Auctioneer’s lure: 15 cents on the dollar

Sun

You could own a new home in this province for 15 cents on the dollar. You would have to drive some to use it, of course; about 10 1/2 hours by the province’s reckoning.

An American auction house this week circulated notice that it will ”bring down the hammer” next month on 40 apartments on Lake Windermere. ”REAL ESTATE AUCTION FEVER SPREADS NORTH!” the headline atop the news release announces.

The auction company is Kennedy Wilson and it is ”one of the world’s largest real estate auction companies.”

Heck, we at Westcoast Homes would have paid attention just because of the company’s address, Wilshire Boulevard, in Beverly Hills.

There they know how to liquidate unwanted real estate, with the Kennedy Wilson news release reporting that 34 Pasadena residences sold in one hour was the company’s most recent success.

”Bidding is set to start at just $85,000 on new designer condos which were previously priced at up to $589,900 each,” the Kennedy Wilson Lake Windermere news release teases. The Lake Windermere Pointe auction is also a Canadian first, the news release further teases. (If journalism ever dies, one engraving on the craft’s tombstone will read, superlatives ‘r’ us.) Lake Windermere Pointe is located in Invermere (”unmatched scenic beauty … rugged mountains … mature stands of fragrant evergreens”). If you bid, more likely not not you will be bidding against Albertans: Calgary is a three-hour drive away. The Lake Windermere Pointe developer, Pointe Of View, is a Calgary company, with some Vancouver-area developments on its CV. Kennedy Wilson’s Rhett Winchell reports that Pointe Of View ”is eager to take advantage of lower labour and material costs to start the next phase of its J/V waterfront resort in Invermere. ”To do so they have decided to sell 40 of their remaining units at Lake Windermere Pointe. The cost savings derived by starting the next phase now are huge.” Eleven different plans will be auctioned off, all of them either one bed or two bed. ”Bright, open designs with spacious balconies and barbeque decks provide picture-postcard views of tranquil Lake Windermere and its lush, primordial surroundings. ”Inside, each home features top-quality materials and high-end design details such as ceramic tile flooring in the entryway and brushed nickel hardware in gourmet kitchens. ”Plush wall-to-wall carpeting and central heating and air conditioning ensure every home is a paragon of comfort no matter what the season.” (We at Westcoast Homes usually spare you these sales-literature promises, but the Lake Windermere Pointe story would be incomplete without them.) Bidders must register, and with a cashier’s cheque of $2,000 for each home, the news release says. Bidders can also practise. The auctioneer has scheduled an information meeting for Sept. 26, in Calgary. “The seminar will close with a live practice auction hosted by an actual Kennedy Wilson auctioneer.” The auction is scheduled for Oct. 3, in a Calgary hotel. For more information, visit WindermerePointeAuction.com on the Internet.

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Ledingham McAllister apartments profess recovery sensibility

Michael Sasges
Sun

At the Memento new-home project in Burnaby, there is a ‘front yard’ (left) and a ‘back yard’ (right). The former is shared by the north-facing first-floor households and is ‘around the corner’ from the building entrance. Each patch of individual lawn has been fenced off. Developer Ward McAllister wanted an entry to the building that would differentiate Memento from earlier Ledingham McAllister residential buildings across the street. Stone piers, timberwork and a water feature will all tell Memento residents and visitors they’ve arrived. The knee-braces (below) broadcast the roof’s generous overhang; the railings, the outdoor extension of residency.

The Ledinghom Mcallister development company is selling the Memento homes from two show homes, one larger, one smaller. Sun photographer Stuart Davis shot the larger, a two-bed, two-bath 805 square foot apartment, with south facing covered patio.

MEMENTO

Project location: Brentwood, Burnaby

Project size: 87 residences, 4-storey building

Residence size: 1 bed + den (687 sq. ft. – 705 sq. ft.); 2 bed (797 sq. ft. – 807 sq. ft.); 2 bed + den (872 sq. ft. – 915 sq. ft.)

Prices: From $269,900

Sales centre: 2088 Beta St., at Lougheed

Hours: noon – 6 p.m., Sat – Thu

Telephone: 604-298-1283

Web: ledmac.com/memento

Developer: Ledingham McAllister

Architect: Rositch Hemphill and Associates

Interior designer: i3 design

Occupancy: Immediate

– – –

By location, in time and place, the Memento new-home project is a public memento in the making of where real estate locally has been for the past year and where it is going — or not — in the next year.

Of course it’s unreasonable to nominate a (mostly) private achievement as a public memorial to an era or epoch, this one the retreat from, and then the recovery of, one of our town’s defining activities: the construction, sale and purchase of the attached home and the subsequent densification of neighbourhoods.

