Tony Gioventu
Province

Dear Condo Smarts:

Our strata recently hired a company to do our 85 decks and patios at a cost of $150,000, all of which was approved by the owners at a special general meeting in March. Unfortunately, within a week of starting the project everything went sideways. The company was using inexperienced workers, no contract was signed by our council, there was no construction insurance, no WCB coverage, and now we’ve been told that due to the trade shortages, material increases and deck damage, the cost will likely be over $250,000. Now work has stopped and we’re in a pickle. Doesn’t strata law require a minimum of three bids and a proper contract?

— Mr. D. Bell, Richmond

Dear Mr. Bell:

There are no such laws for strata corporations. So unless your bylaws have restrictions, or the resolution was written with specific directions, or the owners by majority vote at the general meeting added some directions, the council is on its own with the funds and the project approved. This can be terrifying for seven volunteers often with little business experience, and unfortunately there is no quick fix here. Just take it one step at a time and formalize. Your informal contract process may have put your strata back at the start, facing delays and higher costs, but it would be prudent to clear all of this up before your strata proceeds.

In cases like yours, if competitive bids are desired, the only way to make it fair is to have a third party like a certified inspector, technical writer or engineer write the scope of work and specifications, then the contractors are bidding on exactly the same scope of work, otherwise a bidding process often means little.

A negotiated contract can be just as successful as a tendered contract, however in both methods, before you sign on the bottom line you need to confirm everything in writing.

Here are a few basics to know before work can commence: who is paying for the construction insurance and WCB costs; what are the terms and conditions of payment; what are the specifications of the contract; are sub-trades allowed; who is inspecting and certifying the work; who is responsible for building permits, licences and warranties; when is the work to be commenced and completed; who pays for waste removal; what are the expectations of site conditions and work schedules; who is acting on behalf of the strata to approve work order changes; how are hold-back funds being managed; what is the total upset cost including labour and materials; and most important, who is going to perform your legal review before you sign the contract?

Tony Gioventu is the executive director of the Condominium Home Owners Association (CHOA). Contact CHOA at 604-584-2462 or toll-free 1-877-353-2462, fax 604-515-9643 or

e-mail [email protected].

© The Vancouver Province 2006

 

But StatsCan’s index may not reflect real West Coast prices, officials say

Sun

Increases in new home prices in Vancouver and Victoria during June were almost reasonable compared to other cities across the country, according to Statistics Canada’s new housing price index.

Vancouver and Victoria saw the price of a new house rise only 0.2 per cent in June from May, with a year-over-year increase of 5.2 per cent in Vancouver and 5.4-per-cent rise in Victoria.

While prices rose an average of 1.4 per cent across Canada in June, in Calgary they roared ahead by 6.9 per cent. That means that during the past year, Calgary prices have rocketed almost 50 per cent, and Edmonton follows at 28.1 per cent.

House prices in Winnipeg, Saskatoon, Regina, Halifax and Quebec also outpaced B.C. cities, according to the Statistics Canada report.

“Those are the highest for year-to-year for both Calgary and Edmonton,” said Leon Comeau, a spokesman with Statistics Canada’s Prices Division.

But the unexpected results may be due to the methodology.

The index asks builders of single-family dwellings and townhomes to supply representative house prices, Comeau said. But the builders who participate are mostly large-tract builders who are more likely to construct subdivisions, which are rare in Vancouver, rather than single-family houses, he said.

Cameron Muir, a market analyst with Canada Mortgage and Housing Corp., said the apparently low price increases in StatsCan’s index were not indicative of what was happening locally.

“It’s hard to believe that when we see construction costs going up 10 or 12 per cent per year that the actual new home price index is indicating that it’s half that,” Muir said. “And I think it might be a function of Statistics Canada’s methodology, but in actuality any builder or developer you talk to will say that costs and prices are rising much more rapidly than that index may suggest.

“It tends not to be representative of actual home prices in Vancouver and Victoria,” Muir added.

Elsewhere, monthly price gains in Saskatoon were 1.6 per cent, Regina 1.2 per cent and Winnipeg 0.5 per cent.

Other noteworthy gains in June were in Hamilton, Ont. (0.7 per cent) and in nearby St. Catharines/Niagara (0.6 per cent). Increases were also tallied in Halifax, Montreal, Quebec, Toronto, Oshawa, Kitchener, and Windsor.

