Bill Cleverley
The Province

VICTORIA — Two Victoria councillors want the 15 per cent provincial property transfer tax on foreign buyers applied in the capital region, and say local municipalities should be given the authority to impose a tax on vacant properties.

Councillors Ben Isitt and Jeremy Loveday hope their council colleagues will support asking the Capital Regional District board to throw its weight behind the changes. Revenue from the foreign buyer tax — a measure introduced in Metro Vancouver last summer —should be used to invest in affordable housing, they say.

“We’re definitely hearing from the public that there’s substantial concern around escalating prices for residential real estate and also real concern about affordable home ownership being out of reach for more and more families,” Isitt said.

“When you look at the escalating price of land, it has an impact both on renters as well as on people hoping to be homeowners.”

Loveday said there are a number of Victoria properties that have “lots of vacant units in them.

The two are are not proposing immediate implementation of a tax on vacant properties, but rather the authority to levy such a tax if warranted by the data, Loveday said.

Isitt said they want Victoria city council to forward the issue to the CRD because it would be good policy to apply such taxes regionally.

If the resolution makes it to the CRD table, there’s no guarantee it would pass.

The Victoria Real Estate Board says predictions that foreign buyers would flock to Victoria after the tax was imposed in Vancouver have not materialized.

According to the board’s latest numbers, the percentage of property transfers involving foreign buyers in Victoria went from 3.9 per cent in June-August, before the tax was implemented in Metro Vancouver, to 4.6 per cent in November.

Oak Bay Mayor Nils Jensen said he would want to see “an up-to-date analysis” on what impact the tax has had on the Vancouver market before making a decision.

“Now that there is a track record of approximately six months, the first step is to see how it has affected prices and impacted the Vancouver market generally,” Jensen said.

Langford Mayor Stew Young said there’s no way he would support a foreign buyer tax, and urged caution about imposing a tax on vacant properties.

Young said he views the tax on foreign buyers “a modern-day head tax” contrary to his belief in the free market.

“I just fundamentally don’t agree with it,” Young said. “I think for people who own a house, government should stay away from that. We’re already over-taxed.”

Esquimalt Mayor and Capital Regional District chair Barb Desjardins is also opposed to the idea.

“I have been watching what’s been going on in Vancouver, and I think it has had significant effects that I don’t think they really understood fully would be encountered,” Desjardins said.

“I tend to support [the idea] that the market will correct itself —and we’re already seeing that. So I would hesitate in implementing a policy that really kind of got brought in on the fly.”

© Copyright Times Colonist

Steve Randall
Canadian Real Estate Wealth

The government in Ontario should establish a housing affordability task force to tackle the increasing barriers for first-time buyers, the province’s real estate body says.

“We are facing a critical housing supply shortage that is putting home ownership out of reach for Ontario’s first-time buyers and young families,” said Valerie Miles, Ontario Real Estate Association Government Relations Committee Chair. “In some markets, housing inventory is at all-time lows and prices are at record highs. Increasing the housing stock is necessary to give buyers more options at affordable levels. We need industry leaders to come together on this issue before the supply problem gets any worse.”

The association has made several recommendations to the government including cutting red tape surrounding building permits and zoning.

OREA CEO Tim Hudak says the benefits to boosting affordability of housing is far-reaching.

“Every home transaction generates $55,000 in economic spin-offs which creates jobs and supports local business, while home ownership offers endless social benefits for families and communities. If the goal of the pre-budget consultation is to build up Ontario’s future, then finding ways to make home ownership affordable is a great place to start.”

Copyright © 2017 Key Media Pty Ltd

Zetter Place merges country living with an ?urban esthetic?

Mary Frances Hill
The Province

Zetter Place

Where: 8520 204th Street, Langley

What: 82 townhomes at Yorkson Creek, Langley

Residence sizes and prices: 1,232 — 1,978 square feet from $419,900 for A plan (two-bed-plus-den); from $489,900 for C plan (three-bed with side-by-side garage); from $599,900 for B plan (four-bed)

Developer and builder: Lanstone Homes

Sales centre: 8520 204th Street, Langley

Hours: noon — 5 p.m., Sat — Thurs

For Lisa Hansen, working on a small scale can make a big difference in creativity and design.
Hansen, an interior designer with Area3 Design, says she relishes working with boutique designers like Lanstone Homes, the developer behind Langley’s new Zetter Place community. Spared from the lumbering bureaucracies that can plague much larger companies, designers who consult with boutique developers often find that their creative ideas are heard, respected and embraced.

