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

Greater Vancouver housing market maintains a steady spring pace

VANCOUVER, B.C. – May 2, 2012 – Home sale and listing activity has maintained a consistent pace on the Multiple Listing Service® (MLS®) in Greater Vancouver in recent months, which has helped create balanced conditions for the region’s housing market.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 2,799 on the Multiple Listing Service® (MLS®) in April 2012. This represents a 13.2 per cent decline compared to the 3,225 sales recorded 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.

“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.
 
New listings for detached, attached and apartment properties in Greater Vancouver totalled 6,056 in April 2012. This represents 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 on the region’s MLS®.

Last month’s new listing total was 6.7 per cent above the 10-year average for listings in Greater Vancouver for April. At 16,538, the total number of homes listed for sale on the region’s MLS® increased 8.5 per cent in April compared to last month and increased 16 per cent from this time last year.

“Recent activity has had a stabilizing effect on home prices at the regional level, although pricing can vary depending on area and property type,” Klein said “To best understand conditions within your area of interest, it’s important to do your homework and consult a local REALTOR®.”

The MLS® HPI benchmark price for all residential properties in Greater Vancouver currently sits 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. The benchmark price for all residential properties in the Lower Mainland is $612,000, which is a 3.4 per cent increase compared to April 2011 and a 2.6 per cent increase compared to three months ago.
 
Sales of detached properties on the MLS® in April 2012 reached 1,126, a decline of 19.7 per cent from the 1,402 detached sales recorded in April 2011, and a 17.8 per cent decrease from the 1,370 units sold in April 2010. The benchmark price for detached properties increased 6.3 per cent from April 2011 to $1,064,800.

Sales of apartment properties reached 1,190 in April 2012, a decline of 0.9 per cent compared to the 1,201 sales in April 2011, and a decrease of 22 per cent compared to the 1,526 sales in April 2010.The benchmark price of an apartment property increased 1.1 per cent from April 2011 to $375,900.Townhome property sales in April 2012 totalled 483, a decline of 22.3 per cent compared to the 622 sales in April 2011, and a 21.6 per cent decrease from the 616 townhome properties sold in April 2010. The benchmark price of a townhome unit increased 1.7 per cent between April 2011 and 2012 to $487,300.

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.

Three new towers proposed for Rogers Arena vicinity - Vancouver New Development

Public consultations beginning this month on the development of towers around the Rogers Arena mean Vancouver's skyline could change in an area that has seen plenty of controversy.

Aquilini Development's proposal to build three new residential and commercial towers may upset some residents, but community activist Sandy Garossino supports the idea.

She believes the project could convince the B.C. Pavillion Corporation to abandon reviving the idea of building a mega-casino in favour of condo and office tower development in Yaletown.

"We're still concerned the casino idea is going to come back," Garassino said. "There is just such a strong feeling that this is a community; this is a residential neighrbourhood."
Public consultation on the three towers will begin on Feb. 20.

While the proposed changes to the skyline and the density of the neighbourhood make the project noteworthy, it's also the first to consider what would happen if city council approves demolishing one of the two viaducts in Vancouver.

Vancouver city councillor Geoff Meggs has long championed the contentious idea of removing the viaducts in favour of more public and residential development.

He says the long-term possibility of a fourth tower where the Dunsmuir Viaduct now runs fits with the city's vision for the area.

Cat: Vancouver Real Estate

Group-on Concept For Vancouver New Condos

Cat: Vancouver Real Estate

Overseas investors are buying properties in Vancouver

Rich Asians Buying B.C. Real Estate By Helicopter

Cat: Vancouver Real Estate

Greater Vancouver housing market trends near long-term averages as spring market approaches

Closer alignment between home buyer and seller activity helped bring greater balance to the Greater Vancouver housing market in February.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 2,545 on the MLS® system in February 2012. This represents a 61.4 per cent increase compared to the 1,577 sales recorded in January 2012, a decline of 17.8 per cent compared to the 3,097 sales in February 2011 and a 2.9 per cent increase from the 2,473 home sales in February 2010.

February sales in Greater Vancouver were the third lowest February total in the region since 2002, though only 151 sales below the 10-year average.
“With a sales-to-active-listings ratio of over 18 per cent, we see fairly balanced conditions in our marketplace as we move into the traditionally busier spring season,” Rosario Setticasi, REBGV president said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,552 in February 2012. This represents a 2.5 per cent decline compared to February 2011 when 5,693 properties were listed, and a 3.5 per cent decline compared to January 2012 when 5,756 homes were added to the MLS® in Greater Vancouver.
Last month’s new listing count was the second highest February total in Greater Vancouver since 1996.

At 14,055, the total number of residential property listings on the MLS® increased 12 per cent in February compared to last month and increased 17.9 per cent from this time last year.
“Region-wide we’ve seen relative stability in home prices over the last six months, but it’s important to do your homework and consult your REALTOR® because pricing can vary considerably depending on the neighbourhood and property type,” Setticasi said.

The MLS® HPI benchmark price for all residential properties in Greater Vancouver currently sits at $670,900, up 6 per cent compared to February 2011 and an increase of 0.9 per cent compared to January 2012. The benchmark price for all residential properties in the Lower Mainland is $601,300, an increase of 5.5 per cent compared to February 2011.

