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May 2010

Ally

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B.C. real estate shows signs of stability in April

VANCOUVER — Expect British Columbia`s property prices to remain flat for the balance of the year, which will be good news for buyers again being squeezed by the province`s sky-high values, according to the B.C. Real Estate Association.

Cameron Muir, the association`s chief economist, said sales have stabilized while inventories of unsold homes have risen, which is keeping pressure off prices.

Provincially, realtors processed some 8,385 units through the Multiple Listing Service in April, 21 per cent higher than the same month a year ago, but when figures are adjusted to account for seasonality, April sales were four per cent below March, according to Muir.

At the same time, provincial inventories hit 54,029 in April, some nine per cent more than in April of 2009.

"Overall there is more balance in the Lower Mainland and Victoria markets going forward and much less upward pressure on prices," Muir said in an interview.

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Group picked to build South Fraser Perimeter Road

A Spanish-led consortium of companies has been picked to build the $1.1-billion South Fraser Perimeter Road after a lengthy procurement delay.

The provincial government said Friday the Fraser Transportation Group will advance to detailed negotiations to finalize a contract to build the 40-kilometre four-lane truck freeway connecting Deltaport to Highway 1 and the Golden Ears Bridge.

The group consists of ACS Infrastructure Canada and Ledcor Industrial/Mining Group Ltd. as equity partners and Dragados Canada Inc., Ledcor CMI Ltd., Belpacific Excavating and Shoring and Vancouver Pile Driving Ltd. as design-build contractors.

ACS and Dragados are subsidiaries of a major Spanish infrastructure firm.

Fraser Transportation beat out two other groups of bidders, which included SNC Lavalin and Pieter Kiewit, and is to be repaid for its $800-million investment in the public-private partnership over a 20-year period.

The announcement comes 17 months after the province first short listed qualified bidding groups in January of 2009.

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Sellers are optimistic, but can former Olympic Village find enough buyers?

As of Tuesday, buyers had stepped forward to claim 40 of the 474 remaining apartments in Vancouver`s Millennium Water, at prices ranging from the $600,000s to $4.7 million.

The sellers are ecstatic, saying the pace of sales is far beyond their expectations. But some industry watchers are asking whether that pace will continue.

How many buyers are out there, they ask, for deluxe homes on blue-chip waterfront real estate, which come at premium prices due to the high environmental standards of their construction?

"The concern is about how much it costs," Vancouver realtor Will Wertheim said in an interview. "If money is no object for some people, sure, [buying makes sense]. But you`ve got several hundred units to move, and do you have that many people for whom money is no object?"

Wertheim was among about 1,000 realtors who toured the development Sunday, the day after about 15,000 people lined up to view suites in the project, which has had heavy backing from the city.

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Ally

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Vancouver demand expected to fall as first-time buyers bow out

Metro Vancouver real estate sales will drop in 2010 compared to last year and flatten out in 2011 because new buyers who would have been in the market were enticed to buy in 2009, Canada Mortgage and Housing Corp. said Wednesday.

CMHC is forecasting that Metro Vancouver will see 35,000 property sales cleared through the realtor-controlled Multiple Listing Service, a 3.5-per-cent decline from 2009 and will slip another three per cent to 34,000 transactions in 2011.

"Certainly the market recovery we saw over the past year, at least anecdotally, a lot of that seems to have been first-time homebuyers taking advantage of the lower [mortgage] rates combined with lower prices," Robyn Adamache, a market analyst with CMHC said in an interview.

And with prices rebounding past their previous peaks and with mortgage rates having begun to creep up, Adamache added that it makes sense 2010 and 2011 sales will be dominated by move-up buyers.

On prices, CMHC is forecasting that Metro Vancouver`s average price to top $655,000 in 2010, up 10.6 per cent from 2009. In 2011, however, the federal mortgage insurer estimates price growth will edge up 3.1 per cent to $675,000.

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Ally

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Housing sales back off from heady days of late 2009

British Columbia real estate sales dropped by more than one quarter in the three months of 2010 from the last quarter of 2009 in both the number of transactions and value, Landcor Data Corp. reported this week.

The real estate consultants counted 23,195 sales cleared through B.C.`s Land Title office during the first quarter, which is substantially higher than the same period a year ago, but almost 27 per cent off the 31,623 sales recorded during the last three months of 2009.

The total value of those sales almost tipped $10.7 billion, nearly double the number seen during the first quarter of 2009, but again was almost 26 per cent off the $14.4 billion in deals done at the end of 2009.

The results quantify the trend economists such as Cameron Muir, chief economist for the B.C. Real Estate Association, have observed since January.