“We love working with boutique–style developers for various reasons,” says Hansen, who led the interior work for Zetter Place’s two display townhomes.
“They are often more open to creative ideas brought forward and the chain of command is smaller. The communication is easier throughout the project.”
That ease of communication certainly helped Hansen and her team bring their esthetic and creativity to the fore at the Zetter Place display homes.

One of the first ideas Hansen entertained for the spaces focused on the background of the buyers. Many come from Vancouver, where they may be priced out of the market, and although they’re attracted to the bucolic beauty around Langley’s Yorkson Creek, they still prefer to live within what Hansen calls the “urban esthetic” as far as finishes and interior décor are concerned.  So she says combining modern design with the homes’ relatively rural surroundings was a must. At Zetter Place, Area3 Design proves that country living doesn’t have to dictate a traditional or rustic interior.

The bright white kitchen, for instance, is contemporary design defined: a model of clean crisp angles that sets the tone for the rest of the space.

“I think for years the assumption was that if you lived in the suburbs then you only liked traditional,” says Hansen.

“With the cost of real estate, a lot of people are choosing to move away from the city for monetary reasons, but we believe they still like the urban esthetic as long as it provides a welcoming and warm ambience.”

Hansen is partial to black as an accent shade, and she uses it throughout the display homes. In one townhome, she sets off the light wood and white walls with black seating in the kitchen, dining and living rooms and with a coffee table and bold artwork. One bathroom boasts two black walls in contrast to a bright white vanity. She predicts that black’s versatility will continue to inspire professionals and homeowners for some time to come.
“This colour is fun to play with as it can be very masculine, fashionable, edgy, traditional, or modern, and it all depends on how you use it.

“A homeowner can play with this shade by adding some flatware to the dining table, picture frames or accents in their space.”

© 2017 Postmedia Network Inc

Mortgage rules spur changes

GARRY MARR
The Vancouver Sun

Canada Mortgage and Housing Corp., the Crown corporation that controls the majority of the mortgage default insurance market in the country, is raising premiums for a third time in the past couple of years, saying new regulations are forcing its hand.

The increase in premiums depends on the down payment — they are rising more dramatically for loans with higher down payments. But the premium for consumers with a loan-to-value ratio up to and including 95 per cent, will rise to four per cent on March 17 from the current 3.6 per cent.

“The changes were necessary because the capital regime for mortgage insurers as put in place by the regulator has changed effective Jan. 1, 2017,” said Steven Mennill, senior vice-president of insurance with CMHC, referring to changes brought in by the Office of the Superintendent of Financial Institutions. “It places different requirements on mortgage insurers with respect to the capital that we have to hold.”

The country’s two private insurers, Genworth Financial and Canada Guaranty, have often matched CMHC increases. Neither could be reached for comment Tuesday.

Canadians with less than a 20 per cent down payment must get mortgage default insurance, but the CMHC said it is also increasing rates for people with what is referred to as a low-ratio mortgage. In those cases, to mitigate risk, the banks often seek out and pay the insurance for low-ratio loans.

For loan-to-value ratios of up to and including 65 per cent, the premiums will remain at .60 per cent. It’s in the up to and including loan-to-ratio values of 75 per cent and 80 per cent — both levels that don’t legally require insurance — that premiums are rising the fastest.

In the 75 per cent loan-to-value category, the premium jumps from .75 per cent to 1.7 per cent; in the 80 per cent category the increase is from 1.25 per cent to 2.4 per cent.

With financial institutions paying that fee, it is inevitable that Canadians with those larger down payments will actually see mortgage rate increases passed on by the banks, while Canadians with small down payments won’t, said Rob McLister, founder of ratepsy.com.

“This is absurd. There is no statistical evidence about why (the hikes) are justified,” McLister said, adding the CMHC is on an advisory panel at OSFI and would have had input into the new capital requirements that have led to the fee hikes.

“What CMHC is not telling people is that its premium hikes are going to jack up rates (again) on mortgages with 20 per cent to 35 per cent equity. I’m seeing up to 50 basis point spreads between lower risk low-ratio mortgages and higher risk five per cent down mortgages. The whole mortgage market has been turned on its head.”

CM H Cs aid for the average homebuyer in its portfolio, the higher premium will result in an increase of about $5 to the monthly mortgage payment. The average CM H Cinsured loan is $245,000. The averaged own payment was eight per cent with an average gross debt service ratio of 25.6 per cent, below the 32 per cent maximum to qualify for a loan.

