Shapes provide building blocks for decor of Onni Group?s townhomes in Abbotsford

Mary Frances Hill
The Province

Allwood Place

Where: 2800 Allwood St., Abbotsford

What: A master-planned community of 224 townhomes, with the first phase of 32 two- and three-bedroom townhomes

Residence sizes and prices: Starting from $389,900 for homes ranging from 1,155 to 1,300 square feet

Developer and builder: The Onni Group

Sales Centre address: 2800 Allwood St. Abbotsford

Sales Centre hours: noon — 6 p.m., Sat — Thurs

Dianna Sung and her team at the Onni Group approached the interior design of Allwood Place — the developer’s new townhome community in Abbotsford — with a lighthearted sense of fun. Her use of angles, shapes and textures shows that elevating the design and décor of a home need not be serious or painstaking work.

Sung brings a sense of play into the space with geometric patterns and shapes in a living room. Circular imagery in the artwork reflects the shape of both the coffee table and its base, set off by triangular patterns on the rug and the square seating.
“We wanted to evoke a sense of playfulness in this space and the geometric shapes were a great way to go back to basics,” says Sung, who leads the in-house design team at the Onni Group.

“The concept was building blocks and layering these elements achieved that. Neutral fabric tones added a sense of softness, while the pops of yellow and gold elevated the playfulness.”

In another living room, Sung and her associates built an interesting panel enhanced by vertical lines, juxtaposed by horizontal low shelving below a television. The intersecting lines add depth to the room, and the cool grey finish on the wall adds a subtle contrast more definition to the space.

“We wanted to accentuate the spacious ceiling heights by introducing some vertical elements, and rooting it by adding low horizontal shelving,” she notes.
In a bedroom, the design takes a more dramatic turn with the use of layering. A large headboard is crafted in a soft grey material, which makes it stand out against the darker grey wall covering.

“We wanted to show that a bedroom could be bold, yet still be a relaxing environment,” Sung says of this effect. “By layering the darker-toned wallpaper with the softer-toned fabric headboard, we created contrast through the two textures which are different visually, but pulled together quite cohesively,” she says.

“It can elevate any space with subtlety or boldness to your individual liking. It’s always fun finding a match between unsuspecting combinations of texture, colours and shapes.”
Sung and her team found that layering materials and placing contrasting shapes and angles together is the perfect technique for adding sophistication to a space at a reasonable budget.

At the starting price of the high $300,000s, these homes attract first-time or “move-up” buyers, though the foundation of these homes have been thoughtfully planned out to cater to a variety of family types, she says. “The homes feature large airy windows, not only in the main living spaces, but also in most bedrooms. The spacious kitchens and open-concept living and dining areas are perfect for entertaining and gathering.”

© 2016 Postmedia Network Inc

Dan Fumano & Joanne Lee-Young
The Province

When home prices are on the rise, there are few foreclosures. Owners not able to make mortgage payments can easily sell or refinance to get themselves out of a bind.

When prices fall, however, it’s a different story.

“Any drop in prices can lead to an increase in people defaulting (on their mortgages) because people who are stretched tightly don’t have an exit strategy,” said Andrew Bury, a Vancouver-based partner at Gowling WLG, who specializes in handling foreclosures for banks, mortgage investment companies and other lenders.

At the moment, mortgage default rates in B.C. are very low, Bury said. But looking back, he said, “in 2008, it didn’t take a huge decline in prices. In short order, there was double and then triple the number of defaults because of price declines.”

The concern comes as the B.C. Real Estate Association forecast this week that average home sale prices will fall by as much as 8.7 per cent in the Greater Vancouver area next year, from an average of $1,030,000 for 2016 to $940,000 for 2017. That marks a 13.8-per-cent drop from the association’s previous forecast for 2017, which it made in late August, and the first time in five years the industry association has forecast a year-over-year price decrease.

It’s not that falling prices lead directly to foreclosures. Ideally, it’s better to hang on to an asset that is declining in value and sell it later when prices rebound. However, if “something goes wrong, and in life, stuff goes wrong — you lose your job or you get a divorce,” said Bury, there isn’t the option to tap into a home’s equity for a lifeline when prices are declining. And for speculators who have taken equity out of one house to buy another, there is less to tap when it comes time for refinancing.

