High property prices - especially in the West - are fuelling small-business opportunities across Canada in the real estate sector.

But company operators and other industry insiders say their lives are becoming less crazy as prices start to level off.

"We're feast and famine a lot of the time - sometimes you're busy and sometimes you're not," says Daniel Kryska, owner of Calgary-based Bow Valley Engineering and Inspections Ltd.

Kryska provides engineering services to construction contractors and home inspections. After a slow spring, the inspection side of his business is picking up as more housing inventory becomes available.

Bayne Stanley, Business Edge
Chris Wlodyka of European Iron Works says his business has increased 20 per cent, but rising property prices are a factor.

"There's a lot of houses on the market now," says Kryska. "People are starting to get more inspections."

In the spring, his business fell dramatically because parties in a transaction were waiving conditions, so inspections were not required.

"It hasn't been so much the high prices as it's been the inventory of houses that are available," says Blair Biswanger, owner of Canadian Property Inspections Ltd.

Biswanger, who has been operating his Calgary-based firm for four years, says business is "back to where it was prior to June.”

In other words, he's very busy.

He's not worried that lower prices will lead to a decline in inspections.

But he advises small-company operators to continually look to increase market share, even when business is strong. "Don't get complacent just because prices are high," says Biswanger.

Carolyn McDonald, a Calgary-based mortgage specialist with the Bank of Montreal, says high prices have provided "a spinoff for all of us" in the industry.

McDonald, who has more than 30 years of experience in banking, is like an independent mortgage broker in that she works on commission according to her own schedule, although she is technically a bank employee.

She estimates her deals are up 30 per cent over last year, but the market is not as fast-paced as it was earlier this year.

"The seller's market is gone," says McDonald. "It's more of a level market now. It'll probably be more normal. I'm not (working) 70 hours a week anymore, I'm down to about 50."

Despite the good times, she says the high property prices have also brought hardship for some small operators who have gravitated to the industry in hopes of large pay days, only to struggle.

"There's been a lot of people that have done extremely well in the past year or so, but there's also a lot of them that have gone by the wayside," says McDonald.

She says real estate-related small-business operators have a more difficult time maintaining credibility today as a result of increased mortgage fraud and stories circulating about "shady" realtors, mortgage brokers and lawyers.

"You want someone who you think is truly looking after your interests, not their own," says McDonald.

The B.C. housing market is also starting to cool off. But Chris Wlodyka, owner of Vancouver-based European Iron Works Ltd., says his business is still running at full steam.

Wlodyka, who manufactures and installs custom-made metal railings, fences, security bars and other products for homeowners and businesses, while working primarily as a one-man shop, estimates his business has increased 20 per cent over the past three years.

"As long as I have a reasonably priced rental property to do things as a shop, I can basically make as much money as I want by working as hard as I want," says Wlodyka.

As property values have gone up, people have wanted to get the most out of their renovations, he says.

"You used to sell the house before fixing it up," he says. "Now, you fix up the house and then sell it.

"So there are more flippers in the market. They'll spend $50,000 fixing up the house and then sell it for $100,000 more."

In the past, he says, sellers would not invest in renovations because they could not ensure they would recover the cost through a higher sale price. Now, they can.

But high property prices are adding to Wlodyka's costs as well as his revenues.

He says a developer tried to buy his rented shop from his landlord, along with other properties owned by others, but the deal fell through because the soil beneath an adjacent dry-cleaning shop is contaminated.

"Because the soil was contaminated from the guy next door, it basically saved my bacon," says Wlodyka, who expects to have to move eventually.

He says he's one of several small-business operators in Vancouver's core who face moves because of higher property values.

"All the light-industrial areas are slowly being redeveloped, and everybody is being pushed out into the suburbs or into industrial parks - which means we have to drive (farther) and spend more money on gas and spend more time driving," says Wlodyka.

In the meantime, he pays his current landlord's property taxes, which have increased to $6,500 from $3,500 annually, as well as property insurance, and his firm's rent is going up $100 per month in January.

So far, he doesn't have to worry about being able to meet expenses, but he's wary of what could happen six months from now.

Benjamin Tal, a CIBC World Markets analyst in Toronto who wrote a recent report on the state of Canadian small business, is predicting a downturn in demand for real estate services provided by small firms.

"We'll probably see some slowing," says Tal. "There is a booming bubble, especially in Ontario and the East. I think we have to recognize that's the case. "I think that we'll see less real estate agents, less home inspectors."

He says Ontario's real estate market will struggle because of the high Canadian dollar, a decline in manufacturing and the province's proximity to the struggling U.S. market.

"With the exception of the West," he says, Canada will see a "retrogressive" real estate market.

The trend, which has already started, will reduce demand for real estate professionals.

"They could be mortgage brokers, real estate agents as well as home inspectors and, of course, construction professions," says Tal.

(Monte Stewart can be reached at monte@businessedge.ca)