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Gilmore Place to be a ‘live, work and play community’

Michael Bernard
The Province

Gilmore Place

Project location: Gilmore Avenue and Lougheed Highway

Project scope: 12 acres; 10 towers in total: seven residential, three office. First phase consists of three concrete highrise towers, providing one-, two- and three-bedroom condominium homes close to shopping (over 500,000 square feet downstairs), recreation and an integrated SkyTrain station

Residence size and price: 540 — 1,085 square feet (not including sub-penthouses or penthouses); from the low $500,000s

Developer: Onni Group

Architect: IBI Group

Interior designer: In-house

Sales centre: 101 – 4190 Lougheed Highway, Burnaby

Hours: By appointment only, starting Sept. 22

Sales phone: 604-488-8986

Website: onni.com/gilmoreplace

 Occupancy: Late 2023

The Onni Group’s Gilmore Place is the third of a trio of master-planned communities launched over the last three years as part of Burnaby’s ambitious plan to foster residential development along the backbone of the SkyTrain Millennium line running through its Brentwood and Lougheed town centres.

Gilmore Place, which is being built around the SkyTrain station of the same name, will join Concord Pacific’s Brentwood community and Shape Properties’ massive City of Lougheed further down the Millennium line, creating homes in the sky for several thousand residents.

The first phase of Gilmore Place, Onni’s largest project in B.C. to date, calls for more than 1,550 suites in three highrise concrete towers of 43, 51 and 64 storeys, with the last being the tallest residential building in Western Canada, says Nick Belmar, Onni Group’s vice-president of sales.

The development will ultimately have 10 highrises with homes for more than 3,000 residents, and supply more than 500,000 square feet of retail space and one million square feet of office space on the 12-acre site.

Belmar said it will be a “live, work and play community” that will provide all the residents’ needs on site and putting them within 20 minutes of downtown Vancouver on SkyTrain.

This marks the first time that Onni has integrated a SkyTrain station into a development, he said. “You’re not finding many projects in Metro Vancouver where the station cuts right through the site. You go down the elevator and in a matter of 20 to 30 steps you’re right at the SkyTrain terminal.”

“It’s a one-stop shop,” he said. “You get home and you don’t have to worry about the car. In fact, you don’t even need a car because you have got everything at your doorstep.”

The three towers will be connected via a sixth-floor podium that will serve as a base for 75,000 square feet of amenities, he added. Those include outdoor and indoor swimming pools, a fitness centre, a bocce court, a landscaped dog walk, a bowling alley, a karaoke room, a children’s outdoor play area, barbecue facilities and lounging area, a movie theatre and even guest suites for visitors. To take advantage of the sweeping views that encompass Vancouver harbour to the west, Gilmore Place has a lounge for all residents on the 35^th floor of one of the towers.

The construction of the first three towers will have a relatively long time line with the first suites being ready for occupancy beginning in late 2023. Onni’s sprawling 10,000-square-foot presentation facility at 4190 Lougheed Highway will feature two suites and a kitchen vignette, as well as scale models of the 10-building development.

The first three buildings will feature double-height lobbies and 24-hour concierge services in each. The homes have outdoor balconies or terraces, expansive windows and nine-foot-high ceilings that will maximize natural light while capitalizing on the panoramic views. All homes have in-suite controlled air conditioning, heating and ventilation supplied by a utility-managed community energy system, which optimizes efficiency while reducing greenhouse gas emissions.

Buyers can choose from three colour schemes. Contemporary wide-plank laminate flooring runs throughout the kitchen, living and dining room areas, while a premium wool blend carpet is used in bedrooms and walk-in closets. White UV-blocking roller blinds on all exterior windows will provide comfort and privacy.

In the one-bedroom and junior two-bedroom homes, Onni features a 24-inch Blomberg panelled refrigerator with bottom-mount freezer, a 24-inch Fulgor Milano stainless steel four-burner gas cooktop, a 24-inch Fulgor Milano convection wall oven, a 24-inch slim profile Faber pullout hood fan, a Blomberg Energy Star-rated dishwasher and an under-counter 1.2-cubic-foot microwave. Kitchens come equipped with three-centimetre thick composite stone countertops and matching waterfall gable ends and multi-functional islands with dining space for four people. The larger two-bedroom and three-bedroom homes feature larger 30-inch versions of the same brand-name appliances.

