Archive for February, 2006

CMHC sees lower house sales in 2006

Wednesday, February 1st, 2006

But agency predicts average Greater Vancouver price will rise nine per cent

Derrick Penner
Sun

Canada Mortgage and Housing Corp. is forecasting that average 2006 home prices will climb nine per cent to $463,000 in Greater Vancouver and 7.6 per cent to $355,000 across British Columbia, making price a key factor in a predicted cooling of the province’s housing market.

Carol Frketich, CMHC’s regional economist for B.C., said buyers will see their carrying costs rise in 2006 as prices continue to escalate and mortgage interest rates increase, which will in turn hold down some of B.C.’s housing demand.

Frketich predicts B.C. will build 32,600 new housing units in 2006, which is six per cent below the 34,667 new homes built in 2005. She also estimates that the province’s resale market will see 97,000 Multiple-Listing-Service sales, which is 8.7 per cent below last year’s record 106,000.

In 2007, Frketich predicts that new housing starts will slip another four per cent to 31,300.

“One of the factors that is going to slow the market down, is the level of prices,” Frketich said. “But we’re still looking at an active market with high levels of new-home construction and resale activity as well.”

CMHC analyst Cameron Muir said it appears that Greater Vancouver is “closer to the end of the current cycle than [it is] to the beginning of the current cycle.”

In 2005, CMHC counted some 34,667 new-home starts, which was six-per-cent higher than Frketich’s initial prediction for the year, but she noted that mortgage interest rates averaged lower than she anticipated.

Frketich noted that B.C. added more jobs to the economy in 2005 than she predicted, so she revised her earlier 2006 housing-starts forecast up from about 31,700.

CMHC forecasts that employment in B.C. will increase by 2.5 per cent over the next two years, which will draw people from other provinces and help support demand.

Across Greater Vancouver, Muir said housing starts will slip 1.8 per cent to 18,500 in 2006 and MLS sales will decline 7.6 per cent to 39,000.

Muir said much of the drop in housing starts will be “to do with both the availability of land as well as a limited supply of skilled trades.”

Peter Simpson, CEO of the Greater Vancouver Home Builders’ Association, said an easing of construction activity won’t be unexpected and characterized it as “almost a self-imposed slowdown.”

Simpson said builders are becoming cautious about taking on too many projects at once in order to ration the available skilled tradespeople capable of the work.

Simpson added that builders are also enduring a great deal of uncertainty over how much construction costs will increase. Last week, Anthem Properties cancelled an upscale, 161-unit condominium-live-work project in Victoria over inflated costs and questions about the availability of skilled workers.

On Monday, the Independent Contractors and Businesses Association of B.C. said builders can expect construction costs to rise by 11 per cent this year and by as much as 55 per cent by the end of the decade.

Simpson added that he does not expect dramatic changes in the market because mortgage rates, although climbing, are rising slowly.

“There’s nothing overly aggressive [in the CMHC forecast],” Simpson added. “And there’s no gloom and doom in it.”

Muir said he predicts that average house prices in Vancouver to increase another four per cent in 2007 to hit $483,000. He also forecasts that new-home starts will decline 1.6 per cent to 18,200.

“Really what we’re seeing out there is that by the time we get to 2007, affordability in Vancouver is going to reach the point that it impinges on sales as well as price gains in the marketplace,” Muir said.

© The Vancouver Sun 2006

 

Most pricey properties here and in Toronto

Wednesday, February 1st, 2006

B.C.’s booming economy and low interest rates combine to keep prices escalating

Fiona Anderson
Sun

Don Lawby, president and CEO of Century 21 in a $1 million condo in dowtown Vancouver. Photograph by : Steve Bosch, Vancouver Sun

A booming economy and low interest rates keep pushing housing prices higher and higher in British Columbia.

But as $1-million price tags become more common, what that actually buys varies across the province, and across the country, according to a Century 21 Canada survey released Tuesday.

