Predicted 9.8% increase in renovation spending to keep contractors busy

Wendy McLellan
Province

New-home construction is expected to slow this year and next, but renovation jobs will keep contractors busy as people upgrade their current homes rather than move.

Two national reports on the residential construction industry released yesterday forecast a softening of demand for new housing this year and next, but they also expect renovations to continue driving growth in the sector.

The Conference Board of Canada says new-home building accounts for about half of the investment in residential construction with most of the rest spent on repairs and renovations.

The board’s Canadian Industrial Outlook: Canada‘s Residential Construction Industry — Summer 2007 report said renovations and repairs will become “the major pillar supporting the industry through the expected downturn in housing starts in 2007 and 2008.”

In its third-quarter housing market report, Canada Mortgage and Housing Corp. said new-home construction will decline in every province except Manitoba, Quebec and Saskatchewan as higher house prices and rising mortgage rates begin to affect buying decisions.

Nationally, CMHC predicts housing starts will slow the rest of this year and next, but still remain at the healthy level of more than 200,000 units. Renovation spending is predicted to increase by 9.8 per cent this year before easing to 6.8 per cent next year.

“We’ve been anticipating a modest decline in housing starts for some time,” said Keith Sashaw, president of the Vancouver Regional Construction Association. “It’s a moderation, and it’s to be expected. It’s a reasonable return to a good level of housing construction.”

Sashaw said renovation work has become a major part of residential construction activity and the trend is expected to continue.

“We have an aging housing stock that needs to be updated, and the high cost of land is driving people to stay where they are,” he said.

Peter Simpson, CEO of the Greater Vancouver Home Builders Association, said Lower Mainland residents spent $2.5 billion last year on renovations and that figure is expected to be higher this year.

“People are spending a lot of money on home renovations, but they are waiting longer to get the job done — contractors are facing the same labour shortages everyone else is suffering.”

Brent Repin, co-owner of BDR Artisan Construction Inc., said his Vancouver-based company is busy with renovation work as homeowners try to maximize their living space.

“The big push on the west side is expanding homes built on small city lots,” Repin said. “We’re adding rooms, clearing out basement suites to make more room for young families. People are really looking for more space, and they want open- concept floor plans.”

Bob Rasmus, president of RJR Construction Management, said he gets calls every day from people looking to renovate their homes.

“We have a huge number of projects — some probably won’t even start until January,” Rasmus said. “When someone calls and they want to start a renovation job in September, I just laugh. Everybody who’s good is busy.”

© The Vancouver Province 2007

 

Noelle Knox
USA Today

For evidence of what is spooking Wall Street and wreaking havoc on the mortgage industry, one need only look at the housing market in Stockton, Calif., 40 miles south of Sacramento.

During the real estate boom, Stockton was a hotbed of speculation, bidding wars, and rocketing prices. Now, foreclosures are soaring, sales are plummeting, and there is more than a year’s supply of homes and condos on the market.

The housing market “is still sliding,” said Larry Underhill, president of the Lodi Association of Realtors, which covers Stockton. “The buzz is there is just a ton of foreclosures, and banks are going to own a lot more property before it’s over.”

Lenders filed 1,129 notices of default against borrowers who were behind on their mortgages in the second quarter, according to DataQuick Information Systems, up 205% from the second quarter last year.

The bulk of the foreclosures, Underhill said, are homes purchased with subprime, adjustable-rate mortgages or exotic loans that allowed the buyer to pay only the interest, or less, for a set period of time. As their monthly payments reset to higher rates, some homeowners and investors are finding they can’t afford them and can’t refinance — either because the property is worth less than they owe, or the mortgage they hoped to get no longer exists in today’s risk-averse market.

While economic growth in Stockton, heavily dependent on agriculture, will help turn this market around, the credit squeeze on Wall Street is making it harder for buyers to qualify for a loan.

Underhill says he’s seeing homes go under contract two or three times, and each time, the deal falls apart because “buyers can’t qualify, or buyers are understandably cautious. They see property values sliding and are saying, ‘Why am I doing this?’ “

Development will have its own walks with lots of trees and vegetation

Kerry Moore
Province

The better the standard package the faster people can make up their minds about buying. Louise Barbour, sales manager for the Fitzgerald at Brentwood Gate, likes to offer a straightforward package.