Andrey Pavlov, a professor of finance at SFU’s Beedie School of Business, said a decline in property prices could lead to a “significant risk” of foreclosures, especially in Vancouver, where the market has been overheated.

“I am concerned that anyone who over-extended themselves to buy a property at the top of the market is at risk,” Pavlov said. 

And in B.C., where real estate and construction account for about a quarter of the province’s economy, Pavlov said, “a real estate decline, even if it’s just a decline in transactions, would put a lot of incomes at risk.”

BCREA chief economist Cameron Muir said the forecasts are based on economic and housing variables, including “data from sales, listings, new ones, active ones, pricing over different product types and areas” as well as populations growth, migration sets, job growth and, importantly, interest rates.

David Hutchinson, a Sutton realtor, monitors Vancouver market activity daily and has seen a number of “notable price corrections” recently. Listings show a house in east Vancouver’s Collingwood neighbourhood that was listed earlier this month for $1.6 million, was re-listed this week for $999,000 — a 38-per-cent reduction in the asking price in three weeks.

“It’s kind of a fickle market at the moment,” Hutchinson said. “The market is still up from 2015, it’s just not ridiculous anymore.”

© 2016 Postmedia Network Inc.

Chinese buyers will put an estimated $220 billion into overseas property by 2025

Juwai
other

However, while education, emigration, and lifestyle opportunities are driving property sales abroad, Chinese buyers put safety at the top of their agenda when making a purchase.

Safety is a multi-faceted concept for Chinese investors that covers a whole range of factors, so it is vital for agents and businesses targeting Chinese buyers to both understand the nuances of the concept, and also make it a stand-out element of their product offerings.

Here are 6 ways safety greatly influences where Chinese buyers would choose to invest, as well as what they look for when property hunting overseas.

#1 Neighbourhood safety

Living in a nice neighbourhood, where the streets are safe even at night, is very important for Chinese.

This is due to the fact China has fairly good public safety standards – especially Shanghai and Beijing, which is heavily policed – hence for Chinese, particularly for those who are less familiar with a foreign country, many tend to perceive that some overseas countries are comparatively less safe.

In fact, relatively high crime levels overseas³, such as cases of suburban riots seen in London in 2012 are rare. Widespread personal gun ownership – as well as gun violence – in the US⁴ are also practically unheard of in China, which has some of the most stringent guns laws in the world.

As such, neighbourhood safety is a high priority for Chinese planning to emigrate or for Chinese parents who are sending their children to overseas schools and universities.⁵

#2 Construction quality

Chinese buyers want houses that last for a lifetime, and not just a decade. Thus, Chinese buyers want to be convinced of the quality of what they are buying abroad because construction practices and standards at home leave a lot to be desired.

Fact is, China built the equivalent of the entire stock of housing in Europe between 1999 and 2009 but not all of that was of quality that could be considered up to par.⁶

The average lifespan of a Chinese building is 30 years, compared with 132 years in the UK, according to Pan Jiahua, a researcher at the Chinese Academy of Social Sciences, which means that Chinese move often before their houses deteriorate.⁷

And while the Chinese government has been increasingly strict about work safety and continue striving to improve the quality of China’s development, a fixation for speed and efficiency lingers on in China⁸, and this has led to many Chinese buyers to continue looking for overseas properties that generally come with better quality assurance.

#3 Food safety high on the menu

An annual China Youth Daily survey earlier this year revealed that 77.3% of its respondents cited food safety as their top concerns.⁹ Food safety is such a big concern in China that it has even spawned an industry worth $2.7 billion per year¹⁰ – imported milk.

A wide-ranging quality scandal in 2008¹¹ saw powdered milk imports experiencing a seven-fold increase between 2008 and 2014.¹²

And although a revised Food Safety Law with harsher punishment recently came into effect on 1 October 2016⁹, it may take a while to rebuild the Chinese public’s confidence in China’s domestic food industry.

It’s no wonder that food safety became the #3 motivation for rich Chinese to emigrate, according to Hurun Report.¹³ At the same time, the value of food safety is of such importance that it’s one of the reasons justifying the popularity of countries famed for food hygiene – Japan, Australia, and New Zealand – with Chinese investors.

