Anna Asi, M.A.

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

Cat: Vancouver Real Estate

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.

Group-on Concept For Vancouver New Condos

Cat: Vancouver Real Estate

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

Vancouver Rental costs is up more than 40%

Renting office space in downtown Vancouver is up more than 40% in the past five years.

Cat: Vancouver Rentals

Big banks drop fixed mortgage rates

Several of Canada's big banks are dropping their fixed mortgages to record-low levels - less than three per cent.

The Real Estate Board of Greater Vancouver Housing Market Update for October 2011 with REBGV president Rosario Setticasi.

Cat: Vancouver Real Estate

Real Estate Affordability - BC In-migration Turns Negative

Surrey Central and Olympic Village Real Estate Update

HST change likely to delay new-home sales in BC until its elimination

Plans to remove the HST and return to a provincial sales tax mixed with the Goods and Services Tax will probably cause some potential buyers of new homes in British Columbia to delay purchases until 2013, Central 1 Credit Union forecasts.

In a news release Thursday, Central 1 economist Bryan Yu said: "People looking at new homes priced over $525,000 may very well wait until the tax changes lower the 12 per cent hit they face."

The HST added provincial tax to new housing on top of GST and $525,000 was the upper limit for a rebate program intended to add no additional tax on homes.

Yu is forecasting that B.C.'s total home sales through the Multiple Listing Service will reach 88,200 units by the end of this year, which is down one per cent from 2010's sales mark.

However, while resale home transactions are forecast to end the year 4.7 per cent ahead of 2010, new home transactions will lag by 26 per cent.

While sales will remain soft, the median price will rise 6.8 per cent to $417,000, Yu said.

"The real estate market will remain stable for the next couple years, weighed down by global economic issues, moderate employment and population growth and changes to mortgage insurance rules," Yu said.

Central 1 forecasts that next year total home sales are expected to increase by about 3.4 per cent, driven by higher new home sales. The resale of existing homes will decline.

Meanwhile, the Canadian Real Estate Association released a report Thursday showing that the sale of existing homes across Canada declined 0.5 per cent in August.

On a seasonally adjusted basis, sales totalled to 37,177 units during the month, down from 37,378 in the previous month, the industry group said. However, sales were still up 15.8 per cent from August 2010, on a non-adjusted basis.

The national average home price of $349,916 in August, on a non-adjusted basis, was up 7.7 per cent from a year earlier.

"[Economic] headwinds will likely persist until, and indeed after, fiscal quagmires in the U.S. and Europe are resolved. In the meantime, the Bank of Canada will have ample reason to delay raising interest rates further, which is supportive for the Canadian housing market."

© Copyright (c) The Vancouver Sun

Explore Strange Homes of the Future

We’re now a full decade past 2001, but a quick look outside shows that the home of the future as depicted in films never quite caught on. Contenders are still being built, however. It’s just that society's priorities have changed—homes are being designed with an eye toward sustainability and energy efficiency. These concerns are giving architects opportunities to push boundaries, break taboos, and try new things.

Some of the designs are bold, some are bizarre, and some seem unlikely to get past the drafting table. However, they all address current challenges and create new rules.

What are some notable examples of the new homes of the future? Check out these cool, futuresque homes:

Birds Island

Birds Island is a dwelling designed by Graft architects that addresses an age-old quandary—how do you enjoy the great outdoors and sit in your house at the same time? Located in Kuala Lumpur, the home has a silicone glass exterior “skin” that makes this very thing possible. It changes the transparency of the walls, allowing residents to drink in the views in all their splendor, get a canopy of shade, or shut everything out entirely.

Birds Island is also a sustainable dwelling, and its outer skin collects rain water, and harnesses solar energy and wind power. The structure’s placement on a pier is another nod to energy efficiency. It allows the natural cooling of the water underneath and permits energy collection and distribution from nearby lotuses.

Airdrop House

The Airdrop House is so futuristic and forward-thinking that it has yet to get past the artistic rendering stage, so anyone who wants one will have to wait until some distant tomorrow. However, they are being designed to provide emergency shelter to disaster survivors, so hopefully the need for them won’t come up too often.

