Sun

Condominiums continued to be the most saleable new home type in the Greater Vancouver Regional District in the first six months of 2007, with 76 per cent of all products being sold, reports MPC Intelligence Inc., which tracks trends in the housing industry.

The market absorbed 3,369 new concrete condos and 2,965 new wood-frame condominiums in the first six months of the year. New townhomes and duplexes accounted for 17.8 per cent of the sold inventory, while single-family homes accounted for five per cent of all new sold product in the first half of 2007.

As the affordability of single-family homes deteriorates, more buyers are beginning to choose the relative affordability of condominiums where price point, not size, is the driver, says MPC Intelligence.

KITCHENS NEW HUB

Want to know the future role of the kitchen?

According to the KitchenAid Kitchens for Cooks Institute Kitchen Trend Report, the kitchen is no longer merely the room in which meals are prepared and eaten, but the home’s social hub, where people work, entertain and relax.

Before long, says the report, it will also be the site of technological innovation. It says we can expect to see such things as appliances that continuously monitor freshness and inventory levels, touch-screen computers that control heating, lighting and entertainment systems, and even floors that recognize the walker and adjust the temperature to the preference of that person.

With environmental responsibility on the top of everyone’s mind, we can also expect to see more energy-efficient appliances and edible food packaging.

CARBON CREDIT

Macdonald Realty has launched the MacGreen Carbon Offset Program, which will enable the company’s 800-plus real estate agents in B.C .and Alberta to offer homebuyers and sellers “carbon neutral” transactions.

“The fact is, real estate agents drive a lot and are perceived to drive a lot,” said Macdonald Realty CEO Lynn Hsu in a prepared release. “As this is a necessary function of a real estate agent’s job, reducing all carbon dioxide emissions is difficult. However, for every one tonne of carbon that is released driving clients from house to house, an agent can compensate for emitting that tonne through offsetting.”

Macdonald Realty has teamed up with carbon offset provider Offsetters Climate Neutral Society of Vancouver.

© The Vancouver Sun 2007

 

CIBC says it will not have a major impact on global growth

Anne Howland
Sun

OTTAWA — Canadian investors have been “throwing out babies with the U.S. mortgage bathwater,” says a new report from CIBC World Markets’ senior economist Avery Shenfeld.

According to Shenfeld, recent losses on the Toronto Stock Exchange are being driven by “unwarranted fears” that current troubles in the American subprime market would have a major impact on global growth.

Negativity has reigned on the TSX since mid-July, when takeovers and takeover speculation propelled the index to a record high of 14,646.82. Since then, it has lost almost seven per cent, as investors question the stability of lending markets that finance these acquisitions.

“Investors followed a circuitous route to link U.S. mortgages to Canadian equities over the past month,” said Shenfeld in a report released Thursday. “Losses on subprime mortgages put some hedge funds at risk, which raised concerns about Wall Street’s liquidity. This led to widening spreads on high-yield bonds and loans, which left dealers stuck with loans on leveraged buyout (LBO) deals in process. “This added to the risks to lending liquidity and pressured investment grade spreads, which raised concerns over global growth,” he said, and led to “a broad-based drop in Canadian equities.”

The U.S. mortgage market has been plagued with rising delinquency and default rates in the subprime — or riskiest — segment of the market, causing some lenders and fixed-income investors to shy away from higher-risk debt in general.

Shenfeld pointed to a “missing link” between these problems in the U.S. mortgage market and corporate credit quality globally, especially since corporate defaults and debt burdens outside the realm of leveraged buyouts are low. Also, economic growth and corporate earnings are strong, Shenfeld said, citing Canadian earnings that are on track for a 16-per-cent gain this year and another double-digit gain in 2008.

“Buoyant global growth and the pick-up seen in Canada underpin our optimism on the equity outlook, driving earnings on both sides of the Canada-U.S. border to materially exceed the Street’s expectations in the second quarter,” said Shenfeld. “But unfortunately, over the last month investors have been throwing out babies with the U.S. mortgage bathwater.”

CIBC noted that private equity, which has fuelled 27 per cent of deal volume in the U.S. over the past two years, has not played as large a role in Europe or in Asia.

Buyout firms have been behind only 17 per cent of takeovers of Canadian companies since 2005, concentrated in the telecom and media sectors.

“Strip out the high-profile telecom deals, and private equity’s M&A share has been just seven per cent, a quarter of that stateside,” said the report. “Such LBOs have accounted for less than one per cent of mining acquisitions and just five per cent of deal volume in the energy patch.”

At the same time, corporate buyers, often other resource producers, have accounted for about 95 per cent of recent takeovers in Canada‘s resource sector.

© The Vancouver Sun 2007

 

Derrick Penner
Sun

Lower Mainland real estate markets defied the expectations of analysts last month, posting the second-highest level of sales for July in Greater Vancouver and the third-biggest July in the Fraser Valley.

Projections had sales in Canada‘s highest-priced markets slowing down for the month. However, buyers giving up on the prospects for price corrections and buyers rushing to beat rising mortgage rates helped push sales, and prices, higher.

