Brian Morton
Sun

A tight housing resale market is good news for B.C.’s new residential construction sector in 2010, according to a report released Monday by the Canada Mortgage and Housing Corporation.

“In terms of the resale market, conditions have improved in the second half of 2009 and they’ll continue to be strong in 2010,” Carol Frketich, CMHC’s regional economist for B.C., said in an interview. “In 2010, a pick-up in home sales, a stronger domestic economy with income growth and low mortgage rates will lead to an increase in new home construction.

“Greater Vancouver tends to lead the other markets and that’s what we’re now seeing. In 2010, it will spread to the rest of the province. This will prompt builders to start more homes to meet a growing need for housing.”

According to CMHC’s Housing Market Outlook Report, total housing starts in B.C. next year will be about 23,400, which represents an increase of about 54 per cent from the projected 2009 total of 15,200 — itself a 56-per-cent decline from 2008’s 34,321.

However, Frketich also said their projected numbers for B.C. starts in 2010 could rise as high as 26,800 or fall to 20,200 if economic circumstances change.

The report by Canada’s national housing agency said the rebound in both single-detached and multi-family housing starts will bring the level of residential construction closer to, but still below, the 10-year average.

Frketich said the peak was 2007 when there were 39,195 starts. She said starts will rise to about 31,700 in 2013.

Frketich also said the average existing price for all homes will increase modestly in 2010 to $460,000, a 1.8-per-cent rise from this year’s projected $452,000.

“Prices [this year] will be very similar to the annual level of 2008 [$454,499], because the second half of the year has been stronger.”

She said Alberta and B.C. will see more of a rebound in construction next year than the rest of Canada, in part because “we had a bigger slowdown.”

The report, which noted that the recovery of the province’s export sector will be tempered by a high Canadian dollar, also forecast increased renovation activity next year.

CMHC is also forecasting that population growth through migration will help provide support for home ownership demand through 2010.

Nationally, the CMHC report forecasts that housing starts will reach 141,900 in 2009 and rise to 164,900 next year, numbers that are far below 2008’s final tally of 211,056.

Listed home resales are expected to reach 441,300 units this year and 445,150 units in 2010, CMHC added.

© Copyright (c) The Vancouver Sun

Don Cayo
Sun

What began as a spat between a discount broker and Toronto’s real estate establishment has burgeoned into a national issue that could sharply lower the cost of home-buying in B.C. and across the country.

The Competition Bureau of Canada is playing its cards close to its vest, but it confirms it is leaning on the real estate industry nationwide to “voluntarily” ease rules that impose high costs on sellers who use the ubiquitous Multiple Listing Service.

And the bureau has some big sticks to wield if it doesn’t get its way. A spokesman notes it can impose administrative penalties of $10 million to $15 million, or it can directly order a change in the practices that force home-sellers to choose between paying five-figure commissions or having their listing excluded from MLS, which is by far the largest point of contact with potential buyers.

A letter from the Ottawa-based Canadian Real Estate Association to its 100-member associations has been leaked around the southern Ontario media. But, never mind that the horse is gone, the Vancouver Real Estate Board is steadfastly holding the barn door shut, refusing to release or comment on the letter.

But the letter’s contents have been thoroughly reported, and its implications are clear.

A bureau investigation has found the CREA rules to be uncompetitive. And the realtors have been threatened with an order to appear before a competition tribunal, which has the power to invoke those large penalties, if they can’t reach a settlement with the bureau.

If the bureau gets its way, says CREA president Dale Ripplinger in his not-so-secret letter to members, real estate firms will no longer be able to require customers to buy either a full MLS package or nothing. The upshot is likely to be that sellers could simply buy the right to be listed on MLS for a fixed fee, without also paying a realtor to act as the selling agent. Or they might pay a somewhat higher fee — still much less than the commissions that run to $20,000 for the sale of a $400,000 home — for the listing plus some professional advice.

In other words, members of the real estate boards would no longer have the exclusive right to post MLS listings, or to extract hefty commissions when a property sells. Individuals could also post on MLS websites, and the cost could be a fixed fee rather than a commission.

The bureau is as tight-lipped as the Vancouver Real Estate Board, citing privacy concerns to the degree that its spokesman won’t even say if it ever had a complaint in B.C. or Metro Vancouver. But published reports in Toronto make it clear that there was at least one complaint there, and the bureau concedes it was prodded into action by one or more complaints.

The one publicly documented complainant is Lawrence Dale, who used to run a Toronto-based service called Realtysellers.com. It allowed sellers to go through his company to list homes on MLS, for a fee of a few hundred dollars. He says he was forced out of business by CREA rules, and he’s suing both the national organization and the Toronto Real Estate Board for $100 million.

© Copyright (c) The Vancouver Sun

Province

Housing markets across the Lower Mainland are headed higher next year, Canada Mortgage and Housing Corp. predicts.

A combination of more sales and fewer active listings will push average house prices higher in 2010, CMHC said yesterday.

“Home prices in most Lower Mainland centres are still below their previous peak,” CMHC senior market analyst Robyn Adamache said.

“Prices will rise as buyers take advantage of lower prices and favourable mortgage-interest rates.”

In 2010, average MLS prices in the Vancouver area are forecast to rise to $605,000 from $580,000. Vancouver’s average MLS price last year was $593,767.