But I will not be able to pass the Burnaby intersection of Lougheed and Beta in the future without thinking of the Memento sales and marketing campaign.

It is an expression, from a veteran developer, that in September 2009 the local real estate business cycle, more likely than not, is in its recovery stage and it is a demonstration of the means of recovery, modest product from a developer possessing the wherewithal — capital and human — to prepare for recovery during retreat.

• The Memento homes are not homes first offered for sale last September; pulled from the market when they generated little interest, as an international financial crisis commanded the front page and the top of the news hours, and then re-offered as government monetary decisions mitigated the evaporation of credit around the world.

• They are not newly priced homes, meaning recently reduced in price. (They, of course, are newly priced, as in recently priced.)

• They are not “remainders,” inventory not sold during a sales and marketing campaign conducted before construction or inventory returned to the developer by purchasers during construction

• They are not more-of-the-same homes, a new phase in a new-home community, a completed clubhouse or completed grounds the only other news.

They were built for the buyer who restored liquidity to the local real estate market, new and resale: the first-time buyer.

And they were built by a seller who could start and complete a new-home project from its own financial resources or with bank financing extended without a pre-sale requirement. They are ready for occupancy.

Their modesty is only relative. In every home, granite tops the counters, stainless steel clads the kitchen appliances and the backsplashes are full-height, from counter to cabinetry. And, at fewer than 90 homes, they are a small undertaking for the Ledingham McAllister development company. Across the street, the company is finishing up the Brentwood Gate new-home community of eight buildings and about 800 homes.

For Ledingham McAllister, today’s Memento grand opening is the first in 15 months, reports Manuela Mirecki, the company vice-president charged with selling the homes.

In those months, Mirecki says, the first-time buyer has improved his or her product knowledge. And that’s why, for her, a completed building is an important part of the sales and marketing campaign.

“With the market cycle that we’re starting to come out of, with things slowed down, with a lot of developers finding themselves in tough straits and purchasers finding themselves in tough straits, buyers have become much more aware, much more savvy, much more educated about what they’re purchasing.

“There is very little if any finished product that’s brand-new and that’s available right now. Any opportunity a person can actually walk through, touch, feel, eliminates guesswork. What you see is what you get.”

The Memento building and grounds will be seen daily by thousands of passersby, either in private vehicles on the Lougheed Highway or on SkyTrain carriages above the regional roadway.

Any opportunity a person can actually walk through, touch, feel, eliminates guesswork. What you see is what you get.”

The Memento building and grounds will be seen daily by thousands of passersby, either in private vehicles on the Lougheed Highway or on SkyTrain carriages above the regional roadway.

This last quality is, perhaps, why public-memento status for this new-home project is more than mere fancy. The Ledingham McAllister development company hasn’t so much erected a building as it has sculpted a very public addition to the built environment in a very public location.

“Are they more ambitious than things we have done in the past? Probably not. Are they more ambitious for first-time, entry-level product? Probably,” Manuela Mirecki says of the Memento building and grounds.

“We see this as an entry-level product, first-time buyers, but I would say a more sophisticated first-time buyer. . . . The level of finishing . . . does not speak to a bare-bones, first-time buyer. The building, in the way it has been designed so the outlooks, for the most part, are to the quiet side, the landscaping. I don’t think it reads as a first-time-buyer opportunity but that’s who we are targeting.”

At least five different claddings cover the exteriors: two different-in-colour vinyl sidings; two different board-and-batten treatments, and wood shingles.

The trim and casings at windows and corners are robust. Muntins divide the windows into “lights.”

Black ironmongery defines decks and patios and yards.

More-difficult-to-execute hipped roofs top the building. “Knee-braces” proclaim the intersection of roof and exterior walls and accentuate generous overhangs.

Ward McAllister didn’t, of course, set out to erect a permanent pointer to business-cycle retreat and recovery. In specifying the Memento architectural elements that he specified, he was only doing what other builders of “spec” homes have always done: drape the product with a pride of ownership sensibility.

This work is especially pronounced at the building’s entrance, which few passing by on the Lougheed or in a SkyTrain carriage will see.

The ceiling of the exterior portion of the entrance is a true wood soffit, of dimension lumber and in the herringbone pattern. Timber and stonework guide resident and visitor to the lobby. Water features soothe their passage. These are “sense of entry” treatments and the company means them to reference the ski lodges of Whistler.

