?As sanity returns to the marketplace? and foreign investment wanes, local homes will lose much of the price appreciation seen since spring last year, says forecast

REW

The report predicted that foreign investment will “wane further within the region, due to the recent Land Transfer Tax on foreign nationals and China’s State Administration of Foreign Exchange imposing new, stricter requirements on currency conversions.”

“It is expected that Greater Vancouver will experience a near double-digit correction in the new year, as sanity returns to the marketplace, causing the region to give back much of the appreciation witnessed in the first half of 2016,” said Randy Ryalls, general manager, Royal LePage Sterling Realty. “However, inventory will continue to be the story in the new year, as any movement within the market will be exaggerated at their current, extremely low levels, meaning that if sentiment remains unchanged, conditions could worsen and prices may fall even further.”

The report stated, “Despite the flurry of new policies designed to tame demand and foreign investment in Greater Vancouver, critically low inventory levels have been the predominant factor affecting the region’s market activity and house price appreciation. Market characteristics have melded to create a perfect storm where prospective homeowners are unable to find adequate affordable property due to an extreme lack of supply, and have thus refrained from putting their own homes on the market, causing sales activity to slow further and leading prices to soften.

“While this has caused appreciation to slow across many property types within the Greater Vancouver market, condominiums have remained remarkably resilient in the face of recent conditions due to their relatively better supply and affordability.”

Indeed, Royal LePage predicted that Greater Vancouver’s robust condominium market, along with the region’s “nation-leading” economy, would serve to offset any further decreases in aggregate home prices in 2017.

Across the whole of Canada, the report said that 2016 was marked by a slew of new public policy initiatives at national, provincial and municipal levels.

Phil Soper, president and CEO of Royal LePage, said, “While efforts to address deteriorating affordability in Ontario and BC’s largest metropolitan areas are well-intentioned, too many new taxes and regulations, by too many levels of government, introduced within such a short timeline and with perceivably little research and consultation, have caused confusion and triggered drops in consumer confidence, risking the long-term health of Canada’s housing market.

“Price appreciation disparities between regions have created a quandary for policymakers who have tried to tame overheated housing markets, while supporting slower ones. What our leaders have been slow to address, and what is at the heart of the matter, is the supply side of the equation in the country’s hottest markets. Housing shortages have put immense upward pressure on prices.”

© Copyright 2017 

Emma Crawford Hampel
Vancouver Courier

Decreasing affordability and falling consumer confidence across Greater Vancouver are expected to contribute to cooling home prices in 2017, according to a Royal LePage forecast released January 12.

Prices started to moderate in 2016’s fourth quarter, and this year they are expected to drop 8.5 per cent, in part due to new federal and provincial regulations introduced in 2016.

“It is expected that Greater Vancouver will experience a near double-digit correction in the new year, as sanity returns to the marketplace, causing the region to give back much of the appreciation witnessed in the first half of 2016,” said Royal LePage Sterling Realty general manager Randy Ryalls.

“However, inventory will continue to be the story in the new year, as any movement within the market will be exaggerated at their current extremely low levels, meaning that if sentiment remains unchanged, conditions could worsen and prices may fall even further.”

As prices moderated across the region in Q4 2016, the single-detached and attached home segments both flipped from seller’s to buyer’s markets.

“After appreciating at an unsustainable rate for the better part of the year, prices across Greater Vancouver have begun to correct as a result of deteriorating affordability, a lack of quality inventory and heightened market uncertainty stemming from conflicting governmental intervention,” Ryalls said.

“This has led to a decrease in competition for listings across Greater Vancouver, giving rise to new market conditions where prospective homeowners have more power at the bargaining table, causing prices to soften.”

Condos bucked the trend in 2016’s fourth quarter, and this segment remains in a seller’s market. Sales prices for this home type are not expected to cool as much as the other two categories in 2017.