Most of the homes have a built-in nook with composite stone countertop that can be used as a functional desk or computer space. All have a built-in pantry with adjustable interior shelving, and premium marble or limestone tile used for the backsplash.

The bathrooms feature 12-by-24-inch premium marble or limestone flooring and NuHeat-heated floors in the master or primary bathroom. All bathrooms come with a medicine cabinet, soaker tubs and frameless glass enclosed shower with a recessed niche in the shower wall.

All homes are pre-wired for in-suite security systems and feature a solid-core wood entry door with peephole and deadbolt.

© 2018 Postmedia Network Inc.

Home Sales Continue at Slower Pace in September

Ephraim Vecina
Mortgage Broker News

Amid warnings of an impending bubble burst, Vancouver and its surrounding markets have experienced a sharp decline in home sales in September, according to latest data from the Greater Vancouver Real Estate Board.

The Board stated that sales activity in the Greater Vancouver region fell by more than 40% on a year-over-year basis last month, and by 17.3% when compared to August 2018 numbers.

Metro Vancouver contributed to much of the shrinkage with a 43.5% fall, representing 1,595 transactions (from last year’s 2,821). Last month’s volume was 36% lower than the market’s 10-year sales average for September.

As for supply, total listings in Metro Vancouver stood at 13,084, which was 38.2% higher compared to September last year and 10.7% higher from August this year.

Detached homes in the region were valued at a benchmark level of $1,540,900. This was a 3.4% shrinkage over the most recent quarter, and 4.5% lower compared to September 2017.

For condo apartment units, the benchmark price stood at $687,300, which was a 3.1% slide over the past quarter, but still 7.4% higher than the same time last year.

Greater Vancouver townhomes fell by 2% over the last 3 months, but increased by 6.4% year-over-year to reach $837,600.

“There’s more selection for home buyers to choose from today. Since spring, home listing totals have risen to levels we haven’t seen in our market in four years,” Board president-elect Ashley Smith told The Canadian Press.

“Metro Vancouver’s housing market has changed pace compared to the last few years. Our townhome and apartment markets are sitting in balanced market territory and our detached home market remains in a clear buyers’ market.”

Copyright © 2018 Key Media

Policymakers increase rate to prevent housing bubble

Neil Sharma
Mortgage Broker News

Interest rates could hit 6% by 2020, according to Moody’s Analytics.

The prediction, using RPS data, is based on policymakers realizing plans to quell housing bubbles in Toronto and Vancouver, as well as on rising interest rates.

“Two macroeconomic projects now dominate housing markets in Canada,” said Andres Carbacho-Burgos, a Moody’s economist. “The first is that the [Bank of Canada] will continue to tighten short-term interest rates through 2020 in order to head off inflation and also maintain the value of the Canadian dollar relative to its U.S. counterpart.

“With some lag, monetary tightening will pull up mortgage rates. The five-year mortgage rate is now at about 4.4% after bottoming out at 3.6% in mid-2017; the Moody’s Analytics baseline projection is that it will continue to increase until it levels off at about 6% in late 2020.”

Prolonged North American Free Trade Agreement negotiations have only deferred the Bank of Canada’s rate hiking mandate, but with the federal government this week finalizing a new deal, the United States-Mexico-Canada Agreement, there will almost certainly be a hike on Oct. 24.

“Overall, when it comes to the new USMCA, it’s going to affect the housing market because interest rates are bound to go up,” said Samantha Brookes, founder of Mortgages of Canada. “The Bank of Canada was holding back the rate until there was an agreement. Now, we’ll get increases based on the way the economy has been performing, and what that means for Canadians is interest rates will go up and prices will continue to adjust.”

That will likely make conditions favourable for buyers as the market continues recovering from the shock of so many changes.

