The majority of empty homes were apartments

Mike Howell
Van. Courier

A city-commissioned study has revealed 10,800 homes in Vancouver were left empty for more than a year in 2014.

But reasons for the vacancies and whether governments can do anything to penalize homeowners — or force them to rent their properties — remain open questions as the city continues to grapple with an affordable housing crisis.

The study by Ecotagious measured B.C. Hydro electricity consumption data collected from 225,000 of 280,000 homes in Vancouver from 2002 to 2014. The company concluded the rate of empty homes remained consistent from 4.9 per cent in 2002 to 4.8 per cent in 2014, which is in line with rates in the rest of the Greater Vancouver Regional District.

“It’s worth noting that during the same period, the benchmark price for apartments in the Greater Vancouver area increased 140 per cent,” Bruce Townson, the CEO of Ecotagious, told city council Tuesday. “And while an analysis of housing prices was outside the scope of this project, a quick comparison of the housing prices to the non-occupancy rate doesn’t suggest that there’s a correlation between the two.”

The majority of the empty homes in 2014 were apartments — 9,747 — and vacancy rates were highest on the West Side of the city, with 9.4 per cent in the area that stretches from Kitsilano to Point Grey and 8.6 per cent in neighbourhoods that include Kerrisdale, Dunbar and Southlands.

Suggested reasons for the vacancies included a home was bought for investment, was under renovation, the owners were on vacation, the home was caught up in an estate sell-off, or it was being flipped. A home was deemed empty in a given month if the hydro data showed a flat consistent use of electricity for 25 or more days in that month for a year. The findings were not specific to neighbourhoods but separated into five large geographic areas. Basement suites were not included in the study.

The highly anticipated report, which attracted a large crowd of media to city hall Tuesday, was believed to provide Vancouverites with an answer or clue to what is driving the city’s hot housing market. Instead, the data supplies the city with information that it can use to develop policy aimed at building more rental housing in Vancouver.

Although the study concluded the overall rate of empty homes held steady for 12 years, the findings showed the number of non-occupied properties increased from 8,400 in 2002 to 10,800 in 2014.That increase is what concerned city council Tuesday when discussing what powers the city had to open up vacant homes for renters.

“That’s the bigger concern,” said Mayor Gregor Robertson, pointing out the average increase of 200 homes per year over the study period. “We know that there are thousands of units of empty homes that potentially could be available for rental. We have one of the tightest rental markets in the world right now – almost zero vacancy across the city.”

Councillors Geoff Meggs and Andrea Reimer suggested the way to get renters into those homes may lie with restrictions governing strata councils, which prohibit owners from renting their homes. Meggs said it’s been an issue for many strata councils and recommended the provincial government make the necessary changes under the Strata Property Act to remove restrictions.

“That’s going to be a bit of a tricky problem for the province to try and untangle, but it’s one that they should try to do because we do need these units in the rental stock, notwithstanding they may end up being owner-occupied at some point, ” Meggs said.

Municipalities have limited tools to penalize homeowners with taxes or force them to rent their empty homes. The mayor successfully moved a motion Tuesday that he write a letter to Premier Christy Clark to reiterate a request he made in May 2015 to give municipalities the power to track property ownership and “ensure timely occupancy of vacant units.”

Mukhtar Latif, the city’s chief housing officer, told reporters after the council meeting the city’s goal in opening up empty homes is to “help homeowners make use of the asset, as much as anything else. If there is a barrier, we want to be able to help them bring that unit back into use.”

Other cities around the world, including those in the United Kingdom, Netherlands and the United States have levied taxes on absentee landlords and created registries of empty homes. More detail on those schemes and how they might apply to Vancouver is expected to go before council in a report later this year.

“I sort of feel like we’re in a C.S.I. episode but we don’t have all the tools we need to figure out what’s actually killing affordability in this city,” said Reimer, who will soon be on the hunt for another home to rent in Vancouver.