As of the end of 2016, aggregate home prices across Greater Vancouver differed by region, according to Royal LePage data, as follows:

• Vancouver: $1,506,498, an increase of 25.6 per cent year-over-year;
• West Vancouver: $3,573,148, up 32.8 per cent in the year;
• North Vancouver: $1,391,197, up 28 per cent;
• Richmond: $1,102,456, up 27.6 per cent;
• Burnaby: $1,030,282, up 19.3 per cent;
• Coquitlam: $1,003,650, up 27.1 per cent;
• Surrey: $765,726, up 22 per cent; and
• Langley: $786,720, up 25.7 per cent.

Glacier Community Media © Copyright ® 2013 – 2017 LMP Publication Limited

Rennie seeks $16 million in suit against developer over alleged unpaid fees

? JOANNE LEE-YOUNG
The Vancouver Sun

Condo king Bob Rennie has been the target of many lawsuits, but for over four decades, the power broker says he has never taken action to sue anyone himself. Until now.

Rennie Marketing Systems is suing Vancouver-based Shape Properties Corp. for more than $16 million in real estate marketing fees related to the sale of more than 1,300 condo units at developments near Brentwood Mall in Burnaby, according to a notice of claim filed in B.C. Supreme Court.

In June 2016, Shape and its partners, including multi-billion-dollar, Toronto-based pension funds, terminated Rennie’s services on the massive mixed-used, retail, office and residential project. They decided to market the project in-house despite three towers of condo units nearly selling out and the defendants “having learned the Rennie Platform from Rennie Marketing Systems,” states the claim.

“There’s not a lot to say,” said Rennie. “I have never sued anyone in 42 years in business, so it’s not a comfortable spot.”

The allegations in the claim have not been tested or proven in court.

Shape president John Horton said: “My view is that there is no merit to this claim. We will vigorously defend (it) in due course.”

Rennie started working in 2011 with Shape and its partner companies that are associated with the Healthcare of Ontario Pension Plan to market the “Amazing Brentwood” project, a 28-acre site at Lougheed and Willingdon next to Brentwood shopping centre, according to the claim. The vision was a “master planned community” with 13 high-rise residential towers. 

“Rennie Marketing Systems was instrumental in developing this concept and in the planning, branding and market positioning of the project,” states the claim.

The lawsuit, filed at the end of December, said Rennie began marketing for this project in 2013 and also started drawing up similar plans for “City of Lougheed,” a separate, 40-acre site in Burnaby co-owned by Shape and companies associated with Greystone Capital Management, a Regina-based firm that invests $32 billion on behalf of pension and endowment funds for Canadian universities, unions and companies.

The Lougheed project plan also contains mixed-use retail and office space and a plan for 23 high-rise residential towers.

The companies agreed for Rennie Marketing to receive a fee for each condo sold, based on a confidential percentage of the sale price, with half paid by Shape to Rennie when buyers signed a firm, pre-sale contract and the remaining due when the condos were completed and the deals closed. Shape would also pay a monthly advance. The claim said even though Shape failed to sign the agreement for six months, Rennie allegedly staffed up a sales centre and nearly sold out two towers of 845 condo units at Brentwood between 2013 and 2015.

Shape paid the monthly advances, but in April 2015, it requested a reduction in fees “in light of the number of towers being planned for the two projects.”

The claim said that Horton proposed for Rennie to exclusively market other future projects to be developed by Shape and Greystone.

Rennie made several proposals for fee reductions, but did not hear back from Shape even though it “continued to work intensively with Rennie,” said the claim.

By April 2016, according to the claim, Rennie had nearly sold out a third tower at Brentwood when Shape asked to keep the presentation centre there staffed with sales agents and coordinators to direct potential customers to its Lougheed project. 

Then, in June 2016, Horton advised Rennie that Shape was terminating Rennie Marketing Systems’ services on both projects, according to the claim.

In total, Rennie’s company is seeking $16, 464,650 for unpaid fees and damages for breach of contract, but Rennie said, “the large size of the claim is distorted. There were 960 brokers who sold condos. It’s not $16 million goes to Bob. We’re a clearing house for the agents who sold 1,300-plus units.”

Horton said he couldn’t elaborate as the company readies a reply to the claim, but described the move as a “business decision”, adding: “We are a real estate company with integrated platforms, and we are well within our rights to internalize marketing.”

