Anna Asi, M.A.

Vancouver Real Estate Market Update - April 2012

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.

Full Report:

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.

BCREA Housing Market Update - In Focus: Differing BC Market Conditions (Feb 2011)

January 2011 CMHC Housing Market Report

OTTAWA, February 8, 2011 — The seasonally adjusted annual rate¹ of housing starts was 170,400 units in January, according to Canada Mortgage and Housing Corporation (CMHC). This is up from 169,000 units in December 2010. According to final figures, actual housing starts for 2010 totalled 189,930 units, with activity moderating towards demographic fundamentals by the final quarter of 2010.

“Housing starts moved slightly higher in January because of an increase in rural starts,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre. “Single-detached and multiple starts showed a moderate decline.”

The seasonally adjusted annual rate of urban starts decreased by 1.7 per cent to 146,900 units in January. Urban multiple starts moderated by 1.5 per cent in January to 82,900 units, while single urban starts moved lower by 2.0 per cent to 64,000 units.

January’s seasonally adjusted annual rate of urban starts decreased by 19.0 per cent in the Prairie Region, by 7.9 per cent in British Columbia, and by 1.0 per cent in Québec. Urban starts increased by 13.3 per cent in Atlantic Canada and by 10.3 per cent in Ontario.

Rural starts² were estimated at a seasonally adjusted annual rate of 23,500 units in January.

As Canada's national housing agency, CMHC draws on 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable homes. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.

Vancouver House Prices Rise - Seller's Market

More Canadians were on move in 2010 and they were mostly headed West

TORONTO - A new report from the TD Bank suggests that Canadians are taking the phrase "Go West, young man" seriously.

More Canadians were on the move last year as a percentage of the population than any year since 1998, the bank says.

And most were headed West to take advantage of better job prospects and higher standards of living.

The analysis shows 337,000 Canadians migrated within the country's border's last year, 45,000 more than in 2009. The level represents about one per cent of the total population, the highest since 1998.

Except for New Brunswick, only Saskatchewan, Alberta and British Columbia experienced a net inflow of people last year.

And the report predicts that westward bound migration will continue over the next two years, although not up to the levels seen during the resource boom prior to the recession.

In relative terms, Manitoba and Prince Edward Island are losing the most people. Ontario and Quebec will continue to keep shedding numbers, but by a tiny fraction relative to their populations, the bank said.

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.

B.C. cities, including Victoria, are world-class in their lack of affordability, story and photos

Homes are "severely unaffordable" in all four of the B.C. cities that were included in a 325-city international survey of housing costs, and Vancouver's affordability score was the third-worst of all.
The average home in Vancouver, according to data from the third quarter of last year, cost $602,000 -- or 9.5. times the $63,100 median income of households in the city, according to the survey results released Monday by the Winnipeg-based Frontier Centre of Public Policy. Only Sydney, Australia, at 9.6 times the median income, and Hong Kong, at 11.4 times, scored worse.

With their housing prices quite a bit lower but their incomes a little lower, too, Victoria, Abbotsford and Kelowna were -- in that order -- uncomfortably close to Vancouver's 323rd-place finish in the international rankings.

Victoria's average price of $430,000 was 7.1 times the median household income of $60,900, resulting in a ranking of 297th out of 325. Abbotsford's $402,000 average price made it 6.5 times the median household income of $62,300 and 297th in the rankings. And Kelowna finished 283rd with a median income of $57,500 that was 5.9 times the median price of $57,500.

The study pins the "severely unaffordable" label on any city with a multiplier of more than five -- about 75 of the 325 studied, including Montreal and Toronto, but nowhere else in any part of Canada except B.C.

For a housing market to be rated as "affordable" the ratio of price to income can't exceed three times. And in nearly half the 35 Canadian cities surveyed, it is either lower or very close to that mark. In Edmonton, for example, the multiplier is just 3.5, although its low figure is in part thanks to the very high median income of $88,800. And in Winnipeg, where people earn just a little less than in Vancouver, it's 3.2.

