Steve Randall
REP

The sharp downturn in Vancouver’s housing market is not the result of the foreign buyer tax or the federal changes to mortgage regulations according to Capital Economics economist David Madini.

“We simply think the housing bubble has burst,” he wrote in his latest report, adding that bubbles are “inherently unstable because they are largely driven by unpredictable investor mania.”

The economist says that the considerable growth in house prices which continues in the Greater Toronto Area is fueled by easier-to-obtain mortgage credit and warns that overinflated prices could cause economic pain.

“The performance of the economy this year could hinge on the direction of the much larger overheated Toronto housing market,” he wrote.

He warns that affordability issues and the imbalances in the housing market could be signs of an “economic crisis in the making.”

Copyright © 2017 Key Media Pty Ltd

Justin da Rosa
Mortgage Broker News

Chinese influence on Canada’s real estate market may be coming to an abrupt end due to new rules that lock their funds.

The Chinese government announced surprise rules for the exchange of the yuan, which will restrict the outflow of currency. 

“As capital flight intensified, China’s reserves have plunged, causing the country to sell US treasury bonds. In response, China has introduced new rules, which now require disclosure of the intended use of the Yuan being converted,” Dr. Sherry Cooper, chief economist with Dominion Lending Centres, wrote in a recent note to brokers. “In addition, they must pledge the money won’t be used for the purchase of property, securities, or insurance products.”

So much for parking money in overseas real estate.

Chinese nationals are now forbidden from borrowing or lending on behalf of others; those caught will be barred from exchanging funds for two years and will be subject to money laundering investigation. 

Despite the existence of prior rules which which limit the amount of capital that can be exchanged to $50,000, many found workarounds that have allowed for the outpouring of $1 trillion yuan from 2014-2016.

It remains to be seen what this new rule will do to curb the outflow of cash but, as Cooper notes, there will always be some who are willing to skirt the law. 

“Much of this money found its way into global real estate markets causing prices to boom. Property prices surged in some parts of Canada, the US, the UK, New Zealand and Australia, all countries that had relatively low barriers to importing large volumes of capital and liquid currencies,” Cooper wrote. “Some analysts believe that the party might be over. However, China has a massive underground banking market that operates in the shadows. In August 2016, the Chinese government shut down one operation in Shenzhen, but no one knows just how many more such shadow banks there are.”

Copyright © 2017 Key Media Pty Ltd

Occupants of Westbank?s Horseshoe Bay West Vancouver will reside in a prime waterfront location

MICHAEL BERNARD
The Vancouver Sun

Horseshoe Bay, West Vancouver

Project Address: 6409 Bay Street, West Vancouver

Project Scope: 158 condominiums and townhomes in six buildings on the waterfront at Horseshoe Bay. The one-to-three-bedroom-and-den homes range from 1,084 to 6,405 square feet, including up to 2,844 square feet of outdoor space. The amenities include a boathouse with a dedicated 24-foot Chris Craft boat and a captain available to homeowners for outings

Prices: From $950,000

Developer: Westbank

Architect: Merrick Architecture

Interior Designer: Merrick Architecture

Sales centre: 1502 Marine Dr., West Vancouver

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

Sales phone: 604-925-9331

Website: horseshoebaywestvancouver.com

Occupancy: 2019

 While most Metro Vancouver residents likely see Horseshoe Bay and its ferry terminal as just a stop on their way to other places, West Vancouverites know it as a village with a distinct history and personality.

That made it especially important for the developer and architect behind the Horseshoe Bay West Vancouver project to consult with the community before it developed plans for what was formerly a parking lot that serviced a marina run by four generations of the Sewell family, says Michael Braun, marketing director for Westbank Corp.

Braun says the visioning process began in 2009 when family patriarch Dan Sewell asked renowned Vancouver architect Paul Merrick to come up with a plan to start consulting with the community.

“It is such a beautiful location,” Braun said. “To have a true oceanfront site in Greater Vancouver is amazing, let alone in West Vancouver is amazing. We looked at it as a once-in-a-generation project that you will never be able to do again.”