James Laird, a co-founder of RateHub, said he didn’t expect the changes announced to have much of an impact on the market. “Premiums will be increased for all of those Canadians with less than 20 per cent down, but these premiums are added on to the mortgage and paid off over the life of the mortgage, so the cash required on closing does not change. This change specifically will not impact the borrowing habits for the majority of high-ratio clients,” he said.

RateHub noted that based on the recent average price of $730,472 in Toronto, with a minimum down payment of 6.6 per cent or $48,047, premiums would rise to $27,297 from $24,567, which comes to $12 per month based on an interest rate of 2.44 per cent and a 25-year amortization.

© 2017 Postmedia Network Inc

PETE MCMARTIN
The Vancouver Sun

In the late 1980s, Saturday Night magazine commissioned British writer Jan Morris to write about Canada.

To Morris — a global traveller who once said she believed Canada to be the best and most moral of the world’s countries — Canada was not the vast snowy wilderness of popular imagination. To her, it was the sum of its cities strung latitudinally across it. Metro Vancouver was one of the 10 cities Morris profiled.

The title of her Vancouver essay was Too Nice for Words? — an open-ended question that suggested not only Morris’ feelings of ambivalence for the city but ours, too. Beautiful? Certainly. Modern? Unquestionably. Efficient, clean, tolerant, admirably multicultural? Yes, yes, yes and yes. She could have been describing a utopian ideal. That, to Morris, was the problem.

“But one need not parody, or even exaggerate, the pleasantness of Vancouver,” she wrote. “This is, one might say, the last resort of pleasantness, and especially, I think, pleasantness of a middleclass, middle-income, middleaged English kind. A metropolis of 1.3 million people, of innumerable nationalities, it still has the public manners of an English country town half a century ago. It seldom raises its voice. It would not dream of jumping a light. During 10 days in Vancouver, I never heard a car horn tooted.”

She felt the city lacked texture. Like San Francisco, Vancouver was a victim of its setting — never living up to it, never quite escaping it. She adored Stanley Park, and felt it unrivalled in all the world, but she chafed at the city’s bland and unadventurous architecture. She cited its “lack of spontaneity.”

“It is a city, one feels, that wants to be something else — like a chrysalis approaching metamorphosis. It surely cannot stay as it is forever, eternally young, eternally diffident, defying all the odds of urban development. Vancouver feels half-empty to me, though natives complain of its growing congestion, and half-fulfilled as well.”

I remember the howls her piece gave rise to here at the time, a reaction that perfectly proved Morris’ point. A more mature city would have shrugged it off. Vancouver, still in its adolescence, reacted accordingly.

But as a visitor and interloper myself — by that time, I had been in Vancouver for only a dozen years — I thought Morris had nailed it, despite the fact that she also thought the Sun and Province “must surely rank high among the dullest journals in the English language.” It wasn’t anything I hadn’t heard before.

But Morris, preoccupied as she was with the surface of things, missed what had become the city’s defining ethos and peculiar genius.

She could not have known that the beautiful setting she felt burdened the city’s sense of itself had also informed it, that its geography had seeped into the everyday lives of its citizens like nowhere else in Canada. It created a tension between those who saw wilderness and beauty as resources to be exploited, and those who saw them as treasures to be protected. It made us mindful not only of our own urban geography, which too often resulted in a cautious and often uninspired cityscape, as Morris correctly noted, but it made us call into question our own personal landscapes as well.

In other areas of Canada, the idea of what constituted The Good Life was never in question. Here, it was all up for debate. How best to live one’s life? Was it with a low carbon footprint, or a convertible? Was it a downtown freeway, or the preservation of neighbourhoods? Was it tankers, or salmon? Was it preservation, or change? Was it suburbanization, or densification? This dynamic gave rise to extremes — this is the city that gave birth to both Greenpeace and the Fraser Institute — but both extremes had their eyes on the same thing, and that was the future.

Not an idealized future, but a livable, urban one. These kinds of questions are run-of-the-mill in cities around the world now, but before I came to Vancouver I had never before experienced such an obsessive degree of civic introspection. But then, I came from Ontario.

Metro Vancouver is not the same city, physically or characteristically, that Morris saw 30 years ago. It’s bigger. It’s doubled its population. It’s a city of greater extremes than it used to be, both financially and demographically. It is not, as too many believe, past its due date. The young will not abandon it. The population will grow, not shrink. People are flocking here, not fleeing it.

But it has had its coming-out party and must now grow up. It is at a crossroads and must decide what kind of city it wants to be.

It threatens to become like a hundred other North American cities — another Toronto, another Dallas — but, as its geography has been compelled to do in the past, it can go its own way and forge something unique. I despair of the former. I believe in the latter.

© 2017 Postmedia Network Inc.

