Anna Asi, M.A.

Vancouver Olympic Village Condo buyers beware

A lawyer warns that it is unclear who would be on the hook for any problems at the former Olympic Village.

See Below for CBC news report:

Price of units lower, but still no bargain, expert says

Even at reduced prices, it's unlikely taxpayers will fully recoup $740 million invested in project, according to UBC professor

The new prices for condos in the taxpayer-owned Olympic village are more in line with the rest of the real-estate market, but they're still no bargain.

That's the analysis of a realestate expert and a business professor who say it will still take years to fill out the Southeast False Creek project.

And even then, it's unlikely that taxpayers will fully recoup the $740 million they invested in the project through construction financing and land sales.

On Thursday, condo marketer Bob Rennie set the stage for the sale of 230 units in five buildings starting today.

He laid out for reporters and fellow real-estate agents an average price reduction of 30 per cent for the units, which make up about half of the 474 unsold units in the village.

Some units, principally the more expensive ones, have been reduced by as much as 50 per cent, while price cuts on smaller lower-priced units are closer to five and 10 per cent.

But Scott Brown, the vicepresident of residential marketing for Colliers International in Vancouver, said those cuts may not be enough.

"It's definitely come down from where it was, which tells you how far out of reality the prices were. They were really out of whack," he said. "I don't know if they have come down far enough to drive any really serious volume."

Brown said Colliers' market research has shown that threequarters of sales in the area have been for units priced at $650 to $750 per square foot.

But most of the new prices in the Olympic village are still higher than that.

Brown cited a 1,445-squarefoot two-bedroom unit now offered at $1.3 million. At nearly $900 per square foot, "that's not a deal," he said. "Those prices are not low enough yet where people will say, 'This is such a deal I've got to buy it now.'" Tsur Somerville, a professor at the University of B.C.'s Sauder School of Business, said he thinks Rennie's overall repricing strategy will eventually drive enough sales for the city to recover the remaining $570 million it loaned for construction.

But he's doubtful there's enough residual value left to also cover the outstanding $170 million owed on the city's sale of the land to the project's original owners, Millennium Developments.

"I think it is reasonable to say that it is highly unlikely that the taxpayers of Vancouver will see the full value of the lands the city contributed to the project," he said.

Somerville said the prices are competitive with other built projects in the city but not for those being sold on the basis of pre-sales, where buyers put down a small deposit and have longer to pay. By Thursday, a dozen people had camped outside the sales office, waiting for today's opening sale.

Rennie said the lineup was encouraging and he expects to see a crush of potential buyers on the weekend. However, the lineup pales in comparison to the interest in other condo developments in Metro Vancouver.

On Saturday, Bosa Properties will open its sales centre for its 45-storey 202-unit Sovereign tower in Burnaby's Metrotown.

Earlier this week, more than 400 people lined up and 2,600 signed on to a company website.

The company sent people home after giving them numbers reserving their place in line, said Bosa vice-president Daryl Simpson. He projected that up to 70 per cent of the units, priced at $650 a square foot or less, will be sold by the end of the weekend. Rennie told reporters that demand in the Olympic village can't be compared to pre-sales at other developments, noting he'd sold all but 11 of 540 pre-sale units in Wall Centre False Creek behind the village.

Pre-sale buyers put down 10 to 20 per cent and have up to three years to pay. But with built stock such as the Olympic village, buyers have to complete their sales in 60 or 90 days. For that reason, Rennie expects upwards of 70 per cent of buyers in the village will be people wanting to live there or buying for their family. There is little true investor demand for the units, he said. Brown said he thinks Rennie's prices may only translate into four to eight sales per month. "I don't think necessarily they will do 20 or 30 transactions a month and shoot the lights out."

© Copyright (c) The Vancouver Sun

Condo Boom in Vancouver

The Sovereign Condominiums in Burnaby by Bosa Properties sells out in 1 day

Vancouver Olympic Village New Prices Revealed!

Realtor Bob Rennie dodged questions Thursday morning about whether taxpayers would even come close to breaking even on the Olympic Village development.

Hosting a media launch about sales that start Friday at what’s now branded The Village on False Creek, he said Rennie Marketing Systems was working to stabilize the city’s asset and to maximize revenue.

Rennie said he sees the downtown condo market stabilizing and the real estate market reviving from its recent slump.

Instead of aiming to sell approximately 480 unsold units like he did last May after the 2010 Winter Games ended and the property was returned to developer Millennium Water and the city, Rennie aims to sell 230 condos in two areas of the village. Of the 737 condos at the village, 263 have sold, most of them in 2007. Friday’s launch is the third time the units have gone on sale.

Receiver Ernst and Young has contracted with a company to rent approximately 114 units to get the “ghost town” populated fast. Those units don’t include the 119 rental units purpose-built by the developer or the city’s 252 market rental, co-op and below-market rental units in the village.

Rennie blamed slow sales after the Games on bad timing due to a sluggish economy.

“I do not believe we ever had a product problem,” Rennie said. “What I do have is a pricing problem, and that pricing problem on May 15 was compounded by the fact that there was 480 units for sale and people didn’t see any sense of urgency and everybody just moved to the sidelines and folded their arms.”