© 2017 Postmedia Network Inc.

Imperial?s condos feature sophisticated design work that aims to provide a getaway feeling

Mary Frances Hill
The Province

 

Project: Imperial

Project Address: 5051 Imperial St., Burnaby

Project Scope: A total of 169 one-, two-, two-bedroom-and-den, and three-bedroom homes, including 13 townhomes with street access, in a 26-storey concrete highrise

Residence sizes and prices: From 535 to 1,115 square feet from $473,900

Developer and builder: Amacon Development Corp.

Sales centre: 4700 Imperial St., Burnaby

Centre hours: noon to 5 p.m., Sat — Thurs

As visitors to fine hotels well know, a getaway can offer a sense of freedom and escape from the clutter and mundane concerns of the everyday. The interior design of a hotel room can enhance this feeling of comfort, and it’s one that homebuyers will recognize in the display space at Imperial, Amacon Development’s new condo community in Burnaby.

False Creek Design Group brings the luxury-meets-comfort so common to high-end hotels into the display home with the talents of designer Louise Noon. Noon lends softness to the textures in the space, by tailoring furnishings and lines, to complete the sophistication in the design.

Amacon Development has enjoyed a long history as a builder of hotels, such as the Loden Hotel in Vancouver. Like the developer, False Creek Design’s designers are influenced by their own history of hospitality work, says Noon.

“Where we can, we like to bring some of the value-added features we see in this field [hotel interior design] into other aspects of our work,” she says. “Amacon’s brand statement is to ‘live well, work well’. That’s a statement that False Creek Design Group can also align ourselves with.”

Noon points to what she calls “lifestyle-enhancement features,” such as pull-outs in the vanities and optional safes in the closets, that distinguish Imperial’s homes from many on the market.
Though each of the three colour palettes available to buyers distinguishes itself from the next by way of shade and tone, Noon says they share in common one essential element: tailoring and luxury.

That luxury can be found in every detail of the materials and finishes, she says. The waterfall style countertop is made of polished quartz stone. The large-format 24-inch tiled backsplash is in stone-style travertine, onyx or marble, and polished quartz stone can also be found in the bathroom.

“The three colour palettes were designed to be well defined, soft, sophisticated packages that are in the warm, soft light or mid tones.”

That softness is contained, in a sense, with the tailoring of the traditional seating.
“[The tailoring] is carried through with features like the tight back sofa with contrasting piping,” she says. The same effect can be found in her favourite pieces in the display space, such as the master headboard with its stitched herringbone detailing and the floating upholstered bed platform.

“[That headboard] was clearly defined as a highly crafted boutique piece. The tailoring involved in delivering on this upholstered detail is of the highest quality. Our custom fabricator did a wonderful job.”

© 2017 Postmedia Network Inc.

Arbutus Village redevelopment about to begin

Naoibh O’Connor
Vancouver Courier

The upcoming redevelopment of Arbutus Village means neighbouring residents will be without a full-scale Safeway for about two years.

Sobeys Inc., which owns Safeway, is downsizing the store during construction. The Safeway store closes Jan. 19, although the pharmacy will remain open throughout construction.

The company has signed an agreement with the landlord and will return to the property once renovations are completed. There are no details about the new store’s features at this point, according to Sobeys.

A reader, who contacted the Courier about the downsizing plans, raised concerns about the many people, including seniors and those who don’t drive, who depend on the grocery store. The next closest grocery store is at 16^th and Arbutus.

The project by Larco Investments Ltd. has been in the works for years. City council approved zoning to allow for a mixed-use development on the seven-acre site back in July of 2011.

The overall project will feature 500 residential units, some of which will be affordable housing units managed by the City of Vancouver, office space, a grocery and liquor store and green space.

Phase one involves what has been dubbed blocks A and B.

Block A will include 100 units of dedicated rental housing to the City of Vancouver — 50 senior and 50 family units, 115 market rental units, as well as the Safeway and a restaurant, which have a total of 54,400 square feet of space. There will also be office space accounting for 15,200 square feet.