Ephraim Vecina
REP

In its latest study, Equifax Inc. revealed that the incidence of mortgage fraud in Canada has risen along with the runaway prices in the country’s hottest real estate markets.
 
The credit reporting agency stated that the number of potentially dishonest mortgage applications has grown by 52 per cent over the past 4 years. Many of these flagged applications have originated from Ontario and British Columbia, both of which play host to Canada’s most expensive housing markets.
 
“It could be investing in the market as a way to cleanse money. It could be: ‘I really want that home and I’m getting into a bidding war and even though I make $60,000, I’m going to say that I make $90, 000,’” Equifax vice-president of customer insight Tara Zecevic stated in the report, as quoted by The Globe and Mail.
 
Canada’s long-running affordability crisis is largely responsible for kick-starting the trend, she added.
 
“I definitely think there is this fear of a continuous rise in the cost of homes, that home ownership is starting to become out of reach.”
 
Banks provided around 90 per cent of the red flags. Most of the deception involved identity theft and money laundering. Many would-be buyers have also been found providing falsified or tampered tax returns, bank statements, and employment documents to qualify for mortgages larger than they are actually entitled to, Zecevic explained.
 
In a related online survey, Equifax found that 8 per cent of Canadians actually falsified information on their own credit applications. Meanwhile, 13 per cent believed it was okay to tell “little white lies” on their mortgage applications, while 16 per cent considered mortgage fraud a “victimless crime”.
 
“What ends up happening is consumers think: ‘I’m not really doing anybody any harm,’” Zecevic said.

Copyright © 2017 Key Media Pty Ltd

Ephraim Vecina
Canadian Real Estate Wealth

According to a report from one of the country’s leading brokerages, Canadian residential real estate markets saw a 13.0 per cent year-over-year increase (up to $558,153) in Q4 2016—the greatest such appreciation in over a decade.

Royal LePage announced in its latest National House Price Composite that the average sale price of two-storey homes nationwide grew by 14.3 per cent over the same timeframe, up to $661,730. Meanwhile, the average price of condominiums rose by 7.4 per cent, up to $356,307.

In the same report, the brokerage predicted that aggregate home prices across the country will increase by 2.8 per cent in 2017 when compared to the levels at the end of 2016.

The Greater Toronto Area saw a 16.1 per cent year-over-year increase in Q4 2016. Royal LePage president / CEO Phil Soper warned that this pace of growth will not end any time soon.

“[There] is no relief in sight for the GTA – forward momentum and supporting fundamentals in the region are that strong. And it is worth noting, Toronto area home prices are much lower than those on the west coast.”

However, the Vancouver market should brace itself for a possible home price correction this year.

“Eroding affordability in B.C.’s Lower Mainland has reached unsustainable ground. This, coupled with recently introduced public policy measures and lower sales volumes, has put visible downward pressure on home prices,” Soper said.

“While the cost of a home in Greater Vancouver will remain the highest in the country, a modest price reset will provide much needed relief in the Lower Mainland and help reignite overall buyer activity in the region.”

However, gradual upward trends in Quebec, Atlantic Canada, and Alberta home prices will help greatly in offsetting the sharp performance disparities between regions, Soper assured.

“In 2017, we anticipate a movement away from the regional extremes of real estate feast and famine – and that is a very good thing.”

Copyright © 2017 Key Media Pty Ltd

 

Ephraim Vecina
Canadian Real Estate Wealth

Sales of homes across Canada rallied by 2.2 per cent month-over-month in December after November transactions suffered some weakness in the wake of stricter mortgage rules, according to a new report from the Canadian Real Estate Association.
 
Home prices also went up by 3.5 per cent year-over-year in the same month, up to $470,661.
 
However, CREA noted that while significant, this surge recovered only less than half of the November declines in the national market. Sales in that month experienced their largest monthly decline in over 4 years, amid increased consumer hesitation right after significant changes to federal mortgage regulations took effect.
 
The price increases were also the smallest year-over-year gains in at least 2 years, Global News reported.
 
Sellers would also have to hold on to their offerings a bit longer than usual, as resale activity will be more sluggish this year compared to the last, CREA warned.
 
“Home sales are unlikely to benefit the Canadian economy as much in 2017 as they did in 2016,” CREA chief economist Gregory Klump wrote in the report.
 
“New regulations mean that in order to qualify for a mortgage, home buyers will either have to save longer for a bigger down payment or purchase a lower priced home. In urban centers where the latter are in short supply, that’s likely to translate into fewer sales.”

Copyright © 2017 Key Media Pty Ltd