A Port Coquitlam family hopes Tri-City residents will take a moment to enjoy a cool ice cream treat this Thursday, Aug. 13, and help support the BC Children's Hospital.

Thursday is Miracle Treat Day when proceeds from Blizzards sold at participating Dairy Queens will support critical research, education and life-saving equipment for the hospital that helps so many sick children, including Clara Howorth, who was five when she was diagnosed with leukemia.

Today, after more than two years of treatment, Clara's cancer is now in remission and the Grade 4 Blakeburn elementary student is winning prizes for her dancing.

Her mom, Andrea, says the family is extremely grateful for the care and support Clara received at BC Children's and hopes Tri-City residents will join them in a Blizzard treat so other families will get similar treatment.

In all, about 840 youngsters are in active treatment for cancer at BC Children's Hospital each year.

"What a great excuse for an ice cream," Howorth said, who said her daughter has bounced back and is an active, happy, healthy young girl.

"We credit children's hospital for saving Clara's life," Howarth noted.

She said other children in the Tri-City area have been stricken with cancer recently and all are getting treatment at BC Children's Hospital so visiting Dairy Queen Thursday will, in a way, help them, too.

"We're really trying to spread the word and support these charities," Howarth added.

BC Children’s Hospital is the province’s only full-service acute-care hospital and serves  close to one million children living in B.C. and the Yukon. All children who are seriously ill or injured are referred to Children’s Hospital and are either treated at the hospital facility in Vancouver or, with consultation from Children’s specialists, in their home community. Last year, more than 84,000 children were treated at Children’s Hospital. Funds raised by BC Children’s Hospital Foundation are used to support BC Children’s Hospital, its research institute and Sunny Hill Health Centre for Children.

This year marks the 13th annual Miracle Treat Day; Dairy Queen has been involved with Children’s Miracle Network since 1984 raising more than $100 million nationwide.

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Summer heat doesn’t slow home buyer activity

Metro Vancouver home sales were more than a third above the 10-year average in July, while the number of homes listed for sale continues to trend below recent years. 

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Metro Vancouver* reached 3,978 on the Multiple Listing Service® (MLS®) in July 2015. This represents a 30 per cent increase compared to the 3,061 sales recorded in July 2014, and a decrease of 9.1 per cent compared to the 4,375 sales in June 2015.

Last month’s sales were 33.5 per cent above the 10-year sales average for the month.

“Today’s activity continues to benefit sellers as home buyers compete for the homes available for sale,” Darcy McLeod, REBGV president said.

New listings for detached, attached and apartment properties in Metro Vancouver totalled 5,112 in July. This represents a 3.8 per cent increase compared to the 4,925 new listings reported in July 2014.

The total number of properties currently listed for sale on the region’s MLS® is 11,505, a 26.3 per cent decline compared to July 2014 and a 5.5 per cent decline compared to June 2015.

"Much of today’s activity can be traced to strong consumer confidence, low interest rates, and a reduced supply of homes for sale.” McLeod said. “We have about 5,000 to 6,000 fewer homes for sale today than we've seen at this time of year over the last five to six years," 

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $700,500. This represents an 11.2 per cent increase compared to July 2014.

With the sales-to-active-listings ratio at 34.6 per cent, the region remains in seller's market territory.

“Although there aren’t as many homes for sale today compared to recent years, home buyers continue to have a range of housing options, at different price points, to choose from across Metro Vancouver,” McLeod said. “The diversity of housing options is part of what’s driving today’s demand.”

Sales of detached properties in July 2015 reached 1,559, an increase of 17.9 per cent from the 1,322 detached sales recorded in July 2014, and a 24.8 per cent increase from the 1,249 units sold in July 2013. The benchmark price for a detached property in Metro Vancouver increased 16.2 per cent from July 2014 to $1,141,800.

Sales of apartment properties reached 1,729 in July 2015, an increase of 42.7 per cent compared to the 1,212 sales in July 2014, and an increase of 42.9 per cent compared to the 1,210 sales in July 2013. The benchmark price of an apartment property increased 5.9 per cent from July 2014 to $400,900.

