Households to pay 3.5 per cent more to Metro Vancouver in 2022

Cheryl Chan
The Vancouver Sun

Metro Vancouver households will pay an average annual fee of $595 to the regional authority — a $21 increase from last year’s rates.

 Construction on the North Shore wastewater treatment plant has stalled and a large portion of the work force laid off. Photo by Francis Georgian /PNG

Metro Vancouver households will be paying 3.5 per cent more to the regional district that oversees their water supply and sewage system.

According to its 2022 annual budget approved Friday, a household will pay an average annual fee of $595 to the regional authority — a $21 increase over last year’s fees, but $17 less than previously forecast.

“This year, we were able to make significant budget reductions and keep the 2022 increase below the rate of inflation by deferring discretionary capital investment and using a variety of financial tools,” said Metro Vancouver commissioner Jerry Dobrovolny in a statement.

The 2022 budget will have an operating budget of $1.017 billion and $1.38 billion in capital expenditures.

Metro Vancouver said it wanted to minimize the impact of this year’s budget on ratepayers still recovering from the effects of the COVID-19 pandemic.

 

A larger increase, however, is projected over the next five years. According to Metro’s 2022 to 2026 financial plan, the yearly rate is expected to increase from $595 next year to $952 by 2026.

Metro Vancouver, which serves 21 local municipalities in the Lower Mainland, has several major and costly projects in the pipeline.

Some of its largest expenditures include the expansion of the Northwest Langley wastewater treatment plant and a new treatment facility on Iona Island in Richmond, which is expected to cost more than $10 billion by the time it is operational in 2034.

Metro is also building a new $1-billion wastewater treatment plant in North Vancouver. The project has been plagued by delays, cost overruns, and a dispute with former builder Acciona Canada, which Metro Vancouver sacked earlier this month.

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Future plans for Vancouver’s False Creek South to start fresh with public planning process

Cheryl Chan
The Vancouver Sun

Starting fresh with a public planning process ensures that the process begins from a place of trust with the residents, said Councillor Christine Boyle.

 A rendering showing the City of Vancouver’s proposed conceptual development plan for city-owned land in False Creek South, with the goal of being built out by 2040. Photo by City of Vancouver /PNG

Vancouver city council has voted to park a conceptual development plan on the future of False Creek South that would see the densification of the mixed-income neighbourhood.

 

Instead, they’ve opted to start fresh with a formal community planning process.

The False Creek South neighbourhood plan proposed increasing the number of units in the waterfront neighbourhood on the south shore of False Creek from the current 1,849 to an eventual target of 6,645. It would also change the housing mix, increasing the proportion of market stratas and rentals.

At a committee meeting Thursday, councillors opted to support an amendment by Coun. Christine Boyle to use the development plan submitted by the city’s real estate department to merely “inform but not constrain” a community planning process.

Too many residents had questions and concerns about the proposed plan, said Boyle.

“It’s rare to have so many groups across the city say that this conceptual plan wasn’t the place to start,” Boyle said after the meeting.

 

The decision doesn’t delay the process, she said.

“Either way we would have gone into a planning process. But this ensures that the process begins from a place of trust with the residents, so it can better engage them and better hear from them, and reflect the direction residents in False Creek South and the city and council all want to see.”

Boyle said most of the concerns she heard weren’t over the planned increase in density, but the desire to have as much co-op and non-market housing as possible, as well as how income-based housing is spread across the neighbourhood.

False Creek South, which was formerly industrial land, was developed in the 1970s and is now home to about 5,500 people.

There are about 1,800 properties on city land, which makes up about 80 per cent of the land in False Creek South. Another 1,300 units are on private land.

 

Non-market and co-op housing make up more than half of all housing units in the city-owned section of the neighbourhood. Another 36 per cent is market strata leasehold, while eight per cent is market rental.

The plan envisioned each of the three housing types making up roughly one-third — something many residents weren’t thrilled about.

“The concern was that the balance was shifting,” said Boyle, noting that even though all types of housing would see an increase, the targets were “too heavily skewed toward market stratas and rentals.”

Boyle also put forward an amendment, which garnered unanimous support, to maintain False Creek South’s original vision of having one-third lower income residents, one-third middle income residents, and one-third upper income residents.

 

Preserving that affordable mixed-income housing with co-ops and lower-income units requires funding from senior levels of government, she added.

Mayor Kennedy Stewart told council the welcoming sentiments expressed by False Creek South residents over having low-income people as their future neighbours should serve as a signal to other parts of the city.

Coun. Colleen Hardwick, who had released a statement earlier Thursday saying the proposed plan would reduce affordability in the neighbourhood, said she breathed a deep sigh of relief over Thursday’s outcome.

“False Creek South has been internationally recognized as an example of getting it right in urban design since its inception in the 1970s,” she told councillors. “I was deeply concerned we were going to be destroying that legacy.”

Council has already directed the city’s real estate department to start formal negotiation concerning residential strata leaseholds leases, most of which are set to expire in the next 15 to 25 years. The city will also begin discussions about lease extensions and redevelopment opportunities with the area’s co-ops.

The community planning process for False Creek South will include consultation with residents in the neighbourhood and across the city, First Nations, and other stakeholders. It is expected to start in the first half of 2022.

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© 2022 Vancouver Sun

City Centre Motel on Main Street in Vancouver sold for over $60 million

Kenneth Chan
other

City Centre Motel at 2111 Main Street, Vancouver. (Google Maps)

It was inevitable that the 67-year-old City Centre Motel in Vancouver’s Mount Pleasant neighbourhood would eventually be acquired for the purpose of pursuing its redevelopment potential.

The 35,000 sq ft motel property at 2111 Main Street — spanning the west side of the street between East 5th Avenue and East 6th Avenue — has changed hands in a deal worth north of $60 million, sources tell Daily Hive Urbanized.

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A deal was recently reached by Nicola-Crosby Real Estate Investments, the real estate arm of Vancouver-based Nicola Wealth Management, to acquire the property.

It is operated as low-cost accommodations with 66 guest rooms. It was previously stated by the building’s longtime owners that the property would be closed from November 2021 to June 2023 for renovations.

