Vancouver's Real Estate Market

[Timpo]

Hot real estate market leads to fake 'architect' claims
Extreme demand for designers leads to spike of citations against unqualified architectural experts
By Jason Proctor, CBC News Posted: Jun 09, 2016 5:00 PM PT Last Updated: Jun 09, 2016 5:00 PM PT

Hot real estate market leads to fake 'architect' claims - British Columbia - CBC News


There's nothing to prevent pretenders from playing with scale models of buildings. But if they slap the word 'architecture' into a LinkedIn profile, they're playing with fire. (AP)

In housing-obsessed Vancouver, everybody these days is supposedly an expert in architecture. Except when they're not.

Extreme demand for home designers in the Lower Mainland has led to a glut of professionals falsely claiming expertise in "architecture." And the real architects are starting to take notice.

They're talking to you — 'arkitekt'

The Architectural Institute of B.C. has issued no fewer than 12 illegal practice findings against people for advertising expertise in either "architectural design" or something like it in the past three months.

The AIBC's general counsel, Thomas Lutes, says the institute also expects to file three civil suits in the next two weeks.

"There are certainly a lot of non-architects who can and do provide excellent design services," Lutes said.

"However, there is certainly a cohort of designers who are supplying low quality design, low quality services to members of the public. And when they go so far as to call themselves ''architects', we have the ability to step in."

As it turns out, the AIBC is mandated under B.C.'s Architects Act to ensure anyone who isn't a member of the institute can't hold themselves out in a manner suggesting they're a registered architect.

A bulletin issued in November 2012 says the prohibition included titles ranging from 'architectural technician' to 'architectural consultant'; even applying the prefix 'archi-' in a "building design/construction context such as 'architectonic' is forbidden.

Europhiles take note: 'arkitekt' and 'European architect' are also on the list.

"It's an interesting word, because unlike some other professions — including my own as a lawyer — the word 'architect' and the connotations around 'architect' are generally quite positive," said Lutes.

"And so, I think whether the person really means to hold themselves out to have professional qualifications or not, the use of the word 'architect' has cachet."

Just because you read it on LinkedIn ...

Many of the citations on the AIBC's website include descriptions made on LinkedIn profiles and Facebook. Almost all the people cited for illegal practice "took immediate steps" to address the institute's concerns.

"Social media and the ease of self-publication and marketing has increased the volume of what we call misrepresentations," Lutes said.

"The fact that a LinkedIn profile is available around the world means that the misrepresentation is there for everybody to see. And so we get more people reporting to us about these kinds of things — I believe — because of social media and the internet."

Lutes says complaints come from members of the institute as well as other designers and people within city hall planning and permit departments.

He says people who hire faux architects have no means of recourse or complaint beyond the courts when things go sideways on a project.

[Timpo]

Reality check: Can Canada’s red-hot housing markets be reined in?
By Tania Kohut National Online Journalist Global News

Reality check: Can Canada?s red-hot housing markets be reined in? | Globalnews.ca


Affordability has become a big problem in Vancouver and Toronto's real estate markets.
THE CANADIAN PRESS/Darryl Dyck

The Bank of Canada’s ominous warning Thursday cut no corners: skyrocketing housing prices in Vancouver and Toronto are not sustainable.

While some are being shut out of the market, those who jumped in are financially stretched. Should there be a correction, a lot of people could be in serious trouble, the report warned.

So what can be done to control sky high real estate prices in Canada’s hot spots?

The foreign ownership question

Foreign ownership of Canadian real estate increasingly gets the blame for pushing up prices, especially in Vancouver. But put down the pitchforks: the hard data to prove it just isn’t there.

“We don’t really know about foreign ownership as much as we would like to,” said professor William Strange from the University of Toronto’s Rotman School of Management, adding that it’s largely folktales painting a picture of empty downtown highrises, bought and paid for with foreign money.

“And that can matter in a lot of ways.”

There’s been suggestion of creating a special tax for foreign owners of Canadian real estate.

Strange says the first thing we need to do is figure out how many foreigners are truly sitting on property, and base any tax changes on basic principles of fairness.

“If it’s just, ‘these darn foreigners are changing our world,’ I don’t think that’s what Canada is about,” said Strange.
He says one change could be to assess if foreign owners are paying their share of the costs of public services.