The researchers who conducted the survey point out that you can't blame things such as interest rates, or the federal mortgage rules that have recently been in the news for B.C.'s worrisomely high score. These factors are the same everywhere across Canada, yet many other Canadian cities remain affordable. For example, it costs just 2.3 times the median income to buy an average home in Fredericton, a small government-dependent provincial capital where incomes are nearly equal to those in unaffordable Victoria.

So the policy factors that drive prices too high in relation to residents' incomes must be closer to home.
David Seymour, a senior policy analyst for the Frontier Centre, and his collaborator on the study, consulting demographer Wendell Cox of St. Louis, finger "politically inflated land costs."

"These land prices include the cost increasing influence of land supply restrictions (such as urban growth boundaries), excessive infrastructure fees and other overly strict land use regulations," they write.

In other words, the problem is not only in Vancouver, where everybody knows housing costs too much, but also in Victoria, Abbotsford, Kelowna and, almost certainly, in all of the other Lower Mainland cities that weren't surveyed. And this problem is world-class, worse here than in most cities in many other developed countries.

But the solution, we ought not forget, can only be local.

New Mortgage Rules

Effective March 18, 2011, it will become harder to buy a new home or consolidate debt into your mortgage.

That’s due to three new changes announced today by Finance Minister Jim Flaherty:

• A 30-year maximum amortization on insured mortgages over 80% LTV
• An 85% LTV limit on insured refinances
• Elimination of government insurance on secured lines of credit (aka., HELOCs)

Flaherty says these regulations are meant to “(encourage) hard-working Canadian families to save by investing in their homes and future.”

Building Too Close

Real estate lawsuit in Vancouver

Vancouver Prices Soared in 2010

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%

Courtesy of Vancouver Sun.

BC Real Estate Association (BCREA) Chief Economist Cameron Muir discusses the November 2010 statistics and an in depth look at the rollercoaster of home sales.

Bank of Canada keeps key interest rate on hold
Economy weaker than expected; productivity, strong dollar blamed

OTTAWA — The Bank of Canada said Tuesday economic activity has weakened due to a poor trade performance that could "dampen" the anticipated recovery in net exports, prompting it to keep its key policy unchanged at one per cent.

In its most recent forecast, the central bank said it expected net exports and business investment to power the economy as overstretched consumers pared back spending. But only one of those factors — capital spending by firms — is holding up in the present environment.

"This underlines a previously identified risk that a combination of disappointing productivity performance and persistent strength in the Canadian dollar could dampen the expected recovery of net exports," the central bank said in its statement explaining its latest rate move.

The decision was largely expected, given heightened tensions in financial markets from Europe's debt woes and a string of tepid economic data.

As a result, keeping the policy rate unchanged "leaves considerable money stimulus in place, consistent with achieving the two per cent inflation target in an environment of significant excess supply," the central bank said, reiterating that any further rate increase would need to be "carefully considered."

The Canadian dollar, which had been trading near parity with its U.S. counterpart ahead of the rate statement, lost ground once the central bank decision was released. Bond yields, however, were up slightly, as traders increased their risk appetite on news that the Bush-era tax cuts would be extended for at least two years.

The statement was a "pretty clear signal of the Bank of Canada's intent to remain on pause for the foreseeable future," said Michael Woolfolk, managing director at BNY Mellon Global Markets.

"With the bank concerned now about the economy's increasing reliance on net exports and recent weakness in net exports amidst ongoing currency strength, it will take particular care not to unnecessarily bolster the loonie via higher rates."

The Bank of Canada's decision Tuesday followed a move hours earlier by Australia's central bank to keep its benchmark rate unchanged, citing heightened risks in Europe and an expected slowdown in job creation over the coming year.

A series of mixed-to-disappointing domestic economic data were released over the past week just as the Bank of Canada, led by governor Mark Carney, contemplated its next move. Among the key economic indicators to emerge: meagre third-quarter growth of one per cent annualized, below central bank expectations for a 1.6 per cent advance; a job gain of 15,200 in November, although the headline figure masked overall market sluggishness as full-time and private-sector positions fell; and a bigger-than-expected fall in the value of building permits.

