Anna Asi, M.A.

Selection broadens and demand eases to kick off 2012 in the Greater Vancouver housing market

VANCOUVER, B.C. – February 6, 2012 – Greater Vancouver home sellers were more active than buyers in January and overall home prices, according to the new MLS® Home Price Index (MLS® HPI), continued to experience more stability and less fluctuation compared to the beginning of 2011.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 1,577 on the Multiple Listing Service® (MLS®) in January 2012.

 
This represents a 4.9 per cent decrease compared to the 1,658 sales recorded in December 2011, a decrease of 13.3 per cent compared to the 1,819 sales in January 2011 and an 18 per cent decline from the 1,923 home sales in January 2010.

 
January sales in Greater Vancouver were the second lowest January total in the region since 2002, though only 146 sales below the 10-year average.

“We’re seeing trends emerge in our market that favour buyers, such as increased selection and  more stability in pricing compared to this time last year,”  Rosario Setticasi, REBGV president  said. “Last month’s activity tells us that competition amongst home buyers was reduced in  January, which means that individuals looking to purchase a home had more time to do their  homework, consult with their REALTOR®, and make a decision.”

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,756 in January. This represents a 19.9 per cent increase compared to the 4,801 new listings reported in January 2011, and a 253.3 per cent increase compared to the 1,629 new listings reported in December 2011.

Last month’s new listing count was the highest January total in Greater Vancouver since 1995.

The total number of properties currently listed for sale on the Greater Vancouver MLS® is 12,544, a 12.5 per cent increase compared to December 2011 and an increase of 20.2 per cent  compared to January 2011.

Today marks the launch of the MLS® Home Price Index (MLS® HPI), the best and purest way of determining price trends in the housing market. The MLS® HPI was pioneered by six  founding partners: the real estate boards of Calgary, Fraser Valley, Greater Montreal, Greater  Vancouver, and Toronto and the Canadian Real Estate Association. The partners contracted with  Altus Group to develop the MLS® HPI which measures home price trends in the five major  markets serviced by those boards.

The new index replaces the MLSLink Housing Price Index, which had been used by Greater  Vancouver and Fraser Valley REALTORS® since the mid 1990s. MLS® HPI statistics should  not be compared with previous MLSLink HPI statistics.

“The MLS® HPI is a national collaboration intended to give the public a more reliable and  comprehensive tool to understand home price trends across the country,” Setticasi said.

The MLS® HPI benchmark price for all residential properties in Greater Vancouver currently sits at $660,600, up 5.7 per cent compared to January 2011 and down 0.1 per cent compared to December 2011. The MLS® HPI also tracks home prices across the Lower Mainland.

The benchmark price for all residential properties in the Lower Mainland is $593,300, an increase of 5 per cent compared to January 2011.

Sales of detached properties on the MLS® in January 2012 reached 659, a decline of 16.9 per cent from the 793 detached sales recorded in January 2011, and a 6.5 per cent decrease from the 705 units sold in January 2010. The benchmark price for detached properties increased 11.3 per cent from January 2011 to $1,034,700.

Sales of apartment properties reached 657 in January 2012, a decline of 7.9 per cent compared to the 713 sales in January 2011, and a decrease of 26.3 per cent compared to the 891 sales in January 2010.The benchmark price of an apartment property increased 2.4 per cent from January
2011 to $371,500.

Attached property sales in January 2012 totalled 261, a decline of 16.6 per cent compared to the 313 sales in January 2011, and a 20.2 per cent decrease from the 327 attached properties sold in January 2010. The benchmark price of a townhome unit declined 0.5 per cent between January  2011 and 2012 to $468,000.

Cat: Greater Vancouver Real Estate

Canadian home prices rise in January-CREA

Feb 6 (Reuters) - Canadian housing prices rose in January on a monthly basis for the first time in three months, led by gains in Montreal, Toronto and Vancouver, according to a report from the Canadian Real Estate Association.

The newly launch MLS Home Price Index, which monitors housing prices in five major urban markets, rose 0.27 percent in January from a month earlier. It was up 5.2 percent from the previous year's level.