“But just objecting because it’s foreigners who are buying it seems not to be in our interest.”

The province of B.C. is starting to track citizenship of real estate owners, as housing affordability reaches crisis levels.

“So much of the [affordability discussion] has focused in part in the absence of reliable data on what exactly is going on. Who is buying, where are they from,” B.C. Finance Minister Mike de Jong said in February.

“We think it’s time to start collecting again.”

Cameron Muir, chief economist with the British Columbia Real Estate Association says he’s eager to see the results, so the “extent and depth” of foreign ownership can truly be examined. But he doesn’t expect it to be a game-changer.

“I think the data to date certainly suggests it’s a factor, but not a sufficient factor to cause the kinds of housing demand that we’re seeing today.”
The Canada Mortgage and Housing Corp. (CMHC) says rates of foreign ownership sit around 3.3 per cent in Toronto and 3.5 per cent in Vancouver when it comes to condos.

Muir says the bulk of B.C. buyers live and work in their communities.

Prime Minister Justin Trudeau has said we need better data on foreign ownership of Canadian real estate, but said we must be wary of imposing hostile measures.

“We have to be very, very cautious about restricting foreign investment in our country,” Trudeau told Global News last December.

Ultimately, Strange said, we should be happy the rest of the world sees Canada as a place to park its money.

“I think that if we tell foreigners that they’re not welcome to invest in Canada we’re going to find there’s lots of consequences for Canadian businesses,” Strange said.

The single detached home: the unicorn of real estate

Sorry, first-time home buyers: a single detached home is likely out of your league. There is simply not enough of the prized real estate to go around.

“Single detached homes… comprise just five per cent of the Metro Vancouver housing stock,” said Muir, calling them “a luxury product.”

Both Toronto and Vancouver lack more land to build more.

“There is no building out,” said Muir. “There really is no ability to sprawl anymore than has already occurred.”
Strange says in Toronto there is simply not enough supply for everyone to have a nice big house on their own lot.

“That’s just not going to work. There’s no way we can accommodate all the growth that’s projected for Toronto. There has to be higher-density development to fit people in.”

Condos, townhouses and other multi-housing structures are becoming the norm, especially for the first-time home buyer.

“Within Toronto we’re talking about [building] up rather than talking about going out,” said Strange.

Even with a shortage of supply, B.C. is seeing a buying frenzy.

“We’re experiencing record consumer demand,” said Muir. “Home sales in the province this year are going to be at all-time record levels.”

It’s not just Metro Vancouver; Victoria and Kelowna are posting housing demand records as well.

“That of course has drawn down inventories,” Muir said, adding there are supply lows not seen in decades in some areas.

“That’s caused quite an imbalance between supply and demand, and causing prices right now to accelerate.”

The possible solutions

Vancouver should see respite in the coming years thanks to a building boom currently underway.

“We’re in a housing cycle that happens every several years in which consumers decide they’re going to buy. And that’s really leading to the record levels,” said Muir.
That’s where the Vancouver market is now: at high tide. And when the demand is great, builders react.

“The lag between getting that signal in the marketplace — supplies get drawn down. It takes a number of years for all these housing units to be completed, to be added into the marketplace,” said Muir.

“In between that, we tend to see rising prices. So we get this ramp up in prices and then a plateau. And that’s quite common in the Vancouver housing market.”

There are a record number of homes under construction in Metro Vancouver, Muir says. But he doesn’t expect real estate prices to ever bottom out.

“Collapse is a pretty charged word.”

He agrees with the Bank of Canada’s comments; growth of 20 per cent year after year is not sustainable. But there will always be people who want to buy real estate in and around Vancouver.

“The regional housing market has many points of growth in which housing demand is very strong.”

More can be done by governments to relax restrictions on Toronto’s housing supply, Strange says.

“This is a competitive market. It’s partly us doing this to ourselves, getting carried away in our enthusiasm,” said Strange.

“And the government does make it a bit harder by regulating supply strictly, and probably needs to find ways to reduce it at least in some parts of the city.”

There are also plenty of places in Canada with plentiful and reasonably priced real estate, but the communities might lack jobs or desirability. Unless that changes, people will flock to the country’s hubs for employment, which tend to be the priciest areas.

