Don Cayo
Sun

The way new homes are taxed in B.C. is excessive, wrong-headed and harmful, and the harmonized sales tax will make it worse.

So I think the home-building industry is aiming too low when it asks for some breathing room to consult with the government, and some tweaking of new-home provisions in the pending federal-provincial HST deal. It should seek — and citizens should support — a thorough review of how all levels of government are driving house prices into the stratosphere.

By the province’s own calculation, the pending tax shift — scrapping the seven-per-cent provincial sales tax and adding seven per cent to the five-per-cent GST — will add $12,500 to the cost of a $650,000 home.

Such a home is, of course, on the low side of what Vancouverites must actually spend to buy a house these days. And this is just the tip of the iceberg.

Peter Simpson, CEO of the Greater Vancouver Home Builders Association, has crunched numbers on a somewhat cheaper home, for which the HST will add a noticeably less additional tax bite — an increase of about $7,500 on a $565,000 new home.

Yet the total tax load on the home will add up to $82,974. Without adding a number of smaller amounts, it will include:

– $2,400 in provincial property transfer tax on the original land sale, plus $8,598 PTT on the finished home.

– $20,603 in municipal development charges.

– $1,731 in water and sewer fees.

– $2,339 for a building permit.

– $695 for the Homeowners Protection Office warranty, plus a $220 Build Green fee.

– $63,588 in HST, less $20,000, which is a five-per-cent rebate on the first $400,000 spent on the home.

Ergo $82,974 — a huge burden at what is already a difficult time for buyers, especially for young families.

All three levels of government — well, four, since the regional district also has its hand in new homeowners’ pockets — may all think they need the money. And I, myself, argued as recently as Monday that, as long as we encourage or tolerate government spending at current levels, we citizens ought not whine at having to pay the cost.

But this is too much to take at one time from too few, especially at a time when they can least afford it. It is, simply put, bad policy to put extra barriers in the way of people facing the already-daunting challenge of providing their family with a home.

And don’t imagine this is just a plea for a tax break for the rich. Consultant Frank Clayton of the Altus Group looked in-depth at who buys homes in Ontario. He found that a quarter of the buyers of newly built Toronto-area homes costing $400,000-$500,000 had incomes under $70,000 a year, as do a fifth of the buyers of homes priced at $500,000 or more. You can bet the numbers are similar here. There’s no shortage of anecdotal evidence that a lot of Vancouverites live incredibly frugally in order put their own roof over their heads.

Altus didn’t look as closely at B.C. as at Ontario, which has also announced it will adopt the HST next July. But an Altus report does point out that in 2006, government-imposed costs added 11.4 per cent to a median-priced house ($715,000) in Vancouver, and 17.4 per cent in Surrey, with a median of $500,000.

I’m guessing the provincial government is getting hammered hard enough on housing costs that it will soon do something with the property transfer tax. With luck, they’ll scrap it, although they may just tinker.

But even scrapping this tax — one of the most unfair and counter-productive tools in the taxman’s kit — isn’t enough. What’s needed is a full review of what governments take from new home buyers, and some intelligent decisions about how much is enough, and which government should get what.

Because currently the whole mess is out of control. Look at just one aspect, development fees, which Altus notes have crept up from about 10 per cent of municipal revenue in 1995 to nearly 20 per cent in 2007.

On one hand, these have been leveraged to provide some striking and worthy amenities in places like Vancouver. But when you look at the essence of these fees, a not-so-pretty picture emerges. What they actually do is take capital costs that would otherwise be paid for by government borrowing, and pawn it off to mortgages of newcomers to the area. Thus they represent a massive tax shift from long-time residents to newcomers.

I’m not saying these kinds of fees must be dropped — perhaps it’s fair to ask newcomers to pay extra, since they are gaining access to existing amenities.

But is it fair to extract these substantial sums plus HST, plus costly permits, plus . . . plus . . . plus? I don’t think so.

The province alone didn’t create this can of worms, but its HST decision certainly pried the lid off. So it’s up to the province, I believe, to use its influence with Ottawa and its power over the municipalities to find ways to rein in the overall tax load on new homes.

