stay on the job until it was completed? Did they complete the job on time?

Develop detailed plans and specifications. It is not enough to sketch your planned project on the back of a napkin. If you are using an architect or interior designer, make sure you work out enough of the details to give everyone a clear picture of the scope of your project. While you are working on these details, you can still alert the trade contractors to your potential project so that they can pencil the job in their schedule.

By supplying the trade contractors with complete drawings and detailed specifications before they actually bid the work, you can be sure you will get a better price and you can also increase your ability to actually secure that contractor.

With detailed drawings and specifications, a trade contractor is able to determine more precisely the amount of materials and labour required to complete their work. If they know they can show up on a Monday morning and be certain they will be pulling their crews off the job Wednesday night, then the trade contractor knows their next job can start on Thursday.

With this kind of certainty, trade contractors will be more willing to take on your job.

Remember, you are buying in a seller’s market. The trades will be in short supply over at least the next year. Do your homework to make your project easier on you.

Bob Ransford is a public affairs consultant with COUNTERPOINT Communications Inc. He is a former real estate developer and is a director of the Urban Development Institute – Pacific region. Email: [email protected]

© The Vancouver Sun 2006

Derrick Penner
Sun

The string of best-sales months reported by Lower Mainland realtors in 2005 adds up to a record-shattering year in real estate, with some 61,812 properties changing hands across the region from Whistler to Mission.

The Real Estate Board of Greater Vancouver reported Wednesday that it cracked the 40,000 transaction mark for the first time ever in 2005, recording 40,530 sales, which was 10.8 per cent higher than the number of transactions in 2004 and also beat 2003, the board’s next best year at 37,816 sales, by 7.2 per cent.

Sales of condominium apartments were up 6.5 per cent to 17,061, the board said in a news release, while detached home sales were up 12.8 per cent to 16,665, and townhomes were up 17.5 per cent at 6,804.

Average prices in Greater Vancouver in December hit $627,451 for a single-family home, a 16.9-per-cent rise from a year ago. Townhomes were up 26.6 per cent at an average of $401,476, and apartment prices reached $309,679, a 17.7-per-cent rise.

The Fraser Valley Real Estate Board recorded 21,282 sales in 2005, which was 17 per cent above last year and some 3.3 per cent higher than 1992, the next best year for sales in the valley.

Year-over-year, prices in the Fraser Valley rose 17.5 per cent for the average single family home, which hit $410,246, 17.8 per cent for the average townhouse, which reached $259,348 and 15.4 per cent on apartments, which reached $168,465.

The results were no surprise for forecasters, who foresaw that 2005 would end with record sales.

Cameron Muir, housing market analyst for Canada Mortgage and Housing Corp., said the Lower Mainland is still in the midst of its longest cycle in the last 25 years, and will probably last into 2007 driven by the province’s improved economy marked by strong labour demand, record low unemployment and rising wages.

Muir said the current cycle started in the winter of 2001 when mortgage interest rates began their drop to record low levels and released the market’s “pent-up demand.”

“We’re now in the second wave of housing demand,” Muir added, which is driven by the economic fundamentals of better employment and higher wages.

“We may not set any more records in terms of sales and price gains, but we see continued rising prices and continued strong sales,” Muir said.

“Eventually, we will see a waning of sales and housing prices before the next cycle begins,” he added. However, a market crash similar to what B.C. experienced in 1982 when prices plummeted 40 per cent in a matter of months “is just not in the cards.”

Muir noted that the upward pressure on prices has eased a little bit. The 11 to 15 per cent increases he saw in prices over 2005 were less than year-to-year increases in 2004, and he is forecasting that prices will rise by between nine and 11 per cent in 2006.

Georges Pahud, president of the Greater Vancouver Real Estate Board, said rising prices do raise some concerns about the affordability of housing, but he noted that 64 per cent of transactions in 2005 were made at prices below Greater Vancouver’s overall average price of $427,469.

 

© The Vancouver Sun 2006

Housing remains affordable due to interest rates

Ashley Ford
Province

To absolutely no one’s surprise Greater Vancouver and the Fraser Valley racked up a record year for residential sales in 2005.

Both Vancouver and the valley, riding the wave of a continuing economic boom, set staggering, multibillion-dollar sales numbers as confident Lower Mainlanders jumped into the market armed with low interest rates.

In Greater Vancouver housing sales topped the 40,000 barrier, finishing at 40,530. That was worth $17.5 billion and surpassed the previous best of 37,816 in 2003.

The Fraser Valley was just as buoyant, ringing up record sales of 21,282 sales worth $6.4 billion and trouncing the previous selling record of 20,600 sales set way back in 1992.