In recent years, the building’s northern facade along East 5th Avenue was improved by a mural commissioned by Vancouver Mural Fest.

Based on BC Assessment’s latest assessment, the property is worth just under $37 million, with $36.9 million coming from the land and just $57,000 from the 1954-built, two-storey structure. 

City Centre Motel at 2111 Main Street, Vancouver. (Google Maps)

City Centre Motel at 2111 Main Street, Vancouver.  (Google Maps)

The site is within the easternmost edge of the city’s protected Mount Pleasant Industrial Area (MPIA), which permits a mix of office and creative industrial uses. However, some variances for other flexible uses could potentially be pursued through rezoning, as the site is directly on the Main Street corridor.

Adjacent developments provide an example of what is potentially achievable for the site.

Immediately to the north is Westbank’s city block-sized Main Alley tech campus at 2015 Main Street, where there will be over 500,000 sq ft of office, creative industrial, and retail space in new and renovated buildings.

The first eight-storey new-build addition to Main Alley with about 150,000 sq ft of office and creative industrial space reached completion earlier in 2021. A parcel of Main Alley that faces the City Centre Motel is proposed to be developed into a 21-storey mass timber rental housing tower as the final phase.

Immediately to the south at 188 East 6th Avenue, a 10-storey building with 145 affordable rental homes and space for retail and restaurant uses is approaching full completion.

There are also new residential developments along the east side of Main Street near East 2nd Avenue within the MPIA.

 Artistic rendering of the Main Alley tech campus. (Henriquez Partners Architects/Westbank)

Artistic rendering of the Prototype mass timber tower (M5) at the Main Alley tech campus at 2015 Main Street, Vancouver. (Henriquez Partners Architects/Westbank)

The new affordable housing building  under construction at 188 East 6th Avenue (left) and City Centre Motel at 2111 Main Street, Vancouver (right). (Google Maps)

The motel is also considered a transit-oriented property, given that it is not only served by frequent north-south bus routes along Main Street but also SkyTrain’s future Mount Pleasant Station — a six-minute walk away to the intersection of Broadway and Main Street.

Over the decades, it has been used by the local film and television industry as the set of productions such as Once Upon A Time, Batwoman, and more recently Disney Plus’ Turner & Hootch series.

The motel’s likely closure eliminates yet another low-cost accommodations option in the city, after governments over the past year went on a spending spree acquiring older, low-cost hotel properties to quickly create housing for the homeless.

Daily Hive Urbanized has reached out to Nicola-Crosby Real Estate Investments for comment.

You might also like:

• 21-storey wooden tower with 216 rental homes proposed for Vancouver (RENDERINGS)
• False Creek Flats rental housing with office and industrial begins construction in 2021
• AbCellera proposes major office and lab expansion in Mount Pleasant in Vancouver
• New public park coming to the corner of Main Street and East 7th Avenue

Copyright Ⓒ 2021 Buzz Connected Media Inc.

West side resident threatens to sue city over redevelopment agenda

Denise Ryan
The Vancouver Sun

Single family homeowners feel their voices haven’t been heard as city fast-tracks zoning changes

 VANCOUVER, BC – Oct. 27, 2021 – Tyman Stewart in front of his home in Vancouver, BC, Oct. 27, 2021. Stewart is upset that rezoning being rammed through may bring about massive land assemblies and he will lose his home. (Arlen Redekop / PNG staff photo) (story by reporter) [PNG Merlin Archive] Photo by Arlen Redekop /PNG

A Vancouver homeowner said he will take legal action if the city does not slow its proposed zoning and

“They say you can’t fight City Hall, but I plan to,” said Tyman Stewart, one of a group of residents from across the city that has hired lawyer Peter Gall, an expert in civil litigation, to get the city to hit pause on its so-called Streamlining Rentals Initiative, which is slated for a public hearing on Nov. 2.

Stewart said there has been no meaningful public consultation on the proposal, which includes a number of “quick-start” options meant to ease restrictions and speed up the building of rental housing throughout the city.

The plan includes changes to C-2 zoning (commercial mixed-use areas) to allow rental housing buildings up to six storeys on busy arterial streets and up to four storeys on side streets a block from arterials.

 

Stewart said he plans to take every legal action he can to ensure the City of Vancouver meets its obligations under the Vancouver Charter that stipulates parties affected by zoning and development amendments have a fair opportunity to understand and respond to such proposals.

On Tuesday, the province announced changes aimed at increasing housing supply, including dropping requirements for local governments to hold public hearings for zoning changes as long as they are consistent with official community plans. But the Ministry of Municipal Affairs said in an email to Postmedia that, “Bill 26’s amendments do not apply to Vancouver as Vancouver already has a broader ability to delegate matters to staff.”

Stewart and other west side residents say the city has been deficient in its notification and consultation process.

“The city has not done their due diligence,” said Stewart. “Not a single person on my block had any idea about this proposed rezoning that could allow land assemblies and six-story apartments to go up next to their homes.”

“It’s not OK for this to happen in anyone’s neighbourhood. I support rental housing, but not at the expense of individual homeowners,” said Stewart, who has lived in his 1925 Craftsman home for 22 years. He shares the home with his partner and two of their three children.

Stewart said his daughter was born in the house, and he hopes to be there until he dies.

The new zoning will open the door for land assemblies, a popular method for developers to join adjacent lots for the purpose of building apartments, said Stewart.

“I don’t want my home to be wedged between two apartment blocks,” said Stewart, who added that for three years his efforts to create a rental laneway home on his property has been stymied by City Hall red tape.

“We respect the needs of the city for density and more rentals. What we want is for the city to work with us in a collaborative way so homeowners are respected as well.”

Gall said a letter will be sent to the mayor and council this week.

“There are a lot of affected people who haven’t had an adequate opportunity to understand what is being proposed, to speak to officials, to think about the changes, and it is impossible for all of this to happen by the Nov. 2 council meeting where it will be dealt with,” said Gall.

“We are requesting for the city to rethink the process. Much more is required procedurally before the city can make its ultimate decision.”

