Price of units lower, but still no bargain, expert says
Even at reduced prices, it's unlikely taxpayers will fully recoup $740 million invested in project, according to UBC professor
The new prices for condos in the taxpayer-owned Olympic village are more in line with the rest of the real-estate market, but they're still no bargain.
That's the analysis of a realestate expert and a business professor who say it will still take years to fill out the Southeast False Creek project.
And even then, it's unlikely that taxpayers will fully recoup the $740 million they invested in the project through construction financing and land sales.
On Thursday, condo marketer Bob Rennie set the stage for the sale of 230 units in five buildings starting today.
He laid out for reporters and fellow real-estate agents an average price reduction of 30 per cent for the units, which make up about half of the 474 unsold units in the village.
Some units, principally the more expensive ones, have been reduced by as much as 50 per cent, while price cuts on smaller lower-priced units are closer to five and 10 per cent.
But Scott Brown, the vicepresident of residential marketing for Colliers International in Vancouver, said those cuts may not be enough.
"It's definitely come down from where it was, which tells you how far out of reality the prices were. They were really out of whack," he said. "I don't know if they have come down far enough to drive any really serious volume."
Brown said Colliers' market research has shown that threequarters of sales in the area have been for units priced at $650 to $750 per square foot.
But most of the new prices in the Olympic village are still higher than that.
Brown cited a 1,445-squarefoot two-bedroom unit now offered at $1.3 million. At nearly $900 per square foot, "that's not a deal," he said. "Those prices are not low enough yet where people will say, 'This is such a deal I've got to buy it now.'" Tsur Somerville, a professor at the University of B.C.'s Sauder School of Business, said he thinks Rennie's overall repricing strategy will eventually drive enough sales for the city to recover the remaining $570 million it loaned for construction.
But he's doubtful there's enough residual value left to also cover the outstanding $170 million owed on the city's sale of the land to the project's original owners, Millennium Developments.
"I think it is reasonable to say that it is highly unlikely that the taxpayers of Vancouver will see the full value of the lands the city contributed to the project," he said.
Somerville said the prices are competitive with other built projects in the city but not for those being sold on the basis of pre-sales, where buyers put down a small deposit and have longer to pay. By Thursday, a dozen people had camped outside the sales office, waiting for today's opening sale.
Rennie said the lineup was encouraging and he expects to see a crush of potential buyers on the weekend. However, the lineup pales in comparison to the interest in other condo developments in Metro Vancouver.
On Saturday, Bosa Properties will open its sales centre for its 45-storey 202-unit Sovereign tower in Burnaby's Metrotown.
Earlier this week, more than 400 people lined up and 2,600 signed on to a company website.
The company sent people home after giving them numbers reserving their place in line, said Bosa vice-president Daryl Simpson. He projected that up to 70 per cent of the units, priced at $650 a square foot or less, will be sold by the end of the weekend. Rennie told reporters that demand in the Olympic village can't be compared to pre-sales at other developments, noting he'd sold all but 11 of 540 pre-sale units in Wall Centre False Creek behind the village.
Pre-sale buyers put down 10 to 20 per cent and have up to three years to pay. But with built stock such as the Olympic village, buyers have to...
Realtor Bob Rennie dodged questions Thursday morning about whether taxpayers would even come close to breaking even on the Olympic Village development.
Hosting a media launch about sales that start Friday at what’s now branded The Village on False Creek, he said Rennie Marketing Systems was working to stabilize the city’s asset and to maximize revenue.
Rennie said he sees the downtown condo market stabilizing and the real estate market reviving from its recent slump.
Instead of aiming to sell approximately 480 unsold units like he did last May after the 2010 Winter Games ended and the property was returned to developer Millennium Water and the city, Rennie aims to sell 230 condos in two areas of the village. Of the 737 condos at the village, 263 have sold, most of them in 2007. Friday’s launch is the third time the units have gone on sale.
Receiver Ernst and Young has contracted with a company to rent approximately 114 units to get the “ghost town” populated fast. Those units don’t include the 119 rental units purpose-built by the developer or the city’s 252 market rental, co-op and below-market rental units in the village.
