-Strategically located within the Collingwood area of Vancouver
-355 - 3,505 SF Available
-Building has fibre, Starbucks, a great Deli & a Sushi Bar
-Close proximity to public transportation
-Reserved and random parking spaces available

Asking: $16.00 psf
Opt Costs: $14.76 psf

Contact:
Francine Tracey| HQ Real Estate Services

604-961-6550

Fran@mfuture.com

The CRU will enjoy prime retail space next to a new Dollarama which is the leading dollar store operator in Canada with 690 locations across the country and a new Value on Liquor Store.
The property is easily accessible from Richmond and Vancouver, a few blocks off the Oak Street Bridge.
Ample free parking.

The 5 KM radius estimated population is 192,862 with a household income of $95,117.
CRU is 2096 SF: Basic Rent $35 / SF  (NNN)
Terms: 10 years + two 5 year options.

Other information:
o New glazing plus new HVAC will be provided
o 200 AMP or 3 Phase will be supplied
o New shell space sprinkler will be supplied
o Separate check meter for Electrical will be supplied
o Turn over date August 2012

Contact:
Francine Tracey| HQ Real Estate Services

604-961-6550

Fran@mfuture.com

Contact:
Francine Tracey| HQ Real Estate Services

604-961-6550

Fran@mfuture.com

- Available Area: 496 SF - 883 SF
- Six storey, air conditioned building
- Easily accessible public transit

Contact:
Francine Tracey| HQ Real Estate Services

604-961-6550

Fran@mfuture.com

Contact:
Francine Tracey| HQ Real Estate Services

604-961-6550

Fran@mfuture.com

Contact:
Francine Tracey| HQ Real Estate Services

604-961-6550

Fran@mfuture.com

Second floor office space available in Downtown Vancouver at 877 Hamilton St. (at Yaletown).

4800 sq/ft

Reduced to $17 per sq/ft with operating costs estimated at $7.50 per sq/ft = $9,800 per month + HST.

This is a great location close to Robson, Vancouver Public Library, Rogers Arena & BC Place, and about a 10 minute walk to the Law Courts. 3 parking spaces in back are negotiable. There is also metered parking on Hamilton St., and a parkade on Hamilton St across from this space.

NO DEMO CLAUSE!

Could be combined with 2750 sq/ft of retail space on ground floor (configured as office space) for 7550 sq/ft at a lease rate to be negotiated.

Contact:
Francine Tracey| HQ Real Estate Services

604-961-6550

Fran@mfuture.com

Contact:
Francine Tracey| HQ Real Estate Services

604-961-6550

Fran@mfuture.com

Contact:
Francine Tracey| HQ Real Estate Services

604-961-6550

Fran@mfuture.com

Large surface parking lot in the rear of the property. 

Asking $18.00 net per square foot and the additonal rent is approx $11.00 per square foot.

Contact the Kyle or Craig for further details.

Contact:
Francine Tracey| HQ Real Estate Services

604-961-6550

Fran@mfuture.com

Reported by,

Audrey McKinnon

A group of Denman Street business owners are giving their landlady seven days to reconsider their disproportionately high rent or they may have to leave the building. They are requesting that she agree to fair lease rates and longer lease terms.

“We’re fighting for our block," says Joseph Mireault, Eyeworx owner since 2007.

The business are located between 1110 and 1124 Denman Street. Landlady Elaine Owyang, who could not be reached for comment, charges from $78 per square foot to almost $120 per square foot, depending on the business, while market value in the area is $50-$65 per square foot.

“In my opinion that’s way above market,” says Colliers commercial realtor, Sherman Scott. He adds that more mindful landlords will charge a low enough price in order to keep long-term tenants. But Scott says that high rent is not the only factor of business failure. Inexperienced business operators might be tempted by Denman's high profile, but aren’t prepared to run a business successfully.

The beach side block has three commercial spaces for lease. Roentgen, a clothing store, Qoola Yogurt & Fruit, and Cookies by George were all occupants. Qoola closed on September 25th “due to the incredibly high rent” according to the moving notice posted on their door.

Mireault, who says that the street has been labeled "Deadman Street," says that after rent and taxes, there’s nothing left for business operators. “If tenants are working and the money that they’re making only covers . . . property taxes, operating expenses, rent there’s nothing left over for you . . . You’re working for the landlord,” says Mireault.

Falafel King, for instance, would have to sell close to 750 shawarmas a day to cover nearly $6,000 in rent plus operating costs for the 500-square-foot space.

Mark Kenna is the former owner of Obsessions, which previously occupied the corner building two years ago before Roentgen. He says Owyang was unwilling to negotiate and wanted to increase rent by 30% before the Olympics while Kenna and his business partner had been struggling to keep their eight-year-old business afloat.

Obsessions went bankrupt as a result. “We should have gone to arbitration for it, but we just had so much on our plate,” he said. Nobody in the building has gone to arbitration yet, which is the primary legal recourse available to commercial tenants in this situation.

“When she turns on you, she turns on you,” said Kenna, adding that Owyang would refuse to speak English during a disagreement. He thinks the rental issues are not just a problem for that building alone and believes that the entire street suffers for it.

But Nariman Moshfeghi, Pit Stop owner, notes that many of his neighbouring businesses two blocks west have changed ownership up to eight times in the 14 years his store has been in business. He blames it on high rent and slow sales from late October through February. “Two to three months, you barely make your rent,” Moshfeghi says.

“If it’s cold nobody comes out.” Robin Delany, who established his first Delany’s Coffee on Denman Street over 18 years ago, says that the location is the most seasonal out of the five Delany’s he has opened. He says the rent is also a challenge for all businesses in the area: “We’re paying less than across the street, but we’re all paying a lot.”

“It’s a big joke," says 17-year Delany’s employee Barbara Wychopen. "How long will they last? We always ask that question.

www.biv.com

January 10–16, 2012

Burnaby’s year?

Colliers International says growing interest in suburban office space may bear fruit for landlords this year if numbers regarding the market’s standing relative to Vancouver are any indication.

Tours of office space last year were common occurrences, but few companies made the move.

“There’s very little movement that took place in 2011 when there was a lot of interest and a lot of tours,” Courtney Markle, research director for Colliers in Vancouver, said last week. “We predicted that they would make more movement than they have. It’s difficult to be accurate in that forecast.”

The numbers are clear, however: The per-square-foot net rent for triple-A space in downtown Vancouver averages $33.92, up 43.1% from five years ago. C-class space is up 48.7%. Rents in Burnaby, meanwhile, are half what they are in Vancouver and have risen just 30% over the past five years.

“With the rare differential and limited spaces available, tenants are becoming frustrated and beginning to look elsewhere,” Colliers reported. “If there is ever a time when companies will consider a move from downtown to the suburbs, it will be over the next two to three years, until downtown new supply is delivered.”

Restless companies eyeing Burnaby include the back office departments of banks and financial institutions – HSBC plans to consolidate a portion of its staff at the Broadway Tech Centre later thisyear – as well as pension funds, foresters and miners.

Colliers reported that Metro Vancouver office vacancies ended the year at 7.4%. Downtown Vancouver vacancies are running at 3.5%, while suburban vacancies are at 11%. All areas reported slight increases in vacancies, Colliers said.

Whistler opportunities

BC Assessment reports that valuations on properties in Whistler have dropped an average of 15% from

a year ago, a phenomenon consistent with what Rob Palm, executive director of the Real Estate Association of Whistler and a broker with the Whistler Real Estate Co., has seen on sold properties.

One-bedroom properties are now available from about $295,000, whereas a year ago the starting price would have been $350,000. Similarly, a two-bedroom unit is available from $400,000, not the $475,000buyers would have been looking at in 2010.

The drop has spurred sales activity, which has helped whittle down listings. There were 550 sales in 2011, up from 462 in 2010 and not far from the five-year average of 569 sales. Sales of condos and townhomes have been particularly strong, increasing 39% and 20%, respectively.

But anyone looking to the Olympics for an influence will come up empty.

“I don’t think that the Olympic factor was as much of a factor as people thought it would be,” Palm said, while not discounting the role infrastructure such as highway improvements have played.