In the past 12 months, the cost of new housing has risen 9.1 per cent in Winnipeg, 8.5 per cent in Saskatoon, 7.9 per cent in Regina, 6.9 per cent in Halifax, and 6.5 per cent in Montreal.

The report cited a number of factors driving up prices, led by a continued strong demand and the rising cost of construction materials and labour.

However, Calgary and Edmonton were identified in the report as having the added pressures of rising lot values, due mainly to land shortages, and prolonged construction times.

Of 15 metropolitan areas showing increases, the price of land rose in 12.

© The Vancouver Sun 2006

 

Province

OTTAWA — The cost of buying a new home went up again in June.

Statistics Canada says new house prices rose sharply in the month with Alberta once again showing the strongest gains.

The agency says the cost of new housing was up across the country by 1.4 per cent from May, but compared with a year earlier, contractors asked 9.8 per cent more in June.

Statistics Canada cited continuing strong consumer demand, rising construction material and labour costs for the increases.

Prices were up in 15 of 21 metropolitan areas surveyed.

Calgary continued to lead the way with a monthly increase of 6.9 per cent, followed by Edmonton at 4.7 per cent, Saskatoon at 1.6 per cent and Regina at 1.2 per cent.

© The Vancouver Province 2006

 

New approach allows co-workers, friends to share housing cost

Ashley Ford
Province

For first-time buyers trying to pry their way into the Lower Mainland’s exorbitantly priced housing market, it’s now a case of getting the right “mix.”

Vancity yesterday unveiled a new mortgage product aptly called the “Mixer Mortgage” that should ease the way into home ownership for those on the lower rungs of the wealth ladder.

It’s a new approach to traditional home buying and specifically designed for a “mix of people” to partner up to buy and get a mortgage, Vancity said.

Potential mixers include family members, friends, co-workers or anyone in a partnership relationship not covered by a marriage agreement, it said.

“The impetus for the new mortgage actually came from members who were looking for more creative and affordable alternatives to home financing,” said Sloan Dinning, Vancity director of brand and marketing communications.

“We saw the opportunity to offer a product that would change the way people look at buying a home,” he said.

Tsur Somerville, director of the UBC Centre For Urban Economics and Real Estate at the Sauder School of Business, said such mortgages already exist. They are especially widespread in the U.K., where they are known as “shared mortgages,” Somerville said.

“What Vancity has done is streamline the process and made it more of a one-stop process that will have appeal,” he said.

It creates a vehicle for people to acquire property and will have attraction for those in the gay community, friends who want

to get in on the real-estate boom or

even households wanting to buy recreation property, Somerville said.

Vancity said home ownership will be more affordable and accessible with “mixers” sharing the down payment, mortgage payments and other ownership expenses.

While each party’s name will appear on the title for the property, the owners will have the flexibility to decide how costs will be divided among the partners.

As an option, Vancity will recommend that an independent lawyer draw up a co-ownership agreement. This is a legal document that outlines each individual’s interest in the property and provides for an equitable distribution of the property if the owners’ relationship ends or the property is sold.

© The Vancouver Province 2006

 

‘Robust activity’ to continue, CMHC analyst says

Brian Morton
Sun

Greater Vancouver’s housing starts climbed 32 per cent to 2,168 units in July, the most yet recorded for the month, according to figures released Wednesday by Canada’s national housing agency.

“It surpasses any other July in the history of Vancouver,” said Cameron Muir, a senior market analyst for Canada Mortgage and Housing Corp., in an interview. “And that’s good news for buyers, because a lack of inventory pushes up prices.”

Single detached housing starts rose 17 per cent to 534 units, while multiple starts rose 38 per cent to 1,634 units compared to July 2005, the CMHC survey stated.

The previous record for July housing starts was 2,151 in 1996.

Year to date, housing starts in the Vancouver region increased 19 per cent to 12,129 units compared to the same period in 2005. Single detached starts climbed 28 per cent to 3,514 units, while multiple starts rose 15 per cent to 8,615 units compared to the first seven months of 2005.

The national survey also showed British Columbia leads the country in the seasonally adjusted annual rate of housing starts in July with a 21.9-per-cent jump in urban starts, followed by Ontario with an increase of 4.2 per cent. In the Atlantic region, the Prairie region, and Quebec, urban starts were down 2.2 per cent, 9.4 per cent and 10.5 per cent respectively.

