Speculative measures
Veteran condo marketer Bob Rennie addressed some of the tough issues facing residential developers when he spoke to the Urban Development Institute on May 22. With interviews earlier in the week tipping listeners to his concern over affordability, Rennie dug deep into the speculation regarding the potential causes of unaffordable housing.
With just 47,000 single-family homes (and dwindling), high development costs (embracing everything from land to materials and labour) and surging demand, housing in Vancouver may never qualify as affordable to the average Joe or Jane, let alone Rennie’s hypothetical couple, Biff and Buff.
Blaming foreigners isn’t the answer, nor is taxing high-value property transactions, Rennie said.
“It is not about foreigners,” he said. “The Asians that are buying are locals. The over $4 million homes? They’re over $4 million because we don’t have supply. If I thought a tax would create more of them, let’s tax them. It’s not going to create more of them.”
Building “more homes for more people” – a slogan the Urban Development Institute coined in 2012 to highlight the issue – is what Rennie believes will help matters.
“The only cure for affordability is supply,” he told the Canada Mortgage and Housing Corp.’s annual housing outlook conference last November.
Taxing speculations
Community groups may need education, but let’s not forget Vancouver Mayor Gregor Robertson, who called for a tax on speculators the day of Rennie’s presentation.
Speculation, in Robertson’s books, is the practice of investors in residential property who, “just to make a quick buck … buy it and then, six months later, turn around and sell it again.”
But how much flipping is really taking place?
According to Central 1 Credit Union, not much.
The latest data indicates that the number of properties bought and sold again within six months averages 2% across Metro Vancouver. It’s just one percentage point higher for condos, the most affordable of housing types.
Central 1 senior economist Bryan Yu said an uptick in speculative activity in 2015’s first quarter has boosted flipping to 5% of all Metro Vancouver home sales for the 12 months ended April 2015.
Yet that’s tame versus the rate back in 2007, when 10% of all home sales and upward of 20% of condo sales in the region were flips.
Those looking for trouble might be better tackling owners of vacant residences – a group that polling firm Insights West reports 86% of B.C. residents are concerned about.
Indeed, 2011 census data pegs the proportion of vacant homes in Vancouver at 6.3% – more than twice the rate of speculative activity.
Reality, not speculation
Vancouver-based Pinnacle International Realty Group is taking advantage of a strong hospitality market to launch a hotel division responsible for three of its hotel properties.
The strata-titled Pinnacle Hotel Whistler (in which Pinnacle holds a majority interest), the Pinnacle Hotel at the Pier in North Vancouver and the Pinnacle Hotel Vancouver Harbourfront (formerly the Renaissance Harbourfront) are the core of Pinnacle Hotels and Restaurants. Not included is the Vancouver Marriott Pinnacle Downtown, which will continue to operate under the Marriott flag.
“We started out with, really, one person as an asset manager in Pinnacle International, and now we’ve got a department of five that are the hospitality division,” said Kyle Matheson, director of hospitality sales for Pinnacle.
Pinnacle principal Michael De Cotiis was not available for comment, but industry sources observe that the resurgence of U.S. visits and the attention garnered for Vancouver by the TED talks make the moment prime for launching a new brand.
Carrie Russell, managing director of appraisal firm HVS Canada in North Vancouver, said contract arrangements with Renaissance likely factored into De Cotiis launching his new brand now.
Three hotels, each with a strong track record, provide sufficient momentum for the new brand, which, Russell said, stands “unto itself” in the local market.
The arrangement will allow the new group to share staff and achieve other efficiencies impossible between hotels operating under separate flags.
