Sun

Since January, Landcor Data Corp. has been putting nearly 466,000 Lower Mainland addresses through its proprietary property-valuation software to help Vancouver Sun readers better understand local property values.

In March, Landcor found that detached-home values varied wildly. Vancouver values approximated September 2006 values, while Langley values approximated November 2008 values.

Attached homes, apartments and townhouses, mostly matched spring/summer 2007 values.

In the last 60 days, what’s happened?

Detached-home values in May were definitely lower than in March, but are showing signs of recovery from a depressed April.

Maple Ridge values were hit the hardest, with May values approximating November 2006 values. Langley city values largely increased, to November 2008.

Most cities showed decreased values from March, but rising again in May with most losing two to five months of value in April and May, including Abbotsford, Coquitlam, North Vancouver district and Surrey. Vancouver actually showed a modest increase from March, gaining two months of value.

Apartment and townhouse values fell the furthest in Port Coquitlam, resembling values from October 2006. Pitt Meadows saw a solid increase in value, gaining a full year of comparable value to July 2008. North Vancouver district gained three months of value, to June 2007. The majority of cities saw either minor price decreases or held steady.

Analyzing interesting trends, markets like Port Moody and Vancouver have had huge price swings recently, with Port Moody’s detached prices increasing almost $100,000 since January, and Vancouver gaining $30,000 over March 2009, although still down $105,000 from the high in July 2008.

”Based on recent data, I think we’re beginning to see a light at the end of the tunnel,” says Rudy Nielsen, Landcor’s president and founder.

“By the time we publish our August report, we’ll know for certain whether it was just a grizzly bear with a flashlight!”

The starter-home buyer is also showing up in the valuations. “Detached properties are seeing a small surge of activity, compared to attached houses and condos,” Nielsen notes.

”Low interest rates and lower house prices are creating a period of affordability not seen in the Lower Mainland in quite some time.

“Condo sales had increased in the past few years because detached homes were not affordable for most families. That trend has reversed somewhat, allowing detached houses to enjoy a small comeback.”

© Copyright (c) The Vancouver Sun

First-time buyer, however, has her mind made up and wants quality ‘specs’

Kim Pemberton
Sun

The recession brings out uncertainty in all areas and no more so than in housing. One question that has been raised is whether cutting back will affect new home buyers — can they, for instance, still expect high-end features like granite countertops and stainless steel appliance packages now the industry standard?

“We cannot keep building the same product as yesterday,” Bob Rennie, a long-time Vancouver real estate agent, recently told the Vancouver chapter of the Urban Development Institute.

“What will tomorrow’s starter condo look like? . . . It is back to basics. I mean back to a basic affordable model. I do not think that we can rely on the investor driven demographic as much as we have been for high-rises in the suburbs.”

In an interview with the Vancouver Sun, Rennie points out when his parents raised their two children in the 820-square-foot family home. They waited 20 years before they could afford the kitchen they wanted.

“I’m not saying everybody has to do that. But we’re into instant gratification. The trouble is that our salaries aren’t keeping up with instant gratification. So we’re going to have to back off.

”There goes the granite. Maybe we don’t have stainless steel gourmet appliances right away; we start with basic cooking facilities and refrigeration. Maybe it’s a cork floor and we’re not going to start with marble at the entrance, we’re not going to start with hardwood.”

Rennie believes it’s better to pare back and go for a basic starter home because it at least gets your name on the title.

But whether today’s discriminating consumer will accept laminate counters or basic appliance packages still has to be determined.

First-time buyer Jen Natic, a 25-year-old legal assistant looking for an apartment in south Surrey, admits she is hoping to get as many high-end finishes as possible for her money.

”I have high expectations for what I can afford,” she says.

“In a perfect world, I’d have a new place with high specifications like granite countertops and hardwood flooring. If it was going to be a choice between hardwood and laminate I’d go for hardwood. You wouldn’t have to upgrade and it would be easier for resale.”

