According to CMHC’s recent Housing Outlook Conference, Victoria is a buyer’s market for housing.
One of the reasons is tax uncertainty created by the HST and transition back to the PST. As a result, single family housing starts are the lowest in a decade.
Last year, 609 single family homes were built. Previously, the lowest number was 629 homes in 2001, followed by 635 starts during the 2008/09 global meltdown.
Greater Victoria is not the only region suffering declines. Virtually every BC community experienced double-digit declines in new single family homes, resulting in significant job losses. The silver lining in this very dark cloud is a buyer’s market has emerged.
According to Stats Canada’s New Housing Price Index, prices in Victoria have declined about 12% since 2007. This outweighs added HST costs, especially when the rebate is included. A new home built in 2007, without the HST, would cost more than an equivalent new home in today's market with the HST.
If you are considering a new home purchase, keep in mind the HST is only one factor. The cost of a mortgage, land, materials and labour are also very important.
When the HST is removed, pent-up demand may increase some of these other costs. In addition, consumers will lose the HST rebate, up to $26,250.
Also, pay attention to CMHC’s monthly reports on single family housing starts. Despite a very tough year, the past three months have shown small increases. It is likely consumers are starting to realize they are in a buyer’s market, despite the HST.
If demand continues and prices rise, the increase in labour and material costs may be greater than any savings realized by waiting for removal of the HST.
Talk to a CHBA builder about building/buying a new home in today’s market with the HST. You might be surprised.
Visit us at http://www.chbavictoria.com/ and http://www.careawards.com/
Wednesday, February 1, 2012
Wednesday, January 25, 2012
CRYSTAL BALL HOUSING FORECAST- MONDAY FEB 6
CHBA Crystal Ball Housing Forecast
Monday, February 6
What is the projection for housing starts and sales in Greater Victoria and BC? What will be the impact of the HST, interest rates, and construction costs? Find out the answers to these questions and more.
MC: Lee King, Corporate Representative, Canada Mortgage and Housing Corporation
Speakers:
Mayor Carol Hamilton, City of Colwood
Cameron Muir, Chief Economist, BC Real Estate Association
Carol Crabb, President, Victoria Real Estate Board
Travis Archibald, Senior Market Analyst, Canada Mortgage and Housing Corporation
Time:
6:00 pm – reception
7:00 pm – dinner
8:00 pm – presentations
CHBA and VREB members - $50 plus HST
Non-members - $75 plus HST
(prices include dinner)
Book a seat at info@chbavictoria.com
Tuesday, January 24, 2012
RESTRICTIVE LAND USE POLICIES REDUCE AFFORDABILITY
A recent editorial by CFAX 1070 News Director Murray Langdon hit the nail on the head.
http://www.cfax1070.com/index.php?option=com_content&view=article&id=4683%3Amurray-langdons-comment&catid=52%3Aeditorials&Itemid=115
Greater Victoria's high housing costs are forcing young families to relocate. This is due to restrictive land use policies in our region implemented by 13 municipalities, all with their own community plans. Why do we have 13 municipalities?
The BC govt has a unique policy in Canada called "self-determination for municipalities." BC has legislation that prevents forced amalgamations by the minister responsible for municipalities. See Section 279 of the Community Charter - No forced amalgamations
http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/03026_09
In other provinces, the minister can force an amalgamation if it is deemed to be in the best interests of the community. BC's legislation should be similar.
Housing affordability can be better addressed when we are able to create a community plan that reflects the needs of the region, including housing affordability, transportation, and infrastructure.
http://www.cfax1070.com/index.php?option=com_content&view=article&id=4683%3Amurray-langdons-comment&catid=52%3Aeditorials&Itemid=115
Greater Victoria's high housing costs are forcing young families to relocate. This is due to restrictive land use policies in our region implemented by 13 municipalities, all with their own community plans. Why do we have 13 municipalities?
The BC govt has a unique policy in Canada called "self-determination for municipalities." BC has legislation that prevents forced amalgamations by the minister responsible for municipalities. See Section 279 of the Community Charter - No forced amalgamations
http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/03026_09
In other provinces, the minister can force an amalgamation if it is deemed to be in the best interests of the community. BC's legislation should be similar.
Housing affordability can be better addressed when we are able to create a community plan that reflects the needs of the region, including housing affordability, transportation, and infrastructure.
EXCELLENT CHBA WEBINAR ON CHANGES TO NATIONAL BUILDING CODE
CHBA held an excellent webinar today on the proposed energy efficiency changes to the National Building Code. The webinar slides are at
http://www.chba.ca/uploads/trc/webinar/webinar%20presentation%20-%20final.pdf
The strong considerations for the changes included cost/benefit (affordability), constructability and achieving a reasonable national standard. They emphasized the importance of maintaining a national standard for many reasons such as consistency for manufacturers. In turn, this helps create jobs.
BC should adopt this national standard rather than continue to pursue its own path such as mandatory EnerGuide80. BC signed a national Memorandum of Understanding to participate in, and abide by, a national code. Our elected representatives agreed to “enact the National Building Code as the core document for building regulations in each province and territory with as few amendments as possible.”
All provincial Building Codes should meet the criteria of affordability, constructability and a consistent national standard.
BC's proposed mandatory EnerGuide80 does not meet these criteria.
http://www.chba.ca/uploads/trc/webinar/webinar%20presentation%20-%20final.pdf
The strong considerations for the changes included cost/benefit (affordability), constructability and achieving a reasonable national standard. They emphasized the importance of maintaining a national standard for many reasons such as consistency for manufacturers. In turn, this helps create jobs.
BC should adopt this national standard rather than continue to pursue its own path such as mandatory EnerGuide80. BC signed a national Memorandum of Understanding to participate in, and abide by, a national code. Our elected representatives agreed to “enact the National Building Code as the core document for building regulations in each province and territory with as few amendments as possible.”