Block B will feature 170 market rental units and retail space covering 34,780 square feet, which will house the Bank of Montreal, a liquor store and Dance Co.

Blocks C and D will include 115 residential units, although it’s not yet determined if they will be market rental or condominiums.

Retail space will cover 9,900 square feet, there will be a 15,000-square-foot community centre featuring the neighbourhood house and adult daycare, as well as a 9,300-square-foot private recreation centre.

As Larco fine tunes the project, blocks C and D could change slightly, but the number of residential units will stay the same.

Art Phillips, Larco’s director of development, told the Courier before Christmas that some changes have already been made to the existing mall, which will allow the Bank of Montreal to relocate into the existing Safeway space.

“We’ll still have continuing operations of the balance of the mall,” he said. “It’s a matter of the front façade is going to be removed and we’re looking at doing that in the latter part of January.”

Excavation is expected to begin adjacent to Arbutus sometime in March or early April.

The first phase will take 26 months from when the backhoe hits the ground, according to Phillips.

Construction work on blocks C and D, which are on the west half of the site (west of the Yew Street extension) will start after the first phase is completed.

“Because we can’t start on the west half without relocating Safeway, Bank of Montreal, the liquor store, Dance Co into the new facilities,” Phillips explained.

Meantime, the developer will be going back to the community sometime in February with regards to the development permit for block B. There will be a model and renderings of block A and B combined at that time.

Glacier Community Media © Copyright ® 2013 – 2018

Justin da Rosa
REP

A Vancouver price correction is expected to contribute to more moderate home price growth across the country, according to a comprehensive report.

But that doesn’t spell the end for the country’s former hottest market.

“If were to call for an 8.5% correction in Ottawa or Montreal, that would be a huge deal. It would represent a market crash because the price appreciation has been moderate. In Vancouver, when you see prices rising at the rate they have been rising in the mid to high 20s, 8.5% in that context seems moderate,” Phil Soper, president of Royal LePage, told MortgageBrokerNews.ca. “Think of it this way, in relative terms, rather than rising by 26% you’re going the other direction by 8.5%, in market terms that’s a significant market turnaround. It is a significant change but it’s not unexpected.”

The brokerage expects the home price appreciation gap to narrow in 2017, with traditionally hot markets to trend to more historical norms, according to its 2017 real estate report, released early Thursday.

That includes Vancouver, which is forecasted to experience home price depreciation.

But Toronto is trending in the other direction.

“Like Greater Vancouver, the Greater Toronto Area markets we studied in our House Price Composite are seeing double-digit year-over-year home price appreciation across the board.

“However, these two regions, often grouped together as Canada’s booming real estate markets, are on divergent paths,” Soper said in the report. “Unlike Vancouver where a price correction is underway, 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 that those on the west coast.”

As for Alberta, it seems the hard-hit market has weathered the worst of the economic storm.

“What consumers don’t realize when they read a report like ours is how hard the market was hit. What they don’t see is the volumes were down 20%,” Soper said. “It was a very hard-hit market but the province went into the oil crisis with the tightest reno market, the youngest population, the lowest unemployment rate. So if there was any province in the country that could handle a downturn.”

Copyright © 2017 Key Media Pty Ltd

Steve Randall
Canadian Real Estate Wealth

Canada’s sub-prime mortgage lenders are increasingly teaming with unregulated Mortgage Investment Corporations (MICs) to avoid rules designed to outlaw risky lending practices.

Reuters reports that tighter lending standards have led to growth in the practice of pairing primary mortgages with secondary loans from the MICs. Borrowers can obtain a home loan with a 10 per cent downpayment, half that of either CMHC or privately-insured mortgages.

Ottawa’s finance department told Reuters that it was monitoring co-lending but did not comment on whether tighter mortgage rules had increased the practice.

Copyright © 2017 Key Media Pty Ltd

other

CES – Consumer Electronics Show – also known as the most important tech innovation convention in the world, is happening this weekend. CES is held yearly in Las Vegas, and is the site where the newest and shiniest tech innovations (in everything from headphones to drones) are unveiled to the world – ready or not! We’ll feature a special roundup of CES 2017’s “Best Of” next week, but for now we’re keeping our eyes glued on Vegas, and suggest you do the same! 

