The government to pick up 5% of a mortgage

Canadian Real Estate Wealth

Canada’s housing agency says new spending measures aimed at helping first-time buyers afford homes won’t push prices up more than a few tenths of a percentage point.

A report Thursday from the Canada Mortgage and Housing Corp. estimates prices could go up between 0.2 per cent and 0.4 per cent _ a tiny bump relative to other ideas the Liberals were pressed to enact to make homes more affordable.

The agency says loosening the mortgage-insurance stress test or allowing longer mortgages would have raised housing prices five to six times more than the measures in last month’s budget.

The government says it will pick up five per cent of a mortgage on existing homes for households that earn under $120,000 a year, in exchange for a share of the home’s ownership.

For new homes, to spur construction, the government would be willing to cover 10 per cent, but either way the house price couldn’t be more than $480,000.

Despite the limits on the program, CMHC says it can work in all markets, including Vancouver and Toronto.

Copyright © 2019 Key Media Pty Ltd

BC to install a searchable registry on home ownership

REP

In Vancouver, it’s impossible to identify the true owners of nearly half of the city’s most expensive properties — dozen of homes are held by anonymous shells, with one $29 million waterfront mansion registered to a student and others to homemakers with no apparent income.

British Columbia plans to peel back some of that anonymity, proposing legislation Tuesday to establish a public, searchable registry of beneficial property owners in the Pacific Coast province. Failure to disclose could result in a fine of $100,000 or 15% of the property’s assessed value, whichever is greater, according to a government statement.

The move comes as Premier John Horgan’s government spearheads an anti-money laundering drive after finding that Vancouver-area casinos served for years as “laundromats” for crime organizations. This week, the government received a widely anticipated report on how that dirty money may have flowed into real estate, luxury cars and horse racing.

“This registry will make information about the true owners of B.C. real estate publicly available and help crack down on illegal activities,” Finance Minister Carole James said in the statement.

In 2016, Transparency International found that ownership couldn’t be determined for at least $1 billion worth of Vancouver property. It estimated that at least 11% were registered to nominees – individuals, such as students and home makers, used as fronts.

It’s not clear how the legislation will tackle such so-called straw holders. The proposed legislation will only require private corporations, trusts and partnerships that currently own land or that buy land to disclose ownership information. The registry will give public access to the names of all corporate interest holders, beneficial owners, and partners. It will have more detailed information for tax authorities and law enforcement agencies.

In addition, the government said it’s also introducing amendments to the Business Corporations Act, which will require private companies to hold accurate information about the true owners of shares. It also plans to eliminate bearer shares — unregistered shares that aren’t tracked by the issuer and are owned by whoever has physical possession of the stock certificate.

Copyright Bloomberg News

Copyright © 2019 Key Media Pty Ltd

Airbnb rentals limited to principal residences

Duffie Osental
Canadian Real Estate Wealth

In order to increase rental inventory, Vancouver passed a series of rules last year requiring Airbnb operators to register for a license. However, it looks like almost half of Vancouver’s listed Airbnb operators remain unlicensed.

Aside from registering operators, the new rules also limit Airbnb rentals to principal residences. However, out of the 4,720 listings in Vancouver, only 2,628 are licensed, according to city figures. And despite having an agreement with the popular online home sharing service, only 17 licenses have been suspended so far.

Vancouver Mayor Kennedy Stewart struck a positive cord last month, however, noting that more than 2,000 cases have opened against errant Airbnb operators – and one operator with 35 listings was even levied $20,000 in fines.

“This program is one of many designed to move more supply into the long-term rental market because housing in our city needs to be first and foremost for those who live and work in Vancouver,” Stewart told CityNews Vancouver in mid-March.

Under its agreement with Vancouver, Airbnb provides host information – such as names, email addresses, and license numbers – four times a year, with the city doing the legwork of chasing after wayward operators. And according to CityNews, officials have been reminding operators who are using a 2018 licence that they must renew for 2019 to make sure they are complying with the city’s regulations, noting nearly 70% have already done so.