© 2016 Vancouver Courier

 

Justin da Rosa
Other

The trend measure for housing starts in Canada holds steady in February.

The CMHC’s housing start measure fell slightly to 198,880 in February from January’s mark of 199,107.

“The national housing starts trend held steady in February, despite some important regional variances,” CMHC Chief Economist Bob Dugan said. “Housing starts are trending at a 4-year low in the Prairies where low oil prices have weakened consumer confidence. At the same time, starts are trending at an 8-year high in British Columbia, as new and resale home inventories remain low.”

The Crown Corporation’s trend measure is used to complement monthly seasonally adjusted annual rate of housing starts. It helps provide a more accurate picture of Canada’s housing market, according to CMHC.

“The standalone monthly SAAR was 212,594 units in February, up from 165,071 units in January. The SAAR of urban starts increased by 30.9 per cent in February to 200,231 units,” CMHC said in a release. “Multiple urban starts increased by 46.0 per cent to 138,774 units in February and the single-detached urban starts increased by 6.1 per cent to 61,457 units.”

The SAAR posted its biggest one-month gain since 1983 due, in large part, to condo starts.

According to Bloomberg, the 29% jump to 212,594 units exceeded all 14 Bloomberg News economist survey predictions.

Urban starts increased in February in BC, Ontario, Quebec, and Atlantic provinces. They decreased in the Prairies.

Copyright © 2016 Key Media Pty Ltd

 

REBGV
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Fear and loathing in Metro

Barbara Yaffe
The Vancouver Sun

Metro Vancouver has a finite land base and a steady stream of newcomers chasing a limited housing supply. But there is another factor contributing to the dire housing situation: the fear factor.

Observers agree that the fear of selling one’s home and not being able to find another property is part of the story behind a low inventory of real estate listings, both in Vancouver and Toronto. The situation is handicapping buyers and sending prices skyward.

“Many locals are reluctant to sell, concerned they will not have a place to go to,” says Andrew Hasman, a veteran realtor in Vancouver.

ReMax realtor Rhonda Sacks notes that Vancouver simply does not have enough townhouses and row houses — now being sought both by downsizers and young families — to meet demand. “There are not enough options for them, post-sale.”

Adds architect and real estate consultant Michael Geller: “The sad reality is that often a large new townhouse or apartment — if you can find one in a location where you want to move — costs almost the same amount as what someone can get for their house, even if they are getting $2.5 million.

“Moreover, there is this perception that, for the time being, prices are not going to go down.”

In other words, by hanging on, a potential seller can make even more money by waiting.

The low-inventory story is being told by way of a metric known as the sales-to-active listings rate, which increasingly is being cited in news releases from the Real Estate Board of Greater Vancouver.

It reflects the number of house sales compared to the number of active listings, expressed as a percentage.

In January, the sales-to-active- listings rate in Metro Vancouver reached 38 per cent — its highest point in a decade.

And the fact that new listings do not stay on the market very long contributes to the low-inventory problem, explains Craig Munn, the real estate board’s communications manager.

The rate in January of last year was just 17.7 per cent. In January 2014, it was 14 per cent.

A balanced market has a rate between 14 and 20 per cent, which ensures price stability.

Upward pressure on prices starts to occur when the rate hits 20 to 22 per cent for a sustained period. A rate of 12 per cent or less generates downward pricing pressure.

The sustained spike in the number of home sales to listings, which began in 2015, comes as new home starts are up more than eight per cent this year, to about 20,800 new units — reflecting a “stable pace of new home construction,” according to Canada Mortgage and Housing Corp.

Which adds weight to the theory that something else is happening to create the low-inventory conditions. Property owners, collectively, are surveying the situation and deciding to hang on to what they have. This, despite the fact there is big money to be made.

They know that by hanging on, they might make more money in the long run.

They also know, if they want to buy something else in their neighbourhood, they are likely to face that scourge of the real estate industry, the bidding war.

And so, realtors looking for listings are finding the most willing sellers tend to be estates or seniors requiring different housing arrangements, committed downsizers, divorcing couples, and people moving out of the area.