He’s confident the prices are appropriate now. He said market testing done before the latest sales launch attracted 31 offers in 10 days. They included 12 for units that cost more than $900,000, 11 offers for units priced from $600,000 to $900,000 and eight offers for units under $600,000.

Seven chairs sat outside the sales centre at 5 p.m. on Wednesday. Fourteen chairs labelled with people’s names were positioned outside the sales centre just before 11 a.m. Thursday morning. The sales centre was to open at noon Thursday with sales to begin Friday. Rennie said he was giving a tour to 1,058 realtors through the site yesterday starting at 2 p.m.

Prices for the unsold units have been reduced an average of 30 per cent from May 2010 rates. Rennie said rates on the lower priced units weren’t reduced much—a studio now goes for $349,500 to $354,900—but prices on larger units that were priced at $1.5 million saw greater reductions.

He aims to sell 60 units in 60 days.

He noted the receiver for the village, Ernst and Young, has been tackling building deficiencies and that regular new home warranties protect owners.

Only a bank and a private liquor store operate at the village. Rennie said London Drugs is eying population numbers, negotiations are underway with an unnamed grocery store—previously the grocery seller was meant to be Urban Fare—and a consultant has been hired to focus on leasing the other commercial spaces.

The city is owed $740 million for the development.

© Copyright (c) Vancouver Courier

Vancouver Olympic Village Latest Updates

Olympic village condo prices to be slashed by an average of one-third

Condo prices at the troubled Olympic village project will be reduced by an average of 30 per cent from May 2010 levels, according to Ernst & Young, the project's receiver. The following is a look at how much Olympic Village units are going for on the market.

$575,000: 1 Beds, 1 Baths - # 710 1633 ONTARIO ST.

$589,000: 1 Beds, 1 Baths - # 405 1633 ONTARIO ST.

$469,000: 1 Beds, 1 Baths - # 703 123 W 1ST AV

$469,500: 1 Beds, 1 Baths - # 405 123 W 1ST AV

$760,000: 2 Beds, 1 Baths - # 710 123 W 1ST AV

$998,800: 2 Beds, 2 Baths - # 804 123 W 1ST AV

$498,000: 1 Beds, 1 Baths -# 201 181 W 1ST AV

$539,980: 1 Beds, 1 Baths - # 502 181 W 1ST AV

$1,238,000: 2 Beds, 2 Baths - # 607 181 W 1ST AV

$1,259,000: 2 Beds, 2 Baths - # 909 181 W 1ST AV

Courtesy of Vancouver Sun.

Real estate market calm expected to follow hectic 2010 in Metro Vancouver

Home sales forecast to increase modestly across B.C. as prices stabilize

VANCOUVER - If there's one sentence to sum up B.C.'s real estate picture in 2011, it's probably "Let's take a breather."

While Metro Vancouver prices rose fairly sharply over the past year, the same wasn't true in the Interior and other parts of the province where prices were flat and sales stalled.

A combination of low interest rates, relatively stable prices throughout the province and a gradually improving economy helped by the 2010 Winter Olympics brought buyers -- especially first-time buyers -- back into the market after a recessionary slump.

Those conditions are expected to continue in 2011, although interest rates are predicted to gradually rise.

That may keep a lid on housing prices, which are also expected to rise a bit, although less than in 2010.

However, there will be no repeat of 2010's price bump.

"When you look at 2010, we saw fewer sales than 2009 [across B.C.]," Cameron Muir, chief economist for the B.C. Real Estate Association, said in an interview. "Since [July], we've seen a modest increase in consumer demand."

Muir said he expects the province will see that continue into 2011, although the sales numbers aren't expected to post any records or rise above the 10-year average.

"I'd expect housing sales to be around 80,000 to 82,000 units in 2011. We're likely to see a six-to seven-per-cent increase in housing sales this year compared to last year."

Muir said job growth and rising incomes will underpin demand, although higher interest rates in the second half of the year will partly offset the benefits of more economic activity.

"There will be a much more gradual increase in consumer demand and less volatility. There will be more stable market conditions this year."

Robyn Adamache, senior market analyst for Metro Vancouver with Canada Mortgage and Housing Corp., said in an interview that she doesn't see any huge changes this year over 2010.

"We're expecting a slight increase in sales, about five to six per cent, for 2011.

"For 2010, we were around 31,000 sales.

"For 2011, we're expecting 33,000 sales."

However, Adamache said Metro Vancouver should see much less price growth in 2011.

"In 2010, we saw a 14-percent increase in prices.

"We're calling for a three-percent increase in 2011."

Adamache said she expects that mortgage rates will creep up later in 2011, although not dramatically. "So, that will put a bit of a damper on sales."

Tsur Somerville, director of the centre for urban economics and real estate at the University of B.C.'s Sauder School of Business, said he doesn't like forecasting the future, but nevertheless believes that 2011's real estate picture will be largely determined by the speed of the recovery and the Bank of Canada's action on interest rates -- and how that reflects on mortgage rates.