The city didn’t respond to a request for comment.

Evelyn Jacob, a member of the Upper Kitsilano Residents Association, who advocates further consultation, said she is worried about what the proposed changes will mean for her Point Grey neighbourhood and to the home she grew up in.

Her parents, Jewish-Iraqi refugees, fled Shanghai after Mao Zedong came to power in 1949 and worked in menial jobs in Vancouver for a decade until they could afford what was then a modest home at 14th and Waterloo. 

 

Evelyn Jacob is opposed to Vancouver’s proposed rezoning for apartment rentals. Photo by NICK PROCAYLO /PNG

Jacob, who bought out her sister’s interest in the home when her parents died, now carries a hefty mortgage, and manages on a modest income by deferring her property tax. Jacob also houses three UBC students in her basement suite, and shares the home with her husband and son.

 

“I don’t know where we would go if we could no longer live here,” said Jacob. “This streamlining rental plan will affect many neighbourhoods across the city. My street is not one that would be affected by the plan yet, but my fear is that this is precedent-setting and the city doesn’t want people to live in single detached homes anymore.”

Some housing activists have argued for an end to single-family homes, and not just in Vancouver. New Zealand’s government recently ordered an end to single-family zoning in its five biggest cities, drawing the attention of B.C. housing advocates and planning experts.

Jacob said, “I think we can have both: affordable rentals and single-family homes. Part of the beauty of Vancouver is its neighbourhoods.”

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© 2022 Vancouver Sun

Is the mortgage industry set for a blockchain revolution?

Fergal McAlinden
other

An industry CEO believes NFTs and other developments will profoundly transform the mortgage space

Following the announcement of a new collaboration to allow mortgage documentation to be minted through non-fungible tokens (NFTs), a prominent executive has predicted that further revolution of the mortgage industry by blockchain technology is imminent.

Shawn Allen (pictured), CEO of Matrix Mortgage Global, told Canadian Mortgage Professional that NFTs – units of data stored on digital ledgers – had the potential to transform the document submission and collection process, allowing immediate verification and decentralizing each transaction.

Matrix recently launched a partnership with EZ365, a subsidiary of Wee-Cig International Corporation, that sees both companies commit to developing a system to render key documentation including mortgage deeds, appraisals, inspection reports and identification into NFTs.

“Right now, we have a very centralized infrastructure. There’s so many stakeholders in a mortgage transaction – if it’s a purchase you’ve got a buyer’s lawyer, a seller’s lawyer, potentially an appraiser, a home inspector and all these different players that are looking for and relying upon the same data,” Allen said.

“It’s very cumbersome to transmit that data across all the different people privy to the information required to get the deal done without any form of consensus. There’s a lot of opportunity for fraud to peek its way through – whether on the broker or lender side, at the CMHC [Canada Mortgage and Housing Corporation] side or the insurer’s side.”

Through NFTs, Allen said that each party in the mortgage process could rely on information that was unique, with its non-fungible status meaning that it could theoretically be verified immediately across multiple platforms.

Read more: Matrix Mortgage Global, EZ NFT announce new tech partnership

That development, he emphasized, could drastically speed up the mortgage process and make things more straightforward for all parties.

“Right now, we don’t have that consensus; everyone has to do the work independently all the time,” he said. “What I’m proposing is to be that starting point for verifying documentation, whether it’s ID, mortgage deed or appraiser report.”

At present, blockchain technology has seen little uptake – and is arguably little-understood – in the mortgage industry. However, Allen said that it also had the potential to add an extra layer of security to the mortgage process because of the fact that data can be distributed but not edited using that method.

“It’s way more secure, because the reliance on the blockchain for that security is sound,” he said. “You cannot change that data – you’ll find out if there’s an issue. And you’ll find out a whole lot sooner than if you were to do anything in the current situation.

“This would mitigate against title fraud, for sure. It’ll drive the cost down on [that] because it’ll pretty much be non-existent.”

While mortgage professionals could be set to hear a lot more about blockchain technology down the line, it seems that the use of cryptocurrency to conduct transactions in the industry could be some way off.

That’s usually attributed to its unpredictability and relatively niche status, although Allen envisages future developments in lending and credit reporting that will see cryptocurrency emerge as more of a mainstream option in the industry.

Read more:Alternative lender to begin accepting cryptocurrency for services rendered

“I’m not talking about bitcoin or Ethereum or any crypto that goes up and down and is very volatile – I’m talking about staking stablecoins,” he said. “Those are cryptocurrency or coins that are tapped or tied to a dollar.

“They don’t fluctuate as much in theory as would bitcoins, Ethereum, alt coins or anything like that.”

While Allen said that those products are depreciating assets when inflation is factored in, he noted that they’re considered a much more stable and safe investment than other forms of cryptocurrency because of the fact that they’re connected to dollar assets.

The potential of blockchain to transform the industry would also have implications beyond Canada’s borders, with Allen saying that it could foster greater interconnectivity between networks and companies in different countries.

“It makes the global real estate community that much smaller, because it allows for digitization of the whole process [and] for foreign investors to come in and have a consistent feel to transacting in real estate – whether in Canada, the US, or overseas,” he said.

“There are a lot of countries that would definitely benefit from this technology, because a lot of them are still using paper to document their deeds. Imagine if we digitized that and then had access to that across a global platform – the uptake could be tremendous.”

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Bank of Canada announces latest overnight rate target

Ephraim Vecina
other

The central bank will be moving into a new phase following the end of its QE program

The Bank of Canada has announced that its target for the overnight rate will remain at the effective lower bound of 0.25%, with the bank rate at 0.5% and the deposit rate at 0.25%.

However, while the central bank will maintain its “extraordinary forward guidance” on the path for the overnight rate, the institution will be ending its quantitative easing (QE) program and moving into the reinvestment phase. During this phase, the BoC will be purchasing Government of Canada bonds “solely to replace maturing bonds,” it said.

“The global economic recovery from the COVID-19 pandemic is progressing. Vaccines are proving highly effective against the virus, although their availability and distribution globally remain uneven and COVID variants pose risks to health and economic activity,” the BoC said.