Tuesday's statement was shorter than the previous Oct. 19 decision — at which time it scaled back growth expectations — and tried to recap recent economic developments by pointing out negative and positive developments. Central bank watchers were keen to see if the rate statement would nix market expectations, based on trading in fixed-income markets, for a rate hike in either March or April of next year.

Commenting on recent third-quarter data, Bank of Canada said household spending was stronger than anticipated and growth in business investment — which Carney had repeatedly said was crucial to the recovery — was "robust."

However, net exports proved to be a "significant drag," shaving 3.4 percentage points off the headline GDP figure. It also contributed to Canada posting a record current-account deficit, equivalent to roughly four per cent four per cent of GDP, in the July-to-September period.

Higher-than-expected inflation readings for October — 2.4 per cent headline and 1.8 per cent core — had people wondering if this would force the central bank's hand in terms of rates, given the Bank of Canada's mandate to keep inflation at two per cent. The statement, however, said inflation dynamics "have been broadly in line" with expectations, and underlying pressures remain "largely unchanged."

"The tone of the statement was defensive and had enough of a tint of pessimism to validate the decision," said Andrew Pyle, wealth adviser and markets commentator at ScotiaMcLeod. "The bank sees the export factor as an offset to what is still a very favourable domestic demand recovery in Canada. But, the real concern is clearly what is happening across the pond with respect to sovereign debt."

The central bank said the global economic recovery "is proceeding largely as expected, although risks have increased. As anticipated, private domestic demand in the United States is picking up slowly, while growth in emerging market economies has begun to ease to a more sustainable, but still robust, pace."

At least one prominent U.S. economist predicted big things for the American economy now that the uncertainty over the Bush-era tax cuts looks to be settled.

"Instead of another year expanding at no more than the U.S. economy's potential growth rate — with job gains of 1.2 million and unemployment hovering near 10 per cent — real GDP growth will accelerate to four per cent, job gains will pick up to 2.8 million, and the unemployment rate will decline to around 8.5 per cent by year's end," said Mark Zandi, chief economist at Moody's Analytics.

While data from Europe suggest a modest recovery is underway on that continent, "there is an increased risk that sovereign debt concerns in several countries could trigger renewed strains in global financial markets," the central bank statement said.

This is the final Bank of Canada rate statement for the 2010 calendar year. The next decision comes on Jan. 18, followed shortly after by an updated economic forecast. The central bank projected three per cent growth in Canada this year and 2.3 per cent in 2011.

2011 housing prices to climb while sales stall

Gazing into its crystal ball, Re/Max forecasted in a report released Tuesday that housing markets will stabilize in most major Canadian cities and that the value of homes will climb even further in the coming year.

Re/Max's housing market outlook for 2011 contains mostly positive predictions but the agency doesn't expect the number of sales to increase, extending a downward trend that emerged in 2010.

Canada's housing market is coming off a 12-month period that recorded about 441,000 sales, five per cent less than 2009.

Housing values climbed despite the cool-down. Lower inventory propped up prices in the midst of weaker demand, the report states. Most areas reported an upswing in average price, ranging from just under one per cent to 15 per cent.

Re/Max is predicting a repeat of 2010. The brokerage expects about the same number of homes to sell in 2011 but sees greater stability and homes fetching more cash in most major centres.

The agency is also forecasting the national average price to climb three per cent to $350,000.

Sylvain Dansereau, executive vice-president of Re/Max Quebec, said 2011 will see more widespread recovery, setting the stage for a better 2012.

"Low interest rates and improving consumer confidence levels should stimulate home-buying activity at all price points next year," Dansereau said in a statement. "Overall gains will be more muted – a welcome reprieve for purchasers."

British Columbia could be the most active market. The report suggests a 10 per cent increase in sales in Vancouver, eight per cent in Victoria and six per cent in Kelowna. Re/Max is calling for a big gain of five per cent in Windsor, Ontario after a significant economic downturn.