Natic says she’s seen some resale product with laminate countertops but she isn’t interested.

“It’s just not up to par anymore,” she says.

According to Ralph Archibald, of Polygon, buyers want affordability but they aren’t willing to compromise on design and style.

“Just because it’s more of a buyer’s market, compared to recent years, doesn’t mean buyers will accept less in terms of finishes. They won’t accept less. The challenge is to offer high specs at an affordable rate,” he says.

To achieve that affordability every part of the development process needs to be analysed with cost-savings in mind, says Archibald, giving the example of working with the trades to lower construction costs, which he adds aren’t expected to rise in the near future.

The federal New House Price Index determined it costs 61/2 per cent less to build a new home in January, 2009 compared to January 2008. The fact housing prices have dropped since that time are an indication those savings have been passed on to the customer, as the industry claims.

So just what do buyers want?

The lowest possible price was the priority for potential buyers, when asked to rank their reasons for purchasing a first property.

The Royal LePage First-Time Home Buyers’ Report 2009 found affordability was their top consideration, but in a market like B.C. where high house prices have kept them out of the market for years a second close consideration were low interest rates.

Ninety-two per cent of all potential buyers in B.C. reported they were more likely to buy because of low interest rates compared to the 86 per cent of Canadians for the same reason. Still, lower house prices still came in as the top priority for British Columbians, with 96 per cent saying this was the main reason they would buy now.

“The biggest thing helping the entry level buyers is interest rates,” says Archibald. “It’s a rare combination to have those two worlds collide (low prices and low interest rates). People are coming out of rental accommodation with a minimal down payment of 10 per cent and finding they can buy for not much more than the cost of renting. That’s what is driving the market.”

Anyone not buying now Archibald considers a gambler.

“What are you going to wait for? Lower rates? I don’t know how they can go any lower. Lower prices? Inventory is being gobbled up and come next year we will have a shortage of product

because there are no new ones being built and won’t be in the foreseeable future.”

Polygon has eight projects on the go, from North Vancouver to south Surrey, but no plans to start new projects immediately. Archibald wouldn’t release sale figures, other than to say the current projects are exceeding expectations originally forecast when the recession hit.

Peter Simpson, of the Greater Vancouver Home Builders’ Association, says while there’s some validity in going back to basics to create affordable housing he believes it can’t really be done because of buyer reluctance.

“Buyers today are very sophisticated, savvy buyers. I don’t think you have to sacrifice quality and go back to 1980 products. Granite before was expensive but not so much anymore.”

The issue of affordability is more than just the finishes and for B.C. residents the real reason why prices here are higher than elsewhere in Canada comes down to geography, he says.

“B.C. is a very desirable place. It’s always going to be more expensive than other regions, because we have many geographic constraints — mountains, oceans, forest, [Agricultural] Land Reserve and whatever is left is pricey,” says Simpson.

“Because we live in a more expensive area it behooves industry, community planners, designers to find ways to making housing affordable. Everyone has to be working towards the same goal.”

But Simpson adds he doesn’t believe everyone is equally working towards that affordability goal and blames government for adding to the housing costs, specifically the tax fee levies.

“We have the feds, the province, the regional government and 21 municipalities (in the Lower Mainland) and now first nations bands all wanting a say in land use. That’s five levels of government. The more fingers in the pie the more expensive it (housing) will be,” he says.

Simpson says municipal governments can start by reconsidering just how much they are charging to developers and builders wanting to create new housing stock.

But Vancouver‘s director of planning, Brent Toderian, challenges the assertion city fees affect affordability, saying the main issue is about supply and land when it comes to affordability.

“It’s a developer’s industry perpetuated myth that fees and charges affect affordability,” says Toderian, adding even if the fees were reduced the consumer wouldn’t necessarily benefit.

“If the fees were reduced it’s a windfall for the developer. They’d get more profits.”

Toderian notes the fees are necessary to pay for city amenities and infrastructures necessary to support growth and this in turn determines how liveable a city is.

