New Memento development offers affordable homeas in a great aslocation

LENA SIN
Province

Memento’s great location provides easy access to SkyTrain, the Lougheed Highway, TransCanada Highway, Brentwood Mall and local schools. Photograph by: Arlen Redekop, The Province

When sales of the master-planned Brentwood Gate community outpaced expectations by two to three years, developer Ledingham McAllister knew they were on to a good thing.

So naturally, they hopped across the street and acquired more land in this key Burnaby location in a bid to meet the high demand for the neighbourhood.

Now, two years later, Memento, a West Coast-inspired craftsman low-rise building, is ready for its debut.

The grand opening is scheduled for Sept. 12 and, with the development nearly completed, buyers will get to see exactly what’s on offer.

“They get to walk through the home, they get to see the view, the excellent finishing. None of it is left to guesswork,” says Manuela Mirecki, senior vice-president of marketing for Ledingham McAllister.

Memento is located on Beta Avenue at Lougheed Highway, two blocks east of Willingdon Avenue and within minutes of the SkyTrain station and Brentwood Mall.

Across the street is the Brentwood Gate community, comprised of seven buildings, which sold quickly when the first phase launched in 2006 and now has less than half a dozen units left.

“The response to that community was unbelievable,” says Mirecki.

“So because of that, we immediately recognized there’s a huge demand for this neighbourhood.”

With the success of Brentwood Gate, the long-time Vancouver developer had the confidence to continue with the construction of Memento, even through 2008, when many B.C. developers were halting projects in the wake of an economic recession.

Mirecki says the location has been one of the biggest draws for buyers.

“It just makes logical sense in terms of access to post-secondary education, to the schools that are nearby, to shopping, public transit and the highway. You’re literally right in the hub of accessing everything in the Lower Mainland, but you’re still in a solidly residential neighbourhood that’s as close to Vancouver as you can get.”

Memento has 87 units, with the smallest condos at 687 square feet and starting at $269,900.

While part of the L-shaped building fronts on to Lougheed, most of the condos are positioned along Beta Avenue to maximize privacy. The inner courtyard, with south facing views of Burnaby, is surprisingly quiet while the architecture is heavy on timber details and stone columns in an ode to classic West Coast style.

Inside, the suites all have either patios or balconies, electric fireplaces and kitchens equipped with stainless steel appliances and granite countertops.

The furnishings in the show suites tell the story of whose buying: The two-bedroom suite of 800 sq. ft. comes with two bathrooms and is furnished to show how a small family could comfortably fit in the space.

Meanwhile, the one-bedroom and den is feminine, furnished with designer, Burberry accents.

“If the homes are designed appropriately and sized appropriately, there’s no reason a small family can’t live in these homes,” says Mirecki. “[And] single women is a trend that we’ve definitely seen. It’s actually women in general. Those that are in committed long-term relationships, they are definitely the drivers to settle down to make the financial decision to say ‘You know what, we’re gonna put down roots.'”

Mirecki believes potential buyers of Memento will be similar to those who bought at Brentwood Gate — crossing all age groups and ethnicities, from first-time home buyers to empty nesters downsizing, but who share the common desire to live in homes they buy.

THE FACTS

What: Memento, 87 condos.

Where: 2088 Beta Ave.

(at Lougheed), Burnaby.

Developer: Ledingham

McAllister

Builder: Marcon

Sizes: One bedroom plus den from 687 to 770 sq. ft.; two bedrooms at 805 sq. ft.; two bedrooms plus den from 869 sq. ft. to 915 sq. ft.

Prices: From $269,900

Open: Grand opening is Sept. 12. The sales centre opens daily from noon to 6 p.m. (except Fridays) at 2088 Beta, Burnaby.
More information: www.ledmac.com/memento

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Four levels of government have their hand in the buyer’s wallet and the take is going to get larger next year unless something is done

Peter Simpson
Sun

French economist Jean Baptiste Colbert (1619-1683) opined that “the art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing.”