“In the face of strong global demand for goods, pandemic-related disruptions to production and transportation are constraining growth.”

The Bank also announced a slight revision of its forecast for the timescale on hiking rates, projecting that its inflation target would be sustainably achieved by sometime in the middle quarters of 2022. In its previous statement at the beginning of September, the Bank had said it expected interest rates to begin rising in the second half of next year.

National inflation reached an 18-year high of 4.4% in September, according to Statistics Canada. This marked the sixth straight month that the rate exceeded the BoC’s policy target of 1% to 3%.

“The recent increase in [consumer price index] inflation was anticipated in July, but the main forces pushing up prices – higher energy prices and pandemic-related supply bottlenecks – now appear to be stronger and more persistent than expected,” the Bank said.

“Core measures of inflation have also risen, but by less than the CPI. The bank now expects CPI inflation to be elevated into next year, and ease back to around the 2% by late 2022.”

Read more: Rate hike fears driving Canadians to scale down spending – MNP Debt

The central bank added that inflation rates had increased in many countries, boosted by those supply bottlenecks and higher energy prices. “While bond yields have risen in recent weeks, financial conditions remain accommodative and continue to support economic activity,” it said.

The Bank said that it is expecting global GDP to grow by 6.5% this year, 4.25% in 2022, and around 3.5% in 2023. The Canadian economic restart will likely push the national GDP up by 5% this year, before moderating to 4.25% in 2022 and 3.75% in 2023.

“Demand is expected to be supported by strong consumption and business investment, and a rebound in exports as the US economy continues to recover,” the BoC said. “Housing activity has moderated, but is expected to remain elevated.”

Still, the economy will continue to require “considerable” monetary policy support, the central bank said. “We remain committed to holding the policy interest rate at the effective lower bound until economic slack is absorbed so that the 2% inflation target is sustainably achieved,” it noted.

“In light of the progress made in the economic recovery, the governing council has decided to end quantitative easing and keep its overall holdings of Government of Canada bonds roughly constant.”

The central bank will be making its next overnight rate target announcement on December 08.

Copyright © 1996-2021 Key Media, Inc.

Dan Fumano: As both Vancouver and B.C. look to speed up housing, expect debate

Dan Fumano
The Vancouver Sun

Opinion: Changes proposed by both Vancouver and the province are “heading in the same direction,” says Vancouver housing official. They’re also likely to be controversial, especially at the civic level.

Photo showing a detached house in foreground, beside a multi-unit residential building, in Vancouver. The city is moving toward making it easier to build more of the four-storey units without complex zoning changes. Photo by Arlen Redekop /PNG

The governments of both Vancouver and B.C. are eyeing changes to speed up housing construction, moves sure to be criticized by some for going too fast and too far, while others will call them as timid half-measures.

“That’s exactly what we’ve heard: for some people, it’s anxiousness about change in their neighbourhoods. For other people, this is just an initial step that doesn’t go far enough,” said Dan Garrison, Vancouver’s assistant director of housing policy and regulation. “It’s one of the hardest balances to strike.”

Vancouver city council is set to make a final decision next week on significant changes, in the works for a few years, aimed at making it faster and less expensive to build rental housing. These include buildings up to six storeys high on busy arterial streets and — in what’s likely to be the more controversial piece — up to four storeys on side streets a block off arterials.

Meanwhile, the provincial government made its own announcement Tuesday, unveiling changes aimed at increasing housing supply, including dropping requirements for local governments to hold public hearings for zoning changes as long as they are consistent with official community plans.

While the B.C. NDP government’s announcement was welcomed by developers and non-profit housing executives, as well as the organization representing the province’s local governments, expect some residents to complain about the provincial government removing opportunities for public participation in decisions about their neighbourhoods.

The B.C. government has been recently trying new things to help — and sometimes push — local governments to approve more affordable housing more quickly. In one example this year, Vancouver Sun columnist Vaughn Palmer observed Housing Minister David Eby was willing to assume “the political risk” of weighing in on a major local decision, endorsing a massive project proposed for Port Moody encompassing social, rental and market housing.

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Garrison said: “I think you’d have to have been living under a rock to be working in the planning world and housing world and not be aware that minister Eby and the provincial government generally are looking for ways to expedite the delivery of housing, and particularly affordable housing.”

The proposed amendments to B.C.’s Local Government Act will not affect the City of Vancouver, which is governed by a unique law, the Vancouver Charter.

But the changes proposed by both Vancouver and the province are “heading in the same direction,” Garrison said.

They can also be seen as part of a broader trend, including the national example from New Zealand, where the national government recently ordered an end to single-family zoning in its five biggest cities, a move many British Columbians noticed and some want to follow, Postmedia’s Derrick Penner reported this week .

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Rendering from the City of Vancouver showing what types of building densities could be allowed on single-family residential streets a block from arterial streets. Photo by City of Vancouver /PNG

Vancouver’s council will consider proposed changes that, in short, would make it easier to build six-storey mixed-use rental buildings on busy commercial streets (think Kingsway or West 4th Ave.) and four-to-six-storey rental buildings, depending on the level of affordability, on streets outside those commercial shopping areas (think areas dominated by detached houses on Arbutus Street between West 16th and King Edward Avenue, or along West Boulevard and East 41st Avenue).

The change most likely to draw the most opposition would be allowing four-storey apartment buildings, subject to a case-by-case decision from council, on side streets a block off certain arterials (40th and 42nd Avenues, for example).

For many Vancouver neighbourhoods, busy commercial streets are the only place to contemplate anything much bigger than a duplex or triplex. Of course, apartment buildings exist on quiet residential side streets in many other cities in the world, and in some Vancouver neighbourhoods, especially older ones.

So when council considers allowing four-storey rental buildings on certain side streets next week, they will certainly hear arguments about shadowing and neighbourhood character from homeowners in favour of preserving those blocks as they are.

Although the proposed changes include maximum building widths, heights and depths for the side streets, to prevent overly large buildings, there is still “a strong attachment to the house form” in many residential neighbourhoods, Garrison said.