Copyright © 2019 Key Media Pty Ltd

Canada’s newest digital bank has launched

Steve Randall
REP

Canada’s newest digital bank has launched with a special offer for mortgage customers.

motusbank (styled with a lower case m) has been launched by Ontario-based credit union Meridian and is 100% owned by it, but its reach is not restricted to the province, with the digital platform available across Canada.

“This is a truly momentous and exciting day, not only for our organization, but also for the millions of Canadians who have told us they are eager for an attentive, competitive and digitally-friendly alternative to the Big 5 banks,” says Bill Maurin, President and CEO of Meridian and motusbank. “motusbank is a full-service, digital bank with a full retail product line that is supported by friendly and professional member service.”

Mortgage offer The launch offer for mortgage customers is a 3.09% rate in all 1 to 5 year fixed rate mortgages and for a 5-year variable closed mortgage. HELOCs are available at a 3.75% rate.

“We believe that every Canadian deserves a shot at owning a home,” says Dave Baldarelli, COO, motusbank. “Because we’re committed to offering a truly tailored and personalized approach, we’re giving our members an opportunity to choose what mortgage term fits their needs best.”

Customers can apply for and receive mortgages completely online but can always connect to a member of staff. Other banking products are also available for entirely online completion.

“We are the first financial institution to offer a fully digital lending experience for mortgages and for unsecured lending,” says Maurin. “And with the backing of Meridian, Canadians can feel confident in securing loans from an established organization with a track record of financial strength and stability.”

Copyright © 2019 Key Media Pty Ltd

Amazon’s largest Vancouver office draws optimism, worry

Ephraim Vecina
Mortgage Broker News

The redevelopment of downtown Vancouver’s old Canada Post building into a new high-tech office space has invited both celebration and trepidation.

Last year, Amazon announced that it would be taking over a part of the complex, which is slated to be revamped into The Post, a mixed-use building that will play host to the e-commerce leader’s largest office in Vancouver.

As of late March, builders are already hard at work in the old structure to pave the way for the construction of The Post.

With the launch of the much larger office by 2022, Amazon is expected to boost its employment in Vancouver from the current 1,000+ technical specialists to approximately 5,000 employees – an unprecedented opportunity for B.C.’s graduates and tech worker pool.

“We don’t want to be someone who just takes,” Amazon Web Services Canada director Eric Gales said in an interview with the Georgia Straight. “We want to contribute back to continuing to develop Vancouver as a great technology hub.”

This dovetailed with the trend predicted by CBRE’s Paul Morassutti, who stated in late February that the tech sector will play a pivotal role in ensuring the stability of Canada’s commercial real estate market for the foreseeable future.

“Over the past 10 years, tech has grown at more than 2.5 times the pace of the energy sector and three times the overall economy,” Morassutti noted. “Tech companies anchoring new buildings is something we have virtually never seen before.”

Gales assured that Amazon’s increased prominence will be a significant net positive for the city.

“What we’ve generally found is that when we invest in cities like Vancouver, it has a positive broad effect on the ecosystem,” he said.

“Everything from encouraging people to enter the tech sector – we need more people entering the workforce, for sure – to the investments that we make with community start-ups, [where] we share knowledge from our developers here. We are very conscious of our responsibility to contribute to the community as a whole.”

However, other observers have warned that the upward spike in higher-salary jobs will actually harm the city’s start-up scene. Small and medium-scale companies will be nowhere near at the position to offer comparative wages, and Amazon might just end up absorbing Vancouver’s best talent – thus stifling long-term competition and innovation.

Copyright © 2019 Key Media

Historic building has landed on several Heritage Vancouver Society watch lists

Naoibh O?Connor
Western Investor

The St. Paul’s Hospital 6.6-acre site on Burrard Street in downtown Vancouver is up for sale now that plans are moving forward for the replacement health care facility on False Creek Flats.

News of the sale was first reported in a John Mackie story in the Vancouver Sun April 2.

Proceeds will help cover costs for the new $1.9-billion St. Paul’s Hospital on Station Street, which is expected to be completed by 2026.

CBRE Limited, which listed the Burrard Street property, calls it a “once-in-a-generation downtown development opportunity.”

“Situated at the highest point in the downtown core, this expansive site holds the immense potential to become a ‘city within a city’ including the next series of signature mixed-use towers that will shape the skyline of Vancouver and direct the future of the downtown core,” the sales brochure states.