Since the provincial government, in the middle of an otherwise perfectly good summer, surprised everyone with its intent to pursue tax harmonization, there certainly has been a great deal of hissing.

Granted, some business sectors will benefit from combining the provincial (PST) and federal (GST) tax systems, and they will, cross their hearts and hope to die, pass on their savings to consumers.

I understand and respect their reasons for supporting harmonization (HST). It’s just that I am more than a little choked that buyers of new homes and homeowners renovating their homes will pay significantly more tax on these major expenditures next July, when the HST is implemented.

The current tax burden on new homes is staggering. Four levels of government — federal, provincial, regional and municipal — take turns plucking feathers from the goose, cleverly disguised as a homebuyer. Make no mistake, all taxes, regardless of when they are assessed, are borne by the buyer.

Without publishing a spreadsheet along with this column, here’s a rundown of the taxes, fees, levies and charges that are applied on a new home. And pardon me if I inadvertently leave out a couple.

There is the property transfer tax (PTT) on the building lot, builder licensing fee, sewer and water levy, school site acquisition fee, subdivision fee, building permit fee, development cost charges, embedded PST on all costs, PTT again on the purchase of the completed home, and the GST.

I asked a prominent award-winning builder to figure out the total taxes and fees on a home his company is building. He put me in touch with his controller, a chartered accountant. We settled on basing a reasonable example on a single-family home under construction in Maple Ridge. For the record, I have no quarrel with Maple Ridge; the subject home just happens to be there.

The home — a 2,200-sq.-ft., three-bedroom, 2-1/2 bath home with double garage and unfinished basement – has a selling price of $565,000. The total included tax burden is a whopping $75,500.

That same home under HST, including the proposed input tax credits and $20,000 rebate, jumps to $572,500, an increase of $7,500 or 9.9 per cent more tax than the current system. So, under HST, the tax burden on that new home next July will be $83,000.

There are police officers, firefighters, nurses and teachers among the homeowners in that Maple Ridge subdivision. They are hard-working, average family folks who likely don’t give a tinker’s damn about productivity, competitiveness or other buzzwords used to promote the benefits of the HST. They do, however, worry there might be too much month left at the end of their paycheques.

Commenting on the benefits of HST, Stephen Spector, president of the B.C. branch of the Certified General Accountants of Canada, was recently quoted as saying, “If someone is spending nearly a million dollars [on a house], don’t tell me they can’t afford an extra $20,000.”

I wonder if this enlightened number cruncher feels the same way about someone having to pay an extra $7,500 in taxes in order to purchase an average-priced home? Don’t know about Mr. Spector, but most folks take a long time to save $7,500 from their take-home pay after taking care of the bills.

Assuming the buyer of that Maple Ridge home has a down payment of 20 per cent of the purchase price, it is reasonable to presume 80 per cent of the $83,000 in taxes ($67,000) is going to be included in a mortgage. Based on a six-per-cent interest rate amortized over 25 years, the interest on that $67,000 worth of tax buried in the mortgage will cost the homeowner an extra $61,600.

And mortgage qualification for some buyers could also be affected by the higher cost of HST, as lending institutions aren’t exactly rubber-stamping mortgage applications these days.

I would like one brave builder to step up and advertise his homes like the automobile dealers advertise their vehicles. You know, a photo of a shiny new car accompanied by a too-good-to-be-true price with an asterisk after it. At the bottom of the advertisement, beside the corresponding asterisk, are about five lines of impossible-to-read explanations of what is not included in the advertised price – taxes, finance charges, license, fees, paint charges, battery and tire levy, air conditioning levy, etc.

That Maple Ridge home, which carries a price tag of $572,500, would be advertised as $489,500, plus applicable taxes, fees, charges, levies, etc. That sure sounds like one sweet deal.

Being an inquisitive guy, I asked the builder about his profit margin. After land costs, development-related expenses, construction costs, staff salaries and office expenses, his margin is razor thin.