And it is a vicious circle because the more apprehension that potential sellers feel, the fewer listings there are. And the scarcer the listings, the higher the prices climb, reinforcing people’s apprehensions.

Dexter Associates Realty, on its current real estate blog, observes that active listings for attached properties are down 43 per cent this year while detached property listings are down 38 per cent.

Dexter counted 1,285 active listings on the city’s West Side in the first week of February, down from 2,023 a year ago. On the East Side, 524 active listings were counted, down from 847 a year earlier.

It’s scary out there.

© Copyright (c) The Vancouver Sun

 

Glen Korstrom
The Vancouver Sun

Vancouver home prices’ 24.5 per cent average price hike in 2015 topped a list of 100 global cities “by some margin,” according to the 2016 Knight Frank Wealth Report.

The gain easily topped the 14.8 per cent residential property price rise in Sydney, Australia and the 14.4 per cent increase in Shanghai, China. 

Istanbul, Turkey homes rose in value 13 per cent whereas the increase was 12 per cent in Munich, Germany and 11.9 per cent in Melbourne, Australia.

The report noted that 10 cities saw double-digit-percent increases.

“A lack of supply, coupled with foreign demand, spurred on by a weaker Canadian dollar explain the city’s stellar performance,” the report noted.

It added that Vancouver is enduring the lowest level of inventory in 25 years.

“The number of multifamily developments along the major transportation routes is rising but this is not enough to make up for the lack of prime market supply,” said Kevin Skipworth of Knight Frank’s partner Dexter Associates in the report.

On average, the value of the world’s leading residential property markets rose on average by 1.8 per cent in 2015, according to the report’s Prime International Residential Index. That’s down slightly from a 2 per cent average rise in 2014.

The biggest losers were oil-dependent Lagos, Nigeria, where prices fell 20 per cent and in Buenos Aires, where prices were down 8 per cent. All changes in home values cited in the report were in local currencies. 

Of the 34 cities where real estate prices fell, 22 were in Europe. 

Munich, Amsterdam, Monaco and Berlin were Europe’s standout performers, recording price growth of 12 per cent, 10 per cent, 10 per cent and 9 per cent respectively in 2015, the report said. 

Within North America, San Francisco came second with a 10.9 per cent home price increase. Toronto, with an 8 per cent increase was third in North America. Then came Miami (6.4 per cent), Los Angeles (4.7 per cent) and Boston (3.8 per cent).’’

Curiously, the report did not include Vancouver in a chart showing what US$1 million will buy in 20 selected cities.

Monaco topped that list as the world’s priciest city on a per-metre basis as US$1 million will only buy 17 metres in that sovereign city-state. The next expensive places to buy real estate based on how much living space you can buy were Hong Kong (20 metres), London (22 metres) and New York (27 metres).

© 2016 Vancouver Courier

 

Naoibh O?Connor
Van. Courier

Preliminary renderings released last week that depict the proposed Kettle Boffo building redevelopment will spur more Grandview-Woodland residents against the project, according to opponents.

Barbara Cameron, one of the organizers behind the neighbourhood’s No Venables Tower coalition, calls the scale “massive” and argues it’s too high and too dense for the site at Venables Street and Commercial Drive.

“I think the actual renderings are going to galvanize the community in opposition to this because it’s finally becoming real what the massiveness of this development will be,” she said. “Drawings that were provided earlier didn’t identify that there would actually be three towers. So we’re not dealing with one, we’re dealing with three towers on a footprint that is really not appropriate for this kind of density.”

Proponents argue that along with market housing, the project will deliver much-needed supportive housing and a new expanded space for the Kettle Society’s services.

The Kettle Society, which is a non-profit that provides housing and support to people with mental illness, needs to expand the services it offers at its 1725 Venables St. location. However, the society couldn’t get government funding so it formed the arrangement with Boffo Properties for the redevelopment. Boffo owns buildings on either side of the Kettle, while the city owns the parking lot to the north, which could be amalgamated into the proposed redevelopment.