In the meantime, the feds could speed the process by agreeing to the request of the Canadian Home Builders Association branch in Victoria and delaying the planned end-of-the-month signing of the deal. Because, on balance, the move from PST to HST should be a good one for the provincial economy. But the whole process risks being sullied by this one very large flaw.

© Copyright (c) The Vancouver Sun

Consumers can get listing information from property signs with realtor’s code

Derrick Penner
Sun

Starting the house hunt in Metro Vancouver no longer needs to be a static pursuit.

A couple of firms have joined the technological wave of text-messaging and map-location to launch services that deliver property information to consumers on their wireless devices.

It is the thin edge of making property searches completely mobile, although not a lot of consumers may be aware they are available.

“There’s no doubt that mobile is where it’s at,” says Kye Grace, a tech-savvy realtor and consultant in Vancouver. “From searching right down to a realtor [website] having a mobile option for iPhones, BlackBerrys and Android phones.”

The logic for realtors, Grace said, is that “you want to be where the consumer is. And in all reality, the consumer is going mobile.”

From the consumer’s perspective, Grace said regardless of how much time consumers spend looking up property listings on their computers at home, they still wind up driving around to see the offerings, so its more convenient and efficient if you can deliver information to them where they are.

RealtyText is one program created by the Vancouver-based firm RT RealtyText, which uses text-messaging to deliver information to house-hunting consumers.

Company president George Haddad said realtors can subscribe to the service, which allows them to upload their listings to RealtyText’s system, then put an addition to their property signs printed with the realtor’s special code.

The consumer who sees that sign texts the code to the RealtyText system, which sends back the listing information — including specs, photos and an option to contact the listing agent to set up a viewing.

“Business has been really, really good,” Haddad said of his company’s initial sales campaign.

“What [realtors] like is that they’re providing information to clients 24/7,” he added. “As well, they love the fact they can monitor activity on a property,” by seeing how many people request information.

Haddad, an active developer, said he got the idea for RealtyText out of his own frustration at not being able to get information quickly while he was on the road.

And from watching American Idol and registering the show’s method of text messaging for viewers to vote for favoured contestants, Haddad thought that text would be the way to do it. After about 18 months of development, he launched RealtyText earlier this year.

The technical experts at Myrealpage.com dreamed up a more comprehensive search tool that marries Google Maps with the Multiple Listing Service databases of B.C.’s real estate boards, and provides a search tool accessible through a mobile version of a subscribing realtor’s website.

“With the mobile product, it gives consumers their first opportunity to go and shop for a home away from their home computer,” Ray Giesbrecht, Myrealpage.com’s sales and marketing manager in Vancouver, said in an interview.

The service uses the iPhone’s GPS navigation system to show consumers MLS property listings within the vicinity of their location on a Google Map, and set it to follow them around, plotting more listings as they travel through neighbourhoods.

This gives homebuyers “a more realistic context of the property vis-a-vis its neighborhood,” he added.

Giesbrecht said the system also has options realtors can access for users to flag favourite listings, grade them, and make comments on them for future review at the realtor’s office.

The Rogers-owned search service Zoocasa.com does offer a similar mobile application for the iPhone, but Giesbrecht noted that it aggregates listings from sources other than MLS databases, so its listings are limited compared with Myrealpage.com.

Grace, while he is not a user, offers a favourable review of Myrealpage.com’s offering.

“As far as individual products go, Myrealpage is the best,” he said, “but I don’t think they have any competition either.”

The difficulty right now, Grace added, is accessibility. At this point, consumers probably aren’t aware that the tools are available.

© Copyright (c) The Vancouver Sun

Resort shows steepest drop in average room prices in the country, Hotels.ca says

Derrick Penner
Sun

Hoteliers in Whistler have had a tougher time than their counterparts anywhere else in Canada during the recession, recording the steepest decline in average room prices in the country from January to June, according to Hotels.ca.

Using data from bookings made through its website, Hotels.ca found that Whistler’s average room rates declined 27 per cent in the first part of the year to $173 per night from $235 per night over the same period of 2008.