“It’s no accident Vancouver is rated the number one liveable city and that is in part due to developers being required to contribute to the city’s amenities.

He pointed out right now the city charges large developers $6 a sq. ft. as a cost levy, but the figure should actually be in the $10 to $11 range to keep up with the costs.

City council had just directed staff to explore a price catch up “when the worst of the downturn (in the economy) hit so we’re in a process of trying to catch up but not raise the fees.”

Later this fall, city hall will make a decision on whether to consider waive fees and charges for developments that offer rental accommodation.

The goal is to make Vancouver an affordable city to live in and that may not apply to buyers.

“Can you afford to live in Vancouver and can you afford own in Vancouver are two different things. I’m a renter and I’m not anticipating buying in Vancouver because even for me the size of that mortgage isn’t necessarily doable,” he says.

“It’s not always a city goal to have (home) ownership. The key in most North American cities is to have affordable rents so the teachers, the nurses, the service providers can live here.”

He says developers know how to go after the high end of the market but maybe the time has come with this recession to go after the “modest” market.

© Copyright (c) The Vancouver Sun

Derrick Penner
Sun

Developers of the high-profile Jameson House condominium project in downtown Vancouver won court approval on Thursday for a plan to restructure and get construction back on track. However, B.C. Supreme Court Chief Justice Donald Brenner’s decision came despite the objection of presale buyers in the 37-storey tower, who argued that they should have been given the right to change their minds about their purchases.

Jameson House developers sought court bankruptcy protection last November when a major lender pulled out from its consortium of financiers. The tower was designed by world-famous architect Norman Foster, and attracted some high-profile attention until the financing fell through.

© Copyright (c) The Vancouver Sun

Options include reducing it with homeowner grant and deferred payment

Fiona Anderson
Sun

Just when you get one set of taxes all squared away for the year, it’s time for another. This time it’s property tax. But unlike income taxes, there is no scratching of heads figuring out what to claim. Instead, it’s pretty straightforward: figure out if you are entitled to a grant, and then pay or defer.

Property taxes are based on the value of your property multiplied by the tax rate (called a mill rate in property tax). The more your property is worth, the more you have to pay.

If you think your property has been overvalued, that complaint had to be made by the end of January. So you’ll have to grin and bear it this year, but keep it in mind for next year.

But you can reduce the amount of tax you have to pay if you live in the property you own through a homeowner grant. The basic grant lowers the tax by $570 just for living in the home, provided that leaves at least $350 in tax owing. Properties worth more than $1,050,000 are entitled to only a reduced grant and if the property is worth more than $1,164,000, no grant is available.

Those 65 and older or on disability or receiving a veteran’s allowance are entitled to deduct another $275. But in no case can the amount of tax owing be less than $100. Again, high-end properties aren’t eligible, although the limits are slightly different than for the basic grant.

Can’t afford to pay the tax, even after the grants are tallied? You might be able to defer them until you’ve sold the property. But again, you have to live in the property. Generally, anyone 55 or older or on disability can defer paying property tax if the property has more than 25 per cent equity.

For those under 55, the B.C. government this year introduced the financial hardship property tax deferment program. Under that program, taxes for 2009 and 2010 can be deferred for those who sign a statement saying they are facing financial hardship due to the economy. In this case, the taxpayer must have at least 15 per cent equity in the home.

The deferred taxes have to be paid, with interest (currently at 1.5 per cent for the general deferment and 3.5 per cent for financial hardship) when the house is transferred to someone other than a surviving spouse or when the owner dies. And don’t assume because you got a grant or a deferral last year that you don’t need to reapply. Applications have to be made every year and to avoid a penalty, the applications must be made before taxes are due. This year the due date varies by municipality. For example, the deadline in Vancouver is July 3. In Victoria it’s July 2.

Late tax payments — including money you didn’t have to pay because you were entitled to a grant but haven’t yet applied — are subject to penalties, which differ depending on the municipality.

