National residential real

NEWS photo Terry Peters

TWO WORKERS stand on a rocky bluff where s site is
being cleared in preparation for the construction of two
new homes in the 3900 block of Marine Drive in West

Vancouver.

estate market changes

MAJOR CHANGES have
taken place in the way Ca-
nadians buy, rent and sell
homes, according to Royal
LePage, and the real estate
industry has had to respond
to these changes.

‘*Home buyers are
younger, and they’re buying
different types of housing
than they were a decade
ago,’’ said Ozzie Jurock,
president, Royal LePage
Residential Real Estate Ser-
vices. ‘‘In addition, they’re
opting for different forms of
home financing and deman-
ding more and better infor-
mation about the process of
buying and selling homes.’’

These are just a few of the
observations reported in the
recently-released Royal
LePage 1987 Market Survey,
a comprehensive analysis
and forecast of Canada’s

residential and commercial
real estate markets.

Jurock notes that Royal
LePage research has in-
dicated that as many as 40
per cent of homes are pur-
chased by first-time buyers.
Moreover, 30 per cent of
home buyers are under 30
years of age and 25 per cent
are single. He also points out
that in major Canadian cities
like Toronto, condominiums
now represent one in every
four homes bought or sold.

“These kinds of changes
have made us alter the way
we do business,’’ Jurock
says. For example, the need
for more and better infor-
mation has prompted com-
panies to invest in multi-
million dollar computer
networks in an effort to put
comprehensive, up-to-the-
minute rea! estate market in-
formation in the hands of

consumers.

He also points out that
consumers seem to have an
insatiable appetite for in-
formation. Royal LePage,
for example, has printed and
distributed close to 3 million
copies of an _ educational
series of booklets on buying
and selling homes in the
past 18 months.

Jurock also foresees a
continuation of the changes
in home financing. Pre-
approved mortgages, for ex-
ample, first introduced in
Canada by Royal LePage in
the fall of 1985, are expected
to become the standard form
of home financing in a very
short period of time. Jurock
points to the substantial
number of pre-approved
mortgages approved by
Royal LePage during 1986 to
underline his contention.

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OPEN SUNDAY 2-4 PM

55 - Friday, January 9, 1987 - North Shore News

jftice

supply

and demand
to balance

i
THE BLOOM will soon be
off the rose for tenants who
hope to reap the benefit of
an imbalance in Vancouver’s

office market, a breakfast
audience was told recently.

Speaking to a group of
local business people and
government representatives,
Ron Muldoon of Royal
LePage Commercial Real
Estate Services predicted
that all forms of induce-
ments being offered to te-
nants likely will be cut back
in 1987 to a more palatable
level for owners to deal in
the marketplace.

Muldoon underlined that
Vancouver now is cycling
out of its drastically over-
supplied office market. This
will lead to an improvement
in effective rental rates real-
ized by landlords and a
Steady reduction of the
overall! vacancy rate to 15 or
16 per cent by the end of
1987.

The current oversupply to
which Muldoon referred is
the result of 900,000 sq. ft.
in five buildings added to the

a

tr

937

market in 1986, to produce a
vacancy of just over 20 per
cent.

As competition for tenants
grew this year, owners of-
fered more and more in
terms of inducements to lure
tenants. Muldoon explained
that inducements have in-
cluded free rent, leasehold
improvement allowances,
lease takeovers and cash
bonuses.

“It even became popular
for owners to offer im-
provement allowances and
free rent to their own tenants
to have them stay and renew
in their existing premises,”
he said. ‘‘As a further exten-
sion of that trend, existing
tenants were being offered
inducements to tear up their
leases and re-negotiate under
current market conditions if
it was felt by an owner that
they might be lured away to
a newer building’’.

Activity generated by
these conditions has resulted
in 1.3 million sq. ft. of actu-

al leasing transactions to
date this year.

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Market to offer challenges

ANTICIPATED economic
stability in the coming year
will provide a positive back
drop for the majority of
Canada’s real estate markets
in 1987, forecasts George
Cormack, president of Royal
LePage Ltd.

The Royal LePage real
estate forecasts are based on
“slow, but steady economic
growth throughout 1987,”
Cormack said at a breakfast
meeting recently attended by
local business people. He
added that regional
disparitics will continue to
characterize the various
markets.

However, the impact of
dynamic forces in the mar-
ketplace, such as financing

innovations, rent controls in
the residential sector, shif-
ting market characteristics
and changing user profiles,
means that the real estate
community cannot become
complaisant.

“Putting it into perspec-
tive, I’m not saying that
economic stability means a
ho-hum year for real estate.
Far from it. Dynamic
changes will continue to take
place in all market sectors,
further complicating the
decision-making pracess."’

Looking to the residential
sector, Cormack anticipates
that changing user
demographics will continue
to impact activity.

“The growing percentage

of jirst-time buyers, singles,
two-income families and
empty nesters and their
changing financial situa-
tions, have dramatically
altered the ways homes are
bought and sold. It’s no
wonder that information has
become a critical component
of residential real estate
transactions,’’ notes Cor-
mack.

As well, commercial real
estate has not been immune
to change. Growth of firms
on the leading edge of tech-
nological advances, increas-
ing tenant mobility and the
changing purchasing power
of consumers have been well
documented.

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