But the highway has merely helped traffic flow between Whistler and Vancouver, from whence 65% to 70% of buyers hail. And what they’re coming for is the value.

Many have cashed out of Vancouver and North Shore properties, Palm said, and used the proceeds to downsize in Vancouver while buying a primary residence in Whistler – often a chalet, townhome or two-bedroom apartment.

"We’re probably more affordable today than a lot of markets, and they’re starting to see the value,” Palm said of buyers.

Crowds, not clouds

Preparations for the release this spring of units in Canada House at the Village on False Creek (formerly known as Millennium Water) are under discussion. But if a new year underscores anything for the muchmaligned development, which remains a hot political potato, it’s the attraction the place had for revelers welcoming 2012.

A couple of hundred people lined the waterfront at midnight, watching fireworks spark off the Plaza of

Nations. A lone trumpeter played a sad reveille for the dawning year as party yachts steamed by.

While not apparent from West First Avenue, the activity was a vindication of marketer Bob Rennie’s proclamation last February that the cloud over the Olympic Village was finally lifting.

The village is a ghost town no more, with all but the presentation centre – or 91% – of commercial space leased to long-term tenants, and 70%, or 452 of the 644 available units sold.

By Charlie Smith, November 3, 2011

Waide Luciak has seen Granville Street go through plenty of ups and downs over the past quarter-century. When he bought the historic Yale Hotel shortly after Expo 86, it was on one of Vancouver’s seediest strips. This was before luxury condos were constructed across Yaletown, before the creation of the city’s entertainment district, even before Hong Kong–based billionaire Li Ka-shing built his first shiny high-rise on the north shore of False Creek.

In those days, the 900-to-1300-block stretch of Granville Street was Vancouver’s version of the downtrodden Parisian neighbourhood of Pigalle. Most noteworthy for its street kids, prostitution, porn shops, and occasional biker hangout, it was then known as Downtown South.

In an interview with the Georgia Straight inside the Yale’s blues bar, Luciak recalls doing a brisk business in the first five years of owning the hotel, before things started to wane. “We noticed that over the years, the business really became a little bit slower and slower,” he says.

Meanwhile, down the street, the Commodore Ballroom ran into severe financial trouble in the early 1990s, eventually forcing out its popular owner, Drew Burns. It was a far cry from the Granville Street of today, which is home to trendy restaurants, funky retailers, crowded nightclubs, and a growing number of street festivals.

Last month, Vancouver city council approved the Telus Garden mixed-used development, which will include a 45-storey residential tower in the block bounded by Seymour, West Georgia, Richards, and Robson streets. This will add more people to the neighbourhood. At the southern end of the strip, next door to the Yale, Rize Alliance is building a 187-unit, 23-storey tower. Across the street and behind the Best Western Hotel, Cressey Development is proceeding with a 193-unit, 32-storey development called Maddox.

That’s just the beginning. The city also plans to remove the “Granville loops”—two on-ramps connecting Pacific Street to the bridge—which will free up land for a new streetscape and new high-rises. That’s in addition to the Mark, Onni Group’s 47-storey residential tower being built behind the Yale on Seymour Street.

“Great public streets need population supports—they need anchors on either side, to move people back and forth,” the city’s director of planning, Brent Toderian, tells the Straight over the phone. “There is a lot of learning over generations in North America on how to make a great street like Granville work. Telus [Garden] and the Granville loops are an important part of that.”

All this follows a $20.8-million facelift to Granville Street completed just before the 2010 Games. This resulted in wider and fancier sidewalks, new lighting, and a rejigging of the block north of Smithe Street to create a public plaza.

“The Olympics, of course, transformed the perception of Granville Street and its role within the downtown,” Toderian points out. “It became more than ever the living room of the downtown. So we want to do everything we can to enhance that with additional population in the area.”

The executive director of the Downtown Vancouver Business Improvement Association, Charles Gauthier, tells the Straight by phone that buskers on the street, including rapper Marc Stokes, have injected an urban flavour. He adds that the VIVA Vancouver program, which transformed part of the road space into a pedestrian zone this summer, also lured more people to the area. “We get a lot of inquiries from people who want to do festivals and events on Granville Street,” Gauthier says.

He sees potential for conflict in the future between new residents and what he calls the "night-life economy." However, Gauthier adds that the clubs at the southern end of the strip where much of the development will occur, such as Ginger 62 and the Morrissey, have a different energy than those north of Nelson Street.

Meanwhile, Vancouver retail consultant Phil Boname says Granville Street was held back for many years because city planners decided to create a pedestrian mall and transit corridor without vehicular traffic, which was modelled on a similar experiment in Minneapolis. “We have found in many of our studies that converting a downtown street into a transit corridor does not necessarily work for the advantage of commercial interests,” he says by phone, quickly adding that this approach also doesn’t create a “social success”.

In 1997, Boname wrote a report for the City of Vancouver recommending several changes to breathe new economic life into Granville Street. He says he’s pleased to see more mixed-use development, but regrets that the city didn’t embark on a design competition to create a “glamorous” gateway at the bridge head into downtown. At the same time, he believes that the Canada Line, which was completed in 2009, will lure more major retailers to the strip.

“The corner of Robson and Granville will become increasingly powerful,” the consultant says. Then he tosses in a prediction that the Sears store will vacate this location within five years because its sales-per-square-foot ratio isn’t high enough to justify remaining in such a prime spot.

Sherman Scott, associate vice president of retail with Colliers International in Vancouver, tells the Straight by phone that lease rates are increasing along Granville Street. But they're still significantly lower than along Robson Street, where some are paying $200 per square foot.

"The highest deals I've seen on Granville Street are around $60 a square foot," Scott says. In an aside, he notes that he has never in his life seen so many vacancies on Robson Street.

Back during the slow times on Granville, Luciak had to make some changes to ensure the survival of his business. His son Joe became music director, with a mandate to bring in bands that attracted a younger clientele. Luciak then devoted his time to buying the Cecil Hotel next door in the 1300 block, with the intention of selling the entire site to a developer. This would give him a second prized liquor-primary licence and provide him with an opportunity to modernize the old blues bar.

His timing was impeccable, coming just before Granville began its revival. Vancouver city council let Luciak sell the “air rights”—unused density on the site—to Rize to enable it to build a taller tower. In return, Rize was required to preserve the Yale Hotel, refurbish its 43 low-cost housing units, and turn them over to the city. As part of the deal, Luciak demanded that his family would continue operating the blues bar after it was made more earthquake-proof.

“They could have knocked it down,” Luciak says, “but they worked with the city to preserve it. In fact, that was why I went to Rize. I knew that they were a developer that appreciated heritage buildings and that had, in the past, done this sort of development where they would preserve the old building and use the density next door.”

In the meantime, the Luciaks won the city’s approval to move their liquor licence from the Cecil to 1050 Granville, where they will open a new nightclub. “We love live music and we love producing shows,” Joe Luciak explains. “So what we’re doing is a kind of New Orleans meets Vancouver, kind of a Mardi gras seven nights a week. We’re going to be a great little daytime pub-restaurant, and by night we’ll have a mixture of live and electronic music—a real eclectic mashup of culture and creativity.”

They’re moving into a crowded area. One of the pioneers in creating the entertainment district, Blaine Culling of Granville Entertainment Group, says over the phone that when he opened the Roxy 24 years ago, he never expected that he would look across the street to the south and see a Le Château store. “We’ve seen a lot of changes over the years,” he tells the Straight. “It’s not viewed as a street to be afraid of, or anything like that. It’s a fun street, an interesting street.”

Granville Entertainment Group owns the Comfort Inn at Nelson and Granville streets, so it won’t have to cope with higher lease rates. Culling predicts that a major restaurant chain—such as Cactus Club, Earls, or the Keg—will appear on the strip.

“I think it’s Cactus that will make the move first,” Culling says. “It’s a couple of years away, but it will happen.”

In the meantime, other dining establishments have demonstrated some staying power. They include Glowbal Group’s Sanafir, with its Middle Eastern–themed décor, the Donnelly Group’s Granville Room, and SIP Resto-Lounge and the Refinery, which are owned by Peter Raptis and Raymond Staniscia.

