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.
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.
Vancouver Real Estate Market Update by REBGV - March 2012
Increased selection helps maintain balance in Greater Vancouver housing market
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 2,874 on the Multiple Listing Service® (MLS®) in March 2012. This represents a 12.9 per cent increase compared to the 2,545 sales recorded in February 2012, a decline of 29.6 per cent compared to the 4,080 sales in March 2011 and an 8.4 per cent decline compared to the 3,137 home sales in March 2010.
March sales in Greater Vancouver were the second lowest total for the month in the region since 2002 and were 16.8 per cent below the 10-year sales average for the month.
“Home sellers have been more active than buyers the first few months of the year, but we continue to see a relative balance in the total supply of homes for sale and current demand in the marketplace,” Eugen Klein, REBGV president said.
New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,843 in March 2012. This represents a 5.2 per cent increase compared to February when 5,552 homes were listed and a 14 per cent decline compared to March 2011 when 6,797 homes were listed for sale on the region’s MLS®.
Last month’s new listing total was 4.5 per cent above the 10-year average for listings in Greater Vancouver for March.
At 15,236, the total number of residential property listings on the MLS® increased 8.4 per cent in March compared to last month and increased 16 per cent from this time last year.
“The total number of properties for sale in Greater Vancouver has increased each month since December, which means there’s more selection to choose from as we enter what’s traditionally the busiest season of the year in our market,” Klein said.
The MLS® HPI benchmark price for all residential properties in Greater Vancouver currently sits at $679,000, up 5.3 per cent compared to March 2011 and an increase of 1.1 per cent compared to February 2012. The benchmark price for all residential properties in the Lower Mainland is $607,700, an increase of 4.8 per cent compared to March 2011.
Sales of detached properties on the MLS® in March 2012 reached 1,183, a decline of 34.1 per cent from the 1,795 detached sales recorded in March 2011, and an 11.5 per cent decrease from the 1,336 units sold in March 2010. The benchmark price for detached properties increased 9.2 per cent from March 2011 to $1,056,400.
Sales of apartment properties reached 1,191 in March 2012, a decline of 26.6 per cent compared to the 1,622 sales in March 2011, and a decrease of 4.9 per cent compared to the 1,252 sales in March 2010.The benchmark price of an apartment property increased 2.2 per cent from March 2011 to $375,100.
Townhome property sales in March 2012 totalled 500, a decline of 24.6 per cent compared to the 663 sales in March 2011, and an 8.9 per cent decrease from the 549 townhome properties sold in March 2010. The benchmark price of a townhome unit increased 0.9 per cent between March 2011 and 2012 to $480,900.
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...
B.C. Assessment released its data on the value of homes in the province on Tuesday. While some regions saw values skyrocket, others dropped. Take a look to see how your property's value (and your taxes) will jump this year.
List ranked in order from largest hike to biggest drop in values:
1. Vancouver - Up 16.42%
2. Richmond-Delta - Up 12.83%
3. North Fraser (Burnaby, Coquitlam, etc.) - Up 8.45%
4. Surrey-White Rock - Up 7.83%
5. Peace River - Up 7.44%
6. North Shore-Squamish Valley - Up 6.48%
7. Northwest B.C. (Prince Rupert, Terrace, Kitimat) - Up 4.74%
8. Prince George - Up 2.36%
9. Fraser Valley - Up 1.67%
10. Nelson/Trail - Up 1.08%
11. Cariboo - Up 0.32%
12. Central Vancouver Island (Nanaimo) - Down 0.06%
The B.C. government has raised the threshold for homeowner property grant to $1.285 million to accommodate rising property values.
The news comes as hundreds of thousands of annual property assessments are being prepared for B.C. property owners by the government. Last year, the threshold was $1.15 million. The grant effectively reduces the property tax paid by most B.C. homeowners by up to $1,045.
Every year the province adjusts the grant to ensure 95.5 per cent of homeowners receive the full amount of the grant. Those with homes above the threshold may still be eligible for part of the grant.
"The homeowner grant provides a maximum reduction in residential property taxes on principal residences of $570 in the Capital, Greater Vancouver and Fraser Valley regional districts and $770 elsewhere in the province," said a statement issued by the government on Tuesday.
"An additional grant of $275 is available to those who are age 65 or over, permanently disabled or a veteran of certain wars,."
"We continue to see challenging economic times around the world. By maintaining the homeowner grant, we continue to help families with the costs of owning their homes," said Finance Minister Kevin Falcon in the statement.
The grant is only available to Canadian citizens and to landed immigrants who normally reside in B.C.
REGIONAL HOUSING MARKETS: A YEAR IN REVIEW AND A LOOK AHEAD
Gradual unwinding of the over-valuation in house prices across the country
Highlights
As the year draws to a close, we conclude that the Canadian housing market put forth a respectable showing. Annual price gains are estimated at 7.5% in 2011 and sales’ growth ought to come in positive as well, but at a much more modest pace of 2.2%.