Tourist officials and hoteliers at the resort question Hotels.ca’s estimate of the depth of discounting, but put the dropping rates down to a need to draw local travellers to replace business from American tourists and corporate visitors that evaporated last fall and winter.

“We’re showing a 14-per-cent decline,” Arlene Schieven, vice-president of marketing for Tourism Whistler, said in an interview. “Their [estimate] is more dramatic.”

However, the discounting has allowed the resort to sell to a wider clientele, which might not normally visit, Schieven added, and that has helped hotels to mitigate the decline in business experienced by all resorts.

Hotel-night stays in Whistler were down eight per cent over last winter, Schieven said, which was less than expected.

Anita Chau, senior marketing manager at Hotels.ca, which provides a third-party booking service, said the survey shows that no destination area, particularly among resorts, has been immune to the recession.

After Whistler, Hotels.ca found that the mountain playground of Jasper saw the second steepest drop in average room prices — 22 per cent to $179 per night, compared with $229 a year ago.

Collingwood, in Ontario’s Blue Mountain area, saw the third steepest drop: 15 per cent to $182 per night, versus $214 a year ago.

Hotels.ca said Vancouver saw average room rates dip 10 per cent to an average $144 per night from an average $160.

“[The survey] says that right now is a great time for travellers to be travelling,” Chau said. “But we’re finding that it’s unfortunate for hoteliers in Canada in that the economic climate has hit them as well and, like the rest of the world, prices have declined,” Chau said.

In Whistler, Roger Soane, general manager of the Fairmont Chateau Whistler Hotel, said he noticed a distinct drop in the amount of corporate business after last fall’s meltdown of the financial sector and “it wasn’t the trend to be seen meeting at a resort.”

“So when you lose that type of booking, you go out and try to replace it,” Soane said.

He added that Chateau Whistler tried to “add value” to its room rates by throwing in things such as free skiing during the winter and free golf or free food and beverage options rather than lowering prices.

“Of course you have to [also] reduce your prices and we’ve done that, the same as every other destination in the world,” Soane said.

Beyond room prices, Soane added that resort hotels have seen net revenue per room — this includes all money guests spend at a hotel, apart from the room — down 20 per cent overall.

Trevor Graham, general manager at the Westin Hotel in Whistler, said there has also been a noticeable decline in American visitors.

Graham said Westin’s average room-rate was down just nine per cent from January to June a year ago and his company has used “value-added” techniques such as throwing in attractions or offering three nights and get a fourth night free to draw customers rather than slashing rates.

“I think we would all agree that when you lead with price you lose,” Graham said.

“Because it just takes so long to recover from a rate war, and as much as its tough right now, the cost of goods and costs of labour are holding your own. You still want to be as profitable as you can.”

The Hotels.ca index is part of the Expedia-owned Hotels.com worldwide group of travel websites.

Hotels.com also noted that the average price of a hotel room around the world fell by 17 per cent in the first six months of 2009, the lowest levels in five years. The report found Canadian travellers paid up to 27 per cent less in the first half of 2009 for a one-night stay in some of the most expensive cities than they did in the same period in 2008.

Closer to home, Toronto topped the list of favourite domestic destinations for Canadian leisure and business travellers, followed by Montreal and Vancouver.

© Copyright (c) The Vancouver Sun

Derrick Penner
Sun

Metro Vancouver’s dramatic 117-per-cent increase in home resales in August compared to August 2008 led a national rebound in the real estate market.

According to statistics released by the Canadian Real Estate Association, 42,483 homes changed hands across Canada via the Multiple Listing Service Systems in August 2009.

University of B.C. real estate expert Tsur Somerville said Metro Vancouver’s dramatic bounce is surprising, but it is important to remember that sales here peaked higher, then dropped more quickly and more steeply than in other parts of the country.

“So we’re coming back from much more of a nadir than is the case of other provinces,” said Somerville, who is director of the centre for urban economics and real estate in UBC’s Sauder School of Business.