Landcor`s numbers "certainly support the data we`ve been looking at that shows that obviously the pace of sales have slowed since the last quarter of 2009," Muir said in an interview.

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South Fraser Perimeter Road completion pushed back

METRO VANCOUVER -- The completion date for the South Fraser Perimeter Road has been pushed back a year.

Within a recent Ministry of Transportation and Infrastructure announcement regarding the project, it was also noted the second and final phase of construction will be completed in 2013. That`s a year later than the original target of 2012.

Ministry spokesperson Jeff Knight said the new timetable is due to approvals, including environmental and, in particular, the Agricultural Land Commission go-ahead in late 2008, occurring later than expected.

"The project was initially thinking they may be able to make up that time. So the schedule wasn`t initially adjusted and some thought they could make up time for the delays, but they realized this is what the schedule is going to have to be," he said.

The section from 176th Street in Surrey to the Pattullo Bridge is on course to be completed by the end of 2012 as originally planned. The section from the Pattullo Bridge to Deltaport Way was also to be completed by that time before being pushed back.

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Secondary homes will bear primary cost of HST

COLLINGWOOD—Unless you are planning to make it your permanent home, purchasing a new ski chalet, a new weekend condo, or a new cottage will get a lot more expensive when the harmonized sales tax comes into effect July 1. The tax will add tens of thousands of dollars to the cost of a new second home.

Last summer, after vigorous lobbying from developers, the Building Industry and Land Development Association (BILD), and the Ontario Home Builders` Association, the province backtracked on charging the HST on the full cost of a new home priced at more than $400,000 by introducing a housing rebate of up to $24,000. The catch is that to qualify for the rebate, the home has to be a primary residence.

"If it`s a new ski chalet, it will be subject to HST with no rebate," says Scott Blodgett of the Ministry of Finance.

The same goes for a new cottage on a Muskoka lake, a new condominium at developments such as the Village at Blue Mountain or Red Leaves in Muskoka, a new home in a golfing community or any new home in Ontario, if it`s not going to be a primary residence.

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Tallest tower outside downtown core is proposed for Canada Line site

The Vancouver-based developer PCI Group is proposing to build the city`s tallest tower outside the downtown core as part of an ambitious redevelopment of the southeast corner of Cambie Street and Marine Drive.

Rising more than 30 storeys to 350 feet (105 metres), the proposed tower would contain 577 residential units (390 condominiums and 187 rental apartments) and form more than one-third of a sprawling 950,000-square-foot project PCI has named Marine Gateway.

The residential tower would provide housing for 750 to 850 people. A second, 260-foot office tower plus a 288,000-square-foot retail centre at its base would support 2,000 jobs, said PCI CEO Andrew Grant.

Grant said the site`s two-hectare size, plus its location practically on top of the Canada Line`s Marine Drive Station and TransLink bus exchange, begged for a substantial, "transit-oriented-design" project.

"This site, because it was a large site with a station on it, represented an opportunity for mixed-use development with job density, and our plan meets that," Grant added.

PCI is aiming to have its rezoning complete and development-permit process concluded in time for a 2011 construction start and possible 2014 completion date.

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Ally

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Metro Vancouver housing demand expected to flatten out in 2010

VANCOUVER — Metro Vancouver real estate sales will drop in 2010 compared to last year and flatten out in 2011 because new buyers who would have been in the market were enticed to buy in 2009, Canada Mortgage and Housing Corp. said Wednesday.

CMHC is forecasting that Metro Vancouver will see 35,000 property sales cleared through the realtor-controlled Multiple Listing Service, a 3.5-per-cent decline from 2009 and will slip another three per cent to 34,000 transactions in 2011.

"Certainly the market recovery we saw over the past year, at least anecdotally, a lot of that seems to have been first-time homebuyers taking advantage of the lower [mortgage] rates combined with lower prices," Robyn Adamache, a market analyst with CMHC said in an interview.

And with prices rebounding past their previous peaks and with mortgage rates having begun to creep up, Adamache added that it makes sense 2010 and 2011 sales will be dominated by move-up buyers.

On prices, CMHC is forecasting that Metro Vancouver`s average price to top $655,000 in 2010, up 10.6 per cent from 2009. In 2011, however, the federal mortgage insurer estimates price growth will edge up 3.1 per cent to $675,000.

Read the full article here.
 

Ally

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Trajectory of Metro Vancouver home prices level out

VANCOUVER — Metro Vancouver home prices tipped past their previous peak in the first quarter of this year, but their pace of growth slowed considerably according to the unique measure of the Teranet National Bank House Price Index.