“Fitzgerald includes a seven-appliance standard package from Whirlpool, as well as granite counters, imported ceramic tile and good berber carpet,” says Barbour.

Buyers, she says, also appreciate the Fitzgerald’s clubhouse. Taking up most of the lobby level in the 27-storey highrise is a complex of “billiard lounge, meeting room, all-purpose/party room with a bar, a fitness studio, change room and hot tub.”

Another major draw is the location of Brentwood Gate’s block-long development of six low-rise clusters and one highrise (the Fitzgerald).

“From this point you can move quickly along the Lougheed Highway to Port Moody and Coquitlam, over the Ironworkers Memorial Bridge to the North Shore, or to Highway 1 to get to the Valley and to the border.”

The Fitzgerald is a few minutes walk from SkyTrain’s Brentwood station and thus about 20 minutes from downtown.

“And yet the area will not feel busy. The Brentwood Gate development will have its own walks and a central road with lots of trees and vegetation giving it a rural feel,” says Barbour “This north side of Lougheed is residential so there won’t be commercial or industrial buildings nearby.”

Plentiful windows and balconies mean there’s a sense of spaciousness and “lots of light” in the units.

The details include tile flooring in foyer, kitchen and bathroom, electric fireplace with a wood-grain mantel, loop carpeting in living, dining and bedrooms, and wood baseboards and door mouldings. Buyers can choose from three different colour schemes, all neutrals in either light, medium or dark tones.

Cooks will appreciate the plentiful kitchen cupboards, plus a stacking bank of drawers and a corner lazy susan, granite countertops with handset porcelain backsplashes, and an undermounted double sink.

There are several upgrades available — glass-fronted cabinets in the kitchen and laminate flooring in entry, kitchen and living areas. Laminate counters in the main bathroom can be upgraded to marble or limestone. Buyers can also opt for KitchenAid rather than Whirlpool appliances and bug screens for windows.

Occupation is by end of 2008, when the whole of Brentwood Gate should be completed.

[email protected]

THE FACTS

FITZGERALD AT BRENTWOOD GATE

What: 27 storey tower part of the Brentwood Gate neighbourhood development.

Where: 1960 Beta Avenue, Burnaby

Developer: Ledingham McAllister

Sizes: Two-bedroom condos 830 sq. ft. to 919 sq. ft.; penthouse and subpenthouse both 1119 sq. ft.

Prices: Two beds from $390,900; sub-penthouse $665,900; penthouse, $670,900

Open: Noon to 6 pm daily except Friday. 604-205-7228. brentwoodgate.com

© The Vancouver Province 2007

 

Tony Gioventu
Province

Dear Condo Smarts:

We live in a small 18-unit bare-land strata complex on Vancouver Island.

All of our units are owner-occupied, except the middle unit, which has housed a number of excellent tenants over the years.

The current renters, however, are a serious problem in our community. There have been late-night parties, a backyard fire that got out of control, domestic disputes that have required police intervention and now a drug bust.

The owner refuses to do anything, and our residents are now afraid to leave their homes and go on vacation. Is there anything we can do to force the landlord to get better tenants?

— The Bennets

Dear Bennet Family:

People in strata corporations are the root of most struggles in community living.

Landlords don’t have a right to rent to irresponsible tenants and leave the mess to a strata. If the strata executes their authority properly it can be very expensive for the landlord, and result in an eviction for the tenant.

The strata corporation has the right to act in place of the landlord if he refuses to take action.

The strata may evict the tenants if they continually contravene a significant bylaw or seriously interfere with another person’s use or enjoyment of the strata lot or the common property.

The process of eviction can often be accelerated if the contraventions are placing property and other persons at risk. Make sure you document all the contraventions, police incident reports and proceedings to ensure you have reasonable grounds for the eviction.

The strata should provide written notice of the violations to the tenants and the landlord, and should contact the Residential Tenancy Branch to obtain the proper forms for eviction. Go to: www.rto.gov.bc.ca to download the forms.

 

© The Vancouver Province 2007

 

On the edge of a dream

Ashley Ford
Province

Osoyoos is “hot” and not just because it’s slap bang in the middle of Canada‘s only desert.

The South Okanagan town and B.C.’s newest resort sits on the shores of a lake of the same name, cheek by jowl with the U.S. border.

It has become a mecca for developers, who are pouring more than $250 million into new tourism projects.

