Fed rate decision comes in

Martin Crutsinger
Canadian Real Estate Wealth

The Federal Reserve has raised its benchmark interest rate for the second time in three months and signalled that any further hikes this year will be gradual. The move Wednesday reflects a consistently solid U.S. economy and will likely mean higher rates on some consumer and business loans.

The Fed’s key short-term rate is rising by a quarter-point to a still-low range of 0.75 per cent to 1 per cent. The central bank said in a statement that a strengthening job market and rising prices had moved it closer to its targets for employment and inflation.

The message the Fed is sending is that nearly eight years after the Great Recession ended, the economy no longer needs the support of ultra-low borrowing rates and is healthy enough to withstand steadily tighter credit.

Investors had seemed unfazed in recent weeks by the possibility that the Fed will raise rates several times in the coming months. Instead, Wall Street has been sustaining a stock market rally that began with President Donald Trump’s election in November, buoyed by the prospect that tax cuts, an easing of regulations and higher spending for infrastructure will accelerate growth.

A robust February jobs report _ 235,000 added jobs, solid pay gains and a dip in the unemployment rate to 4.7 per cent _ added to the perception that the economy appears fundamentally strong.

That the Fed is no longer unsettling investors with the signal of a forthcoming rate increase marks quite a change from the anxiety that prevailed after 2008, when the central bank cut its key rate to a record low and kept it there for seven years. During those years, any slight shift in sentiment about when the Fed might begin raising rates _ a step that would lead eventually to higher loan rates for consumers and businesses _ was enough to move global markets.

In 2013, then-Chairman Ben Bernanke sent markets into a panic merely by mentioning that the Fed was contemplating slowing the pace of its bond purchases, which it was using then to keep long-term borrowing rates low.

But now, the economy is widely considered sturdy enough to handle modestly higher loan rates. Inflation, which had stayed undesirably low for years, is edging near the 2 per cent annual rate that the Fed views as optimal.

And while the broadest gauge of the economy’s health _ the gross domestic product _ remains well below levels associated with a healthy economy, many analysts say they’re optimistic that Trump’s proposed tax cuts, infrastructure spending increases and deregulation may accelerate growth. Those proposals have lifted the confidence of business executives and offset concerns that investors might otherwise have had about the effects of Fed rate increases.

Yet for the same reason, some caution that if Trump’s program fails to survive Congress intact, concerns will arise that the president’s plans won’t deliver much economic punch. Investors may start to fret about how steadily higher Fed rates will raise the cost of borrowing and slow spending by consumers and businesses.

The Fed typically raises rates to prevent an economy from overheating and inflation from rising too high. But throughout the Fed’s history, its efforts to control inflation have sometimes gone too far _ slowing borrowing and spending so much as to trigger a recession. Already, the current expansion, which officially began in 2009, is the third-longest in the post-World War II period.

The Fed’s benchmark rate, after modest increases in December 2015 and December 2016 and again on Wednesday, is still quite low by historical standards. But if the Fed ends up raising rates three or four times this year and follows up with three additional hikes in 2018, its benchmark rate would be left at a level that might start to dampen economic activity.

Copyright © 2017 Key Media Pty Ltd

REP

The hot real estate market in Toronto and the surrounding areas helped push home sales up last month to their highest mark in nearly a year.

The Canadian Real Estate Association says home sales though its MLS system hit their highest level since last April, gaining 5.2 per cent in February compared to January.

The association says February sales were up from the previous month in about 70 per cent of all local markets it measures, with the national increase driven by the Greater Toronto Area and surrounding regions.

CREA president Cliff Iverson says homes are selling briskly throughout the Greater Toronto Area and nearby communities, but elsewhere, competition among potential buyers is less intense, so listings take longer to sell.

Compared with a year ago, sales were down 2.6 per cent from February 2016 due to a slowdown in B.C.’s Lower Mainland region.

The national average price for a home sold in February was $519,521, up 3.5 per cent from a year ago, boosted by Greater Vancouver and Greater Toronto.

Excluding those two markets, the national average price was $369,728.

Copyright © 2017 Key Media Pty Ltd

Justin da Rosa
Mortgage Broker News

Gary Mauris, president of Dominion Lending Centres has been hard at work educating the government about just how disastrous last October’s mortgage rule changes have been for potential home buyers. 

And he hopes his efforts will lead to a reversal or, at the very least, tweaks to some of those changes.