But perspectives seem to be shifting on what neighbourhoods should look like, and the city has been hearing from a wider range of residents.

Edna Cho, a senior housing planner with the City of Vancouver, added: “We also did hear from a lot of people who want to see more change in the neighbourhood, that we go further.”

Cho said that since the COVID-19 pandemic has led to more online participation by the publics, the city has observed “a much younger and more diverse demographic” than the crowd in previous years, when in-person attendance was usually required to address council.

The 348-page report going to council next week includes a summary of three years of public engagement on the subject of encouraging more rental housing construction. Respondents expressed “equity concerns” about concentrating almost all apartment developments along busy streets with more noise and air pollution. The report says 82 per cent of survey respondents “supported policies to allow rental buildings in low-density areas close to arterials and commercial districts.”

Those findings might surprise some: If you sat through a lot of public hearings on housing — especially in past years, before online participation — you might be left with the impression almost everyone opposes these kinds of neighbourhood changes . But the people who show up at public hearings — who should be applauded for caring about their communities and participating in these processes — may not be representative of the entire neighbourhood population.

Research has found that members of neighbourhood associations, which often oppose development in cities like Vancouver, tend to be older homeowners who have lived in their homes for longer. Younger renters, for example, may have different priorities, but have traditionally been less likely to show up to council meetings.

At press time, only 11 people had registered to address Vancouver council next Tuesday about the proposed rental housing changes. Expect that number to increase in the coming days.

[email protected]

twitter.com/fumano

© 2021 Vancouver Sun

Thanks, Mom: Over $10 billion gifted to home buyers over last year

Michelle McNally
Livabl

Amidst rising prices and dwindling inventory, it’s no secret that buying a home in Canada has become increasingly difficult, particularly for first-time buyers looking to get their foot on the property ladder.

Hoping to help their loved ones set down roots in a home of their own, parents and family members have been known to contribute to the sizable down payment required for a property purchase.

According to a recent CIBC In Focus report penned by deputy chief economist of CIBC Capital Markets Benjamin Tal, that monetary contribution has amounted to billions of dollars.

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Using CIBC data, the research report estimates that over the past year, financial gifting for home purchases has amounted to just over $10 billion. This accounts for 10 per cent of the total down payments in the market as a whole during that time period.

The number of first-time home buyers that received help from family members was just under 30 per cent this past year, Tal said. Surprisingly, the share of new buyers receiving help did not grow during the pandemic.

Giving money for a downpayment is nothing new. In 2015, approximately 20 per cent of first-time buyers got financial assistance from family. Back then, the size of a financial gift was approximately $52,000, an amount that has now swelled to a record-high average of $82,000. 

First-time buyers aren’t the only group of purchasers receiving support from their relatives. A little under nine per cent of mover-uppers also had help. Although this number has been on a decline, Tal said that the size of the financial gift for this group has “risen dramatically” to $128,000 as of September.

“[The] average size of a gift is highly correlated with home prices,” said Tal’s report. “In fact, over the past half a decade, growth in the average size of gift outpaced home price inflation, averaging 9.7 per cent per year—a full two percentage points faster than growth in home prices.”

No less than two-thirds of first-time buyers that received a gift indicated that the financial gift was the primary source of their down payment, Tal explained. In this case, gifts for first-time property buyers averaged $104,000, and “no less” than $157,000 for mover-uppers.

In Canada’s most expensive markets, where home prices are higher and down payments would be larger, financial gifts were the most expensive.

During the first three business quarters of 2021, the average gift in Toronto is estimated to be $130,000 for first-time buyers and $200,000 for move-up purchasers. Vancouver buyers received even bigger monetary gifts of $180,000 and $340,000 for new and seasoned property purchasers.

 The report states that a large portion of financial gifting for home purchases likely comes from parents’ savings, which grew during the pandemic and therefore led to increased amounts of gifted money. However, data from Equifax estimates that 5.5 per cent of parents use debt to finance their gifting.

Tal explained that in light of the trend and size of home-related gifting, this exchange is becoming an important item that is impacting housing demand and pricing in Canada.

“As for the impact of wealth inequality, clearly gifting acts to narrow somewhat the wealth gap between gifting and non-gifting parents,” said Tal’s report. “At the same time however, gifting clearly works to widen the wealth gap between receivers and non-receivers. That increase in the gap is much larger than the actual gift size as it might make the difference between owning and not owning a house, with receivers potentially benefiting from future home price appreciation.”

© 2020 BuzzBuzzHome Corp.

Real Estate Statistics: The Latest Trends in the Housing Market (2021)

Matthew Speakman
other

The housing market has significant importance for the broader economy, accounting for 17.5% of the U.S. GDP in 2020. 4.2% of the GDP impact is the spending on construction. The other 13.3% includes other spendings on homes such as rent, utilities, and the home buying process, totaling $2.8 trillion. This indicates the real estate industry trends can be indicators of the overall health of the economy.

KEY FINDINGS

• The total housing market value reached $36 trillion.
• There were a whopping 6.69 million homes sold up until July 2021
• By July 2021, the total median home price reached $390,500
• The number of Realtors has increased from 1,11 million in 2009 to 1.53 million in 2021, reaching an all-time high.
• Realtors earn an average of $8,500-75,000 depending on the experience. 
• A typical real estate agent is a white woman who is 54 years old and has some post-secondary education.
• Gen Xers make up the largest percentage of homeowners at 24%
• The main reasons for buying a home in 2021 are the desire to own a home, a larger home and to be closer to family and friends.
• June and July are the best months to buy a house.

Sections

The US Housing Market

A bright spot in an otherwise gloomy 2020 was the real estate market. Following a brief period of retrenchment at the start of the epidemic, home sales skyrocketed. Prices increased due to a dearth of available houses on the market and low mortgage rates. Rising prices increased property values, resulting in more wealth for home sellers.

However, 2021 will not be such a steady rush and this may be excellent news for purchasers. Because of the pandemic, traditional homebuying seasons were canceled in 2020, resulting in a free for all. However, with things returning to a new normal in 2021, expect homebuying seasons to return, with a spike of buyers in the spring and summer months and a slowdown in the winter. 

