Vancouver home prices fall for fifth consecutive month
OTTAWA — Homes prices edged down 0.2 per cent in February from the month before but were still 6.1 per cent higher than a year ago, according to a well-watched housing index.
The month-over-month decline was the third such retreat in the past four months for the Teranet-National Bank National Composite House Price Index, released Wednesday, which measures price changes for repeat sales of single-family homes.
In January, prices rose 0.1 per cent.
Teranet's report showed prices falling from the previous month in six of the 11 metropolitan markets surveyed.
In Canada's two hottest real-estate markets, prices in Vancouver fell 0.3 per cent, the fifth consecutive decline, while prices in Toronto rose by just 0.1 per cent. On a yearly basis, however, Toronto prices were 10 per cent higher.
Nationally, prices were 6.1 per cent higher than a year ago. In January, prices were 6.5 per cent higher.
The data is likely to show up on the radar of Bank of Canada governor Mark Carney, who has repeatedly warned that Canadians are piling on too much debt as they buy homes whose prices keep rising.
At a House of Commons finance committee meeting Tuesday, Carney warned that house prices in relation to income levels are now running 35 per cent above historical norms.
Last week, the Canadian Real Estate Association reported that seasonally adjusted sales in March rose 1.6 per cent from year-earlier levels, although the national average home price declined 0.5 per cent to to $369,677.
"It is a fact that according to CREA (the Canadian Real Estate Association) data for March, five of the 11 markets covered were rather favourable to sellers (Toronto, Hamilton, Winnipeg, Halifax and Quebec City). Overall, the Canadian market is nevertheless balanced," said National Bank senior economist Marc Pinsonneault.
Metropolitan area % change m/m / % change y/y
Calgary / -0.6 % / +1.3 %
Edmonton / -1.0 % / +1.1 %
Halifax / +0.4 % / +2.3 %
Hamilton / -0.8 % / +7.5 %
Montreal / +0.2 % / +4.4 %
Ottawa / -0.4 % / +4.6 %
Quebec / +1.6 % / +5.6 %
Toronto / 0.1 % / +10.0 %
Vancouver / -0.3 % / +6.2 %
Victoria / -1.1 % / -1.7 %
Winnipeg / +0.2 % / +8.2 %
National Composite / -0.2 % / +6.1 %
Source: Teranet-National Bank National Composite House Price Index
Metro Vancouver housing market remains balanced despite sharp sales drop: report
Local homes sales are in a balanced state despite the lowest April sales numbers since 2001, according to a report by the Real Estate Board of Greater Vancouver.
“Although April sales were below what’s typical for the month, we continue to see, with a sales-to-active listing ratio of nearly 17 per cent, a balanced relationship between buyer demand and seller supply in our marketplace,” Eugen Klein, REBGV president said in a statement.
“Recent activity has had a stabilizing effect on home prices at the regional level, although pricing can vary depending on area and property type.”
According to the monthly report, homes sales and listings have maintained a consistent pace in recent months, contributing to the balanced conditions.
However, the report noted that Metro Vancouver sales totalled 2,799 in April 2012, a 13.2-per-cent decline compared to the 3,225 sales in April 2011 and a decline of 2.6 per cent compared to the 2,874 sales in March 2012.
April sales were the lowest total for the month in the region since 2001 and 16.9 per cent below the 10-year April sales average of 3,369, the board said in a release.
New listings for detached, attached and apartment properties totalled 6,056 in April, a 3.6-per-cent increase compared to both March 2012 when 5,843 homes were listed and April 2011 when 5,847 homes were listed for sale.
Last month’s new listing total was 6.7 per cent above the 10-year average for listings in Greater Vancouver for April, the release said.
At 16,538, the total number of homes listed for sale increased 8.5 per cent in April compared to last month and 16 per cent above this time last year.
The benchmark price for all residential properties stood at $683,800, up 3.7 per cent compared to April 2011 and an increase of 2.8 per cent over the last three months.
Sales of detached properties in April 2012 reached 1,126, a decline of 19.7 per cent from the 1,402 detached sales recorded in April 2011, although the benchmark price for detached properties increased 6.3 per cent from April 2011 to $1,064,800.
The highest benchmark price in April for a detached home was Vancouver West at $2.27 million, followed by West Vancouver at $1.98 million.