Attached property sales in July 2015 totalled 690, an increase of 30.9 per cent compared to the 527 sales in July 2014, and a 41.7 per cent increase from the 487 attached properties sold in July 2013. The benchmark price of an attached unit increased 7.8 per cent between July 2014 and 2015 to $511,500.

The market for houses with basement apartments is about to get a little hotter. CMHC has announced it will allow 100% of the rental income from legal secondary suites to be used when qualifying for a mortgage. Currently it allows 50%.

The nation’s largest default insurer says the move is meant to “facilitate affordable housing choices for Canadians.”

“Secondary rental suites are recognized as a source of affordable housing offered at a cost that is often lower than those for apartments in purpose built rental buildings,” it adds. Secondary/basement suites also give lower-income Canadians the chance to live in single-family residential neighbourhoods.

The new rule takes effect September 28, 2015.

“This is definitely good news for anyone who is looking to buy a home and subsidize the cost” with a renter, says Vancouver-based broker Peter Kinch, of DLC’s Peter Kinch Mortgage Team. “…The ability to utilize 100% of the rental income to qualify for the mortgage…can certainly make the difference for many homeowners and may move a larger number of homebuyers from condo purchases to a single-family home with a mortgage helper.”

Broker Marg Green, of Concierge Mortgage Group, agrees that “there will be a big demand for it,” but rightly notes that more clarity is needed on what CMHC considers a legal suite. “What is legal? Is it fire retrofitted? Is it registered with the city? If the suite isn’t legal, lenders generally won’t use the rental income (for qualification purposes).”

Here’s what we’ve gathered thus far, with respect to what’s required to use 100% of suite income with CMHC:

• The property must be owner-occupied.
• The property being insured can have only two units (i.e., a duplex or a single home with a legal secondary suite). 
• Rental income cannot be used if the suite is “illegal/non-conforming” but “legal non-conforming” is okay. (Non-conforming means that the suite was grandfathered in before zoning/regulations restricted such units. You can check with the city to confirm if a suite is legal.)
  
• The suite must be self-contained with its own entrance.
  
• Property taxes and heat must be factored into the borrower’s debt ratios (which is currently not the case when using rent from legal secondary suites).
  
• For existing units, there must be two-year history of rental income from the suite. The maximum rental income allowed for qualification is a two-year average of the unit’s rent.
  
• For new units, a market rent appraisal can be accepted if an appropriate vacancy rate has been applied to the estimated rental income.
  
• Mortgage applicants must “demonstrate a strong history of managing credit” with a minimum credit score of 680.
  

On 3-4 unit owner-occupied properties and 1-4 unit non-owner occupied rentals, CMHC will be allowing a net rents calculation (i.e., gross rents less operating expenses).

Note that individual lender guidelines may very well be tighter than what you see above.

Genworth and Canada Guaranty have had a 100% add-back policy for a while (for basement suites), but mainly in Victoria and Vancouver. CMHC’s new policy extends nationwide. Both private insurers say they’re reviewing CMHC’s changes and haven’t decided if they’ll match this guideline. We’ll bet that one or both of them will.

“In the big picture, I do not see that this will have a significant impact on the overall housing market,” says Kinch. “But in certain suburban areas, this shift in CMHC policy will help speed up a trend that is already taking place, and that is the widening price-gap between single-family and multi-family (condo, townhome) homes.”

Another broker, who didn’t want to be named, said the move could encourage more people to lie about owner-occupying a property (i.e., say they’re living in one unit but renting out both units). That minor unavoidable side effect aside, CMHC deserves applause for trying to boost the stock of affordable rentals and allowing young homebuyers an alternative to condo living.

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2015/07/cmhc-to-allow-100-of-suite-income.html 

Limiting foreign investment would hurt sales and cost jobs: province

When Premier Christy Clark threw cold water on Vancouver Mayor Gregor Robertson’s call for measures targeting foreign homebuyers to cool the housing market — steps that have been taken in Australia, the U.K. and Singapore — she said such interference would have little effect on housing prices.