“I thought we would see some moderation [in sales] as those higher mortgage rates took effect,” Helmut Pastrick, chief economist for Credit Union Central B.C., said in an interview.

Rates started edging up in May and again in June, with the posted rate for a five-year closed mortgage sitting at 7.24 per cent.

Pastrick added that “there is a time lag involved” in the effect of interest rates. Many of July’s buyers locked in pre-approved mortgages obtained before rates rose in May, which could mean a drop in sales is in the offing for August or September.

Regardless, Pastrick said sales have “exceeded my expectations,” and he is now adjusting his Lower Mainland housing forecast upward.

In July, Greater Vancouver recorded 3,873 Multiple-Listing-Service sales, 41.8 per cent more than the same month last year, and five per cent over the record July in 2003.

Greater Vancouver‘s inventory of unsold homes was also up 7.6 per cent to 11,215 units compared with a year ago.

The median price for a single-family home in East Vancouver hit $651,250 in July, a 10-per-cent increase from a year ago. In Port Coquitlam, the median house price was up 13 per cent to $499,700.

Brian Naphtali, president of the Real Estate Board of Greater Vancouver, recalled that sales had slowed last November through the early part of 2007.

“[Buyers] may have been anticipating price corrections,” Naphtali said, “and it became apparent that wasn’t happening, so people got tired of waiting.”

He added that some of the sales boost was due to buyers rushing to buy homes before their pre-approved mortgages, with lower rates, expired.

The Fraser Valley saw 1,984 MLS-recorded sales during July, a 21-per-cent increase from July 2006 and three per cent below the record July of 2005.

Fraser Valley inventory, at 8,376 units, is also up 35 per cent over July of last year.

Jim McCaughan, Fraser Valley Real Estate Board president, said demand is still strong, especially for townhouses and apartments, but “we are seeing price increases start to moderate on a month-to-month basis.”

The median price for a Fraser Valley single-family home hit $472,000 in July, which is six per cent higher than a year ago. However, that price is 3.2 per cent lower than June’s median price.

McCaughan said he considers the month-to-month drop a “statistical aberration” driven by what types of homes sold during the month.

“I’m certainly not seeing indications of prices going down,” he added.

However, Pastrick said high prices continue to hinder first-time buyers, who are increasingly being squeezed out of the market. He added that according to provincial figures, fewer people applied for property-transfer-tax exemptions during government’s fiscal 2007, which ended March 31, than the year before.

© The Vancouver Sun 2007

 

U.S. fears ‘unwarranted’

Anne Howland
Province

OTTAWA — Canadian investors have been “throwing out babies with the U.S.-mortgage bathwater,” says a new report from CIBC World Markets’ senior economist Avery Shenfeld.

According to Shenfeld, recent losses on the Toronto Stock Exchange are being driven by “unwarranted fears” that current troubles in the U.S. subprime market would have a major impact on global growth.

Negativity has reigned on the TSX since mid-July, when takeovers and takeover speculation propelled the index to a record high of 14,646.82. Since then, it has lost almost seven per cent, as investors question the stability of lending markets that finance these acquisitions.

“Investors followed a circuitous route to link U.S. mortgages to Canadian equities over the past month,” said Shenfeld in a report released yesterday.

“Losses on subprime mortgages put some hedge funds at risk, which raised concerns about Wall Street’s liquidity. This led to widening spreads on high-yield bonds and loans, which left dealers stuck with loans on leveraged buyout deals in process.

“This added to the risks to lending liquidity and pressured investment grade spreads, which raised concerns over global growth,” he said, and led to “a broad-based drop in Canadian equities.”

The U.S. mortgage market has been plagued with rising delinquency and default rates in the subprime — or riskiest — segment of the market, causing some lenders and fixed-income investors to shy away from higher-risk debt in general.

Shenfeld pointed to a “missing link” between these problems in the U.S. mortgage market and corporate credit quality globally, especially since corporate defaults and debt burdens outside the realm of leveraged buyouts are low.

Also, economic growth and corporate earnings are strong, Shenfeld said, citing Canadian earnings that are on track for a 16-per-cent gain this year and another double-digit gain in 2008.

© The Vancouver Province 2007

Sales refuse to slow just because experts say so

Gordon Clark
Province

The Lower Mainland housing market continues to defy the experts.

Despite a general view by analysts that sales would slow this year, the real-estate boards for the Fraser Valley and Greater Vancouver both reported yesterday that sales in July were the second highest in history for the month.

Total sales reached 3,873 units last month in Greater Vancouver — a whopping 42-per-cent increase over the 2,732 in July 2006.

In addition, there were 1,984 sales in the Fraser Valley, 21 per cent more than the 1,635 sales in July 2006 and just three per cent under the July record set in 2005 when 2,051 homes changed hands.

Greater Vancouver‘s best July for sales was in 2003, when 4,023 sales were reported.

“At the beginning of the year, most experts predicted a slower market than what we’ve experienced for the past five years in the Greater Vancouver area,” said Brian Naphtali, president of the Real Estate Board of Greater Vancouver.

“To date, realtors are reporting the exact opposite as the housing market continues to exceed market forecasts.”

Jim McCaughan, president of the Fraser Valley Real Estate Board, attributed the near-record sales to several factors.

