Non-residential permits up 61.7 per cent in May, Statistics Canada reports

Derrick Penner
Sun

British Columbia’s construction sector continued to boom in May, Statistics Canada reported Thursday, with contractors in Greater Vancouver, particularly on the non-residential construction front, leading the way.

Contractors across the province took out building permits worth $961 million in May, a 16-per-cent gain over the previous month.

Residential construction activity in May, at $582 million, was down almost two per cent from April, however non-residential permits were up a whopping 61.7 per cent from the month before at $378.4 million.

From January to the end of May, the $4.5 billion in permits taken out by builders is 13.2 per cent higher than the same period in 2005.

Nationwide, Statistics Canada said the value of building permits issued in May hit $5.4 billion, which was a 6.9-per-cent increase from April and was the sixth straight month that permits were over $5 billion.

Keith Sashaw, president of the Vancouver Regional Construction Association, said the May results for Greater Vancouver were what he expected they would be.

Statistics Canada reported that Vancouver saw $508.6 million worth of building permits issued in May, a 25-per-cent increase over April. The $2.4 billion in permits issued between January and May was up 11.3 per cent over the same period a year ago.

“That continues a trend we’ve seen for over a year now and expect to continue to see for some time to come,” Sashaw said.

The VRCA’s analysis of the Statistics Canada report found that permits for 2,009 new dwelling units were issued in May, which was up 41 per cent from April. Their value, at $335 million, was up 20 per cent from the previous month.

Vancouver’s non-residential permits hit $173.5 million in May, up 36 per cent from April.

Sashaw said he expects growth in the residential results to level off toward the end of 2006 because the demand for new housing will be closer to being met and rising prices will make housing less affordable for more people.

However, he believes demand for non-residential buildings is only “half-way up the curve.”

“We’ve still got quite a bit of strength left and we will continue to see it grow into 2007 and 2008 if not longer,” Sashaw said.

Sashaw added that an easing of housing markets in the United States and around the world should help to slow down the dramatic rise of construction costs in B.C. However, he still expects construction costs to rise about 12 per cent this year.

The city of Abbotsford’s own building-permit statistics differ from Statistics Canada’s report. Jay Teichroeb, Abbotsford’s manager of economic development said he couldn’t pinpoint why.

However, he said the city’s figures show continued growth in the region’s construction sector with $41 million in building permits issued in May, up 1.4 per cent from April.

“With the projects that are in the pipeline, we’re not seeing the leading edge of a slowdown,” Teichroeb said.

“If anything, we’re seeing larger and more ambitious projects,” he added, such as an increasing number of highrise apartment towers being proposed by developers drawn to the Fraser Valley by the availability of relatively lower-cost land.

CONSTRUCTION UPSWING

B.C.’s building boom continued in May as evidenced by the growth in building permits issued by municipalities.

British Columbia

Total

May: $961 million

+16.1% over April

Jan. – May: $4.55 billion +13.2% over 2005

Residential

May: $582.6 million

-1.8% from April

Jan. – May:$3 billion

+12% over 2005

Non-residential

May: $378.4 million

+62% over April

Jan. – May:$1.6 billion

+16% over 2005

Source: Statistics Canada

© The Vancouver Sun 2006

 

Licences of Point Grey Properties Inc., managing broker suspended after complaint

Derrick Penner
Sun

The Real Estate Council of British Columbia has suspended the licences of Point Grey Properties Inc. and managing broker Stephen Edward Le Sage, and has frozen the firm’s bank accounts for failing to account for money held in trust on behalf of rental-property clients.

Anthony Cavanaugh, the Real Estate Council’s communications and privacy officer, said Point Grey Properties failed to file its annual accounting report on the firm’s trust accounts by the Dec. 31, 2005 deadline, as well as by an extension deadline of Jan. 15.

Cavanaugh said Le Sage was facing a hearing before the Real Estate Council over the missing report when a Point Grey Properties client filed a complaint with the council over alleged non-payment of rental income.

He added that the council issued the order to suspend Le Sage and Point Grey Properties’ licences after the complaint and pending a hearing into the matter.

The Real Estate Council’s suspension order states that “the length of time required to complete an an investigation . . . would be detrimental to the public interest.”