Sales of detached properties on the MLS® in February 2012 reached 1,101, a decline of 21.5 per cent from the 1,402 detached sales recorded in February 2011, and a 12 per cent increase from the 983 units sold in February 2010. The benchmark price for detached properties increased 10.5 per cent from February 2011 to $1,042,900.

Sales of apartment properties reached 1,020 in February 2012, a decline of 15.4 per cent compared to the 1,206 sales in February 2011, and a decrease of 5 per cent compared to the 1,074 sales in February 2010. The benchmark price of an apartment property increased 2.8 per cent from February 2011 to $373,300.

Townhome property sales in February 2012 totalled 424, a decline of 13.3 per cent compared to the 489 sales in February 2011, and a 1.9 per cent increase from the 416 townhome properties sold in February 2010. The benchmark price of a townhome unit increased 0.7 per cent between February 2011 and 2012 to $472,800.

Cat: Vancouver Real Estate

Selection broadens and demand eases to kick off 2012 in the Greater Vancouver housing market

VANCOUVER, B.C. – February 6, 2012 – Greater Vancouver home sellers were more active than buyers in January and overall home prices, according to the new MLS® Home Price Index (MLS® HPI), continued to experience more stability and less fluctuation compared to the beginning of 2011.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 1,577 on the Multiple Listing Service® (MLS®) in January 2012.

 
This represents a 4.9 per cent decrease compared to the 1,658 sales recorded in December 2011, a decrease of 13.3 per cent compared to the 1,819 sales in January 2011 and an 18 per cent decline from the 1,923 home sales in January 2010.

 
January sales in Greater Vancouver were the second lowest January total in the region since 2002, though only 146 sales below the 10-year average.

“We’re seeing trends emerge in our market that favour buyers, such as increased selection and  more stability in pricing compared to this time last year,”  Rosario Setticasi, REBGV president  said. “Last month’s activity tells us that competition amongst home buyers was reduced in  January, which means that individuals looking to purchase a home had more time to do their  homework, consult with their REALTOR®, and make a decision.”

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,756 in January. This represents a 19.9 per cent increase compared to the 4,801 new listings reported in January 2011, and a 253.3 per cent increase compared to the 1,629 new listings reported in December 2011.

Last month’s new listing count was the highest January total in Greater Vancouver since 1995.

The total number of properties currently listed for sale on the Greater Vancouver MLS® is 12,544, a 12.5 per cent increase compared to December 2011 and an increase of 20.2 per cent  compared to January 2011.

Today marks the launch of the MLS® Home Price Index (MLS® HPI), the best and purest way of determining price trends in the housing market. The MLS® HPI was pioneered by six  founding partners: the real estate boards of Calgary, Fraser Valley, Greater Montreal, Greater  Vancouver, and Toronto and the Canadian Real Estate Association. The partners contracted with  Altus Group to develop the MLS® HPI which measures home price trends in the five major  markets serviced by those boards.

The new index replaces the MLSLink Housing Price Index, which had been used by Greater  Vancouver and Fraser Valley REALTORS® since the mid 1990s. MLS® HPI statistics should  not be compared with previous MLSLink HPI statistics.

“The MLS® HPI is a national collaboration intended to give the public a more reliable and  comprehensive tool to understand home price trends across the country,” Setticasi said.

The MLS® HPI benchmark price for all residential properties in Greater Vancouver currently sits at $660,600, up 5.7 per cent compared to January 2011 and down 0.1 per cent compared to December 2011. The MLS® HPI also tracks home prices across the Lower Mainland.

The benchmark price for all residential properties in the Lower Mainland is $593,300, an increase of 5 per cent compared to January 2011.

Sales of detached properties on the MLS® in January 2012 reached 659, a decline of 16.9 per cent from the 793 detached sales recorded in January 2011, and a 6.5 per cent decrease from the 705 units sold in January 2010. The benchmark price for detached properties increased 11.3 per cent from January 2011 to $1,034,700.

Sales of apartment properties reached 657 in January 2012, a decline of 7.9 per cent compared to the 713 sales in January 2011, and a decrease of 26.3 per cent compared to the 891 sales in January 2010.The benchmark price of an apartment property increased 2.4 per cent from January
2011 to $371,500.

Attached property sales in January 2012 totalled 261, a decline of 16.6 per cent compared to the 313 sales in January 2011, and a 20.2 per cent decrease from the 327 attached properties sold in January 2010. The benchmark price of a townhome unit declined 0.5 per cent between January  2011 and 2012 to $468,000.

Cat: Greater Vancouver Real Estate

General price declines in B.C. make province 'nation's new weak spot,' according to report

Canada's housing market is not a bubble, it's a balloon. And unlike the catastrophic decline the U.S. housing market experienced in 2008, the market in Canada will deflate slowly rather than pop, according to a report by BMO Capital Markets.

The sole possible exception is Vancouver, where the number of unoccupied condominiums is high due to building the Olympic Village, economists Sherry Cooper and Sal Guatieri wrote in "Will Canada's Housing Boom Forge On, Fizzle Out, or Flame Out?"

But generally, the report says that despite rising household debt, low interest rates and rising home prices, it is unlikely that a sudden correction will take place.

"The main take-away is that the national housing market appears some-what pricey, but is far removed from bubble territory," the report stated.