#4 Property rights security

Property rights are a perennial bugbear for Chinese homeowners, and that’s where overseas properties shine in comparison as a safer investment. Freehold ownership terms that are common across the world offer certainty and safety compared to what Chinese buyers are used to at home.

According to US-based think tank Heritage Foundation, China scored a mere 25 out of 100 when it comes to property rights on its 2016 Index of Economic Freedom.¹⁴

China’s property rights are so weak that it’s even lower than Uganda and Cambodia, because homeowners in China only get 70-year use rights to their properties while the Chinese government retains formal ownership.

With such limited rights to property and time-bounded usage terms that prevail in China, concerns about the long-term safety of property investments has arisen for Chinese buyers, particularly when it comes to the ability of passing on assets to later generations – a major motivator for Chinese investing overseas as many tend to be generational investors.

That’s why being able to own freehold property overseas holds such massive appeal for all Chinese buyers, and that’s an undeniable fact.

#5 Asset assurance

64% of China’s HNW population consider asset safety as their top consideration when investing overseas¹⁵, hence the reason behind the Chinese propensity for portfolio diversification.

China’s property markets are highly cyclical, with four cycles counted alone in the last 10 years. While all real estate markets are cyclical to an extent, property options abroad are comparatively stable, so investing in overseas markets like the US and the UK is equivalent to creating a nest egg protected from volatile markets, and that’s what most Chinese buyers desire.

#6 Medical standards

China’s ageing population means a massive increase in Chinese demand for quality health services. This is particularly apparent when it comes to wealthier Chinese, many who are increasingly looking for top-notch medical services, which might be hard to find in China’s rapidly expanding cities.

As such, Chinese property investors looking overseas also want the security of access to top-quality medical services, and the freedom of being able to choose the best treatment.

Such sentiments have already built a huge market for overseas healthcare that was worth some $438.6 billion in 2015, and is expected to grow to $678.5 billion by 2017.

It’s also a growing factor that has driven Chinese buyers towards popular destinations that offer world-class medical and healthcare treatments, including the US, Japan, Singapore, Thailand, and the UK.

Agents, listen up

That said, one must remember that venturing into overseas property markets is a big step for Chinese, many of whom haven’t travelled out of the country until relatively recently.

As such, it’s imperative for agents to help and guide them along the way. With this in mind, plus the points above, put your clients at ease by highlighting the security of a freehold lease, the quality of local food and water supplies, the stability of local markets, and the durability of the property you are selling.

With Chinese buyer presence increasingly growing in various markets around the world, competition for business is rising, so it’s detail like this, as well as attention to other major motivators like education options and travel opportunities, that can make the difference.

 2016 © Juwai.

Steve Randall
REP

The share of foreign ownership of Canadian condos remains low, CMHC says, with Toronto at 2.3 per cent and Vancouver at 2.2 per cent; both markets saw a lower share than 2015.

“Foreign ownership is just one factor influencing Canada’s housing markets – but it’s an important one that continues to gain attention,” said Bob Duggan, CMHC’s chief economist.

The figures are closer to those seen in 2014 and the agency says this is due to an “unusually high” proportion of foreign buyers of newly-built condos in 2015, relative to 2014 and 2016.

For other CMAs, there was a range of foreign ownership share from 0.2 per cent in Regina to 1.2 per cent in Halifax.

The data shows that foreign buyers favour newer and larger condo complexes; in Toronto for example the share is 3.9 per cent for developments built after 2010 and 5.5 per cent for those with more than 500 units.

Copyright © 2016 Key Media Pty Ltd

BCREA
other

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Mortgages and consumer debt now in the spotlight in mixed results year

? BARBARA SHECTER
The Vancouver Sun

It was a mixed year-end for Canada’s biggest banks, with two beating analyst expectations with fourth-quarter financial results released this week and two disappointing, as concerns over the fallout from low oil prices give way to scrutiny of mortgages and consumer debt.

Canadian Imperial Bank of Commerce topped profit expectations Thursday with quarterly results that included posting double-digit mortgage growth driven by two of the country’s hottest markets: Toronto and Vancouver.