Behind the headline figure, we have seen gains in prices and sales activity decelerate in recent months. Some of the underlying factors include tighter insured mortgage financing rules and weakened confidence related to the stability of the economic recovery. Helping cushion the impact of these negative forces has been the persistence of low mortgage rates.
We believe that the average Canadian home price is over-valued by roughly 10%. Metrics like price to income, price to rent, and affordability all support this conclusion. We expect that the price excess will gradually unwind over the next two years in light of a softening in employment conditions in 2012 followed by higher interest rates in 2013.
In contrast to the resale market, starts continue to come in well above expectations. The strength witnessed over the last few years has been driven exclusively by the multi-residential category. Consistent with weaker resale markets, we expect new starts to trend toward 170,000-180,000 units in the 2012-13 period.
In addition to our national perspective, we provide an in-depth forecast of twelve major markets. While no urban center will be immune to the macroeconomic and interest rate headwinds, Calgary and Edmonton are likely to do better than the rest. By contrast, a larger-than-average price and sales correction looks to be in store for both Toronto and Vancouver.
Homebuyers came out in the early part of 2011 to take advantage of record-low interest rates and to beat out changes to new insured mortgage financing rules. With Canadians bringing forward their purchases and national job gains tapering off since the autumn, the past few months have recorded more modest price and sales gains. In all, 2011 put forth a very respectable showing with price appreciation clocking in at an estimated 7.5% and sales growth also positive, but at a more modest 2.2%. At around 190,000 units, housing starts also continued to come in above long-run averages.
Looking ahead, we anticipate a tug-of-war action to take hold in the Canadian real estate market. At one of the rope is the magnetism of low interest rates; at the other end are subdued prospects for economic, income and employment growth. Ultimately, we expect the economic side of the equation to win out over the near-term. In particular, the first half of 2012 is likely to be characterized by ongoing confidence-sapping events in Europe, global financial turbulence and slowing world economic growth.
While housing activity is expected to do somewhat better in the second half of the year, as external clouds start to dissipate, rising Canadian interest rates in 2013 should erect the next road block in the way of housing markets. Overall, we expect sales to record annual average declines of 2.4% and 3.5% in 2012 and 2013, respectively. Prices are poised to suffer a similar fate – annual average declines of 1.9% in 2012 and 3.6% in 2013. Starts should dip to an average 170,000 to 180,000 units in 2012-13. Collectively, these adjustments will gradually erase the over-valuation in the marketplace.
While no urban center will be immune from economic volatility and higher prevailing interest rates, some regions are expected to do better than others over the next two years. Among the twelve major markets profiled in this report, Calgary and Edmonton ought to lead the pack. Solid economic fundamentals and the absence of a recent run-up in prices support our call. Toronto and Vancouver do not appear to be as lucky – we have them experiencing a greater-than-average correction in both sales and prices...
Historically normal activity keeps the Greater Vancouver housing market in a balanced state
The Greater Vancouver housing market saw relatively typical home sale and listing activity in November.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties on the region’s Multiple Listing Service® (MLS®) reached 2,360 in November. This represents a 5.9 per cent decline compared to the 2,509 sales in November 2010 and a 1.9 per cent increase compared to the 2,317 sales recorded in October 2011.
Looking back further, last month’s residential sales total is 5.8 per cent below the ten-year average for sales in November.
“The pace of home listings entering the market eased slightly in November, compared to recent months, while sale levels remained fairly normal for this time of year,” Rosario Setticasi, REBGV president said. “November activity helped put our market firmly in balanced territory.”
New listings for detached, attached and apartment properties in Greater Vancouver totaled 3,222 in November. This represents a 26.3 per cent decline compared to the 4,374 new listings reported in October 2011, but a 6.3 per cent increase compared to November 2010 when 3,030 properties were listed for sale on the MLS®.
Looking back further, last month’s new listing total is 2.1 per cent above the ten-year average for November.
The total number of properties currently listed for sale on the Greater Vancouver MLS® sits at 14,090, a decline of 9 per cent compared to October 2011 but an increase of 13 per cent when compared to this time last year.
The MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 7.2 per cent to $622,087 in November 2011 from $580,080 in November 2010.
Since reaching a peak in June of $630,921, the benchmark price for all residential properties in the region has declined 1.4 per cent.
Sales of detached properties on the MLS® in November 2011 reached 916, a decrease of 12.8 per cent from the 1,050 detached sales recorded in November 2010, and a 21.3 per cent decrease from the 1,164 units sold in November 2009. The benchmark price for detached properties increased 11.4 per cent from November 2010 to $890,204.
Sales of apartment properties reached 1,000 in November 2011, a 4.9 per cent decrease compared to the 1,052 sales in November 2010, and a decrease of 28.4 per cent compared to the 1,396 sales in November 2009. The benchmark price of an apartment property increased 2.7 per cent from November 2010 to $399,686.
Attached property sales in November 2011 totaled 444, a 9.1 per cent increase compared to the 407 sales in November 2010, and a 15.1 per cent decrease from the 523 attached properties sold in November 2009. The benchmark price of an attached unit increased 4.5 per cent between November 2010 and 2011 to $510,960.
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