“Last year was truly remarkable, with sales exceeding 40,000 for the first time and the largest dollar volume of sales achieved in our board history,” Georges Pahud, president of the Real Estate Board of Greater Vancouver, said.

“Many factors contributed to this accomplishment — mainly economics, of course — interest rates, confidence in the economy, international and inter-provincial migration and employment, but mainly people and their continuing faith in real estate.”

“We sold almost 20 per cent more condos, townhomes and detached homes in 2005 compared to the previous year,” said Jake Siemens, president of the Fraser Valley Real Estate Board. “Very competitive interest rates and housing affordability remain key factors in our sales growth. Even though prices have risen steadily over the last couple of years you can still get into the Fraser Valley market for less than $250,000,” he said.

Both are adamant that despite double-digit price increases over the past year — expected to moderate into the single digits this year — housing remains relatively affordable due to low interest rates.

Pahud pointed out that more than 64 per cent of the homes sold in Vancouver last year were under the average price of $427,469.

In the Fraser Valley the average price of a detached home increased 17.5 per cent to $410,246 from a year ago.

 

© The Vancouver Province 2006

Average house values in province rose 18.8 per cent, analysis shows

Chad Skelton
Sun

Whistler homeowners saw the average value of their homes drop last year — making it one of the few places in the province to see property values decline in 2005, according to figures released by BC Assessment Tuesday.

An analysis of assessment figures by Landcor Data Corp. indicates the average single-family home in B.C. increased in value by 18.8 per cent over the past year, while condominiums jumped in value by 14.8 per cent.

But in Whistler, the assessed value of an average single-family home has dropped 2.4 per cent, from just under $1.02 million to $995,517.

And Whistler condo owners have fared even worse — with the average value dropping 4.7 per cent from $542,649 to $516,915.

Nearby Pemberton also saw a drop in land values last year.

Pat Kelly, president of the Whistler Real Estate Company, said there’s been a noticeable cooling of the housing market in the resort area.

“I’ve been selling real estate for 25 years and one thing I know is markets don’t go up forever,” he said. “It’s just part of a cycle — markets go up and markets go down.”

Tsur Somerville, a housing expert with the University of B.C.’s Sauder School of Business, has done some analysis of house prices in Whistler.

Somerville said it’s not surprising that Whistler’s market has cooled since it outpaced the rest of the province for most of the late 1990s.

“When everyone else was going through a downturn from 1994 to 2000, Whistler was rising,” he said.

Somerville also cautioned against concluding that Whistler’s downturn is a sign of things to come for the rest of the province.

“Most of the people who buy in Whistler are from B.C. But there’s a lot of money that flows into Whistler that’s not B.C. money,” he said. “Whistler is a resort community with international capital flows. It’s moving on a different schedule than the rest of us.”

While Whistler lagged behind, other regions did better than the provincial average.

Single-family homes were up 20 per cent in Penticton, 21.6 per cent in Nanaimo, 21.8 per cent in Kamloops and 25 per cent in Courtenay.

The hottest region of the province was Prince Rupert. There, the average single-family home jumped 25.8 per cent from $97,485 to $122,602. And Prince Rupert condos skyrocketed 55.7 per cent, from $65,360 to $101,764.

Gordon Kobza, a realtor with Realty Executives Prince Rupert, says the planned expansion of the city’s port is driving the real estate gains. And Kobza said he expects prices to continue rising in 2006 as construction begins on the port.

“Over the last year, it was mainly speculation. But I believe this year, it will actually be people who are motivated to move here for work,” he said. “Over the next 18 months, it should be very exciting.”

The most expensive single-family homes in the province, according to the assessment figures, are in West Vancouver, where average values broke through the million-dollar mark for the first time — to $1.1 million, from $980,864 the year before.

© The Vancouver Sun 2006

New construction drives increase as assessed total reaches $660 billion

Derrick Penner
Sun

British Columbia‘s booming real estate market pushed the collective value of the province’s property higher by $80 billion last year to $660 billion, an increase of 14 per cent over 2004, the B.C. Assessment Authority reported Tuesday.

About $12 billion of the increase reflects the value of new construction added to property rolls in the year, such as the 30,000 new homes the Canada Mortgage and Housing Corp. estimates were built in 2005, as well as new commercial and industrial properties.

The majority, however, represents a $68-billion increase in the value of existing properties within B.C.’s improving economy.

“What’s a highlight is that everywhere, with the exception of a very few communities in central B.C., everything was on the rise this year, in terms of assessment,” said John Barry, manager of community relations for BC Assessment. “The real estate market is primarily what’s driving [assessment increases].”

He said a combination of factors helped push the assessed value of properties, but low interest rates that prompted people to buy real estate was a major influence.

Barry cautioned that assessments lag behind real estate markets by about six months, because they are based on land values as of July 1, 2005.