“The hope is that the government will realize the impact and realize they made a lot of these changes without full consultation,” Mauris said. “And that they’ve made a mistake. Hopefully, around the low ratio bulk insurance restriction, hopefully they will loosen that up or reconsider that. Hopefully they will reconsider the qualifying rate and consider different standards. Something that is a little more palatable.”

The Government of Canada released a set of mortgage rule changes on October 3 of last year, including hiking the minimum qualification requirements for holders of insured mortgages as well as stipulations that make it more difficult for monoline lenders to compete with the big banks, especially when it comes to refinances. 

Meaning fewer mortgage options for Canadians.

The fallout has been higher qualification standards for buyers across the country – not just in Toronto and Vancouver, which the government seemed to be targeting with the tweaks – while not cooling Canada’s hottest markets. 

For his part, though Mauris is trying to make the government aware of just how wide-ranging the impact has been.

“I was asked to meet with the Deputy Governor of the Bank of Canada. That’s on the 22 of this month. In preparation for that, it’s important to keep the heat on the government and keep sharing the stories of Canadians because many Canadians just misunderstand the impact these rules are having on them,” he said.

“What I’ve done is I’ve invited a couple different people to join me in that meeting in Vancouver on the 22. What we’re doing is we’re preparing stories from Canadians in every region; BC, Alberta, Manitoba Saskatchewan, all across the country, big cities, small cities. Communities, just sharing real life stories on how this is impacting people. Tax paying Canadians. Average Canadians.”

Mauris will be putting that feedback together in a book and providing it to all MPs, CMHC, the Bank of Canada, and the Department of Finance. 

“The rules don’t make any sense,” Mauris said. “The new rules really disadvantage average Canadians who are good payers, who have good credit.

“It’s very bad policy is what it is.”

Copyright © 2017 Key Media

Millions in Funding Announced for New Housing Data: Federal Budget 2017

Penelope Graham
other

There were no new measures to further cool the Canadian housing market in today’s tabling of the Federal Budget – though a good chunk of change has been set aside to improve the collection of home purchasing data, including foreign buyer activity.

A total of $300 million to be spent over the next 10 years on gathering housing market data was announced by federal finance minister Bill Morneau, $39.90-million of which is earmarked for Statistics Canada’s foreign buyer study, as well as info on homeowner demographics and mortgages.

The spending is a small portion of an $11.2-billion commitment to improving the supply of affordable housing over an 11-year timeline.

Efforts to Uncover Extent of Foreign Investment

The initiative to gather better data will hopefully fill in the gaps on the extent of foreign investor activity in Canada’s housing market, and give policy makers a solid basis for future tweaks to real estate and mortgage borrower rules. While several provinces have started collecting their own data and implementing their own measures (such as the 15% foreign buyer’s tax introduced in Metro Vancouver), the lack of national data on the issue has been widely panned by housing critics and economists.

“It’s just a disgrace how bad our data is. How can you make informed policy if you don’t have better data?” said Bay Street money manager John Stephenson in a recent interview with BNN. “We don’t know who the buyers are, we don’t know where they come from, we don’t know if they live here. There’s very little data, there’s very little transparency.”

In response to today’s announcement, Royal Bank of Canada Chief Economist Craig Wright told CTV, “This is much needed. You can’t manage what you can’t measure.”

The initiative will also provide Crown Corporation Canada Mortgage and Housing Corporation (CMHC) with $241 million in funding and be used to create the Housing Statistics Framework – a database of all properties and real estate purchase activity in Canada – with a total price tag of $291 million.

No Changes to Capital Gains Tax

While slight tweaks and scale backs of tax credits (including the Transit tax credit and phase out of Canada Savings Bonds) were announced, there was no word of upping the margin on capital gains tax as recently requested by Ontario Finance Minister Charles Sousa, which would have had consequences for sellers of non-principal residences, investors, and small businesses. Sousa implored the federal government to consider upping the tax rate from 50% to 75% this week, as part of efforts to cool speculation in the province’s housing market, and especially in the Toronto real estate market.

Business wizard was a calm philosopher who meditated daily, juggled obligations

STEPHEN HUME
The Vancouver Sun

Visionary artist, calm philosopher who meditated every day — even while juggling complex obligations that involved hundreds of millions of dollars — business wizard, respected by all as a kind, decent man, his stunning architecture marked the world.

Bing Thom’s astonishing, emotionally engaging designs ranged from private homes to entire cities. Dalian New Town, completed in 1996 in northeast China, was designed to balance industrial needs for rapid port expansion with a sustainable built environment sensitive to local history and culture.