It compares average resale prices with median family incomes and finds the ratio is 4.9 nationally, compared to 3.2 a decade ago.

In Vancouver, though, where house prices have gone up 159 per cent in the last 10 years - compared to 104 per cent nationally - the ratio of price to income is 10, nearly double what it was a decade ago, the report said. Victoria is also high, at 5.7, but not as high as Toronto, which has a price to income ratio of 6.7.

Montreal has also seen prices rise dramatically - by 153 per cent - and its price-to-income ratio double, but that ratio remains low at 4.5.

Despite rising home prices in most of Canada's major cities, the growth doesn't seem to be excessive, the report said. But elevated valuations could lead to trouble in the event of a shock.

For example, if interest rates were to spike by about four percentage points, the affordability of homes would quickly drop throughout the country. A severe recession would also affect affordability.

But the chance of either of those events happening is unlikely, the report authors stated. Also, except for a few markets, the national housing boom has already cooled.

And British Columbia is now "the nation's new weak spot, with prices generally declining," the report said.

Some of that decline reflects fewer sales of high-end homes.

"[But] some real underlying softness is at play, and will likely continue until valuations improve," the report stated.

Tsur Somerville, director for the Centre for Urban Economics and Real Estate at the Sauder School of Business at UBC, said BMO's report is one of many predicting slight drops or slight increases in the housing market rather than a major correction.

"The kinds of things you need to get major corrections, like oversupply or radical change in the financing environment, just aren't there," Somerville said.

And just because the overall market will be flat, it doesn't mean that certain portions of it - such as areas that have had higher run-ups in prices over the past few years - aren't in for a correction, he said.

Helmut Pastrick, chief economist with Central 1 Credit Union, believes that while there may be a soft landing at some point in the future, it won't be in 2012.

"The market is holding up generally well and it looks like 2012 is going to be fairly similar to 2011 in terms of overall unit sales," Pastrick said. "Housing prices will go up by some amount, sales will also increase by a small amount."

And while the economy isn't booming, it is growing, interest rates are low and there is job growth, he said.

"So the conditions to me aren't ripe for a correction."

Meanwhile, Bloomberg reported that Canada's banking regulator fears that Canadian lenders are loosening standards on mortgages that are similar to U.S. subprime loans, posing an "emerging risk" to financial institutions.

Banks and other lenders are becoming "increasingly liberal" with mort-gages and home-equity credit lines that don't require individuals to prove their income, according to documents obtained by Bloomberg under freedom of information law request from the Office of the Superintendent of Financial Institutions.

"Non-income qualified" lending has been added to a list of issues to be considered by OSFI's "emerging-risk committee," Bloomberg reported the documents showing.

Pastrick disputes this finding.

"We're not subprime, not by a long shot," he said.

Lenders in Canada have "credible lending criteria and standards." And while lenders will lower rates to grab market share "credit isn't easy like it was in the U.S.," he said.

Somerville believes the problem is with home equity lines of credit which have become more popular over the year and don't always require income verification.

Not only are lines of credit given out without the same level of super-vision or the same standard of care that is applied to mortgages, they are also junior in seniority to mortgages, Somerville said.

With a file from Bloomberg

© Copyright (c) Postmedia News

Picture by: All rights reserved by JOHN CORVERA

Downtown Vancouver Small rental suites

The country's smallest rental suites are unveiled in Vancouver, but demonstrators disrupt the news conference, demanding access to housing.

A Vancouver developer has unveiled 30 "micro-lofts," which are under 300 square feet in size and are touted as the smallest self-contained furnished rental apartments in Canada.

They are in a newly renovated building at 18 West Hastings Street, across from Save-On Meats in Vancouver's Downtown Eastside and were displayed Monday. The suites, which range in size from 226 to 291 square feet, go for an average of $850 per month, including cable and internet.
"I was looking for an affordable living space ... and the suite was perfect," said Lia Cosco, one of the building's tenants. "The unique allocation of space and the design concepts make the small space very inviting and comfortable to live in."

While the suites may seem microscopic to some, the developer says the units maximize the square footage by using built-in pull-down wall beds, folding tables and compact appliances.
'This is a homelessness strategy'

The city, along with developers Reliance Properties and ITC Construction Group, are billing the suites as "an affordable and much needed non-subsidized rental housing opportunity in downtown Vancouver."

However, that description doesn't sit well with a handful of protesters who stormed the unveiling on Monday.

"I don't understand how this is part of an affordable housing strategy," said demonstrator Ivan Drury. "This is not an affordable housing strategy. This is a homelessness strategy."
The project is in a previously abandoned building, which had been operating as a single room occupancy (SRO) hotel. Protesters are calling on the city to stop converting former SROs into brand new apartments, which are being marketed at a significantly higher cost.
However, Coun. Kerry Jang defended the project, maintaining it does fit in with the city's affordable housing strategy.

"Mixed neighborhoods work best," he said. "It's because some people bring in the money, they live in these places [and] they end up subsidizing, keeping the businesses open."

Cat: Vancouver Real estate

Balanced real estate market prevailed through much of 2011

REBGV Stats December 2011

The 2011 Greater Vancouver housing market began with heightened demand in regional hot spots and concluded with greater balance between seller supply and buyer demand.