The provincial government should ensure the HST on new homes is tax neutral — homebuyers must not pay any more tax on their new homes under harmonization than they do now. If tax neutrality is not achieved, watch for the hissing to reach a fever pitch next July.

Peter Simpson is the chief executive officer of the Greater Vancouver Home Builders’ Association. E-mail [email protected]

© Copyright (c) The Vancouver Sun

Prices will remain below 2008 levels before edging up in 2010

Derrick Penner
Sun

Spurred by record-low mortgage rates, provincial real estate sales should continue to rise through the remainder of 2009 from last year’s market fall, according to the B.C. Real Estate Association’s latest forecast.

Home sales have doubled since January’s near collapse in sales, association chief economist Cameron Muir said in a news release.

He expects transactions recorded through the Multiple Listing Service to climb some 15 per cent from 2008 to 79,400 units.

Prices, although edging up from their declines through the last half of 2008, will remain below last year’s levels before showing slight gains again in 2010, according to Muir’s forecast.

The provincial average price for a home of $451,200 will be one per cent below the 2008 level, and should show a one-per-cent gain to $457,600 in 2010.

“When we look at the economy itself, we’re coming out of the recession, albeit slowly,” Muir said in an interview. “And the amount of demand we’ve obviously seen — year-to-date and going forward — [justifies] sales around or below the 10-year-

average.”

B.C.’s 10-year average for housing resales is about 83,000 units.

Economic forecasts continue to indicate that the province’s recovery from recession will be slow, however. Central 1 Credit Union was the latest with its forecast that B.C. will experience below-average growth until 2012.

Muir’s expectation is for provincial unemployment to average 7.7 per cent this year, and go down only marginally next year.

However, he does expect the slow recovery from recession to start creating jobs that will help support demand for housing at that 10-year-average level.

Muir sees housing as a brighter spot in the economy, which will likely spill over into other areas, such as retail sales.

However, economist Helmut Pastrick, with Central 1 Credit Union, believes Muir’s forecasts are somewhat conservative given the pace of sales in recent months.

In answer to the question why, Pastrick replied, “Interest rates. It’s amazing the power of those low mortgage rates.”

Over the short term, with the Bank of Canada vowing to keep its trend-setting overnight rate at 0.25 per cent until the middle of next year, there seems to be little risk of mortgage rates rising.

Muir noted that most first-time homebuyers lock in mortgages for five-year fixed-rate terms, so they should be insulated from rising rates.

However, “if interest rates climb higher than expected, that’s going to pull demand out of the market as [a buyer’s ability to pay mortgage costs] is eroded.”

In a recent report, Scotiabank Economics senior economist Adrienne Warren noted that the average new mortgage payment in Canada in 2009 declined 26 per cent from its peak in 2007, due almost entirely to the reduction in mortgage interest rates.

Pastrick said the increase in interest rates should “be a self-correcting mechanism,” and if the province does not fall into the dreaded double-dip recession, they should rise as the overall economy improves.

“In a broader sense, at some point [low rates] run their course,” Pastrick said. “We know there will be a rate-

normalization phase when economic growth does pick up.”

The recovery of sales, however, hasn’t been shared equally across the province.

Metro Vancouver, Victoria and the Fraser Valley have seen relatively sharp rebounds, while the South Okanagan, the Kelowna to Vernon region and Kamloops are forecast to see much slower recoveries.

Muir expects housing starts to remain depressed for the remainder of this year, and not recover by a lot next year.

His forecast is for 14,800 new home starts by the end of 2009, which is only slightly higher than the most recent low of 2000.

Muir added that if some of those starts do not materialize and they fall below 14,400, that will be the lowest level of new home construction in the province since 1962.

© Copyright (c) The Vancouver Sun

Uptick in sales is ‘brightest light’ in otherwise dismal economic picture

Province

A better housing sales season is a bright spot in a gloomy economy, says the B.C. Real Estate Association’s forecast for 2010. Photograph by: Ric Ernst file, The Province

The B.C. Real Estate Association is forecasting a better sales season this fall than last, hoping to see the last of the housing recession.