In terms of housing values, St. John's is expected to lead the charge with an eight per cent increase in average prices. Five per cent gains are also forecasted for Vancouver, Kelowna, Regina, Saskatoon, London-St. Thomas, Ottawa, Sudbury and Montreal.

The report examines real estate trends and developments in 26 major centres across Canada.

In 2010, Kitchener-Waterloo, Quebec City and St. John's saw the biggest spikes in average price, while markets in Eastern Canada, including Hamilton-Burlington (Ontario), Sudbury (Ontario), Windsor (Ontario), Moncton (New Brunswick) and Prince Edward Island were the only ones to buck the downward trend in homes sales, Re/Max found.

Re/Max's report conflicts the tone of a gloomy forecast released in November by the Canadian Real Estate Association.

The CREA expects home sales to decline by nine per cent in 2011 due to slow economic and job growth, muted consumer confidence and interest rate increases.

The Vancouver Condo Project Receiver To Approve Significant Price Cuts Later this Week
Condo marketer Bob Rennie announced that he is about to receive approval from Ernst & Young to reduce condo prices across the board in the Olympic Village complex in southeast False Creek. Although he did not speak to any specific numbers, Rennie called the pending reductions ‘significant' . He spoke about a very delicate positioning of the new Olympic Village marketing plan quoting a ‘do it right or die' approach is the one they'll be taking.
The neighbourhood's reputation has taken a beating over the past year as the market for luxury concrete condos in Vancouver has softened. I did witness quite a few of the resale unit listings go stale towards the end of the Summer.
The social or non-market component has not been without its share of problems, particularly finding someone qualified to manage it. The development mix of high-end luxury condos and social housing has also been a contentious issue and a thorn in the side of the marketing effort.
Rennie hinted that a possible relaunch price could be around $1,000 per square foot for the high-end units and that he expects to move 100 units by June next year. The target date for the newly priced marketing relaunch is Feb 12, 2011, the one year anniversary of the 2010 games.
My feeling is that while $1,000 per square foot will be achievable, those sales will be limited to the best of the best only – waterfront suites. Look for a huge price differential between the waterfront suites and those further back in the compound towards the Wall Center at False Creek development site.

MLS® stats show more sales, fewer property listings in November

Greater Vancouver residential home sales improved in November compared to the previous four months, with the number of sales posted on the Multiple Listing Service® (MLS®) coming in slightly higher than the 10-year average for that month.

The Real Estate Board of Greater Vancouver (REBGV) reports that the number of residential property sales in Greater Vancouver totalled 2,509 in November 2010. This represents a 7.4 per cent increase compared to October 2010 and an 18.6 per cent decline from the 3,083 sales in November 2009.

Looking back further, last month’s residential sales represent a 187.1 per cent increase over the 874 residential sales in November 2008, a 13 per cent decline compared to November 2007’s 2,883 sales, and a 6.4 per cent increase compared to the 2,358 sales in November 2006.

“Housing sales numbers were fairly typical for a November and indicate a fairly balanced market. Activity on the buyer side has been stable, with slight increases, over the last few months while the number of homes listed for sale in our region has declined each month since we reached a peak in June,” Jake Moldowan, REBGV president said.

Total active residential property listings in Greater Vancouver currently sit at 12,384, a 12.1 per cent decline from last month and a 12 per cent increase from November 2009. New listings for detached, attached and apartment properties declined 17.1 per cent to 3,030 in November 2010 compared to November 2009 when 3,653 new units were listed.

“Home values have been relatively stable over the last five months compared to the summer period when we were seeing some downward pressure on prices,” Moldowan said. “It’s the homes priced accurately for today’s market that are receiving a lot of attention and selling right now.”

The MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 4.1 per cent to $580,080 in November 2010 from $557,384 in November 2009. This price has remained virtually unchanged since June of this year.

Sales of detached properties on the MLS® in November 2010 reached 1,050, a decrease of 9.8 per cent from the 1,164 detached sales recorded in November 2009, and a 226.1 per cent increase from the 322 units sold in November 2008. The benchmark price for detached properties increased 5.6 per cent from November 2009 to $799,312.