Ron Antalek, a realtor with ReMax Ridge Meadows Realty, said in an interview that he's seeing an uptick in buyers who believe interest rates are heading north.

He believes there will be a modest increase in both pricing and demand this year.

"The vast majority of buyers are convinced that prices won't decline and that interest rates will rise.

"So, they feel their investment is safe.

"Sales are picking up." Mike McDougall recently took possession of a new detached home in Maple Ridge after moving to B.C. from Alberta.

"Hopefully, it was a good time to purchase," McDougall said in an interview.

"From what I hear, it was. I think there's still potential for rates to go up."

McDougall, who moved into his new home on Jan. 12 with his wife and two small children, said he was also comfortable with the price he paid.

Average BC home price hits record high of $505,178 in 2010
BCREA: Sales fell 12%

VANCOUVER - The average price for a home in British Columbia reached a record high of $505,178 in 2010, the B.C. Real Estate Association says.

Home sales fell 12 per cent last year to 74,640.

The BCREA cited fewer active listings and increased consumer demand in a news release this morning.

"Tighter credit conditions and expended pent-up demand curbed home sales during the first half of 2010,” Cameron Muir, BCREA chief economist, said in the release.

“However, low mortgage interest rates and improved economic conditions buoyed home sales in the latter half of the year.”

"The inventory of homes for sale peaked at 53,375 units in May before declining 14 per cent to 46,000 units by December,” added Muir. “The combination of fewer active listings and increased consumer demand has improved market conditions in many areas."

Below is the district-by-district breakdown of average home prices in BC:

BC Northern: 192,971, down 5.8 %
Chilliwack: 264,266, down 13.8%
Fraser Valley: 444,258, down 0.5%
Greater Vancouver: 700,773, up 11.7%
Kamloops: 288,009, down 5.5 %
Kootenay: 256,013, down 8.4%
Northern Lights: 175,403, down 19.5%
Okanagan Mainline: 393,512, down 3.6%
Powell River: 275,732, up 19.8%
South Okanagan: 282,308, down 19.3%
South Okanagan: 282,308, down 19.3%
Victoria: 496,814, down 4.9%

Courtesy of Vancouver Sun.

Real estate market stable at year-end

The Greater Vancouver residential housing market entered three distinctive phases in 2010. Continued buoyancy from the post-recession recovery began the year, followed by a summer lull and, throughout the fall, a sustained period of stability.

The Real Estate Board of Greater Vancouver (REBGV) reports that total sales of detached, attached and apartment properties in 2010 reached 30,595, a 14.2 per cent decrease from the 35,669 sales recorded in 2009, but a 24.2 per cent increase from the 24,626 residential sales in 2008. Last year’s number of housing sales was 10.3 per cent below the ten-year average for annual Multiple Listing Service® (MLS®) sales in the region.

The number of residential properties listed for sale on the MLS® in Greater Vancouver increased 9.7 per cent in 2010 to 58,009 compared to the 52,869 properties listed in 2009. Compared to 2008, last year’s total represents a 7.3 per cent decline compared to the 62,561 residential properties listed in 2008. The number of properties added to the MLS® peaked in April and generally declined for the remainder of the year.

“The last two years have been a bit of a rollercoaster for the real estate market. However, sales over the past six months have definitely shown a trend toward stability. We think that’s good news for home buyers and sellers,” Jake Moldowan, REBGV president said. “The Greater Vancouver housing market experienced a modest increase in home prices in 2010, and a continual decrease in the number of properties being listed for sale.”

Residential property sales in Greater Vancouver totalled 1,899 in December 2010, a decrease of 24.5 per cent from the 2,515 sales recorded in December 2009—an all time record for the month—and a 24.3 per cent decline compared to November 2010 when 2,509 home sales occurred. 

More broadly, last month’s residential sales represent a 105.5 per cent increase over the 924 residential sales in December 2008, a 0.1 per cent increase compared to December 2007’s 1,897 sales, and a 12.6 per cent increase compared to the 1,686 sales in December 2006.

The residential benchmark price, as calculated by the MLSLink Housing Price Index®, for Greater Vancouver increased 2.7 per cent to $577,808 between Decembers 2009 and 2010. However, prices have decreased 2.6 per cent since hitting a peak of $593,419 in April 2010.

“Although we saw some pressure on home prices throughout the year, home values in 2010 remained relatively steady in the region compared to the last few years when we witnessed much more fluctuation,” Moldowan said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 1,699 in December 2010. This represents a 21.1 per cent decline compared to the 2,153 units listed in December 2009 and a 43.9 per cent decline compared to November 2010 when 3,030 properties were listed.

Sales of detached properties in December 2010 reached 769, a decrease of 14.8 per cent from the 902 detached sales recorded in December 2009, and a 121.1 per cent increase from the 348 units sold in December 2008. The benchmark price for detached properties increased 4.0 per cent from December 2009 to $797,868.

Sales of apartment properties reached 811 in December 2010, a decline of 29.7 per cent compared to the 1,154 sales in December 2009, and an increase of 94.5 per cent compared to the 417 sales in December 2008.The benchmark price of an apartment property increased 1.2 per cent from December 2009 to $387,115.

