cubicles transform into incubators

Get ready for a hot time at work

BC Hydro asks managers of 400 downtown buildings to ease up on power after transformer blowout

The Vancouver Sun
Wednesday, July 11, 2007
By Scott Simpson, Glenn Bohn and Linda Nguyen

Office workers and tourists in downtown Vancouver may feel the heat this summer after a major transformer blew out last week at one of BC Hydro's main substations.

Hydro spokeswoman Gillian Robinson said Tuesday the electricity utility is urging the managers of 400 buildings in the province's main business district to keep a lid on electricity consumption to avoid overtaxing the area's only other transformer.

The managers are being asked to allow interior temperatures to reach as high as 26 C on exceptionally hot days, rather maintaining them at the usual 22 C.

For today, Environment Canada is forecasting another hot and sunny day in the Vancouver area, with highs of 37 in the Fraser Valley and 28 near the water.

The area affected by the Hydro warning is from Robson Street to the Vancouver waterfront, between Beatty and Jervis -- in effect, the boundaries of the city's core business district that includes most major downtown hotels and office buildings, as well as many condominiums.

A failure of the remaining unit is a "remote possibility," Robinson said.

"We just don't want to push it too hard. We want to handle it with kid gloves and be very kind to it.

"We are being proactive to let customers know what's going on, and how they can help."

Hydro engineers say it might take as long as six weeks to restore full service to the transformer.

Thoren Hudyma, spokeswoman for B.C. Transmission Corporation, which is in charge of operating and maintaining the transformers, said there is a "contingency plan" in case the second one breaks down.

"There are a number of different options that could take place," she said. "We could look at using backup generators or we would revive the [first] damaged transformer to very basic or limited service."

Charles Gauthier, executive director of the Downtown Vancouver Business Improvement Association, said an estimated 72,000 people work in the affected area -- many in office towers with sealed windows.

His prediction for the summer: "A lot of sweating people."

"I'm glad I'm going on vacation," Gauthier said. "A lot of people will be taking vacation time in August, but I don't think we'll see all 72,000 going."

Gauthier suggested managers could relax dress codes for office workers.

"We don't need to dress up in suits and ties and our Sunday best if we can avoid it," he said.

An expert who studies indoor air quality and temperatures said the increase in indoor temperatures suggested by BC Hydro is "reasonable."

"It will seem warmer but if we are aiming at sustainability, we'll be looking at 26 C as being the new norm during some days in Vancouver anyway," University of B.C. associate professor Karen Bartlett said.

This temperature is within the range universally promoted by the American Society of Heating, Refrigerating and Air Conditioning Engineers, a society that studies acceptable indoor temperatures.

Bartlett said Vancouverites are lucky because it's not as humid here as in other sweltering cities like Toronto.

And if the humidity remains at around 40 per cent, office workers should be fine.

"For most people, this isn't going to be a huge issue but if it makes some uncomfortable then they're not going to be efficient," she said. "People are going to be sweating more, which will mean most people will be emitting more body odour, too."

She said along with relaxing dress codes, employers should ensure their ventilation systems are adequate and windows are opened.

"If the ventilation system is not delivering fresh air to these offices then people will start complaining about headaches and feeling tired," Bartlett said. "People can also run their hands under cold water every half an hour or so to stay cool."

Mike Bishop, a director of the Building Owners and Managers Association of B.C., said Hydro has asked building owners to conserve electricity between the peak hours of 10 a.m. and 3 p.m., turn off all non-essential lighting and turn down the setting in their air conditioning systems.

"People are going to be inconvenienced for a short period of time, because they're going to be experiencing higher than normal building temperatures," he said.

Bishop, general manager of the new energy-efficient Shaw Tower, said the temperature in that office and residential tower is going up by just one degree, to 24 degrees on average. Managers are also asking tenants to conserve power by turning off computers and office lights when they're not in use.

"If everybody in the downtown core does it, it could make a substantial difference," he said, especially in older buildings that are less energy-efficient.

Robinson said electricity demand on the sole operating transformer is not normally an issue in Vancouver's temperate summer climate, and the second unit is usually reserved for backup duty.