“In some sense, it’s the way that some people have described the recession, very steep but surprisingly short,” he said. “In some sense, our housing sales numbers really reflect that.”

The CREA summarizes statistics reported by real-estate boards across the country. They showed that in August, Metro Vancouver had the biggest jump in home resales across the country, at 117 per cent.

In B.C., the 8,565 homes sold in August represented a 67-per-cent increase from the same month a year ago compared with Alberta, where the 5,407 homes sold represented a 7.5-per-cent increase from a year ago.

Ontario saw 18,067 homes sold in August, a 16-per-cent increase and Quebec saw 5,709 homes sold, which was a 5.2-per-cent increase.

Nationally, the 42,483 sales in August represented an 18.5-per-cent increase from the same month last year, and the third consecutive year-over-year gain of more than 15 per cent, according to the news release.

Sales were 6.6 per cent below the record for the month of August set in 2007.

Aggregate MLS home sales activity for 25 major markets posted the third consecutive increase from year-ago levels of more than 20 per cent in August.

The national MLS residential average price rose 11.3 per cent from year-ago levels to $324,779, according to the release.

The seasonally adjusted dollar volume of all residential MLS sales also set a record in August 2009, rising 1.5 per cent from the previous month to $14 billion.

© Copyright (c) The Vancouver Sun

Greater city area sees huge gains from a year ago

Province

Canada‘s resale home sales sizzled in August, led by Greater Vancouver’s 117-per-cent gain from a year ago, the Canadian Real Estate Association said yesterday.

Across the country, 42,483 homes changed hands in August, an 18.5-per-cent gain from a year ago, the association said.

Economists warned, however, that the market’s performance in recent months is not likely to be repeated as home prices rise and the market consolidates gains.

On a month-to-month basis, in fact, national homes sales dipped slightly to 42,426 units in August from 42,666 in July.

“Canada’s housing market has taken its cue more from the Great Houdini than the bear [economist Noriel] Roubini, fully escaping from the clutches of a potentially lengthy, harsh downturn,”said BMO Capital Markets deputy chief economist Doug Porter.

“Record-low borrowing costs, combined with the growing realization that the economic storm is passing, have fuelled the remarkable turnaround.

“However, the gaudy sales growth will be tough to maintain now that prices are moving higher again.”

Resale activity rose from year-ago levels in about three-quarters of local markets.

Toronto‘s year-over-year sales rose 27 per cent, Calgary’s 17 per cent and Montreal’s nine per cent.

August marks the third consecutive month in which year-over-year sales rose by more than 15 per cent, CREA said.

Greater Vancouver remains Canada’s most expensive market. Year-over-year average prices in the area climbed 9.1 per cent to $608,032.

Victoria, the country’s second priciest market, climbed 6.4 per cent to $481,279.

The national average price rose 11.3 per cent from a year ago to $324,779 in August, CREA said.

A market-weighted average shows a more modest 5.3-per-cent year-over-year rise in average prices.

“On balance, given the recent unbelievable strength in the

Canadian housing market, the modest [month-to-month] down-shift in sales in August should not be seen as anything other than a brief respite in what has been a remarkable recovery in the sector,” said TD Securities economics strategist Millan Mulraine.

“Even so, we believe that Canadian housing market activity in the coming months will be relatively tepid as the sector consolidates the gains made since January.”

© Copyright (c) The Province

Fiona Anderson
Sun

The new condominium market seems to be alive and well in Vancouver with the Ritz-Carlton on West Georgia Street the latest in a string of mothballed projects that are coming back to life.

Construction of the planned 60-floor Ritz-Carlton — with a 127-room luxury hotel occupying the first 20 floors and 123 condominiums above — started in March 2008, but was halted last fall as the economy nose-dived.

In February, only half of the condos, which ranged in price from $1.4 million to $28 million, had been sold and the project was shelved.

But earlier this month, the project’s developer, Holborn Group, applied to the city to add height to the current design and increase the density of the project, Holborn’s president and CEO Joo Kim Tiah said.

Tiah hopes to have approval in place by the end of the year so that construction can start again in March 2010.