Attached property sales in December 2010 totalled 319, a decline of 30.5 per cent compared to the 459 sales in December 2009, and a 100.6 per cent increase from the 159 attached properties sold in December 2008. The benchmark price of an attached unit increased 2.7 per cent between December 2009 and 2010 to $490,869.

Property assessments jump 12 per cent for Vancouver homes
B.C. property assessments online, see evaluations of your homes and others

British Columbia Assessment Authority data for 2011 show that market value for homes in the city of Vancouver rose more than 12 per cent from the previous assessment, while home values in Richmond shot up more than 17 per cent.

The assessments were made available online today for owners of the 1.9 million properties in B.C.

B.C. Assessment staff began posting data this past weekend.

Notices with expanded information were given to Canada Post on Dec. 31 and will be arriving in the mail this week.

Online users can go to www.bcassessment.bc.ca and click on the box for “e-valueBC” to see the new figure for their own and neighbouring properties. B.C. Assessment’s website will also show the value of sales in the surrounding area in 2010.

For most properties, B.C. Assessment shows the assessed value as of July 1 of the previous year. Their actual value depends on the market at a particular time.

B.C. Assessment appraisers takes into account criteria such as size, age, quality, condition and location of individual properties.

This year’s deadline to appeal assessments is Jan. 31. If you don’t agree with the assessment, B.C. Assessment encourages you to call or visit their office to try to resolve the matter.

The Crown corporation’s office is closed Monday and reopens Tuesday.

While individual property values are now online, regional and provincial statistics and graphs will be coming out on tomorrow. That information will include the total value of the provincial assessment roll, year-over-year changes in assessment values in municipalities, and new construction.

The capital region has more than 140,000 property owners. At this time last year, most homes were valued higher than in the previous year.

In January 2010, the total value of the Greater Victoria assessment roll was $88.16 billion, up from $84.6 billion year-over-year. New construction, subdivisions and rezonings represented $1.3 billion of that increase.

Provincially, the assessment roll reached $969 billion in January 2010.

If a property’s assessment goes up, that does not always mean municipal taxes will increase. What typically makes the difference is if an assessment rises or falls beyond the average.

Landcor Data Corp. of New Westminster predicted last month that Greater Victoria single-family house assessments would increase throughout the region. The company, which analyses B.C. real estate data, expects these assessments to increase by as much as 12.6 per in Sidney, and by 1.3 per cent in Langford.

BC Real Estate Association (BCREA) Chief Economist Cameron Muir discusses the November 2010 statistics and an in depth look at the rollercoaster of home sales.

The Vancouver Condo Project Receiver To Approve Significant Price Cuts Later this Week
Condo marketer Bob Rennie announced that he is about to receive approval from Ernst & Young to reduce condo prices across the board in the Olympic Village complex in southeast False Creek. Although he did not speak to any specific numbers, Rennie called the pending reductions ‘significant' . He spoke about a very delicate positioning of the new Olympic Village marketing plan quoting a ‘do it right or die' approach is the one they'll be taking.
The neighbourhood's reputation has taken a beating over the past year as the market for luxury concrete condos in Vancouver has softened. I did witness quite a few of the resale unit listings go stale towards the end of the Summer.
The social or non-market component has not been without its share of problems, particularly finding someone qualified to manage it. The development mix of high-end luxury condos and social housing has also been a contentious issue and a thorn in the side of the marketing effort.
Rennie hinted that a possible relaunch price could be around $1,000 per square foot for the high-end units and that he expects to move 100 units by June next year. The target date for the newly priced marketing relaunch is Feb 12, 2011, the one year anniversary of the 2010 games.
My feeling is that while $1,000 per square foot will be achievable, those sales will be limited to the best of the best only – waterfront suites. Look for a huge price differential between the waterfront suites and those further back in the compound towards the Wall Center at False Creek development site.

Metro Vancouver housing became more affordable in the third quarter of 2010, according to the RBC Housing Affordability Index.

Or rather, the unaffordability of Metro Vancouver housing became less severe, because the notion of "affordability" in Vancouver's high-priced markets is always a relative term.

The latest edition of RBC's regular report noted that in the third quarter of 2010, Metro Vancouver's home ownership costs declined between 2.2 and 5.4 percentage points following five straight quarters of increasing costs.

That, report author Robert Hogue noted, was the biggest decline among major Canadian markets, "but is unlikely to change the perception that this is an expensive market to enter, because affordability remains very poor."

The RBC affordability measure is a calculation that estimates what percentage of the median family income in each market would be required to carry all the costs associated with home ownership (including payments on a standard 25-per-cent down, 25-year mortgage, property taxes, utilities and insurance).

In Metro Vancouver, a standard bungalow, with a purchase price of $672,500, would require 69 per cent of that median income to carry all its costs, which is down 5.4 percentage points from the previous quarter.

The standard two-storey home, with a purchase price of $766,300, would require 78 per cent of that median income, down 4.7 percentage points from the previous quarter.