McAllister calls the building’s architectural style West Coast. A Ledingham McAllister partner can call it anything he wants: the first predecessor company started building in Vancouver in 1905. McAllister and partner Bruce Ledingham have built and sold thousands of homes in the last 25 years.

One additional reason for the presence of so much decorative detail is the presence of the Brentwood Gate community across the street, McAllister reports. He wanted to differentiate if not the buildings, then their entrances.

“Most of our projects have got a very strong sense of entry. In this project we just wanted to differentiate it from the entrances we have across the street.”

© Copyright (c) The Vancouver Sun

Derrick Penner
Sun

Metro Vancouver new-home prices have posted their biggest month-to-month gain in more than a year.

Contracted home prices for Metro Vancouver on Statistics Canada’s new housing price index rose 1.2 per cent in July from June, the biggest increase among Canadian cities.

Year over year, however, Metro’s new-home prices were still eight per cent below their level in July 2008.

The July increase beats the 0.4-per-cent rise in Metro’s index score in May, which was the only other month in the last 15 in which the index score rose.

That appears to indicate homebuilders have stemmed the price-cutting they engaged in to make sales during the market downturn.

What is noticeable in the market now is a shrinking inventory of new homes on the market, said Neil Chrystal, president of builder Polygon Homes Ltd.

Chrystal thinks developers discounted more steeply than the eight per cent reported by Statistics Canada and buyers are jumping in because they perceive they are getting good deals, especially with current low mortgage rates.

“In the last few months prices, I think, have stabilized and there might be a small creep up,” Chrystal said in an interview. “But they still represent really good value from where they were a year ago, whether that’s eight per cent or 15 per cent [lower]. I would guess that it’s more than eight per cent.”

Nationally, prices rose unexpectedly in July, the first increase in 10 months, amid signs of recovery.

Statistics Canada said its overall new-house price index edged up 0.3 per cent during the month. Most economists had expected prices to decline 0.1 per cent after a 0.2-per-cent drop in June.

July saw the first increase since September 2008, the agency said.

Following Vancouver, Hamilton had the next biggest gain at 1.1 per cent. Windsor, Ont., and Calgary both gained 0.5 per cent. The biggest price decline was in Victoria, which fell 3.5 per cent. “In response to slow market conditions, some Victoria builders reduced their prices in order to finalize sales,” Statistics Canada said.

Millan Mulraine, economic strategist at TD Securities, said it appears that “the buoyancy that has been seen in the Canadian existing homes market may finally be filtering through to the new homes markets.”

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Derrick Penner
Sun

B.C. home sales recorded through the Multiple Listing Service in the first eight months of the year exceeded the number of sales recorded during the same period in 2008, the B.C. Real Estate Association reported Friday.

That came as a result of strong sales in August. During that month, 8,565 units changed hands through MLS, 66 per cent more than the number of sales across the province in the same month a year ago.

And in total, B.C. saw 54,945 homes sold by Aug. 31, some 0.6 per cent higher than the 54,635 homes sold during the same period in 2008.

Sales results, however, have been uneven as the province’s resource dependent-regions, which have been more deeply bit by the recession, haven’t fared as well as the Lower Mainland and Victoria.

“Every region has shown improvement since the beginning of the year,” Cameron Muir, chief economist for the B.C. Real Estate Association, said in an interview.

“But when you look at the South Coast and Victoria, you see a sharp upturn. In the Interior or north, it’s more of a gradual increase in terms of market conditions.”

And in the Lower Mainland and Victoria, the markets have experienced greater price stabilization, which helped raise B.C.’s average home price in August 12 per cent to $471,078, compared with $421,685 a year ago.

Muir added that current year-over-year comparisons pit this year’s sales rebound against the beginning of last year’s precipitous decline in sales, so “you’re going to see some wild swings.”

And while current sales are driven by the pent-up demand of buyers who sat out the market decline of last fall and winter, but are now jumping back in to take advantage of historically low mortgage interest rates and lower prices, he doesn’t expect the rebound to continue as strongly.

“Record-setting levels are unlikely, given the economy is crawling out of recession and full recovery of the B.C. economy is still some distance away,” Muir said.

Still, Muir said the recovery B.C. has seen in real estate sales is a positive sign of growing consumer confidence and evidence that the household financial conditions of buyers are “in relatively good shape.”

“The expectation is that typically in a recession, consumers are the first out of the gate [to start spending] to signal that [economic] recovery is soon to follow,” he added.

However, eight of province’s 12 real estate boards, reported sales down from the same period a year ago.

The Northern Lights district of B.C.’s northeast saw the biggest decline in sales, with 41 per cent fewer transactions in August and 38 per cent fewer for the year as of Aug. 31.