Muir said the Vancouver numbers are only for one month, but that “a continuation of this robust activity will have an impact on the overall marketplace by having more choices for consumers. This mitigates the risk of a further erosion in affordability.”

Muir said he expects that starts will continue at a very strong pace for the balance of the year because of high demand and because inventories are still at fairly low levels. “There’s no danger of an oversupply happening right now. [But] I expect a levelling off of prices next year as the affordability peak is reached.”

Greater Vancouver Home Builders’ Association chief executive officer Peter Simpson said in an interview that the survey is another sign of Vancouver’s robust housing market.

Simpson called the CMHC numbers “surprisingly high,” adding that B.C.’s strong economy is a contributing factor. Another factor, he said, is that Vancouver is simply a nice place to live.

“I was speaking to some of my counterparts in the U.S. last week. I hosted them three years ago. They’re still talking about Vancouver, saying it’s a wonderful place to be.”

Simpson believes prices will still rise, at least for the foreseeable future.

“Demand still outstrips supply. And there’s not a whole lot of developable land. Land costs are going up and material prices are going up. [So] prices are going to go up.”

Simpson doesn’t believe the high rate of construction will lead to a housing glut. “Nobody’s building units that aren’t unsold right now.”

On Tuesday, Statistics Canada figures revealed that Vancouver is bucking the national trend in the value of residential building permits issued in June.

According to that survey, the value of all building permits across the country slipped marginally in June and would have been much sharper without a burst of industrial projects in Alberta.

However, the survey noted that the value of all construction — residential and non-residential — rose 17.8 per cent in Vancouver to $605 million, but was down 4.9 per cent for B.C. to $922 million.

Although the value of non-residential permits declined 26 per cent in B.C. to $281 million and 0.4 per cent in Vancouver to $172 million, the value of residential permits rose 8.8 per cent in the province as a whole to $641 million, and 27 per cent in Vancouver to $433 million.

For the year to date, the Statistics Canada survey said, the value of residential permits was up 16 per cent in Vancouver and 3.6 per cent in the non-residential sector.

© The Vancouver Sun 2006

 

New construction up 32% over 2005, beats previous high set in ’96

Ashley Ford
Province

Homebuyers scorched by boiling Lower Mainland prices may hunt in vain for a silver lining in the latest month of record housing starts.

Canada Mortgage and Housing Corp. said yesterday July’s starts of 2,168 were a 32-per-cent rise from a year ago and bested the previous high of 2,151 starts set in 1996.

But it is debatable whether the surge will help buyers.

“July’s figures are good news for homebuyers beleaguered by a lack of homes available for supply,” said Cameron Muir, CMHC senior analyst in Vancouver.

“A few more months like July will help offset the imbalance between sales and listings and curb further erosion of affordability.”

However, Peter Simpson, CEO of the Greater Vancouver Home Builders Association, is not so sure that will happen.

“Costs are going up all across the board from land, to labour, to materials to development-cost charges and that always impacts on prices,” Simpson said.

Development-cost charges for a lot in Surrey or Langley Township are more than $20,000, he said, which helps explain why single-family housing is no longer the dominating force in the marketplace.

“Two decades ago, multifamily was roughly 40 to 45 per cent of the market. Today, it is two-thirds, or 80 per cent and is the result of the industry trying to address affordability.”

While Simpson doesn’t see the single-family house on the endangered-species list, he said they are becoming less and less affordable for the majority of homebuyers.

“Ninety-four per cent of all new single-family houses now start at $350,000-plus and I believe that is now over $400,000,” he said.

“What we will see in this sector is more imaginative thinking with smaller lots, legal secondary suites over garages and rear-lane-entry homes,” Simpson said.

Still, single-family starts were up in July and also ahead for the year so far.

Last month saw 534 single starts, up 17 per cent from July 2005. On the year to date, there have been 3,514 starts, a 28-per-cent rise.

However, multiple starts climbed 38 per cent last month to 1,634 units. For the year to date, multiple starts stand 15 per cent higher at 8,615 units.

© The Vancouver Province 2006

 

June permits worth $433 million, just short of record

Jim Jamieson
Province

Led by Vancouver, B.C.’s residential builders continued to post strong gains in the value of construction permits last month, Statistics Canada said yesterday.

The Vancouver area recorded a seasonally adjusted increase of 27 per cent in residential permits to $433 million in June, the

second-highest local level on record, StatsCan said.

