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MAY 2008, Volume
23 Issue 5
What's
Happening in
British Columbia
Credit Union bullish on
housing outlook to '09
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Helmut Pastrick: house prices will rise 10 per cent
to
to 12 per cent by the end of next year
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British Columbia's white-hot housing market will keep roaring into 2009, according to the chief economist for the Credit Union Central of B.C.
"Lower mortgage rates, high income growth and rising in-migration through to 2009 are favourable trends supporting sales demand," said Helmut Pastrick.
He cautioned, however, that first-time home buyers will find it difficult to break into the market, and this is the "main restraint to even higher sales levels."
Pastrick estimates that average house prices in British Columbia, already the highest in Canada, will increase by 10 to 12 per cent this year and from five to six per cent in 2009, to $504,000.
Supply will grow faster than sales, resulting in some easing in market conditions, according to the Credit Union's recent housing outlook report. "New construction will stay at a high level and possibly climb higher, although supply from the existing housing stock will be the larger source [of listings.]"
Patrick believes that smaller towns in B.C. will lead the sales increase over the next year.
"The Kamloops, Kootenay and Okanagan markets have out-performed the B.C. average recently, and this will continue into 2009," he noted.
Weaker markets are likely in northern lumber-dependent economies hit by the U.S. housing recession, he said.
B.C.'s major urban markets will also see a strong year ahead, Pastrick suggests. Greater Vancouver, for example, is forecast to post 38,200 MLS sales in 2009, up from 36,800 this year and just 500 units below the record level 2007.
The Fraser Valley will see sales rise to 17,200 units in 2009, compared with a projection of 16,500 this year. In Victoria, the Credit Union expects 8,100 home sales in 2009, up from 7,700 this year and close to the record level of 2007.
"Tighter rental markets will emerge, with rising in-migration and less ability for renters to enter the home ownership market. Lower vacancy rates and higher rent increases will materialize in 2009," he added.
Chinese investors
drawn to forum
The organizers of a Canada-China business forum, to be held this July 5 at the Vancouver Trade and Convention Centre, say the focus will be on Chinese real estate investments in Western Canada.
Some 800 delegates are expected to attend this second annual event, co-sponspored by Dawa Business Press of Vancouver and the China publishing giant Beijing Youth Media Group.
Western Investor will also be a media sponsor for the business forum.
"The forum is almost exclusively focused on real estate development and investment opportunities in Canada, with special attention on Greater Vancouver and B.C.," said Chris Deng, general manager of Dawa Business Press. The event will allow local developers to showcase their projects, and give Chinese buyers an opportunity to discuss investment opportunities, he said.
Airport draws
light industrial
Development around the Abbotsford International Airport is taking off.
A new exit off Highway 1 and completion of improvements to Mount Lehman Road has paved the way for a variety of light industrial businesses to set up shop just north of Abbotsford airport.
An example is Airport North Business Park at Mount Lehman Road and South Fraser Way, which welcomed its first tenants last fall.
Its initial, 41,000-square-foot building is 75 per cent leased, and a second building is fully occupied. A third building, nearing completion, will bring the park's finished space to 88,000 square feet.
Ken Neufeld, a broker with Royal LePage Fraser Valley Realty Ltd., is currently fielding a handful of inquiries that could result in all three buildings being fully leased, setting the stage for additional construction.
Tenants include local, national and international companies, Neufeld said, with the project's location in a popular light industrial area being a prime draw.
For example, Abbotsford's Towne Millwork Ltd. leased 6,000 square feet in the park because it's across the street from its existing facility and was a convenient option. West Coast Machinery Ltd., on the other hand, moved its truck retrofitting business from Langley's Gloucester Industrial Estates because Airport North could raise its profile.
West Coast has more than 16,000 square feet of office space in Airport North, a step up from the 7,000 square feet it had in Gloucester.
Meanwhile, Fraserway RV Limited Partnership is consolidating its three Abbotsford locations on an 11-acre site adjacent to Airport North.
Developed by Mt. Lehman Holdings Ltd., Airport North Business Park will have 300,000 square feet of space when complete. Mt. Lehman also has plans for a 15-acre site located to the east of the airport.
- Peter Mitham/BIV
Deal reached to
restart mill
Catalyst Paper Corp. has inked a unique deal with its unionized workers in Port Alberni, a move that has cleared the way for a $12 million capital upgrade and a kick-start of an idled paper machine.
The decision is in contrast to a trend in B.C. where 45 wood processing operations have shut down since 2001.
The Port Alberni mill upgrade, part of $38 million earmarked by Catalyst for capital projects in 2008, followed months of discussions on actions required to improve the mill's business climate and cost competitiveness.
"It's a breakthrough labour agreement," Richard Garneau, Catalyst's president and CEO, told financial analysts and institutional investors in a conference call. "The agreement puts modern work practices into place that will bring our labour costs to a competitive industry level."
The company has a $14 million early retirement and severance package associated with the labour agreement that will pave the way for investment in the mill's thermo-mechanical pulp facility and a mid-year restart of its high-cost No. 4 paper machine that was indefinitely idled last September.
Catalyst has also negotiated an agreement for its first major acquisition since 2002, the first one to extend its manufacturing base outside Canada. It will spend US$161 million in cash to buy a recycled newsprint mill in Arizona from a subsidiary of AbitibiBowater Inc.
- Krisendra Bisetty/BIV
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