While some homeowners might be happy to have the paper value of their homes increase, the result could also be an additional tax hit, depending on how much the assessment increases.

Municipalities use property assessments to calculate property taxes and Richard Taylor, executive director of the Union of B.C. Municipalities, said homeowners whose assessments increase by more than the average for their community can expect to have their taxes rise.

“Some will pay less taxes,” he said, “if the geography of [a homeowner’s] community is such that assessments in their neighbourhood didn’t go up as much as the average.”

David Baxter, director of the Urban Futures Institute, a demographic and economic forecasting firm, said simple economics are driving the increase in assessments.

People’s incomes are rising, mortgage interest rates are remaining low, so values are increasing as buyers capitalize on the convergence of those two factors.

“We shouldn’t be surprised,” Baxter said. “We have a good assessment system that attempts to capture the actual value of real property assets, and real property assets have been rising very strongly everywhere in North America.”

That was also true in B.C. Barry said most of the province’s major urban areas had increased assessments.

In Vancouver, the average assessed value of a single family home rose 12.51 per cent to $654,611; in West Vancouver the increase was 15.42 per cent to $1.1 million.

Property assessments also increased by substantial amounts outside Vancouver. Kamloops’ average assessment on a single-family home rose 21.84 per cent to $214,027. In Kelowna, the single family home value jumped 15.53 per cent to $338,541.

Prince George had a 16.35-per-cent gain in the assessment of an average single family home to $141,568.

Jason Grant, B.C. Assessment’s area assessor for the Vancouver – Sea to Sky region, said assessment increases of 15 to 20 per cent were common through Vancouver and across the North Shore.

“It has been widely reported that it was a hot year in real estate, for Vancouver especially, and assessments are simply reflecting that,” Grant said.

Barry said that outside Vancouver, recreational-type properties such as waterfront homes and resort developments experienced some more substantial gains.

The assessment for the resort town of Invermere, for instance, rose 27.2 per cent to almost $593 million.

Fernie’s total assessment spiked about 28 per cent to $748 million, and Rossland’s collective value increase almost 29 per cent to $374 million.

“There has been a lot of investment in the Kootenays [with] some out-of-province buyers driving it a little bit,” Barry said.

Baxter said the influence of Alberta purchasers is very strong in the Kootenays.

The Urban Futures Institute conducted a study on where property tax notices from Kootenay communities were being sent, and discovered that in the ski-resort town of Invermere, about 40 per cent went to addresses in Alberta.

B.C. Assessment assessed about 1.75 million properties for the 2006 assessment roll, compared with 1.73 million assessed for the 2005 roll.

FREQUENTLY ASKED QUESTIONS:

WHAT IS A PROPERTY ASSESSMENT?

An assessment is an estimate of how much your property is worth. The assessment is based on “market value” — meaning the price the property could have been sold for on July 1, 2005.

HOW ARE ASSESSMENTS CALCULATED?

BC Assessment, a provincial Crown corporation, has a staff of appraisers that estimates property values each year. The values are affected by the overall real estate market in each region, but also the quality of each property including its size, age and any add-ons such as a garage or sundeck.

MY ASSESSMENT WENT UP 15 PER CENT THIS YEAR. DOES THAT MEAN MY PROPERTY TAX WILL INCREASE BY THAT MUCH, TOO?

Probably not. Municipalities usually adjust their tax rates to reflect changes in property values, so that tax revenues do not rise or fall because of assessment changes. If your property’s value rose about the same as everyone else in your city, you’re probably fine. But if your property increased in value much faster than everyone else — because, say, you live in a really hot neighbourhood — you’ll probably see a bump in your property taxes.

HOW CAN I FIND OUT THE ASSESSMENT FOR MY HOME — OR MY NEIGHBOURS?

If you own a home, you were mailed a copy of your assessment by BC Assessment on Dec. 31. But if you don’t want to wait, you can check your assessment online right now for free. Just go to BC Assessment’s main website at www.bcassessment.bc.ca, then click on Assessment by Address and type in your street address. The site allows you to check the assessed value of any home in the province — so can find out how much your neighbours‘ houses are worth. But hurry — the free online service is only available until March 15.

WHAT IF I DON’T AGREE WITH MY ASSESSMENT?

If you disagree with your assessment, you can ask BC Assessment to review its decision. If BC Assessment agrees with you, it will recommend changes on your behalf to a Property Assessment Review Panel — an independent body appointed by the province. If BC Assessment disagrees with you, you can ask the panel to look at the matter yourself. This request for review must be received by BC Assessment no later than Jan. 31. You can find out more about review panels online at http://srmwww.gov.bc.ca/clrg/parp/. Only about one per cent of property owners request a review each year.

Source: Chad Skelton

© The Vancouver Sun 2006