Vancouver office space at premium. Vacancy rate lowest in
Canada with market that's going to get tighter.
Wendy McLellan
The Province
Wednesday, July 23, 2008
Vancouver's short supply of downtown office space means companies have to make longer-range plans if they want to expand.
Downtown office space is easier to rent in Tokyo than Vancouver.
It's also easier to find vacant office space in 84 other big cities in the world, according to a new real-estate report showing downtown Vancouver has the twelfth tightest office-vacancy rate in the the world. At 2.3 per cent, the city has the lowest downtown office-vacancy rate in Canada. Toronto has the second-tightest downtown office space with a 3.8-per-cent vacancy rate. Among big U.S. cities, Boston has the lowest rate at 6.6 per cent.
"If a company needs office space in Vancouver, they will have trouble finding options," said Pierre Bergevin, president and CEO of global real-estate firm Cushman and Wakefield LePage. "There is clearly not enough supply to meet demand." The company released the report on office-vacancy rates in the core areas of 97 cities worldwide, based on first-quarter statistics. Vancouver's short supply of desirable downtown office space means companies have to make longer-range plans if they want to expand, Bergevin said.
"Anybody who has space and needs to do something about it in the next three to five years will have to start looking now," he said. "This is a challenge for businesses that are expanding - they don't have a lot of options right now."
Tony Astles, executive vice-president of Bentall Real Estate Services, said a normal vacancy rate would be in the range of five to nine per cent. Rents for prime office space have been rising for more than two years and hit an all-time high late last year. "What most people haven't come to grips with is that even at this level, the rents aren't enough to induce new building construction. Construction costs are still higher," Astles said.
Residential towers are more profitable, and since building a new office tower takes about five years, developers are reluctant to take a risk on an uncertain future market. Instead, they are turning to the suburbs and building lower-rise office buildings on cheaper land near public transit.
"If tenants can't grow in Vancouver, they will move to other areas to achieve that growth, and that is already beginning," Astles said. "They are moving to more suburban areas of Vancouver, Burnaby, Richmond because there's no room."
Currently, there are no new office buildings under construction in the downtown core and only a couple projects in the discussion stage at city hall, Astles said. "If it was economically viable to build office buildings, they would be built," he said. "In the next five years, there will be few new buildings constructed and that means an even tighter market."
Fewer Sales and Large Inventory Cool Housing Market.
Vancouver, BC – July 16, 2008.
British Columbia Real Estate Association (BCREA) reports residential sales dollar volume on the Multiple Listing Service® (MLS®) in BC declined 34 per cent to $3.31 billion in June, compared to June 2007. Residential unit sales fell 36 per cent to 7,133 units during the same period. The average MLS® residential price in the province was $463,458, up 4 per cent from June 2007.
“Weaker consumer confidence and eroded affordability are slowing home sales in the province,” said Cameron Muir, BCREA Chief Economist.
Seasonally adjusted MLS® residential unit sales in June were near 2002 levels. During the first half of the year, BC MLS® residential sales were down 22 per cent to 42,907 units, when compared to the same period last year. The average residential price rose 9.6 per cent to $473,536 over the same period.
“The combination of a larger inventory of homes for sale and fewer home sales have tilted most BC markets in favour of homebuyers,” added Muir. “This means little upward pressure on home prices in many markets.” Victoria was in balanced conditions, while Northern Lights remained a sellers’ market in June. “Despite a dip in home sales, inventories could soon edge lower as home sellers adjust their asking prices to reflect market conditions.”
New government rules put a crimp on mortgage borrowing.
Garry Marr
Canwest News Service
Thursday, July 10, 2008
TORONTO - The federal government has cracked down on the mortgage industry with new rules that will make it more difficult for consumers to borrow.
One of the key measures the government has introduced is a stipulation that insured mortgage products not have an amortization period that is longer than 35 years.In the past two years, the amortization period has stretched from 25 years to as much as 40 with some people suggesting a 50-year amortization was soon to come.
Any consumer with less than a 20-per-cent down payment on a home is required to get mortgage insurance if they are borrowing money from a financial institution covered by the Bank Act. The new rules affect those mortgages.
Another key measure being introduced is a requirement that all mortgages have at least a five-per-cent down payment. Competition in the mortgage industry has allowed consumers to put zero money down on a home and still get a competitive rate.
Canadian consumers have actually been borrowing more than 100 per cent of the value of their home. Many financial institutions allow consumers to put closing costs, which include land-transfer fees and legal bills, on their loan. It has led to mortgages that are about 103 per cent of the value of a home.
The government will also require anybody with an insured mortgage product to have a minimum credit score. It is also introducing new loan-documentation standards.
The mortgage-insurance industry is dominated by Canada Mortgage and Housing Corp., a Crown corporation that controls 70 per cent of the market. The other 30 per cent of the market is controlled by Genworth Financial Canada.
New entrants like AIG United Guaranty, a subsidiary of American International Group Inc. or AIG, and PMI Mortgage Insurance Co. have been trying to crack the market.
Market activity offers awaited relief for homebuyers.
Vancouver, B.C. – July 3, 2008
Increased property listings and moderating home prices have eased the Greater Vancouver housing market into a buyer’s phase. The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver declined 42.9 per cent in June 2008 to 2,425 from the 4,244 sales recorded in June 2007.
New listings for detached, attached and apartment properties increased 18.3 per cent to 6,546 in June 2008 compared to June 2007, when 5,533 new units were listed.
“Although housing prices, on a year-over-year comparison, continue to show single-digit percentage increases, we are beginning to see more price reductions in properties listed on the market today,” said REBGV president, Dave Watt. “Homes priced at a competitive level continue to sell quickly, but it is important for people to accurately identify their home’s value when putting it on the market.”
Sales of detached properties in June 2008 declined 43.4 per cent to 918 from the 1,623 units sold during the same period in 2007. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties rose 7 per cent from June 2007 to $765,654.
Sales of apartment properties declined 42.7 per cent last month to 1,057, compared to 1,846 sales in June 2007. The benchmark price of an apartment property increased 7.8 per cent from June 2007 to $388,722.
Attached property sales in June 2008 decreased 41.9 per cent to 450, compared with the 775 sales in June 2007. The benchmark price of an attached unit increased 7.6 per cent between June 2007 and 2008 to $476,585.
Bright spots in Greater Vancouver in June 2008 compared to June 2007:
Apartments:
New Westminster up 46.2 per cent (19 units sold from 13)
Vancouver office space at premium. Vacancy rate lowest in