In Vancouver, a cool million can buy a 1,500-sq.-ft. two-bedroom, two-bathroom penthouse suite in Yaletown, or a three-bedroom, four-bathroom house on a corner lot in Dunbar, the survey — which looked at 43 cities across Canada — found.

The same amount of money can buy a 2,670-sq.-ft. condo on the water in Summerside, P.E.I., plus a 2,900-sq.-ft. home on four acres of land just outside town and still leave enough to buy a third home or to completely furnish the other two, the survey said.

The majority of Canada’s million-dollar properties are in the Lower Mainland and the Toronto area, said Don Lawby, president of Century 21 Canada.

“To me, that just says that those communities have large populations, and there are more people demanding more high-end properties, and therefore there are more high-end properties,” Lawby said.

Bargains can still be found in places like Saskatchewan and Prince Edward Island where populations are smaller, Lawby said.

The economy, consumer confidence and available land also have a lot to do with pricing across the country, he said

Outside Vancouver, where land is less scarce, $1 million does go a lot further.

Merritt real estate agent Tom McDonagh said that kind of money could buy 10 townhomes in his community, if there were that many for sale.

But even in Merritt, housing prices have gone up 20 per cent in each of the last two years, McDonagh said.

“But you can still find a very nice home for $250,000 in a decent location,” McDonagh said.

David Baxter, executive director of the Urban Futures Institute, a non-profit society that researches changes affecting population, community growth and land use, finds the discussion of house values “amusing” as owners of million-dollar homes will never see the cash in their pockets.

If a person sells in this market, price is absolutely irrelevant because whether the house is $50,000 of $500,000, to replace it the person has to buy in the same market, Baxter said.

“The only way I can win is to go to Winnipeg,” Baxter said.

“Most of us look at our houses and say ‘Isn’t that great. I feel much more comfortable [because] if I ever need it, I can sell it’,” Baxter said

“But we also know in the back of our minds if we sell it, to really get any benefit out of it we’d have to radically change our lifestyle.”

“So for the vast majority, that [price] figure is irrelevant. It’s interesting, but it’s irrelevant.”

BRITISH COLUMBIA:

– Vancouver: Yaletown penthouse condo: two bedrooms, two bathrooms in 1,523 sq. ft.

– Abbotsford: Detached home: Four bedrooms, six bathrooms in a 6,008 sq-ft home on a 10,880 sq.-ft. lot

– Vernon: Waterfront home: Three bedrooms, four bathrooms in 3,181 sq. ft.

Elsewhere in Canada:

– Calgary: Detached home: four bedrooms, three bathrooms in 2,439 wq. ft on a 13,563 sq.-ft. lot

– Toronto: Detached home: Four bedrooms, two bathrooms in 1,800 sq. ft, on 0.5 acres

– Prince Edward Island: A three-bedroom, three-bathroom 2,900-sq.-ft. house on four acres, as well as a two-bedroom two-bathroom 2,670-sq.-ft. condo, plus a three-bedroom, two-bathroom 2,600-sq.-ft. detached house on a quarter acre.

© The Vancouver Sun 2006

Gateway the ‘key to B.C. prosperity’

Wednesday, February 1st, 2006

But critics want government to release studies of project it claims will relieve traffic congestion

William Boei and Scott Simpson, With Files From Jonathan Fowlie
Sun

ABOVE: An artist’s rendering of what the Port Mann bridge will look like upon twinning, including bike and mass transit lanes.

LEFT: An illustration to show of what the new Pitt River bridge would look like.

WARD PERRIN/VANCOUVER SUN BELOW RIGHT: Premier Gordon Campbell and Transportation Minister Kevin Falcon (left in picture) announced the Gateway transportation program in Vancouver Tuesday morning. The program will see the twinning of the Port Mann as one of its elements.

STUART DAVIS/VANCOUVER SUN BELOW LEFT: The Port Mann Bridge in the afternoon rush hour.