“The matter is still actively under investigation, but the council does not have any tolerance for tampering with trust monies,” Cavanaugh said. “The consequences are significant, as evidenced by this suspension order.”

There was no answer at Point Grey Properties when a Vancouver Sun reporter telephoned the company on Thursday. Le Sage did not return voice messages.

Cavanaugh said the Real Estate Council on Thursday appointed a receiver to oversee Point Grey Properties’ trust accounts and sort out the “money trail.”

The receiver’s job will be to examine what money has been paid into the trust accounts and what has been paid out. Cavanaugh said if it is determined that clients have not received money that is rightfully theirs, that will be paid out also.

“It’s just so there’s an orderly way of handling the financial records of the brokerage by an independent party,” he added.

Cavanaugh said clients will be protected from potential losses by the B.C. Real Estate Compensation Fund.

Cavanaugh did not know how much money was involved in the complaint. He also did not have a complete list of Point Grey Properties’ clients.

The council wants Point Grey Properties clients to call their offices at 604-683-9664.

© The Vancouver Sun 2006

 

Permits in B.C. running 13.2% ahead of 2005

Ashley Ford
Province

Construction fever is raging through the B.C. economy, with more than $4.5 billion in building permits alone issued in the first five months of the year.

Permits across B.C. are running 13.2 per cent ahead of last year, driven by vigorous activity in non-residential and residential sectors, Statistics Canada figures released yesterday show.

Residential permits worth $2.98 billion have been issued this year in B.C., up 11.9 per cent from a year ago, the federal agency said.

The non-residential side is also powering ahead, with $1.56 billion in permits being issued — a 15.9-per-cent increase from the same period a year ago.

These buoyant numbers only tell part of the story, as they apply to actual structures and exclude infrastructure projects such as the Sea-to-Sky Highway, Golden Ears Bridge and the Canada Line light-rail transit construction. “What we are seeing in the construction industry is unprecedented in B.C.,” said Keith Sashaw of the Vancouver Regional Construction Association.

B.C. government numbers estimate there are $92 billion in projects on the books, Sashaw said.

“The industry is cyclical but we have never seen the depth and scope of the industry at all levels and across all geographic areas of the province that we are seeing now,” he said.

Construction is a huge job spinner.

It’s estimated that every $1 million of construction provides 20-person years of employment, Sashaw said.

“It is a very sweet and strong situation and going forward I can see no reason for change at this point,” said Helmut Pastrick, chief economist for Credit Union Central of B.C.

“We will see substantial growth this year.”

And, said Pastrick, “we have yet to start feeling the impact from 2010 Winter Olympics projects.”

The industry’s employment-generating powers go beyond immediate construction jobs, he said.

Constructing large buildings is a complex process that creates jobs in other sectors as it ripples through the economy, he said.

While Western Canada continues to spearhead the country’s economic growth, the rest of the country is faring well, StatsCan said.

May’s level of building permits was the third highest on record, the agency said.

Municipalities issued $5.4 billion worth of building permits in May, up 6.9 per cent from April, driven mainly by activity in the non-residential sector.

The showing was much stronger than the 1.3 per cent rise economists had expected.

It was the sixth straight month of building permit activity above $5 billion and was the third-highest level on record, surpassed only by December and March.

© The Vancouver Province 2006

 

Gillian Shaw
Sun

Real estate sales dropped and listings rose in both Greater Vancouver and the Fraser Valley in June compared with the same month last year, but the overall market remains at record highs.

While Greater Vancouver sales for the month were down almost nine per cent over last year, the Real Estate Board of Greater Vancouver reported Wednesday, the figures still represent an increase of 12.7 per cent over June of 2004.

“In 2005 around this point in time, we had a very shortened supply of listings, more so than we do this year,” said Rick Valouche, president of the real estate board. “This year we have had a few more listings come on the market, so that has helped.

“It has turned a teeny bit toward the buyers, but it is still a seller’s market.”

While the news is somewhat encouraging for beleaguered buyers who find they are fighting multiple bids when they attempt to buy residential real estate, competition is still stiff.

“Last year it was so frenzied [that] the moment a listing came on the market there were 10 or 12 offers,” said Valouche. “A listing now, instead of 10 offers, may have three.

“They are still commanding very good prices; they are still getting asking and over-asking [offers].”

A total of 3,951 single-family, attached and apartment units were sold in Greater Vancouver in June, compared with 4,333 in the same month last year.