The broken unit failed just a few weeks after a routine inspection, and Hydro engineers are still trying to determine what happened, Robinson said.

The broken unit is a two-storey structure installed 20 metres underground at Cathedral Square at Dunsmuir and Richards.

Robinson said building managers were informed last week about the situation.

how many pricks does it take...

Vancouver Housing Bubble to Pop?

Interest rates could change tomorrow. Then what?

TheTyee.ca

July 9, 2007

By Vanessa Richmond

Vancouver housing prices could be about to fall.

Tomorrow, the Bank of Canada is likely to increase interest rates by a quarter point in order to curb overheating inflation.

Vancouver is the "extreme outlier" of housing affordability in the country right now, according to the Royal Bank of Canada's (RBC) most recent report, meaning it's the worst by far. Due to continued housing price increases, and despite increased salaries, households spend, on average, 70 per cent of their income on housing costs (for two-storey, single family dwellings). Many prospective homeowners are currently priced out of both the house and condo markets.

Two-in-three Canadians think houses in their neighbourhood are overpriced, according to a poll released today by Angus Reid Strategies. Almost three-in-four homeowners say they could not afford a down payment on their house as it's presently valued. And the vast majority of Canadians rank home ownership as a top priority, but are pessimistic about their chances of buying a house in the current market.

That could be about to change. Sales and listings in B.C. have "cooled down" and "levelled off," according to RBC. Inventory in the Greater Vancouver market is up to around 12,000 properties for sale, those properties are sitting on the market longer, and the housing market generally is experiencing a slowdown. B.C. "is unique in the Western provinces" because it appears to have already reached a "saturation point."

RBC predicts that the likely interest rate increase tomorrow will be the first of several increases this year, bringing the total increase up to a full per cent over the next twelve months. Combined with the other factors, this likely means the beginning of the end of the real estate "bull" cycle. The question is whether it will mean a levelling off or a decrease in prices.

Floating mortgages common

With the rate increase, "We're likely to see more changes to housing prices here than elsewhere in the country," said Benjamin Tal, senior economist for CIBC World Markets. It will affect people at the margins first, then will start to have an impact that "is not insignificant" on the market as a whole, especially if the total rate increase goes to a full per cent. Housing prices here depend on very low interest rates.

In Vancouver, in addition to the fact that "affordability is the worst, housing prices are in the sky," and the market is already levelling off, the share of people who use a variable rate mortgage is higher than elsewhere in the country, so the increase will be felt more.

Tal predicts we will likely start to see decreases in housing prices within the next year, but Tsur Somerville, director of the UBC Centre for Urban Economics and Real Estate told the Tyee it's hard to be that precise. Changes to interest rates can take at least a year or two to work themselves through the economy, he says. "It's like turning a supertanker. You turn the wheel now but it will have an effect in five miles."

Somerville also says that the quarter point increase on its own is not very significant.

Right now, according to the Real Estate Board of Greater Vancouver, a typical Greater Vancouver house costs $715,700. With a mortgage for 75 per cent of the value of that house, a quarter point increase would only mean a further $85 a month. That would only affect someone on the margins, he says.

But on the other hand, with the increases that we've had since January, that adds about $286 a month. And if you go back to the lowest point of interest rates in July 2005, that's a $500 a month difference. As Somerville says, "That does bite."

Rather than act on its own, he says the increase will "further dampen the market" when combined with other factors like a slowdown in sales and an increase in the inventory.

'Sticky' prices

But while Somerville expects to see a lower rate of price increase, he says, "Nobody credible has predicted a price decline."

Instead, prices could become "sticky." "People are reluctant to lower prices, so instead, they just let them sit." In Vancouver, from 1994 to 2001, housing prices were flat, meaning that adjusted for inflation, they dropped in worth, but the price tags themselves didn't change. He says that could happen again.

Vancouver's housing market has much in common with other cities that saw price increases, factors including a growing economy, rising incomes, increased immigration and higher employment. But Vancouver also has a limited land base, bordered by the mountains, water and the Agricultural Land Reserve, which intensifies those factors.

Vancouver's price increases were also tied to people's exuberance for real estate. "The market partly feeds on itself, on people's expectations, people guessing it will go up." And Somerville says that might not change.