The Value of the Housing Market

The U.S Housing Market is booming amidst the pandemic

COVID-19 left Americans trapped in their homes and millions of others out of jobs. Yet, amid the pandemic and recession, the housing market flourished.

• In 2020, the total housing market value reached $36 trillion, increasing $2.5 trillion within the year, the biggest jump year-on-year since 2005.
• The booming market started in July 2020, when the total number of homes sold reached 6.8 million, increasing 1.2 million from June 2020.

Homes are selling at a rapid rate

By July 2021, the total number of homes sold was at a seasonally adjusted rate of 6.69 million, with 5.99 million of them being existing houses.

The first part of 2021 constituted an 18% increase from the previous year, with $41.3 million spent on home sales. While Americans are buying relatively the same amount of newly constructed houses as in 2020, there was a $6.8 million increase in existing home spending.

0 Million

The number of total homes sold in 2021

30000 Million

The number of existing homes sold in 2021

0 K

The number of new homes sold in 2021

The median price for new homes sold had a 15.55% year-on-year increase

Prices for both existing and newly constructed homes experienced an upward trend in the last decade. In 2020, the price for existing homes peaked at $296,700, a $24,800 increase from the previous year. At the same time, the price of newly constructed homes increased by $11,600, reaching $333,100 by the end of the year.

Starting from January 2021, the median home price surged, except for a slight decrease in March 2021. By July 2021, the total median home price reached $390,500.

Median Price of Home Sales in the US

The increase in total home sales and median price coincides with a decrease in mortgage rates

The record-low mortgage rates come as a result of the Federal Reserve lowering rates in response to COVID-19.

However, the July 2021 Federal Reserve meeting minutes released show that they plan to taper their bond-buying program. Though the market did not respond to the news, the moment the Fed starts applying changes to their bond-buying program, the mortgage rates will surge.

“Currently, there are fewer than three months of supply of homes on the market, the lowest on record since the turn of the century”

Newly Constructed Housing Units in the US

The housing market faces a supply shortage of 2.5 million housing units

The data from the U.S. Census Bureau shows there were 1,391,000 newly constructed houses in July 2021. This is a slight increase of 51,000 housing units from last year’s same period. 

The small change in the market supply with houses indicates that the buyers will continue to fight for homes that will keep the price high for some time.

Real Estate Agent Statistics 2021

Nowadays, Tech has enabled homebuyers to do most of the legwork themselves when it comes to discovering listings. However, that first search is only a small fraction of the total house purchasing process. 

While finding your ideal home all by yourself might save you the hefty commission rates that many real estate agents charge, for many, going Han Solo may not be the best option, and may end up costing more than a realtor’s commission in the long run.  In these situations, it really pays to have a helping hand from a specialist. 

General Real Estate Agent Statistics

Demand for homes is high but so is for real estate agents

In fact, the number of active agents and NAR members has increased from 1,11 million in 2009 to 1.53 million in 2021, reaching an all-time high.

This trend reflects the recovery of the real estate market following the 2007-2009 financial crisis, as residential home sales started to increase from 2011 onwards.  

Home Sales vs. Number of Realtors

 

This growth in real estate agents and home sales also correlates with the low mortgage rates which hit another all-time low of 2.87 in the last 50 years. These low rates make credit cheap and amply available,  fueling more bidding wars and encouraging an already fiery housing market.

0 %

of Realtors are licensed sales agents

0 %

are broker associates

Real Estate Agents vs. Realtors

A person cannot use the title “Realtor” unless they are a member of the National Association of Realtors, pays an annual due of $150 a year and complies with NAR Code of Ethics and Standards of Practice.

There are over 3 million active real estate licensees in the United States

It is estimated that there are more than 3 million active real estate agents in the US but only 1,534,008 (NAR) are Realtors.

This means that real estate agents and Realtors are not one and the same. Although we use the terms “real estate agent” and “Realtor” interchangeably in common language, real estate agents are not necessarily Realtors.

Real estate professionals helped 88% of sellers during the sale

Buying a house through a real estate agent is a regular real estate trend that has persisted for years. 

In 2021, 88% of buyers acquired their property through a real estate agent or broker, 5% directly from a builder or builder’s agent, and 5% from the previous owner.

90% of homebuyers would recommend their real estate agent to others

Homebuyers are generally pleased with their real estate agents’ knowledge of the buying process and responsiveness. NAR reports that 90% of buyers would at the very least recommend their agent to others. 

Buyers have generally recommended their agent at least once since buying their house.

41% of homebuyers found their real estate agent through referrals 

NAR reports that real estate professionals earn their income mostly through referrals.

 41% of homebuyers consult with a realtor referred to them by a relative, neighbor or friend.

This means that the main source of income for real estate agents is through referrals.

Honesty and integrity are the most sought after qualities for a real estate agent

Finding a trustworthy and honest agent was the most essential factor for homebuyers, according to 98% of respondents. 

Other essential qualities to consider while selecting an agent were knowledge of the purchase process and agent’s responsiveness at 94%.

Homebuyers also valued communication and negotiation skills at 89% and 82%, respectively, and deemed skills with technology to be critical for their agents at 45%.

Essential Qualities of a Real Estate Agent

Real Estate Agent Income

On average, real estate sales agents bring in $43,000 a year, a decrease from $49,700 in 2019. However, the first years are the most difficult  for real estate agents in terms of gross income and expenses. Realtors with 2 years or less experience earned an average of $8,500 annually compared to Realtors with 16 years or more experience who had a median gross income of $75,000.

Being a New York real estate agent pays the best

No prizes for guessing that New York, with its extremely expensive real estate in its suburbs and Long Island has the highest average annual salary for real estate agents at $102,200. 

The top-5 states for real estate agent salaries are largely located in the Northeast and the West, encompassing both the Pacific Coast and the mountain states of Colorado and Utah. 

43% of Realtors are paid by the Seller

In general, 55% of real estate agents are paid by the seller, while just 21% are compensated by the buyer only. When the buyer reimbursed the agent, it was usually a percentage of the sales price rather than a flat charge.