The project features six buildings and 11 separate levels, which rise in elevation as one moves back from the waterfront. The homes, with their floor-to-ceiling glass exposure and outdoor space, have north and west views looking up Howe Sound.

“In terms of view impacts, because Horseshoe Bay is small scale with lots of small homes and duplexes,” Merrick said in an interview. “You could put more on the project site without necessarily having a negative impact. Particularly if you started at the street and relatively low at a townhouse scale and then built up away from that and behind it. “

Merrick said the consultations went well, with community leaders readily understanding that the project could even rise higher than originally anticipated without causing problems for other homes. He also indicated that the Sewell family’s history in the village fostered trust among other residents and businesses.

“It was a way to get quite a bit of stuff on there without feeling there was a monster invaded the fine grain of the existing community,” he said.

A boathouse, which Braun described as the “architectural jewel box” with dramatic parabolic arches on the waterfront, was the idea of Westbank founder and CEO Ian Gillespie.

“He (Gillespie) brought forward and fostered that “West Coast mentality,” said Merrick. “He is always interested in a better idea and he will support it if it comes forward.”

He said residents saw new development as a way to revitalizing local businesses, many of which had closed as more and more land was given up to parking for the B.C. Ferry terminal. At the council meeting where the zoning was approved last October, those speaking in favour outnumbered those opposed by a margin of six to one, a North Shore News story noted.

The buildings of reinforced concrete construction allow home access through covered external walkways and have views of the waterfront, mountain, forest and park. The design meets LEED standards with heating and cooling provided through an outside geothermal ocean loop, allowing a reduction of up to 70 per cent of greenhouse gas emissions. An on-site cistern was built to capture storm water run-off and recycle it for irrigation, thereby reducing fresh water use.

Each building will have a private lobby with vaulted ceilings and an architectural fireplace. Each home has overheight ceilings and wideplanked wood flooring in all living areas, porcelain limestone-look tile in the bathrooms and designer wool carpet in the bedrooms.

Kitchens are equipped with European matte lacquer cabinetry with under-cabinet lighting and feature polished granite slab, white corian or glass-fused countertops. In the master ensuite and second bedroom bathrooms feature polished quartz countertops are used. Fixtures are by Grohe and Duravit.

Teak cabinetry is used in the bathrooms, and most homes have a 30-inch or 36-inch gas fireplace covered in travertine stone.

The appliances by Miele include a 30-inch or 48-inch dual fuel range, with the latter including a speed oven, (a combination convection-microwave appliance), a dishwasher, 30- or 36-inch refrigerator, 36-inch hood fan, a wine fridge and a stackable wash and dryer. Kitchens come with a double sink and garburator.

“We seem to have two types of buyers,” Braun said. “We have a lot of folks who own a house but want to downsize and live in West Vancouver. And then we have a group that would like to be in West Vancouver, but can’t buy a house there because of what housing prices have gone to, but can afford a condo.”

Both Braun and Merrick point out that travel time to downtown Vancouver would surprise most people, with Highway 99 making it faster to drive to the Lions Gate Bridge than for other residents in Dundarave.

© 2017 Postmedia Network Inc

Vancouver bubble ?has burst,? expert says, leaving Toronto to drive the market

GARRY MARR
The Vancouver Sun

 

Those booming housing markets may make some homeowners rich and provide a short-term boost to the economy, but a Canadian economist is warning about the long-term impact on the country.

David Madani, of Capital Economics, said in a report out Friday that while the housing boom supported the economy through the oil shock in 2016, a further deterioration in housing affordability will cost the economy over time.

“The abrupt slowdown in Vancouver’s housing market serves as a warning shot. As things stand now, the performance of the economy this year could hinge on the direction of the much larger overheated Toronto housing market,” Madani writes.

The report notes that Vancouver home sales have plummeted 40 per cent over the last 12 months and despite mortgage rates remaining very low, house prices are also beginning to drop.