"We are closer to the end of the cycle than the beginning of the cycle, but I don't know where the end is."

What will the end be, in his opinion? "People have this notion that when the cycle ends, housing in Vancouver will be affordable." He laughs. "Get real. When you look at other world cities with limited land and active economies, prices are high. If you want to get rid of the ALR, fill in the ocean and flatten the mountains, well, that's my recipe for affordability."

We'll know the answer to whether prices will stay stagnant or decrease sometime in the next year. But after tomorrow, prices are unlikely to keep going up.

Vanessa Richmond is the managing editor on The Tyee.

good luck... buying a house in this century!

'Good luck' behind B.C. growth in key areas

Despite strong retail sales and consumer spending, there's no 'indication economy is on huge boom'

The Vancouver Sun
Thursday, July 5, 2007

The British Columbia economy grew by 1.3 per cent in the second quarter of 2007, nearly double the growth of a sluggish first quarter, according to the Business Council of British Columbia's (BCBC) B.C. Economic Index.

For the first time in the five years that the index has charted economic activity in the province, growth occurred in all seven of its categories. Of these seven, housing starts climbed 8.2 per cent, followed by retail sales at 2.8 per cent.

Strong growth in retail spending remains one of the key drivers of the current economic expansion, said BCBC director of economic research, Ken Peacock.

"Retail sales growth is quite strong," said Peacock. "Consumer spending is strong, and that's due to good job growth, a sustained housing market and the strongest income growth in at least a decade."

Non-residential building permits were up 1.5 per cent and manufacturing shipments increased 1.3 per cent. Although employment grew by a more modest 0.8 per cent, it was a significant factor in the index's gain because it is not as volatile as some of the other indicators.

International visitors (0.6 per cent) and the Canadian leading indicator (0.9 per cent), which reflects strength in the broader national economy, rounded out the across-the-board gains.

The growth occurred in spite of a decline in home building in the United States, which has hamstrung the province's lumber industry.

"The gain in manufacturing shipments is close to being a surprise because the lumber industry is struggling," said Peacock.

Peacock said people shouldn't read too much into the fact that all seven indicators were up.

"It's more good luck than anything," said Peacock.

"It's good news that all seven are going up, but it's not an indication that the economy is on some huge, unprecedented boom. The overall gain of 1.3 per cent is stronger than average, but it's not the strongest gain we've seen in the last couple of years."

Growth in the first quarter of 2007 was just 0.7 per cent.

This year's second-quarter growth of 1.3 per cent beats the same figure one year ago (0.4 per cent) and that of 2005 (0.8 per cent), although it falls short of 2004's second quarter of 1.5 per cent.

Peacock said there that an increase in visits to the province by Asian and European tourists have offset the fact that fewer Americans are coming here because of a strong Canadian dollar.

KEY ECONOMIC INDICATORS

British Columbia saw growth in seven key areas in the second quarter of 2007, according to the Business Council of British Columbia's B.C. Economic Index:

- Housing starts +8.2%
- Retail sales +2.8%
- Non-residential building permits +1.5%
- Manufacturing shipments +1.3%
- Employment +0.8%
- International visitors +0.6%
- The Canadian leading indicator, which reflects the national economy +0.9%

Source: Business Council of British Columbia

--

Home sales increase makes for second-best June yet

Buyers feel financially secure as rates inch up, analyst says

The Vancouver Sun
Thursday, July 5, 2007
By Derrick Penner

An increase in Greater Vancouver home sales in June indicates both strong employment and buyer concerns about rising mortgage rates, according to at least two analysts.

Greater Vancouver recorded 3,951 sales on the Multiple Listing Service in June, a 7.4-per-cent increase from sales in June 2006 -- and the second-best June on record, according to statistics from the Real Estate Board of Greater Vancouver.

Forecasts have predicted sales would slow in 2007, however, Cameron Muir said buyers are feeling more financially secure and able to afford to buy a home.

Buyers have also watched mortgage rates inch up over recent weeks. Posted rates for a five-year closed mortgage stand at 7.24 per cent, according to the Bank of Canada, compared with 6.64 per cent at the beginning of June.