“Handling the scale at which Canada has changed is a challenge. And we’re going to need to be at the top of our game to address it,” Strange said.
© 2016 Global News, a division of Corus Entertainment Inc.

[UFO]

Originally Posted by westopher

I'm not asking for a 1-2% tax on absentee owners. I think the tax should be 100%. Hell tax them 1000%. As far as I'm concerned if the problem is this large, they shouldn't be able to purchase, period.

What you think isnt relevant though, no offense. It needs to be realistic, and the 1-2% tax is what some policy makers are talking about. But even then they realize it's a fine line to skirt. Demanding unrealistic options just makes ppl sound like extremist entitled NIMBY's, once again no offense to you as that is a view I'm sure many share.

Well, it takes many people to make a city great, and they come from all socioeconomic backgrounds.

When this runs it's course and all the skilled middle class young talent leave as since have proposed, then the city will suck and be less desirable, which will then make it cheaper. How many truly great to live in cities that are not expensive can you name off?

All real estate investment is, is just old money multiplying to the families of the old money.

That is pretty unfair. There are many who took heavy gambles when buying was a far less favorable proposition, bought several properties, worked their asses off to make ends meet, and are now cashing in their efforts over many many years. Yes, a huge turn of luck is involved. But isn't that really all investment is at the end of the day, a glorified trip to the casino?

[4444]

Originally Posted by G

I have yet to hear any idea/policy from anyone where it fixes this problem. Have you guys? I am actually interested in hearing them :P

Talking about interest rates being increased in benign, as they are a factor of the greater economy (and in Canada, the US).

Here's how to make life more enjoyable for the average Canadian:

1) Lower income taxes on earned income
2) Heavily raise taxes on real estate. All real estate
3) Increase the filing burden and regulations regarding non-resident ownership of real estate, including the requirement to file taxes on income (i.e. capital gain on property) and if you don't (non-residents don't have to file returns), withhold 25% of proceeds. No one in their right mind wouldn't file.
3a) There would need to be a proof mechanism for earned income in Canada to apply the principal residence exemption (i.e. you can't buy a $30M house for a student and get any future gains tax free).
3b) Airbnb over a certain level would be treated as a business, eliminating the utilization of many condos with strata for this, as well as demanding some level of business tax on the property
3c) limit the principal residence exemption to some amount, similar to the US system (you defer gains to a point or on properties of a certain value)
4) Potentially increase sales taxes

items 1), 2), and 4) should net out to zero for the majority of people (it should be set out to do this).

Number 3) will increase the burden and the transparency of who is buying, and will generate tax revenue.

The above are just some of many easy things that could be implemented to level the playing field and make Vancouver more livable for its working residents. but the politicians have no interest in serving those that elected them.

As the most right wing person around, someone who is self sufficient, self educated, all that BS, I'd vote NDP in a heartbeat just to fuck over people that have taken advantage of the current corruption in the political system.

winds of change are in the air... i just feel from the rhetoric that enough smart people in the media are getting some level of steam... something will come out of this that will change things.

[hypediss]

IMO there are multiple plausible causes to the white hot market and they could be attributed to foreign money (not necessarily foreign investors) and the immigrant investor programs (Quebec).

With QIIP still in place, we're going to have individuals that have bought their PR moving to BC (even though they are suppose to stay in Quebec but who checks anyway?) and bring with them a lot of cash for homes; with the veil of being a permanent resident of Canada they would not be labelled as "foreign investors" and as such, policies aiming to tax or prevent foreign investment may not work.

Finding a way to stem the flow of foreign cash would be the best approach - but that's probably the hardest thing to do I mean FINTRAC is suppose to be the solution to stem such flows but we can all see that it's hardly effective at all.

From what i learnt, Chinese investors want to move their money away from China as there is huge risk that the RMB would be devalued in the near future (take that as an anecdote) and furthermore, they want to move out of China due to high political risks/poor living conditions (pollution etc.).

In terms of foreign money, Canada has been a country that embraces multiculturalism and as such, some of us may have some sort of ties with the countries our parents immigrated from (example Hong Kong). Some of us may have immigrated with our parents back in the 80s/90s and have grown up here to be naturalised as Canadians.