What This Means For Real Estate Marketing
Smart agents know the future (and present) is digital, and that technology has everything to do with real estate. Keeping up with tech innovations is crucial to not only being successful in how you market properties better than the next guy or gal, but also how you position yourself as an innovator. Real estate is changing fast, and being fluent in digital will make you more impressive than ever.

CES Convension in Shanghai China

W. Scott Brown
other

For many, the arrival of each year new is met with a certain sense of hope. I certainly feel that way.

Since I was about 18 years old, at the end of each year I have taken time to reflect on the year that was and contemplate the year to come. I welcome the fresh start that each year represents, and while I am not one to make resolutions, I do tend to establish my direction or approach for the coming year. I especially like to think about new habits I wish to see manifest. I also focus on a theme throughout the year, allowing it shape how I grow, learn, and change. For instance, last year’s theme was “Jubilee”. A “Jubilee” year is a year at the end of a key cycle or cycles, which is believed to be the 50 ^th year. It ironically had a special impact on the ownership and management of land in the Ancient World. According to ancient writings, promises and debts would be forgiven and the mercies of God would be particularly manifested in a “Jubilee” year. It seemed an appropriate theme after all, because in 2016 I turned 50.

Now that I am starting a new cycle, I chose the word “One” for my 2017 theme. This word means priority. I am curious to see what I learn as I practice this theme throughout 2017. Perhaps you are wondering what 2017 will bring for you, or what theme it may take on?  Some would refer to the past year as “Eventful”. I think the word for 2017 may very well be “Healthy”.

Of course, this is the time of year I am more frequently asked for market predictions. So I thought I’d share my views once again.

Due in part to the B.C. Liberal Government’s recently announced first-time buyer down payment assistance initiative, we expect a quick start to the year for new multifamily sales. Of course, affordability challenges will continue to drive many home shoppers to suburban markets including areas such as Surrey and Langley. In 2017 the market will see multifamily product become acceptable to a growing number of consumers. I especially expect consumer demand for multifamily product priced under $750,000 to be strong through this quick start. This demand, combined with the ongoing challenge of limited supply, may result in another season of price appreciation. This could be expected in the First Quarter and Second Quarter of the coming year, but not likely at the same magnitude experienced in the Second Quarter of 2016.

This time of year is when public annual reports are released on the market and authorities on our market release their outlooks for the year ahead. It is also the time of year when everyone who owns property receives their annual tax assessment. Given the heated market activity and price escalation of the first half of 2016, many homeowners are facing a tax increase in the New Year. Sadly, this comes at the same time as many consumers receive their January credit card bill reflecting all those seasonal purchases.

At Fifth Avenue, we have started work on our own comprehensive year-end report on the multifamily market. Early polling on the final quarter of 2016 indicates a more positive result than the 3,004 new sales posted in the somewhat tumultuous Third Quarter of 2016. The year total is projected to be greater than 19,000 units or a +9 percent increase over the prior year, which means it will be establishing a new high. This is quite surprising given that the current reports on the annual sales figure for re-sales/MLS sales indicate a 5.6% drop from 2015. That being said, the number of pre-owned MLS homes sold across Metro Vancouver was still the third highest on record after 2015 and 2005.

Simply put, new multifamily product is performing well, even in uncertain times. This trend is expected to continue throughout 2017. We do think that the annual sales total for 2017 may not surpass the high water mark posted in 2016. That being said, we expect 2017 to see another 15,000+ new multifamily homes sold. This will result in the coming year to be one of the best years in the past decade. Then again sales could surpass this year’s record levels if interest rates and lending policies remain relatively stable, and developmental approvals occur on more expedited basis. We also foresee the new multifamily market outperforming the MLS market on a percentage basis, and representing a growing percentage of overall sales in 2017. Now that’s hopeful.

Happy New Year!
W. Scott Brown
President & CEO