In its latest third-quarter housing forecast, the association predicts that Multiple Listing Service residential sales will go up 15 per cent this year over last year.

In 2008, there were 68,923 units sold in the province, a sales drop of 33 per cent, according to the report. By the end of 2009, the provincial real-estate board, which represents the interests of 12 regional real-estate boards and more than 17,500 B.C. realtors, hopes to see 79,400 units sold, up 15 per cent from 2008’s lows.

In 2010 they are aiming for 84,200 units sold, an increase of six per cent over this year.

The 10-year-average for sales is 82,800 units.

The BCREA also anticipates that more homes can be sold in 2010. It is forecasting a sales increase of six per cent across the province for 2010.

“After twelve months of significant volatility in B.C.’s housing markets, greater stability is expected through 2010,” BCREA chief economist Cameron Muir said.

It expects growth in 2010 in Greater Vancouver with a predicted four-per-cent increase, in the Fraser Valley with a five-per-cent increase, and in Victoria with an anticipated nine-per-cent increase.

Double-digit sales increases over 2009 are forecast for the Sunshine Coast (15 per cent), the Northern Lights (12 per cent), Okanagan Mainline ( 12 per cent), and Kootenay (11 per cent) real-estate boards.

All of the boards had sales declines in 2008, and in some regions sales were down as much as 39 per cent. All but three regions had better sales rates in 2009 over 2008. In 2010, all boards are expected to be in positive territory. With an assumption of better sales comes an anticipated increase in sales volumes.

In 2009, $35.8 billion of real estate changed hands. In 2010, the real-estate industry hopes to see $38.5 billion in sales.

The association also made predictions on a rebound in housing starts.

This year has so far been a “dismal” one for housing starts, the association said, with a forecast total decline of 57 per cent by the end of this year compared to 2008, which was also a low year (starts in 2008 were down 12 per cent).

That comes to a total of just 14,800 units built in 2009, the lowest level of activity since 2000.

In 2010, the association predicts, starts in the province will regain some ground, with an estimated 18,500 units forecast to be built. Muir cautioned, though, that recovery would be spotty.

“Market conditions vary depending on the region of the province,” he said, adding that while Vancouver and Victoria have shown improvement, “interior markets are demonstrating a more gradual trend toward balance between supply and demand.”

The association noted that the uptick in housing sales over the traditionally strong spring/summer season is the “brightest light” in an otherwise dark B.C. economy.

It points out that overall, “economic output is expected to contract 2.2 per cent this year, with employment down 2.8 per cent and unemployment rising to an annual rate of 7.7 per cent.”

© Copyright (c) The Province

Malcolm Parry
Sun

NEW SPACE RACE: Recessionary chills are declining in numerous economic sectors. High among them is housing, on which the development community is throwing warm water again.

With the $330-million Woodward’s redevelopment closing, 160 buyers received their keys last week. Meanwhile, that project’s Ian Gillespie appears nearer to acquiring the Bayshore property. That should see two condo towers and a second hotel — estimated value $127 million — added to the Coal Harbour waterfront site. Gillespie reportedly now has until mid-October to complete due diligence on the deal.

As for hotels, don’t expect a 127-room Ritz Carlton on West Georgia Street. Malaysia-based Holborn Group president Joo Kim Tiah still has contractual obligations to renegotiate with the hotel chain, but the Arthur Erickson-designed 58-floor tower-with-a-twist should go ahead again in March with smaller, less-ritzy condos on the upper floors and a different-named hotel below. Original condo-buyers’ deals were cancelled in April. Multi-property owner Rob McDonald later half-joked it’d be a good site for Starwood Hotels & Resorts Worldwide’s luxury St. Regis brand. He’d just spent $11 million refurbishing his Dunsmuir-at-Seymour St. Regis hotel and has legal right to that title here. Still, Tiah’s father, Holborn chair and TA Enterprise executive chairman Datuk Tony Tiah Thee Kian, owns the now-renovating,185-room Aava Whistler hotel and others, so who knows?