More importantly, it had the potential to harm the economy, according to the premier.

If the province drastically reduced foreign investment, it would have little impact on general housing prices, but would cause the loss of about $1 billion in residential real estate sales and 3,800 jobs in construction and real estate sectors.

It would also knock $350 million in nominal gross domestic product out of the economy, noted a B.C. Ministry of Finance analysis meant to back up Clark’s response.

If government action caused a 10 per cent fall in house prices, roughly $60 billion in home equity would be lost in the province, which would work out to about $85,000 for a homeowner in Metro Vancouver.

The analysis was based on using government policy to drive down a hypothetical foreign investment rate of five per cent to just one per cent of the total $27 billion in Greater Vancouver home sales in 2014.

Although there is no solid, clean data on foreign money, five per cent is considered the upper level of foreign investment by provincial estimates based on information provided by the real estate industry.

The province used an economic model from B.C. Statistics to estimate the impact on jobs and gross domestic product (GDP), a widely used measure of economic activity.

It is clear that the provincial government wants to be careful about tampering with the real estate and property development sector as it believes it is an important driver of the economy.

So, how important is this sector that is under so much scrutiny?

According to Statistics Canada data from 2011 provided to The Vancouver Sun, the latest numbers that are available for a detailed sector-by-sector break down, real estate agents, brokers and related activities generated $1.93 billion in GDP in B.C.

That is a contribution of just under one per cent of the province’s total GDP in 2011, and equivalent to the contribution by computer design and related services, truck transportation and legal services.

The real estate sector’s contribution was the same in 2009 and 2010. A report by the Real Estate Association of B.C. using 2007 data also found that the real estate sector contributed about one per cent to the province’s GDP.

The report on economic impacts also found that for every 100 house sales, $2 million in GDP was generated and the equivalent of 28 jobs were created. That year, the 102,000 home sales in the province on the multiple listings service (MLS) accounted for the equivalent of 28,000 jobs created.

The report noted that whenever homes are bought and sold, lawyers, appraisers, realtors, surveyors and other professionals collect fees. Governments also collect significant taxes, and many homebuyers renovate their homes to suit their lifestyles.

As well as the commissions and fees that have to be paid out, realtors must provide supplies and services to their offices where technology is increasingly important, said Dan Morrison, a realtor for 25 years and president-elect of the Real Estate Board of Greater Vancouver.

A hot market can also create increasing economic spinoffs, said Morrison, one of the 12,000 real estate agents in the Greater Vancouver area.

“Usually, you would have one home inspector, but in this market it’s not unusual to get five or six inspectors the day before the offers are presented so the people can present that offer without it being subject to inspection,” observed Morrison.

Cameron Muir, an economist with the B.C. Real Estate Association, says while the real estate sector directly does have an effect on the province’s economic output, it is the construction sector that delivers a bigger economic bang.

“When you build a house, there’s a tremendous amount of economic activity,” said Muir.

Statistics Canada data shows that residential construction contributed 2.7 per cent to GDP in 2011, nearly three times as much as the real estate sector.

A report by the Urban Development Institute, a group representing a broad spectrum of the development industry including developers, lawyers, bankers and real estate professionals, found in a study using 2012 data that the property development industry generated $8.17 billion in GDP, a little under four per cent of the provincial total.

The analysis encompassed construction of all buildings, property development, heavy and civil engineering and specialty sub-contracting. Residential construction made up about 75 per cent of the $20 billion in construction in 2012.

“The residential sector, broadly defined, does play a significant role. So, 

changes in the demand for real estate will filter through the real estate economy and hence the broader economy,” says Central 1 Credit Union economist Helmut Pastrick.

“There are obviously indirect and induced spinoff benefits. When you start adding that up, it starts becoming a larger number,” said Pastrick.