Culling says there are already enough liquor-primary seats on Granville, and he’s concerned about the restaurants converting part of their operations to compete with the nightclubs. In 2009, the Donnelly Group persuaded city council to allow it to convert 38 food-primary seats into liquor-primary at the Granville Room, even though there were already 1,373 licensed liquor seats in the 900 block. At the same meeting, council also voted not to allow any other food-primary locations to convert their seats in the same manner.

Sitting in his elegant second-floor Refinery restaurant in the 1100 block of Granville, Raptis tells the Straight that he doesn’t think this is fair. “I think Granville Room, Sanafir, and SIP are just natural lounge-type places,” he says. “I don’t think any of them will stop serving food or change their focus.”

Raptis says there has only been one 911 call to police from his establishments, and that only pertained to something happening outside on the street. This track record, he insists, shows that he runs a safe operation.

These days, Raptis is feeling a sense of pride after winning an award from Tourism B.C. for his company’s environmental record. His wife is a teacher, and he says he caught the sustainability bug after visiting her classroom to speak to the kids. He expected them to pepper him with questions about chefs like Gordon Ramsay, and the amount of swearing that occurs in restaurant kitchens. Instead, students wanted to know about his company’s environmental practices.

“I really firmly believe that those children in that particular classroom are a snapshot of who our future customers are and what their future wants and needs are going to be,” Raptis says.

He suggests that this same environmental ethic is also persuading more people to live downtown and drive less. This is contributing to a more diverse group of people coming to the entertainment district. “It’s still a challenge,” he acknowledges, “because I think people perceive Granville Street as a bit of a party destination, as opposed to a place where you can go and have a nice meal.”

The marketing manager for the Yale, Stella Panagiotidis, has been on three Downtown Vancouver Business Improvement Association committees, including one dealing with Granville Street. In an interview outside the Blenz shop at the corner of Granville and Davie streets, she tells the Straight that she likes the area’s “gritty edge”.

“It’s got the cheap pizza joints and the erotic shops,” she states. “Maybe that will always be a part of what defines the character of Granville.”

In the middle of the interview, an older panhandler approaches and asks for change. She suggests that the street might also always include people like him—and that doesn’t bother her in the slightest.

The nearby Best Western Plus Chateau Granville has been upgraded, and it now includes the swanky Edge Social Grille & Lounge. It’s another sign of creeping gentrification, which will only intensify with the addition of more high-rises further to the south. Panagiotidis points out that the Scotiabank Dance Centre across the street and the nearby Vancity Theatre on Seymour Street have brought more artistic types of people into the area, as well.

“We may see a change over time—less cheap, fast-food takeout shops and more higher-end dining,” Panagiotidis admits. She quickly adds that the skateboarders and punk rockers might continue to gather on the street. But with the closure of the Yale blues bar for more than a year, she’s going to have to pound the pavement and find another job. “I’ll be exploring other options,” she says.

The Luciaks, on the other hand, plan to remain on Granville Street for the long haul. They’ve seen the bad times—and they’re in no mood to leave now that the neighbourhood is turning the corner.

Canada Mortgage Bond

Canada Housing 06/15/17*: 1.91%

Canada Housing 03/15/22: 2.60%

* denotes interpolated rate

Select Government of Canada Bonds

CAN 4.00 06/01/17: 1.58%

CAN 2.75 06/01/22: 2.16%

GOC Bonds are for reference purposes only

First National Floating

Insured Cost of Funds

1.15%

Bank Prime Rate

3.00%

Posted Rate

1 Year: 3.20%

2 Year: 3.55%

3 Year: 3.95%

4 Year: 4.64%

5 Year: 5.44%

Market Commentary

The federal budget didn’t contain any surprises so the markets are taking it in stride.

Canadian GDP expanded slightly in January, but at a slower rate that in December. January saw a 0.1% increase, led by manufacturing. Financials also did well. The construction sector saw a 0.1% decline.

December 0.5% growth, revised upward from 0.4%.

In the U.S., personal income increased 0.2% in February while personal consumption expenditures climbed 0.8%. Real disposable income dropped 0.1%.

The confidence of American consumers improved in March. The Reuters/U of M Index climbed nearly 1 point to 76.2, from 75.3 in February. While not optimistic, pessimism is fading in the face of the improving job market in the U.S.

And the Chicago Purchasing Managers Index dropped more than expected in March to 62.2%, down from 64% in February. Expectation had been for 63.6%. Production and new orders rose, but the new orders component decelerated to 63.3% in March from 69.2% in February. Employment fell near 8 percentage points and the prices paid component rose to the highest level since Aug. 2011. Readings over 50% indicate expansion.

Canada Mortgage Bond

Canada Housing 06/15/17*: 2.05%

Canada Housing 03/15/22: 2.74%

* denotes interpolated rate

Select Government of Canada Bonds

CAN 4.00 06/01/17: 1.68%

CAN 3.25 06/01/22: 2.27%

GOC Bonds are for reference purposes only

First National Floating

Insured Cost of Funds

1.15%

Bank Prime Rate

3.00%

Posted Rate

1 Year: 3.20%

2 Year: 3.55%

3 Year: 3.95%

4 Year: 4.64%

5 Year: 5.24%

Market Commentary

Canadian inflation clocked in at a higher than expected 2.6% for January, led by food and fuel. It’s the second monthly increase in a row. The price of gasoline is up 2.6% from January and nearly 9% from a year ago. Even with the volatile elements of food and energy removed, core inflation stepped-up two notches to 2.3%.

In the U.S., new home sales in February fell for the third straight month. Prices, though, climbed to their highest level in 8 months. February sales dropped a seasonally adjusted 1.6% last month to 313,000 homes. The median price now stands at $233,700. The numbers suggest builders are anticipating higher demand in the coming months.

The irony that bankers dangling some of the lowest rates in history are also asking Ottawa to tighten mortgage rules hasn't been lost on the Finance minister, now suggesting he'd rather sit pat.

“I find it a bit off that some of the bank executives are taking the position that the Minister of Finance or the government somehow should tell them how to run their business,” Jim Flaherty told reporters just outside Ottawa Thursday. “It’s their market. It’s not my market.

“They decide what they want to charge in interest rates.”

While analysts are still parsing through those comments, a consensus is emerging that the government will hold off on further tightening of the country’s mortgage rules, at least for now.

TD’s chief economist, among others, had urged Flaherty to use his budget address next week to announce one of three moves to slow demand for housing.

On Thursday, the Minister hinted at none of those – a shorter amortization, a higher minimum down payment or new stress tests for borrowers.

“With respect to tightening up the mortgage insurance market we’ve done it three times,” he said. “If we have to tighten it some more we will,” he said. “I’d like the market to correct itself, quite frankly, if it can.”

That likely answers broker prayers. Most have been hoping the government would let the current bull market exhaust itself rather than rein it in, potentially boxing in the country's housing industry.

"The new housing market produces a lot of jobs in Canada so there’s a balance that needs to be addressed," Flaherty said.

VANCOUVER, B.C. – March 2, 2012 – Closer alignment between home buyer and seller activity helped bring greater balance to the Greater Vancouver housing market in February.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 2,545 on the MLS® system in February 2012. This represents a 61.4 percent increase compared to the 1,577 sales recorded in January 2012, a decline of 17.8 percent compared to the 3,097 sales in February 2011 and a 2.9 percent increase from the 2,473 home sales in February 2010.

February sales in Greater Vancouver were the third lowest February total in the region since 2002, though only 151 sales below the 10-year average.

“With a sales-to-active-listings ratio of over 18 percent, we see fairly balanced conditions in our marketplace as we move into the traditionally busier spring season,” Rosario Setticasi, REBGV president said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,552 in February 2012. This represents a 2.5 percent decline compared to February 2011 when 5,693 properties were listed, and a 3.5 percent decline compared to January 2012 when 5,756 homes were added to the MLS® in Greater Vancouver.

Last month’s new listing count was the second highest February total in Greater Vancouver since 1996. At 14,055, the total number of residential property listings on the MLS® increased 12 percent in February compared to last month and increased 17.9 percent from this time last year.

