June 2012 B.C. Economic Fundamentals

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     News articles for June 2012.
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    Three downtown Vancouver towers to focus on rental units over market condos

    Three new highrise towers planned beside Rogers Arena will feature several hundred rental units as their residential component instead of condominiums.


    “It’s in the heart of the downtown core and we thought it would be a great rental project,” said David Negrin, president of Aquilini Developments and Construction, on Wednesday. “We’re taking some risk, but feel there’s a real requirement for rentals in downtown Vancouver."


    According to the plan, which originally favoured condos in the mixed-used development, a total of 614 one-, two- and three-bedroom rental units would be built in stages over the next several years with the last of the towers — between 23 and 32 storeys — completed in the spring of 2016.


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    Vancouver home costs jumped 3.1% in 2011

    It’s getting more difficult to pay the costs associated with home ownership in the Vancouver area and the tab is likely to rise more as interest rates rise, the Royal Bank said Tuesday.


    In Vancouver, which is Canada’s most expensive real-estate market, RBC found that the cost of owning a detached bungalow including mortgage payments, utilities and property taxes is now 88.9 per cent of median annual household income, the Royal Bank said Tuesday. For Vancouver, the figures use a median household income of $56,000. Qualifying income is what is needed to meet banking requirements to borrow a mortgage to finance the home.



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    Vancouver real estate numbers signal slowdown

    The latest Metro Vancouver real estate numbers are “very clear signs” of a slowdown in the market, according to a local analyst.


    “We’re getting this consistently now,” said Tsur Somerville, director, centre for urban economics and real estate, Sauder School of Business at the University of B.C., after a monthly report by the Real Estate Board of Greater Vancouver showed a continued rise in listings as sales drop.


    “We’re in a market that’s much slower than what we’re used to and I think that will transfer into much more sluggish prices, at best.”



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    Landlords who don't declare secondary suites not covered by insurance

    When Raj Bhangu put a secondary suite into his Kitsilano house, he spent the extra $20,000 to do it legally and get the right permits. But he was surprised to find that even though he had home insurance, it would have been null and void had the unthinkable happened — a flood, fire, earthquake or any other unforeseen catastrophe.



    That’s because insurance companies will not pay out if homeowners don’t inform them when they put in a secondary suite, something Bhangu found out when his insurance came up for renewal several months after his first tenants moved in.



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    Commercial real estate activity in Vancouver surges

    It was the second best first quarter ever for Greater Vancouver commercial activity, according to RealNet Canada Inc.

     


    The research company said they were 299 deals worth more than a million in the first quarter for a total of $1.2-billion. The only better first quarter was recorded in 2007.

     


    “Although a decrease in pace was recorded in the first quarter [from the fourth of quarter of 2011], the results are now consistently in line with results witnessed during 2006 and 2007,” said George Carras, president of RealNet. “The Greater Vancouver market has now posted five quarters in excess of $1-billion, a run equalled only once before.”



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    Reduction in Vancouver condo parking spaces becoming the norm

     

    The freshly completed condominium building at 60 West Cordova has 112 living units, but only 13 parking stalls — the lowest amount of parking required for a residential building in the city’s recent history.


    “A lot of the people buying here weren’t interested in any form of vehicle ownership or use,” said Michael Braun, sales and marketing manager for Westbank, which developed the building.


    The parking situation at the new building reflects what Vancouver city Coun. Geoff Meggs calls a “sea change” in the car culture that has led the city to cut requirements for parking stalls for new buildings.



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    Enbridge says 60% of first nations buy into its Northern Gateway pipeline

    Enbridge Inc. said Tuesday that almost 60 per cent of the aboriginal communities along its proposed Northern Gateway pipeline route have accepted an equity position in the $5.5 billion project,


    “We made it available to about 45 of the aboriginal communities along the right-of-way,” said Paul Stanway, manager of Northern Gateway Communications for Enbridge. “Almost 60 per cent of those eligible communities along the right-of-way have now signed agreements to be partners with us in ownership of Northern Gateway.”