“Contrary to the conventional wisdom, there hasn’t been any macroeconomic catalyst or trigger for this abrupt slowdown. The new provincial foreign buyer tax also has little to do with this,” the report states, referring to an additional 15 per cent foreign property transfer tax the province brought in for August, 2016.

“The new foreign buyer tax announced by British Columbia’s government in July doesn’t tell the full story either. We simply think the housing bubble has burst. Housing bubbles are, of course, inherently unstable because they are largely driven by unpredictable investor mania.”

Madani says gains in Toronto continue to be fuelled by loosening credit standards and points to research from the Bank of Canada that says the size of average home loans have ballooned as a proportion of household income which he says makes mortgage lending increasing riskier.

“The largest banks are now being strongly advised by OSFI, the federal banking regulator, to bolster their working capital base for their own protection,” write Madani.

“Overall, while the investment boom in housing supported the economy through the oil shock, the further deterioration in housing affordability and greater housing imbalances are worrisome, symptomatic of an economic crisis in the making caused by investor speculation and excessive financial leverage.”

© 2017 National Post

JARED LINDZON
The Vancouver Sun

A vast majority of Canadians pay their fair share of taxes, but those who don’t put an increased burden on the rest of us. That is why the Canada Revenue Agency (CRA) has implemented initiatives to help Canadians participate in the efforts to help fight offshore tax avoidance and evasion.

The Offshore Tax Informant Program (OTIP) rewards those who come forward with information regarding major offshore tax avoidance that leads to the collection of taxes owing. OTIP has two objectives: encourage those with information to come forward to ensure the fairness of the tax system for all Canadians, and discourage those who are contemplating breaking the law, as there is a high probability that they will get caught.

To target the most serious cases, the CRA only offers an informant a contract leading to an award if the potential assessment of federal taxes, excluding interest and penalties, exceeds $100,000.

Once the taxes owed are collected by the CRA, a reward of between five and 15 per cent of the federal taxes collected (not including interest and penalties) will be awarded to the individual, providing he/she meets all the necessary requirements of the program.

Any individual, no matter where in the world, is eligible to participate as an informant, subject to certain limitations.

“The Offshore Tax Informant Program is an important tool the CRA has at its disposal to combat tax avoidance and evasion,” explained Lisa Anawati, deputy assistant commissioner of the CRA. “Through this program Canadians can play a role in combating tax avoidance and evasion, an issue that impacts us all.”

The initiative is part of a global effort to reduce international tax avoidance and evasion. It also mirrors other programs that are currently being pursued by the Organisation for Economic Cooperation and Development (OECD) and G-20 countries, such as the Whistleblower Office that was established by the Internal Revenue Service (IRS) in the United States.

“Fighting international tax evasion and aggressive tax avoidance is a global issue that goes beyond Canada’s borders and requires international solutions,” Anawati said. “That is why we are working within legal frameworks with our international partners and sharing best practices as well as information, to unravel complex tax structures.”

Information provided through the program will remain confidential, as will the identity of the individual providing the information, unless they are required to testify as part of an investigation.

Those who have been convicted of tax- evasionrelated offences in the past are barred from participating in the program. All calls made to the toll-free tip line are kept confidential, and all information provided over the phone is collected on a no-names basis to protect informants’ identities.

“This program is proving to be very useful,” Anawati said. “As of Dec. 31, 2016, OTIP has received 407 written submissions, 126 of which are active submissions still being reviewed — and, furthermore, has entered into over 25 contracts with individuals who have provided information.”

Those with information are encouraged to call the dedicated North American toll- free number ( 1- 855345-9042) or local number (613-960-4265) that can be reached from anywhere in the world.

Canadians who want to voluntarily correct their tax filings are also able to do so through the CRA’s Voluntary Disclosure Program ( VDP). Through this program, individuals, employers, corporations and other taxpaying entities are able to correct unreported income, capital gains, misappropriated funds, unreported GST/HST, over-claimed input tax credits and unfiled information returns without being penalized or prosecuted.

Canadians who want to take advantage of the VDP program must complete form RC199 or send a letter providing the same information as the form to the CRA by mail, fax or online.