Rennie blamed slow sales after the Games on bad timing due to a sluggish economy.
“I do not believe we ever had a product problem,” Rennie said. “What I do have is a pricing problem, and that pricing problem on May 15 was compounded by the fact that there was 480 units for sale and people didn’t see any sense of urgency and everybody just moved to the sidelines and folded their arms.”
He’s confident the prices are appropriate now. He said market testing done before the latest sales launch attracted 31 offers in 10 days. They included 12 for units that cost more than $900,000, 11 offers for units priced from $600,000 to $900,000 and eight offers for units under $600,000.
Seven chairs sat outside the sales centre at 5 p.m. on Wednesday. Fourteen chairs labelled with people’s names were positioned outside the sales centre just before 11 a.m. Thursday morning. The sales centre was to open at noon Thursday with sales to begin Friday. Rennie said he was giving a tour to 1,058 realtors through the site yesterday starting at 2 p.m.
Prices for the unsold units have been reduced an average of 30 per cent from May 2010 rates. Rennie said rates on the lower priced units weren’t reduced much—a studio now goes for $349,500 to $354,900—but prices on larger units that were priced at $1.5 million saw greater reductions.
He aims to sell 60 units in 60 days.
He noted the receiver for the village, Ernst and Young, has been tackling building deficiencies and that regular new home warranties protect owners.
Only a bank and a private liquor store operate at the village. Rennie said London Drugs is eying population numbers, negotiations are underway with an unnamed grocery store—previously the grocery seller was meant to be Urban Fare—and a consultant has been hired to focus on leasing the other commercial spaces.
The city is owed $740 million for the development.
Olympic village condo prices to be slashed by an average of one-third
Condo prices at the troubled Olympic village project will be reduced by an average of 30 per cent from May 2010 levels, according to Ernst & Young, the project's receiver. The following is a look at how much Olympic Village units are going for on the market.
Real estate market calm expected to follow hectic 2010 in Metro Vancouver
Home sales forecast to increase modestly across B.C. as prices stabilize
VANCOUVER - If there's one sentence to sum up B.C.'s real estate picture in 2011, it's probably "Let's take a breather."
While Metro Vancouver prices rose fairly sharply over the past year, the same wasn't true in the Interior and other parts of the province where prices were flat and sales stalled.
A combination of low interest rates, relatively stable prices throughout the province and a gradually improving economy helped by the 2010 Winter Olympics brought buyers -- especially first-time buyers -- back into the market after a recessionary slump.
Those conditions are expected to continue in 2011, although interest rates are predicted to gradually rise.
That may keep a lid on housing prices, which are also expected to rise a bit, although less than in 2010.
However, there will be no repeat of 2010's price bump.
"When you look at 2010, we saw fewer sales than 2009 [across B.C.]," Cameron Muir, chief economist for the B.C. Real Estate Association, said in an interview. "Since [July], we've seen a modest increase in consumer demand."
Muir said he expects the province will see that continue into 2011, although the sales numbers aren't expected to post any records or rise above the 10-year average.
"I'd expect housing sales to be around 80,000 to 82,000 units in 2011. We're likely to see a six-to seven-per-cent increase in housing sales this year compared to last year."
Muir said job growth and rising incomes will underpin demand, although higher interest rates in the second half of the year will partly offset the benefits of more economic activity.
"There will be a much more gradual increase in consumer demand and less volatility. There will be more stable market conditions this year."
Robyn Adamache, senior market analyst for Metro Vancouver with Canada Mortgage and Housing Corp., said in an interview that she doesn't see any huge changes this year over 2010.
"We're expecting a slight increase in sales, about five to six per cent, for 2011.
"For 2010, we were around 31,000 sales.
"For 2011, we're expecting 33,000 sales."
However, Adamache said Metro Vancouver should see much less price growth in 2011.
"In 2010, we saw a 14-percent increase in prices.
"We're calling for a three-percent increase in 2011."