“Region-wide we’ve seen relative stability in home prices over the last six months, but it’s important to do your homework and consult your REALTOR® because pricing can vary considerably depending on the neighbourhood and property type,” Setticasi said.

The MLS® HPI benchmark price for all residential properties in Greater Vancouver currently sits at $670,900, up 6 percent compared to February 2011 and an increase of 0.9 percent compared to January 2012. The benchmark price for all residential properties in the Lower Mainland is $601,300, an increase of 5.5 percent compared to February 2011.

Sales of detached properties on the MLS® in February 2012 reached 1,101, a decline of 21.5 percent from the 1,402 detached sales recorded in February 2011, and a 12 percent increase from the 983 units sold in February 2010. The benchmark price for detached properties increased 10.5 percent from February 2011 to $1,042,900.

Sales of apartment properties reached 1,020 in February 2012, a decline of 15.4 percent compared to the 1,206 sales in February 2011, and a decrease of 5 percent compared to the 1,074 sales in February 2010. The benchmark price of an apartment property increased 2.8 percent from February 2011 to $373,300.

Townhome property sales in February 2012 totalled 424, a decline of 13.3 percent compared to the 489 sales in February 2011, and a 1.9 percent increase from the 416 townhome properties sold in February 2010. The benchmark price of a townhome unit increased 0.7 percent between February 2011 and 2012 to $472,800.

 Source - Erica Rendall REALTOR® /Real Estate Board of Great Vancouver

Article courtesy of Real Estate Board of Greater Vancouver, Commercial Market News, February 2012

The BCREA Commercial Leading Indicator (CLI) rose for the second consecutive quarter, advancing 1.1 points to an index level of 111. On a fourth-quarter over fourth-quarter basis, the CLI moved 1.6 per cent higher in 2011. While this is a marked slowing from the 5.2 percent surge in 2010, the index picked up considerable momentum in the third and fourth quarter of the year, more than making up for a weak first half of 2011.

The trend in the CLI turned up slightly as early softness in economic activity was smoothed out by a stronger second half of the year. This change in trend indicates a positive economic environment for the BC commercial real estate sector in 2012. “Improving economic data provided a strong tailwind for the CLI in the second half of 2011,” said Brendon Ogmundson, BCREA Economist. “However, growing anxiety surrounding the global economy could constrain the economic environment for commercial real estate this year.”The full BCREA Commercial Leading Indicator index is available at: www.bcrea.bc.ca/docs/economics-forecasts-and-presentations/clireport.pdf

 Mark

I have known Grant and Debbie for many years and in fact worked as an employee of The Mortgage Group when I first started my career.  They have always been good friends and I have followed this organization throughout my career.  I have  respected and admired their business and marketing focus through both high growth and challenging times.

The Mortgage Group deal center will provide invaluable local service to me and my clients by assisting with doing my client reviews and calling my clients to be sure they are in the right mortgage for their needs.    Over the years I have had limited time to devote to this and now with the TMG Deal Center on my side, my clients will hear from me more often and can be assured that their mortgage is the right fit in any given economic cycle.

I have also negotiated with TMG to provide commercial real estate services to their mortgage brokers.  For those brokers who have clients in need of finding new office space, commercial land,  to develop, lease, sell,  or purchase  a property, or to purchase or sell a business,  I can assist them with their referrals and help them increase their portfolio revenue during these highly competitive times.   

Please bear with me as I work on changing my signage and website information.  It is difficult to recreate websites etc into new graphics and we are in the process of transitioning all of our marketing materials from Mortgage Architects Metro-West to TMG The Mortgage Group Metro-West. 

I continue to thank all of my clients and licensed colleagues for their loyalty and referrals.  I will continue to assist Mortgage Brokers with their difficult financings, particularly in the area of Commercial financing, and through my real estate license I bring on a new list of investor clients that can help in the way of joint venture or co-ownership for deals that are too shy on equity to qualify for straight up mortgage financing. 

 "While European sovereign debt concerns and a sluggish US economy will continue to impact consumer confidence, strong demand in the bond market is expected to keep mortgage interest rates at or near record lows for most of 2012,” added Muir.  Home prices in most BC markets are forecast to experience little change over the next 24 months as the supply of homes for sale more closely matches consumer demand.   The average MLS® residential price in the province is forecast to edge down 2.2 per cent to $548,500 this year and remain relatively unchanged in 2013, albeit increasing 0.8 per cent to $553,000. 

While 33 per cent of brokers canvassed for the last CAAMP-Maritz survey characterized the number of mortgage professionals in Canada as “just right,” a whopping 61 per cent said “there are too many brokers” across the country. Only 7 per cent argued that “there are not enough.”

In January, FSCO revealed that as much as 10 per cent to 15 per cent of the province's 9,000-plus licensed agents are no longer working at a brokerage and, therefore, unauthorized to sell mortgages. 

Those mortgage professionals have likely abandoned the business in the more than 21 months since the 2010 renewal period or have taken up administrative or management positions within the industry, IMBA Executive Director Joe Rosati told MortgageBrokerNews.ca.  (Source, Mortgage Broker News.ca)

In my opinion 9000 mortgage broker’s is far too many.  Many  licensed mortgage brokers today are not doing enough volume to gain the experience needed to assist their clients in a professional manner,  to give the best advice, and to navigate through the many challenges that an off center deal will pose in today’s strict lending environment.  If you want the best financing for your needs, make sure you deal with a broker that has many years of experience and has dealt with a high volume of business in order to have handled most situations.   That broker can bring that invaluable experience to you.

I have phoned some of my clients who said to me similar to this scenario:  “oh, my wife’s best friend is a mortgage broker now so we felt obligated to give her a try.  After that experience I’m coming back to you next time, it was a bit of a nightmare”.  Most people think getting a mortgage transaction completed is easy as pie.  In this environment lenders are tight and sticky about paperwork, so it takes a well heeled professional to get your deal through smoothly.  If you didn’t hear of many problems during your transaction, that’s probably because you have the right broker on your side.  Next time might not be so smooth if you veer off in the direction of choosing your mortgage broker because of a friends or family relationship. 

As the province transitions back to the PST, which will replace the HST effective April 1, 2013, measures to ease the HST burden on new home buyers include:

The BC New Housing Rebate threshold will increase to $850,000 from $525,000; so that more than 90% of newly built homes will now be eligible for a provincial HST rebate effective April 1, 2012.

The maximum rebate will increase to $42,500 from $26,250 effective April 1, 2012.  

Buyers of new secondary vacation or recreational homes outside the Greater Vancouver and Capital Regional Districts priced up to $850,000 will now be eligible to claim a provincial grant of up to $42,500 effective April 1, 2012.

For newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the 7% provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of 2% on the full house price.  HST/PST transition rules will help ensure that whenever purchasers buy a new home they will all pay a consistent and equitable amount of tax, whether the home is built:

- entirely under the HST;

- entirely under the PST; or

- partly under HST and partly under the PST.

The temporary housing transition measures will be in place until March 31, 2015. The tax only applies to homes where construction begins before the transition date and ownership and possession occur after.  

(Source, Real Estate Board of Greater Vancouver )

• Looking for large manufacturing operation that may want to lease or buy a property in ideal location, central Surrey, zoned for industrial lease.  It is 62,000 square feet of facility and storage on two acres of land.  Listed at $5,000,000 but vendor willing to entertain lower offers as he’s looking for a quick sale.    Potential leasees  please inquire for rates.   
  
  
• Looking for residential multi-family developer for purchase of land in New Westminster in ideal location.   I also have a potential site in Burnaby.
  
  
• Looking for investment partner, ideally familiar with real estate development, for a highrise project in booming Regina Saskatchewan.  This project is 50% presold and ready to break ground.  Minimum $1,000,000 investment, but ideally $2,200,000, with projected return of 64% over 2 years.   Have you read about the prices of Canola lately?
  
  
• Looking for potential investment partners for residential single family homes in upscale subdivision of booming Regina Saskatchewan.  Minimum Investment $150,000, with projected return of 50% annualized.
  