Metro Vancouver condos are the most affordable with the average price of $390,400 taking up 40 per cent of that median family income, which was down just 2.2 percentage points from the previous quarter.

For comparison, however, in Toronto a standard bungalow with an average price of $466,600 requires 47 per cent of that city's median family income to cover ownership costs.

In Montreal, a typical two-storey home with an average price tag of $355,300 requires 51 per cent of that city's median family income carry its mortgage, utilities and taxes.

In Calgary, the standard condominium with an average price of $246,700 needs 23 per cent of the city's median family income to pay for it.
Relatively speaking, ouch.

In the report, Hogue said "such high ownership costs continue to weigh on demand, which remains fairly weak despite a modest pick-up in home resales in September and October."

And across B.C. in general, Hogue noted that B.C.'s housing affordability measures are "significantly above long-term averages,"

The financial problems with the are taking the troubled project in a new direction, as the owners go into receivership. “This agreement gives us stability,” said Vancouver city councillor Geoff Meggs.

“Now, the milestone payments don’t have to become a recurring crisis. If (the developer) lacks the capacity to pay each time, the damage to the asset will be greater, compared to an orderly approach.”

The City of Vancouver has negotiated an agreement with the owners of the Millennium Water development to put the project into receivership and hand over management to accounting firm Ernst and Young.

Millennium recently failed to make a scheduled loan payment, which raised serious concerns about how the company will pay back its loans on the $1 billion project.

In August, Millennium was supposed to make a $200-million payment, but the city received $192 million and by Sept. 20, a total of $197 had been received. The next payment of $75 million was due from Millennium in January.

“They were facing another deadline in 60 days, which was problematic,” said Meggs. “We always had the option to force them into receivership, but we decided to negotiate an agreement for consensual receivership.”

The owners of Millennium Southeast False Creek Properties, Shahram and Peter Malek, agreed to go into receivership to avoid pending legal action.

The city was preparing to go to the B.C. Supreme Court to petition Millennium into receivership.
Receivership is a form of bankruptcy in which a company can avoid liquidation by reorganizing with the help of a court-appointed trustee.

There are a total of 1,108 units in the Millennium Water project. The marketing company hired by Millennium has managed to just sell 259 units out of 737 market sales units, about 35 per cent of the total. This number includes 223 pre-sales units that were sold last year.

The agreement allows the receiver to make immediate decisions about a new marketing strategy and is designed to secure the payment of about $740 million dollars that is still owed by Millennium to the City. The loan for construction represents about $560 million.

“First, we will sit down and produce a marketing plan that makes adjustments to price,” said Meggs “As part of the agreement, Millennium has pledged other types of security that will be used to close the gaps in the repayment program.”

According to Meggs, cutting prices could reduce the amount of revenue that was anticipated from the sale of the units and create a payment gap.

Almost half of the unsold units left on the market are priced at less than $1 million, but another 24 per cent of these units are priced between $1 million and $2 million.
Twenty eight per cent cost more than $2 million.
About 60 per cent of the 119 market rental units have been rented out.

The city is working with a non-profit housing operator to manage 252 social housing units.

New York-based Fortress Investment Group, which was the developer’s original lender, stopped financing the project.

This move forced the city to buy out the building loan to better control costs and finish in time for the 2010 Winter Games.

The few residents found walking through the empty streets of the Olympic Village were disappointed, but not surprised, to hear Wednesday that the developer of their condos has gone into receivership.

“Sad to hear that,” said Keith MacPherson, who has lived in the Millennium Water development in False Creek since the summer. “I really like the area, the facilities are great and it’s a good environment.”

Vancouver officials announced Wednesday that the city has a reached a “mutual agreement” that would allow a receiver, auditor Ernst & Young, to manage the development, in place of Millennium.

That company is still on the hook with $740 million in outstanding loans to the city.

How hard taxpayers will feel the heat of the debt will not be deteremined for some time, Mayor Gregor Robertson said, as it will take years for the remaining 454 market condos to sell and the city to recoup its losses.

Marie, a woman walking through the neighbourhood’s main square who did not give her last name, said the news of the receivership comes as no shock.

“I’ve had misgivings right from the beginning,” she said. “There’s just been a few too many concerns.”

Scott Hennig, spokesperson for the Canadian Taxpayers Federation, said he didn’t think the city has much chance of recovering any of their investment, let along making any money off it.

“This is bad news and maybe a bit surprising that taxpayers are going to be left holding a bag,” Hennig said. “It’s unique circumstances, but this is what happens in general when governments come in and bail out companies that can’t make a go of it anymore.”

Here's how the Olympic Village fiasco came to be:

Nov. 2002: City of Vancouver signs deal with Vancouver Olympic Bid Committee to build an Olympic Village.

July 2003: IOC selects Vancouver/Whistler to host 2010 Winter Olympics.

April 2006: Millennium Group outbids better-known Concord Pacific and Wall Financial to build the village, offering the city a record $193-million for the 2.6-hectare city-owned False Creek development site. Millennium expects to spend $750-million, borrowed from Wall Street’s Fortress Investment Group, to develop 1,100 units, including 200 for rental and 250 for social housing.