"While home prices remain up compared to one year ago, price growth from one month to the next has been slowing, causing year-over-year gains to shrink, and prices are generally expected to continue to stabilize this year," Gary Morse, the industry group's president, said in a statement.

Cat: Canada Real Estate

General price declines in B.C. make province 'nation's new weak spot,' according to report

Canada's housing market is not a bubble, it's a balloon. And unlike the catastrophic decline the U.S. housing market experienced in 2008, the market in Canada will deflate slowly rather than pop, according to a report by BMO Capital Markets.

The sole possible exception is Vancouver, where the number of unoccupied condominiums is high due to building the Olympic Village, economists Sherry Cooper and Sal Guatieri wrote in "Will Canada's Housing Boom Forge On, Fizzle Out, or Flame Out?"

But generally, the report says that despite rising household debt, low interest rates and rising home prices, it is unlikely that a sudden correction will take place.

"The main take-away is that the national housing market appears some-what pricey, but is far removed from bubble territory," the report stated.

It compares average resale prices with median family incomes and finds the ratio is 4.9 nationally, compared to 3.2 a decade ago.

In Vancouver, though, where house prices have gone up 159 per cent in the last 10 years - compared to 104 per cent nationally - the ratio of price to income is 10, nearly double what it was a decade ago, the report said. Victoria is also high, at 5.7, but not as high as Toronto, which has a price to income ratio of 6.7.

Montreal has also seen prices rise dramatically - by 153 per cent - and its price-to-income ratio double, but that ratio remains low at 4.5.

Despite rising home prices in most of Canada's major cities, the growth doesn't seem to be excessive, the report said. But elevated valuations could lead to trouble in the event of a shock.

For example, if interest rates were to spike by about four percentage points, the affordability of homes would quickly drop throughout the country. A severe recession would also affect affordability.

But the chance of either of those events happening is unlikely, the report authors stated. Also, except for a few markets, the national housing boom has already cooled.

And British Columbia is now "the nation's new weak spot, with prices generally declining," the report said.

Some of that decline reflects fewer sales of high-end homes.

"[But] some real underlying softness is at play, and will likely continue until valuations improve," the report stated.

Tsur Somerville, director for the Centre for Urban Economics and Real Estate at the Sauder School of Business at UBC, said BMO's report is one of many predicting slight drops or slight increases in the housing market rather than a major correction.

"The kinds of things you need to get major corrections, like oversupply or radical change in the financing environment, just aren't there," Somerville said.

And just because the overall market will be flat, it doesn't mean that certain portions of it - such as areas that have had higher run-ups in prices over the past few years - aren't in for a correction, he said.

Helmut Pastrick, chief economist with Central 1 Credit Union, believes that while there may be a soft landing at some point in the future, it won't be in 2012.

"The market is holding up generally well and it looks like 2012 is going to be fairly similar to 2011 in terms of overall unit sales," Pastrick said. "Housing prices will go up by some amount, sales will also increase by a small amount."

And while the economy isn't booming, it is growing, interest rates are low and there is job growth, he said.

"So the conditions to me aren't ripe for a correction."

Meanwhile, Bloomberg reported that Canada's banking regulator fears that Canadian lenders are loosening standards on mortgages that are similar to U.S. subprime loans, posing an "emerging risk" to financial institutions.

Banks and other lenders are becoming "increasingly liberal" with mort-gages and home-equity credit lines that don't require individuals to prove their income, according to documents obtained by Bloomberg under freedom of information law request from the Office of the Superintendent of Financial Institutions.

"Non-income qualified" lending has been added to a list of issues to be considered by OSFI's "emerging-risk committee," Bloomberg reported the documents showing.

Pastrick disputes this finding.

"We're not subprime, not by a long shot," he said.

Lenders in Canada have "credible lending criteria and standards." And while lenders will lower rates to grab market share "credit isn't easy like it was in the U.S.," he said.

Somerville believes the problem is with home equity lines of credit which have become more popular over the year and don't always require income verification.

Not only are lines of credit given out without the same level of super-vision or the same standard of care that is applied to mortgages, they are also junior in seniority to mortgages, Somerville said.