All provincial Building Codes should meet the criteria of affordability, constructability and a consistent national standard.
BC's proposed mandatory EnerGuide80 does not meet these criteria.
Wednesday, January 18, 2012
CRYSTAL BALL HOUSING FORECAST POSTPONED
The Crystal Ball Housing Forecast at Royal Colwood Golf Club is postponed due to snow. We hope to reschedule for early Feb. We apologize for any inconvenience.
Tuesday, January 17, 2012
BUILDING CODE REVIEWS ENERGY STANDARDS
National standards are important to Canadians and a foundation of the country. A case in point is our National Building Code (NBC).
Canada’s NBC ensures research and due diligence is undertaken to create uniform regulations and “enhance public health and safety.”
A review of energy efficiency proposals for housing is underway at http://www.nationalcodes.nrc.gc.ca/eng/public_review/2012_1/introduction.shtml
The introduction to the changes makes some interesting points. Their intent was to achieve an Energuide Rating System (ERS) target of 80. However, they discovered:
“When the proposed requirements were validated, it was apparent to the technical committees that the current proposals achieved significant energy reductions even though they did not reach a rating of 80 in the ERS. When discussing requirements to achieve a performance level of ERS 80 on average across Canada, the technical committees were concerned about cost, enforcement and constructability issues.”
“The CCBFC Executive Committee agreed that the proposed requirements would achieve significant progress towards energy efficient construction while staying within the bounds of constructability. The energy reduction achieved through implementation of these requirements should avoid unintended consequences on other minimum code requirements that contribute to the acceptable performance of the house as a system.”
In other words, mandatory Energuide80 encountered challenges in terms of cost, constructability, enforceability, and unintended consequences. Better to achieve “significant progress” and stay within the bounds of constructability.
Last year, our Builders’ Council arrived at a similar conclusion.
The BC govt has been exploring mandatory Energuide80 for the BC Building Code and should pay close attention to these findings.
Unilateral provincial building standards erode our commitment to the NBC while increasing the risk of unintended consequences.
New housing has already achieved GHG emission targets established by the Kyoto Accord. Between 1990 and 2008, Canadian housing grew by 33%, while its GHG emissions grew by less than 1%.
Additional achievements in this field must adhere to the NBC and due diligence including cost, constructability, enforcement and special attention to unintended consequences.
Canada’s NBC ensures research and due diligence is undertaken to create uniform regulations and “enhance public health and safety.”
A review of energy efficiency proposals for housing is underway at http://www.nationalcodes.nrc.gc.ca/eng/public_review/2012_1/introduction.shtml
The introduction to the changes makes some interesting points. Their intent was to achieve an Energuide Rating System (ERS) target of 80. However, they discovered:
“When the proposed requirements were validated, it was apparent to the technical committees that the current proposals achieved significant energy reductions even though they did not reach a rating of 80 in the ERS. When discussing requirements to achieve a performance level of ERS 80 on average across Canada, the technical committees were concerned about cost, enforcement and constructability issues.”
“The CCBFC Executive Committee agreed that the proposed requirements would achieve significant progress towards energy efficient construction while staying within the bounds of constructability. The energy reduction achieved through implementation of these requirements should avoid unintended consequences on other minimum code requirements that contribute to the acceptable performance of the house as a system.”
In other words, mandatory Energuide80 encountered challenges in terms of cost, constructability, enforceability, and unintended consequences. Better to achieve “significant progress” and stay within the bounds of constructability.
Last year, our Builders’ Council arrived at a similar conclusion.
The BC govt has been exploring mandatory Energuide80 for the BC Building Code and should pay close attention to these findings.
Unilateral provincial building standards erode our commitment to the NBC while increasing the risk of unintended consequences.
New housing has already achieved GHG emission targets established by the Kyoto Accord. Between 1990 and 2008, Canadian housing grew by 33%, while its GHG emissions grew by less than 1%.
Additional achievements in this field must adhere to the NBC and due diligence including cost, constructability, enforcement and special attention to unintended consequences.
Wednesday, January 11, 2012
TIMES COLONIST NEWS STORY SAYS IT ALL
The following news story by Darron Kloster on the front page of today's Times Colonist pretty much says it all.
http://www.timescolonist.com/business/Single+family+housing+starts+sink+decade/5977407/story.html
Builders have said for the past year that the HST, referendum, and transition period back to the PST have hit the home building industry hard. This issue has cost jobs and much of it was unnecessary.
The BC govt already receives revenue of about $1 billion through the Property Transfer Tax, and adding the HST to new housing was just another way to generate more revenue from an already tax-burdened industry.
A decade low in new housing starts could have been avoided with some understanding of the new housing industry, consumers, and mitigation of the HST's impact.
The solution now is to provide an HST rebate to purchasers of all new homes regardless of price or remove the Property Transfer Tax, at least during the transition period.
The new housing industry cannot wait another year, while bearing the brunt of tax uncertainty created by the HST.
http://www.timescolonist.com/business/Single+family+housing+starts+sink+decade/5977407/story.html
Builders have said for the past year that the HST, referendum, and transition period back to the PST have hit the home building industry hard. This issue has cost jobs and much of it was unnecessary.
The BC govt already receives revenue of about $1 billion through the Property Transfer Tax, and adding the HST to new housing was just another way to generate more revenue from an already tax-burdened industry.
A decade low in new housing starts could have been avoided with some understanding of the new housing industry, consumers, and mitigation of the HST's impact.
The solution now is to provide an HST rebate to purchasers of all new homes regardless of price or remove the Property Transfer Tax, at least during the transition period.
The new housing industry cannot wait another year, while bearing the brunt of tax uncertainty created by the HST.
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