HOUSING

HOUSING Economist says interest hikes will hit mortgages

by Carlito Pablo

RBC Economics says home buyers across the country will “feel the pinch of rising rates”.

The Bank of Canada has so far raised its interest-setting rate twice this year, and it’s not yet done.

RBC economist Robert Hogue believes that the central bank will hike rates by one percent more, bringing it to two percent by the end of 2022.

Hogue is convinced that rising interest rates will be a game changer in the Canadian housing market, as this will make mortgages more expensive.

To illustrate, a one percent increase in the Bank of Canada rate translates to $526 more in monthly payments for a typical home in Vancouver.

Also, those who qualify for a mortgage will “see higher rates reduce the size of the mortgage they can get—and the price they can pay”.

As an example, Hogue noted that Canadian households earning the median income will have their maximum purchase budget reduced by 15 percent. This will cool down the market that saw red-hot activity in 2021 because of low interest rates.

“We now expect home resale activity to slow more quickly than previously anticipated and, perhaps more important, we see prices peaking this spring as market sentiment sours from extreme bullishness,” Hogue wrote in an April 21 report.

“In this altered landscape,” the economist continued, “local markets could experience a mild price correction, partly reversing outsized gains recorded in the past year.”

Hogue wrote that the most expensive housing markets in Canada will feel the effects of rising rates the most. “We expect downward price pressure to be more intense in Vancouver, Toronto and other pricey markets,” the economist wrote.

He continued: “This will translate into larger annual price declines in 2023 in British Columbia and Ontario. By comparison, we expect activity and prices to be more resilient in Alberta, where local markets have more catching up to do following a prolonged slump before the pandemic.”

Although resale numbers are projected to decline and prices to experience a “modest” correction, prospects for the Canadian housing market are not really grim.

“While it can’t be completely ruled out, we view the odds of a market crash as low,” Hogue wrote.

The economist explained that “solid demographic fundamentals will continue to support Canada’s housing market. Millennials—in their prime home-buying years—will remain a force, and growing immigration will further boost demand for housing. These factors will keep demand from falling into a deep-freeze.”

Overall, Hogue believes that rising interest rates are “likely to bring welcome changes to the market—including more sustainable activity, fewer price wars, more balanced conditions, and modest price relief for buyers.

“After the extreme price increases and heated bidding wars of the last year,” Hogue concluded, “this would be a positive shift.” g

This five-bedroom Vancouver home at 3239 West 36th Avenue sold for $5,899,800 six days after being listed at $5,998,000. Further interest-rate hikes will make new mortgages pricier.

Spring Is Here At Hunters!

Plant Your Shrubs Now For Blooms All Season Long We Also Have Organic Edible Flowers!

Osteospermum 4 Inch

$4.99

each

Rhododendrons

#1 Pot

starts at $14.99

Gaia Fertilizer

4-4-4, 2kg

$29.99

each

2560 West Broadway Tel. 604-733-1534

HuntersGardenCentre.com 2022 Store Hours:

7 Days a Week 9:00am - 5:30pm

REAL ESTATE Home’s ghost haunts this $18-million vacant lot

by Carlito Pablo

This unique home in West Vancouver’s Whytecliff neighbourhood was designed by renowned architects Arthur Erickson and Geoffrey Massey. Photo courtesy Erickson estate collection.

Awaterfront property associated with renowned architect Geoffrey Massey is back on the market.

Following previous unsuccessful attempts to sell the vacant West Vancouver lot, 7290 Arbutus Place has been listed for $18 million.

Together with legendary architect Arthur Erickson, Massey designed celebrated projects like the SFU campus on Burnaby Mountain.

When Massey died in 2020 at the age of 96, that university paid him tribute.

“Among the giants of West Coast modernism, Massey and Arthur Erickson’s visionary design for Burnaby campus shaped SFU’s educational philosophy by tearing down walls between faculties, removing silos and creating common areas where disciplines merge and ideas flourish,” university president Joy Johnson said in a community notice.

SFU recalled that Massey and Erickson submitted their “strikingly futuristic” winning design for a new university in 1963.

Eight years earlier, in 1955, the two architects designed a home on a rocky West Vancouver waterfront outcrop for artist Ruth Killam. This was 7290 Arbutus Place, and the residence became known as the KillamMassey House after the two married.

The arthurerickson.com site, dedicated to Massey’s renowned former architectural partner, provides a history of the North Shore home.

“The house was originally designed for a bachelor lady artist, and consisted of the kitchen, living room, master bedroom, guest bedroom, bathroom, and studio,” the site says. “Subsequent to the construction of the house, architect Geoffrey Massey married the artist and over the years, due to four children, considerable additional space was required. This consisted of a playroom and laundry to the east of the living room, and three bedrooms and a bathroom were added on the northeast corner.

“In addition,” the account continues, “a greenhouse was constructed on the north end outside the kitchen.”

Canadian Architect magazine said that Massey was elected city councillor in Vancouver in 1972. He served in the position for two years. “During that period, he played a part in the selection of the winning design for the rehabilitation of Granville Island, by Norm Hotson and Joost Bakker, who entered with the support of their employer, partner Richard Rabnett of Thompson, Berwick and Pratt.”

Moreover, “Massey also was a supporter of Art Phillips, who was mayor of Vancouver from 1973 to 1977.”

The magazine went on to note that “Phillips championed livability and inclusivity, and under his leadership, Vancouver’s city planning came to address environmental and quality-of-life concerns”.

Massey retired from architecture in 1991; Killam died in 2011.

The Vancouver Sun noted that Massey sold his Whytecliff neighbourhood residence around 1988. Reporter John Mackie wrote that the home was a “stunning modern structure with a glass pyramid above the central living room”. It also featured “breathtaking views of Howe Sound”.

As for Massey’s legacy in Vancouver’s political life, Mackie wrote that with Phillips and the mayor’s TEAM party in 1972, he was “part of a political movement that put a stop to freeways and redeveloped the south side of False Creek from industrial to residential”.

Royal LePage Sussex listed 7290 Arbutus Place on April 15. The home is long gone from the half-hectare West Vancouver lot.

The listing notes that on the property is the “original foundation of a home”. The seller’s agent also stated that the 63,000-square-foot lot comes with more than 700 feet of waterfront with “absolute privacy”, plus a private dock. It’s a “time capsule” into Massey’s “most impactful house project from the 1950s”.

Based on tracking by real-estate site Zealty.ca, the property listed three times between 2012 and 2019, without fetching a buyer. Those previous asking prices ranged from $10.8 million to $13.8 million.

Massey’s former Arbutus Place address has a 2022 assessment of $11,469,000, all of which is for the vacant residential lot.

Adele Weder is the founder of West Coast Modern League, a nonprofit society dedicated to West Coast architecture. Weder wrote in the North Shore News on December 19, 2020 that Massey and Killam’s former home was later transformed by a new owner into an aviary, “damaging it substantially”.

A later owner demolished the residence.

“But it lives on in photographs—an inspiration, I’d like to think, to future generations who will call this place home,” Weder wrote. g