Burnaby approves 40-acre Willingdon Lands project

Frank O’Brien
Western Investor

More than 5,000 homes, 17 towers, office space and a 450,000-square-foot film studio planned in First Nations-led development
Rendering shows concept of a mixed-use, contemporary Musqueam and Tsleil-Waututh urban village plus residential and commercial towers in a joint venture with Aquilini Development Group. | Aquilini
Burnaby city council approved the redevelopment of the Willingdon Lands May 31, paving the way for the largest First Nation-led real estate project in the city.
The land, located at 3405 Willingdon Avenue. is owned by the Musqueam Indian Band and Tsleil-Waututh Nation, who will develop the property with Aquilini Development Group.
The 40-acre parcel is envisioned as a “contemporary Musqueam and Tsleil-Waututh urban village” according to a presentation to Burnaby council in December 2021.
“The master plan went to public hearing last night and passed with no revisions,” Chris Bryan, manager of public affairs, City of Burnaby, told Western Investor on June 1.
The site is within the overlapping traditional territories of the two First Nations, which partnered together to buy the land from the province in March 2014 for $57.9 million.
Located between Brentwood Town Centre and Metrotown, and across from the BC Institute of Technology, the site will accommodate more than 5,200 residential units, including 20 per cent rental and 300-plus non-market units.
Almost four million square feet of residential land is planned.
A further of breakdown of the proposed residential land use includes: 3.3 million square feet of leasehold strata (condominiums and townhomes); 385,000 square feet of market rental; 70,000 square feet of moderate rental and 151,000 square feet of affordable rentals.
The area is tapped in planning documents to become a rapid transit hub in the future.
To accommodate the incoming growth, city planners envision 17 mixed-use buildings in the range of 14 to 20 storeys, four “landmark buildings” between 22 and 25 storeys, and a series of other low-to-midrise, mixed-use buildings.
A 450,000-square-foot film studio will serve as the commercial anchor of the redevelopment and is estimated to create more than 3,000 jobs.
The May 31 approval is to “establish a conceptual master plan and design guidelines for the Willingdon Lands to guide further site-specific rezoning applications for the construction of a multi-phased residential, commercial, film studio, and office development over four main phases,” according to the City of Burnaby.
The Musqueam and Tsleil-Waututh Nations, along with the Squamish Nation, have become a real estate powerhouse in Metro Vancouver, now controlling an estimated $5 billion in land and property.

© 2022 Western Investor

Port Moody apartment rents surge past $6,000 a month

Mario Bartel
Western Investor

Furnished apartments in new Suter Brook building rent for as much as $6,050 a month
A typical living room in one of Onni Group’s Eve furnished apartments for rent in its Suter Brook development in Port Moody.ONNI GROUP
A furnished three-bedroom apartment in Port Moody has hit the rental market for $6,050 a month, or $5.08 a square foot, but the city says it’s powerless to intervene.
Vancouver-based developer Onni Group is offering 15 furnished suites at 302 Morrissey Road in the city’s Suter Brook neighbourhood for periods ranging from 30 days to more than six months. They come in four different floorplans.
According to evefurnishedapartments.com, a website set up by Onni to advertise units the company holds at projects in Port Moody and Colwood on Vancouver Island, each furnished apartment includes:
a fully equipped kitchen with premium stainless-steel appliances as well as cookware
custom soft-close cabinetry
queen or king-sized bed with custom mattress
full-size in-suite washer/dryer
bath linens
blinds on all windows
wireless internet
cable TV
An additional 11 market-rate units are available unfurnished.
Rents for furnished units in Port Moody start at $4,650 a month for a one bedroom, one bathroom apartment to $6,050 a month for an 1,190 sq. ft. suite with three bedrooms and two bathrooms.
By comparison, in Colwood, junior two bedroom suites with one bathroom start at $3,750 a month, while a two-bedroom plus den apartment with two bathrooms starts at $4,900 a month.
The building in Port Moody also contains 50 affordable rental apartments that were part of a housing agreement with the city that was finalized in Oct. 2018 to allow the developer to increase the density of its last parcel of land in its Suter Brook project from 290 residential units to 512, most of them in two 26-storey towers. Council approved the project in May 2018.
At the time, then-Mayor Mike Clay described the 76 rental units being offered by Onni as “the best opportunity we’ve had in my 13 years on council.”
But on May 24, Coun. Steve Milani, who joined council during the 2018 civic elections, expressed alarm at the expensive units.
“It’s not what the council of the day expected to come forward,” he said. “How can council prevent this luxury furnished suites issue from happening again?”
It can’t, said Port Moody’s general manager of community development, Kate Zanon.
While municipalities can formulate housing agreements that address rules for below-market units or those being offered in a rent-to-own program, Zanon said “we can’t control the maximum a unit will rent for.”
Zanon said developers or property managers are free to rent market units at whatever rate “the market will bear.”
Onni is likely renting the furnished apartments to people with “some sort of arrangement with their employer,” said Mayor Rob Vagramov.
“We know they’re not going to families,” he added.
Vagramov said the city’s experience with the building could serve as an impetus to find ways it can be more specific about the types of market rental suites developers are building
“It would be really unfortunate if more developers opt to go the ultra-mega luxury rental route,” he said.
Onni also offers furnished luxury apartments for short-term rentals under its Level brand in three buildings in Vancouver, as well as other locations like Chicago, Los Angeles and Seattle.