The architecture firm he founded in 1981 has now won more than 90 major awards.

He was born in Hong Kong on Dec. 8, 1940, one year to the day before it was attacked by Japan. His mother brought him to B.C. when he was eight. His father, Wesley Cunningham Thom, stayed in China. Bing’s grandfather had emigrated to Vancouver in the 1890s and Wesley was born in New Westminster. Wesley was the first person of Chinese descent to obtain a pharmacy degree in B.C., but he was denied the right to practice. He went to Hong Kong and stayed, preferring risks from the communist revolutionaries who seized power in 1949 to the racist discrimination here.

His family settled in Kerrisdale. Bing was the only Chinese student at his elementary school. His classmates mocked him. Yet by the time he reached Grade 9 he was elected to student council.

He studied architecture at UBC under another renowned architect, Arthur Erickson, and later worked for him as a project manager for the Robson Square Courthouse and Roy Thomson Hall in Toronto. Then he spent time studying with Japanese architect Fumihiko Maki before launching his own firm. His company’s buildings won two Governor-General’s medals, eight Lieutenant-Governor’s medals and scores of other prestigious acknowledgments of architectural excellence. 

Bing Thom Architects counts among its achievements the Chan Centre for the Performing Arts at UBC, Surrey Central Library, a centre in Hong Kong that blends theatre, art and public space, an Asian hub for the University of Chicago, and the Arena Stage in Washington.

Arena Stage resembles a swooping white wing above a glittering doorway into another dimension, exactly what good theatre represents. The Washington Post said the building transforms an entire quadrant of the U.S. capital — a city not exactly impoverished of iconic buildings.

Thom died of a brain aneurysm on Oct. 4, 2016, during a business trip to Asia.

© 2017 Postmedia Network Inc.

Residents of Concert?s NAV?O at The Creek will overlook parkland and be but steps from the seawall

Michael Bernard
The Vancouver Sun

 

Many people reaching retirement look forward to downsizing to a quiet place in the Okanagan or on Vancouver Island. Not the Joe Frank family.

Ten years ago, the Surrey elementary school principal built a 4,700-square-foot ocean-view home in White Rock, where he and his wife raised their two sons. But now they are eager to move to False Creek, where they can live in the centre of things near their two sons in the Olympic Village and the West End — even if it means downsizing to a condo about one quarter of the size of their former home.

“I am retiring this year and we’d been thinking about moving to the city for the last five or six years but we hadn’t found the right spot until now,” said Frank. “We got into the spot we wanted, which is in NAVÍO.”

“We love the city because we go to plays, we go to concerts. We go to the Canucks, the Lions and the Whitecaps [games]. We go every Saturday to visit our sons. If we live down there, I don’t want to have a car when I retire.”

Helping make the Franks’ downsize possible is a 900-square-foot terrace and balcony space that dramatically expand their 1,200-square-foot living space and allow the couple to carry on their gardening hobby, albeit in pots.

 The Franks are part of an emerging group of buyers fuelling a trend towards larger and more expensive properties in the maturing False Creek community, says Colleen Anderson, Concert Properties’ senior vice-president of sales and marketing.

“The downsizer market is starting to see the value of False Creek and the lifestyle it offers,” said Anderson. “With the (Metro Vancouver) housing values, there are many people who are realizing the value in their homes. And when they have been looking to downsize, there hasn’t been a lot to offer a lifestyle like this.”

While NAVÍO at The Creek’s first building offered more modestly priced one-bedroom-and-den homes under a 1,000 square feet, the second building (along with the last phase of NAVÍO being launched next year) will offer larger homes at higher prices. NAVÍO has just 15 units remaining in its second phase, ranging from 1,358 to 2,035 square feet and priced from $1.9 million.

 The Franks’ recent purchase ended several years of surveying several Vancouver neighbourhoods.

 “We’ve been looking at Kits Point, Coal Harbour, Stanley Park area, Marinaside and Yaletown,” Frank said. “We almost bought a few times, but we have either backed out or it wasn’t the right time for us, or we didn’t like the location. It was too loud or it was too small or the sundeck wasn’t big enough. There was always something that kind of held us back.”

 Along the way, they also learned some lessons, including one from a friend, he said. “A friend of mine lived down by the Vancouver public library. He had a pentouse suite up there,but he had to move out last year because it was just too loud. He didn’t like it at all. He moved back to White Rock, and now he is looking to buy in NAVÍO.”

By contrast, False Creek is bustling without being too noisy and at the same time, close to everything.