Toronto-Dominion Bank, meanwhile, disappointed with weak performance in its retail operations and higher than expected provisions and expenses in the quarter.

The one per cent year-over-year decline in TD’s Canadian personal and commercial banking, though small, “implies this very important segment will underperform peers again this quarter,” Rob Sedran, a bank analyst at CIBC Capital Markets, said in a note to clients.

CIBC shares rose to a 52-week high of $108.05 in early trading, while TD’s stock price opened higher than Wednesday’s close of $63.57, but then fell slightly.

Earlier this week, Bank of Nova Scotia exceeded earnings expectations for the fourth quarter, propelling shares of four of the Big Five banks to 52-week highs, while Royal Bank of Canada came in below expectations largely as a result of lower trading revenues. Bank of Montreal turns in its fourth quarter results next Tuesday.

CIBC, Canada’s fifth-largest bank, boosted net income nearly 20 per cent in the fourth quarter to $931 million ($2.32 a share). After usual items, core cash earnings of $2.60 topped the consensus analyst estimate of $2.49, reflecting growth in retail and business banking, wealth management, and capital markets. The bank increased its quarterly dividend by 3 cents, or 2.5 per cent, to $1.24.

Mortgage volume was up 11 per cent in the quarter, as CIBC continued to increase business through a growing proprietary sales that replaced the widespread use of mortgage brokers.

On a conference call with analysts, the bank’s executives said that the mortgage growth translated into other business as the mortgages acted as an anchor product to build deeper relationships with clients. Personal deposits were up eight per cent, while business deposits were up 10 per cent and business lending was up 13 per cent.

Gabriel Dechaine, a bank analyst at Canaccord Genuity Corp., described the mortgage growth was “frothy” in a note to clients. But he said enhanced disclosure from CIBC on its consumer lending book including mortgages “should alleviate some concerns.”

The bank disclosed that uninsured mortgages it holds in the Greater Vancouver Area and Greater Toronto Area have lower delinquency rates of 90-plus days than the Canadian average.

In addition, the average loan-to-value is lower: 46 per cent in Vancouver and 53 per cent in Toronto, compared to 56 per cent across Canada.

David Williamson, group head of retail and business banking at CIBC, said the relatively small loans as a percentage of the value of the real estate, particularly in Vancouver, provide “a tremendous amount of buffer.”

CIBC also disclosed that less than one per cent of the portfolio consists of what are considered higher-risk mortgages in the industry with a loan to value of more than 75 per cent and a Beacon score — used to measure creditworthiness — of 650 or lower.

Dechaine said he views the bank’s recent mortgage growth trends as indicative of earnings growth deceleration in the future, rather than a credit risk.

In the rest of CIBC’s closely watched consumer book, Barclays Capital analyst John Aiken noted that while credit card write-offs were essentially flat, there was an uptick in impaired loan formations. In addition, credit cards with delinquencies of 90 days or more increased by five basis points. 

Analysts said the strain on consumer loans is so far tied mainly to oil-dependent provinces including Alberta.

On an afternoon conference call, TD executives characterized consumer losses in oil and gas regions as “stable” at Canada’s second-largest bank. 

Overall, TD posted adjusted earnings excluding unusual items of $2.3 billion ($1.22 per share) for the fourth quarter, up seven per cent from a year ago.

CIBC, meanwhile, continued restructuring efforts in the quarter, taking a charge that reduced reported earnings by almost $100 million.

Banks have been cutting staff and investing in technology as customers do more banking online, and such restructuring charges have become common, though Canaccord Genuity’s Dechaine said this is likely to be the last large one for CIBC for the time being.

The bank has taken combined pre-tax charges of $430-million in 2015 and 2016, which are intended to reduce ongoing annual costs by $350-million by next year and $500 million by fiscal 2019.

CIBC became the second Canadian bank this week to reduce target return on equity. In CIBC’s case, the target is now 15 per cent or more. On Wednesday, Royal Bank of Canada reduced its target return on equity to 16 per cent or more.

On CIBC’s morning conference call, chief executive Victor Dodig said the change “reflects regulatory and market pressures on the bank’s globally,” as well as CIBC’s strategy to expand in the United States where ROEs are typically lower.