The home is designed by Andrew Maynard Architects in response to the 2004 Indian Ocean tsunami and the aftermath of Hurricane Katrina. The home is intended to be air-dropped into disaster areas and used as a temporary shelter. Its design also permits the growing of plants on its surface, to provide both food and shade.

Dupli Casa

Many dwellings have been built with what its creators call a “futuristic design.” However, Dupli Casa, from Germany’s J. Mayer H. Architects, truly lives up to the description. In fact, the website Digsdigs.com covered it in a 2009 article titled, “The Most Futuristic House Design in the World.”

Dupli Casa is a three-story dwelling near Ludwigsburg, Germany. On the top floor, bedrooms jut out dramatically from the structure’s core, each with a window strategically angled to provide optimum views of the surrounding area. One such view is of David Chipperfield’s Museum of Modern Literature, which sits across the valley in the town of Marbach am Neckar.

Komb House

Karim Rashid is the architect behind the striking-looking Komb House. Rashid was born in Egypt and studied in Canada and Italy, and according to his own website, he has more than 3,000 designs currently in production.

Komb House uses state-of-the-art technology to minimize its environmental impact. The water is heated by solar panels, and the structure reuses grey and pluvial water. It’s composed entirely of reusable materials, such as wood and glass, and it can be taken apart and put back together again should the need to do so ever arise.

Shell House

If one were flying over Karuizawa, Japan, and saw the roof of the Shell House, it’s possible that one could entirely miss the fact that it’s a house. The dwelling was created by the Japanese architecture firm ARTechnic, and its unusual exterior design resembles nothing so much as a cannoli transforming into a spaceship.

Described as “out of this world” on the website Trendir, the structure’s curves and ellipses give it a look like nothing before or since. It has sound design principles behind it, however, and takes advantage of natural light and interior textures, so you can feel at home once you’re actually inside of it.

Copyright: By Daniel Bukszpan , CNBC.com

Cat: Housing

Summer housing market trends toward balance after an active spring season

VANCOUVER, BC – Home sellers outpaced buyers on Greater Vancouver’s Multiple Listings Service® (MLS®) in June, drawing the market back toward balance this summer.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties reached 3,262 in June, a 9.8 per cent increase compared to the 2,972 sales in June 2010 and a 3.4 per cent decline compared to the 3,377 sales in May 2011.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,793 in June. This represents a 4.5 per cent increase compared to June 2010 when 5,544 properties were listed for sale on the MLS® and a 2.3 per cent decline compared to the 5,931 new listings reported in May 2011.

Last month’s new listing total was 9.8 per cent higher than the 10-year average for June, while residential sales were 7.3 per cent below the ten-year average for sales in June.

“With sales below the 10-year average and home listings above what’s typical for the month, activity in June brought closer alignment between supply and demand in our marketplace,” Rosario Setticasi, REBGV president said. “With a sales-to-active-listings ratio of nearly 22 per cent, it looks like we’re in the upper end of a balanced market.”

At 15,106, the total number of residential property listings on the MLS® increased 3.1 per cent in June compared to last month and declined 14 per cent from 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 8.7 per cent to $630,921 in June 2011 from $580,237 in June 2010.

“The largest price increases continue to be in the detached home market on the westside of Vancouver and in West Vancouver,” Setticasi said. “Since the end of May, the benchmark price of a detached home rose more than $147,000 on the westside of Vancouver and over $80,000 in West Vancouver. Detached home prices in Richmond, however, levelled off slightly, declining $25,000 in June.”

Sales of detached properties on the MLS® in June 2011 reached 1,471, an increase of 29.1 per cent from the 1,139 detached sales recorded in June 2010, and an 11.8 per cent decrease from the 1,667 units sold in June 2009. The benchmark price for detached properties increased 13.4 per cent from June 2010 to $901,680.

Sales of apartment properties reached 1,266 in June 2011, a 0.6 per cent increase compared to the 1,258 sales in June 2010, and a decrease of 29.3 per cent compared to the 1,790 sales in June 2009. The benchmark price of an apartment property increased 3.5 per cent from June 2010 to $405,200.