The business community loved the Gateway Program — the $3-billion highway and bridge-building megaproject unveiled Tuesday by Premier Gordon Campbell — but critics said the government has not provided enough information to judge whether it will ease gridlock in Greater Vancouver, and for how long.

Campbell released an outline of the plan, called it the key to B.C.’s future prosperity and said it will create thousands of jobs in the region’s ports.

But the government did not make public the dozens of supporting studies, on everything from the impact the project will have on traffic congestion to its environmental impacts. Transportation Minister Kevin Falcon said last week that the studies would be released Tuesday.

NDP transportation critic David Chudnovsky challenged the government to release the studies proving that the project would relieve congestion, that it would not work at counter-purposes to the Greater Vancouver Regional District’s livable region strategy, and that it would not increase pressure for development on the Lower Mainland’s agricultural reserves.

“Very often these projects are built, they cost a fortune, and within a year or three years or five years, the project draws increased traffic,” Chudnovsky said.

Gateway Program director Mike Proudfoot said the studies, which may run to thousands of pages, will be posted on the government’s website over the next few weeks.

Business reaction was clearly supportive. Campbell drew two standing ovations from delegates to a B.C. Chamber of Commerce conference where he announced the plan, and chamber president John Winters enthusiastically endorsed it.

“Support from the business community is strong,” he told Campbell, “and we want these projects to move forward as quickly as possible.”

Commuters had mixed reactions.

“Absolutely excellent. If you sit on that highway your traffic is unbearable,” said Warren Doerksen, a tradesman who lives in Walnut Grove and works throughout the Lower Mainland.

He said a proposed toll of $2.50 a trip across a twinned Port Mann Bridge would be fair.

But another commuter didn’t like the price.

“I like the idea of twinning it. I don’t like the idea of paying $2.50,” said Pamela Smith, a welder who lives in Coquitlam and works in Langley.

“Five dollars a day to go back and forth — that’s way too high,” Smith said. “I don’t think you should have to pay. We pay taxes already.”

Campbell described the Gateway Program as a keystone in his government’s plan to turn British Columbia into the funnel through which Asian goods pour into North America.

Even if B.C. does nothing, container traffic will more than double in the next 15 years, he said. If B.C. wants to increase its share of trade — and Campbell said his government aims to quadruple it — “we’re going to have to invest more.”

“We believe that we can reach for a whole new set of opportunities in this province, which will bring thousands and thousands of new jobs,” he said.

Port-related jobs can be increased from 26,000 today “to 71,000 direct jobs,” Campbell said.

He also promised the plan will ease congestion on the Port Mann Bridge, “the largest traffic choke point in our province.”

“If we don’t take action now, we’re going to see a significant, a substantial decrease and deterioration, not just in moving goods, but in the quality of our lives,” the premier said.

Chudnovsky also questioned the cost of the plan, which Falcon said will not exceed $3 billion despite strong cost inflation in the construction industry.

“Construction costs in the next five years are going to increase 55 per cent,” said Chudnovsky, citing research by a construction industry group.

“I think we know already that the cost of this project is going to be at least $1.5 billion more than the premier is telling us, and that should be of concern to the people of the province,” he said. “How is it going to be paid for?”

Vancouver councillor and former TransLink director David Cadman also predicted the project will go well over budget.

But Falcon disagreed.

He said construction will be staggered from 2009 through 2013, after B.C.’s big building binge — Olympic venues, the Sea to Sky Highway, the new convention centre and two new rapid transit lines, among others — has wound down.

Each component of the Gateway Program already has built-in contingencies that have built-in inflation cushions, Falcon said.

The program consists of:

– Twinning the Port Mann Bridge and expanding the Trans-Canada Highway from Langley to Vancouver at a cost of $1.5 billion.

– A new South Fraser Perimeter Road intended to route truck traffic from the ports to the Trans-Canada Highway for $800 million.

– Linking existing roads from New Westminster to Maple Ridge to form a North Fraser Perimeter Road for $400 million, including a new bridge over the Pitt River.