The Real Estate Board of Greater Vancouver (REBGV) reports that total sales of detached, attached and apartment properties in 2011 reached 32,390, a 5.9 per cent increase from the 30,595 sales recorded in 2010, and a 9.2 per cent decrease from the 35,669 residential sales in 2009. Last year’s home sale total was 6.3 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 2.7 per cent in 2011 to 59,549 compared to the 58,009 properties listed in 2010. Looking back further, last year’s total represents a 12.8 per cent increase compared to the 52,869 residential properties listed in 2009. Last year’s listing total was 11.1 per cent above the ten-year average for annual Multiple Listing Service® (MLS®) property listings in the region.

“It was a relatively balanced year for the real estate market in Greater Vancouver with listing totals slightly above historical norms and sale numbers slightly below,” Rosario Setticasi, REBGV president said.

Residential property sales in Greater Vancouver totalled 1,658 in December 2011, a decrease of 12.7 per cent from the 1,899 sales recorded in December 2010 and a 29.7 per cent decline compared to November 2011 when 2,360 home sales occurred.

More broadly, last month’s residential sales represent a 34.1 per cent decrease over the 2,515 residential sales in December 2009, a 79.4 per cent increase compared to December 2008’s 924 sales, and a 12.6 per cent decrease compared to the 1,897 sales in December 2007.

The overall residential benchmark price, as calculated by the MLSLink Housing Price Index®, for Greater Vancouver increased 7.6 per cent to $621,674 between Decembers 2010 and 2011. However, prices have decreased 1.5 per cent since hitting a peak of $630,921 in June 2011.

“Our market remained in a balanced state for most of the year, although higher levels of demand for detached properties in the region’s largest communities caused prices in certain areas to rise higher than others,” Setticasi said. “For example, the benchmark price of a single-family detached home experienced double-digit increases in nine areas within the region over the last 12 months.”

New listings for detached, attached and apartment properties in Greater Vancouver totalled 1,629 in December 2011. This represents a 4.1 per cent decline compared to the 1,699 units listed in December 2010 and a 49.4 per cent decline compared to November 2011 when 3,222 properties were listed.

Sales of detached properties in December 2011 reached 630, a decrease of 18.1 per cent from the 769 detached sales recorded in December 2010, and a 30.2 per cent decrease from the 902 units sold in December 2009. The benchmark price for detached properties increased 11.2 per cent from December 2010 to $887,471.

Sales of apartment properties reached 774 in December 2011, a decline of 4.6 per cent compared to the 811 sales in December 2010, and a decrease of 32.9 per cent compared to the 1,154 sales in December 2009.The benchmark price of an apartment property increased 3.7 per cent from December 2010 to $401,396.

Attached property sales in December 2011 totalled 254, a decline of 20.4 per cent compared to the 319 sales in December 2010, and a 44.7 per cent decrease from the 459 attached properties sold in December 2009. The benchmark price of an attached unit increased 4.2 per cent between December 2010 and 2011 to $511,499.

Below is the complete report:

Car: Vancouver Real Estate

B.C. Assessment 2012

B.C. Assessment released its data on the value of homes in the province on Tuesday. While some regions saw values skyrocket, others dropped. Take a look to see how your property's value (and your taxes) will jump this year.

List ranked in order from largest hike to biggest drop in values:

1. Vancouver - Up 16.42%

2. Richmond-Delta - Up 12.83%

3. North Fraser (Burnaby, Coquitlam, etc.) - Up 8.45%

4. Surrey-White Rock - Up 7.83%

5. Peace River - Up 7.44%

6. North Shore-Squamish Valley - Up 6.48%

7. Northwest B.C. (Prince Rupert, Terrace, Kitimat) - Up 4.74%

8. Prince George - Up 2.36%

9. Fraser Valley - Up 1.67%

10. Nelson/Trail - Up 1.08%

11. Cariboo - Up 0.32%

12. Central Vancouver Island (Nanaimo) - Down 0.06%

13. Kamloops - Down 0.19%

14. Capital (Greater Victoria) - Down 0.23%

15. Courtenay - Down 0.72%

16. Penticton - Down 1.2%

17. East Kootenay - Down 1.71%

18. Kelowna - Down 1.81%

19. Vernon - Down 3.1%

Cat: BC Real Estate

Homeowner grant threshold raised to $1.285M

The B.C. government has raised the threshold for homeowner property grant to $1.285 million to accommodate rising property values.

The news comes as hundreds of thousands of annual property assessments are being prepared for B.C. property owners by the government. Last year, the threshold was $1.15 million. The grant effectively reduces the property tax paid by most B.C. homeowners by up to $1,045.

Every year the province adjusts the grant to ensure 95.5 per cent of homeowners receive the full amount of the grant. Those with homes above the threshold may still be eligible for part of the grant.

"The homeowner grant provides a maximum reduction in residential property taxes on principal residences of $570 in the Capital, Greater Vancouver and Fraser Valley regional districts and $770 elsewhere in the province," said a statement issued by the government on Tuesday.

"An additional grant of $275 is available to those who are age 65 or over, permanently disabled or a veteran of certain wars,."

"We continue to see challenging economic times around the world. By maintaining the homeowner grant, we continue to help families with the costs of owning their homes," said Finance Minister Kevin Falcon in the statement.