This immense investment is coming into a town that only has about 6,000 full-time residents.

But its arrival will boost tourism spending to about $80 million by next year and bring in more than 350,000 visitors annually.

It’s a huge leap of economic faith for the small community and a long way from 1999, when it recorded a scant $3 million in new construction spending.

Few residents seem to be complaining about the hectic pace of expansion and Mayor John Slater says the town is solidly behind the initiative.

Slater says the goal is to boost the economic impact of the town and region without losing its small-town appeal.

“We want that family feeling of ‘Let’s go to grandma’s house.’ It is really important. We also want to make sure the development we do is positive,” he says

There have been some voices of disapproval, Slater admits.

“Their attitude is ‘we have bought our piece of paradise, now let’s close the door,’ but that is not how we see it. We are a vibrant community and the community’s growth, whether commercial or residential, helps pay for the amenities we are putting in,” he says.

“People are resigned to the fact that we have to grow and we simply cannot stand still,” he adds.

The “bogey” of urban sprawl or over-development isn’t in the cards for Osoyoos — space available for future development is limited by geography.

The town is surrounded by untouchable agricultural land, mountains and the U.S. border.

Slater admits the town is “running out of dirt,” adding “we don’t want to move up the mountains.”

Developers are aiming at well-heeled baby boomers on the cusp of retirement, according to Destination Osoyoos executive-director Glen Mandziuk.

Destination Osoyoos is the economic development arm of the town and works with council, the Osoyoos Indian Band and developers.

Most buyers come from Alberta and the Lower Mainland, with some from just up the road in Kelowna.

Prices are already getting that “urban” feel, with small units starting at $200,000.

The town’s appeal is undeniable. It enjoys mild winters and hot, dry summers. It has pristine air, mountains, a lake, golf courses and skiing at nearby Apex resort in winter.

The area is sometimes called Napa of the North. It’s surrounded by spectacularly beautiful vineyards and is home to the Nk’Mip Winery, the first aboriginal winery in North America.

All this is within a 51/2-hour drive from Vancouver.

Current projects under way or in the approval stage include:

– Watermark Beach Resort — developer Osoyoos Shoreline Development, investment $75 million. A beach resort with 153 waterfront units to be operated by Boutique Hotels;

– Walnut Beach Resort — developer Palcor, investment $45 million, with 112 units on the waterfront to be operated by Atlific Hotels;

– Spirit Ridge Vineyard Resort & Spa — developer Bellstar Hotels and Osoyoos Indian Band, investment $75 million. Currently, there are 94 units with another 132 units to be built in second phase;

– Indigo on the Lake — developer Kingsway Group, investment $80 million, 173 condo units, currently in pre-approval phase;

– Mount Baldy Ski Area — developer Mt. Baldy Ski Corp. Plans call for 7,892 “bed units” in a phased approach, 45-per-cent public use and 55-per-cent private use in mostly low-density zoning.

In addition, there are several smaller condo developments, ranging from 10 to 21 units, either in pre-sale or under construction.

Curt Jansen, Bellstar Hotels and Resorts’ manager of real estate, says all the stars are aligned when it comes to Osoyoos.

“This won’t ever be a big city and that’s the lure to people who are stuck in traffic in Calgary or Vancouver.”

Allan Taylor, director of marketing for Lakeshore Development Corp., says many people questioned the company’s judgment four years ago when it developed a higher-end, 42-townhouse project known as Luna Rosa.

“People thought we were crazy to do what we did, but there were buyers and it snowballed from there,” Taylor says.

“People who used to come up here and camp are now investing and looking to retire,” he says.

“That’s the beauty of the condo hotel. You buy a unit, use it for your vacation, put the key on the counter and go. And it’s all looked after.”

– – –

OSOYOOS FACTS

– The official “resort” designation for Osoyoos comes from the provincial government. There are 13 in B.C.

– The designation brings with it some financial contribution from Victoria for advertising and improving amenities.

– Population: About 6,000

– It gets 350,000 visitors annually

– Visitors spend $60 million

– Construction projects worth $250 million.

– Osoyoos is located in

Canada‘s only desert.

– It has the country’s lowest rainfall at just 304.8

millimetres of rain a year.

– It gets more than 2,000 hours of sunshine annually

– The region has 57 per cent of all B.C. vineyards and 86 per cent of all grape

growing.

© The Vancouver Province 2007