Muir added that the increase can act as an incentive for house hunters who had received pre-approved mortgages at lower discounted rates to buy.

"If you look at affordability, it has eroded somewhat because of those higher rates," Muir said.

"Typically what can happen with the perception of higher mortgage rates on the horizon, many potential buyers who have been sitting on the fence not quite ready to jump right in [do buy] in anticipation of higher borrowing costs."

Robyn Adamache, senior market analyst for Canada Mortgage and Housing Corp., added that the recent bump up in interest rates was not something that she had forecast, and it makes sense that some buyers would jump in to take advantage of pre-approvals.

In general, however, she expects mortgage rates to average out at a somewhat lower rate.

"We'll probably see another [mortgage-rate] increase going forward, and then more of a downturn," Adamache added.

Banks offer discounts from their posted rates to their better customers, and Adamache said that as long as buyers can get discounted rates below six per cent, she does not believe that mortgage rates will put a significant dent in the market.

The surprise in sales statistics, Adamache added, is the strong price growth. In Greater Vancouver, prices have increased about 10 per cent over the first half of 2007, which is more than she expected.

However, she added that provincial job growth and economic performance is stronger than anticipated in her forecast, which increases demand.

Greater Vancouver, saw a continuation in the shift toward multi-family housing in its June statistics with all of its growth appearing in townhouse and apartment condominium sales.

Some 1,846 condominiums changed hands in Greater Vancouver in June, a 16-per-cent increase from June a year ago. Townhouse sales were up 3.2 per cent to 775 units.

Combined, the sales outweighed a 10-per-cent decline in June sales of single-family homes across Greater Vancouver. June saw 1,632 single-family homes sold compared with 1,805 in June a year ago.

The so-called benchmark price for a typical single-family home hit $715,715 in June, up 10.3 per cent from a year ago. The benchmark townhouse price also rose 10 per cent to reach $443,060. Benchmark condominium prices were up almost 11 per cent to $360,469.

Greater Vancouver's inventory of unsold homes also rose to 11,811 units, a 17 per cent increase over June of 2006.

In the Fraser Valley, realtors reported 2,126 MLS-recorded sales in June, a decrease of three per cent compared with the same month a year ago.

However, Adamache added that the single-family category experienced the biggest decline with 1,037 sales representing an almost 10-per-cent decrease from the same month a year ago. Condominium sales, in the meantime, were only down 7.4 per cent, and townhouse sales increased almost 10 per cent to 427 units.

The average price of a Fraser Valley single-family home hit $529,678 in June, up 11.5 per cent over June 2006. Apartment sales averaged $219,935, up 16.2 per cent and townhouse sales averaged $321,613, up 11 per cent.

The Fraser Valley's inventory of unsold homes stood at 8,182 in June, up 39 per cent over 2006. However, Jim McCaughan, the Fraser Valley Real Estate Board's president, said the inventory level decreased two per cent from May and overall sales are "on par with some of the strongest real estate cycles in [the] Fraser Valley's history."

SQUAMISH LEADS IN HOUSE PRICE GAINS

The benchmark price* of a detached home in Squamish rose 24.6% from June 2006 to June of this year, the biggest percentage gain of any area in the Real Estate Board of Greater Vancouver's region and well above the board average of 10.3%.

Benchmark price*, detached homes (% change)

June 2006- June 2007

Burnaby
$698,093 (+6.7)

Coquitlam
$621,540 (+9.4)

South Delta
$631,781 (+8.3)

Maple Ridge
$435,021 (+7.7)

New Westminster
$564,621 (+9.4)

North Vancouver
$853,247 (+12.5)

Pitt Meadows
$492,508 (+16.4)

Port Coquitlam
$521,937 (+12.2)

Port Moody
$722,100 (+8.4)

Richmond
$709,500 (+11.6)

Squamish
$522,590 (+24.6)

Sunshine Coast
$412,509 (+6.3)

Vancouver East
$645,729 (+7.5)

Vancouver West
$1,329,884 (+18.0)

West Vancouver
$1,415,852 (+6.8)

Greater Vancouver
$715,715 (+10.3)

* Price of a house typical for the area

Source: Real Estate Board of Greater Vancouver