Falcon said that leaves $300 million in an overall contingency fund. He added that much of the project consists of road-building, while the inflation pressure is mainly on concrete-and-steel structures.

“We believe it’s doable,” Falcon said of the $3-billion budget.

The province has not detailed how it plans to pay for the program, but Campbell indicated it will ask for federal help, since the South Fraser road will connect federal port facilities.

Falcon said some or all parts of the project could be built as P3s — public-private partnerships — but that had not been decided yet.

“P3s don’t work for every project,” he said, “but we look at them for every project.”

As much as half the project cost — $1.5 billion — could be raised through tolls on the twinned Port Mann Bridge, Falcon said.

None of the elements of the project are final yet. It now goes into 18 months of public consultations followed by more detailed design studies and environment assessment.

But Falcon strongly suggested the Port Mann will be electronically tolled, probably at about $2.50 per vehicle per trip. Regular bridge users will have transponders on their vehicles that automatically record the charges. Others will have their licence plates photographed and will be sent bills.

Falcon said tolling will not only bring in money to pay for the bridge, it will be used as a traffic demand management tool — to reduce congestion by discouraging some people from using the bridge.

Academics and environmentalists say — and Falcon has agreed in the past — that you can’t build your way out of congestion. But, he suggested Tuesday, you can keep it at arm’s length for a time.

“If you don’t put electronic tolling in place, you get the benefits [of new capacity] for about five to 10 years,” he said. “With the introduction of electronic tolling, you extend those benefits for 25 years and beyond.”

Falcon said it will be up to future governments to decide whether the tolls should stay in place past 2031.

But he said he is certain commuters will happily pay $5 a day for clear sailing across the bridge in return for an extra hour a day with their families.

Surrey Mayor Dianne Watts agreed.

“Nobody likes tolling,” Watts said. “However, if I have a choice between spending an hour in a lineup with my engine running and paying $2.50, I will pay the $2.50.”

B.C. Trucking Association president Paul Landry said his members were “absolutely delighted” about the plan, which is expected to provide some relief from the hundreds of millions of dollars that truckers annually waste sitting in traffic.

“The premier is providing the vision for the transportation of people and goods across the province for a way we haven’t seen in decades,” Landry said. “The projects that the premier has announced today offer relief from congestion that is choking our industry in the Lower Mainland and quite frankly creating problems elsewhere in the province.”

Cadman said the province hadn’t considered enough alternatives, such as encouraging the truck and port industries to work at night when roads are clear.

FIRST ROUND OF OPEN HOUSES BEGIN IN LANGLEY:

The provincial government starts public consultations on its Gateway Program (including the twinning of the Port Mann Bridge) this month that will go on for up to 18 months. It will move into more detailed design phases in 2007 and 2008, and construction should begin in 2009. Here are the times and locations of the first round of open houses to get the public involved in the process:

– Saturday Feb. 18, Langley, Walnut Grove Community Centre, 8889 Walnut Grove Dr., 10 a.m. to 1 p.m.

– New Westminster, Saturday Feb. 25, Centennial Community Centre, 65 East Sixth Ave., 10 a.m. to 1 p.m.

– Burnaby, Saturday March 4, Eight Rinks, 6501 Sprott St., 10 a.m. to 1 p.m.

– Burnaby, Wednesday March 8, Bonsor Recreation Centre, 6550 Bonsor Ave., 6 p.m. to 9 p.m.

– Vancouver, Saturday March 25, Hastings Community Centre Auditorium, 3096 East Hastings St., 10 a.m. to 1 p.m.

– Vancouver, Wednesday March 29, Roundhouse Community Centre, Great Hall, 181 Roundhouse Mews, 6 p.m. to 9 p.m.

– Surrey, Saturday April 8, Guildford Recreation Centre, 15105 105th Ave., 10 a.m. to 1 p.m.