© 2022 Western Investor

How Canada’s market shift is affecting purchases and renewals

Fergal McAlinden
other

The recent cooldown is having an impact on Canadians’ attitudes toward buying, says digital mortgage platform
There’s been a marked slowdown in Canada’s housing market in recent weeks – a fact that’s reflected in the latest report from digital mortgage platform nesto, which indicated a 10% decrease in new purchases and a growing number of early renewals in its May data. 
That comes as little surprise in the current rising-rate environment, which has seen the Bank of Canada signal an end to the rock-bottom rates that fuelled an unprecedented surge in the country’s housing market during the first 18 months of the COVID-19 pandemic.
Despite showing some signs of moderation in certain markets, home prices across the country remain prohibitively high for many buyers, with nesto reporting that the median down payment has risen to 20% (up from 16% in March) as the median home price registered a $50,000 increase.
Rates are increasing on both the fixed and variable fronts, but fixed rates are still rising significantly quicker than their variable counterparts – meaning Canadians who choose a fixed option usually have to qualify at the contract rate plus 2%, compared with 5.25% for variable borrowers, thanks to new stress test rules introduced last year.
“There are a lot of levers right now currently making the variable rate attractive,” nesto’s co-founder and principal broker Chase Belair (pictured top) told Canadian Mortgage Professional.
“The penalty is so much smaller, the spread between the variable and the fixed is massive, and you qualify for more money on the variable today. Until two out of those three levers disappear, I think the popularity [of variable rates] will remain.”
Read next: A Canada housing crash? Don’t count on it, says RBC economist
Aside from record-low interest rates, a potent cocktail of factors spurred Canada’s pandemic housing boom: the work-from-home revolution, a common desire for more space, and higher savings among many Canadians because of restrictions on tourism, restaurants, and other leisure.
At this stage, those who were desperate to purchase a home have likely already secured a property, while prospective buyers who were in two minds could be given pause for thought by rising rates, according to Belair.
“The sentiment and excitement around buying a house has wavered a bit. Those who were on the fence are no longer in that rush mentality,” he said. “They’re a lot more comfortable with sitting on the sidelines than they were previously.”
According to nesto’s new data, 70% of users were “just looking” in December 2021 – a number that’s now dropped to 52%. Thirty percent (30%) of “ready to buy” users is now up to 48%, a development nesto said showed that “ready to buy” users were determined to purchase as soon as possible while those in the early stages of the buying process were changing their minds.
“Those who are seriously trying to get into a house as soon as possible have put their foot on the gas pedal, and those who were just preapproved and looking for an opportunity – they’re more on the sideline now than they were previously,” Belair said.
Impending further rate hikes and consumer price index (CPI) inflation – currently at its highest level for more than three decades – mean many Canadians are soon set to feel the pinch in financial terms.  
Read next: Mortgage market feels the impact of rising rates
With that in mind, Belair highlighted the importance of ensuring that clients have the right cash flow entering that uncertain economic environment, and that they keep their revolving credit or consumer debt at a low and manageable level.
“A lot of our refinance transactions today, including our early renewal inquiries that turned into refinances, are borrowers that are winding up all their debts into their mortgage, making sure that their monthly payments are as low as possible to enhance their cash flow,” he explained.
That should be a top priority for mortgage professionals, Belair said, with a significant economic shift coming down the line for the remainder of this year.
“The best thing that we can do for our customers today is to make sure that they’re in a position where their monthly income can satisfy all their current needs and potential expenses coming up around the corner, keeping in mind that life is about to get more expensive for most of us,” he said. “So we should be less opportunistic and more protectionist when it comes to our cash flow.”

