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August 2010 BC Economic Fundamentals

Ally

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Government-imposed costs are just the tip of the iceberg in home ownership

With taxes, levies, fees and restrictive rules adding nearly $80,000 to the cost of an average new home in Metro Vancouver, it`s easy to finger governments as a bad guy in driving housing costs sky-high.

But that`s just the obvious. Government influence on house prices — not all of it for wrong reasons — is far greater than that. It includes:

• Maintaining ownership of a great deal of park and other public land, which drives up the price of what`s left to develop.

• Requiring owners to withhold from development countless thousands of additional acres through policies from the ALR to provision of parking to subdivision amenities.

• Limiting density in many residential neighbourhoods.

• Subsidizing people to choose bigger homes than they might otherwise afford through residential property tax rates set far lower than the cost of service, government mortgage insurance that lets people borrow more money more cheaply than they otherwise would, homeowner grants that pay up to half the property tax bill, and tax-exempt capital gains, which makes a home (at least, one in the right place at the right time) a savvy investment as well as place to live.

Read the full article here.
 

Ally

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B.C. forest industry`s losses may be at an end: Conference Board

VANCOUVER — The signs are glimmers of hope that British Columbia`s forestry-driven industries may be at the end of years of punishing losses and high unemployment, according to reports released Tuesday by the Conference Board of Canada.

Much of Canada`s wood-products sector has returned to profitability this year, the Conference Board said in its Canadian Industrial Profile-Summer 2010, published in collaboration with the Business Development Bank of Canada.

And the paper-products sector, at least the segment of it that produces pulp and paperboard for packaging, should stem its losses this year and return to modest profits in 2011.

"In the near-term outlook, we do expect to see some growth [in the wood and paper-products industries], and do expect a return to profitability," said Michael Burt, the Conference Board`s associate director for industrial economic trends.

In wood products, Burt said the post-recession rebound in Canadian new-home construction has helped the industry along with increased shipments to Asia. In the longer term, a slow recovery of U.S. housing starts should improve demand for structural lumber and push the Canadian industry to $1-billion-a-year profits by 2012.

Read the full article here.
 

Ally

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B.C. hits $-billion mark in commercial real estate sales in first half of 2010

VANCOUVER — A post-recession appetite for investments more stable than stock markets helped drive British Columbia to a record $1 billion in significant commercial real estate sales in the first half of 2010, commercial realtor Avison Young said Tuesday.

That $1-billion figure, which counts commercial transactions worth $5 million or more, is 43-per-cent higher than the $715 million that investors spent in the second half of 2009, and compares with $643 million spent in the first half of the recession-plagued previous year.

And 70 per cent of that investment — $711 million — has been poured into shopping centres, including some very large transactions.

Michael Gill, a principal in Avison Young`s Vancouver office, said that is a function of the type of properties investors are looking for combined with the recognition of property owners that they can fetch decent prices for retail properties.

"Investors have indicated they like retail, they like food-anchored [malls], they like stable cash flow," Gill said.

And with the prices that investors have paid to secure cash-flow generating properties, Gill said owners have "elected to sell into that marketplace."

Read the full article here.
 

Ally

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Port Moody in bad mood over transit snub

Port Moody is unhappy that a third Evergreen Line rapid-transit station serving the western portion of the community is no longer part of the $1.4-billion project.

Public comment closes Sunday on the environmental assessment of the connection between Coquitlam City Centre and Lougheed Town Centre, and thus to the Millennium Line SkyTrain.

But that assessment doesn`t include a Queens Street station that was part of the plan for rapid transit in the region that dates back to when the line was going to be light-rail transit.

Port Moody Mayor Joe Trasolini has called a special meeting of council for Thursday afternoon to give his city`s reaction to the assessment and it`s unlikely to be very positive.

"It`s not a third station," added Trasolini. "It`s been there from Day One."

Evergreen Line project manager Dave Duncan, who said a third station could cost about $20 million, indicated the station can still be part of the plan.

"I think the first step is for the city to look at the area and see whether they have an interest in making a significant density increase," said Duncan.

Trasolini doesn`t think that kind of density is realistic.

Read the full article here.
 
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