The grant is only available to Canadian citizens and to landed immigrants who normally reside in B.C.

Cat: Vancouver Real Estate

REGIONAL HOUSING MARKETS:
A YEAR IN REVIEW AND A LOOK AHEAD

Gradual unwinding of the over-valuation in house prices across the country

Highlights

• As the year draws to a close, we conclude that the Canadian housing market put forth a respectable showing. Annual price gains are estimated at 7.5% in 2011 and sales’ growth ought to come in positive as well, but at a much more modest pace of 2.2%.
• Behind the headline figure, we have seen gains in prices and sales activity decelerate in recent months. Some of the underlying factors include tighter insured mortgage financing rules and weakened confidence related to the stability of the economic recovery. Helping cushion the impact of these negative forces has been the persistence of low mortgage rates.
• We believe that the average Canadian home price is over-valued by roughly 10%. Metrics like price to income, price to rent, and affordability all support this conclusion. We expect that the price excess will gradually unwind over the next two years in light of a softening in employment conditions in 2012 followed by higher interest rates in 2013.
• In contrast to the resale market, starts continue to come in well above expectations. The strength witnessed over the last few years has been driven exclusively by the multi-residential category. Consistent with weaker resale markets, we expect new starts to trend toward 170,000-180,000 units in the 2012-13 period.
• In addition to our national perspective, we provide an in-depth forecast of twelve major markets. While no urban center will be immune to the macroeconomic and interest rate headwinds, Calgary and Edmonton are likely to do better than the rest. By contrast, a larger-than-average price and sales correction looks to be in store for both Toronto and Vancouver.

Homebuyers came out in the early part of 2011 to take advantage of record-low interest rates and to beat out changes to new insured mortgage financing rules. With Canadians bringing forward their purchases and national job gains tapering off since the autumn, the past few months have recorded more modest price and sales gains. In all, 2011 put forth a very respectable showing with price appreciation clocking in at an estimated 7.5% and sales growth also positive, but at a more modest 2.2%. At around 190,000 units, housing starts also continued to come in above long-run averages.

Looking ahead, we anticipate a tug-of-war action to take hold in the Canadian real estate market.  At one of the rope is the magnetism of low interest rates; at the other end are subdued prospects for economic, income and employment growth. Ultimately, we expect the economic side of the equation to win out over the near-term. In particular, the first half of 2012 is likely to be characterized by ongoing confidence-sapping events in Europe, global financial turbulence and slowing world economic growth.

While housing activity is expected to do somewhat better in the second half of the year, as external clouds start to dissipate, rising Canadian interest rates in 2013 should erect the next road block in the way of housing markets. Overall, we expect sales to record annual average declines of 2.4% and 3.5% in 2012 and 2013, respectively. Prices are poised to suffer a similar fate – annual average declines of 1.9% in 2012 and 3.6% in 2013. Starts should dip to an average 170,000 to 180,000 units in 2012-13. Collectively, these adjustments will gradually erase the over-valuation in the marketplace.

While no urban center will be immune from economic volatility and higher prevailing interest rates, some regions are expected to do better than others over the next two years. Among the twelve major markets profiled in this report, Calgary and Edmonton ought to lead the pack. Solid economic fundamentals and the absence of a recent run-up in prices support our call. Toronto and Vancouver do not appear to be as lucky – we have them experiencing a greater-than-average correction in both sales and prices over the next two years.

Canada’s housing market defies the odds in 2011

In 2011, the national housing market turned in a respectable performance despite some notable hurdles. In the spring, the federal government responded to growing signs of excessive household indebtedness by announcing a further tightening in the rules surrounding insured mortgages.

In order to beat this announced change, we suspect that many homebuyers brought forward their purchases earlier in the year. In the summer, a combination of concerns about European sovereign debt, a U.S. government credit rating downgrade and worries about the global recovery led to increased uncertainty. Businesses have responded by reducing hiring in Canada since the autumn. Yet, home sales are headed for their seventh gain in ten years; prices are on tap to see their ninth gain in ten years. Still, a closer look at the data shows that activity in most of Canada’s major markets has moved past its peak and has since landed softly.

Average residential prices have also been skewed by outsized strength in Vancouver and to a lesser extent, Toronto. If we were to exclude these two major markets, the price and resale activity gains would be much more muted than the headline number would suggest.

In the new home market, starts have fallen from their peak levels of 229,000 recorded in 2007. But at an estimated 192,000 new starts in 2011, readings continue to remain well above demographic fundamentals, which we calculate to be 180,000 units. Similar to the resale side of the story, the national numbers have been skewed disproportionately by strong performances in large urban markets, notably Toronto. If we were to exclude Toronto from the national tally, total starts would have declined significantly in 2011.

Metrics point to over-valuation embedded in home
prices today

As we recast our focus on where the housing market is headed, there has been considerable attention given to the extent of over-valuation in Canadian home prices. There is no definitive measure that one can point to quantify the degree of excess (with absolute certainty) imbedded in average residential prices in Canada today. Each measure carries with it some underlying concern about the conclusions that can be made. For example, if we use the average price-torrent ratio as a benchmark, it would tell us that homes are over-inflated by as much as 75% relative to the long-run average. However, the ratio inherently ignores the impact of changing mortgage rates, the presence of provincial rent control measures, and a potential divergence in quality between owned and rental accommodation.