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Bank of Canada announces another oversized rate hike

Fergal McAlinden
other

The central bank has now raised its benchmark rate three times in 2022
The Bank of Canada has raised its trendsetting interest rate by 50 basis points, marking its second consecutive oversized hike – and third overall increase this year – as the central bank grapples with inflation that currently sits at a three-decade high. 
The 0.5% increase to that benchmark rate brings it to 1.5%, the latest step in the Bank’s efforts to get consumer price growth under control, and means that it has now hiked the rate at each of its last three announcements.
In remarks accompanying today’s news, the Bank indicated that inflation continued to persist “well above” target levels and was expected to increase in the near term – meaning further rate hikes will be required.
“The risk of elevated inflation becoming entrenched has risen,” the central bank said. “The Bank will use its monetary policy tools to return inflation to target and keep inflation expectations well anchored.”
Two successive oversized rate hikes in April and June, arriving after a 25-basis-point increase in March, signal a further departure from the strategy pursued by the Bank for nearly two years after the COVID-19 pandemic struck.
Amidst public health restrictions, work-from-home orders and business closures throughout multiple waves of the pandemic, the Bank kept its policy rate at a rock-bottom 0.25%, a record-low-rate environment that partly spurred a homebuying frenzy among Canadian borrowers.
Still, while two consecutive oversized hikes are unusual by the Bank’s standards – it had not raised its rate by more than 0.25% for over 20 years prior to its April decision – the move was widely anticipated on Bay Street, with the central bank having long telegraphed its intention to move decisively against inflation.
Read next: A Canada housing crash? Don’t count on it, says RBC economist
At the end of April, the Bank’s governor Tiff Macklem said it would move “forcefully” to curb inflation whose longevity has belied the central bank’s earlier confidence that it was largely a transitory issue.
Statistics Canada reported in recent weeks that inflation had ballooned by 6.8% in April compared with the same time last year, remaining well above the central bank’s 1-3% target range and all but confirming that further rate hikes were coming down the line.
Speaking in Montreal on May 12, the Bank’s deputy governor Toni Gravelle said a “perfect storm” of factors had helped boost inflation including supply chain disruptions and Russia’s invasion of Ukraine.
“We are confronted with an economy that is showing clear signs of overheating, very tight labour markets and this perfect inflationary storm of global events and preference shifts,” he said.
“All of this means that our policy rate, at one per cent, is too stimulative, especially when inflation is running significantly above the top of our control range.”

Copyright © 1996-2022 Key Media, Inc.

Four Tips for Buying a Home Following Bank of Canada’s Interest Rate Increase

Patti Cosgarea
other

Today, the Bank of Canada announced its third rate increase of the year. Interest rates have increased again by 50 basis points to 1.5%. This is in an effort to tame inflation which is at its highest in decades.  Rising interest rates also have a significant impact on lending across the country.  So what is the best way forward for prospective home buyers as the cost to borrow climbs?

• Read: Entering a Balanced Market Spells Relief for Many Buyers: CREA

In its press release, the Bank of Canada cautioned “the risk of elevated inflation becoming entrenched has risen. The Bank will use its monetary policy tools to return inflation to target and keep inflation expectations well anchored.” This decision was widely expected by economists and many people that are currently active in the market, or planning to be this summer, have prepared for this. 

However, interest rates are expected to continue rising this year as inflation is growing faster than originally forecasted. The good news for buyers is that as interest rates have been rising steadily this year, the housing market is cooling and entering balanced market territory. We are starting to see significant declines in home prices.  Lower prices are meaningful for those trying to get onto the property ladder as they may find their qualifying borrowing capacity limited with increased mortgage rates. 

•  

Four Tips for Buying a Home While Interest Rates are Rising

1. Don’t try to time the market

The housing market is always changing, and buyers and sellers should remember the non-financial factors when making the decision to enter the market. If you need to upsize, downsize, or have secured a down payment and are ready to make the move; don’t put off the decision with hopes that you’ll get a better deal next month or next year. One will only know the market has hit bottom when the prices go up again and the opportunity to buy at that price is gone.  