It was much the same story in the Fraser Valley, where listings were up while sales for June were down 15 per cent from 2005, which was also the best June on record. The Fraser Valley saw 2,126 homes change hands in the month, compared with 2,515 homes in the same month last year.

Meanwhile, the 2,938 new listings in June represented an eight per-cent increase over the new listings for June 2005 and brought the total number of active listings for the month to 5,893, close to that a year ago.

David Rishel, president of the Fraser Valley Real Estate Board, said as the market heads into what is traditionally the slower summer months, the increase in listings will alleviate upward pressure on prices.

“Sales are down, but that is compared to last June which was the highest month of June ever,” he said. “This is the second-highest June.

“Comparatively speaking, we are still in a good market.”

Rishel said he doesn’t believe June’s figures signify a downward trend.

“I don’t think it is the beginnings of any trend. That being said, over the coming year or two there are going to be peaks and valleys, but generally speaking we are in a very stable market that will continue to reap value for homeowners and still show some affordability for buyers.”

Single-family homes in the Fraser Valley saw significant price increases while townhouses and apartments saw little change. The average price of a single-family detached home in June was $475,075, up 22 per cent from last year’s $389,330.

In Greater Vancouver, year-to-date sales are still on track to see 2006 come in as one of the top three years on record, with 3,681 units changing hands so far.

Listings were up 15 per cent in June over the same month last year. Sales of detached homes dropped by 13 per cent from June 2005 but the benchmark price climbed 22 per cent over last year to $649,048.

Apartment sales saw a drop of 10 per cent with the benchmark price climbing 24 per cent from a year ago, to $325,154.

Attached property sales increased by six per cent with the price of those units climbing 21 per cent to $402,477, a shift Valouche said represents baby boomers looking to trade in the big lawns and gardens of detached homes for townhomes.

Outlying areas continued to sizzle, with Maple Ridge, Port Coquitlam and the Squamish area recording large increases.

Apartment sales in Maple Ridge/Pitt Meadows were up a whopping 131 per cent compared with June 2005, an increase that translated into 44 units sold over last June’s 19. Squamish saw sales of attached units jump 73 per cent and the number of detached homes sold went up 36 per cent.

“There are still lots of sales happening in the west side of Vancouver and with downtown apartments but the big push — the most sales overall — are coming from our outlying areas,” said Valouche.

© The Vancouver Sun 2006

Ashley Ford
Province

There is simply no quit in B.C.’s residential real-estate market.

Despite heavy price increases, eager buyers are still pouring into the market. With no sign of the traditional summer cooling in sight, double-digit price increases remain the order of the day, Royal LePage Real Estate Services said in a survey released yesterday.

Across the Lower Mainland, the detached bungalow has been the star housing performer, increasing an average 22.3 per cent, year-over-year, to $708,000.

Not far behind, a standard two-storey property rose by 19.4 per cent to $792,375. The average price of a standard condominium rose 18.8 per cent to $369,000.

Yet buyers seem impervious to the numbers. Last month, Vancouver sales reached 3,951 units, the second-highest June ever for the Real Estate Board of Greater Vancouver.

And the Fraser Valley Real Estate Board reported 2,126 sales in June, slightly below the 2,517 sales last year, for the best June and second-best performing month on record.

“While residential real-estate sales are lower than last year, you have to put that into perspective,” said board president David Rishel.

“Last month’s sales still out-performed all other Junes except for last year, indicating demand in the Fraser Valley still remains healthy after more than four years of growth.”

Market conditions in Vancouver are persistently tight as buyers remain active and a shortage of inventory continues, said Chris Simmons, president, Royal LePage Westside, Vancouver.

Credit Union Central chief economist Helmut Pastrick sees little immediate hope for any price relief.

“Generally, it will remain a tight market although we should see some increase in supply next year,” he said. It will be 2008 before there is any significant move back to a more balanced market with inventory catching up, Pastrick added.

Housing starts in B.C. this year are forecast to reach 38,500 units, rising to 40,000 in 2007, Pastrick says.

Peter Simpson, CEO of the Greater Vancouver Home Builders Association, also sees no immediate relief on the supply front. “Our contractors are telling us they are flat out and the demand is out there.”