Shaf Hussain, a spokesman for Providence Health Care (PHC), said he believes the site went to market soon after the Feb. 15 announcement revealing that the new St. Paul’s Hospital was officially moving forward. He said a “unique part of this project” is that the sale proceeds will be PHC money since it owns the land, so “the cost to the taxpayer is minimized.” He noted that the provincial government stated on Feb. 15 that its contribution will be $990 million.

Building height on the Burrard Street property is determined by the zoning and development bylaw, Downtown Official Development Plan (ODP) and city-adopted view cones.

“The maximum height permitted within the ODP is 300 feet, and allows an increased height up to 450 feet to be considered on a discretionary basis. The West End Plan allows maximum heights up to 550 feet to be considered for rezoning applications,” Karen Hoese, the City of Vancouver assistant director of the rezoning centre, stated in an email to the Vancouver Courier. “However, the maximum height on most of the site (except the Burrard/Comox corner) is limited to approximately 180 to 200 feet by view corridors.”

Meanwhile, under zoning, the maximum density that could be achieved is up to 6 floor space ratio (+10 per cent heritage density).

“However, on any site, the maximum density cannot always be achieved due to site specific constraints, urban design objectives, on site open space and impact on traffic and other infrastructure,” Hoese explained.

“Based on some very preliminary analysis and taking into account view corridors, shadow analysis of nearby parks, on site open space, heritage retention, tower form and separation, and transportation requirements, it is anticipated that the density achievable on the site under the existing zoning could be in a range of roughly 1.4M square feet gross floor area. This is only a preliminary estimate and more detailed analysis on this would be required to confirm that number.”

Heritage Vancouver is one organization that’s keeping an eye on the sale and future plans for the site — St. Paul’s Hospital landed in the No. 2 position on Heritage Vancouver Society’s Top 10 Watch List in 2015 after the provincial government and Providence Health Care announced the plan to move the hospital from Burrard to Station Street. (It was also on Heritage Vancouver’s 2006, 2007, 2012 and 2013 top 10 lists.)

In its 2015 watch list, the organization urged that “the maintenance, retention, seismic upgrading and restoration of the historic Burrard Building be included in the planning process for the future use of the existing St. Paul’s site.”

The Burrard Building is comprised of the centre block, the oldest surviving section of the hospital that was built in 1912-1913, and the north and south wings that were completed in 1931 and 1939.

“In the rush to attempt to maximize revenue-generating development on the existing site, the Burrard Building risks being sacrificed. The excuse given is the need for extensive seismic upgrading of the historic building,” Heritage Vancouver noted in its 2015 watch list.

“However, detailed engineering studies have proven the feasibility of seismic upgrading as part of the adaptive reuse of the Burrard Building for office and support services. Therefore, this historic building could be adapted to these purposes or possibly to unique residential uses, as part of the future development on the existing site.”

The City of Vancouver’s Heritage Action Plan encourages the conservation and celebration of heritage resources, according to the email from Hoese. The site is listed in the ‘A’ evaluation category on the Vancouver Heritage Register, which identifies the site to be of primary significance. Statements of Significance (SoS) have been prepared for three buildings:

• Burrard Building including the Centre Block (1913), North Wing (1931) and South Wing (1940):
• School of Nursing Building (1056 Comox Street) (1931, addition in 1946)
• Boiler Plant (1913, additions in 1954 and 1961)

The city says future uses for the site would be determined through a development permit process, including the opportunity for public input, while Vancouver Coastal Health and Providence Health Care will determine future health care planning in the area.

The sales brochure indicates that Providence Health Care will “enter into a sale and leaseback with the buyer until the new hospital is ready for occupancy.”

“The existing St. Paul’s hospital will continue to operate on the site until a new hospital is developed,” it states.

Copyright © Western Investor

Early spring home sales are proving to be flat

Penelope Graham
other

Early spring home sales are proving to be flat, if stable, in the Greater Toronto Area – according to the latest data released by the Toronto Real Estate Board (TREB), March sales are nearly identical to activity during the time last year, with 7,187 homes changing hands, compared to 7,188 in 2018. For the first quarter of 2019 as a whole, sales are down -1%.