Oct. 2007: Millennium pre-sells 222 of 737 available condos ranging in price from $600,000 to $3.4-million. Some of those pre-sale buyers are currently in court trying to get out of the deals.

Oct. 2008: Leaked documents show city council unanimously agreed to lend $100-million to the development to ensure it be built prior to Olympics. The city is liable for delivering the village on time.

Nov. 2008: Issue becomes political hot potato during lead-up to civic election, which ends in landslide win for Gregor Robertson and Vision Vancouver on Nov. 15, 2008. Pundits say the controversy played role in demise of the NPA and its mayoral hopeful Peter Ladner.

Jan 2009: Fortress tightens loan conditions on cost overruns, which Millennium can’t meet. Fortress cuts off funding and city starts process to step in.

Feb. 2009: City votes unanimously to bail out project to ensure completion.

Dec. 2009: Olympic Village completed after city agrees to buy out Millennium’s borrowings.

Feb. 2010: Olympics held.

May 2010: Millennium starts trying to sell 450 remaining units with little luck.

Sept. 2010: Millennium now owes the city $740-million and has sold just 259 units with almost 500 unsold.

Oct. 2010: Millennium defaults on $200-million it owed the city, only paying $192-million.

Nov. 2010: Millennium unable to meet payments and a receiver is appointed with the city owed $740-million. Total project cost was just over $1-billion.

TORONTO — Canadian home sales volume rose in October for the third month in a row as the market continued to rebound from a trough hit in July following months of revved up activity in early 2010 and late 2011.

The Canadian Real Estate Association said Monday that seasonally adjusted home sales on its Multiple Listing Service climbed 4.6 per cent in October, following similar increases in August and September.

CREA says October's gains are a further sign the market is returning to normal and is balanced, which means favouring neither buyers nor sellers. Prices were up slightly from October 2009 and from September of this year.

Housing market activity now sits 13.3 per cent above July levels, when it reached a low-point for the year.

Still, sales activity was 21.6 per cent levels reported last October, when activity set a new record for the month.

"National sales activity is now running almost halfway between the highs and lows posted between late 2008 and late 2009," said Gregory Klump, CREA's chief economist.

"This suggests that the Canadian housing market may be starting to normalize. After the wild rollercoaster ride that many housing markets have been on, normal and stable market conditions are something that many buyers and sellers will likely welcome."

Many Canadians had rushed into the housing market during the second half of last year and the beginning of this year in advance of new mortgage regulations in April, an expected increase in interest rates and a new sales tax regime that took effect in July in Ontario and B.C.

That had the effect of pushing ahead sales that may have otherwise taken place in the spring and summer.

"National sales activity rebounded last year without a single monthly decline and hit record levels in the second half of 2009," CREA said in its release.

"As a result, large declines in activity compared to year-ago levels are masking recent monthly gains in national sales activity."

The number of new listings on the MLS edged up 1.3 per cent in October, still 14 per cent below the recent peak reached in April 2010.

That the number of new listings is normalizing to levels consistent with the reduction in sales activity has kept the market balanced since the spring.

Price increases are also starting to level off as a cooler sales market becomes the new norm.

The national average price for homes sold this October was $343,747, up less than a percentage point compared to one year ago. It was the fourth month the average home price was flat when compared to a year ago.

However, the average home cost about $12,000 more in October than the $331,089 reported in September.

Prices reached a peaked of $346,881 in May.

The seasonally adjusted number of months of inventory stood at 6.2 months at the end of October, down from 6.5 months in September.

The number of months of inventory represents the number of months it would take to sell current inventories at the current rate of sales activity, and measures the balance between housing supply and demand.

In October, three-quarters of local real estate boards posted monthly sales increases, led by the bustling Toronto and Vancouver markets.

However, record activity levels set in the last few months of 2009 indicate that it will be difficult to meet year-over-year comparisons for the rest of 2010.

Meanwhile, a second report released Monday from Canada Mortgage and Housing Corp. said the level of home construction will continue to trend downwards in the last quarter of this year and into 2011.

"High employment levels and low mortgage rates will continue to support demand for new homes in 2011. Nevertheless, housing starts will decrease next year to levels which are more in-line with long-term demographic fundamentals," said Bob Dugan, CMHC's chief economist.

Construction activity lags the resale home market by several months, but tends to fall along with a decrease in demand to avoid an oversupply of new homes on the market.

The federal Crown corporation said the reduced activity will be more in line with the rate of Canada's population growth than in the past decade when low interest rates helped stimulate pentup demand for home sales.

It's currently estimating about 186,200 housing starts this year.

CMHC estimates that construction will begin next year on between 148,000 and 202,300 homes, or about 174,800 units at the midpoint.

As for existing homes, the CMHC expects about 438,400 units will be sold next year through the Multiple Listing Service --about 2,000 fewer than this year.

Vancouver’s pricey commercial real estate market is driving investment volumes across Canada.

This according to commercial real estate firmAvison Young, which released a report Tuesday morning indicating the Canadian commercial real estate market in 2010 had already surpassed 2009 sales totals.