Attached property sales in June 2011 totalled 525, an 8.7 per cent decrease compared to the 575 sales in June 2010, and a 34.5 per cent decrease from the 802 attached properties sold in June 2009. The benchmark price of an attached unit increased 6 per cent between June 2010 and 2011 to $522,424.

Cat: Vancouver Real Estate

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 factor is also breathing new life into tired older neighborhoods, and that, in turn, is contributing to rising values. 

As prices escalate, first-time buyers are indeed spending more—some out of necessity, but others are simply in a position to do so. Unlike in years past—a greater percentage of today’s first-time buyer pool is comprised of dual-income, college or university-educated couples with solid earnings. They’re spending close to average price or slightly more to secure—in most cases—a better location or a home that will grow with them.   Yet, the fact remains that those on a tighter budget can get in for considerably less, with reasonable choices in every major market across the country.   While some may feel discouraged by eroding affordability levels, the underlying confidence in the concept of homeownership is rising.

“While market conditions are one thing that influences first-time buyers, few things trump the fundamental belief in homeownership,” says Sylvain Dansereau, Executive Vice President, RE/MAX of Quebec. “Today’s entry-level buyers are steadfast in their mindset. They know they have to live somewhere, but they simply don’t want to pay someone else’s mortgage. Savvy or practical, they remain a driving force. The bottom line is that the demand for entry-level product will remain steady. The role of starter homes in the marketplace is becoming ever more vital.”

Cat: Vancouver Real Estate

Housing starts drop in B.C., but rise in Metro Vancouver: CMHC report

HST uncertainty blamed for 5.9-per-cent drop, but metropolitan area sees 23-per-cent hike

** See bottom of the post for the full Report

VANCOUVER - Housing starts were down in B.C. in February, with uncertainty over the HST being blamed for part of the problem.

"I'm not surprised the starts are down, but I'm surprised they're down that much," M.J. Whitemarsh, CEO of the Canadian Home Builders' Association of B.C., said in an interview Tuesday after the Canada Mortgage and Housing Corp. released a report showing starts were down 5.9 per cent in February to 24,100 on a seasonally adjusted basis.

"One of the things that's impacting housing starts is uncertainty over the HST," she said of the controversial tax, which will go to referendum this year. "People are holding off either buying new houses or even doing renovations because [the HST] may be gone. It's stifling consumer confidence.

"And if people aren't purchasing, builders aren't building."

According to figures released by CMHC, home construction across Canada edged up more than expected in February, but those gains are unlikely to be matched in the coming months as tighter-mortgage rules and higher-lending rates could begin to dampen building activity.

CMHC said the seasonally adjusted annual rate of housing starts was 181,900 units during the month, led mainly by condominium construction in Ontario and the Prairie provinces.

Although housing starts were down 5.9 per cent in B.C., there were differences around the province, with Metro Vancouver much stronger than other areas.

"For the first two months of the year, Vancouver housing starts are up 23 per cent [compared to January and February 2010]," CMHC's regional economist Carol Frketich said in an interview. "That reflects a stronger resale market in [Metro Vancouver]. Also, Vancouver has had stronger job creation than the rest of the province."

Frketich said urban B.C. starts were also up 5.1 per cent for the first two months of 2011 compared to last year, but fell in February.

"The numbers can fluctuate from month to month," said Frketich, adding that the results reflect CMHC's forecast.

CMHC noted there were 1,414 housing starts in the Vancouver CMA in February, a slight increase from the same month a year ago, with strength in multiple unit housing starts in Richmond, Coquitlam and Surrey accounting for most starts.

Greater Vancouver Home Builders' Association president and chief executive officer Peter Simpson noted in an interview that there were 2,850 housing starts in Metro Vancouver for the first two months of 2011, compared to 2,319 in the same period in 2010.

"We've certainly come a long way from the dark days of 2009," he said. "We're going in the right direction."

The Abbotsford CMA had 25 housing starts in February, down slightly from 37 starts during the same month a year ago.