The society and Boffo released the preliminary drawings Feb. 26. The proposal envisions 200, one-to-three bedroom market housing units, as well as 30 supportive housing units for the Kettle to own and operate, and a larger space for its other services.

Daniel Boffo, principal of Boffo Properties, said the Kettle services would be relocated during construction with costs paid by the project.

He described the design as one building “massaged” into multi-levels. At its lowest it’s five storeys, while at its highest it’s 12 storeys. Small scale retail and a public courtyard are included in the plans.

“The goal is to mimic something like Gaolers Mews in Gastown where when you’re at grade you’ve got retail within the courtyard and it’s not just a podium and tower project,” Boffo said. “It feels like a bunch of separate buildings grouped together in varying heights.”

Boffo Properties and The Kettle Society released preliminary renderings of their proposed redevelopment project last week.

He said the proposed design was informed by four years of  public feedback and the height has been dropped from the initially proposed 15 storeys based on input from the community and the city.

Many individuals and groups have voiced support for the project, according to Boffo, including housing advocate Judy Graves.

“You’ll never satisfy everybody and I think when you satisfy everybody something gets lost. What we’re hoping to achieve is to build on the common ground that we have.

The common thread that I’ve heard is [both sides] believe in strong, inclusive communities,” he said.

It’s unclear what the city  will allow on the site. The Grandview-Woodland community plan hasn’t been adopted yet. The draft plan goes out for public review this spring, although no dates have been set yet. Boffo is waiting to file the application until after council approves the plan.

Neighbourhood reaction has been mixed. The Grandview-Woodland Citizens’ Assembly didn’t reach consensus on what height should be allowed, but 16 members signed a “minority report” backing the project.  

When asked what she defines as a tower, Cameron said, “We have a point of view that we need to keep the Commercial Drive area under five storeys. Our slogan has been, ‘Keep the Drive under five’ and so we don’t want to get into this discussion of what a tower is and what a tower isn’t because right now we’re talking at least 12 storeys for this one and that’s certainly a tower.”

The coalition has collected more than 3,560 petition signatures against the development. Cameron acknowledges some residents support the proposal.

“But I think people are biting their tongues and saying, ‘Well, if this is the way the Kettle would get what it wants then we’re OK with it.’ But I don’t think people really want a great amount of density in Grandview-Woodland, at least not density in the way of towers. We’ve always felt, and this has been reflected in a lot of different ways, that people want gentle density.”

Cameron argues towers put upward pressure on land prices and contribute to the loss of affordability.

“It’s not about the Kettle. It’s never been about the Kettle and I say that 100 times a day. This is about a tower or towers, in this case three towers, and the imposition of such a massive development on the community. We think there are alternatives.”

Boffo, who maintains the project is respectful of the Drive’s character, wants to see the project move forward.

“We’re excited to hear what the city’s going to come out with in April with their plan. After hearing that, then we can decide what the next steps are. But we’ve been talking about this for four years. We need to get an application in ASAP,” he said.

© 2016 Vancouver Courier

Carla Wilson
Other

The Victoria market is seeing some buyers paying $100,000 or more above asking prices for single-family houses in desirable neighbourhoods.

Multiple offers. No conditions. Buyers cashing out in Vancouver to live here. Purchasers from China. These are all commonplace as the capital region’s already-hot housing market flares up and inventory tightens.

In February, the total number of sales reached 772, the highest for that month since 1992, when 780 properties changed hands, the Victoria Real Estate Board said Tuesday.

The benchmark price for a single-family house in Victoria’s core was $638,700 in February, up by 15 per cent from $557,000 last year. In Vancouver, the average price for a single-family home tops $1 million.

The new norm is for sellers to set a time and date to accept offers that pour in after a house in a popular area has been listed for only a few days, real estate agents say.

