Business in Vancouver November 8-14, 2005; issue 837
Real estate round-up
Peter Mitham
Credit union boss upbeat about the province's housing market
Green buildings pay dividends to owners and occupants, Royal Institute of Chartered Surveyors report says
Market not chilled
The latest rise in mortgage rates shouldn't cast a chill on the housing market, say observers.
The Bank of Canada reports a 0.2-percentage point increase in mortgage rates over the past month - back to where they were at the beginning of the year.
The relative lack of change has Credit Union Central of B.C. chief economist Helmut Pastrick remaining optimistic regarding the housing market in B.C. Pastrick's latest outlook forecasts province-wide home starts rising through 2007. Starts are poised to top 33,600 this year, rising to 35,700 next year and 38,200 in 2007.
That call outpaces the Canada Mortgage and Housing Corp. forecast, which projects starts to fall next year to 31,600. The outlook for Greater Vancouver is 17,500 starts.
Rising land and construction costs, not borrowing costs, are the major threat to homebuying, analyst Cameron Muir told participants in last week's CMHC housing outlook conference.
"Longer-term mortgage rates are, if anything, lower than they were several years ago," concurred William Tharp of M. Murenbeeld and Associates Inc. in Victoria and senior economist with the Dundee Group of Companies.
Tharp feels a strong economy in B.C. will continue to give the housing market legs for another year to 18 months, though he fears a long, slow slump could follow as older homeowners retire into smaller quarters and the aging population requires less house space overall.
Concert enters Victoria
Vancouver builder Concert Properties Ltd. has been active in the Victoria development industry, now it's taken a bite of the investment opportunities the city offers. Concert picked up 712 Yates Street for $12.25 million at the end of October, adding the 79,000-square-foot property to an investment portfolio now valued in excess of $850 million.
During the first 10 months of this year, Concert has acquired $47 million in properties in British Columbia and Ontario.
It will retain the Victoria property for office use, said Andrew Tong, Concert vice-president, acquisitions. There are no plans for redevelopment of the property, which is fully leased to government tenants.
B.C. properties now represent 87 per cent of Concert's investment holdings, with Ontario and Alberta assets in the minority at 11 per cent and two per cent, respectively.
Green buildings pay
Green buildings will repay their owners and occupants, a recent report from the Royal Institution of Chartered Surveyors says.
Three B.C. properties were presented as case studies in the report, which concluded a link exists between so-called green - or environment-friendly - features in a building and its market value.
Take the case of Cranberry Commons, a 22-unit Burnaby housing co-op that was one of the B.C. properties profiled. The co-op was built at a cost of $5.3 million, but residents now estimate the value of their units at 15 to 20 per cent above current market value for units of similar square footage. The higher valuation is only partially attributable to higher construction costs, the report states. It notes that operating costs were six to 10 per cent better than expected (an estimated $1,936 per unit last year).
Vancouver Island Technology Park, which reported similar advantages in terms of operating costs, noted that E-Traffic Solutions reported that employee productivity was up 30 per cent compared with its experiences in conventional offices. (Perhaps that helps explain why absorption exceeded owner expectations by between 21 per cent and 50 per cent.)
UBC, whose C.K. Choi Building for the Institute of Asian Research and the Liu Centre for the Study of Global Issues enjoyed a showing in the study, is meanwhile showing sustainability is viable in low-rise construction. It has launched the Residential Environmental Assessment Program, which has taken existing sustainability standards and adapts them for low-rise construction projects on campus.
More to follow on REAP, as the program's called, in a future column.
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Quote of the Decade on SSP: "what happens would it be?" - argon007
"orange vested guy" - towerguy3
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