"Canadian residential construction activity appears to be stabilizing at a level consistent with underlying demographic demand," said BMO Capital Markets economist Robert Kavcic.

"In the quarters ahead, home sales could be challenged by higher mortgage rates and shorter amortizations, which will eventually weigh on starts, but the maturing economic recovery should help," he added.

On Monday, Statistics Canada reported the value of building permits fell unexpectedly in January due to weaker residential and non-residential activity.

The agency said permits were down 5.1 per cent to $5.4 billion during the month.

Below is the full CMHC report:

CMHC Housing Market Report for BC - 1st Quarter of 2011

Property sales rise ahead of mortgage changes

Canadian sales of existing homes rose 4.5% in January, hitting their highest level since April last year, as buyers rushed to beat tighter mortgage regulations set to come into effect next month, according to Canadian Real Estate Association figures.

Vancouver and Toronto led the growth, with half of all local markets reporting seasonally adjusted gains in the month, CREA said. Sales activity improved over the second half of last year and is now 25% above its low in July, it said.

"We anticipated the recent announcement of tighter mortgage regulations, which will come into effect this March, would pull forward sales activity into the first quarter of 2011, particularly in some of Canada's more expensive housing markets," said Gregory Klump, CREA's chief economist. "The sharp rise in sales activity in Toronto following the announcement provides early evidence confirming this," said Klump.

CREA warned the government not to take any further action until the longer-term impact of the most recent changes is fully known.

Ottawa announced in January that it would tighten mortgage-lending rules for the second time in a year to stop borrowers taking on more debt than they can afford. The government is reducing the maximum amortization period on mortgages backed by government insurance to 30 years, from 35 years, which makes monthly payments higher.

The tightening is expected to primarily hit first-time homebuyers, or those with less available for a down payment.

BMO mortgage expert Laura Parsons said the changes are a good thing.

“People are like deer in the headlights when these things happen, but they need to be properly informed,” she said. “This is a good thing, it saves them money.”

Reducing the amortization period by five years to 30 years would save about $53,000 in interest payments over the life of the mortgage, she said.

Actual new listings through the MLS System posted their biggest month-over-month increase since 2007 in January, with more than double the listings from the previous month, CREA said.

As sales activity and new supply have risen in tandem, the national market remains balanced, CREA said. The national sale-to-new listings ratio stood at 55.7% in January, little changed from the previous two months.

Parsons said BMO expects the market to remain balanced throughout 2011.

“According to our survey, 61% of homeowners are confident their homes will hold their current values throughout the year,” she said.

The national average price was little changed from the previous three months at $343,675, an increase of 4.5% from January last year, CREA said.

The January year-over-year gain was distorted by a jump in the number of multi-million dollar homes sold in a couple of areas in Greater Vancouver, it said.

By Sharon Singleton, QMI Agency

Vancouver Olympic Village New Prices Revealed!

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.

© Copyright (c) Vancouver Courier

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Tight market sparks bidding wars in hot neighborhoods
Anticipated interest rate hikes and amortization changes help fuel the 'crazy market'

For a 100-year-old, the east Vancouver denizen doesn't look too bad.

The bone structure is solid, but the skin is sagging and more than a bit of plastic surgery is required. There are a few screws loose, too.

The house near East 5th and Victoria is a fixer-upper, but that didn't stop someone this week from paying $800,000 -$151,000 more than the list price -after a fierce bidding war for the property.

The scenario is playing out across Vancouver in hot neighborhoods such as Mount Pleasant, Commercial Drive and Strathcona as buyers contend with tight supply, as well as with looming amortization changes and interest rate hikes.

Throw into the mix homebuyers who held off purchasing last year and it's fuelling a "pretty crazy" market, said Rick Stonehouse, a realtor who specializes in east Vancouver.

"It's been a very unusual beginning to the year," said Stonehouse, whose clients -a young professional couple -offered $766,000 for the house.

There were 20 offers, according to the listing agent.

The ramshackle place has a garage that leans to one side, missing shingles, a decrepit kitchen and an untamed yard. On the plus side, it has nice views, large bedrooms and an original fir floor.