“International tax evasion and aggressive tax avoidance carry a cost for all Canadians and can have serious consequences for those who choose to participate in these activities,” Anawati said. “We strongly encourage those who wish to correct their tax affairs to do so to gain peace of mind.”

While international tax evasion and aggressive tax avoidance remain a significant problem around the world, proactive steps like the establishment of the VDP and OTIP help ensure everyone pays their fair share of taxes.

For more information on the OTIP, visit http://www. cra-arc.gc.ca/gncy/cmplnc / otip-pdife/menu-eng.html

For more information on the VDP, visit http://www. cra-arc.gc.ca/voluntary disclosures/

© 2017 Postmedia Network Inc

REW

Home sales may have fallen last month, but they were still above January’s average – and as for those condos… Check out our monthly market infographic for a closer look.

The “levelling-off” of Fraser Valley home sales continued in January, according to Fraser Valley Real Estate Board figures released early February, with detached house sales slowing and condo transactions still doggedly rising.

In total, 848 Fraser Valley homes were traded in January, which was a fall of 28.4 per cent year over year and 0.7 per cent lower than December 2016. Despite the drop, January’s sales were still higher than the 10-year average, unlike those of Greater Vancouver.

What’s more, prices maintained their elevated level, still considerably higher than one year ago – albeit varying considerably by municipality.

Check out the sales figures and price breakdown in our essential monthly infographic below (and just look at those condos go).

To read the full story and analysis, click here.

© 2016 Real Estate Weekly

REW

Home sales are way down over last January’s, but prices are still much higher than a year ago… Get your head around the latest real estate stats with this infographic.

Although Vancouver home sales saw what the Real Estate Board of Greater Vancouver described as a “lukewarm” start to the year in terms of unit transactions, prices are still much higher than a year ago, according to board figures released in early February.

And even though sales are down, demand is still outstripping the available inventory, meaning that it remains a sellers’ market – for now.

However, the market varies considerably depending on your neighbourhood and property type, as our useful infographic below reveals.

To read the full story and analysis, click here.

© 2016 Real Estate Weekly

Housing costs part of dynamics shaping Metro moving trends, demographer says

DERRICK PENNER
The Vancouver Sun

In the leafy confines of Vancouver’s upscale Shaughnessy neighbourhood, the population decreased by 140 residents between the 2011 Canadian census and the 2016 census.

It is a small number in Vancouver’s overall population, but represents a seven per cent decline for the neighbourhood and speaks to a “re-sorting” of Metro Vancouver’s population, according to Andy Yan, a demographer and director of the City Program at Simon Fraser University.

“What’s interesting is we’re talking about a city that grew by five per cent,” Yan said. He was referring to the Statistics Canada census report, released Wednesday, that showed an overall rise of the city of Vancouver’s population by 27,984 residents since 2011, bringing the city’s total population to 631,486 in 2016.

However, those new people are crowding into places such as the Olympic Village on False Creek, parts of downtown or even into the rapidly growing outer edges of the city.

Shaughnessy isn’t alone in losing residents since the last census.

Yan analyzed shifts of population among the smaller census units within the Lower Mainland’s municipalities, referred to as census tracts, which showed a pool of areas, mainly on Vancouver’s west side, that also had their populations drop.

Dunbar, Arbutus Ridge and Kerrisdale neighbourhoods declined by an average of three per cent.

These shifts don’t correlate closely with data about empty or periodically occupied homes that Yan had already compiled.

The census found that 25,502 homes in Vancouver classified as unoccupied or occupied by foreign or temporary residents on census day. However, Yan said the highest concentrations of those are in Coal Harbour, Marine Gateway and Joyce-Collingwood.

Yan said shifts such as this aren’t unexpected in neighbourhoods like those on the west side and there are a number of possible factors. 

“Aging in place,” is one factor, Yan said. As households age, they shrink as children leave home and settle elsewhere.