Taking a look at just real home prices would lead to a conclusion that houses are priced more than 60% higher than the long-run average. Still, historical prices do not factor in key structural changes over time, such as lower trend mortgage rates, longer amortization periods, rising land values, transit development nearby, improved home quality and rising incomes. The price-to-income measure attempts to take income movements into consideration, but still does not capture some of the other factors previously presented. Based on this measure, prices are 44% over-valued. A more defensible measure assumes that total housing costs relative to income eventually revert back to a long term average. If we use this measure and assume a return to more normal levels of interest rates, the degree of overvaluation would be around 10-15%. Given the behavior of sales and price trends in recent years – one that does not share bubble-like characteristics such as those in the U.S. pre-2007 – we are comfortable with this estimate of national price over-valuation.

Less supportive factors on tap for housing

When we look ahead to our 2012-13 forecast period, we see that the headwinds facing both supply and demand will increase in intensity. In turn, we anticipate resale price froth to gradually evaporate leaving the market in a more balanced position relative to where it stands today. More specifically, we expect both sales and prices to record annual average declines in both 2012 and 2013, with the latter year expected to record the brunt of the hit. Several factors support our forecasts, which we briefly delve into next.

Modest economic, income and employment growth over
short-term

Real GDP growth in Canada is estimated at a solid 2.4% in 2011. However, storm clouds will increasingly hang over our small open economy during the first half of 2012. Much of the risk surrounds the European sovereign debt crisis and the failure of politicians to take decisive action so far to pour water over the flame. The base case scenario embedded in our forecast includes a recession within Europe, coming to a climax in early 2012 when borrowing pressures and requirements will be heightened. Financial market volatility and a global economic slowdown will likely play out as a result. In this context and given our export-based economy, real GDP growth is projected to slow to a minimal 1% on average during the first half of 2012. With these headline numbers, the national unemployment rate is expected to increase from 7.3% to 7.7% by the middle of next year.

National employment growth is also poised to be sub-1.0%, on a quarterly basis, during the first half of the year, while gains in after-tax incomes will be significantly restrained.

Prices and sales tend to be negatively correlated with financial market volatility and job and economic uncertainty – a house is too big an asset for most families to jump into when job security is in question and financial portfolios are vulnerable to sizeable swings in total value. As a consequence, resale prices and sales are expected to decline during the first half of 2012, before the turbulence eases in the months thereafter. In our forecast, we make the explicit assumption that – faced with a mounting crisis – leaders in Europe ultimately take bold action to address the situation, thus delivering benefits to financial markets and economies around the world. As such, Canada’s economy and job market is likely to regain traction in the second half of 2012 and into 2013, with real GDP growth rebounding to above 2.0%.

At the regional level, we believe the resource-based provinces of Alberta, Saskatchewan and Newfoundland and Labrador will continue to carry the best economic prospects over the 2012-13 period. The manufacturing-heavy regions of Ontario, Québec and Manitoba are expected to come in close to the national average. Last but not least, the Maritime provinces should see sub-par numbers over the next two years, with Nova Scotia being the as shipbuilding work gets underway.

Below is the full report:

Cat: Canada Real Estate

REBGV Stats November 2011

Historically normal activity keeps the Greater Vancouver housing market in a balanced state

The Greater Vancouver housing market saw relatively typical home sale and listing activity in November.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties on the region’s Multiple Listing Service® (MLS®) reached 2,360 in November. This represents a 5.9 per cent decline compared to the 2,509 sales in November 2010 and a 1.9 per cent increase compared to the 2,317 sales recorded in October 2011.

Looking back further, last month’s residential sales total is 5.8 per cent below the ten-year average for sales in November.

“The pace of home listings entering the market eased slightly in November, compared to recent months, while sale levels remained fairly normal for this time of year,” Rosario Setticasi, REBGV president said. “November activity helped put our market firmly in balanced territory.”

New listings for detached, attached and apartment properties in Greater Vancouver totaled 3,222 in November. This represents a 26.3 per cent decline compared to the 4,374 new listings reported in October 2011, but a 6.3 per cent increase compared to November 2010 when 3,030 properties were listed for sale on the MLS®.

Looking back further, last month’s new listing total is 2.1 per cent above the ten-year average for November.

The total number of properties currently listed for sale on the Greater Vancouver MLS® sits at 14,090, a decline of 9 per cent compared to October 2011 but an increase of 13 per cent when compared to this time last year.

The MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 7.2 per cent to $622,087 in November 2011 from $580,080 in November 2010.

Since reaching a peak in June of $630,921, the benchmark price for all residential properties in the region has declined 1.4 per cent.

Sales of detached properties on the MLS® in November 2011 reached 916, a decrease of 12.8 per cent from the 1,050 detached sales recorded in November 2010, and a 21.3 per cent decrease from the 1,164 units sold in November 2009. The benchmark price for detached properties increased 11.4 per cent from November 2010 to $890,204.

Sales of apartment properties reached 1,000 in November 2011, a 4.9 per cent decrease compared to the 1,052 sales in November 2010, and a decrease of 28.4 per cent compared to the 1,396 sales in November 2009. The benchmark price of an apartment property increased 2.7 per cent from November 2010 to $399,686.