Adamache said she expects that mortgage rates will creep up later in 2011, although not dramatically. "So, that will put a bit of a damper on sales."
Tsur Somerville, director of the centre for urban economics and real estate at the University of B.C.'s Sauder School of Business, said he doesn't like forecasting the future, but nevertheless believes that 2011's real estate picture will be largely determined by the speed of the recovery and the Bank of Canada's action on interest rates -- and how that reflects on mortgage rates.
Ron Antalek, a realtor with ReMax Ridge Meadows Realty, said in an interview that he's seeing an uptick in buyers who believe interest rates are heading north.
He believes there will be a modest increase in both pricing and demand this year.
"The vast majority of buyers are convinced that prices won't decline and that interest rates will rise.
"So, they feel their investment is safe.
"Sales are picking up." Mike McDougall recently took possession of a new detached home in Maple Ridge after moving to B.C. from Alberta.
"Hopefully, it was a good time to purchase," McDougall said in an interview.
"From what I hear, it was. I think there's still potential for rates to go up."
McDougall, who moved into his new home on Jan. 12 with his wife and two small children, said he was also comfortable with the price he paid.
Average BC home price hits record high of $505,178 in 2010 BCREA: Sales fell 12%
VANCOUVER - The average price for a home in British Columbia reached a record high of $505,178 in 2010, the B.C. Real Estate Association says.
Home sales fell 12 per cent last year to 74,640.
The BCREA cited fewer active listings and increased consumer demand in a news release this morning.
"Tighter credit conditions and expended pent-up demand curbed home sales during the first half of 2010,” Cameron Muir, BCREA chief economist, said in the release.
“However, low mortgage interest rates and improved economic conditions buoyed home sales in the latter half of the year.”
"The inventory of homes for sale peaked at 53,375 units in May before declining 14 per cent to 46,000 units by December,” added Muir. “The combination of fewer active listings and increased consumer demand has improved market conditions in many areas."
Below is the district-by-district breakdown of average home prices in BC:
BC Northern: 192,971, down 5.8 % Chilliwack: 264,266, down 13.8% Fraser Valley: 444,258, down 0.5% Greater Vancouver: 700,773, up 11.7% Kamloops: 288,009, down 5.5 % Kootenay: 256,013, down 8.4% Northern Lights: 175,403, down 19.5% Okanagan Mainline: 393,512, down 3.6% Powell River: 275,732, up 19.8% South Okanagan: 282,308, down 19.3% South Okanagan: 282,308, down 19.3% Victoria: 496,814, down 4.9%
The Greater Vancouver residential housing market entered three distinctive phases in 2010. Continued buoyancy from the post-recession recovery began the year, followed by a summer lull and, throughout the fall, a sustained period of stability.
The Real Estate Board of Greater Vancouver (REBGV) reports that total sales of detached, attached and apartment properties in 2010 reached 30,595, a 14.2 per cent decrease from the 35,669 sales recorded in 2009, but a 24.2 per cent increase from the 24,626 residential sales in 2008. Last year’s number of housing sales was 10.3 per cent below the ten-year average for annual Multiple Listing Service® (MLS®) sales in the region.
The number of residential properties listed for sale on the MLS® in Greater Vancouver increased 9.7 per cent in 2010 to 58,009 compared to the 52,869 properties listed in 2009. Compared to 2008, last year’s total represents a 7.3 per cent decline compared to the 62,561 residential properties listed in 2008. The number of properties added to the MLS® peaked in April and generally declined for the remainder of the year.
“The last two years have been a bit of a rollercoaster for the real estate market. However, sales over the past six months have definitely shown a trend toward stability. We think that’s good news for home buyers and sellers,” Jake Moldowan, REBGV president said. “The Greater Vancouver housing market experienced a modest increase in home prices in 2010, and a continual decrease in the number of properties being listed for sale.”
Residential property sales in Greater Vancouver totalled 1,899 in December 2010, a decrease of 24.5 per cent from the 2,515 sales recorded in December 2009—an all time record for the month—and a 24.3 per cent decline compared to November 2010 when 2,509 home sales occurred.
