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.
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...
BC Real Estate Association (BCREA) Chief Economist Cameron Muir discusses the July 2011 statistics and an in depth look at the seasonal adjustment of housing statistics.
Vancouver is Canada's most expensive housing market, report says
Vancouver is Canada's most expensive housing market, with average prices for a four-bedroom, two-bathroom home coming in at over $1.546 million, according to the Coldwell Banker Real Estate Home Listing Report.
The report, released Wednesday, is a snapshot survey of average listing prices for four-bedroom, two-bathroom homes in 70 Canadian markets over a six-month period from September 2010 to March this year on coldwellbanker.com.
Vancouver was followed by Kelowna, B.C., at $1.087 million and Burnaby, B.C., at $797,455.
Fort McMurray, Alta., was fourth overall at $652,382 followed by West Kelowna, B.C., ($640,055), Oakville, Ont., ($624,914), Victoria ($540,087), and Surrey, B.C., ($536,109).
Calgary is ranked the ninth, with an average price of $534,912. Sherwood Park, Alta., rounded out the top 10 at $534,850.
In the survey, Vancouver was ranked the third most expensive market in North America behind California's Newport Beach ($2.5 million US) and Pacific Palisades ($1.6 million US).
Windsor, Ont., was Canada's most affordable market at $144,456.
First-time buyers in major Canadian markets move to get in ahead of higher interest rates, says RE/MAX
BC (April 5, 2011) -- Driven by the threat of higher interest rates down the road, first-time buyers are contributing to strong upward momentum in residential housing markets across the country, according to a report released today by RE/MAX.
The RE/MAX First-Time Buyers Report, highlighting trends and developments in nineteen major Canadian centres, found that low interest rates and balanced market conditions have provided significant impetus in 2011, particularly at lower price points. Just over 30 per cent of markets are reporting sales in excess of 2010 levels as a result, while almost 70 per cent have experienced an upswing in average price. Leading the country in terms of percentage increases in the number of homes sold are Western Canadian markets, including Saskatoon (up close to 15 per cent), Greater Vancouver (up close to 12 per cent), and Winnipeg (up just over 11 per cent). With an average price hike of close to 20 per cent year-to-date (February), Greater Vancouver continues to show unprecedented strength, followed by Hamilton-Burlington (eight per cent), Quebec City (seven per cent), Winnipeg (close to seven per cent), Greater Toronto (five per cent), and Greater Montreal (five per cent).
“With the Canadian economy on firmer footing overall, residential real estate is well-positioned moving into the traditionally busy spring market,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Consumer confidence is climbing in conjunction with economic performance, and concerns over a secondary recession fade with each passing day. The mood is cautiously optimistic as first-time buyers enter the market.”
Inventory levels, while tight in several larger centres, are more balanced overall, giving first-time buyers a good selection of housing product from which to choose. Not surprisingly, condominium apartments and town homes have become the first step for many entry-level purchasers, especially in Greater Vancouver, Victoria, Kelowna, Edmonton, Calgary, London-St. Thomas, Hamilton-Burlington, Greater Toronto, the Island of Montreal, and Halifax-Dartmouth where average prices have risen unabated in recent years.
“Despite homeownership rates approaching 70 per cent, there is clearly room for growth as entry-level buyers make their moves from coast-to-coast, undeterred by higher housing values and changes to lending criteria” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “Many purchasers intent on realizing homeownership are scaling back on expectations or are willing to sacrifice location, quality and/or size to make their dream a reality – not unlike generations before them.”
Changes to recent financing criteria have not created the anticipated run up in activity in most markets. From a financial standpoint, most rookie home buyers remain quite prudent. Those making the leap are not doing it lightly, buying within their means. While this most recent round of policy tightening will likely have a negligible effect on demand, the message is getting across.