Average home prices have also kept an even keel, up 0.5% year over year to $788,335, while the benchmark rose 2.6% indicating a slight uptick in the value of homes sold. Average home prices skewed slightly higher in the City of Toronto proper at $830,043 (+1.5%), while the 905 markets saw price small gains of 2.6% to $765,469, reflecting a 5.3% pickup in sales, compared to a -8.5% slowdown in the 416.

Too Few Homes to Choose From

However, the market as a whole continues to be defined by a lack of new home listings which fell -5.1% throughout the GTA. This continues to put pressure on buyers and keep market conditions on the tighter end of balanced; the sales-to-new listings ratio for all markets tracked by TREB is 51%, with conditions steeper in the 416 at 56%, and slightly softer in the 905 at 49%. This ratio, which measures the level of competition in the market, is calculated by dividing the number of sales by the number of new listings over the course of the month. A ratio between 40 – 50% is considered balanced, with above and below that threshold indicating sellers’ and buyers’ markets, respectively.

Mortgage Borrowers Continue to be Stressed by Test

TREB continues to point to the cooling effect of the national stress test as the impetus behind slowing sales activity, as well as municipal policies that stifle the development of gentle density housing such as townhomes, rather than the influx of Toronto condos that have clustered neighbourhoods with development-friendly zoning. Currently, large chunks of the city are deemed to be within the “yellow belt”, zoned only for single-family Toronto houses. 

“The OSFI stress test continues to impact home buyers’ ability to qualify for a mortgage. TREB is still arguing that the stress test provisions and mortgage lending guidelines generally, including allowable amortization periods for insured mortgages, should be reviewed,” said TREB President Garry Bhaura.

“The supply of listings in the GTA also remains a problem,” he adds. “Bringing a greater diversity of ownership and rental housing online, including ‘missing middle’ home types, should be a priority of all levels of government.”

Jason Mercer, TREB’s chief market analys, says that despite slower sales activity, buyers continue to feel the heat, especially in some of the 416’s most competitive neighbourhoods, due the lack of inventory coming to market.

“Market conditions have remained tight enough to support a moderate pace of price growth. Despite sales being markedly lower than the record levels of 2016 and early 2017, the supply of listings has also receded,” he stated. “This means that in many neighbourhoods throughout the GTA, we continue to see competition between buyers for available listings, which provides a level of support for home prices.”

© 2015-2017 Zoocasa Realty Inc.,

Selecting exactly the right agent can be as challenging as finding the perfect home

Kara Kuryllowicz
REW

In Toronto and Vancouver, Canada’s hottest real estate markets, selecting exactly the right agent can be as challenging as finding the perfect home. To help savvy home buyers and sellers launch their selection strategies, REW is sharing practical tips on how to identify the agent that’s right for you from the approximately 53,000 and 14,000 agents working in the Greater Toronto and Greater Vancouver markets.  

1. Get serious
Take the time required to collect and carefully assess at least three agents’ results and experience. “Your realtor really influences your buying and selling decisions, so selecting the right realtor is one of the most important decisions you’ll ever make,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada, Kelowna, B.C.  “Consumers don’t tend to approach the realtor selection process as seriously as they should.”

2. Do due diligence on three agents
“Ask for and expect confirmation of your prospective agents’ professional abilities and experience,” says Ash. “Be polite but don’t be shy about asking very direct, even tough questions, whether you’re interviewing a potential realtor or checking his or her references with their customers.” Use REW’s agent search to launch your selection strategy as you seek information that may include their years of experience and the languages they speak.

3. Read their reviews and talk to their clients
Run a Google search, check sites such as Yelp and Rate My Agent as well as LinkedIn and Facebook for reviews and recommendations. You can also check out the agent’s own site for testimonials. Over the past few months, certain brokerages have launched anonymous surveys and are posting the resulting reviews.

4. Knowledge of the industry
Real estate markets are in constant flux and affected by an extraordinary range of factors, from interest rates to the B-20 stress test, land-transfer and foreign-buyer taxes and the economy. How will the Liberal government’s “Investing in the Middle Class” budget, which lets first-time home buyers use up to $35,000 from the previous maximum of $25,000 of RRSP, impact the market? “Consumers need a real estate professional who invests the time and effort necessary to ensure they stay current and have relevant experience,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX of Ontario-Atlantic Canada, Mississauga, Ont.

