Opportunities afield
Vancouver-based Aragon Properties Ltd. isn’t daunted by concerns regarding the Toronto condo market, seeing opportunities there as well as in California.
Having built more than 4,000 residential units and cultivated a portfolio of 600,000 square feet of commercial space since its creation by principal Lenny Moy in 1988, Aragon now has an additional 1,323 units under construction or in the planning stages. These include the GlassHouse Lofts, a 67-unit condo development in New Westminster, and Enigma Lofts, an 86-unit project set to launch this September in Toronto’s Bloordale neighbourhood.
While the Bank of Canada recently added its voice to ongoing concerns at highrise construction in Toronto, noting “the risk of an abrupt correction in prices and residential construction activity,” if units being completed in the next 12 to 30 months aren’t absorbed quickly, Aragon sales and marketing director David Wan downplays the risk.
“We see it very differently from a lot of the reports that are coming in through the media,” Wan said. “We’re there, we’re on the ground, we see a lot of demand.”
Enigma will be aimed at first-time buyers who want to live close to family in the Bloordale area, which has seen little new development in recent decades and is dominated by older residences. Aragon aims to create homes for the area’s next generation. Similar optimism surrounds the company’s move into California, where Bosa Development Corp. has shown renewed interest with towers in San Francisco and San Diego.
Aragon opened an office in Los Angeles in fall 2012, Wan said, and plans a 220-unit condo project three blocks southwest of Dodger Stadium.
Aragon expects to break ground on its Los Angeles project next year, but marketing won’t begin till the building nears completion. State law regulates deposits on pre-sales. Relatively small deposits are allowed prior to construction – good news for buyers, but a risk for developers.
“Purchasers could easily just walk away from the deals because the deposit they put in there is so small,” Wan explained. “It pre-empts the ability of developers to go and do the pre-sales that we see so readily up here.”
Summer is here
Summer is the time for recreational property, but it’s also the time for paying property taxes.
B.C. has some of the most expensive land-accessed waterfront property in the country, according to Royal LePage Real Estate Services – $800,000 to $2 million in Kelowna, a sharp rise from the max of $1.5 million reported two years ago. P.E.I., by contrast, has among the cheapest, at $125,000, while prices in neighbouring New Brunswick start at $175,000.
But when it comes to property taxes, the property tax specialists at Altus Group Ltd. report that P.E.I. non-resident recreational property owners are taxed at twice the rate of P.E.I.-resident owners. New Brunswick, meanwhile, levies a provincial tax as well as a municipal tax on secondary residences.
The difference can be as much as 2.63 times in unincorporated areas.
British Columbia properties might not be the cheapest in the country, but owners can be thankful for a simpler levy when government comes calling.
Meanwhile, in Burnaby ...
Nevertheless, property taxes in B.C. are not above criticism.
Burnaby mayor Derek Corrigan recently issued a press release telling Class 5 (light industrial) property owners to talk to the province regarding phasing out of the school tax credit, which is back on the table with the re-election of the BC Liberals.
The credit was included in the province’s February budget that wasn’t passed prior to the legislature being dissolved, and again features in the budget retabled in the last week of June. The credit, introduced in 2009, will be slashed by half this fiscal year and eliminated in 2014. Neither the Building Owners and Managers Association of BC nor commercial real estate association NAIOP were consulted prior to the change being announced in February.
Burnaby has approximately 400 affected properties, and Corrigan wants them to complain to the province about the change – not his staff.
“Business owners are calling the city to voice their extreme concern, not realizing that the city played no role in setting this tax,” Corrigan said in the release. •