“I believe it will probably take until 2020 until we see some light at the end of the tunnel,” she said. “But that’s based on the correction that’s been happening over the last year. People need to be more creative with how they’re purchasing.”

This could give further rise to co-ownerships in the housing market.

“It’s becoming more and more popular,” said Brookes. “Be creative and you’ll still be able to get in. We all know real estate is still the number one investment, and it will be time to hold onto that investment rather than flipping it for a quick buck. It’s too risky for that right now, so buy and live in your home for a few years until the market corrects.”

Copyright © 2018 Key Media

Developers are torn between purpose built rentals and condos

Neil Sharma
Canadian Real Estate Wealth

The British Columbia government is coming down hard on landlords, including condo investors, and there’s mounting fear that 12,000 much-needed rental units in Metro Vancouver are imperilled.

David Goodman, principal of HQ Commercial and one of the Goodman Report’s publishers, told CREW that the units, which total around $5bln, might not get built if so long as landlords remain in the government’s crosshairs—which he attributes to overzealous tenants organizations and sympathy from high-ranking government officials.

“You had the increase in construction costs and the significant increase in land costs pitted against the recent rollback of rent increases for 2019, where landlords can only allow inflation instead of the full 4.5%,” said Goodman. “The provincial government wants to see tighter control against landlords. We’re waiting to see what the further recommendations are. Right now, sky’s the limit.”

David Hutniak, CEO of LandlordBC, previously expressed consternation that a housing task force struck by the government, which eliminated 2% from annual rent increases, might tie rent control to units rather than to tenants like it currently does.

“Moving to a basis whereby rent control would be tied to the unit versus the tenant would be catastrophic,” he said. “That would put the nail in the coffin for the ability of landlords to continue investing in their properties and provide safe and secure rental housing. Why would anybody build purpose-built rentals anymore? Ultimately, we can only charge based on what local incomes can support, so there’s a bit of a misperception that it’s some big cash grab—it’s not.”

The 12,000 units Goodman fears are compromised have either been approved for construction or are in the permitting process, and he says there are waning incentives for developers to build purpose-built in lieu of vastly more profitable condos.

“They must be saying, ‘Maybe we’d be better off building condos or mothballing projects because we’re not even going to see a 10% return over three or four years.’ They need 10-15% just to get bank financing. We’re concerned banks will grow increasingly leery about funding new rental projects, which up until now were low risk.”

Supply remains at the heart of the issue, he added, because government ultimately determines what can and cannot be built.

“The government is saying ‘We want you to risk your money but we’re going to cap your rent increases to less than market,’” said Goodman. “Landlords are now being singled out as the culprits, but it’s really the federal, provincial and municipal governments, not just in B.C. but across the country, that have been guilty of not supporting new rentals.”

Developers, claims Goodman, have returned to their drawing boards to determine whether or purpose-built rental buildings remain viable ventures.

“We have all these forces at work right now and we know from talking to a number of developers over the past week that this is not just hearsay,” said Goodman. “They’re all going back to the drawing boards and looking at their projects to see if they really want to build rental buildings.”

Copyright © 2018 Key Media Pty Ltd

Another condo project in Toronto Cancelled

Neil Sharma
REP

Upon cancelling a Vaughan condominium tower, and in the process leaving buyers out in the cold, The Gupta Group is planning another condo nearby.

The Gupta Group—headed by Steve Gupta who made his money in the hotel industry—is the latest developer to cancel a condominium project in the Greater Toronto Area, with the last being The Liberty Group, which also cancelled a Vaughan condo.

A report in the Toronto Star revealed the Gupta Group applied for official plan and zoning amendments for a new project on Aug. 24, about three weeks before it sent cancellation letters and refunds to Icona purchasers.

“It just seems there are no rules in place that stop them from doing that,” Patricia DeBartolo, one of the purchasers, told the Star.

“There are 1,600 (Icona) units and their owners that have had future plans for their children, dreams (and) investments, literally snuffed out like a flame.”