– Surrey, Tuesday April 11, North Surrey Arena, 10275 135th St., 6 p.m. to 9 p.m.

– Coquitlam, Saturday April 22, Coquitlam Library, Poirier Branch, 575 Poirier St., 10:30 a.m. to 1:30 p.m.

– Coquitlam, Tuesday April 25, Planet Ice, 2300 Rocket Way, 6 p.m. to 9 p.m.

– Abbotsford, Saturday April 29, Abbotsford Recreation Centre, 34690 Old Yale Rd., 11:30 a.m. to 2:30 p.m.

© The Vancouver Sun 2006

Housing starts to decline as interest rises

Wednesday, February 1st, 2006

B.C., Alberta to remain strongest national performers

Ashley Ford
Province

The bloom will fade slightly from B.C.’s vibrant home-construction market over the next two years, but the sector will continue to thrive by historical standards.

Canada Mortgage and Housing Corp. said in its latest housing outlook yesterday that B.C. will see starts shrink this year to 32,600 from last year’s 34,667. In 2007, they will dip a little more to 31,300.

In fact, the slight slowing will probably be welcomed by the hard-pressed construction industry which has been running flat out for the past four years and increasingly finding it difficult to find skilled trades.

While B.C. and Alberta will be the strongest-performing provinces next year others will see their home-construction numbers fall.

CMHC predicts nationally the industry will slow by 7.5 per cent this year and a further 6.5 per cent in 2007. The good news for consumers is that house-price increases, after hitting 10 per cent in 2005 — the biggest surge in 16 years — are forecast to moderate to 5.5 per cent this year and 3.8 per cent in 2007.

Total housing starts this year are expected to be 208,700 units, down from 225,481 last year, declining to 194,800 next year, ending five consecutive years above 200,000.

“Higher mortgage-carrying costs due to strong house-price growth and modest increases in mortgage rates will contribute to the slower pace of new-home construction,” said Bob Dugan, chief economist at CMHC.

Sales of existing homes, which hit a record 481,900 units in 2005, are expected to ease about four per cent to 461,500 this year.

© The Vancouver Province 2006

Anti-gridlock program may take a toll

Wednesday, February 1st, 2006

Sweeping plan includes twinning of the Port Mann Bridge and Highway 1 from Langley to Vancouver — and probably a $2.50-per-vehicle fee

Frank Luba, with a file from John Bermingham
Province

The B.C. government is considering a toll of about $2.50 per trip to pay the estimated $800-million cost of twinning the Port Mann Bridge.

Premier Gordon Campbell (right) and Transportation Minister Kevin Falcon unveil details of Gateway Project yesterday. Photograph by : Jason Payne, The Province

A key component of the $3-billion Gateway Program involves twinning the Port Mann Bridge A new $180-million, six-lane Pitt River Bridge linking Port Coquitlam and Pitt Meadows is due by 2013 and includes possible provision of rapid transit and bicycle lanes. for completion in 2009 as part of a $400-million North Fraser Perimeter Road project.

A new $800-million South Fraser Perimeter Road on the south shore of the Fraser River would The plan calls for widening of the Trans-Canada Highway between Vancouver and Langley, to connect Deltaport with the new Golden Ears Bridge in Langley in 2012. be completed in conjunction with the Port Mann Bridge twinning by 2013.

Lower Mainland commuters, frustrated with congestion on the Port Mann Bridge, are getting a $3-billion solution.

Premier Gordon Campbell announced yesterday that the province is going ahead with the region-wide Gateway Program, including twinning of the Port Mann and the Trans-Canada Highway from Langley to Vancouver.

But neither he nor Transportation Minister Kevin Falcon could answer how the Gateway plan will be paid for, although a toll on the Port Mann is a distinct possibility.

“It would be irresponsible to not put forward the option of tolling,” said Campbell.

The anticipated $2.50 toll for cars would pay for another Port Mann twin worth approximately $800 million. But the government hasn’t determined how to pay for other parts of the plan like a new Pitt River Bridge or the South and North Fraser Perimeter roads.