Sales of apartment properties reached 1,052 in November 2010, a decline of 24.6 per cent compared to the 1,396 sales in November 2009, and an increase of 156.6 per cent compared to the 410 sales in November 2008.The benchmark price of an apartment property increased 1.9 per cent from November 2009 to $389,168.

Attached property sales in November 2010 totalled 407, a decline of 22.2 per cent compared to the 523 sales in November 2009, and a 186.6 per cent increase from the 142 attached properties sold in November 2008. The benchmark price of an attached unit increased 4.1 per cent between November 2009 and 2010 to $488,733.

Metro Vancouver housing became more affordable in the third quarter of 2010, according to the RBC Housing Affordability Index.

Or rather, the unaffordability of Metro Vancouver housing became less severe, because the notion of "affordability" in Vancouver's high-priced markets is always a relative term.

The latest edition of RBC's regular report noted that in the third quarter of 2010, Metro Vancouver's home ownership costs declined between 2.2 and 5.4 percentage points following five straight quarters of increasing costs.

That, report author Robert Hogue noted, was the biggest decline among major Canadian markets, "but is unlikely to change the perception that this is an expensive market to enter, because affordability remains very poor."

The RBC affordability measure is a calculation that estimates what percentage of the median family income in each market would be required to carry all the costs associated with home ownership (including payments on a standard 25-per-cent down, 25-year mortgage, property taxes, utilities and insurance).

In Metro Vancouver, a standard bungalow, with a purchase price of $672,500, would require 69 per cent of that median income to carry all its costs, which is down 5.4 percentage points from the previous quarter.

The standard two-storey home, with a purchase price of $766,300, would require 78 per cent of that median income, down 4.7 percentage points from the previous quarter.

Metro Vancouver condos are the most affordable with the average price of $390,400 taking up 40 per cent of that median family income, which was down just 2.2 percentage points from the previous quarter.

For comparison, however, in Toronto a standard bungalow with an average price of $466,600 requires 47 per cent of that city's median family income to cover ownership costs.

In Montreal, a typical two-storey home with an average price tag of $355,300 requires 51 per cent of that city's median family income carry its mortgage, utilities and taxes.

In Calgary, the standard condominium with an average price of $246,700 needs 23 per cent of the city's median family income to pay for it.
Relatively speaking, ouch.

In the report, Hogue said "such high ownership costs continue to weigh on demand, which remains fairly weak despite a modest pick-up in home resales in September and October."

And across B.C. in general, Hogue noted that B.C.'s housing affordability measures are "significantly above long-term averages,"

The financial problems with the are taking the troubled project in a new direction, as the owners go into receivership. “This agreement gives us stability,” said Vancouver city councillor Geoff Meggs.

“Now, the milestone payments don’t have to become a recurring crisis. If (the developer) lacks the capacity to pay each time, the damage to the asset will be greater, compared to an orderly approach.”

The City of Vancouver has negotiated an agreement with the owners of the Millennium Water development to put the project into receivership and hand over management to accounting firm Ernst and Young.

Millennium recently failed to make a scheduled loan payment, which raised serious concerns about how the company will pay back its loans on the $1 billion project.

In August, Millennium was supposed to make a $200-million payment, but the city received $192 million and by Sept. 20, a total of $197 had been received. The next payment of $75 million was due from Millennium in January.

“They were facing another deadline in 60 days, which was problematic,” said Meggs. “We always had the option to force them into receivership, but we decided to negotiate an agreement for consensual receivership.”

The owners of Millennium Southeast False Creek Properties, Shahram and Peter Malek, agreed to go into receivership to avoid pending legal action.

The city was preparing to go to the B.C. Supreme Court to petition Millennium into receivership.
Receivership is a form of bankruptcy in which a company can avoid liquidation by reorganizing with the help of a court-appointed trustee.

