Cost concessions needed to build enough houses to meet B.C. demand, say real estate groups | Canada News Media
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Cost concessions needed to build enough houses to meet B.C. demand, say real estate groups

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Real estate companies say cost concessions will need to be made if they are to do everything they can, as quickly as they can, to help alleviate the province’s housing crisis.

More than 1,200 people, including developers, building owners and investors attended the Vancouver Real Estate Forum on Wednesday. Topics of discussion included rising construction and labour costs, post-pandemic building-use trends, and how to prepare for an influx of housing demand propelled by immigration.

“Development groups like ours are actually very good at designing properties to meet the needs of the people that are looking for accommodation,” David Podmore, president of Concert Properties, told Global News.

“But the one thing in the current circumstances that we really can’t do a lot with is the cost of land. The cost of land is very, very high.”

Podmore, who spoke at the forum, said there’s a “real opportunity” for private industry to partner with governments to tackle the housing crisis, but it’s going to take  “a lot of concessions,” no matter who is involved.

“One of the models that really should be explored is making land available on a leasehold basis,” he suggested.

“Government would have to look at bringing down the cost for, and the development community have to get comfortable with working on the leased land, which would revert see at the end of the lease, which might be 80 years or might be 99 years, but they shouldn’t lose control of the land at any point.”

The province announced a multibillion-dollar, four-point housing plan earlier this week, aimed at cracking down on soaring real estate prices, increasing construction and creating more rental units.

Highlights of the ‘Homes for People’ project include a promise of legislation that allows up to four units on a single traditional housing lot, a tax on the proceeds of house-flipping, and a forgivable loan of 50 per cent of the cost of basement suite renovations, up to a maximum of $40,000 over five years, if the secondary suites are rented at below-market rate for at least five years.

It also includes measures to speed up permitting and reduce development costs, with a goal of leveraging the private sector.

The plan is expected to cost $4-billion investment in the first three years and $12 billion over a decade.

Podmore said he has found the Eby government’s approach to the crisis “encouraging,” and hopes municipalities will do what they can to reduce fees for developers as well.

Mark Kenney, president of CAPREIT, said the province also “seems to understand” the affordability and supply challenges, and the pressure required to crack down on the problem.

“The world wants to come to Canada and the world wants to come to B.C.,” he said.

“The three big cities in Canada — Toronto, Vancouver, Montreal — they have to have the capacity and the municipal willingness to put more units in play, so lots of talk about development fees, lots of talk about taxes. All of these costs do not build more supply.”

Canada aims to bring some 465,000 new permanent residents to the country in 2023. It’s unclear how many will wind up in B.C., although the province saw high levels migration in 2021, with more than 100,797 new residents settling in. It was the highest annual total since the 1960s.

“Our housing supply is not meeting population growth, so if it’s not meeting population growth, we can’t begin to address affordability,” said Brad Jones, senior vice-president of Wesgroup Properties.

“So we need all levels of government to work together and target immigration. We have a shortage of construction workers, we should be targeting skilled trades — we should be targeting those types of groups that will help us solve that problem.”

Jones also addressed the cost of building in B.C.; a recent Canada Mortgage and Housing Corporation (CMHC) report found various government fees and charges account for between seven and 20 per cent of building costs in Vancouver alone.

“That’s far, far more than anyone’s making in profit delivering housing,” he said, referencing the higher end of the scale. “I think it really boils down to time and cost.”

Housing Minister Ravi Kahlon has said the B.C. government is doing what it can to reduce costs and red tape, and expects to have more than 100,000 homes built or under construction in B.C. by 2027.  The province is on track to meet its goal of 114,000 new units over 10 years, he added.

 

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Greater Toronto home sales jump in October after Bank of Canada rate cuts: board

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TORONTO – The Toronto Regional Real Estate Board says home sales in October surged as buyers continued moving off the sidelines amid lower interest rates.

The board said 6,658 homes changed hands last month in the Greater Toronto Area, up 44.4 per cent compared with 4,611 in the same month last year. Sales were up 14 per cent from September on a seasonally adjusted basis.

The average selling price was up 1.1 per cent compared with a year earlier at $1,135,215. The composite benchmark price, meant to represent the typical home, was down 3.3 per cent year-over-year.