Still, the high sale price had Stonehouse scratching his head. It didn't take long this year for the market to get overheated, either -one property that was listed at about $1.1 million sold for $1.6 million in early January.

It's quite a contrast to late last year, when "you could just feel the brakes coming on" starting in September, Stonehouse said.

Realtor Selina Jansen, who also had a client bidding on the house, says artificially low list prices are fuelling the bidding "frenzy."

"Some people are notorious for it, and I think other people are now copying them because they're having so much success with it," she said.

Jansen's client offered $711,000 for the East 5th house, one of three unsuccessful offers in the space of a week. In the others, her client -a professional woman -bid $811,000 for a house at East 14th and Knight that was listed at $789,000 and sold for $860,000. A home on Aubrey Place was listed at $749,000 and later taken off the market despite bids exceeding $800,000.

Mortgage broker Angela Calla of Dominion Lending Centre says bidding wars are dangerous because of the tendency for emotion to trump reason, resulting in the buyer paying more than what the lender determines its worth.

"Borrowers have got caught up in bidding wars like that when they focus too much on the emotional aspect and not really the fundamentals," she said.

Knowing the assessed value of the property is an important piece of research, Calla said.

People entering a bidding war should also set a ceiling of what they can comfortably afford -and be prepared to walk away if it's exceeded. Homes that are the subject of bidding wars often require work, so homebuyers should include renovation costs in their calculations, she advised.

Those bidding on a property also need to make sure the closing date falls within their preapproval window to ensure the lowest possible interest rate, she said.

Various studies have identified Vancouver as one of the most unaffordable housing markets in the world.

For some, particularly firsttime homebuyers, it gets worse on March 18. That's when new federal rules take effect setting the maximum mortgage amortization eligible for Canada Mortgage and Housing Corp. insurance at 30 years, down from 35. For a homeowner with a $600,000 mortgage at a fiveyear closed rate of four per cent, that works out to an extra $200 a month. Ottawa discontinued the 40-year amortization and no down payment options in October 2008.

Interest rates are also heading up. TD Economics projects the Bank of Canada will raise its key interest rate from the current one per cent to three per cent by the end of 2012, and some of the big banks hiked five-year mortgage rates this week.

For those already testing the outer limits of their financial comfort zone, the looming lending changes compound the sense of urgency.

But it's not only people rushing to beat the disappearing 35-year amortization period who are finding it a tough market to crack.

Miri Malkin and Gabi Kabazo, the parents of three children under 5, are living in a Yaletown condo while they look for a house in Vancouver in the $800,000 to $1-million range. The couple are pre-approved and plan a 40-or 50-per-cent down payment.

They've been looking since May, but have yet to put in a bid because all the houses they've looked at are either fixer-uppers or don't have enough space for their family. They would prefer to live in Vancouver rather than move to the suburbs.

"It's very frustrating," Malkin said. "We're willing to pay but we can't find anything."

The couple, who moved to Vancouver from Israel in 2004, were looking in 2008 but didn't buy because they thought prices might come down. One Arbutus townhouse they looked at was priced in the $700,000 range and is now listed for more than $1 million.

News of bidding wars in an overheating Vancouver market comes on the heels of a TD Economics report that identifies B.C. residents as most vulnerable to interest rate hikes, a housing correction or an economic downturn. The province's average household debtto-income ratio of 160 per cent is the highest in the country and matches levels reached in the U.S. just before the financial crisis and housing bust.

Tsur Somerville, director of the Centre for Urban Economics and Real Estate at the Sauder School of Business at UBC, is watching the real estate activity "with concern."

"The only hopeful piece is that it's just sort of a mismatch between people looking and available product," Somerville said. Somerville, however, doesn't believe Vancouver is at risk of a U.S.-style housing meltdown. Two characteristics that were prevalent south of the border are missing here, he said: fast and loose credit, and a lot of speculative product.

"I'm always willing to believe in a market adjustment or a market correction, but I'm not willing to believe that Vancouver's going to be cheap," he said. "So it's just sort of what variant of expensive we're looking at."

© Copyright (c) The Vancouver Sun

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