At the end of the third quarter, more than $12 billion in commercial real estate assets had changed hands in 2010, a 57% increase when compared with the same nine-month period in 2009.

Although Toronto remains the most active commercial real estate market across the country, Vancouver is the most expensive.

According to Avison Young, Vancouver accounted for $2.4 billion in commercial real estate sales in the first nine months of 2010.

That represents a 34% increase when compared with the same period last year and is 20% of the total investment volume across the country in 2010.

As well, the national average cap rate for major property types, that is the ratio between a property’s net operating income and its capital cost, has declined 50 basis points to 6.75%.

Across Canada, cap rates range from an average low of 5.97% for multi-residential properties to 7.47% for multi-tenant industrial buildings, Avison Young said.

Vancouver’s 6.12% average cap rate makes it the highest-priced market in Canada.

Avison Young principal Mike Gill explained, "The recent influx of foreign capital from Europe, the far east and the Middle East, together with competition from local investor capital, has applied further pressure to already declining cap rates for the premier assets."

The real estate firm predicts further “compression” of cap rates across Canada based on increased bids for assets, low interest rates, ample liquidity and a steady flow of product to the market.

Sales levels in Lower Mainland real estate markets remain somewhere between the highs of 2009’s market rebound and the lows of 2008’s sales collapse, reports from the region’s major real estate boards show.

In Metro Vancouver, realtors recorded some 2,337 sales in October through the realtor-controlled Multiple Listing Service, which was down almost 37 per cent from the frenetic pace of the same month a year ago, the Real Estate Board of Greater Vancouver reported Tuesday.

However, October’s 2,337 sales were some 71 per cent higher than the recessionary October of 2008, and board president Jake Moldowan said agents have “seen a lot more consistency and less volatility” in sales levels and pricing over the past few months.

“As we enter the final two months of the year, buyer demand is in closer alignment with supply than we’ve seen for most of 2010,” Moldowan said. “Those buying today recognize that they

still have a chance to enter the market with near-record-low interest rates, while gradual reductions in inventory have eased downward pressure on prices.”

In the Fraser Valley, realtors made 1,014 MLS sales in October, down 40 per cent from the same month a year ago, but 32 per cent higher than the doldrums of October 2008.

“With help from near-record-low mortgage rates and a steady decrease in the supply of homes, we’re getting back to what I call a ‘normal,’ balanced market,” Deanna Horn, president of the Fraser Valley Real Estate Board said in a news release.

In the area of Metro Vancouver covered by the Real Estate Board of Greater Vancouver, the benchmark price (an average of typical homes sold) for detached homes hit $796,833, which was up 6.3 per cent from the same month a year ago.

For townhouses, the benchmark price hit $487,530 in October, up four per cent from the same month a year ago.

For condominiums, the benchmark price reached $390,074 in October, up 2.4 per cent from the same month a year ago.

In the Fraser Valley’s board area, which includes Surrey, the benchmark price for detached homes hit $505,759 in October, up three per cent from October 2009, but down 0.3 per cent compared with September of this year.

For townhouses, the $319,058 benchmark was up 2.2 per cent compared with the same month a year ago, but down 0.9 per cent compared with September.

The benchmark for Fraser Valley condominiums reached $240,542 in October, up 0.2 per cent from a year ago and was 0.4 per cent higher than September of this year.

This is a roller coaster simulation of the last 35 years of the Vancouver Real Estate market. The actual graph you're riding is the inflation adjusted value of a house in Vancouver BC based on data collected by Royal LePage and calculated by the UBC Centre for Urban Economics and Real Estate.
** Courtesy of Vancouver Condo **

Watch below:

TORONTO, Nov. 2 /CNW/ - 2011 promises slowing, steady growth and decent prospects for Canadian real estate investors as long as the U.S. economy does not drag them down, according to the Emerging Trends in Real Estate® 2011 report, released today by PwC and the Urban Land Institute (ULI). The report reflects interviews with and surveys of more than 875 of the industry's leading real estate experts, including investors, developers, lenders, brokers and consultants in both Canada and the U.S.

Canadian property owners and financial institutions cannot help contrasting their reasonably healthy condition with precarious U.S. markets. Canadian fundamentals trend near equilibrium, employment is recovering and banks boast sound balance sheets, putting Canada in a better place and boosting confidence that the local market can escape issues faced in the U.S. However respondents say a weak U.S. dollar and sputtering U.S. economy dampen cross-border commerce, especially hurting Ontario industrial markets, which serve Midwestern U.S. manufacturing centres.

"The big difference for Canada has been the sound condition of its banks," says Chris Potter, leader of the Real Estate Tax practice for PwC Canada. "We have no distressed banks and few distressed owners and sales. Now, rising interest rates coupled with tight bank requirements and broader economic concerns tamper down a recent home buying spurt, particularly in Ontario and B.C., where purchasers stepped up activity before HST went into effect."

While capital returns, investment opportunities will be limited. Institutions dominate the major central city markets, holding on to assets for steady income instead of trading. Emerging Trends respondents exemplify the hold-on mentality: they think it is a good time to buy, but do not want to sell. In this "compressing cap rate" environment, many deal-starved Canadians will be active in the U.S., where they should have greater opportunity to spend and find higher yields.