  
• Looking for a buyer for a single family property in North Burnaby.  Four bedroom home, excellent family starter home  at $659,000.   Owner willing to lease back the premises if our buyer is revenue property investor.  Many homes in North Burnaby sold over asking price since January 2012.  Most homes are going for well over $730,000 so this is a very well priced home.  View  a link to the listing at:  http://francinetracey.hqreservices.com/officelistings.html/details-21729413
  
  
• Looking for potential investment partners for multi family development in Fraser Street Corridor of East Vancouver.  Minimum investment $50,000.
  
  
• Looking for development sites zone multi-family, or industrial.    Developer willing to buyer outright or join venture with land holder if landholder prefers to profit from the venture.
  
  
• Looking  for a multi-family apartment building for my purchaser who wants to buy a building with 20-30 units in the Fraser Valley or Edmonton Markets.  If you know somebody that owns such a building, please refer them even if you’re not sure if they are interested in selling.
  
  
• Looking for an Industrial Property or Retail Strata/ Strip Mall in the $6-8,000,000 price range for an investor that has about $3,000,000 to place.  This investor will consider taking on an investment partner who might want to purchase something of higher value

Canada Mortgage Bond

Canada Housing 06/15/17*: 1.82%

Canada Housing 03/15/22: 2.55%

* denotes interpolated rate

Select Government of Canada Bonds

CAN 4.00 06/01/17: 1.50%

CAN 3.25 06/01/22: 2.16%

GOC Bonds are for reference purposes only

First National Floating

Insured Cost of Funds

1.14%

Bank Prime Rate

3.00%

Posted Rate

1 Year: 3.50%

2 Year: 3.55%

3 Year: 3.95%

4 Year: 4.64%

5 Year: 5.14%

Market Commentary 

Yields are up and so is Canada’s inflation rate.  The CPI was pushed higher in January by food and energy prices.  Last month’s consumer prices climbed 2.5% Y/Y, a slight increase from the 2.3% Y/Y posted in December.  Core inflation – excluding food and energy – came in at 1.6% Y/Y in January, again, a slight increase from 1.3% Y/Y in December.  Increased car prices are cited for the increase.

Inflation in the U.S. increased a seasonally adjusted 0.2% in January, for a 12 month, unadjusted rate of 2.9%.   Core inflation for 12 months stands at 2.3%.

Initial jobless claims in the U.S. dropped to a new cyclical low of 348K in the second week of February, nearly 20K below expectations. 

And Canada’s international securities transactions report indicates an on-going appetite for Canadian assets.  In December foreigners acquired $4.7B worth of securities, including $2.1B in bonds.  Foreigners purchased a total of $95.6B worth of Canadian securities in 2011, down from $117.4B in 2010.

Next week, look forward to Canadian Retail and wholesale trade numbers, U.S. existing home sales , Canadian Q4 corporate profits and American consumer sentiment.

Source - First National Commercial Financing



Canadian Household Finance

• During 2011 the Bank of Canada increased it’s lending rate by .75% from .25% to 1.0%
• Residential mortgages grew to 1.042 Trillion as of March 2011.
• In 2010 mortgages represented 68% of household debt. 
• Household liabilities increased faster than assets and net worth during 2000-2010 period
• Personal lines of credit have increased in popularity taking over for personal loans.
• Most mortgage holders have substantial equity in their homes with 79% of home owners with greater than 25% equity (note that in US more than 25% of home owners had mortgages greater than the value of their homes).  
• Trends in total household debt - Annual Growth rates of Total Household Debt:  1981-1990 10%, 1991-2000 6.0%, 2001-2010 9.4%. 
• Household debt loads are considered to be currently manageable because of low interest rates, rising household income and net worth, and innovative financial products allowing for lower monthly payments.

Housing Markets and Demographics

• Sales to listing ratio at the end of 2010 was 52.3% indicating a balanced market
• The national apartment vacancy rate for major urban centers moved down to 2.9%
• Economic recovery continued throughout 2010.  The real disposable income indicator (disposable income/consumption deflator) rose to 126 from a low of 75.  (This indicator had peaked in 2006 at 200). 
• Canada’s Population grew faster over the past 3 years than in any other time since the early 1990’s
• Saskatoon led CMA population growth from 2008 -2010 followed by Vancouver, Calgary, Regina, and Toronto and Edmonton.  Notably Kelowna also experienced high levels of immigration.
• New immigrants tend to spend higher fractions of their incomes on shelter, with the number of new immigrants landing in Canada in 2010 reaching 271,000
• Canada’s population of 65 and over will more than double by 2036.
• One person households will become the largest type of household by the 2020s accounting for 28% of all households.
• Average prices in 2010:  Vancouver $675K, Toronto $432K, Calgary $398K, Canada $339K, Montreal $297K, Saskatoon $296K.
• Average monthly  rents in 2010:  Iqaluit $2265, Vancouver $1,185, Toronto $1,123, Calgary $1,069, Montreal $700,  Saskatoon $934

Credit Markets:

In February 2010 the Government of Canada announced changes to the standards governing mortgage back insured mortgages, which represented a tightening of credit standards.  These included higher qualifying interest rates, lower equity withdrawal limits, and larger down payment requirements for rental properties. 

I currently have the following investment opportunities on my desk.  These investments range from $50,000 to $4,500,000.  I have a number of other investments listed on my website and those can be found at my blog.

• $50,000 minimum:  Developer selling limited partnerships in his property which is a multi family condiminimum project  located in the desireable Commercial Drive area.  This developer has another project in the same area which may be reviewed by the investor as to its progress and success.  
  
  
• $100,000:  Busy and reputable café for sale in the Commercial Drive area.
  
  
• $131,800:  Investment required to purchase  a revenue property in the desireable Vancouver Heights area, the lowest price in the neighbourhood at $659,000.  This is a well maintained, fully renovated four bedroom home.  Minimum down payment if the buyer is intending to live in the property:  only $32,950.
  
  
• $150,000:  Established Granite Counter Top and Custom Granite works shop for sale in the Richmond area.  Owner may consider terms, if investor wants to put less money down than full price.
  
  
• $1,125,000:  Industrial property owner in Surrey BC requires a quick sale of his property.  Property appraised at $5,800,000.  Owner is willing to review any reasonable offer.   Current mortgage lender willing to extend mortgage terms to new buyer with minimum investment of $1,125,000.  This property requires some slight renovations for excellent upside potential for the right investor.
  
  
• 1,200,000 - $2,200,000:  Did you know CMHC reports on Saskatchewan are extremely favourable?  Saskatchewan boasts a strong economy with excellent resource base including food, potash, and much more.  Real estate markets there are still showing excellent value and are trending upwards.    I have a developer wanting to sell 25% of his property to raise funds for his multi family project there, which is 50% presold.   Minimum investment is $1,200,000.  Projected return based on pre-sale prices in the 64% range.   This opportunity  can also be structured  as a mortgage investment at 20% return. 
  
  
• $2,950,000 – Development site in New Westminster, in highly desireable up and coming neighbourhood, for mixed use multi-family / retail building. 

Commercial Lease Space: 

• Currently working on leasing up 20,000 square feet of warehouse space in east Vancouver neighbourhood.  Excellent building in clean neighbourhood.  Can portion the space down to minimum 5,000 square feet for the right tenant. 
  
  
• Coming soon:  3,500 square feet of office space in a building under renovations in Mount Pleasant neighbourhood on Broadway.  Spaces as small as 400 square feet available.  As renovations are currently in the works the space can be customized for the new tenants needs.



A leading marble, granite and natural stone fabricator and installer is up for sale !  Specializing in granite kitchen countertops, vanities, bar tops, flooring, fireplace surrounds, and furnishings for the home and  office, this business is being sold for less than equipment value.  The business was established 3 years ago, has good cash flow, and established clientele, but owner is not hands on and is spread too thin among too many businesses so wishes to sell.    There are 4 skilled employees working in the business.   The current operation is located in Richmond but could easily be moved as lease is breakable.  With the right expertise this business could show high profitability.