According to the head of the Starke Realty Team, every time builders cancel projects like the Gupta Group has, they risk sullying their brands. However, the market will ultimately determine their standing.

“I think that there’s enough information out there that people can make an educated decision about whether or not they want to invest in a Gupta Group project or not,” said Brett Starke. “It’s up to the market to see how they’re going to react. Ultimately, that’s what’s going to happen. Price per square foot will be reflected in past projects, the trust of their customers will be reflected, consumer confidence in their ability to deliver will also be reflected.”

As have other developments with cancelled projects, the Gupta Group blames financing issues for Icona’s cancellation.

However, the new project, which will be built at Yonge St. and Steeves Ave. is alleged to have been called Icona at Yonge. Both Icona buyers and the Toronto Star have seen the name referenced online, although the websites have since been deleted. The communications company representing Gupta Group denied the websites were created by its client.

Copyright © 2018 Key Media Pty Ltd

NDP’s rent capping will likely hurt renters

Josef Filipowicz
The Province

In its latest move on the housing front, the B.C. NDP government last week pegged annual rent increases to inflation (estimated at 2.5 per cent in 2019), citing affordability concerns in Metro Vancouver and beyond.

Indeed, average rents in B.C. were the highest of any province in 2017, according to the Canada Mortgage and Housing Corporation. There’s a real problem, and Victoria wants to address it. Unfortunately, the government’s actions will do little to solve B.C.’s rental woes. In fact, it will likely make them worse.

To be clear, the government’s intentions (more affordable rents) are laudable, but its decision to lower maximum allowable rent increases treats the symptom, not the cause. High rents (relative to incomes) are a product of a severe lack of rental vacancies. B.C.’s provincewide rental vacancy rate hovers just above one per cent and it’s even lower in Metro Vancouver. By contrast, the rental vacancy rate is 7.5 per cent in Alberta and 3.4 per cent in Quebec.

Consequently, many would-be renters compete for the few available units, bidding up rents in the process.

So, one might ask, why aren’t there more units available? This is the key question — one that governments don’t appear to be asking. But there’s a growing body of evidence on new rental developments that suggests they aren’t worth building, from a purely financial perspective.

For example, a report commissioned by the CMHC examines the economics of purpose-built rental housing development in six of Canada’s largest housing markets (including Vancouver). It finds that in the vast majority of development scenarios (ranging from basic to high-end projects), financial returns are either negative or negligible, giving builders little reason to build new rental housing.

Underlying these poor returns are the high costs of land, taxes (both local and provincial) and construction, relative to the earning potential offered by rental income. In short, it simply doesn’t make financial sense to build new rental units, especially when earnings are capped by stringent rent controls.

Consider the situation in Ontario. After the Wynne government doubled down on rent controls last year, 1,000 rental units under construction across the Greater Toronto Area were converted to condominiums. Here in B.C., rental homebuilders now face similar decisions, with some already halting plans to build purpose-built rental housing in favour of more profitable condominium development. Crucially, a far greater (though less visible) impact plays out in the long run, as future projects exclude rental units altogether.

So, if the business case for building much-needed rental housing doesn’t make sense, what can governments — both local and provincial — do?

For starters, city hall can reduce the per-unit cost of building new apartments on expensive lots by zoning for greater density. Every additional floor allowed on an apartment building generates greater returns relative to the high cost of buying land in cities such as Vancouver.

Local governments can also reduce onerous or ad hoc fees such as the “Community Amenity Contributions” most new housing developments in Vancouver trigger. And, of course, the B.C. government can lift the rent controls it just imposed.

Of course, lifting rent controls will almost certainly raise rents on some units. However, by supporting the construction of new units, the vacancy rate will eventually fall, making older, more affordable units available as higher-income renters stop competing for them. Only once this natural process of building and aging (called filtering, in land-use parlance) takes course will B.C.’s tightest rental markets truly become affordable to middle- and lower-income earners.

The Horgan government’s decision to further cap rental increases is well intentioned, but does nothing to meaningfully address the province’s woefully slim rental vacancy rate. By reducing the burden on rental construction, government can help make B.C. a far better place for renters.