“The good news is that some municipalities now are moving to or considering allowing smaller lots and other innovations such as rear-lane-entry homes and secondary suites.”

The major pressure area is single family homes in the Fraser Valley, where land prices are expensive.

But if you think things are bad here, spare a thought for your neighbours across the Rockies. In Calgary, the average price of a standard two-storey house jumped by almost 55 per cent from a year ago to $397,86.

The rest of the country remains in positive territory but its performance was pallid compared with the West.

Quebec, Ontario and Atlantic Canada showed moderate price increases. A standard two-storey house in Toronto rose by 4.4 per cent from a year earlier to $474,766.

Alan Herbert
Sun

Re: Outlook B.C., June 28

Fiona Anderson names the Central Waterfront as “one of the last remaining pieces of waterfront land in Vancouver”, and she is correct. She names the future site of the Olympic Village on Southeast False Creek as the other, but she missed a third intriguing rival, just a hop, skip and jump from the False Creek shoreline.

That third spot is some 300 to 400 acres of industrial land often called the ‘East False Creek Flats’. The city promised to begin a public process on the future uses of this land over a year ago, but so far nothing has happened. Those lands, if rezoned residential, could easily accommodate well over 10,000 units taking much of the pressure off the downtown core. The Flats are also crossed by two existing Skytrain lines plus, as far as ‘location, location, location’ is concerned, the Flats are first rate, ideal.

The problems as I see them are first, Vancouver dare not alienate more industrial land and much of these Flats are zoned industrial. That said, the Port of Vancouver has yet to gauge the scale of growth coming our way from Asia, but it is coming, it will be enormous, and it is a truism that a good part of that new traffic growth, Vancouver being a transshipment port from its founding, will be destined for points elsewhere with the mode of transit being rail. That demand for rail has similarly yet to be gauged.

The second problem is that the Flats are land fill, but so is downtown or lower Manhattan and more significantly, Mexico City, built on a lake bed with an active volcano to the northeast and a major Pacific fault line to the west, one identical to the one off Vancouver Island. Mexico City has developed the technologies to build subways and skyscrapers that can withstand great shock and were indeed tested a few years ago when these structures withstood a quake measuring approximately 8.0 on the Richter scale.

The challenge is to have our cake and eat it too. We have ‘extended’ the city in Coal Harbor by building piecemeal, a roof over the tracks — remember when the Marine Building was on the waterfront — and now the Whitecaps Stadium is proposing to do the same thing rather than cause the loss of industrial port land.

Why not do it again, but this time consciously and purposefully, and on a large scale.

In short, build a roof — “Plus 30”, just like Plus 15 in Calgary, over the Flats. Beneath the roof the industrial uses remain while a new city with residences, parks and institutions are built above it.

If you visit Midtown Manhattan and you take a moment to notice, you can slide your hand underneath the Waldorf-Astoria Hotel because a similar approach was used — building a roof for a fast growing city that, at the same time, needed to retain its rail yards.

The truth is that our city is going to grow much larger than it is today and accommodating that growth is going to demand some bold and innovative plans.

© The Vancouver Sun 2006

 

Small furniture and high ceilings create the illusion of space

Fiona Anderson
Sun

Design and layout, as well as smaller furniture, can make a small condominium look bigger than its size.

At DoMain — at Main and 12th Streets in Vancouver — the smallest units are one-bedrooms at 535 square feet. But the bedrooms have a partial wall with openings on either side, rather than a door, which creates “an open flow” said Patricia Glass, senior marketing coordinator with Platinum Project Marketing Group, MacDonald Realty, which markets the units.

Other tricks used to make the space look bigger are lots of natural light and high ceilings, Glass added.

“Through the design you can do it so that although small, these people can live large,” Glass said.

Another trick is buying smaller furniture. Mark Dawson, owner of Cocoon Home Designs, is often asked to build something smaller than what would be found in a traditional store.

There has definitely been a trend toward “more space efficient, smarter furniture,” Dawson said.

Dawson specializes in “clean-lined, modern furniture” that looks less cluttered in a small space.

For example, couches are normally 200 to 225 centimetres (80 to 88 inches) long, which is too big for many condominiums, Dawson said.

So Cocoon sells couches — that are made locally but not by Dawson — that can be customized to any size.

L-shaped sectional couches are also popular because people can order each section any length they want to make it exactly fit into a particular space, he said.