 I also have a café available for purchase on Commercial St in Vancouver.   Well established with neighbourhood clientele.  This business has been around for  many years but was purchased by a couple last May who need to sell for reasons not related to the business.  The café has excellent cash flow and can be expanded to incorporate the Deli section that the new owners have not operated since purchase.  

Please call me directly if you are interested to know more. 

2. Speciality Automotive Business looking for 10,000 square foot storage warehouse in East or West-side Vancouver.

3. Wholesale/Retail Furniture business looking for 10-15,000 square foot warehouse with exposure in North Burnaby/Vancouver.

4. Owner/User looking for 20- 25,000 square feet office/warehouse space in the Vancouver area.

5. Manufacturer looking for 20-35,000 square feet of high ceiling storage warehouse with dock loading. Proximity to Vancouver a benefit to its current manucturing facility.

6. Construction company looking for 1 acre of land to build its new Office/Warehouse facility. Highway corridor from the North Shore to Coquitlam. Will consider small building on land and renovating/building

7. Developer looking for land zoned multi-family in Burnaby, East Van, or Coquitlam preferably 15,000-30,000 square feet in size.

First time buyers are entering a market which is characterized by high prices, but one which is still very affordable because of historical low interest rates.  CMHC predicts prices to remain steady.  The closer the buyer is to the core of Vancouver, the pricier the real estate.  A buyer looking outside of the city should focus on key transit locations as these properties will continue to be in demand for years to come as population in Vancouver grows.  To get the home of your dream, considering downsizing by at least one vehicle per family and moving close to premium transit routes.

For current homeowners that have significant equity in their principal residence strong consideration should be given to purchasing revenue property for a retirement nest egg.  Reliance on government pension should be avoided and independent financial strategies to maximize retirement income should include premium real estate.  Vancouver is expected to hold its value given the expected population growth over the next 10-15 years.  Real estate is a long term investment and this is one corner of the world where you can rely on one thing…everybody seems to want to live here. 

The pertinent facts: (source CMHC Fall report November 2011)

Housing starts:

In recent months, housing starts have been supported by low interest rates and an improving employment situation. They are, however, expected to moderate through 2012. Housing starts are forecast to be 191,000 units for 2011 and 186,750 units for 2012.

Alberta and British Columbia:

With respect to 2012, total housing starts are expected to moderate, but Alberta and British Columbia starts are expected to buck this trend and grow by 15.3% and 7.1%, respectively.

Resales:

Sales of existing homes through the Multiple Listing Service® (MLS®) 2 are forecast to remain stable through to the end of 2011. MLS® sales are expected to increase modestly in 2012. Overall, 450,100 sales are forecast in 2011, followed by a 1.9% increase to 458,500 in 2012.

Resale prices:

With balanced conditions expected in most markets, the average MLS® price is also expected to remain fairly constant for the rest of 2011 and rise slightly in 2012. For this year, the average MLS® price is forecast to be $363,900, while 2012 will see a modest increase to $368,200.

Current market conditions: 

Over the past quarter, listings continue to increase giving buyers more time to make decisions and more options for choosing their next home.  The market continues to be a buyers market and buyers should take advantage of this situation to get the best possible price and terms.  Over the past 10 years virtually every time I have seen a break in the market, it is followed within months, at the drop of a hat, by an extreme change characterized by frenzied buying, multiple offers, high pressure decision making, and escalating prices at a fearsome velocity.   Potential purchasers considering a near future transaction should start seriously considering before the devil we call the hot Vancouver real estate market comes round again.  

Having said that, I’m pleased to say that we have had more first time buyers into our office in the last few months than we have seen in over 2 years.  This is a very healthy sign for our market as it is those buyers that characterize those good market fundamentals are present.

Advice for First time buyers:  

Vancouver is going to continue to be a prime market for global real estate shoppers and will continue to be pricy compared to other cities.  First time buyers to our market need to understand that we now live in a major metropolis and we have to adjust our lifestyles in order to afford real estate.  First time buyers should consider downsizing to at most one vehicle.  Average car annual operating costs are $8000 including insurance, maintenance, and loan payments.   In terms of mortgage servicing costs this can allow the first time buyer to purchase a home worth $150,000 more than their budget would otherwise afford them.  That’s enough to guarantee most first time home buyer’s a prime spot close to premium transit routes.    A car can only depreciate.    Historically, real estate over time helps you build equity, wealth, and security. 

The outlook for commercial real estate in the GVRD and Vancouver Metropolitan continues to be strong.  Global cash rich investors who are seeking low risk opportunities will continue to park their money here in Vancouver knowing that market fundamentals are solid.   The real estate component of any Vancouver business can be a significant source of equity for the company over years, and provides a reliable source of capital for the future by providing a banking relationship with valid security.       Business owners and shareholders should seriously consider this option for decreasing risks associated with having to alter location or premises and for building retirement savings.

Multifamily Development and Investment:

In British Columbia, multi family development activity will continue to be focused around major transit routes (source Translink), as the GVRD continues to increase densities in these areas.  First time buyers are more likely to head towards these new communities which are designed to incorporate both transit and retail and community amenities to enhance the pedestrian and neighborhood experience, and decrease the dependency on single user vehicle transport. 

The City of Vancouver badly needs affordable housing, however,  current city policies are preventing multi family rental investment and a recent moratorium doesn’t help matters.

“Vancouver densities need to be increased (source Goodman Report www.goodmanreport.comand Business in Vancouver):   

Replacing Vancouver’s aging rental stock to maintain affordable housing options is going to be financially painful and politically distasteful unless neighborhoods accept higher building densities, there will be no new development and homeowner taxes will continue to climb.

Conventional wisdom held that investors would fill the gap in rental stock created by the demolition of rental apartments. But the (recent) loss of rental units was considered serious enough that the city imposed a demolition moratorium on apartment units in RM-3 zones like South Granville, home to most of the city’s walk-up apartments.  Any rental units demolished had to be replaced one-for-one in new developments.

Building rental units has been harder to achieve, because it requires higher neighborhood density. Vancouver now boasts the highest multi-family rents in Canada, with CMHC pegging one-bedroom rents at $934 a month and two-bedroom units at $1,181 a month.  However without condos, or some other means of being repaid for its investment, a developer can’t afford to build rental units because rents, while among the highest in Canada, are out of line with Vancouver land costs. The average age of the city’s rental stock is about 58 years old, but rents don’t reflect current land economics.”                          

Industrial Real Estate Market

This market may be positively affected by the recently downturn of the Canadian Dollar visa vies the US dollar, in hopes that the increased stimulation to US export markets will help demand for warehouse space  in the region. 

• Metro Vancouver Market Overview (source Colliers International Market Report)

Net absorption in the third quarter totaled to 200,882 square feet, down from 295,410 square feet last quarter. The vacancy rate held steady at 4.1%, and the volume of sale transactions continued to decline due to lack of supply, while demand from investors continued to grow. While tenants remain cautious of the economy, activity across all markets is increasing, creating a positive outlook moving into the fourth quarter of 2011.

• Tri-Cities/Burnaby/North Vancouver/Vancouver (source Colliers)

Leasing activity was slow in Burnaby and the Tri-Cities, and vacancy rates increased in all markets. Port Coquitlam experienced the largest jump in vacancy to 3.5 percent in the third quarter from 2.6 percent in the second quarter. Reasons for the increased vacancy rates include: new product such as Lakeview Business Park in Burnaby, perception of limited access in the Coquitlam area due to construction, and the addition of large-bay vacant product to the market such as 1765 Coast Meridian in Port Coquitlam.

In the latter part of the third quarter, activity increased and tenants were actively touring. Existing tenants were content with remaining in their current market as shown by two significant renewals: Rona Revy Inc. renewed 50,356 square feet from Standard Life Assurance Company at 1160 East 3rd Street in North Vancouver and Rolls Royce Canada Ltd. renewed 44,544 square feet at 96 North Bend Street in Coquitlam.

The region continues to be an attractive area for investors; however, the general constraint on the supply of quality product in Metro Vancouver has resonated in the region. The most significant investment transaction of the third quarter was Lloyd Investments Ltd. ‘s acquisition of 116,500 square feet at 1765 Coast Meridian Road in Coquitlam for $8.9 million.