Simon Fraser University economist Andrey Pavlov thinks the effect of the real estate sector — taken in the broadest sense to include the banking system which relies on mortgages for a significant portion of their business — is even bigger than the data on direct impacts shows.

“It’s hard to find hard data on that, but my feeling is that it’s a lot more. It’s more like 25 per cent,” said Pavlov, who specializes in real estate finance. “We don’t have any manufacturing really to speak of — with the exception of mining and forestry. Most of our industries are really real estate, finance, insurance and a bit of services.”

Across the border, analysis by the National Association of Realtors produces a higher relative contribution to GDP for the real estate sector with the inclusion of title insurance, rental and leasing, house appraisals, moving truck services and other related activities.

In Washington State, the real estate sector’s contribution was 16.6 per cent of GDP, while in Oregon it was 15 per cent.

“I think the premier is rightfully concerned that if we do something to the real estate market, that will have a negative impact on the economy,” said Pavlov.

Still, he believes the market is overheated and some action should be taken.

But Pavlov explains the rise in prices largely as a result of low interest rates and aggressive lending by banks, who take on very little risk because mortgages are backed by federal insurance through the Canada Mortgage and Housing Corp.

If the concern is that real estate is getting too expensive, the first step is to remove the subsidy and normalize interest rates, said Pavlov.

“In other words, don’t pour additional resources into real estate. Don’t get people to over-extend themselves. That to me is the proper response,” he said.

The federal government has taken some steps in an attempt to stem Canada’s hot real estate market, including reducing amortization periods and not providing CMHC insurance for homes worth more than $1 million.

However, the Bank of Canada lowered its benchmark overnight landing rate by 25 basis points to 0.5 per cent on July 15, a move that was promptly followed by the major banks.

University of B.C. economist Tsur Somerville believes slowing down price increases wouldn’t necessarily be a bad thing, but says you have to be careful not to use a big policy hammer that drives the market into a serious decline, given that the wider real estate construction market is important to B.C.

“You want to try to get a soft landing when you cool things down,” said Somerville.

He said any policies should directly target issues that are causing harm, which is difficult to pinpoint given the dearth of data on variables such as foreign investment.

He also noted you are contending with population increases in the Vancouver region largely driven by immigration.

Still, Somerville suggested that it may make sense to consider policies that deal with non-resident buyers and vacant properties, but also a broad-based supply response.

That could include increased density in more areas, and even allowing subdivision of lots to build additional single-family homes, he said.

Muir, the economist with the B.C. Real Estate Association, is frustrated with the current debate, arguing there is no crisis, and noting that apartments and condos have only increased in price five to six per cent since the financial crisis in 2008, while it is the stock of diminishing detached housing that is increasing in price.

Says Muir: “Why are we trying to devise a solution to a problem we don’t know exists?”

ghoekstra@vancouversun.comwith files from Postmedia News

Read more: http://www.vancouversun.com/business/Tinkering+with+housing+market+could+dangerous+economy/11241388/story.html#ixzz3hO3CYbeP

Be prepared to feel the heat if you’re in the housing market. The British Columbia Real Estate Association released their second quarter results, and demand for homes in the province are the highest they’ve been since 2007.

According to the report, Vancouver and the Fraser Valley are leading BC’s housing growth with a 16 and 17 percent increase in sales, respectively.

Demand for single family homes in Vancouver will go down, while demand for apartments will go up, so expect to see more construction of multi-family buildings over the next year.

The city will also see the average home price shoot to $870,000, which is an increase of seven percent. The board says to expect that number to grow to nearly $900,000 in 2016.

“Market conditions in Vancouver have improved as a result of consumer demand rising faster than the number of homes for sale. While the market is exhibiting sellers’ market conditions overall, there is variability according to product type and its location in the region,” reads the report.

The BCREA notes that foreign investment persists, but it remains a “relatively small, niche market” in the luxury sector.

The average price for an apartment in Vancouver is $465,000, up 1.4 percent.

http://www.vancitybuzz.com/2015/06/vancouver-real-estate-facing-highest-demand-eight-years/