How Real Estate Agents Are Compensated

Real Estate Agent Demographics

The real estate sector is undeniably competitive. Although a college degree is not a prerequisite to enter the industry, it appears that some demographics of Realtors are typically given more representation than others. 

Even though we have come a long way as a society, there’s still a lot to do since discrepancies in the real estate market among different ethnic groups, genders and socio-economic backgrounds are still too large to ignore. Let’s take a closer look at the demographics of the NAR membership this year:

74.2% of all real estate agents are white

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White realtors make up the largest percentage among real estate agents pointing to a huge gap between them and their Black, Hispanic/Latino and Asian counterparts.

64% of realtors are women

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As far as numbers go, the real estate industry is very much a woman’s world. Women have been active in the real estate industry practically since its beginning in 1794 and its legalization as a business in the 1840s.

Realtors’ median age is 54 years old

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The median age for a Realtor is 54 years old down from 57 years old in 2013 and 2012. So, the typical real estate agent is someone who has more experience and has a college degree.

93% of realtors have post secondary education

read more

According to the latest NAR member profile study, the majority of realtors have a bachelor’s degree (32%), associate’s degree (13%), or have some college completed (29%).

Real Estate Technology Statistics

Technology is continuing to change the way real estate agents do business and interact with clients. While older technologies such as e-mail, social media, and GPS are widely used on a daily basis, there are also new developing technologies such as Photofy and the usage of drones.

Agents may go “all-mobile,” avoiding the conventional office atmosphere and using drones to take pictures of a property, and even use virtual home tours to present a home to a customer on the other side of the world.

Percentage of realtors that use a smartphone nearly every day 96%

Percentage of realtors that use texting (SMS) for communication 93%

Percentage of realtors that use Facebook for their work 76%

Percentage of realtors that use drones for their work 73%

Percentage of realtors that use a website 69%

Homebuying Statistics 2021

As we zoom in on the housing market, we found that the typical homebuyer is a white, married, 48 years old, with a median income of $113,300. While the average American home buyers had similar behaviors and purchasing motives over the years, we witness differences among generations. 

Millennials continue to be the biggest homebuyers group, with most of the younger millennials being first-time buyers. They are also the group that relies most heavily on mortgages to finance their home.

A top favorite of all homeowners continues to be a detached single-family home in the suburban area. Homebuyers usually start their buying process during the spring and summer months, visiting ten houses before purchasing the one they liked. 

Homebuyers Age

1 out of 4 homebuyers was in between 41 – 55 years of age

This makes Gen Xers the largest age group of homeowners. They are followed by older millennials (31 – 40 years), that make up 23% of the homebuyers.

These two groups have been the largest age group of homebuyers in the last five years. However, we see a decrease in these two groups as younger millennials (22 – 30 years) come to the workforce, start families, and buy homes.

In 2017, only 6% of homebuyers were younger millennials. The number more than doubled to 14% in 2021.

American Homebuyers Age in 2021

Homebuyers Ethnicity

Ethnicity of American Homebuyers in 2021

9.33% of homebuyers were 22 – 56 years old Latinos compared to 2.67% that are Latinos over 56 years old

While White/Caucasians comprise 83% of homebuyers, we see an increase of African-Americans and Latino homebuyers at younger ages. In 2021, 6% of homebuyers age 32 – 41 were African-American, 4.1% more than African-American homebuyers older than 76 years.

Homebuyers Marital Status

There are twice as many single women homeowners aged 30 – 54 years compared to single men

Throughout the years, we see that married couples are the ones buying most homes,  actually, 6 out of 10 homeowners are married couples. It is logical because when couples get married they want to start a new life together to create a family which involves having a home. 

However, out of single people, women own more houses. In 2021, single women comprised 18% of total homeowners compared to 9% of single men homeowners.

Marital Status of American Homebuyers in 2021

Homebuyers Yearly Income

In 2021, the median income of homebuyers increased by 3.41% from the previous year

Over the past five years, we see an increase in homebuyer’s medium income, jumping by $8,000 in the last five years. Just this last year, it increased by $3,300. 

Yearly Income of American Homebuyers in 2021

In the last 8 years, Gen Xers, continue to be the top earners with a yearly income of $113,300 in 2021

Homebuyers Behaviors

For most Americans, buying a home is their biggest life investment. Close to a third of them said the desire to own a home was the main purchasing drive.

The typical buyer buys a previously owned home in a suburban area, a behavior mostly prevalent in younger generations. The behavior is plausible as older generations prefer to live in community-based homes.

Americans usually purchase their homes in the spring and summer months, hoping to settle in before the new school year starts.

The main reasons for buying a home in 2021

1 %

the desire to own a home

0 %

the desire for a larger home

0 %

the desire to be closer to family

The desire to own a home is more prevalent in younger generations, with 1 in 2 homebuyers of 22 – 31 years old saying this was the main drive to purchase a home.

In contrast, older generations buy their houses mainly because they want to be closer to their families or own a small home. As retirement approaches and children move out of the house, it is convenient for the elderly to downsize their homes.

Why Are Americans Buying Homes in 2021?

9 out of 10 people younger than 40 years old bought a previously owned home

For the last five years, 85% of homes bought were previously owned houses. The number comes as no surprise since the new homes built every year have kept relatively low. However, homebuyers have different reasons for buying a previously owned home compared to a new one.

Reasons for Buying a Newly Constructed Home in 2021

In 2021, avoiding renovations was the main reason why Americans invested in a new house. Close to a third of new homes buyers said they purchased because they appreciated the ability to choose and customize design features. It means the higher price will save them in the long run by allowing them to spend less money on problems with plumbing or electricity.

35% of previously owned homebuyers said the better overall value was the primary reason for purchasing their home. Existing homes come in the market cheaper than a new home, which is an advantage for people looking for a house at a reasonable price.

Reasons for Buying a Previously Owned Home in 2021

Favorite location to buy a home

1 out of 2 homebuyers bought a house in the suburban area.

Over the years we see a slight decline in homes bought in the suburban area, even though it continues to be a favorite location for Americans.