Most people approach Dawson with dimensions and a rough sketch of what they have in mind and he pieces it together in the right proportions.

“A lot of them need to [have furniture custom made] when they’ve got a tricky space,” Dawson said.

“If you do the circuit and check out all the stores, sometimes it’s just impossible to find something that works in that space.”

Unfortunately, smaller condominiums often lack storage space, Dawson said. So a lot of his furniture is built with added drawers.

One sought-after piece of furniture is his dining room table which not only comes with drawers but can also have matching benches rather than chairs that hide more storage space.

Cocoon’s beds also come with drawers for storage underneath. To make sure the queen-size bed can fit into the condo, Dawson makes it modular so it can be taken apart in pieces.

“It’s super easy to get it in and out of your condo,” he said.

© The Vancouver Sun 2006

Price-conscious developers are now building one-bedrooms at less than 500 square feet

Fiona Anderson
Sun

One-bedroom condominiums aimed at first-time buyers and investors are getting progressively smaller — the latest only 478 square feet — as escalating prices means size has to be compromised for affordability.

Units at 1010 Howe Street in downtown Vancouver — which went on sale June 24 — ranged from 478 square feet to 600 square feet, excluding the penthouses. But prices for the apartments, which were converted from offices about 12 years ago, were as little as $221,900, with an added discount if the buyer was willing to take the unit as is: without new paint, lighting or window coverings.

That’s the option realtor Matt Stone of Coldwell Banker Westburn Realty chose. Stone, who is also on the sales team for 1010 Howe, bought in because “it’s a really good location and a great price.“

Stone thinks the size of the apartment — in his case 531 square feet — will be fine for him since he lives alone. He plans to open up the kitchen, and with the high ceilings, the place will look bigger, he said.

Most apartments downtown are about the same size, Stone added.

Bob Rennie, of Rennie Marketing Systems, which is marketing the project, said the only way to make apartments affordable is to make them smaller or get the city to subsidize the developer.

“With today’s land costs and today’s construction costs, we’re really coming to the end of the under-$300,000 product downtown,” Rennie said.

While apartments in Yaletown and other downtown areas aimed at first-time buyers are getting increasingly smaller, the average size of new apartments in downtown Vancouver have in fact stayed steady in the past six years as high-end condominiums in Coal Harbour get larger, said Jennifer Podmore of MPC Intelligence, which tracks new residential developments in the province.

Where size has really dropped is in Richmond, where the average new condominium — including two-and three-bedroom units — was 1,123 square feet in 2000 and is now only 905 square feet, Podmore said.

Even in Pitt Meadows and Maple Ridge, one-bedroom apartments have shrunk from 750 square feet to 590 square feet.

Another trend Podmore has seen is smaller units on the lower end of the scale.

“The one thing that is getting smaller is the smallest units that we can offer,” Podmore said. “It’s partly for affordability [but] it’s also because we know how to maximize space much better.

“We are being incredibly functional with our space because we have to be.”

Podmore said Vancouver is just catching up to cities like Hong Kong, Paris, London and New York that know what it’s like to have “these spatial crunches.”

In the Main Street area, 50 per cent of units in the latest development– DoMain at the corner of Main and 12th Streets — are under 600 square feet, the project’s marketer said.

The smallest units are one-bedrooms at 535 square feet priced under $300,000, said Patricia Glass, senior marketing coordinator with Platinum Project Marketing Group, MacDonald Realty Ltd. Only five units have not yet sold and they are the larger one-bedrooms at 750 square feet, she said.

Buyers used to be freaked out by 550-square-foot apartments but now they recognize that to get into the real estate market for the first time they have to look at units in that range, Glass said.

It’s not just first-time buyers who are buying the smallest units, she added. About 25 per cent of the units were sold to investors who like the size because the rent can cover the mortgage, Glass said.

Smaller units aren’t unique to the Greater Vancouver area either. Platinum Project Management Group has a project in Chilliwack that is selling “very efficient” 850-square-feet, two-bedroom-two-bathroom units that would have been more than 1,000 square feet before, Glass said.

“If we can shrink 1,000 square feet into 850 by cutting corridors [and] reducing excess flow spaces we’ve got much more efficiency and thus affordability,” Glass said.

© The Vancouver Sun 2006