5. Get the facts and look at their results
Find out how accurately they price and how well they negotiate. How many homes does the agent sell annually and over a multi-year period? Did the homes sell over or under asking? How did the sale prices compare to similar homes in the neighbourhood?  
Keep in mind that everything from the asking price to national and local events can affect buyer interest, days on the market and ultimately the selling price.

6. Neighbourhood-specific expertise
To intimately understand a specific area, agents must know the neighbourhood and its homes firsthand. “In 15 years, they’ve likely been in 85 to 95% of the homes sold and have more accurate local inventory intelligence than an agent who has never seen the homes or personally experienced the neighbourhood’s evolution,” says Alexander.
Really understanding local demographics can ensure the home is staged to appeal to young families, singles, co-purchasers, retirees, empty nesters, or a particular culture. “It can make it easier to sell and reduce days on the market,” says Alexander.  

7. Willingness to work hard and meet expectations 
There is no substitute for experience, but experts note that a new, well-trained agent is hungry for the business and keen, if not desperate, to earn referrals. Be sure your agent is prepared to respond to every text, email and phone call within the hour and is open to arranging same-day viewings. Be aware that certain agents will be more available and willing to work early mornings, evenings and weekends.

8. Get social
It all starts with real estate portals, but it doesn’t stop there. Increasingly, agents leverage social media, such as Facebook, Instagram, LinkedIn, Twitter and other platforms, as well as their own websites, to maximize exposure. “You want a smart, aggressive marketer that can price, prepare and promote a property to its best advantage,” says Alexander.

Before you commit to the agent that will guide you through one of the most important financial transactions you’ll ever make, get serious and do your homework to ensure the agent you hire has the qualities that matter most to you.

© 2019 REW. A Division of Glacier Media.

Residential transactions plunge to just over half the 10-year average for the month, as prices slide across all property types

Joannah Connolly
Western Investor

Falling home sales in Metro Vancouver are “largely policy induced” and policymakers are “using policy to delay housing demand and feeding disruptive cycles,” according to the new president of the Real Estate Board of Greater Vancouver (REBGV).

Issuing its monthly market statistics April 2, the REBGV reported that there were just 1,727 home sales in March 2019, which is 31.4 per cent year over year decline, and 46.3 per cent below the 10-year average for the month.

It’s also the lowest number of March home sales since 1986. See infogram

However, the sales total is higher than one monthly previously, up 16.4 per cent from the 1,484 homes sold in February, which is typical for this time of year.

“Housing demand today isn’t aligning with our growing economy and low unemployment rates. The market trends we’re seeing are largely policy induced,” said Ashley Smith, the new REBGV president. “For three years, governments at all levels have imposed new taxes and borrowing requirements on to the housing market.”

She added, “What policymakers are failing to recognize is that demand-side measures don’t eliminate demand, they sideline potential home buyers in the short term. That demand is ultimately satisfied down the line because shelter needs don’t go away. Using public policy to delay local demand in the housing market just feeds disruptive cycles that have been so well-documented in our region.”

The number of homes for sale continues to climb as sellers try to offload their properties in what is traditionally a busy spring market, while buyers hold back. There were 4,949 homes newly listed for sale on the MLS in March 2019. This is an 11.2 per cent increase from March 2018 and 27.2 per cent higher than February 2019.

The total number of homes available on Metro Vancouver’s MLS as of the end of March is 12,774, a 52.4 per cent increase compared with March 2018 and up 10.2 per cent month over month.

The overall sales-to-active listings ration for all property types is teetering between a balanced market and a buyer’s market, and currently standing at 13.5 per cent. The improvement in sales in March brought this figure back into balanced market territory, which is generally between 12 and 20 per cent.

However, the market varies greatly by property type, as the ratio is 9.4 per cent for detached homes, which is firmly a buyer’s market. It’s a balanced market for townhomes/duplexes/rowhomes at 15.9 per cent, and for condos at 17.2 per cent.

