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.

Overseas investors are buying properties in Vancouver

Rich Asians Buying B.C. Real Estate By Helicopter

Cat: Vancouver Real Estate

Vancouver real estate at risk if Canadian lending not constrained: TD
Canada housing 10-15 pct over-valued

OTTAWA - Canadian housing is 10 to 15 percent over-valued, Canada’s second largest bank warned, as it called for more action to constrain lending growth.

Toronto-Dominion Bank chief economist Craig Alexander said last week in an analysis that if the overvaluation were unwound rapidly, the market correction would be three times the magnitude of the housing market correction of the early 1990s.

Alexander said it is more likely that there will be a gradual decline in sales and prices over the next several years unless there is a sharp rise in joblessness or interest rates. He warned against complacency, however.

“We need to acknowledge that a significant imbalance has developed and it poses a clear and present danger to Canada’s medium-term economic outlook,” he wrote. “It also suggests that further actions to constrain lending growth may be prudent.”

At greatest risk is Vancouver, a magnet for foreign buyers, along with the Toronto condo market, and the broad housing markets in Quebec City and Montreal, he said.

“Nevertheless, beyond selected cities, it is natural to assume that it will be a shock to all real estate markets when interest rates eventually rise from their prevailing exceedingly low levels,” he said.

Parallel with the real estate valuations is elevated household indebtedness. The ratio of debt to personal disposable income declined in the fourth quarter of 2011 to 150.6 percent from 151.9 percent in the third, but Alexander said this was due to a spike in unincorporated business and farm income that will probably prove to be temporary.

In fact, he forecast that by late 2013 the ratio will reach the 160 percent peak seen in the United States and Britain before their real estate corrections.

Alexander said the Bank of Canada, which has repeatedly voiced concern over housing prices and household debt, is in a bind because if it raises rates while the U.S. Federal Reserve holds rates steady, that would boost the Canadian dollar further and slow growth.

A majority of forecasters polled by Reuters last month predicted that the federal government would tighten mortgage rules this year.

Cat: Canada 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

B.C. property assessments skyrocket but appeals drop off

VANCOUVER — Despite skyrocketing and sometimes uneven property assessments that will mean property tax increases for some homeowners, appeals are down in key areas compared to this time last year, according to BC Assessment.

With 10 days to go before the Jan. 31 deadline, appeals have fallen 15 per cent in the Vancouver-Sea to Sky region and 18 per cent in the Richmond-Delta region, two areas that saw assessments in some areas jump by as much as one-third, said Grant McDonald, deputy assessor for BC Assessment’s Vancouver Sea to Sky region.

The average assessment increase in Vancouver was 16.4, 15.9 in West Vancouver and 16.5 in Richmond.

Some assessments went up much more than the average increase, such as a two-storey house built in 1972 on a 60-by-120-foot lot on Riverdale Avenue in the Thompson area of Richmond that went up $300,000 from $780,200 last year to $1,083,500 this year, said Richmond realtor Shafik Ladha.

McDonald gave an example of a house on the west side of Vancouver on a 50-foot lot that went from $1,189,000 last year to $1,645,000 this year, an increase of $456,000. Both of these examples are up 38 per cent, more than double the average increase in their cities.

People who saw their property go up more than the average will likely see a bigger-than-usual increase in their tax bill, although the amount of that increase will depend on the assessed value of their home and how much the city’s budget is increased.

Vancouver Councillor Raymond Louie, who chairs the city’s finance and services committee, said it’s not automatic that the city will get more money when people’s property assessments go up.

“When your property value goes up, the city takes that assessed value and divides that into what it takes to run our city,” Louie said. “The amount it takes to run our city generally stays about the same. The city does not get additional revenue just because your property value goes up.”

Former Vancouver city councillor Gordon Price said it’s fair that taxes are linked to a property’s assessed value, but that it’s important to remember there isn’t a one-to-one relationship between property assessments going up and property taxes going up.

“Whatever your percentage increase is above the average, you can expect that you will be paying a greater percentage of the city’s property tax,” said Price, who is director of the City Program at SFU. “It would be very difficult to come up with anything else that would be more fair.”

In Vancouver, assessed values are averaged over three years to mitigate the effect of large single-year value increases, Louie said. He and Price also noted that property taxes do not all go to the city, a portion goes to school taxes, TransLink and other levies.

This year certain neighbourhoods went up more than others, something McDonald said is simply based on what actual sales reveal. Both Vancouver realtor Tom Gradecak and Ladha said good schools made a big difference in an area’s popularity.