The benchmark price of an apartment increased 1.1 per cent from April 2011 to $375,900, while the price of a townhome increased 1.7 per cent between April 2011 and 2012 to $487,300.
Meanwhile, the Fraser Valley's housing market also showed a drop in sales year-over-year, although not as sharp as in Metro Vancouver.
According to the Fraser Valley Real Estate Board, there were 1,435 sales processed in April, down five per cent from April 2011, but up slightly from 1,412 sales in March.
In April, the board added seven per cent more new listings compared to one year ago, up to 3,134 from 2,918 last year. That pushed the number of properties for sale to 10,312, the highest level since July 2010.
“To put it in perspective, in the last decade, April 2012 ranked second lowest for sales during that month, while new listings came in at the third highest, meaning it’s a good time to be shopping for a home in the Fraser Valley because selection has only been this extensive twice,” said board president Scott Olson in a statement.
According to the report, the benchmark price for a detached home in the Fraser Valley rose 5.3 per cent in the year, from $547,800 in April 2011 to $576,600 last month.
In April, the price of a townhouse was $318,400, up 1.9 per cent year-over-year, while the price of an apartment increased 0.8 per cent over the same period to $205,800.
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...
Metro Vancouver builders have returned to building condominiums in a big enough way to push up the region’s overall housing starts this year while the number of single-family homes is declining, according to new numbers from Canada Mortgage and Housing Corp.
The pace of new-home construction in June declined from an unexpected frenzy of starts in May, according to Robyn Adamache, a Canada Mortgage and Housing analyst in Vancouver. However, the 8,472 total housing starts recorded in Metro Vancouver at the end of June represented a 23-per-cent increase from the same period of 2010.
Of those starts, 6,813 were multi-family homes — condominiums and townhouses — which was a 51-per-cent increase from starts during the same period of 2010. On the other hand, the 1,659 single-family-home starts for the same period represented a 30-per-cent decline.
Adamache said the post-recession recovery in housing construction began a year ago in single-family home building, but this year’s increase in multi-family construction reflects the confidence developers have that the economic recovery is on more solid ground.
“Builders are feeling more confident to start those larger projects now on the multi-family side,” Adamache said Monday. “They’re feeling like it’s not just a short-term change in the economy and things are really settling down.”
Overall, Adamache added that the factors that drive new-home construction — immigration, an improving job market and continuing low mortgage rates — are still strong enough to support the construction underway.
Adamache said Metro Vancouver saw a spike in the pace of housing construction in May that skewed provincial results, but that was likely due to the nature of stronger multi-family construction.
“[Multi-family] construction is very volatile,” she said. “It makes it look like things are swinging a lot from month to month when it really could be the difference of one or two projects [starting in a given month] if they are very large.”
As of the end of June, Adamache said builders around Metro Vancouver were on pace to start work on 15,700 new housing units by the end of 2011, which is close to Canada Mortgage and Housing’s forecast of 16,000.
The biggest increases in multi-family construction have come in Richmond and Surrey with some of the activity pushed along by same influence of immigrant and offshore purchasing that is affecting the overall real estate market.
Richmond recorded 1,185 multi-family housing starts in the first half of 2011 versus 458 for the first half of 2010, and total starts of 1,315 in 2011 compared with 595 in 2010.
Across B.C., the province’s urban centres saw 11,405 new-home starts in the first half of 2011, which was fractionally lower than the 11,475 in the same period of 2010.
Nationwide, home construction rose more than expected in June, led by a jump in single-unit activity, according to Canada Mortgage and Housing.
Nationally, the seasonally adjusted annual rate of housing starts was 197,400 units last month, up 1.7 per cent from a revised 194,100 units in May, CMHC said. The April figure was also revised to 194,100 units.
Economists had expected between 184,000 and 185,000 starts in June.
“Housing starts increased in June due to an increase in single and multiple starts in Ontario,” said Bob Dugan, chief economist at CMHC’s Market Analysis Centre.
“The revised numbers show that housing starts have been above their trend line since March,” according to Bob Dugan, Canada Mortgage and Housing’s chief economist. “However, we expect housing starts to move back toward levels consistent with demographic fundamentals in the near term.”
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