2. Be willing to adjust your budget as needed

When interest rates are lower, buyers are often able to secure larger loans meaning they can afford a higher-priced home. Now that interest rates are rising, work with your real estate agent to understand what you can afford in today’s market. As we are entering a balanced market, listing prices are coming down, so you may be pleasantly surprised with what your dollar can buy you.  

If you haven’t found that dream property but you are actively looking, securing your pre-approval now is also helpful to lock in at a lower rate before the Bank of Canada makes further adjustments this year.  Most pre-approvals are good for four months which might just get you through future rate increases. 

• Read: Now is the Time to Sell: Durham Cities Currently Have the Shortest Average Property Days on Market

3. Review all your loan options

A shorter term loan, such as 15 or 20 years often comes with a lower interest rate compared to 30-year rates, as well as variable rates which are often lower than fixed-rate mortgages.  “Anyone who is risk-averse should only consider a fixed-rate mortgage,” explained CEO at CanWise Financial, James Laird. “Canadians who are open to a little more risk and have financial flexibility in their household should still consider a variable rate, since they currently remain about 2 per cent lower than the fixed rates you can get today.” Discuss your options with your real estate agent and your mortgage broker so you can make the most informed decision.

4. Be open to surrounding markets and home types

There are many markets in Southwestern Ontario that can offer a great deal for buyers and sellers alike. In the April Canadian Real Estate Association report, we saw home prices decline in many key markets by 3.0% to almost 6.0% including Milton, London, and Cambridge. If you have the flexibility, make sure to look at a variety of cities and compare your options.

Alternatively, if you are set on a certain neighbourhood or city, looking at a variety of home type options might help your budget go further. Home prices declined in April 2022 across townhomes the most, down in Toronto by -2.7% month-over-month in April, and -7.6% in the GTA.  

For more tips, download our free buyer’s guide and contact a Zoocasa agent today. 

Considering Getting Into The Market This Spring?

Sign Up for a Free Buyer Consultation

 

© 2015 – 2022 Zoocasa Realty Inc., Brokerage

VGH and UBC Hospital foundation buys Vancouver property for $100 million

Joanne Lee-Young
The Province

The foundation in late March completed a deal to buy a 1.4 acre property at the 900 block of West 12th Avenue, which is right next to VGH’s main campus
The VGH and UBC Hospital Foundation’s $100 million purchase of a prime block of land on Vancouver’s west side is a way of raising funds for a non-profit cause, even though the major real estate move makes sense for other reasons, according to its president and CEO. Photo by Wayne Leidenfrost /Vancouver Sun
The VGH and UBC Hospital Foundation’s $100 million purchase of a prime block of land on Vancouver’s west side is a way of raising funds for a non-profit cause, even though the major real estate move makes sense for other reasons, according to its president and CEO.
VGH and UBC Hospital Foundation, which is the main fundraising partner for Vancouver Coastal Health, had been investing the money from its donors, millions of dollars, into market funds.
But for some years, its board of directors, which has included real estate and investment professionals from companies such as Westbank, Peterson Group, Odlum Brown Ltd., CBRE Group, Larco Investments and Rize Alliance Properties, has tapped into Vancouver land and property, especially as charities across the country face more uncertainty about how to maintain past levels of donations.
“We thought, doesn’t this make more sense? Let’s take the dollars that are donated, invest them in our own real estate that then has a double impact,” said Foundation president and CEO Angela Chapman.
The foundation in late March completed a deal to buy a 1.4 acre property at the 900 block of West 12th Avenue, which is right next to VGH’s main campus.
It’s a site that includes Windermere, a 14-storey long-term care facility with 207 beds, and a three-storey, 26-unit rental apartment building.
The foundation will get income from leasing Windermere to Vancouver Coastal Health, which will operate it as a fully public care facility. All its 207 long-term care beds will continue to stay in a location close to VGH.
There are no current plans to redevelop the rental apartment building, but Chapman said the potential exists in coming years for plans that get much more allowance for density since the location is so close to the Broadway Corridor and the major artery of Oak Street.
In order for the venture not to trigger taxation requirements for the foundation as a non-profit organization, any redevelopment would have to stay within the confines of the foundation’s mission of supporting healthcare, said Chapman.
The city will require the foundation to replace the existing 26 rental units that are currently in the three-storey building, in any plan moving forward.
“We have to do that. So, we’re going to have to figure out a plan. Ideally, we would like to do it within our mandate to support healthcare. That could mean some different kinds of health care-related possibilities for those units on the site. We’re working through those different kinds of options with the city. One of them is the possibility of something like space for healthcare workers because of its wonderful proximity to the campus.”
Chapman said there are “incredible challenges” in attracting and keeping nurses and allied health professionals and this is causing problems for healthcare, “including delays in surgery and so on.”