As some of us have ties to two countries (somewhere in Asia and Canada), many of us will not only look for jobs locally in Vancouver but back in Asia as well. Those of us that do choose to move to Asia will likely to be pursuing a better and more lucrative opportunity (not to mention lower taxes). Those of us that moved away from our homes to look for jobs still love Canada and our hearts are with Vancouver/Toronto, we want to retire here so what do we do? Purchase homes in Canada with the salary we make in Asia. Would FINTRAC detect and stop us from purchasing homes with cash we earn from abroad? Don't think so (I could be wrong here and if I am, great!). Once we purchased a home, we'll either rent it out or let our parents do the house sitting for us.

While I do agree that there are sense of entitlement mixed in with the message of affordability in terms of home ownership in Vancouver and Toronto but I do think something needs to be done to protect the social fabric/culture that made Vancouver so attractive to this day (I hope some of you guys still agree). If the city/country wants to remain competitive and attractive, intervention is needed to entice the next or current generation of talent and brains to stay and raise their family. Many of my friends have gone south of the border to work; choice was tough for them but as some posters have said they toughed it out and went for greener pastures.

At this point, I don't think there would be a fiscal or political solution that would cool the market without creating casualties - whether its heavy taxation, raising interest rates, or restricting foreign investment. Politicians don't want to do anything as they would not want to be the one who pressed the button to send Canada into a prolonged recession.

[Digitalis]

Worse yet they could become chefs. Where a thriving local economy is in demand for. U know ppl that actually live here and eat here.

Originally Posted by westopher

Yeah 11 dollar an hour job growth for all the people working in luxury retail clothing stores.

[westopher]

What the fuck are you even trying to say with your disjointed sentences?

[Tapioca]

Originally Posted by 4444

Talking about interest rates being increased in benign, as they are a factor of the greater economy (and in Canada, the US).

Here's how to make life more enjoyable for the average Canadian:

1) Lower income taxes on earned income
2) Heavily raise taxes on real estate. All real estate
3) Increase the filing burden and regulations regarding non-resident ownership of real estate, including the requirement to file taxes on income (i.e. capital gain on property) and if you don't (non-residents don't have to file returns), withhold 25% of proceeds. No one in their right mind wouldn't file.
3a) There would need to be a proof mechanism for earned income in Canada to apply the principal residence exemption (i.e. you can't buy a $30M house for a student and get any future gains tax free).
3b) Airbnb over a certain level would be treated as a business, eliminating the utilization of many condos with strata for this, as well as demanding some level of business tax on the property
3c) limit the principal residence exemption to some amount, similar to the US system (you defer gains to a point or on properties of a certain value)
4) Potentially increase sales taxes

1. Most people will probably support this.

2. Well-intended, but many Canadians have legitimate reasons for buying and selling property. Not everyone buys a home and plans to stay in it for 10+ years. Buyers already pay taxes on purchases - GST (new builds) and the PPT. Should they pay more? What about people wanting to get into the market today for legitimate reasons?

3. I'm not sure what this would accomplish other than making accountants happier. This would largely be just another "cost of doing business" for offshore investors and speculators.

3a. This would require collecting data which the province is now committed to doing. The feds don't collect this data on their own.

3b. I don't think anyone knows what to do with AirBNB. It's successful because it operates in a grey area that is difficult to enforce. You can have neighbours ratting each other out, I suppose.

3c. When single family homes are over a million dollars, what is a reasonable limit to this exemption?

4. Sales taxes should have been raised a long time ago.

IMHO, none of these measures will have an immediate and drastic effect on the real estate market. This is what people seem to want.

[UFO]

Originally Posted by Tapioca

3b. I don't think anyone knows what to do with AirBNB. It's successful because it operates in a grey area that is difficult to enforce. You can have neighbours ratting each other out, I suppose.

On that note, how about enforcing unreported rental suites/rooms. With how rents are here nowadays, how many are collecting rental income tax free? I wouldn't doubt there are those in uproar about shadow flipping but collecting rent under the table on their basement suite(s) and laneway home.