Victoria, for example, charges 10 per cent on any amount not received by the end of the day July 2. The City of North Vancouver, on the other hand, will add five per cent to the tax bill on July 2, and another five per cent on balances still outstanding on Sept. 1.

The best way to pay? Without a doubt, it is paying online, said Bonnie Penny, manager of revenue services at the City of Vancouver. Vancouver and Victoria let taxpayers apply for the homeowner grant online. Rural taxpayers can too, and it’s likely other municipalities allow it as well. Once the grant application is in, payments can be made online through a financial institution.

By applying for the grant and paying online, not only are you being good to the environment, you avoid having to find parking, and there is no waiting in line, Penny said. And don’t wait until the last minute. Pay it now, and you can post-date the payment for the due date.

To find out what you need to know about your property tax, and how to pay it, no matter where you are, check the back of the tax notice, which provides all the information you need.

But if you still have questions, in the case of Vancouver, call first before you come in person because you will likely save yourself a trip, Penny said.

SOME USEFUL WEBSITES:

City of Vancouver: http://vancouver.ca/fs/treasury/

City of Victoria: http://www.victoria.ca/residents/billpayment_tax.shtml

Tax deferral applications: http://www.sbr.gov.bc.ca/individuals/Property_Taxes/Property_Tax_Def erment/ptd.htm

© Copyright (c) The Vancouver Sun

Derrick Penner
Sun

A bucolic chunk of Langley Township is the Lower Mainland’s hottest real-estate neighbourhood, a place where average prices are actually higher now than a year ago, says realty firm Century 21.

The rural utopia of horse paddocks and pastures came out tops in the company’s research on the best-performing areas in the Lower Mainland for real estate prices.

The neighbourhood was one of three that recorded year-over-year price gains in April. The other two were Coal Harbour in Vancouver and a section of Richmond.

Langley Century 21 realtor Sukh Kang said the area’s high performance is “probably because of the acreages.”

Acreage properties, homes with some room to move around in, have been moving in the area, Kang said, commanding higher prices than in the past from buyers who can pay a little more for the tranquillity.

Rural peace drew Renee and Robert Tillmanns to their first home, a tidy house on one-third of an acre in Tall Timbers Estates eight years ago.

“It’s nice and quiet, there’s not a lot of traffic,” Renee Tillmanns said in an interview. “I’ve never lived in town, I’ve always lived out in the country. I like the kids [boys ages four and six] to be able to run around.”

The Tillmanns recently sold their house, not for the initial asking price of $550,000, but for $495,000, which is above the Multiple Listing Service average price of $490,354 for the neighbourhood in April.

The average price in the neighbourhood was 16-per-cent higher in April than in March, and 12-per-cent higher than the $437,041 average recorded in April 2008.

“The message for homeowners is that Canada‘s housing markets are comprised of thousands of individual neighbourhoods that often perform differently from average prices in their cities or their provinces or the country,” Century 21 president Don Lawby said in a news release.

Century 21’s research examined price performance within Canada Post forward sorting areas — which it considers to be the equivalent of large neighbourhoods — where there were 30 or more property sales.

Some 44 areas qualified by having the requisite number of sales.

The top three areas were:

– An area of Langley Township between 56th Avenue and 62nd Avenue and 196th Street and 248th Street.

– An area of Richmond bounded by No. 5 Road and Westminster Highway, where the average price of $448,469 in April was 15 per cent higher than in March and up 3.43 per cent from April 2008.

– An area of downtown Vancouver Century 21 defined as Coal Harbour, which stretches from Hastings Street to English Bay in the south and between Burrard and Broughton Streets. There, April’s average price of $561,198 was 15-per-cent higher than the average recorded in March and 0.34-per-cent higher than in the same month a year ago.

Of the 44 neighbourhoods surveyed, 25 saw prices increase from March to April, though they still showed losses year-over-year.

Of the top 10, three neighbourhoods were in Vancouver; others were in Port Moody, Burnaby, Abbotsford, Mission and Port Coquitlam.