© 2022 The Province

Analysts: Large BoC hikes will likely end sooner than later

Ephraim Vecina
other

The increments in the central bank’s rate hikes will become narrower in the foreseeable future, analysts say

 After three oversized rate hikes pegged at 0.5%, the Bank of Canada is expected to slow down the pace of its policy tightening, analysts estimated.

Approximately three or four more hikes in the neighbourhood of 0.25% are likely after those substantial increases, with the central bank set to stop at around 3%, according to economists polled by Bloomberg.

“We believe that risks tilt to the upside. The Bank of Canada is likely to update inflation forecasts even higher in July. If price pressures persist into [Q3], it may be difficult for the central bank to pause in [the second half of the year], but a stepdown to 25 basis points is certainly possible,” said Angelo Manolatos and Ira Jersey of Bloomberg Intelligence.

Read more: Impact of BoC hikes particularly apparent in new mortgages, renewals

At stake is the Canadian public’s faith in the central bank’s capacity to rein in soaring inflation levels, which have reached heights not seen in more than three decades.

“If [Bank of Canada governor Tiff Macklem] is worried about his credibility, what he probably has to do – and this is the unfortunate thing – is he probably has to overdo it, in terms of interest rate increases and risk a little bit more,” said Christopher Ragan, founding director of the Max Bell School of Public Policy at McGill University.

A recent Reuters poll of economists concluded that the Bank will almost certainly hike the overnight rate by another 50 basis points on June 1, building on a previous 0.5% upward adjustment in April. These rank as the central bank’s largest hikes in 22 years.

 

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Metro Vancouver suburbs take hardest home sales hit

Frank O’ Brien
Western Investor

Housing sales will plunge by 30 per cent in the Fraser Valley this year and prices will “flatline” by 2023, BCREA forecasts

 Housing sales in the Fraser Valley will fall more than 30 per cent this year – most in the province – compared to 2021 and Valley price increases will flatline by 2023, according to the BC Real Estate Association (BCREA).

The average price forecast may prove optimistic. Recent listings show price reductions ranging from $10,000 to $300,000 on more than 300 Fraser Valley condos, townhomes and detached houses.

No area of British Columbia will be immune to the sales downturn and price corrections, according to the BCREA’s 2022 Second Quarter Housing Forecast, released May 31.

Multiple Listing Service residential sales in the province are forecast to decline 22 per cent from a record high 2021 to 97,240 units this year. In 2023, MLS residential sales are forecast to fall an additional 12.4 per cent to 85,150 units, the forecasts states.

“After a strong first quarter, B.C. markets are now adjusting to a much different interest rate environment,” said BCREA chief economist Brendon Ogmundson. “With mortgage rates surpassing 4 per cent for the first time in over a decade, the housing market over the next two years may have very little resemblance to the housing market of the past year.”

BCREA anticipates “that prices may be somewhat volatile but will ultimately flatten out through 2023.”

The biggest sales declines this year are forecast in the Fraser Valley, down 30.3 per cent from a year earlier, and Chilliwack, with a 27.1 per cent decline. Greater Vancouver housing sales will drop 22 per cent in 2022 from a year earlier, which matches the sales forecast for the province, according to the BCREA.

The BCREA predicts that home prices will increase 11.5 per cent this year compared to 2021, but that now appears optimistic based on recent listings information, particularly in the Lower Mainland.

On May 31, real estate listing portal ojohome posted more than 300 homes in Surrey where the listing price had been reduced. An example is a 7-bedroom luxury detached house on 62 Avenue, Surrey, where the asking price was cut by $301,000 to $1.99 million after 13 days on the market.

The Royal Bank of Canada is forecasting that B.C. will see the largest price reductions in Canada next year, due to rising interest rates.

Most analysts now expect the Bank of Canada to increase its key overnight lending rate with consecutive rate hikes of 50 basis points on June 1 and in July, which would bring the key rate from 0.25 per cent to 2 per cent in a matter of four months.

 

© 2022 Western Investor

Metro Vancouver suburbs take hardest home sales hit

Frank O Brien
Western Investor

Metro Vancouver suburbs take hardest home sales hit

Frank O Brien
Western Investor