The benchmark price for all residential properties in Metro Vancouver stands at $1,011,200, which is a 7.7 per cent drop from March 2018, and a 0.5 per cent slide in the month since February 2019.

Sales and prices by property type and area

There were 529 sales of Metro Vancouver detached homes in March, which is a 26.7 per cent year over year decline, but an 18.1 per cent rise compared with February this year.

The benchmark price for a detached home in the region is $1,437,100, which is 10.5 per cent lower then March 2018, and a 0.4 per cent decrease from February 2019.

West Vancouver continued to see the largest year-over-year detached home price drops, down 17.1 per cent, followed by North Vancouver (-12.8 per cent) and Richmond (-12.6 per cent). The benchmark price of a single-family house in Vancouver West – which comprises West Side, Downtown West and West End, but for detached homes is essentially just the West Side – was down 12.3 per cent.

The only area to see higher detached prices than last year was Bowen Island, up 0.9 per cent, while the Sunshine Coast prices slid very slightly for the first time but largely held their value, down 0.2 per cent.

Attached homes such as townhouses, duplexes and rowhomes saw a fairly dismal 325 transactions across the region in March. This was a 27.1 per cent annual decrease, and down nearly 19 per cent in the single month since February this year.

A typical attached home price is now pegged at $783,600, six per cent lower than in March 2018, and a 0.7 per cent decrease compared with February.

Benchmark attached home prices fell the most in Vancouver East (East Side and Downtown East), at 9.6 per cent lower than a year ago, followed by Port Coquitlam (-8.6 per cent) and Coquitlam (-7.4 per cent). Townhome prices fell in all Metro Vancouver areas, but saw the least-steep declines in New Westminster (-2.4 per cent) and Burnaby East (-2.7 per cent).

Some 873 Metro Vancouver condos exchanged hands last month, a 35.3 per cent decrease compared with one year previously but a 15 per cent rise from February’s figure.

The benchmark price of a condo now stands at $656,900, which is 5.9 per cent less than March 2018, and a slight drop of 0.5 per cent from February 2019.

West Vancouver once again saw the steepest price declines, with a typical condo in the municipality pegged at 12.7 per cent less than the same month last year. The only other area to see a double-digit condo price drop was Burnaby East, down 10.4 per cent year over year. Like with townhomes, all 18 areas in the REBGV jurisdiction saw condo prices lower than one year ago, with Coquitlam (-2.5 per cent) and Richmond (-3.3 per cent) seeing the least damage.

Home prices vary widely in different areas throughout the region. To get a good idea of home prices in a specific location and by property type, check the detailed MLS® Home Price Index in the full REBGV stats package.

Copyright © Western Investor

Expert Panel on Money Laundering and Dr Peter German meet deadlines to hand in two commissioned reports

Joannah Connolly
The Vancouver Sun

Two reports on money laundering in real estate and other high-end sectors were handed to the B.C. government today – but it could be a while before they are made public.

The reports were commissioned in September 2018 as part of a two-pronged approach to tackling dirty money being laundered through B.C.’s luxury sectors – primarily high-end real estate, but also luxury cars and horse racing.

The Expert Panel on Money Laundering was convened to create the first report for the Ministry of Finance, recommending rule changes to close loopholes in the real estate market and increase transparency in B.C. property ownership.

The other report is the second of Dr. Peter German’s reviews into money laundering for Attorney-General David Eby, this one focusing on real estate, luxury cars and horse racing. 

“Money laundering is a serious problem in our real estate market and this kind of activity has no place in our province,” said finance minister Carole James in a statement April 1. “Our real estate market should be used for housing people, not for laundering the proceeds of crime. That’s why we asked our expert panel to review our rules and regulations, and to offer concrete actions that we can take to clean up our real estate sector.”

Eby stated of Dr. German’s report, “British Columbians feel the effects of money laundering in their daily lives, with apparent links to organized crime, the opioid crisis and the housing market, which is why we have focused our efforts on quickly shutting down this criminal activity. Peter German’s first report made it clear that while money laundering was a significant problem in our casinos, there was also troubling evidence that the criminal economy was growing elsewhere in British Columbia.”

The government said that it would review the contents of both reports before making them available to the public, without specifying a deadline for this.

Copyright © Western Investor