Canada has one of the world's healthiest capital markets and few borrowers confront refinancing issues. Overall in 2011, Emerging Trends respondents expect a reasonable balance in debt market capital availability and an oversupply of equity capital, the result of non-satiated buyers.

"In Canada, the real estate industry didn't get overleveraged and the markets never suffered any interruption of credit availability," says Holly Allen, leader of the Real Estate Deals practice for PwC Canada. "Canadian banks benefit from a combination of institutional risk aversion and relatively stringent government regulation."

• Insurers and Pension Funds - A dominant handful of large insurance companies and public pension funds will continue to command ownership of the nation's trophy commercial assets—downtown office space and regional malls.
• REITs - Prices levelled off after strong run-ups in 2009. For 2011, analysts do not see "much room for big gains," and these stocks should stick close to valuations.
• Foreign Investors - It is hard enough for domestic investors to find good acquisition opportunities, foreign players will struggle even more to break in. Offshore investors can't build portfolios easily.

Best 2011 Investor Bets in Canada

Respondents to the Emerging Trends cite the best invest or bets for 2011, including:

• Remove portfolios of select low-yielding assets and reinvest opportunistically in a U.S. market recovery.
• Time investments to the market and buy down-but-not-out city-centre hotels and struggling industrial properties in the Greater Toronto area.
• Buy apartments if you can find anything available, they offer the best security.
• Look for underperforming infill retail or commercial space and position for redevelopment as condos.Canadian cities will continue to grow vertically as planners seek to encourage 24-hour environments.
• Reserve land sites inside the Toronto greenbelt for future residential development; demand and pricing should continue to increase.

Markets to watch

For 2011, major Canadian real estate markets settle in a fair to good investment range, with only modest investment prospects and constrained development potential. Toronto bumps Vancouver from the top ranking city to invest and develop in the Emerging Trends survey, while Calgary must hope to recuperate from cooled demand and a touch of development binging. Population continues to concentrate in and around a handful of major 24-hour cores scattered from coast to coast, leaving extremely limited investment opportunities in small cities and rural areas in between. Shut out of primary cores, some investors scrounge for product in select secondary and suburban markets.

• Toronto - Some softness creeps into the office market as major tenants "play musical chairs" and move into new Class AAA development projects. Market vacancy will not increase materially above the current mid-single digits, and any near-term additional office development will be small and niche. New condo projects pop up in all directions. Some respondents worry about flattening apartment rents as condo investor's lease out units. High housing prices and immigration flows help make apartments a good bet. Investors retain interest in buying and holding industrial properties, which should recover from higher-than-average vacancies and rent declines once the U.S. gets untracked.
• Vancouver - Office and condo markets almost defy logic and stay "red hot." Many wealthy Asian investors park money with plans for eventual citizenship. Institutional investors control the relatively small office market, which enjoys minuscule vacancies. Vancouver's natural barriers control development and attract investors—a powerful combination. But some respondents are uneasy: "The market is artificially inflated; it's been too hot for too long." The HST raises costs and temporarily cools demand for mid-tier housing in some areas outside the core.
• Ottawa - Nothing much will change. The government does not downsize but the city will never attract the same lobbying intensity or contractor-related business seen in the U.S. The Ottawa Convention Centre opens next year and could provide a potential market lift, particularly for hotels and retail.
• Montreal - The Montreal market will continue to hold its own as respondents cite its good value and better yields. Besides mainstay Quebec provincial government offices, the city benefits from a fairly diversified economy, including aerospace and financial services.
• Edmonton - Edmonton avoids the level of oversupply that deflates Calgary. The oil services business thrives and locals expect positive impacts to filter through the economy, including employment growth.
• Calgary - Sprawl and overbuilding "temporarily" subdue outlooks, but "absorption will come." Developers retreat in the face of high vacancies and show no appetite for new office projects. Locals put faith in robust commodities markets and U.S. consumption of oil from tar sands. Expect spreading hot growth to resume in coming years.

Reflecting modest expectations, property sector ratings improve over last year's tepid forecasts, especially for apartments and offices. Retail and industrial hold up, but hotels suffer from reduced U.S. tourist travel. Commercial markets promise to deliver cash flow but not much appreciation, while housing prices could ebb after an unsustainable surge. Most investors take heart in consistent metrics from markets, which linger in reasonable equilibrium; it beats write-down's, defaults, and foreclosures.

"Not only has the Canadian real estate industry been able to weather the downturn in the economy better than other markets, the environment in the U.S. has allowed Canadian investors to be opportunistic," says Lori-Ann Beausoleil, national leader of the Real Estate practice for PwC Canada. "Canadian investors looking to expand into the U.S. market or who are already in the U.S. have been able to take advantage of some great growth opportunities and purchase assets at a distressed price."

Now in its 32nd year, Emerging Trends is the oldest, most highly regarded annual industry outlook for the real estate and land use industry and includes interviews and survey responses from more than 875 leading real estate experts, including investors, developers, property company representatives, lenders, brokers and consultants.