Whether the Ritz-Carlton will still be part of the plan is up in the air, though the two groups have agreed to work together to see whether the building can be re-engineered to make it viable, said Michael Beckley, senior vice-president of development with Ritz-Carlton in Canada.

The building design — a twisting tower by Arthur Erickson — is “stunning,” Beckley said. But “the space wastage was incredible.”

So the two groups need to find a way to redesign the building to increase both the number of hotel rooms and the number of condominiums, “without taking away Erickson’s stamp on it,” Beckley said.

At the same time, Ritz-Carlton has certain brand standards that have to be met at every hotel bearing its name.

“But if we can make it work, we want to make it work,” Beckley said.

Other projects once on hold have been taken off the back burner to become sizzling successes.

Ninety per cent of the units in Richards were sold in 45 days this spring and summer after being temporarily put on hold, Tracie McTavish, president of Rennie Marketing said. It was the first presale in a year and he called it “a roaring success.”

Next up for Rennie Marketing is Maynards Block False Creek Flats, which will come to market in the next two to four weeks, McTavish said.

In July, Concord Pacific had even hotter success, selling more than 230 units in its Cosmo project in under three days.

And construction at Jameson House on West Hastings Street is also back on track now that the developer’s financial woes have been soothed and a new partner, Bosa Properties, has joined the team.

Like Richards and Cosmo, Jameson House is lowering its prices, even for those who had already committed through presales.

But lower prices may not be here for long.

“Prices are coming back to where they were and the activity is definitely there again,” McTavish said. “It’s a very healthy market.”

© Copyright (c) The Vancouver Sun

Sun

Vancouver led the nation with a whopping 117 per cent increase in home sales in August compared to August a year ago.

According to statistics released by The Canadian Real Estate Association, a total of 42,483 homes traded hands across Canada via the Multiple Listing Service Systems in August 2009.

This represents an increase of 18.5 per cent from the same month last year, and the third consecutive year-over-year gain of more than 15 per cent, according to the news release.

Sales were 6.6 per cent below the record for the month of August set in 2007.

Year-over-year gains in Vancouver (117 per cent), Toronto (27 per cent), Calgary (17 per cent) and

Montreal (nine per cent) contributed most to the national increase in activity.

Aggregate MLS home sales activity for 25 major markets posted the third consecutive increase from year-ago levels of more than 20 per cent in August.

© Copyright (c) The Vancouver Sun

 

THE BEACON: Former drug haven now features clean, safe rooms

CHERYL CHAN
Province

The Downtown Eastside’s most notorious hotel reopened for business yesterday with a new mandate to provide safe, clean rooms for 40 homeless people.

The Backpackers Inn at 7 West Hastings Street — a crime and drug haven singled out by Vancouver police as the worst-run single-roomoccupancy in the city — was purchased by the provincial government in January for approximately $3 million.

“I wasn’t sure this one could actually get done,” said Housing Minister Rich Coleman, referring to the deplorable condition the hotel was in before renovations began.

“I’m just thrilled and impressed at how it’s turned out.”

The former owner completed renovations on the three-storey brick building as part of the sale conditions before the province took possession in July and put in fire and safety upgrades.

Re-christened the Beacon Hotel, the building will be operated by the Portland Hotel Society, which is also set to provide support to the new tenants — many of them from the New Fountain shelter a block away, who often struggle with drug addiction and mental illness.

It’s the latest SRO to be unveiled out of the 23 hotels purchased and renovated by the province at a cost of $138 million.

Other recent openings include the 25-unit Savoy and the 63-room Dominion Hotel. Renovations at two more buildings — the 40room Orwell Hotel and the 138-room Marble Arch — are expected to be completed in late fall.

Michael Shadbolt, who had been homeless for two years, said he’s happy to finally have a roof over his head.

“It’s a complete change of life for me, a place to recharge my batteries. It’s just safe, clean housing,” said Shadbolt, 47.

Coleman said safeguards such as 24/7 staffing, secure entrances, surveillance cameras and a police liaison officer have been put in place to make sure the building doesn’t revert to its former state.