“B.C.’s economy continues to hum along, Fraser Valley realtors are receiving a strong influx of new listings and some of our clients are feeling a little uncertainty about where interest rates are going,” he said.

“It all adds up to a desire to invest in real estate now.”

In Greater Vancouver, total listings for detached, attached and apartment properties last month rose 7.6 per cent to 11,215 units compared to 10,424 in July 2006.

The benchmark price of an apartment in Greater Vancouver was $364,510, up 10.8 per cent from a year ago.

The price of an attached unit was $448,383, also up 10.8 per cent while detached properties rose 10.9 per cent to $714,810.

In the Fraser Valley, the number of active listings hit 8,376 last month, 35 per cent higher than July 2006’s 6,200 listings.

The average price of a townhome in the Fraser Valley was $323,259 in July, 7.1 per cent higher than a year ago, when it was $301,718.

Apartment prices rose 10.8 per cent to $220,275 from $198,882 in July 2006 while single-family detached homes averaged $519,896, 6.2 per cent higher than $489,547 from last year’s average price.

© The Vancouver Province 2007

Melville’s condos average 925 sq ft, priced $500-plus per foot

Malcolm Parry
Sun

NINE, TEN, YER IN: Other boxers found it impossible to knock out amateur light-welterweight Marcello de Cotiis during the ring career from which he retired at age 26 in 1997. Today, as president of the family held Amacon development firm, he almost stretched himself on the canvas recently. It was a canvas lounger beside the lap pool of the $10-million, 5,800-square-foot penthouse de Cotiis demonstrated at Amacon’s $146-million The Melville tower at Melville and Bute Street.

Sister Lilliana, who is Amacon’s sales-and-marketing director, was an even likelier candidate for stretching out. She’d married contractor Vito di Franco in Ontario the day before, then hot-footed home alone to join selling agent and Anson Realty principal Grace Kwok at the penthouse unveiling.

The Melville’s condos average 925 square feet at $500-and-some per foot. They’re also building a 200-unit mixed-use tower nearby at Homer and Smithe that will incorporate the old Homer Diner premises.

Amacon also has projects in Port Coquitlam and Surrey, but its major gigs are further afield. De Cotiis said it recently restored a Montreal office building, is rejuvenating a 34-floor, 160-unit building in downtown Los Angeles, and is seeking to rezone a five-hectare Edmonton site for mixed-use development.

Its biggest project, in Mississauga, Ont., will eventually contain 6,500 housing units, de Cotiis said. A 300-unit tower is built, with a 315-unit one under construction and 328 units about to start.

“I’m ready to retire again,” said de Cotiis, whose stretching out now occurs mainly in back-and-forth aircraft seats.

– – –

ULTIMATE PENTHOUSE: City businessman Randy Bishop is asking $18.2 million for his two-floor, 6,900-square-foot penthouse at 1000 Beach Avenue.

It fetched $3 million unfinished in 2004, following which Bishop reportedly spent “millions” on it.

As for the penthouses of towers still under construction, the most costly will be the Shangri-La development’s 5,900-square-foot unit, complete with its own lap pool, at Georgia and Thurlow Street. Asking price: $15,630,000.

An adjacent 4,000-square-foot penthouse isn’t for sale. It’s already been claimed by Shangri-La co-developer Ian Gillespie for occupancy by him, wife Stephanie and their two children.

As for action on Bishop’s pad, Shangri-La realtor Bob Rennie said: “We’re watching the price of Beach Avenue, and monitoring whether we should raise ours. And I’m sure Grace Kwok is doing the same thing.”

– – –

BRANDING THE WATER: False Creek North’s 1.4-million-square-foot Millennium Water project was given sharper focus in a grocery chain’s boardroom Wednesday morning. That’s when Overwaitea directors were briefed on the Urban Fair store that will serve, among others, the $1.1-million-worth of condos Peter and Shahram Malek’s Millennium Group is building there.

The Urban Fair supermarket that now essentially brands False Creek North was built only years after Concord Pacific began erecting residential towers ton the old Expo 86 site. This time, it’ll be in situ from the start.

– – –

FALSE CREEK, REAL MONEY: Wall Financial Corp head Peter Wall did handsprings in April 2006, when the Maleks bid $193 million for Millennium Water’s 2.6-hectare site. That price almost doubled the $130 per buildable foot developers then paid for downtown land. It also jacked up the value of property Wall owned across First Avenue from the Maleks‘ acquisition.

The four-tower, 425-unit project to be built on that site was officially named Wall Centre False Creek last week. The original Wall Centre occupies the city block bounded by Burrard, Nelson, Hornby and Helmcken streets. Wall Centre Richmond, now having its site pre-loaded at Number Three Road and Sea Island Way, will house a 234-room Westin hotel and 231 condos in two towers.

All but 27 of the latter sold in a frenzied weekend offering recently, when Wall offered $25 Great Canadian Casino chips (not necessarily for gambling) to anyone who showed up. Maybe he’ll do the same with chips for across-False Creek Edgewater Casino when Wall Centre Three goes on sale late next spring.

© The Vancouver Sun 2007