Attached property sales in November 2011 totaled 444, a 9.1 per cent increase compared to the 407 sales in November 2010, and a 15.1 per cent decrease from the 523 attached properties sold in November 2009. The benchmark price of an attached unit increased 4.5 per cent between November 2010 and 2011 to $510,960.

Cat: Vancouver Real Estate

Metro Vancouver real estate prices up 7.5 per cent year over year: report

New listings are sharply higher than a year ago, but much lower than September

Benchmark home prices in Metro Vancouver have increased 7.5 per cent to $622,955 in October 2011 from $579,349 in October 2010, according to the latest monthly report from the Real Estate Board of Greater Vancouver.

However, since reaching a peak in June of $630,921, the benchmark price — that of a typical home — for all residential properties in the region has declined 1.3 per cent.

The report also said that sales of detached properties in October reached 974, about the same as October 2010.

As well, new listings for all properties totalled 4,374 in October, an 18.3-per-cent increase compared to October 2010, when 3,698 properties were listed for sale, and a 23-per-cent decrease compared to the 5,680 new listings in September 2011.

The total number of properties listed for sale now sits at 15,377, 9.3 per cent higher than the 14,075 properties listed for sale during the same period last year.

Meanwhile, the benchmark price of a single family detached home in the Fraser Valley in October was $530,335, an increase of 4.9 per cent compared to $505,759 in October 2010 and on par with the price in September, according to the Fraser Valley Real Estate Board.

Cat: Vancouver Real Estate

© Copyright (c) The Vancouver Sun

Gregor Robertson of Vision Vancouver's victory speech

Vancouver mayor re-elected.

Cat: Vancouver

Canadian home values have doubled since 2000

A new report suggests that the average home value has doubled in most of Canada's big cities since the millennium.

Re/Max says it examined the value of homes in 16 major markets across Canada, calculating the changes that occurred from 2000 to 2010.

The real estate organization found that an average home in these markets was worth $339,030 as of last year, more than double the average price of $...163,951 in 2000.

Re/Max says that Canadians have spent an estimated $450 billion on renovations over the decade, while more than $340 billion in residential building permits were issued.

This heavy-duty investment has helped build value in individual properties while an increasing number of people looking for housing has helped spur demand.

"They key to Canada's housing evolution has been an increase in population," says Michael Polzler, the executive vice president of Re/Max Ontario-Atlantic Canada Inc.

With further sharp population growth expected in the years ahead, Polzler says that portends "continued investment and continued growth in Canadian housing values."

The hundreds of billions poured into rejuvenating homes and properties across the country have also created new trends in urban neighborhoods, Re/Max says in its report.

In cities where space is scarce, residents are increasingly seeing small properties snapped up and turned into new structures, whether personal residences, townhomes or high-rise apartment buildings.

Condominiums have also become more popular and more varied in terms of what they can offer. Re/Max says buyers can now choose from mixed-use residential, live-work studios, lofts, townhomes and condo bungalows in major markets.

The 16 markets that Re/Max studied were: Greater Vancouver; Victoria; Kelowna, B.C.; Edmonton; Calgary; Regina; Saskatoon; Winnipeg; Ottawa; Greater Toronto; Hamilton-Burlington; Kitchener-Waterloo in Ontario; London, Ont.; Saint John, N.B.; Halifax-Dartmouth and St. John's.
No markets from Quebec or the Territories were included in the Re/Max analysis.

Cat: Canada Real Estate

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

Cat: Vancouver Real Estate

To buy or rent: that is the question

In a report earlier this year, Royal Bank of Canada chief economist Craig Wright suggested home ownership for a growing number of Canadians has become an impossible dream. That’s certainly true in Vancouver, where the affordability index is at record highs, with the average home price at nearly 10 times the median income.

But perhaps ownership has been oversold as an aspirational goal. As thousands of Americans have discovered, sometimes the dream becomes a nightmare.

In the United States, home ownership wasn’t just a dream, it was held up as an inalienable right. Washington pressured financial institutions to lend money to almost anyone who asked, giving rise to the NINJA mortgage (no income, no job, no assets).

Because mortgage interest was (and still is) tax deductible, homeowners did not bear the full burden of borrowing. Financial institutions turned to the wizards of Wall Street to devise derivatives that might mitigate the heightened risk.

The U.S. government had already sanctioned mortgage-based securities, having set up the Government National Mortgage Association (Ginnie Mae) in 1968 and the Federal Home Loan Mortgage Corp. (Freddie Mac) in 1970 to expand the secondary market for mortgages.

Inevitably, homeowners without the means to repay their debts defaulted on their mortgages and the derivatives based on them, including mortgage-backed securities and collateralized debt obligations, became worthless. Not knowing the extent of exposure to toxic debt, financial institutions became reluctant to lend to each other.

The result was a credit crisis that plunged much of the world into recession.

The housing crash that crippled the U.S. didn’t happen in Canada for several reasons. For a start, more prudent lending practices prevented the emergence of a significant subprime mortgage market. Canada’s regulatory regime acted as a rudder that kept the financial services industry on an even keel. And besides the capital gains exemption on the sale of a principal residence, there is no particular tax advantage in owning a home in Canada.