Victoria is experiencing a trickle-down effect from the Lower Mainland market. Wealthy buyers from China are snapping up Greater Vancouver homes, driving up prices. In turn, Vancouver buyers are cashing out by selling their homes and heading over to the Island to buy a home of equal quality for half the price.

“They are not afraid to fight. Multiple offers [in Vancouver] are expected on everything,” said Jason Binab, with the Engel and Völkers real estate firm in Victoria.

Those Lower Mainland buyers are “what’s really throwing things over the top,” said Binab, who specializes in homes in Victoria, Oak Bay and Saanich East. He said he hears from Vancouver residents every week wanting to purchase a house here, and they are prepared to quickly travel to vet a prospect.

Choice is more limited compared with a year ago. There were 2,562 listings last month in Greater Victoria, down from 3,480 in February last year, the Victoria board said.

“The combination of strong, steady job growth and highly favourable affordability are continuing to support healthy levels of housing activity in B.C.,” Landcor Data Corp. said in a report on the fourth quarter of 2015.

Binab sealed a deal Monday for a house at 177 Joseph St. in Fairfield. It was listed at $1.2 million. A local buyer beat out the competition with an unconditional offer at $152,000 above the asking price.

The successful bidder prevailed against buyers from California, Paris, Vancouver and another from Victoria, he said Tuesday.

Another listing at 1632 Kenmore Rd. in Saanich sold for $58,000 above its $600,000 asking price, Binab said. The accepted bid came from Victoria. Other offers were submitted by a local resident, and two from China.

Buyers from China are typically families who want to live and work here, Binab said. Setting a date and time to accept offers makes sense to sellers. “You are giving yourself a chance for full exposure to the market.”

Demand is surpassing supply and offers are crafted to be as simple as possible. “Right now, when the market is as hot as it is, nobody is writing offers subject to the sale of a home,” Binab said.

A Calgary buyer, who used to live in Victoria, was successful recently with an offer of $125,000 above the list price of $1.2 million for a house on Romney Road in Victoria. The three other offers were from Vancouver. Two inspections were carried out before offers were even being accepted. The deal was struck in fewer than 12 hours after the house went on the market, Binab said.

Frank Rudge, a real estate agent with Re/Max Camosun, said most properties would typically sell at between two to five per cent above their assessed value. But now, “I’ve been selling real estate for 40 years and I’ve never seen that much activity or that wide a range between the list price and the sale price.”

When he listed a house in the high Quadra area for $500,000, prospective buyers had 48 hours to check it out before making an offer. More than 100 showings took place and 21 offers were submitted. The house, which needs extensive upgrading, sold for $614,000.

A two-day deadline for offers is “very quick and that shows the fever pitch that we’ve got here in Victoria,” Rudge said.

This kind of system benefits the seller. The first offer for the Quadra house was $523,000, more than $90,000 lower than the accepted offer, Rudge said.

The challenge comes if a seller then tries to find something else in the same market.

Gregg Mah, a real estate agent with Pemberton Holmes, said the two- to three-day wait times before accepting an offer is “almost the norm” these days. He knows one agent who had 72 people through a house in a day and a half.

The market started gaining strength at the start of 2015, Mah said. “Towards the end of last year, we were putting in offers Christmas Day, Christmas Eve.”

When 2016 arrived, “the floodgates opened up and everyone is rushing,” he said.

It’s not just the capital region that’s hot. Vancouver Island north of the Malahat saw 407 single-family homes sold last month, up by 44 per cent from 282 in February 2015.

“We are seeing multiple offers in many transactions throughout the board area because there are more buyers than sellers,” Margo Hoffman, president of the Vancouver Island Real Estate Board, said.

“We are beginning to see some migration from Vancouver that isn’t retirement focused.

“An interesting development we’re watching is young professionals who are trading in their homes for a significantly nicer property on Vancouver Island and then commuting to their jobs on the Lower Mainland.”

It’s easier to commute these days than in the past, Hoffman said, citing float planes and helicopter service.

© Copyright Times Colonist