“We love this location right in the heart of the Olympic Village with Mount Pleasant just around the corner. It’s a changing area. We see the area changing so much for the better as far as the energy goes. Young people and families are down there. Grandparents are moving down there. I see a lot of retirees down there. It just felt like home to us.”

 The Franks also researched the developers on the major projects and “found that some are just better builders” and that Concert was among them. “That was part of our decision to buy from them.”

 Anderson said that NAVÍO is different from other projects, partly because of the excellent views it offers, looking at the city and north to the mountains, and because internal roadways put owners right on the creek with little between them and the water’s edge.

 She also stresses the benefits of the local amenities at the east end of False Creek,including shopping, restaurants and the seawall, plus easy access to other developing areas such as Strathcona and Mount Pleasant. “ I think NAVÍO ties it all together and further development in the area will take that even further.”

NAVÍO at The Creek is a project from developer Concert in Vancouver. For Westcoast Homes. Supplied Martin Tessler / PNG

 A more affluent market has also led to a higher quality of finishings in NAVÍO’s homes, she said, things like quarter-cut solid core wood veneer entry doors with a high end Italian-made mortise set and an elegant quartz threshold. Townhomes, for instance, feature a two-storey stone façade entrance with gated patio, and a contemporary fibre glass door with frosted glass insets.

 Inside, great room spaces have eight-foot-eight inch to 10-foot-high ceilings and expansive windows overlooking a landscaped park or courtyard. Wide-plank engineered floors will be used throughout living spaces.

 In the kitchens are wood veneer and contemporary high-gloss white acrylic cabinets and seamless quartz slab countertops with matching back splashes. The kitchen island features a granite slab countertop with waterfall gables and wood veneer cabinetry.

 Appliances are top-of-the-line Bosch packages with an integrated and panelled bottom-mount 24-or-30-inch refrigerators, dishwashers, touch-control electric cooktops, built-in double-wall ovens with speed ovens or single built-in ovens with under-counter microwaves.

 Some suites have a full-height built-in pantry for extra storage.

NAVÍO at The Creek is a project from developer Concert in Vancouver. For Westcoast Homes. Supplied Martin Tessler / PNG

 The bathrooms feature a wood veneer “floating” vanity with under-mount lighting, custom wood veneer upper cabinet with mirrored door and wall sconce, and quartz slab countertops. Flooring is large-format tiles in sandstone or Carrera-pattered porcelain, heated by Nuheat climate control.

 There are frameless glass shower doors in the main bath or ensuite, while some ensuites feature a separate soaker tub and shower combination.

 

NAVÍO at The Creek is a project from developer Concert in Vancouver. For Westcoast Homes. Supplied Martin Tessler / PNG

 Underground parking provides for substantial bicycle storage for riding around the seawall and some parking stalls come equipped with outlets for charging electric vehicles.

 There is a fully equipped fitness room with cardio machines and weights, including indoor and outdoor spaces for stretching.

NAVÍO at The Creek

Project Address: 1678/1688 Pullman Porter St.., Vancouver

 Project Scope:  A total of 177 two and three-bedroom homes  (condos and townhomes) in two concrete buildings of 12 and 14 storeys overlooking a 2.7-acre public park. Steps to False Creek and the seawall, Olympic Village and BC Place Stadium. Building amenities include two private rooftop resident lounges with entertainment rooms and kitchens opening to expansive landscaped terraces. Energy efficient and sustainable building design target LEED Gold certification.

 Prices: Remaining homes from $1,929,900; 1,358 — 2.035 sq. ft.

 Developer: Concert

 Architect: Rafii Architects Inc./Richard Henry Architect Inc. 

Interior Designer: BBA Design Consultants

Sales Centre:  1551 Quebec St., Vancouver 

Centre hours: Noon — 6 p.m., Sat — Thurs

 Sales phone: 604-681-8282

 Website: www.thecreekbyconcert.com

 Occupancy: Summer 2018 (est.)

© 2017 Postmedia Network Inc

Ephraim Vecina
REP

While enterprising real estate investors from overseas have gained notoriety as the boogeymen responsible for home price growth, a survey released earlier this week found an unexpected reason among Chinese buyers for getting into the Canadian housing market.

The results of the survey jointly conducted by Juwai.com and Sotheby’s International Realty Canada revealed that education was the leading motivation among potential Chinese home buyers who were considering properties in major Canadian markets last year, The Canadian Press reported.