1 in 5 homebuyers bought a small townhome

In the past two years, row houses are becoming more popular. While in 2021, 22% of home buyers purchased a small townhouse, only 18% of them did the same in 2014.

June and July are the best months to buy a house

A house stays in the market for 69 days during summer. On the other hand, winter months are considered the slowest with homes typically staying in the market for 92 days.

Winter also falls behind with the number of closed sales, with 505,135 fewer home sales compared to the summer months of the same year.

Homebuying Process

On average, it takes two months to buy a home

Homebuyers usually view 5 to 6 houses online and visit 8 to 10 places before purchasing the one they like during the search time.

Process of Search for American Homebuyers in 2021

First Step Taken During the Homebuying Process in 2021

43% of home buyers start their buying process by searching online

In contrast, only 18% of them contact a real estate agent.

However, 33% of 23 – 31-year-old homebuyers said their first step was learning about the homebuying process.

1 in 2 American home buyers said they found online the home they purchased.

Over the years we see that more and more people are using the internet to find their homes, a 9% jump from 2013.

At the same time, 28% of homebuyers found their home through real estate agents, a decrease of 6% from 2013.

Where the Buyers Found the Home They Purchased in 2021

Key Takeaways: The Future of Housing Market

The housing market boom came due to a disproportion of supply and demand in the market, contributing to a jump in home prices. At the same time, shrinking mortgage interest rates lured buyers into purchasing a house.

The pressing question for every home buyer and seller in the current hot market is the market going to crash in 2022?

According to experts, a crash may be a big word, however, they expect the market to flatten out.

First, experts predict that the construction of new houses will increase to 1.68 million units in 2022 from 1.38 million in 2020. With more homes in the market, the price may flatten as there will be less strife among the buyers.

Second, experts predict mortgage rates will rise to a full percentage during 2022. The low mortgage rates came as a result of actions taken by the Federal Reserve. However, as the market stabilizes, the Fed may change its strategy.

For the American homebuyer, this means that in the future, there will be an increase in mortgage rates. However, so will the supply of houses, which most likely will contribute to lower home prices.

 

Copyright © 2021 Timeshatter

Office real estate may be struggling, but there are bright spots in commercial real estate

Murtaza Haider and Stephen Moranis
other

Industrial real estate has emerged as an unexpected saviour, with leasing volumes rising across Canada

With offices and educational institutions resuming face-to-face operations by early next year, downtown spaces are expected to be back in demand. Photo by Galit Rodan/Bloomberg files

The suburbs made a remarkable comeback during COVID-19, as residential prices, rents and sales escalated faster than those in the urban core, while commercial real estate data depict a similar picture of strength and resilience in the areas outside the downtown areas.

 

Indeed, the real estate story during COVID-19 is a tale of not one, but several markets. One is that the roaring housing market defied all predictions of doom and gloom, with unprecedented increases in demand coupled with lacklustre supply pushing housing prices upwards.

Another is focused on commercial real estate markets, which are further differentiated by geography and type. Often concentrated in the urban core, office real estate continues to struggle with growing vacancy rates and softening of rents. The short-term forecasts for office markets spell even more trouble, with vacancy rates projected to rise further.

But not all is lost in commercial real estate. Industrial real estate, especially suburban warehousing space, has emerged as an unexpected saviour, with leasing volumes rising across Canada. And if you thought COVID-19 had taken the retail sector down, think again. The on-again, off-again restrictions have certainly hurt retail real estate as has the shift to e-commerce. But retail leasing volumes started to recover after the second quarter of 2020, and retail vacancy rates are forecasted to stay steady.

Recent data from CoStar Group, which tracks and analyzes activity in commercial real estate markets, demonstrates the diversity in market trends. For example, office leasing, like residential real estate sales, declined in the first quarter of 2020. But office leasing has since struggled to fully recover, while residential sales sprang back almost immediately. 

 

The decline in office leasing is most pronounced in Toronto, where CoStar Group data show leasing volume in the third quarter of 2021 was 47 per cent lower than the average for the same quarter from 2018 to 2020. Other major markets, including Calgary and Edmonton, which were struggling even before the pandemic, showed similar declines.

The office market in Vancouver, though, showed resilience. Leasing volume there was up by 33 per cent in the third quarter of 2021 compared to the average for the same quarter from 2018 to 2020. Why is Vancouver bucking the trend? Carl Gomez, chief economist and head of market analytics at CoStar Group Canada, believes it’s because of the number of small- to medium-sized tech companies located there.

Toronto’s urban core is dominated by firms specializing in banking, finance, law, and insurance. The shift to working from home has been more pronounced in those sectors, according to Statistics Canada. The decline in office space leasing was, therefore, expected given the declining demand.

Suburban office markets, however, have managed to stay in the black. The net absorption of office space has been negative in downtown Toronto since the second quarter of 2020. But the suburban Greater Toronto Area (GTA) has fared much better, with positive net absorption quarter after quarter.

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The urban-suburban divide also persists in Vancouver. The net absorption of office space has been negative downtown, at least since the first quarter of 2020. The suburban office markets, on the other hand, have reported positive net absorption. Even in the second quarter of 2020, soon after COVID-19 was declared a pandemic, suburban Vancouver reported almost one million square feet in net absorption.

The suburban markets are also conducive to the growth in industrial real estate. By the fourth quarter of 2020, industrial leasing had topped pre-pandemic leasing levels in Canada. Furthermore, an additional 16 million square feet of industrial real estate is in the pipeline for Toronto and almost eight million for Vancouver.

 

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The better-performing suburban commercial real estate markets in Toronto and Vancouver suggest a slight shift in location preferences that the pandemic has accelerated. However, one should not be quick to write-off downtown areas just yet. With offices and educational institutions resuming face-to-face operations by early next year, downtown spaces are expected to be back in demand, which might require vacancy forecasts to be revised downwards.

Murtaza Haider is a professor of Real Estate Management at Ryerson University. Stephen Moranis is a real estate industry veteran. They can be reached at the Haider-Moranis Bulletin website, www.hmbulletin.com.

© 2022 Financial Post