However, Shaughnessy, the neighbourhood that lost the biggest proportion of its population, is also among the most expensive. The median assessed value of a home is $4.91 million, according to B.C. Assessment, compared with a city-wide median of just under $2 million.

Yan said housing costs are part of the dynamics pushing population shifts. Outside of Vancouver, he found that the other census tracts losing population are in West Vancouver, on the west side of Richmond and around Deer Lake and Burnaby Lake in Burnaby, all upscale areas.

The hottest growth tends to be in suburbs further out, such as Surrey and the Township of Langley.

“That really covers, I think, how people are dealing in terms of not only high housing costs, but ensuring that housing is adequate for their families,” Yan said.

In Vancouver’s shrinking neighbourhoods, however, there are implications for maintaining schools and local services if the population is leaving.

“Then there’s the discussion that maybe these are areas that you should be looking at (for) a certain level of densification,” Yan said. “That’s part of the discussion about where the census can take us.”

© 2017 Postmedia Network Inc.

Airbnb Is in Talks to Acquire Canada?s Luxury Retreats

OLIVIA ZALESKI, GERRIT DE VYNCK AND SCOTT DEVEAU
The Vancouver Sun

Airbnb Inc. is in talks to buy Montreal-based Luxury Retreats International Inc. to help it expand in high-end vacation rentals and travel services, people familiar with the matter said.

The Airbnb board of directors is expected to vote on approving the deal this week, said the people, who asked not to be identified because the terms have yet to be finalized. A sale is expected to fetch no more than $300 million in cash and stock, said one of the people.

“We are always looking to provide our community with access to new and different options, but we have no announcements to make,” Airbnb spokesman Nick Papas said on Thursday. A spokesman for Luxury Retreats declined to comment. Luxury Retreats is expected to operate with its own employees in Montreal, said one of the people.

Luxury Retreats, which has more than 4,000 properties around the world, would be Airbnb’s largest acquisition. Adding more high-end rentals would enable Airbnb to target the sort of clientele willing to pay for its new luxury tourism services. In November, it began offering truffle tastings, mushroom hunting and guided tours provided by local experts. The company is looking to expand into other parts of the travel business and is working on a flight-booking tool.

Airbnb still has practically all of the $3.1 billion in funding it’s raised from investors, who last valued the business at $30 billion. Founded in San Francisco in 2008, Airbnb turned a profit for the first time in the second half of 2016, Bloomberg reported last month, and expects to maintain profitability this year.

Luxury Retreats is also profitable, a person familiar with the matter said. And it isn’t the kind of young, scrappy startup typically targeted by Silicon Valley buyers. Founder Joe Poulin started building websites for Caribbean villa owners back in 1999 at the age of 17. Over the next decade, he added new destinations and acquired another Caribbean-focused rental broker in 2011. Luxury Retreats has raised about $16 million in two rounds led by Canadian venture capital firm iNovia Capital.

The website has a similar feel to Airbnb’s. Its villas, chalets and other fancy homes span 90 markets around the world, generating about $150 million in gross bookings a year, according to the company. Luxury Retreats has said it carefully vets every property on the site and that fewer than 5 percent of applicants’ homes get selected.

The Luxury Retreats site also offers customers a concierge service with access to private chefs, bartenders and masseuses — similar to what Airbnb added a few months ago. Airbnb is eager to implement the software Luxury Retreats built to manage those services into its own system, a person familiar with the matter said.

Airbnb has more than 3 million listings, about 1,400 of which are “castles.” The company is also seeing big growth in Luxury Retreats’ homeland. Airbnb said this week that it sees a lot of room to grow in Montreal and other Canadian cities, including Toronto, where listings jumped almost 60 percent last year.

Luxury Retreats could bolster Airbnb’s brand among wealthy globe-trotters and help the technology startup fend off Expedia Inc. and Priceline Group Inc. Both travel industry giants have increased their focus on home rentals, with Expedia’s HomeAway unit zeroing in on vacation destinations like Florida or the mountain resorts of Colorado — precisely the market Luxury Rentals operates in.

© 2017 Postmedia Network Inc.