“While we are still early in the Bank of Canada’s rate cutting cycle, it definitely does appear that an increasing number of buyers moved off the sidelines and back into the marketplace in October,” said TRREB president Jennifer Pearce in a news release.

“The positive affordability picture brought about by lower borrowing costs and relatively flat home prices prompted this improvement in market activity.”

The Bank of Canada has slashed its key interest rate four times since June, including a half-percentage point cut on Oct. 23. The rate now stands at 3.75 per cent, down from the high of five per cent that deterred many would-be buyers from the housing market.

New listings last month totalled 15,328, up 4.3 per cent from a year earlier.

In the City of Toronto, there were 2,509 sales last month, a 37.6 per cent jump from October 2023. Throughout the rest of the GTA, home sales rose 48.9 per cent to 4,149.

The sales uptick is encouraging, said Cameron Forbes, general manager and broker for Re/Max Realtron Realty Inc., who added the figures for October were stronger than he anticipated.

“I thought they’d be up for sure, but not necessarily that much,” said Forbes.

“Obviously, the 50 basis points was certainly a great move in the right direction. I just thought it would take more to get things going.”

He said it shows confidence in the market is returning faster than expected, especially among existing homeowners looking for a new property.

“The average consumer who’s employed and may have been able to get some increases in their wages over the last little bit to make up some ground with inflation, I think they’re confident, so they’re looking in the market.

“The conditions are nice because you’ve got a little more time, you’ve got more choice, you’ve got fewer other buyers to compete against.”

All property types saw more sales in October compared with a year ago throughout the GTA.

Townhouses led the surge with 56.8 per cent more sales, followed by detached homes at 46.6 per cent and semi-detached homes at 44 per cent. There were 33.4 per cent more condos that changed hands year-over-year.

“Market conditions did tighten in October, but there is still a lot of inventory and therefore choice for homebuyers,” said TRREB chief market analyst Jason Mercer.

“This choice will keep home price growth moderate over the next few months. However, as inventory is absorbed and home construction continues to lag population growth, selling price growth will accelerate, likely as we move through the spring of 2025.”

This report by The Canadian Press was first published Nov. 6, 2024.

The Canadian Press. All rights reserved.

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Homelessness: Tiny home village to open next week in Halifax suburb

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HALIFAX – A village of tiny homes is set to open next month in a Halifax suburb, the latest project by the provincial government to address homelessness.

Located in Lower Sackville, N.S., the tiny home community will house up to 34 people when the first 26 units open Nov. 4.

Another 35 people are scheduled to move in when construction on another 29 units should be complete in December, under a partnership between the province, the Halifax Regional Municipality, United Way Halifax, The Shaw Group and Dexter Construction.

The province invested $9.4 million to build the village and will contribute $935,000 annually for operating costs.

Residents have been chosen from a list of people experiencing homelessness maintained by the Affordable Housing Association of Nova Scotia.

They will pay rent that is tied to their income for a unit that is fully furnished with a private bathroom, shower and a kitchen equipped with a cooktop, small fridge and microwave.

The Atlantic Community Shelters Society will also provide support to residents, ranging from counselling and mental health supports to employment and educational services.

This report by The Canadian Press was first published Oct. 24, 2024.

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Here are some facts about British Columbia’s housing market

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Housing affordability is a key issue in the provincial election campaign in British Columbia, particularly in major centres.

Here are some statistics about housing in B.C. from the Canada Mortgage and Housing Corporation’s 2024 Rental Market Report, issued in January, and the B.C. Real Estate Association’s August 2024 report.

Average residential home price in B.C.: $938,500

Average price in greater Vancouver (2024 year to date): $1,304,438

Average price in greater Victoria (2024 year to date): $979,103

Average price in the Okanagan (2024 year to date): $748,015

Average two-bedroom purpose-built rental in Vancouver: $2,181

Average two-bedroom purpose-built rental in Victoria: $1,839

Average two-bedroom purpose-built rental in Canada: $1,359

Rental vacancy rate in Vancouver: 0.9 per cent

How much more do new renters in Vancouver pay compared with renters who have occupied their home for at least a year: 27 per cent

This report by The Canadian Press was first published Oct. 17, 2024.

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