On one of downtown’s smaller sites, at Hastings off Hornby Street, the 31-floor, $180-million Jameson House looks ready to roll again with Bosa Properties founder Robert Bosa supplanting brothers Tony, John and Tom Pappajohn, and son-president Colin Bosa running the project. Original purchasers have reportedly been offered renewal discounts from one to 15 per cent. The question for the Bosas and marketer Bob Rennie will be whether to sell hard right away or wait a year for better prices and activity.

Meanwhile, 250 buyers marched past the B.C. Regiment’s Beatty Street drill hall recently to pay some $600 per square foot for all the units of Concord Pacific’s adjacent Cosmo project.

© Copyright (c) The Vancouver Sun

Derrick Penner, John Morrissy
Sun

Metro Vancouver saw house prices tick higher in June after 11 straight months of decline on one bank’s index measure of property values.

With three other major cities on the index measure also showing price recovery, the National Bank of Canada is suggesting “[the] worst of home price deflation in Canada is therefore behind us,” according to a note from bank economist Marc Pinsonneault.

In June, Vancouver home prices rose 1.6 per cent from May based on the Teranet-National Bank house price index.

However, Vancouver prices were still down almost 11 per cent from their peak on the index in August 2008.

Nationally, Pinsonneault said real estate sales versus new listings slipped into seller’s market territory, and remained there in July.

“This is an environment conducive to continued improvement in home prices on a monthly basis,” he said, concluding that the worst of the housing downturn could be over.

The Teranet-National Bank index is based on repeat or paired sales of homes, so it captures direct examples of changes in value, rather than only the average value of all homes that sell in a given month.

National Bank spokesman Simon Cote said that in June the number of Metro Vancouver’s paired sales exceeded the number in the same month in the previous year for the first time since May of 2008.

Cote said that suggests a recovery in sales as well as prices. “This is very positive,” he said. “It is a result of the more relaxed monetary policy [which brings] more people to the market.”

Adrienne Warren, senior economist with Scotia Economics, concurred, saying, “Metro Vancouver is experiencing the same trend of firming sales and prices.

“Demand is benefiting from a little bit more optimism in the economy, and certainly low interest rates,” Warren said.

She noted that those low rates are the biggest factor in the 25-per-cent decline in average monthly mortgage payments since the late 2007 peak.

She added that if there is any concern it is over whether or not the buyers of today face substantially higher interest rates when they go to renew their mortgages.

Rates are expected to stay low for the next couple of years, Warren said, but “if [buyers] were to see increases in interest rates, they would be more vulnerable to increases in their monthly payments.”

Housing-market indicators in the United States are also turning more positive relative to bone-jarring declines that marked the subprime meltdown and drove housing prices 31 per cent below their peak in 2006, TD Bank chief economist Don Drummond said.

On Tuesday, the S&P/Case-Shiller composite index showed home prices in the U.S. bouncing higher for the second straight month.

And on Wednesday, the U.S. Commerce Department announced new-homes sales surpassed expectations by increasing 9.6 per cent to 433,000 units in July, the biggest increase in more than four years and the highest level of activity in 10 months.

Though residential real estate accounts for only five per cent of each country’s economies, Drummond said rising home prices boost household wealth and spending power, and carry a psychological boost to recession-weary consumers beyond their numbers.

Renewed strength in the Canadian market was evident in four of six major markets tracked by the Teranet-National Bank survey.

Montreal posted its fourth straight monthly increase, up 1.2 per cent; Ottawa gained 2.1 per cent; and Toronto recorded its second straight month of gains, up 2.3 per cent.

Halifax and Calgary were the only laggards, each slipping 0.2 per cent. For Calgary, it was the 12th consecutive losing month.

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