There are a total of 1,108 units in the Millennium Water project. The marketing company hired by Millennium has managed to just sell 259 units out of 737 market sales units, about 35 per cent of the total. This number includes 223 pre-sales units that were sold last year.

The agreement allows the receiver to make immediate decisions about a new marketing strategy and is designed to secure the payment of about $740 million dollars that is still owed by Millennium to the City. The loan for construction represents about $560 million.

“First, we will sit down and produce a marketing plan that makes adjustments to price,” said Meggs “As part of the agreement, Millennium has pledged other types of security that will be used to close the gaps in the repayment program.”

According to Meggs, cutting prices could reduce the amount of revenue that was anticipated from the sale of the units and create a payment gap.

Almost half of the unsold units left on the market are priced at less than $1 million, but another 24 per cent of these units are priced between $1 million and $2 million.
Twenty eight per cent cost more than $2 million.
About 60 per cent of the 119 market rental units have been rented out.

The city is working with a non-profit housing operator to manage 252 social housing units.

New York-based Fortress Investment Group, which was the developer’s original lender, stopped financing the project.

This move forced the city to buy out the building loan to better control costs and finish in time for the 2010 Winter Games.

International tourist visits to British Columbia slipped for the second straight month in September, falling to 343,664 visitors, down 0.5 per cent from August.

A 2.3 per cent drop in non-U. S. international visits during the month accounted for the decline, as U.S. visits edged up by 0.5 per cent. Based on data adapted from Statistics Canada by Central 1 Credit Union, September declines were driven by a drop in entries from Asia following a strong uptick in visits recorded from June to August.

Despite September's decline, non-U. S. international visits have helped stabilize B.C. tourism during the post-recession and post-Olympics periods. After a surge during the Olympic period, U.S. tourist visits have reverted back to the decade-long downward trend.

In contrast, non-U. S. international tourist visits have remained relatively steady and near levels reached during the Olympic period due to a higher inflow of tourists from Asia and Oceania.

Nonetheless, international tourist visits still remain low despite being up three per cent from the same period in 2009.

Excluding 2009, which was heavily influenced by the recession, year-to-date international entries are the lowest since 1995.

OCTOBER MLS SALES RISE IN MOST REGIONS

Based on data released this week by the Canadian Real Estate Association, housing sales in British Columbia rose in October for a third consecutive month. Seasonally adjusted sales increased 13 per cent from September to reach an annualized pace of 73,840 units and marked the highest level of activity since May.

Sales gains were broad-based across the province with 10 of the 12 local real estate boards reporting higher sales. Monthly gains were particularly strong in the Chilliwack, Victoria and Okanagan area markets.

While sales have embarked on an aggressive upward trend in recent months and should continue to rise in the quarters ahead, overall sales still remain relatively low. Despite near-record-low mortgage rates, the pace of provincial housing activity is similar to levels observed in 2001 and remains well below the 85,000 to 110,000 range observed during the middle of the decade.

The low ratio of sales to active listings outside the Lower Mainland suggests that most areas of the province continue to favour buyers. Month-end inventory levels and the flow of new listings have declined since the middle of the year, but most markets remain oversupplied, particularly the Okanagan, Kootenay, and on Vancouver Island. This suggests that there could be further downward pressure on prices in some markets.

In the Lower Mainland, sales-to-active listings ratios suggest a balanced market, which has been reflected in a slight rise in the region's MLSLink Housing Price Index since August.

NEW VEHICLE SALES UP IN SEPTEMBER

New vehicle sales in British Columbia and Yukon, Northwest Territories and Nunavut rose 1.5 per cent from August to reach a seasonally adjusted 13,379 units in September.

Vehicle sales have followed an upward trend since April, having risen in five of the last six months. Increased sales of trucks have more than offset a continued downward trend in the number of cars sold.

Annualized sales are hovering near 160,500 vehicles, which is well below an average monthly trend of 193,500 annualized vehicles sold from 2005 to late 2008, despite population increases since then. Auto sales are expected to rise over the next year as the economy grows moderately, but sales are expected to remain relatively low as consumers remain hesitant to take on additional debt.