Sometimes that will mean that houses on one side of the street sell for much more than those on the other side, if the school boundary is drawn down the middle, Gradecak said.

Gradecak said assessments are traditionally lower than market value, but that they’re moving closer.

“Some of the assessments are now quite close to the market value, but most are still a little bit low,” Gradecak said. “If it’s an older home, some of the assessments can be fairly close [to market value] because they’re looking mostly at the land value. For the newer homes, the assessments could be a bit low because they don’t always take into account all of the improvements.”

Assessments are a snapshot of market value on July 1 of the previous year. By the time homeowners receive them in early January, they are already six months out of date.

One reason appeals are down may be the amount of information now available online. Assessed values are all online (http://evaluebc.bcassessment.ca/) and people can compare homes by address and by comparable sales.

Fewer than two per cent of homeowners usually appeal an assessment in any given year, McDonald said.

People who want to ask questions about their assessment, or the appeal process, can call BC Assessment at the number listed on their assessment.

“We’ve got a team of professional appraisers you can call and they will know your neighbourhood, they may even know your house, but they can certainly call it up on the computer, and talk to you about the specifics of your property,” McDonald said.

“If at the end of that process [you are not satisfied], there is the last resort of filing an appeal.”

© Copyright (c) The Victoria Times Colonist

Cat: BC Real Estate

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

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

Home listings continue to rise in the Greater Vancouver housing market

Consistent increases in property listings and fewer home sales over the summer months has helped move the Greater Vancouver housing market into the upper end of a buyers’ market.

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 2,246 in September, a 1.2 per cent increase compared to the 2,220 sales in September 2010. Those sales also rank as the third lowest total for September over the last 10 years.

“There's more competition amongst home sellers in today's market, providing more options for prospective buyers," Rosario Setticasi, REBGV president said."Buyers now have more properties to choose from and more time to make decisions compared to the spring season.”

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,680 in September, the third highest volume for September in 17 years. This represents a 20.1 per cent increase compared to September 2010 when 4,731 properties were listed for sale on the MLS® and a 21.2 per cent increase compared to the 4,685 new listings reported in August 2011.

The number of properties listed for sale on the Greater Vancouver MLS® system has increased each month since the beginning of the year. At 16,085, the total number of residential property listings on the MLS® increased 4.6 per cent in September compared to August 2011 and rose 4.4 per cent compared to this time last year.

“Our sales-to-active-listing ratio currently sits at 14 per cent, which is the lowest it’s been this year. Generally analysts say that a buyer’s market takes shape when the ratio dips to about 12 to 14%, or lower, for a sustained period of time,” Setticasi said.

The MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 8.8 per cent to $627,994 in September 2011 from $577,174 in September 2010.

Since reaching a peak in June of $630,921, the benchmark price for all residential properties in the region has declined 0.5 per cent.

Sales of detached properties on the MLS® in September 2011 reached 957, an increase of 10.5 per cent from the 866 detached sales recorded in September 2010, and a 32.8 per cent decrease from the 1,423 units sold in September 2009. The benchmark price for detached properties increased 13.4 per cent from September 2010 to $896,701.

Sales of apartment properties reached 922 in September 2011, a 5 per cent decrease compared to the 971 sales in September 2010, and a decrease of 38.1 per cent compared to the 1,489 sales in September 2009. The benchmark price of an apartment property increased 4.4 per cent from September 2010 to $405,569.

Attached property sales in September 2011 totalled 367, a 4.2 per cent decrease compared to the 383 sales in September 2010, and a 43.3 per cent decrease from the 647 attached properties sold in September 2009. The benchmark price of an attached unit increased 5.4 per cent between September 2010 and 2011 to $516,697.

Cat: Vancouver Real Estate

Greater Vancouver home sales trend toward buyers’ market over summer

VANCOUVER, BC – August marked the third consecutive month that home sale activity in Greater Vancouver was below the 10-year average for the month. In contrast, home listing activity in the region has exceeded the 10-year norm every month since the beginning of the year.

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 2,378 in August. This total represents an eight per cent increase compared to the 2,202 sales in August 2010, but also ranks as the third lowest total for August in the last 10 years.

“MLS® statistics continue to indicate that we’re in a balanced market,” Rosario Setticasi, REBGV president said. “However, with a sales-to-actives listings ratio of 15 per cent, Greater Vancouver is in the lower end of a balanced market and has been trending toward a buyers’ market over the past three months.”