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The ins and outs of the HRTC

Jamie Golombek
Sun

The Home Renovation Tax Credit is so popular among homeowners it will likely be reintroduced in years to come. FOR CANWEST NEWS SERVICE

Canadians’ love affair with the “proposed” Home Renovation Tax Credit (HRTC) continues unabated, despite the fact that legislation to make the HRTC law has not yet been drafted.

The legislation officially enacting the popular credit is expected to be introduced shortly after Parliament resumes sitting on Monday.

Even if the current government is defeated under a confidence motion this fall, the HRTC is so ingrained in the Canadian taxpayer psyche that any future government will most certainly reintroduce it.

That has been confirmed publicly by Liberal Leader Michael Ignatieff and Bloc Québécois Leader Gilles Duceppe.

The HRTC is a 15% non-refundable tax credit for eligible renovation expenditures made to your home or vacation property. The credit applies to any amounts spent over $1,000, up to a maximum of $10,000, producing a maximum credit of $1,350.

The Canada Revenue Agency has indicated that a new schedule will be included in your 2009 income tax return that will allow you to list your eligible renovation expenses and calculate the amount eligible for the credit. The CRA has even introduced a nifty yellow HRTC envelope in which to save your receipts. Envelopes are available at various retail stores including Home Depot and Canadian Tire.

In the seven months or so since the credit was first introduced, the CRA has released numerous technical interpretations over exactly which types of renovation expenses qualify for the HRTC. Here’s a quick summary of some of the more recent qualifying expenditures: – Air conditioners and heat pumps that are permanently installed.

– Common areas of condos that are paid for either from the condo’s reserve fund or a special fund.

– Dock: The materials and installation costs for a dock are eligible provided the dock is attached to land that forms part of the eligible dwelling.

– Driveways.

– Sanding and refinishing of hardwood floors.

– Permanently wired or installed home security systems qualify, but not ongoing alarm monitoring costs.

– Landscaping.

– Sauna: The costs of installing a wood-fired, 10 x 10-foot, outdoor sauna building on the land that forms part of an eligible dwelling qualifies.

– Solar panels on your home or on adjacent land qualify unless the cost is part of the purchase price of the home. You can still claim the full HRTC on the costs of the installation if you’ve received another government tax credit or grant for installing the solar panels.

– Tree removal if the removal relates to a renovation project that is of an “enduring nature and integral to the home.” – Wireless broadband tower: The costs of building such a tower, even if unattached to your home but anchored to the ground qualifies, provided it’s installed on the adjoining one half-hectare of land that is considered an eligible dwelling.

– Jamie Golombek, CA, CPA, CFP, CLU, TEP is the managing director, tax and estate planning with CIBC Private Wealth Management in Toronto.

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Brian Morton
Sun

Non-residential construction in Vancouver saw the biggest price drops in Canada over the 12 months to the end of June, the Conference Board of Canada reported Thursday.

But the industry’s decline in B.C. has started to slow, and the last year’s poor results can be attributed in part to the completion of several major projects either before or during the recession, a Conference Board official said.

“The price decline in Vancouver has been the largest of any of the metro areas across the country,” Michael Burt, the Conference Board’s associate director of industrial economic trends, said in an interview.

“There are strong indicators that demand has weakened more in Vancouver than other markets,” Burt said.

“However, the rate of decline is slowing in Vancouver and in fact, for the second quarter (April, May and June) was below [the national] average.”

Vancouver recorded a 1.2-per-cent decline in prices in the quarter compared to 1.9 per cent for the country. Burt said B.C.’s non-residential construction peaked in mid-2007.

Year-over-year, prices declined about 14 per cent in Vancouver over the 12 months, more than twice the national average, according to the board’s outlook report on the industry.

“You [Vancouver] are moving in the right direction,” Burt said of the latest quarterly numbers. “The rate of decline is slowing. And there were big projects that drew to a close regardless of the recession.”

Keith Sashaw, president of the Vancouver Regional Construction Association, which deals mainly with non-residential construction, agreed that the industry has had a rough year.

But he too said things are looking up.

“Building permit activity [for Metro Vancouver] for the first seven months of 2009 compared to 2008 show about a 50-per-cent decline in building permit values,” Sashaw said in an interview.

“But we’ve seen the winding up of several major projects before or through the recession, including the Canada Line, the … convention centre, and the Golden Ears Bridge.

“But we’re beginning to see some positive signs. Construction employment has increased over the past three months. Non-residential permits increased 34 per cent in July over June. It’s the third month in a row of increased activity. We probably hit the low point in January.”

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