More broadly, last month’s residential sales represent a 105.5 per cent increase over the 924 residential sales in December 2008, a 0.1 per cent increase compared to December 2007’s 1,897 sales, and a 12.6 per cent increase compared to the 1,686 sales in December 2006.
The residential benchmark price, as calculated by the MLSLink Housing Price Index®, for Greater Vancouver increased 2.7 per cent to $577,808 between Decembers 2009 and 2010. However, prices have decreased 2.6 per cent since hitting a peak of $593,419 in April 2010.
“Although we saw some pressure on home prices throughout the year, home values in 2010 remained relatively steady in the region compared to the last few years when we witnessed much more fluctuation,” Moldowan said.
New listings for detached, attached and apartment properties in Greater Vancouver totalled 1,699 in December 2010. This represents a 21.1 per cent decline compared to the 2,153 units listed in December 2009 and a 43.9 per cent decline compared to November 2010 when 3,030 properties were listed.
Sales of detached properties in December 2010 reached 769, a decrease of 14.8 per cent from the 902 detached sales recorded in December 2009, and a 121.1 per cent increase from the 348 units sold in December 2008. The benchmark price for detached properties increased 4.0 per cent from December 2009 to $797,868.
Sales of apartment properties reached 811 in December 2010, a decline of 29.7 per cent compared to the 1,154 sales in December 2009, and an increase of 94.5 per cent compared to the 417 sales in December 2008.The benchmark price of an apartment property increased 1.2 per cent from December 2009 to $387,115.
Attached property sales in December 2010 totalled 319, a decline of 30.5 per cent compared to the 459 sales in December 2009, and a 100.6 per cent increase from the 159 attached properties sold in December 2008. The benchmark price of an attached unit increased 2.7 per cent between December 2009 and 2010 to $490,869.
Property assessments jump 12 per cent for Vancouver homes B.C. property assessments online, see evaluations of your homes and others
British Columbia Assessment Authority data for 2011 show that market value for homes in the city of Vancouver rose more than 12 per cent from the previous assessment, while home values in Richmond shot up more than 17 per cent.
The assessments were made available online today for owners of the 1.9 million properties in B.C.
B.C. Assessment staff began posting data this past weekend.
Notices with expanded information were given to Canada Post on Dec. 31 and will be arriving in the mail this week.
Online users can go to www.bcassessment.bc.ca and click on the box for “e-valueBC” to see the new figure for their own and neighbouring properties. B.C. Assessment’s website will also show the value of sales in the surrounding area in 2010.
For most properties, B.C. Assessment shows the assessed value as of July 1 of the previous year. Their actual value depends on the market at a particular time.
B.C. Assessment appraisers takes into account criteria such as size, age, quality, condition and location of individual properties.
This year’s deadline to appeal assessments is Jan. 31. If you don’t agree with the assessment, B.C. Assessment encourages you to call or visit their office to try to resolve the matter.
The Crown corporation’s office is closed Monday and reopens Tuesday.
While individual property values are now online, regional and provincial statistics and graphs will be coming out on tomorrow. That information will include the total value of the provincial assessment roll, year-over-year changes in assessment values in municipalities, and new construction.
The capital region has more than 140,000 property owners. At this time last year, most homes were valued higher than in the previous year.
In January 2010, the total value of the Greater Victoria assessment roll was $88.16 billion, up from $84.6 billion year-over-year. New construction, subdivisions and rezonings represented $1.3 billion of that increase.
Provincially, the assessment roll reached $969 billion in January 2010.
If a property’s assessment goes up, that does not always mean municipal taxes will increase. What typically makes the difference is if an assessment rises or falls beyond the average.
Landcor Data Corp. of New Westminster predicted last month that Greater Victoria single-family house assessments would increase throughout the region. The company, which analyses B.C. real estate data, expects these assessments to increase by as much as 12.6 per in Sidney, and by 1.3 per cent in Langford.
Email