The idea of tolls was overwhelmingly condemned by motorists interviewed by The Province.

“I could understand paying a toll if the bridge was privately financed, but since the government is building the bridge with our tax dollars, we shouldn’t have to pay to use a bridge that we’re already paying for with our taxes,” said Tim Shrigley of Vancouver.

Campbell said tolls weren’t the only solution to paying for the improvements and promised wide public consultation.

“Clearly, by the time we’re through this project, we’ll know how it is going to be funded,” he said.

“It may be funding partly by public-private partnerships, partly by tolling. I can’t give you the answer to that,” Campbell said.

For his part, Falcon doesn’t have any problem with tolls.

“Is it worth a couple of bucks?” said Falcon.

“I think most people will say it is. Certainly from a business point of view, there’s no question that’s an easy answer.”

But NDP transportation critic David Chudnovsky, the MLA for Vancouver-Kensington, questioned the business case for the plan.

He pointed to data from Philip Hochstein, president of the Independent Contractors and Business Association of B.C., that indicated construction costs have risen 45 per cent over the past five years and is likely to continue for the next five years with average yearly inflation of 10 per cent.

Chudnovsky, who doesn’t deny there’s a congestion problem, predicted construction costs could translate into another $1.5 billion for Gateway.

“I don’t know who they’re trying to kid with the costs,” said Chudnovsky. “Come clean. Where is the money going to come from?”

But Falcon said the project would come in on budget.

“That $3 billion will be sufficient to get this project built exactly as we said it would be built,” he said.

Surrey Mayor Diane Watts liked what she heard.

“I think it’s great,” she said.

“The level of frustration is very high and it has certainly increased over the past number of years,” Watts said of the congested bridge and lack of transportation options south of the Fraser.

“We need options,” she said. “We need choices in transportation.”

In contrast to his position before being elected, Vancouver Mayor Sam Sullivan appeared to be in favour of twinning the Port Mann and levying tolls.

I am right now keeping an open mind,” said Sullivan, who has yet to read the Gateway report. “I’m going to listen to the options.”

But he liked tolling. “I think that’s a very interesting option and I would support it,” he said.

The plan included an artist’s depiction of a new Port Mann Bridge with cyclists, an HOV lane and even a light-rail transit train.

The plan also pledged $50 million for cycling improvements

Trace Acres of the B.C. Automobile Association applauded the plan, saying that “doing nothing is simply not an option.”

But he cautioned that “over the longer term it’s widely understood that if you build it, they will come.”

Acres said that BCAA polls show 70 per cent support for tolling on new projects and 50- to 55-per-cent support for tolling on highway expansion projects.

In the Lower Mainland, there is support from 50 to 55 per cent of BCAA members for tolls on an expanded Port Mann Bridge.

The plan’s details, all 90 pages of them, are available on the Internet at www.gatewayprogram.bc.ca.

GATEWAY FAST FACTS

– Traffic on the Port Mann Bridge is 20 per cent higher than San Francisco’s Golden Gate Bridge, despite having fewer lanes.

– In the past five years, the number of registered vehicles in the GVRD grew by 12.5 per cent –greater than the population growth.

– There have been no significant increases in major road capacity since the completion of the Alex Fraser Bridge in 1986.

– If tolls are implemented, they would likely be about $2.50 each way for cars. Trucks would pay more and motorcycles would pay less.

– The province claims that tolls on cars will reduce the amount of traffic on the bridge. Without tolls, they say, the bridge would be congested in 10 years.

– Tolls, along with improved transit service, high-occupancy-vehicle lanes, transit and commercial-vehicle priority lanes, could keep congestion below current levels until 2031 or beyond, planners say.

– The government estimates that, after the project is complete, a commuter travelling from

Langley to Vancouver could save from 50 cents to $1.50 in operating costs and approximately $5 in travel time savings in each direction.

 

© The Vancouver Province 2006