Should the strong activity in Burnaby, Vancouver and North Vancouver continue, it is expected that vacancy rates will continue to compress and rental rates will remain firm throughout the end of the year. The submarkets of Coquitlam and Port Coquitlam are expected to experience increased vacancy and falling lease rates until the completion of the Port Mann Bridge and the Highway 1 improvements at the end of 2013.

Office Leasing and Real Estate:   (source CBRE Global Knowledge Center)

Despite ongoing global economic challenges, leasing activity in the Metro Vancouver office market remained steady during the third quarter of 2011.  The overall sentiment resonating throughout the market is that tenants remain cautious, but active.  Limited supply downtown has created a stable level of demand, and conversely, suburban office markets continue to work through existing vacancies providing competitive options for tenants.  The confluence of these two factors has led to relatively positive indicators for the Metro Vancouver Office Market this quarter.

Regional vacancy rate remains unchanged at 8.7%. The downtown market recorded the largest gain among the submarkets.   North Van and Richmond posting positive absorption offset Burnaby and New West with slightly negative absorption.  Suburban market vacancy rate stands around 13.5%.

The market dynamics in Metro Vancouver are expected to change little over the next several quarters given the uncertain outlook for the economy and labour market.  Overall modest and incremental gains in the market are expected, although most of the activity will be concentrated in the downtown and peripheral areas.  The upcoming occupancy of a number of tenant’s downtown and in Burnaby should cause vacancy to decrease further next quarter, which will put more pressure on the demand cycle until significant new supply is added to the market.  (Source CBRE.com)

Retail Real Estate Market Report  (Source Cushman Wakefield and businesswire.com) 

The Canadian retail real estate market continues to have an upwards trend in 2011, according to Cushman & Wakefield’s Main Streets across the World 2011 Research Report… “The strong Canadian Dollar has created an attractive market for US retailers looking to do business in Canada, because of increased profit margins.  That is the largest force behind Canadian retail rental rates not only remaining stable, but increasing in markets such as Edmonton, Vancouver and Montreal.”

In Toronto, Bloor Street has remained stable, and is ranked as the 20th most expensive street in the world for retail space. This is largely due to continued consumer spending in Canada, along with heightened interest in Canadian presence from retailers in the United States, particularly in larger urban markets. Demand for space on the key high streets may improve further, with several retailers planning to open new stores.

While most Canadian retail markets remained stable, some other main streets in Canada have experienced great increases in rates and activity

Vancouver’s Robson Street also experienced a massive increase in rates, jumping from an average $220/square foot annually to $240, an increase of 9.1%.  

Over the next two to three years, four factors will influence Metro Vancouver’s retail market: elimination of HST, urban densification, a new “tenant mix”, and millions of square feet of new retail supply. (Source Colliers International) 

International retailers continue to flock to Canada in a calculated attempt to capture share of a market-place that has proven, in some instances, close to double the sales volume per square foot compared to their native countries of operation. 

Over the past year a number of new developments have been announced and will be ready for occupancy in the next one to three years. During this time, more than 5.0 million square feet of new retail space will be added across the Lower Mainland in efforts to deliver space to new tenants and to service the exponential residential growth that has occurred over the last several years.

High Street, Fremont Village, Central at Garden City, and Tsawwassen Power Centre are the four most notable developments that will be ready for occupancy in the next two to three years. These four developments will add approximately 2.4 million square feet of retail space in Abbotsford, Port Coquitlam, Richmond and South Delta respectively.

Land Development:   

Developers continue to seek quality investment opportunities particularly in regions characterized by rezoning for multi family density.    Mixed use commercial/residential zoned land is also in demand for redevelopment.   Properties located close to transit, particularly sky train, with diverse neighborhood amenities characterize great opportunities for redevelopment.

Summary and Conclusions and Advice for the Wary:   

Global markets remain uncertain with North American markets showing indications that those economies will remain in the black (albeit slightly) throughout 2012.  Stock markets continue in high volatility.  Global pressure on pension plans means that individuals will need to have firm private pension plan options, or solid investment strategies to ensure comfortable retirement.  For British Columbians, these strategies should definitely include real estate investments (refer to further qualification of this advice in the sections that follow regarding the Canadian Economy and Real Estate projections). 

Pertenant Details regarding the Global Economy:

Despite global uncertainty 80% of S&P500 companies have reported quarterly earnings, with three-quarters of them beating profit estimates while 56% have exceeded revenue forecasts.  This is good news for the US who has been struggling to get out of their financial mess for almost 3 years now. 

The current situation in Europe has been at the heart of the Global Economy’s pain this year.  This week, the Globe and Mail quotes Steven Harper:  “I think what the Europeans have put together  is certainly on the right track….however there is a view, which I share, that the euro zone countries are relatively rich in world terms…. and  have the means to deal with their own problems.”  Mr. Harper noted that the IMF”s funds and those of Chinas and Brazil (and also Canada’s) should be reserved for crises that will effect the developing world. 

Of Major concern:  The state of government pensions (source Allianz Pension Stability Index and Allianz Global Investors Report November 2011):   

• The negative impact of the financial crisis on accumulated funds and national economies has tested the resolve of many governments.  Increased levels of sovereign debt following the financial crisis have exacerbated the need for reform in many countries.
  
• According to a new study that charts the relative sustainability of national pension systems in 44 countries around the world, Greece is under the most pressure to reform.  India, China and Thailand show the greatest need for pension reform, though for different reasons.
  
• The results of this study show Greece to be in the greatest need for reform. Not only does Greece have the worst ranking within Europe, it yields the highest score of all the countries considered in this study. At the heart of Greece’s deteriorating ranking are acute sovereign debt, a relatively serious aging problem and a still generous pension system, despite pension reforms initiated as a condition of IMF and ECB financing initiatives.
  
• Australia, in contrast, is ranked as the best prepared followed by Sweden, Denmark, New Zealand  and the Netherlands.
  
• Canada scored a ranking under 4 (where a rank of 10 is the worst and 1 is the best), including private and public pension systems. Canada’s pension system is a three tiered mix of public and private pension schemes and its ranking included voluntary individual retirement savings plans (Registered Pension Plans).
  
• One of the main forces driving pension reform today is the aging population. The old-age dependency ratio, which compares the number of people aged 65 or older (retired population) to the number of people aged 15 to 64 (working population), gives a clear indication of a country’s aging demographics. This ratio is already quite high in ‘older’ Europe, which has seen a steady trend towards lower birth rates and increasing life expectancies. To put this into perspective, the old-age dependency ratio is 28% in western Europe, about 10% in today’s younger regions (i.e., Asia and Latin America), and even less in Africa. Younger regions, however, will not remain unscathed from the effects of changing demographics and can expect to see rapid change – particularly in Asia and Latin America. Aging demographics are set to explode between now and 2050, by which time the old-age dependency ratio will have almost tripled in Asia and Latin America, more than doubled in Eastern Europe, and increased by some 80% in North America and Western Europe.
  
• Canada’s ability to remain high on the pension index will depend largely on immigration.  Our existing population has a low birth rate and is clearly aging.  The resultant immigration policies recently set by the Canadian government have largely been driven by the desire to keep the pension plan afloat. 

The Stock Market (source the Globe and Mail Investor):

Markets are and have remained volatile throughout 2011 and economists caution that volatility may continue throughout 2012.  As the result of this volatility we have seen Canadian Banks cancel their discounting on prime based lending, and in particular on variable rate mortgages. 

Stock market volatility and uncertainty moving forward has been fuelling the hunger and will continue to arouse the global investor’s appetite for Vancouver real estate. Vancouver real estate investments are considered a “safe haven” with solid returns for global investors wary of stock market trends.

 12 month Stock Market Trend: (Canadian and US Market data combined S&P TSX Composite Index)

Passive income as a result of real estate investment activity has helped bridge the gap between rich and poor for many Canadians over the years, a gap which is continuing to increase for average Canadians.   Today’s market enables home owners to access the equity from their homes to make these types of real estate investments.  Additionally first time buyers who partner on first home purchases can find that basement suite income supplements the mortgage payment for significant wealth building over the years.    