The Teranet index score for Metro Vancouver hit 152.16 in March, up 14 per cent from the same month a year ago, and above the city`s previous high of 150.65 reached in June, 2008.

However, the rate of growth from February to march was just 0.61 per cent, and the index climbed just 2.12 per cent over the entire quarter.

"The broad slowing of monthly gains is consistent with a general loosening of resale-market conditions across the country," Marc Pinsonneault, senior economist with National Bank Financial Group said in a news release. "For some months now, homes have been coming on the market faster than they have selling."

Rather than calculating average or benchmark prices from housing sales in a given month, the Teranet method examines price changes of all homes on a "repeat sales basis."

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Enbridge moves ahead with $5.5-billion pipeline

Enbridge filed its environmental application for the Northern Gateway oil pipeline Thursday and immediately ran afoul of opponents of the proposed $5.5-billion project.

Enbridge envisions a 1,172-kilometre twin pipeline system running between Edmonton and the British Columbia coastal town of Kitimat, as well as a tank terminal and marine shipping terminal in support of crude oil shipments from the Alberta oilsands.

The company issued a news release to announce it has filed with the National Energy Board an eight-volume application that provides "a comprehensive overview of the proposed project and its benefits."

"We take pride in our long-standing reputation as a safe pipeline operator and socially responsible company," Enbridge president Patrick Daniel said in the release, adding that the project "will be a model of world-class safety and environmental standards."

The company estimates economic benefits to include 62,700 person-years of construction employment, 1,150 long-term jobs and $2.6 billion in tax revenue.

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Paper products industry to return to profitability in 2011: Report

OTTAWA — Canada`s paper products industry is starting to recover after eight consecutive years of losses and should post a profit next year. But that`s not cause for celebration, according to a Conference Board of Canada report that says margins will "remain thin."

Rising energy costs, a strong Canadian dollar, increased foreign competition and coming interest rate increases are some of the factors weighing on an industry which had been struggling even before the recession cut a huge chunk out of demand for its products.

"After recording a cumulative loss of more than $5 billion over the past seven years, the financial performance of the paper products industry is expected to gradually improve, but it will be 2011 before the industry records a profit," writes report author Michael Burt.

"Improved pricing, the removal of higher cost capacity, and a modest recovery in demand will all contribute to the turnaround — but margins are expected to remain thin."

Thanks to cost-cutting over the past 18 months losses will fall to $132 million this year — the industry`s best performance since 2004, when its loss was $32 million, the report says.

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Ally

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From the depths of its decline, pulp and paper sees prospects for profit

Canada`s paper sector should return to profits by 2011, albeit looking up from the depths of an industry-wide decline that saw companies purge half their workforce and endure eight years and $5 billion in losses, the Conference Board of Canada said.

The Conference Board, in its Industrial Outlook report for the sector released Thursday, forecast that Canadian pulp and paper producers will turn $366 million in pre-tax profits in 2011, following a narrowing of its losses to $139 million this year from $1.3 billion in 2009.

"This is definitely good news, but it`s certainly not going to make up for the lost ground we`ve seen in the last few years," Michael Burt, the Conference Board`s associate director for industrial and economic trends said in an interview.

In his report, Burt noted that "the industry is still far from healthy."

Burt said the industry`s restructuring efforts, which have seen companies shutter high-cost mills, install more efficient equipment to improve productivity and slash some 26,000 jobs since 2006, deserves some credit.

The Conference Board expects the sector`s workforce to total 68,100 in 2010. Burt noted that as late as the late 1990s, some 120,000 people worked in pulp and paper.

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Ally

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Housing affordability and the Hated Sales Tax

HST, OMG! Can you believe how this thorny issue -day after day after day -continues to dominate the news and commentary? It certainly has hit a raw nerve with many thousands of British Columbians.

Actually, HST has been under my skin since March 2009, when Ontario announced it had inked a $4.3-billion tax harmonization deal with the feds. I figured then, what with B.C.`s budget challenges and all, it would only be a matter of time until this province jumps aboard the HST bandwagon.

We all know what happened. On July 23, 2009, the B.C. government, without consultation, announced it had signed a memorandum of understanding with the federal government on HST implementation. In exchange, B.C. was promised $1.6 billion. The firestorm of criticism and accusations has been relentless ever since.

The Province recently published a letter to the editor from provincial Finance Minister Colin Hansen, who wrote that the Liberals did not promise during the election there would be no HST. He acknowledged his party "received dozens of surveys from organizations" and that two of those surveys (restaurant owners and home builders) asked about the HST. Further, he wrote "these surveys are answered on behalf of candidates by individuals working out of party headquarters."

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