© Copyright (c) The Vancouver Sun

 

Vancouver, Richmond, Langley recession proof?

Lena Sin, with a file from Jack Keating
Province

Three Lower Mainland neighbourhoods appear to be recession proof in the current tough housing market.

The three neighbourhoods — in Langley, Richmond and Vancouver — experienced price increases of up to 12 per cent from April 2008 to April 2009, according to a survey by real estate company Century 21.

“This shows markets are truly local,” said Don Lawby, president of Century 21.

The survey looked at 44 neighbourhoods in the Lower Mainland, and tracked prices on the Multiple Listing Service.

The top 10 neighbourhoods all saw price increases between March and April 2009, with three neighbourhoods experiencing price increases in the 12 months since April 2008.

The top spot on the list went to the Willoughby-Salmon River area of Langley Township, where average prices were $490,354 in April, up 15 per cent from the previous month and up 12 per cent from a year ago.

Lawby chalked up the price increases to first-time buyers who are driving demand.

The second-hottest neighbourhood was in Richmond, north of Westminster Highway and west of No. 5 Road. Average home prices there were $448,469 in April 2009, an increase of 16 per cent from the previous month and a rise of 3.43 per cent from April 2008.

The third neighbourhood to experience price increases was Coal Harbour and the West End in downtown Vancouver.

Average prices were $561,198 in April, up 15 per cent from March. The area also saw a minor increase of 0.34 per cent in 12 months.

Jack and Rhonda Hamilton were pleasantly surprised to learn that they lived in one of those so-called “recession-proof” neighbourhoods.

The Hamiltons, who live in northwest Richmond, were able to sell their 3,500- square-foot, four-bedroom home this week after just six weeks on the market.

“We were surprised to sell in this time frame with the market and the economy the way it is and everything,” said Rhonda. “I expected it to be a little more drawn out.”

The Hamiltons, with three grown children, sold to move into a smaller home in Ladner.

“This neighbourhood hasn’t dropped as significantly as some of the other places have,” she said.

In general, the downturn in B.C.’s real-estate market seems to be stabilizing, according to Cameron Muir, chief economist with the B.C. Real Estate Association.

Residential home sales were up three per cent to 8,270 units in May compared with the same month last year, when the housing market first showed signs of deterioration.

This was the first year-over-year increase since December 2007, according to the association, but the uptick is unlikely to last, said Muir.

“We’ve seen four consecutive months of increases and it’s unlikely that month-over-month [sale] increases will continue. Sales will probably flatten out for the balance of the year,” he said.

Jill Oudil, a realtor with Coldwell Banker Westburn Realty, has been much busier in recent months and was even in a bidding war this week when one of her clients competed with eight others on a Burnaby house listed for around $530,000.

Oudil says it’s a sign that consumer confidence is back — but affordability is still important.

“Everything has to be well-priced to sell — and that’s the key,” she said.

10 HOTTEST NEIGHBOURHOODS IN THE LOWER MAINLAND

1. Langley: The hottest neighbourhood in the Lower Mainland is in the Township of Langley. In this neighbourhood (FSA: V2Y) south of Highway 1, between 196th and 248th streets, average prices were $490,354 in April, an increase of 15.46% from March and 12.2% from April 2008.

2. Richmond: The second-hottest neighbourhood in the Lower Mainland is in Richmond (FSA: V6X), bounded on the east by No. 5 Road and on the south by Westminster Highway, where average prices were $448,469 in April, an increase of 16.29% from March and 3.43% from April 2008.

3. Vancouver: The third-hottest neighbourhood in the Lower Mainland is the Coal Harbour area. In this neighbourhood, bordering English Bay, Hastings Street, Burrard and Broughton (FSA: V6E), average prices were $561,198 in April, an increase of 15.12% from March and 0.34% from April 2008.

4. Vancouver: In the area of Kitsilano bordered on the south by 16th Avenue and on the east and west by Arbutus and Blenheim (FSA: V6K), average prices were $688,471 in April, an increase of 20.28% from March.