[GLOW]

Originally Posted by Timpo

Hot real estate market leads to fake 'architect' claims
Extreme demand for designers leads to spike of citations against unqualified architectural experts

great we have a bunch of art vandelays now to go with shady realtors
if dr dre can call himself a doctor and john cena dr of thugonomics, then those guys can call themselves architects amirite

[josayeee]

Originally Posted by 4444

Here's how to make life more enjoyable for the average Canadian:


3) Increase the filing burden and regulations regarding non-resident ownership of real estate, including the requirement to file taxes on income (i.e. capital gain on property) and if you don't (non-residents don't have to file returns), withhold 25% of proceeds. No one in their right mind wouldn't file.


Number 3) will increase the burden and the transparency of who is buying, and will generate tax revenue.

Pretty sure this one is already in effect?

[Tapioca]

To be honest, I think AirBNB I only an issue in certain areas of Metro Vancouver, like downtown Vancouver. People are upset because they feel that temporary rentals shouldn't take away their chance at renting an apartment in the heart of the city.

NYC and San Fran are 2 desirable cities that have taken action to reduce the amount of AirBNB activity. I think the City of Vancouver should study what they're doing and how effective their actions have been.

People who have not been reporting their AirBNB income should be reported and should be forced to pay their taxes. However, like illegal basement suites, CRA doesn't care if the income is drawn from activities that violate local bylaws. And if income from AirBNB were taxed as business income, well people would just incorporate and pay lower corporation taxes.

[Gumby]

Originally Posted by UFO

On that note, how about enforcing unreported rental suites/rooms. With how rents are here nowadays, how many are collecting rental income tax free? I wouldn't doubt there are those in uproar about shadow flipping but collecting rent under the table on their basement suite(s) and laneway home.

Agreed!

Long story short - I have a basement suite which was rented out from September 2015 to January 2016. After doing it 100% legal (report my extra income, pay extra property taxes, paid for a fucking business license) my net income from having a basement suite was pretty lame. And even now, while it's sitting empty, I'm still paying for the extra property taxes and business license.

[Hondaracer]

This is kind of OT but I've never waded into this territory before.

We have a house in Van, the basement is quite low but we've had two different realtors come through and say it would help 10 fold to have a suite in the basement, it's obviously going to be illegal as I don't see being able to go through the proper avenues given the ceiling heights etc

Do people just build the basement suites without permits or what? The basement is semi-unfinished, has a bathroom but the rest of the walls are kinda half ass boarded, no real proper outlets however it is wired for them etc

[Spoon]

Still remember when we were shopping for a house. Even the realtors were providing hook ups to people who will get an illegal suite up and running so you can get a mortgage helper.

Seriously, we're dealing with Chinese people. Legality is like the last thing on their check list.

[GLOW]

my gut feeling is that if you're going through like an asian GC/contractor it's not permitted and just done, unless a major reno like gutting the house. my feeling is if you want to get the GC to go through the permitting process they tell you the 'upcharge' to go through official channels, permit costs etc.

i've seen some old basements with real low ceilings (i can touch it and i'm short). only way you can get more space would be to dig lower, that would involve structural engineer judgement wouldn't it? sounds $$$$

it's vancouver so wouldn't it be better off to sell it as-is? not sure if it's worth the hassle i think it'll sell regardless no?

[originalhypa]

Originally Posted by Hondaracer

Do people just build the basement suites without permits or what? The basement is semi-unfinished, has a bathroom but the rest of the walls are kinda half ass boarded, no real proper outlets however it is wired for them etc

There are a ton of illegal suites in the lower mainland. A buddy of mine rented a place in east Surrey, near the Langley border. There was a family in the basement, another family in the main floors, and another family living in the coach house above the garage. I'm pretty sure that they exceeded the square footage capacity for the tiny lot. But the streets are littered with far more cars than a standard single family home should have.

[quasi]

Originally Posted by UFO

On that note, how about enforcing unreported rental suites/rooms. With how rents are here nowadays, how many are collecting rental income tax free? I wouldn't doubt there are those in uproar about shadow flipping but collecting rent under the table on their basement suite(s) and laneway home.

The city actually goes after these people in my area for the property taxes, not to sure about if anything is done about income tax and reporting. They inspected my place to make sure I didn't have a suite and I've heard stories from neighbors of them sneaking into yards and in one case opening a door and popping there head inside an unlocked door like fucks could be given to see if there was a suite downstairs.