46 per cent of Chinese would-be buyers who were looking at Montreal listings cited education as their primary objective. 44 per cent were looking at a Vancouver purchase, while 41 per cent were in Toronto and 9 per cent were in Calgary.

Sotheby’s International Realty Canada president Brad Henderson noted that the survey results belied the widespread notion of Chinese influence in the Canadian real estate investment sector.

“I really think a lot of perception that people have around foreign buyers and specifically buyers from mainland China are informed by more anecdotal information and not statistics,” Henderson said, adding that most Chinese property searches in the study timeframe were for Canadian homes valued below $655,050.

Only 27 per cent of prospective buyers from China who were searching for Vancouver and Toronto properties listed investment as their main reason. 23 per cent were in Montreal, and 21 per cent were in Calgary.

“While home buyers from mainland China have been identified as a notable segment of foreign purchases within the luxury property markets of Vancouver and Toronto, Juwai.com data dispels the assumption that Chinese interest is limited to the high-end segment,” the report explained. “Instead, it implies that conventional real estate dominates demand.”

Copyright © 2017 Key Media Pty Ltd

 

Boutique brokerage launches, focuses on technology

Justin da Rosa
REP

The industry’s newest brokerage is the first of its kind, offering a virtual reality experience for its clients

“Virtual reality is a powerful new tool that allows buyers to feel like they are actually walking through the property and effectively permits the seller’s home to become a 24/7 open house” said broker, Michael Montgomery. 

Michael and Willemina Montgomery have launched Renzo Real Estate, a Calgary-based brokerage that aims to market its homes through virtual reality. 

When listing a home with Renzo Real Estate, the property is captured in 3D so buyers can
explore the listing from the comfort of their own homes regardless of where they may be based. 

This sort of listing will be especially helpful for overseas buyers interested in Calgary real estate – which is an area of growing interest for Chinese buyers especially, according to a recent study conducted by Juwai.com — a Chinese property portal — and Sotheby’s.

The company will use high tech 360 degree cameras, allowing agents to capture exactly what it is like to be explore the home.

“It is all about leveraging technology tools to help consumers and agents” adds Office Manager, Willemina Montgomery.

Copyright © 2017 Key Media Pty Ltd

The luxury condominium tower with hotel amenities ? including room service ? is located in the heart of Surrey City Centre

JODIE WARREN
The Province

Local developers such as Century Group are experiencing unprecedented demand for urbanstyle homes – the result of an ongoing shortage of new product in the region. “The condominium and townhome markets are very hot right now,” says Sandra Liang, sales manager for Fifth Avenue Real Estate Marketing, who sells homes in Century Group’s 3 Civic Plaza luxury condominium tower in Surrey City Centre. “There is a very limited supply of high-rise homes to buy and when something does become available, it sells very quickly.”

In a Vancouver Sun article published on Feb. 20, Anne McMullin, CEO of the Urban Development Institute, observed that only eight townhouses built last year in the region remained for sale at the end of 2016. “There is a huge demand out there,” McMullin told the Sun, noting that supply had not kept pace with population growth. “Whatever gets built largely gets sold.”

Liang says there are still some homes available at 3 Civic Plaza, a 52-storey high rise under construction adjacent to Surrey City Hall and the Surrey City Public Library, but many have already been snapped up. She says the homes are particularly appealing to local buyers/owneroccupiers due to their size. “The homes in 3 Civic Plaza are very spacious compared to other offerings out there,” she says of the plans, which start at 563 square feet for a one bedroom and range between 850 and 1,000 square feet for a two bedroom. “There is really nothing comparable to 3 Civic Plaza in the area.”

Liang believes that in addition to the spaciousness of the homes, there are other elements that set 3 Civic Plaza apart. First, the boutique Civic Hotel, which is part of Marriott’s Autograph Collection. Second, the homes will start on the 15th floor, where most condominium towers end, giving homeowners expansive views of the city, mountains and beyond. “The architecture is quite stunning,” she adds, noting elements in the slender structure such as guitarpick-shaped windows and a grand lobby where both residents and hotel guests will enter.

Access to hotel amenities is another big plus. “3 Civic Plaza will offer its residents world-class amenities such as a pool, spa and fitness centre and the ability to order room service from the hotel restaurant, but on an à la carte basis, which keeps strata fees reasonable,” she explains. “It was important to Century Group to ensure that residents who don’t use these amenities won’t have to pay for them.”

Those who want to be part of this exciting community need to act quickly. To book your exclusive appointment, visit: 3CivicPlaza.ca or call: 604-763-5156.

© 2017 Postmedia Network Inc.