© 2018 Postmedia Network Inc.

According to insiders high prices due to government fees and taxes

Neil Sharma
Canadian Real Estate Wealth

Homebuyers and investors have long groaned about escalating price points, attributing them to builder avarice. However, according to industry insiders, government fees and taxes are to blame.

Michael DiPasquale, a CPA and COO of Dunpar Homes, says builders are heavily taxed by all three levels of government and there’s little choice but to relay the cost onto consumers.

“Everyone thinks developers are big, greedy and make all this money—they make money, yes—but they’re not making close to what the government makes on these homes,” said DiPasquale. “People think builders push up the prices, but the prices have gone up because of the significant fees, charges and costs to operate. Most of the cost goes to the government.”

According to numbers compiled by Dunpar, on a three-bedroom, 1,950 square foot townhouse in Toronto that sells for a $1mln, the builder and shareholder profit amounts to $44,100, while the municipal, provincial and federal governments receive $258,540 in taxes paid.

Prior to 2010, there was only GST at 5%, but by July of that year an 8% PST was added and then combined to form a 13% HST. Weighing builders down by essentially appropriating 8% of their revenues, they recouped their lost revenues by passing the tax onto consumers in the form of higher price points.

On a one-bedroom, 600 square foot Toronto condo selling for $500,000, taxes amount to $110,748, while the builder and shareholder profit, after income taxes, total $17,640.

The president of the Residential Construction Council of Ontario confirms DiPasquale’s assertion that government fees, levies and charges have contributed to housing’s astronomical price growth, which, combined with increases in construction costs, create a perfect storm for consumers.

“In certain situations, the hard construction costs almost equal the total quantum of taxes, levies and charges on new housing, which is crazy,” said Richard Lyall. “That’s just straight, hard construction costs. You have all these other costs like marketing, administration, site guys—there’s no question in my mind that you’re in at least $160,000 for condo taxes.”

Development charges have also been hiked a whopping 85%, and it will doubtless be passed onto consumers, too.

“That’s a lot of money, and how much have wages gone up?” asks Lyall. “There’s a proportionality issue here, as well. When the government jacks up costs, and you look at what people are making for a living, it’s scary. We have an affordability issue. We already know 59% of millennials are seriously considering moving from Toronto because they can’t live here, and if they’re thinking about having a family, how the hell are they going to do that?”

Copyright © 2018 Key Media Pty Ltd

Home sales in Metro Vancouver below long term norms

Steve Randall
REP

Sales of homes in Metro Vancouver remained well-below long-term norms in September.

The Real Estate Board of Greater Vancouver reported sales of 1,595 homes in the month, down 43.5% from a year earlier, 17.3% below August 2018 levels, and 36.1% below the 10-year average for September.

Lower demand has allowed inventory to build with 13,084 homes available on the MLS for Metro Vancouver, a 38.2% increase year-over-year and a 10.7% increase month-over-month.

There were 5,279 detached, attached, and apartment newly-listed properties in September; 1.8% down year-over-year but a 36% jump from August.

“Since spring, home listing totals have risen to levels we haven’t seen in our market in four years,” said Ashley Smith, REBGV president-elect.

“Metro Vancouver’s housing market has changed pace compared to the last few years. Our townhome and apartment markets are sitting in balanced market territory and our detached home market remains in a clear buyers’ market,” Smith said.

Market by property type Sales of detached properties in September 2018 reached 508, a 40.4% decrease year-over-year. The benchmark price for detached properties is $1,540,900, down 4.5% y-o-y and a 3.4% decrease over the last three months.

Sales of apartment properties reached 812, a 44% decrease y-o-y. The benchmark price of an apartment property is $687,300, down 7.4% y-o-y and a 3.1% decrease over the last three months.

Attached property totalled 275, a 46.9% cent decrease compared to September 2017. The benchmark price of an attached unit is $837,600, down 6.4% y-o-y and a 2% decrease over the last three months.

Copyright © 2018 Key Media Pty Ltd