[quasi]

Originally Posted by originalhypa

There are a ton of illegal suites in the lower mainland. A buddy of mine rented a place in east Surrey, near the Langley border. There was a family in the basement, another family in the main floors, and another family living in the coach house above the garage. I'm pretty sure that they exceeded the square footage capacity for the tiny lot. But the streets are littered with far more cars than a standard single family home should have.

Yup, your friend lives in my area and this is the problem with it. You have people treating these houses like apartments, if there renting out the basement they are not allowed to rent out the coach house and vice versa. There is seldom spots to park on the streets because of all the renters, that part doesn't bother me to much unless I have guests. The fines are huge if you get caught renting both.

I don't have a coach house and I don't think I want to rent my basement out way to many horror stories. I have a teacher on one side and a cop on the other and both have had there fair share of shitty tenants.

[Hondaracer]

I'm going to be doing all the building/contracting of the suite if we go forward with it.

I'm just wondering as to the legality of there just being a finished basement there one day as opposed to the state it's in now lol

I guess that's just how it's done though for the most part? Who's to say when it was built or put in

[Gumby]

Originally Posted by Hondaracer

I'm going to be doing all the building/contracting of the suite if we go forward with it.

I'm just wondering as to the legality of there just being a finished basement there one day as opposed to the state it's in now lol

I guess that's just how it's done though for the most part? Who's to say when it was built or put in

I don't represent the city, but my experience stems from having a legal basement suite, and seeing my cousin get a notice from the city saying "do these things to make your basement suite legal", or "remove the cellar kitchen and its cooking facilities" (quoted from the letter).

Finishing the basement is perfectly acceptable, but if you put in kitchen facilities, the city will want their cut if they find out. The city will send an inspector to make sure it meets various building-code requirements for a suite, make you apply for a license officially recognizing your suite (you will end up paying more property taxes), and an annual business license. These steps will be required whether you rent it out or not!

What boggles my mind is that you see numerous houses for sale with an ad that says "unauthorized basement suite: 1". Why does the city not go after these people?

[UFO]

Originally Posted by Gumby

Agreed!

Long story short - I have a basement suite which was rented out from September 2015 to January 2016. After doing it 100% legal (report my extra income, pay extra property taxes, paid for a fucking business license) my net income from having a basement suite was pretty lame. And even now, while it's sitting empty, I'm still paying for the extra property taxes and business license.

If all people did that, it would cool the Van housing market quick. New builds now commonly have 2 basement suites and laneway house, yet sell quick and easy because owners see an easy $2500-3000+ a month tax free in mortgage help. Add that to an average $2000/mth regular mortgage contribution and you don't need to make CEO money to afford a 2M house. Now think of how that. that extra taxed income can contribute to actual social problems if everybody went about it the proper way.

Originally Posted by quasi

The city actually goes after these people in my area for the property taxes, not to sure about if anything is done about income tax and reporting. They inspected my place to make sure I didn't have a suite and I've heard stories from neighbors of them sneaking into yards and in one case opening a door and popping there head inside an unlocked door like fucks could be given to see if there was a suite downstairs.

The increase in property tax I'm guessing just goes to pay for increased use of garbage, water, etc. What is the fine/penalty? Clearly not big enough to deter people from doing that. Then we also have the issue of essentially tax evasion with illegal rental suites and non-reported rental income, not sure what sort of hurt CRA could deliver but I'm guessing they know this happens a lot and they can't really do anything to enforce it unless somebody rats out on a landlord?

[GLOW]

i think what some builders do is leave rough-in for future there so there's no complete kitchen and cooking facilities, and it's up to you if you choose to install it, saving them hassle and costs.

i'm guessing the city doesn't want to spend the effort and manpower to look through all that and figure out what is what in each home. CoV is about 3 months behind on permits (t least for electrical) they're busy enough as it is on current paperwork, let alone opening a can of worms to go through real estate listings/houses to check what's really in their basements.

[UFO]

Originally Posted by Gumby

What boggles my mind is that you see numerous houses for sale with an ad that says "unauthorized basement suite: 1". Why does the city not go after these people?

I think you don't need a business license and all that if its meant as an 'in-law/unauthorized suite', and perhaps the building code differentiates from rental vs in-law suite.

[IGTBAR]

.