He said CIBC expects to close its US$3.8 billion acquisition of Chicago-based PrivateBancorp Inc. in the first quarter.

© 2017 National Post

Don?t blame affordability crisis on just foreigners, CMHC says

Peter O’Neil
The Vancouver Sun

It is convenient but wrong to blame foreign buyers for Vancouver’s housing affordability crisis, the head of Canada’s housing authority said Wednesday.

Canada Mortgage and Housing Corp. President Evan Siddall, citing a year of research by the federal Crown corporation, pointed instead to several factors and actors responsible — including critics of federal housing policy like Vancouver Mayor Gregor Robertson.

“While it would be convenient to hang all of the blame for high prices on others — offshore buyers — it’s just not that simple,” Siddall told members of the Greater Vancouver Board of Trade.

“Sure, it makes for a tempting narrative: them, not us.”

Foreign investment, according to Siddall, is “clearly” a factor — but not the only one.

He cited new CMHC data on the condominium market showing that 2.2 per cent of condos in Metro Vancouver are currently owned by offshore buyers — roughly in line with the 2.3 per cent total in 2014, and down sharply from the 3.5 per cent in 2015.

The survey also showed that offshore ownership of newer condos built since 2010 was higher — at five per cent.

“The evidence tells us that the origin of investor activity in Canadian residential real estate is predominantly domestic,” Siddall said. 

Other key factors include low interest rates, population and economic growth that is spurred by the heavy concentration of Canadian immigrants wanting to live in Vancouver, Canada’s tax regime, and “supply constraints” that are particularly apparent in Vancouver, according to Siddall.

Robertson, who has called for action against both foreign and domestic speculators, recently sent a letter to the federal government asking Ottawa to take action to ease the pressure.

Robertson echoed in his letter the Canadian Federation of Municipalities’ call for Ottawa to devote $12.6 billion to housing in the upcoming 2017 budget. Siddall said Ottawa is indeed planning on making new investments in housing, but said Vancouver city council needs to look in the mirror.

“Municipal leaders talk of a housing crisis and their primary solution is to demand $12.6 billion in urgent funding from the federal government,” he said.

“The weak and lagging supply response in Vancouver — rezoning restrictions, density limits, development fees, and the time it takes for approval of new supply, and not just for affordable housing — needs urgent attention.

“If there’s a crisis, we should all act like it.”

The CMHC housing market supply data indicate that supply in the resale market in Vancouver is near 10-year lows, with around four months’ supply of homes.

“The lack of supply of existing homes has caused demand to spill over into neighbouring communities, as well as the new home market, pushing down the stock of newly completed and unsold units to near 10-year lows,” Siddall said.

A key problem, he said, is the city’s aversion to replacing singlefamily homes with higher-density structures.

“Our attachment to low-density single-family housing in many neighbourhoods represents regressive urban planning and makes the problem worse,” he said.

“This is basic economics. The more we hold back supply, the faster prices will rise in response to increased demand. And Vancouver’s supply response is among the weakest in Canada.”

He said it isn’t clear what will be the impact of the B.C. government’s 15 per cent tax on foreign real estate investment.

“Some people have taken the recent slowdown in Vancouver as clear evidence of a foreign investment culprit,” he said.

“However, the slowdown in activity had started before the province announced the foreign investment tax. Heavy activity before the effective date, coupled with a marked slowdown after, is consistent with a temporary pull forward of demand.”

He cited evidence from Hong Kong and Sydney, Australia, that suggests the impact of these taxes is temporary.

“Meeting with Hong Kong authorities two weeks ago in London, I learned that foreign transactions actually increased following the introduction of their stamp duty. In fact the only impact may be psychological: a reduction in extrapolated expectations, or froth, because people believed the tax would work,” he said.

Siddall concluded by urging Vancouverites to be cautious on the foreign investment issue.

“We cannot allow it to become a wedge that divides us, separating neighbours and communities and creating tensions between newcomers and those that have been here longer,” he said.

A city spokesperson said city staff are finding ways to improve the building permitting process in the coming year.

© 2017 Postmedia Network Inc.