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    Little opposition expected to TransCanada $4 billion gas pipeline

     

    CALGARY — TransCanada Corp will build a $4-billion pipeline to serve Royal Dutch Shell PLC’s planned liquefied natural gas plant on British Columbia’s northern coast, the company said on Tuesday.


    TransCanada, Canada’s No. 1 pipeline company, said it would design and build a 700-kilometre line capable of shipping 1.7 billion cubic feet of gas per day from the Dawson Creek area to Kitimat, where three LNG plants, including Shell’s facility, are planned.


    Northeastern British Columbia contains some of the world’s largest unconventional natural gas reserves.



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    Natural gas: Where deep pessism bodes well

    “Well, they might not be going quite to zero but …,” says a portfolio manager. The subject at hand is natural gas prices and the manager sees nothing but bad news ahead.


    To an investor, this is a tipoff to start getting bullish. Natural gas and the stocks of those who produce it are in the doghouse. Market sentiment is near all-time lows, which conveniently matches natural gas prices.


    When professional managers get as bearish as they are now, investors should perk up. We are most likely near the bottom for natural gas prices. We may not be exactly there – the summer might bring fresh lows – but we’re close. Investors should be prepared because even modest price improvements and a change in sentiment could propel some stocks upward.



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    Investment accelerates in Maple Ridge

     

    To meet the Metro Vancouver 2040 forecast doubling of population and jobs in Maple Ridge there are a range of initiatives underway to attract private investment and create high value local jobs.


    The most significant of these is the Town Centre Investment Incentive Program.


    Designed to accelerate private investment in mixed-use, commercial, and multi-family (minimum four- and five-storey) residential projects, since its launch in January 2011 not only has the incentive generated more than 30 projects in the town centre valued at more than $100 million dollars, the momentum has spilled out to the rest of the community where there are more than 350 developments underway.



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    One housing bubble down, one to go

    Vancouver’s housing bubble has burst, but Toronto’s remains “as hot as the weather,” says Gluskin Sheff chief economist David Rosenberg.


    In a note Wednesday entitled Tale of two cities, Rosenberg said Vancouver real estate has cooled significantly, and is now showing signs of turning into a buyers’ market.


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    Canada's massive shipbuilding plan heading for stormy seas

    On a warm but cloudy afternoon at the beginning of May, Prime Minister Stephen Harper participated in the unveiling of a new monument for the Royal Canadian Navy. Erected within sight of Parliament Hill and symbolically surrounded on three sides by the Ottawa River, the monument was being dedicated to the hundreds of thousands of sailors who have served in the navy during its 112-year history.

     


    "Surrounded as we are by three oceans, it can truly be said that Canada and its economy float on salt water," the prime minister said. "Such a nation must have a navy. A navy that serves, a navy that protects."

     


    The Conservative government has committed $35 billion over 20 years to the largest and most extensive overhaul of Canada's navy and Coast Guard in more than a generation.



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    Housing sales in Metro Vancouver hit 10-year low in May

     

    Greater Vancouver housing sales hit a 10-year low in May, dragged down by plunging sales of high-priced homes in West Vancouver, Richmond, and on Vancouver’s pricey west side.


    May sales figures show that detached-home sales fell 59 per cent in West Vancouver, 46 per cent on the west side of Vancouver, and 25 per cent in Richmond.


    Overall sales of detached homes, townhouses and condos fell 15 per cent compared to 2011, making this the bleakest real-estate May since 2001.



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    Okanagan Valley: British Columbia's bubble-free real estate zone


    While Vancouver has grabbed all the national headlines for its continued year-over-year home price gains, the rest of British Columbia's real estate market has performed much differently.



    Vancouver has seen a surge of international buyers, mainly from China, according to the latest real estate industry accounts. That's led some to worry that the market is now building towards a bubble, with prices up 23% in June compared to a year earlier.



    There is no controversy over the influx of mainland Chinese buyers in the Okanagan Valley - the Okanagan Mainline average home prices were down about 10% year-over-year in June, and south Okanagan prices were down 8%, according to the British Columbia Real Estate Association.



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