New listings for detached, attached and apartment properties in Greater Vancouver totalled 4,685 in August. This represents a 24.9 per cent increase compared to August 2010 when 3,750 properties were listed for sale on the MLS® and an eight per cent decline compared to the 5,097 new listings reported in July 2011. Last month’s new listing total was the highest volume recorded for August in 16 years.

At 15,437, the total number of residential property listings on the MLS® increased 1.4 per cent in August compared to July 2011 and rose 0.1 per cent 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 8.5 per cent to $625,578 in August 2011 from $576,597 in August 2010.

“Year over year, prices are up. However, in the detached home category, benchmark prices have come down slightly in each of the past two months,” Setticasi said. “It’s important for people entering the market to understand that activity can differ significantly depending on the area and property type.”

Sales of detached properties on the MLS® in August 2011 reached 1,020, an increase of 14.2 per cent from the 893 detached sales recorded in August 2010, and a 25.4 per cent decrease from the 1,367 units sold in August 2009. The benchmark price for detached properties increased 11.7 per cent from August 2010 to $888,243.

Sales of apartment properties reached 955 in August 2011, a 2.1 per cent increase compared to the 935 sales in August 2010, and a decrease of 34.8 per cent compared to the 1,464 sales in August 2009. The benchmark price of an apartment property increased 5.6 per cent from August 2010 to $407,457.

Attached property sales in August 2011 totalled 403, a 7.8 per cent increase compared to the 374 sales in August 2010, and a 33.9 per cent decrease from the 610 attached properties sold in August 2009. The benchmark price of an attached unit increased 4.5 per cent between August 2010 and 2011 to $511,433.

Cat: Vancouver Real Estate

Macrealty Market Update - September 2011

With the problems in the US and Europe and the resulting economic turmoil, it is hard not to think of how these factors influence our housing market. And while it's true that consumer confidence plays a big role in the overall health of housing, it's important to remember that Canada continues to look like an economic oasis in a desert of bad financial news.

As you know, the US housing market has been in a severe recession for the past several years. And while there's been talk of a possible correction in the Canadian housing market, it is unlikely we will experience anything near as painful as our neighbours to the south.

There are 3 main reasons for this.

(1) Government Tax Policies
(2) Loan Qualification Policies
(3) Bank Lending Policies

Government Tax Policies

The US Government has long had a policy of encouraging home-ownership. Government-sponsored entities Fanny Mae and Freddy Mac have been getting most of the headlines recently for agreeing to purchase mortgage loans that encouraged unsound lending. However, the US Government's tax policy of allowing homeowners to deduct mortgage interest payments may be more significant, as it has encouraged Americans to maximize their debt-loads in order to minimize their tax burdens.

Canada, of course, has no mortgage tax break for homeowners, with interest payment deductions only applying to investment properties.

Loan Qualification Policies

The secondary mortgage market in the US allowed the originators of mortgages to pass on the mortgage notes to investors throughout the world. Because of this, lenders and mortgage brokers were incentivized to originate as many mortgages as possible, with little-to-no regard for risk. These perverse incentives led to 'liar loans' - where individuals would simply lie to their mortgage broker about their income or employment knowing that there would be no incentive to conduct a background check - and 'NINJA loans' - where mortgage brokers offered mortgages to individuals with No Income, No Job or Assets.

In Canada, the originators of loans (typically the Big Banks) tend to hold on to them. Because of this, the correct incentives are in place to ensure that only individuals who can afford the mortgage receive them.

Bank Lending Policies

Another unintended consequence of the secondary mortgage market in the US has been the creation of extensive Adjustable-Rate Mortgage products with attractive 'teaser' rates. These products allowed mortgage-holders to pay an unrealistically low rate for a period of time before 'resetting' to a much higher, unaffordable, rate.

In addition to this, loans in the US tend to be 'non-recourse' meaning that the only collateral that a lender would have on a mortgage is the house itself. In Canada, mortgages tend to be 'full-recourse', with many banks demanding personal guarantees. This difference has resulted in people walking away from their homes in the US at a much higher rate than in Canada.

In the end, the result of all of these policy differences means that Canada is fairly well-insulated from the carnage that is occurring south of the border. Interestingly, our conservative, low-competition banking environment may have saved our housing market from a painful downturn.

Cat: Vancouver Real Estate

Property sales rise ahead of mortgage changes

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

By Sharon Singleton, QMI Agency

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.