5. Port Moody: (FSA: V3H), average prices were $498,358 in April, an increase of 19.83% from March.

6. Burnaby: In the Deer Lake area south of Highway 1 and north of Edmonds and Gilley (FSA: V5E), average prices were $497,960 in April, an increase of 19.42% from March.

7. Vancouver: In the Kitsilano-Shaughnessy area, bounded by 33rd Avenue between Arbutus and Granville (FSA: V6J), average prices were $706,128 in April, an increase of 15.79% from March.

8. Abbotsford: South Abbotsford, (FSA: V2T), average prices were $285,601 in April, an increase of 11.61% from March.

9. Mission: In east Mission (FSA: V2V), average prices were $346,778 in April, an increase of 9.91% from March.

10. Port Coquitlam: In the area north of the Lougheed Highway (FSA: V3B), average prices were $391,750 in April, an increase of 9.35% from March.

© Copyright (c) The Province

 

New home prices dropping faster than in the rest of Canada

Derrick Penner
Sun

Metro Vancouver home hunters are seeing relief on two fronts, with rental-apartment vacancy rates rising and new-home prices falling, according to new statistics released Wednesday.

Vacancy rates for two-bedroom apartments rose to 2.1 per cent in Metro Vancouver in April, a substantial jump from 1.5 per cent a year ago, Canada Mortgage and Housing Corp. reported Wednesday.

Across British Columbia in April, the vacancy rate for two-bedroom apartments varied from one per cent in Victoria to five per cent in Abbotsford.

The higher vacancy rates in Metro means advertisements for apartments are drawing two or three applications instead of 15 to 20, as was the case a couple of years ago when the vacancy rate hovered near zero, said David Goodman, a realtor who specializes in apartment buildings.

“It makes for a somewhat healthier market that there is a bit of equilibrium,” said Goodman, who is with Macdonald Commercial Real Estate Services Ltd.

“There hasn’t been much of that over the past three to six years,” he said.

One reason for rising vacancy rates is the movement of first-time home buyers leaving their rental suites and taking possession of newly built homes, Robyn Adamache, a Canada Mortgage and Housing analyst said in an interview.

Adamache said the slow economy and steep job losses over the fall and winter have meant there are fewer people coming behind to rent the apartments new homeowners leave behind.

And with large numbers of condominiums under construction around the city, Adamache said there is potential for the city’s vacancy rate to climb higher.

Goodman added that due to the recession, “we’re seeing more individuals move back with their parents, doubling up, scaling down, and that has created a mild increase in vacancies.”

Despite the increase, Metro’s vacancy rate is still low.

Adamache noted that since 1988, it has hit two per cent or higher on three occasions: in the fall of 1991, when it was 2.2 per cent; in the fall of 1998, when it climbed to 2.7 per cent; and in the fall of 2003, when it was two per cent.

Adamache cautioned that it is difficult to compare its spring survey with the fall one because post-secondary students take up a lot of apartments in the fall, but tend to depart by spring.

And while vacancy rates may be rising, prices aren’t. The average monthly rent on a two-bedroom climbed 2.7 per cent from the same month a year ago to $1,154.

Abbotsford was the least expensive market, with an average rent of $778 per month.

New-home buyers, however, saw some relief in Metro Vancouver prices, which fell 1.2 per cent in April from March.

Prices were down nine per cent from the same month a year ago, according to Statistics Canada’s new housing price index, which was also released Wednesday.

That was the steepest decline in new-home prices across Canada for that month.

However, that picture might be changing.

Neil Chrystal, president of Vancouver-based developer Polygon Homes Ltd., said his firm sold more new homes this May than it did in the same month a year ago.

“What we’ve seen in the last few months is prices have moved up a little bit,” since last fall, Chrystal said.

“Not a lot, but there was a big fluctuation that happened last fall in average prices.”

© Copyright (c) The Vancouver Sun