Affordability remains a growing concern in most markets, and—aside from first-time purchasers—no one is more in tune with that than housing planners and developers. In fact, the growing demand for reasonably-priced product is creating a shift in the country’s housing mix. That trend is expected to gain traction in coming years, as builders look to create greater options for those seeking to realize homeownership. In recent years, builders have helped ease the move to homeownership by concentrating on intensification—condominium buildings with smaller suites and small-lot subdivisions offering detached, compact homes at a fraction of the cost of a traditional single-family home. On the flip side, the affordability...
Chinese investment surge hits Metro Vancouver housing market
Stable Canadian economy and good quality of life is luring 'planeloads' of overseas buyers eager to invest
When real estate entrepreneur Cam Good hosted a group of predominantly mainland Chinese investors this Wednesday at a White Rock condo showing, he was tapping into a market that's surging across much of Metro Vancouver.
Good, president of The Key, a Vancouver-based sales and marketing firm that's focusing on a new wave of Chinese buyers, figures he's sold more than 500 homes to mainland Chinese investors and immigrants in January and February in Vancouver and Toronto.
He's also opened an office in Beijing's business district -The Key China -where Chinese buyers can purchase Canadian condos from a presentation centre and view videos that showcase various condo developments and the virtues of Canada.
"[Chinese investors] have really picked up a lot of steam in the last two or three months," Good said in an interview. "And I believe this is just the tip of the iceberg. There's an über-wealthy upper class forming and there's a strong middle class growing in China. This massive middle class is now getting to a point where they can afford international real estate. And Canada is viewed by the Chinese as a very stable place to put their money.
"There are literally planeloads of Chinese coming here to buy real estate."
Wednesday's attraction was Avra, a 17-storey condominium tower that's slated to be built over the next two years, and Good took along a busload of investors -some from China and some already living here -and their agents to view the plans.
But it's not just condos that are attracting Chinese buyers, with single-family homes and large lots topping the list.
Across the Lower Mainland, especially Richmond and Vancouver's west side, mainland Chinese buyers and immigrants are becoming a major part of the market, in some cases competing with each other through multiple offers.
But the phenomenon is starting to spread to other areas including Burnaby, West Vancouver, White Rock and beyond.
"We predict that this will be a dominant trend for a long time," Scott Brown, senior vicepresident, Western Canada for Colliers International residential marketing, said in an interview. "Some of the most expensive [Vancouver] real estate is only being marketed to Chinese buyers. And Vancouver and Toronto are very popular."
According to a report on new multi-family home sales in the Lower Mainland by Colliers, which recently opened a dedicated office in Shanghai to deal with the increasing demand, a total of 2,711 new multi-family units were sold in the region in the fourth quarter of 2010, making it the most active quarter of the past year.
"As in each quarter in 2010, the health of the market is expected to continue to be positively impacted by increasing Asian immigrant and investment demand," the report, prepared by Colliers and Urban Analytics, concluded.
Scott said the expected offshore demand will continue to be "the dominant story in 2011 that it was in every quarter of 2010 especially in Vancouver-west, Metrotown and Richmond."
The demand for Vancouver properties appears to be fuelled by many factors -including, ironically, a crackdown on property purchases in mainland China that may be moving much of that investment overseas, particularly to Canada.
Local real estate companies are tapping into the demand, which realtors say is also partly fuelled by an easing of travel restrictions by China with the granting of approved destination status to Canada.
As well, local Vancouver area Chinese-language newspapers are being used by realtors and agents to specifically target mainland Chinese buyers, citing Canada and Vancouver's stability and strong local real estate returns.
A recent report in the China Daily, a state-run publication based in Beijing, said Canada was "the most...
Resale housing market shows further improvement in January
(CREA Monthly Report)
National resale housing activity climbed further in January 2011, according to statistics released today by The Canadian Real Estate Association (CREA). Seasonally adjusted national home sales activity rose 4.5 per cent in January 2011 compared to the previous month, reaching the highest level since April 2010. Led by Vancouver and Toronto, seasonally adjusted sales activity posted monthly gains in more than half of all local Canadian markets in January. National sales activity has improved steadily since last summer, and now stands almost 25 per cent above the low point reached in July 2010.
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