Measures mistakenly introduced to loosen mortgage lending rules — such as interest-only loans and 40-year amortizations — were quickly reversed, forestalling a flood of overly leveraged households.

However, while Canada doesn’t idealize home ownership to the extent the U.S. does, it is still perceived as preferable to renting. Owning is seen as permanent, renting transient, the implication being that ownership contributes more to community stability.

Owners are thought to be more involved in community activities than renters, adding to social cohesion. The pride of ownership is viewed as a motivator for owners to maintain their properties, while renters supposedly lack this incentive. There is scant research to support any of these contentions.

In any case, Canadians have pursued the holy grail of home ownership with as much zeal as their American cousins and have achieved similar rates of both ownership and indebtedness.

Canadian households, on average, now carry nearly $1.50 of debt for every dollar of income. Most of that debt is mortgage debt. Historically low interest rates have enticed buyers to get into the real estate market or to upgrade to more expensive homes. That, along with increasing real estate investment from outside Canada, especially from mainland China, has driven home prices in B.C. to record levels.

Overpriced

Vancouver lays claim to the highest median house prices in Canada and Forbes magazine ranks the city’s real estate market as the sixth most overpriced in the world. (Forbes calculated an annualized rate of return on property based on cash flows from renting, then flipped the result to produce the equivalent of a price-to-earnings ratio. Vancouver’s was 26.8; Monaco was No. 1 at 74.1.)

Each quarter RBC publishes an affordability index that examines the cost of ownership relative to household income. Most recently, it found the cost of mortgage payments, utilities and property taxes for a detached bungalow in Vancouver amounted to 92.5 per cent of a typical household’s monthly income.

“Vancouver’s housing market is without a doubt the most stressed in Canada and is facing the highest risk of a downturn,” Wright said in the affordability report.

That real estate in Vancouver is expensive is not news.

A 2008 study by Tsur Somerville, professor of real estate finance at the Sauder School of Business at the University of British Columbia, and his research assistant, Kitson Swann, determined that house prices in Vancouver would have to fall by 11 per cent to be in balance with rents; in other words, for the price-to-rent ratio to be in equilibrium.

The study assumes that the housing market is in equilibrium when the ratio of house rents to prices equals the sum of mortgage rates and cost of holding a house minus the expected long-run rate of price appreciation. House prices above their equilibrium level doesn’t guarantee they will fall, the study says. But the potential for decline is greatest in cities that have built more units than can be absorbed by the growth in households.

“Recent data,” it adds, “suggests that Vancouver is most at risk in this regard.”

A two-bedroom-plus-den, two-bathroom, 1,500-square-foot townhouse in North Vancouver was recently listed for rent at $2,200 a month. Another townhouse of similar size in the same complex was offered for sale at $649,900. The price to rent ratio of 24.6 suggests that either the property is overvalued or the rent is too low. Trulia.com, a U.S. real estate website, says a ratio of 21 or more means it’s better to rent than to buy.

Analyze this data as an investor would by dividing the annual rent by the capital cost of the property and the return — or rental yield — is 4.1 per cent. With Government of Canada benchmark bond yields trending below three per cent, an investor might consider this an adequate ROI. But mortgage payments with 25 per cent down, a 25-year amortization and a variable interest rate of three per cent would amount to roughly $2,300, which turns this into a losing proposition, even before taxes and maintenance expenses.

According to Forbes magazine, “the relationship between rental yields and housing costs matters because a low rental yield is a good indication of a stretched market — one that has a bubble — since these markets are more likely to face downward price pressures or grow at a slower rate.”

Based on the numbers then, one might draw the conclusion that Vancouver is a real estate bubble. But bubbles don’t always burst; sometimes they slowly deflate. A few analysts believe that fate awaits Vancouver.

TD Bank, for instance, forecast this summer that average house prices in Metro Vancouver will decline by 14.8 per cent by the end of 2013, but will still be worth more than they were in 2010.

A place to call home

Would-be buyers and renters can while away hours by Googling the term “buy or rent calculator” and working through various scenarios.

However, the majority of home buyers aren’t thinking about the return on investment on an asset, they’re looking for a place to raise a family, close to schools and shopping, maybe with a yard, a deck for the barbecue and a basketball hoop on the garage: a place to call home.

These misty-eyed buyers might do better than you imagine.

Consider that North Vancouver listing with the high price-to-rent ratio and low yield. If they were to rent at $2,200 a month with annual rent increases of two per cent, they’d pay $289,072 over 10 years.

If they could come up with $162,500 (for 25 per cent down) and borrow $480,000 at today’s historically low rate of three per cent (and pay $900 a year on upkeep), they’d pay $281,589.

If the house appreciated by seven per cent a year and the cost of selling it was seven per cent, the appreciation value would be $1,278,451. They’d come out ahead by $867,080.

It would take a savvy investor to beat that under current stock, bond, currency or commodity market conditions. At the same time, it is risky to have so much capital tied up in a single immovable and relatively illiquid asset.

In the final analysis, whether it is better to buy or to rent depends not so much on interest rates and ratios but rather on an individual’s goals in life. For some, home ownership is a ball and chain; for others, it is fulfillment of a dream.

Odds are that if you’re asking the question, you’ve already made up your mind.

© Copyright (c) The Vancouver Sun