In the Abbotsford area, the average price should climb to $346,000 in 2010 from $340,000 in 2009. But that will be less than the average 2008 price of $355,099, CMHC said.

Victoria should see prices rise to $487,000 in 2010 from $474,000 in 2009, the housing agency said.

Housing starts will rise over the next 15 months but stay below the levels of recent years, CMHC said.

“New and resale home inventories are being absorbed, pushing home prices higher and providing an incentive to start new residential projects,” CMHC said.

For the province, starts are forecast to rise to between 20,200 and 26,800 next year from a range of 14,850 to 15,600 this year. There were 34,321 starts across B.C. last year.

In the Vancouver area, starts should rise to 13,000 in 2010 from 9,000 this year. The area’s home-building activity remains well below the levels of 2008, when there were 19,591 starts.

House sales for the Vancouver area will strength to 35,000 next year from 33,000 this year, CMHC said.

Nationally, starts are forecast to reach 141,900 in 2009 and rise to 164,900 next year, CMHC said.

Such levels still pale to 2008’s final tally of 211,056 — the seventh-straight year of 200,000-plus housing starts.

© Copyright (c) The Province

Monster homes that violate bylaws leave many people calling for change

Kent Spencer
Province

Surrey has turned a blind eye to 70 illegal monster homes in the city — all of them unauthorized, uninspected and unsafe, says Surrey’s unionized workforce.

The illegal additions, many measuring an extra 1,000 square feet, were built on the sly, they say.

Second-storey sundecks with patios underneath were sometimes boxed in on weekends following official inspections, despite rules that require building permits for such enclosures.

One North Surrey home was advertised as a full “eight bedrooms and eight bathrooms” and has had a stop-work order posted for years.

Robin MacNair, spokesperson for the city’s local of the Canadian Union of Public Employees, says Mayor Dianne Watts knows about the unsafe conditions but has not taken action.

“All of the additions were built without permits and without inspections. The majority were not up to the building code. The work included plumbing and electrical installations,” MacNair said.

Surrey was ready to take more than 70 cases to court in the fall of 2008, with charges of building without permits and building against stop-work orders.

But council voted to hold all impending cases “in abeyance” on Sept. 29, 2008, several weeks before the municipal election. Altogether, the city has 278 stop-work orders for unauthorized construction which are being held in abeyance.

The city council decision came after lobbying by the Surrey Ratepayers Association, which presented a 4,239-name petition requesting stop-worker orders be “held in abeyance” while house sizes were reviewed.

MacNair said the union asked “several times” for meetings with the city about safety concerns, but it took Watts six months to respond.

Watts, whose Surrey First political party holds the majority on council, eventually met with the union last May.

“We told the mayor that staff was [making] efforts to enforce bylaws and being left in limbo. Employees were demoralized,” said MacNair.

Watts told The Province she “absolutely saw their point.”

“The bylaws need to be adhered to,” she said. But Watts also said she told city manager Murray Dinwoodie that “anything that was clearly a safety issue could not be held in abeyance.”

Dinwoodie admitted that there were “potential” safety issues in the 70 cases because the homes hadn’t been inspected.

But he said the city cracked down on “imminent hazards” that it knew about through exterior visual sightings and complaints.

He said the impending court cases were put aside because the city was studying the mega-house issue in the meantime.

“We didn’t want to take action on things that might be rectifiable in a different form, if a new bylaw came forward,” he said.

Surrey Civic Coalition Coun. Bob Bose said the city has left itself liable if anything goes wrong, because it knows about the illegal additions and has done nothing.

“The city has exposed itself to liability. If structures are built unsafely and we have failed to enforce bylaws, we are culpable,” he said.

He accused Surrey First of trying to gain favor with the ratepayer group shortly before last November’s civic election, which Surrey First won in a landslide.

“The Sept. 29 vote was directly related to the election. Surrey First did not want to suffer the wrath of a large part of the community,” Bose argued.

Prior to the election, the ratepayer group lobbied Surrey First and the Civic Coalition.

Watts insisted that putting stop-work cases on hold was not about trying to attract votes.

“I had heated arguments with individuals [from the Ratepayers Association],” she said.

Ratepayers vice-president Kalvinder Bassi said no one in either party “was in a position” to offer promises before the election.

“We got the message that there would be due public process,” he said. “Some people will always abuse the bylaw with multi-family developments. The houses should be taken down and the owners heavily fined.

“This is a pain for everyone. Neighbours are against neighbours,” Bassi said.

Grant Rice, a North Surrey resident who has fought monster homes for five years, said one illegal house in the 12700-block 103 Avenue was advertised as having “eight bedrooms and eight bathrooms.”

“It has had a stop-work order for years, which has been unresolved,” said Rice, a Civic Coalition candidate for council last year.

“It really bothers me that some developers have taken out building permits and played by the book. Others ask to be forgiven for past transgressions,” he said. “Why is there no enforcement?”

Council is currently reconsidering the issue of house sizes across the city. Staff have recommended a 25-per-cent increase in allowable square footage, with a maximum allowable of 4,550 square feet.

Staff say the increase is needed to bring Surrey’s rules closer to other municipalities — although Surrey does not count basements in the total, which Richmond, Delta and Coquitlam do.

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