Year to date in the Vancouver area, spending on residential and non-residential permits rose 11.5 per cent to $3 billion.

The value of residential permits across B.C. climbed 8.7 per cent in June to $641.1 million.

Avtar Johl, whose Platinum Group builds condominiums in Surrey and Langley, said the pace of the industry continues to be red hot.

“Everything is going on eight cylinders right now,” Johl said. “Demand is very strong and we’re seeing a lot of people moving from other provinces and other countries. That seems to be buoying the market.”

But Johl said he wonders how rising prices will affect the market.

“One thing that does concern me is the affordability index compared to the rest of Canada,” he said. “But that goes back to the lifestyle here.”

Johl said there are also issues regarding the increased development charges from municipalities that are passed along to buyers.

Overall, B.C. recorded $922.5 million in building permits for June.

That’s down 4.9 per cent from May but up 13 per cent at $5.48 billion so far in 2006.

On the non-residential side, the Vancouver area slid 0.4 per cent in June to $172 million.

Keith Sashaw, president of the Vancouver Regional Construction Association, said there is a lot of volatility month to month in the non-residential sector figures.

“If you get a $300-million hospital coming on stream that’s obviously going to skew the month-to-month figures,” he said. “When you take a look at the Lower Mainland southwest region, we’re at a 10.2 per cent increase in year-to-date figures.

“We’re expecting the trend to continue. B.C. Hydro just announced $3-billion worth of power projects and more of the Olympic projects will be coming on stream in the next few months.”

Peter Simpson, CEO of the Greater Vancouver Home Builders Association, said a big concern is administrative bottlenecks at municipal permitting departments due to high volumes of applications.

“When our builders apply for a permit and are told it will be ready and it’s not, they run the risk of losing their trades,” he said. “There is some strain there, but I think [the municipalities] are adjusting.”

Nationally, for residential and non-residential permits combined, towns and cities issued builders $5.3-billion worth of permits in June, down 1.4 per cent from May.

The national value of residential building permits fell by 1.3 per cent in June.

© The Vancouver Province 2006

Emily Chung
Sun

VANCOUVER — Changes to plans for a sustainable community on Southeast False Creek may flood a popular bikeway with cars and discourage cycling, says the spokesman for a Vancouver sustainable transportation advocacy group.

Updated plans for the development put a community centre and supermarket very near Ontario Street, one of the most popular north-south bike routes in the city.

“We’re really concerned the added traffic and the confusion at the intersection at First and Ontario is really not going to provide an experience that will encourage more people to cycle,” said Richard Campbell, head of active transportation programs at Better Environmentally Sound Transportation.

Right now, Ontario Street ends at First Avenue, giving way to a marked, car-free bike bath that leads to the seawall. Campbell is asking planners to keep that section of the bikeway car-free when Ontario Street is extended north of First, through the proposed community. That way, he said, the location of the supermarket and community centre can’t negatively affect the bikeway.

Campbell said the bikeway is a popular connection to the seawall and downtown Vancouver, will connect to Burnaby and New Westminster via the Central Valley Greenway now under construction, and is already used by up to 2,000 cyclists daily.

Planners solicited public feedback on the new location of the community centre and other plan changes at an open house last week at the central branch of the Vancouver Public Library. The open house was part of the rezoning process for the part of the development containing the Olympic Village for the 2010 Winter Games.

A feedback form provided at the open house said the community centre was moved closer to Ontario Street to improve its waterfront and dock access.

City staff could not be reached for comment on Monday, but Vancouver city councillor Suzanne Anton, who attended the open house, said she believes planning staff are considering Campbell’s proposal.

“I definitely think it’s an idea worth considering,” said Anton, who has floated the idea of making the community’s school directly accessible only by foot and bicycle.

She said planners were concerned, however, about maintaining truck and car access to the supermarket.

Campbell said Manitoba Street, the next north-south street west of Ontario, should provide enough vehicle access to the supermarket and community centre. He added that keeping Ontario Street car-free will reduce road construction costs and allow for more park space in the new community.

Two more open houses for the rezoning of the Olympic Village area will be held on Aug. 19 and 23 and the rezoning application will go to city council for approval in September.

The new mixed-use community on Southeast False Creek is being redeveloped from publicly and privately owned former industrial land on Southeast False Creek. According to the project’s website, the top guiding principle for the development is “implementing sustainability.” It is intended to be home to 12,000 to 16,000 people.

© The Vancouver Sun 2006