• Migration:  Total net migration to Canada (net international migration including non-permanent residents) stood at 244,573 in 2010. In 2011, net migration is expected to decrease to 232,795. By 2012, however, net migration is expected to rebound to 255,900, which will help support Canada’s housing sector (source CMHC).  Historically, British Columbia has experienced landings of 14-17% of the total migration to Canada (source BC Stats). 
  
  In 2012, Citizenship and Immigration Canada (CIC) plans to welcome 42,000 to 45,000 people under the Provincial Nominee Program (PNP), including nominees themselves, their spouses and dependants.  The PNP gives provinces and territories an active role in immigrant selection by authorizing them to nominate for permanent residence individuals who meet specific local labour market needs. (Source Citizenship and Immigration Canada).

• Mortgage Rates:   According to CMHC’s base case scenario, posted mortgage rates will remain relatively flat until late 2012.

• Employment:    In the 12 months to September, employment has grown by 1.7% (+294,000), primarily in Ontario and Alberta.   Over this period, full-time employment rose by 2.5% (+344,000), part-time work declined 1.5% (-50,000) and total actual hours worked increased 2.0%.   This compositional change to full-time positions will continue to support Canada’s housing sector (source CMHC).  However the Globe and Mail reports that in October 2011 Canada posted 54,000 net job losses.  Therefore compositional change to full time positions is weaker than reported by CMHC, but is still in the positive overall for past 12 months. 

• Gross Domestic Product:    In accordance with the consensus among prominent Canadian economic forecasters, growth in Gross Domestic Product is forecast to be 2.3% in 2011 and 2.1% in 2012.  Employment is forecast to increase by 1.6% in both 2011 and 2012. 

• The Income Gap: The Income Gap between the Rich and Poor is increasing faster in Canada than in the United States.  (Source Conference Board of Canada). 

The global economic recovery is proceeding broadly as expected in the Bank's AprilMonetary Policy Report(MPR). The U.S. economy continues to grow at a modest pace, limited by the consolidation of household balance sheets. Growth in Europe is maintaining momentum, although the risks related to peripheral economies have increased. The disasters that struck Japan in March are severely affecting its economic activity and causing temporary supply chain disruptions in advanced economies. Commodity prices have declined recently but are expected to remain at elevated levels, supported by tight global supply and very strong demand from emerging markets. These high prices, combined with persistent excess demand conditions in major emerging-market economies, are contributing to broader global inflationary pressures.  Despite the challenges that weigh on the global outlook, financial conditions remain very stimulative. 

In Canada, the economic expansion is proceeding largely as expected in the April MPR. The economy grew at an annual rate of 3.9 per cent in the first quarter, reflecting continued strong business investment, smaller contributions from household and government spending, and a modest drag from net exports. Although temporary supply chain disruptions are expected to restrain growth sharply in the current quarter, this is expected to be unwound in subsequent quarters.

While underlying inflation is relatively subdued, the Bank expects that high energy prices and changes in provincial indirect taxes will keep total CPI inflation above 3 per cent in the short term. Total CPI inflation is expected to converge with core inflation at 2 per cent by the middle of 2012 as excess supply in the economy is gradually absorbed, labour compensation growth stays modest, productivity recovers and inflation expectations remain well-anchored.

The possibility of greater momentum in household borrowing and spending in Canada represents an upside risk to inflation. On the other hand, the persistent strength of the Canadian dollar could create even greater headwinds for the Canadian economy, putting additional downward pressure on inflation through weaker-than-expected net exports and larger declines in import prices.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be eventually withdrawn, consistent with achieving the 2 per cent inflation target. Such reduction would need to be carefully considered. 

Information note:

The next scheduled date for announcing the overnight rate target is 19 July 2011.
A full update of the Bank's outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 20 July 2011.

Source - Bank of Canada

Bank sets off round of falling fixed rates

It’s the kind of domino effect brokers like, with one lender moving to lower the rate on its five-year fixed followed by another and another and …

“I expect the lenders in the broker channel to follow suit as well,” said Gautam Jain, a mortgage agent with Argentum Mortgage and Finance as well as a certified financial planner. “It’s simple economics: once one lender moves, they all do.”

The country’s largest bank, RBC, moved Tuesday afternoon to drop the posted rate for its residential five-year fixed mortgage by 10 basis points to 5.59 per cent. It did the same for its special five-year closed, which fell to 4.44 per cent

 Another major player in the mortgage space, TD rushed to duplicate the adjustment, dropping it five-year closed and special five-year closed by the same 10 basis points, to 5.59 per cent and 4.34 per cent, respectively. Scotiabank did the same, bringing its own five-year closed in line with RBC and TD. It also dropped its discounted five-year to 4.39. National Bank and Laurentina Bank also lowered their five-year closed fixed-rates to 5.59 per cent, effective May 20.

Other competitors, both the commercial banks and monocline lenders focused on prime, insured loans, are expected to follow in the next 24 to 48 hours. The same herd mentality was evident in the last collective move by lenders to raise rates on their fixed mortgages last month, by 20 to 35 basis points. As it was in April, shrinking bond yields likely precipitated the move.

“Five-year GICs have come down,” said Jain, “so the lenders are passing on the saving to the consumer and also want to encourage more buyers to enter the market, which has been slow in some areas. It hopefully should encourage some people sitting on the fence to buy now.”

Lenders are likely hoping for the same result, although any delay in adopting the lower rates may cost them as brokers and consumers migrate to institutions offering the lowest rates in addition to broker discounts.

The rate drop actually run counter to what most analysts had predicted for fixed mortgages in the near-term. As late as last month, Canadian banks were forecasting as much as a 100-basis point increase in 5-year bond yields over the next two years, making for a corresponding hike in fixed-rates mortgages.

That could still happen, with brokers across the country readying to contact clients ambivalent about whether to convert variable-rate mortgages to fixed, effectively giving them a heads-up.

Source - Mortgage Brokernews.ca

Carefully structured – and with a timely tune-up – your mortgage can be a powerful financial tool and get you through any challenges in the year ahead.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties in Greater Vancouver reached 4,080 in March 2011. This represents a 31.7 percent increase compared to the 3,097 sales recorded in February 2011, an increase of 30.1 percent compared to the 3,137 sales in March 2010 and an 80.1 percent increase from the 2,265 home sales in March 2009. The all-time sales record for March occurred in 2004 when 4,371 transactions were recorded.

“Our market has had a very strong start to the spring season,” Rosario Setticasi, REBGV president said. “With home sales above 4,000 and nearly 7,000 home listings added to the MLS® in March, it’s clear that home buyers and sellers view this as a good time to be active in their local housing market.”

New listings for detached, attached and apartment properties in Greater Vancouver totalled 6,797 in March 2011. This represents a 3 percent decline compared to March 2010 when 7,004 properties were listed for sale on the MLS®, an all-time record for March. Compared to February 2011, last month’s new listings total registered a 19.4 percent increase.

At, 13,110, the total number of residential property listings on the MLS® increased 9.9 percent in March compared to last month and declined 3 percent from this time last year.

“Conditions favour sellers at the moment, but we’re seeing differences in home-price trends and overall activity depending on the region and property type,” Setticasi said.

The MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 5.4 percent to $615,810 in March 2011 from $584,435 in March 2010.

Sales of detached properties on the MLS® in March 2011 reached 1,795, an increase of 34.4 percent from the 1,336 detached sales recorded in March 2010, and a 100.1 percent increase from the 897 units sold in March 2009. The benchmark price for detached properties increased 8.3 percent from March 2010 to $866,806.

Sales of apartment properties reached 1,622 in March 2011, a 29.6 percent increase compared to the 1,252 sales in March 2010, and an increase of 66.2 percent compared to the 976 sales in March 2009. The benchmark price of an apartment property increased 2.1 percent from March 2010 to $403,885.

Attached property sales in March 2011 totalled 663, a 20.8 percent increase compared to the 549 sales in March 2010, and a 69.1 percent increase from the 392 attached properties sold in March 2009. The benchmark price of an attached unit increased 3.6 percent between March 2010 and 2011 to $511,039.



Source - RE/MAX