With a file from Bloomberg

© Copyright (c) Postmedia News

Picture by: All rights reserved by JOHN CORVERA

B.C. property assessments skyrocket but appeals drop off

VANCOUVER — Despite skyrocketing and sometimes uneven property assessments that will mean property tax increases for some homeowners, appeals are down in key areas compared to this time last year, according to BC Assessment.

With 10 days to go before the Jan. 31 deadline, appeals have fallen 15 per cent in the Vancouver-Sea to Sky region and 18 per cent in the Richmond-Delta region, two areas that saw assessments in some areas jump by as much as one-third, said Grant McDonald, deputy assessor for BC Assessment’s Vancouver Sea to Sky region.

The average assessment increase in Vancouver was 16.4, 15.9 in West Vancouver and 16.5 in Richmond.

Some assessments went up much more than the average increase, such as a two-storey house built in 1972 on a 60-by-120-foot lot on Riverdale Avenue in the Thompson area of Richmond that went up $300,000 from $780,200 last year to $1,083,500 this year, said Richmond realtor Shafik Ladha.

McDonald gave an example of a house on the west side of Vancouver on a 50-foot lot that went from $1,189,000 last year to $1,645,000 this year, an increase of $456,000. Both of these examples are up 38 per cent, more than double the average increase in their cities.

People who saw their property go up more than the average will likely see a bigger-than-usual increase in their tax bill, although the amount of that increase will depend on the assessed value of their home and how much the city’s budget is increased.

Vancouver Councillor Raymond Louie, who chairs the city’s finance and services committee, said it’s not automatic that the city will get more money when people’s property assessments go up.

“When your property value goes up, the city takes that assessed value and divides that into what it takes to run our city,” Louie said. “The amount it takes to run our city generally stays about the same. The city does not get additional revenue just because your property value goes up.”

Former Vancouver city councillor Gordon Price said it’s fair that taxes are linked to a property’s assessed value, but that it’s important to remember there isn’t a one-to-one relationship between property assessments going up and property taxes going up.

“Whatever your percentage increase is above the average, you can expect that you will be paying a greater percentage of the city’s property tax,” said Price, who is director of the City Program at SFU. “It would be very difficult to come up with anything else that would be more fair.”

In Vancouver, assessed values are averaged over three years to mitigate the effect of large single-year value increases, Louie said. He and Price also noted that property taxes do not all go to the city, a portion goes to school taxes, TransLink and other levies.

This year certain neighbourhoods went up more than others, something McDonald said is simply based on what actual sales reveal. Both Vancouver realtor Tom Gradecak and Ladha said good schools made a big difference in an area’s popularity.

Sometimes that will mean that houses on one side of the street sell for much more than those on the other side, if the school boundary is drawn down the middle, Gradecak said.

Gradecak said assessments are traditionally lower than market value, but that they’re moving closer.

“Some of the assessments are now quite close to the market value, but most are still a little bit low,” Gradecak said. “If it’s an older home, some of the assessments can be fairly close [to market value] because they’re looking mostly at the land value. For the newer homes, the assessments could be a bit low because they don’t always take into account all of the improvements.”

Assessments are a snapshot of market value on July 1 of the previous year. By the time homeowners receive them in early January, they are already six months out of date.

One reason appeals are down may be the amount of information now available online. Assessed values are all online (http://evaluebc.bcassessment.ca/) and people can compare homes by address and by comparable sales.

Fewer than two per cent of homeowners usually appeal an assessment in any given year, McDonald said.

People who want to ask questions about their assessment, or the appeal process, can call BC Assessment at the number listed on their assessment.

“We’ve got a team of professional appraisers you can call and they will know your neighbourhood, they may even know your house, but they can certainly call it up on the computer, and talk to you about the specifics of your property,” McDonald said.

“If at the end of that process [you are not satisfied], there is the last resort of filing an appeal.”

© Copyright (c) The Victoria Times Colonist

Cat: BC Real Estate

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Cat: BC Housing Market

Mortgage rates in Canada plunge to historic lows

Cat: Canada Mortgage Rates