Anna Asi, M.A.

Vancouver home prices fall for fifth consecutive month

OTTAWA — Homes prices edged down 0.2 per cent in February from the month before but were still 6.1 per cent higher than a year ago, according to a well-watched housing index.

The month-over-month decline was the third such retreat in the past four months for the Teranet-National Bank National Composite House Price Index, released Wednesday, which measures price changes for repeat sales of single-family homes.

In January, prices rose 0.1 per cent.

Teranet's report showed prices falling from the previous month in six of the 11 metropolitan markets surveyed.

In Canada's two hottest real-estate markets, prices in Vancouver fell 0.3 per cent, the fifth consecutive decline, while prices in Toronto rose by just 0.1 per cent. On a yearly basis, however, Toronto prices were 10 per cent higher.

Nationally, prices were 6.1 per cent higher than a year ago. In January, prices were 6.5 per cent higher.

The data is likely to show up on the radar of Bank of Canada governor Mark Carney, who has repeatedly warned that Canadians are piling on too much debt as they buy homes whose prices keep rising.

At a House of Commons finance committee meeting Tuesday, Carney warned that house prices in relation to income levels are now running 35 per cent above historical norms.

Last week, the Canadian Real Estate Association reported that seasonally adjusted sales in March rose 1.6 per cent from year-earlier levels, although the national average home price declined 0.5 per cent to to $369,677.

"It is a fact that according to CREA (the Canadian Real Estate Association) data for March, five of the 11 markets covered were rather favourable to sellers (Toronto, Hamilton, Winnipeg, Halifax and Quebec City). Overall, the Canadian market is nevertheless balanced," said National Bank senior economist Marc Pinsonneault.

Metropolitan area % change m/m / % change y/y

Calgary / -0.6 % / +1.3 %

Edmonton / -1.0 % / +1.1 %

Halifax / +0.4 % / +2.3 %

Hamilton / -0.8 % / +7.5 %

Montreal / +0.2 % / +4.4 %

Ottawa / -0.4 % / +4.6 %

Quebec / +1.6 % / +5.6 %

Toronto / 0.1 % / +10.0 %

Vancouver / -0.3 % / +6.2 %

Victoria / -1.1 % / -1.7 %

Winnipeg / +0.2 % / +8.2 %

National Composite / -0.2 % / +6.1 %

Source: Teranet-National Bank National Composite House Price Index

Cat: Vancouver Real Estate

No housing crash but a correction coming in Canada Housing Market

Cat: Vancouver 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

Vancouver Real estate Update Summer 2011 and 2012 housing market forecast

Cat: Vancouver Real Estate

BCREA Housing Market Update - Seasonal Adjustment of Housing Statistics (August 2011)

BC Real Estate Association (BCREA) Chief Economist Cameron Muir discusses the July 2011 statistics and an in depth look at the seasonal adjustment of housing statistics.

Cat: BC Real Estate

CREA revised Report on Resale Housing Forecast 2011-2012

National sales activity is forecast to reach 450,800 units in 2011, up less than one per cent from levels in 2010. Erosion in affordability due to higher prices has prompted a small downward revision to the outlook for sales in 2012.

The Canadian Real Estate Association has revised its forecast for home sales upward for 2011, citing stronger-than-expected sales and prices in the second quarter and ...good momentum entering the second half of the year.

But economists warn Canadians should expect a gradual slowdown in the housing market to begin next year, as sales in Toronto and Vancouver cool and interest rate hikes eventually kick in.
The association also revised its estimate for 2012 sales to fall seven tenths of a percentage point to 447,000 housing units.

“Less favorable economic fundamentals, combined with new mortgage rules in place, are beginning to clip the wings of the Canadian housing market activity,” TD economist Sonya Gulati wrote in a note.

Average home prices are expected to moderate in the second half of the year following an unusually high surge of expensive Vancouver home sales.

Sales in July stayed flat in Toronto and fell slightly in Vancouver, according to CREA, and national housing prices were at their lowest level since January 2011 last month, at $361,181.

“Going forward, a correction is ripe for these cities in order to bring both markets in line with balanced territory. However, we expect such a retreat in prices and sales to be gradual in nature taking place over several quarters, with the brunt occurring in late 2012 into early 2013,” Ms. Gulati wrote.

CREA said Tuesday it expects activity will increase by less than one per cent this year compared with 2010, up slightly from its previous forecast of a one per cent decline in sales. National sales are expected to reach 450,800 homes in 2011, the association said, and average sales prices will be 7.2 per cent higher than the previous year.

“While there had been some talk of potential interest rate increases, that hasn’t happened,” Gary Morse, the association’s president, wrote in a statement. “In fact, rates have actually come down, and are now expected to remain low for the remainder of this year and into 2012. It’s a great opportunity to purchase a property with financing at very favourable rates.”

Cat: Canada Real Estate

Macrealty Market Update (August 2011)

There's no doubt that real estate is an interesting topic of conversation for the public. The media, in an attempt to feed this appetite for real estate news, often publishes interesting pieces of real estate information that help sell papers. Due to this heavy dose of constant real estate news, it's important to understand how the data is collected and how to interpret the information.

Below are the 3 most commonly misunderstood statistics in the media:

1) Housing starts rise 1.9%!
(http://www.vancouversun.com/life/Housing+starts+cent+June/
5083165/story.html)

This shouldn't really matter to buyers or sellers out there. While this is related to the real estate market, it is more relevant for the construction industry than it is to the resale housing market.

Remember, these are new home construction figures: not sales or pricing numbers. Unless you're a construction worker or materials' supplier, this type of information is largely irrelevant to your real estate decision-making process.

2) Home sales drop 42%!
(http://www.cbc.ca/canada/british-columbia/story/2008/10/02/bc-real-estate-values-vancouver-september.html)

This kind of information is important for buyers and sellers to know and also helpful for realtors to use. A drop in home sales is sometimes a precursor to lower prices down the road. That said, there are a multitude of reasons that home sales could slow that wouldn't also result in a corresponding drop in prices.

It is therefore important to remember that these are unit sale figures, not price figures. These statistics are generally also seasonally adjusted to reflect the fact that sales tend to be slower in the winter and summer as opposed to the spring and fall. You should talk to a professional to see whether a drop in sales velocity is because of a slowing market or because of some other extraneous event.

3) Average House Prices Expected to Rise 13% this year!
(http://www.vancouversun.com/business/Home+prices+rise+cent+this+year+report/5030251/story.html)

This is the most misunderstood of the media reports that come out. Yes, it is true that Average Canadian Home Prices in 2011 will likely show a significant increase over 2010; however, as we're already half way through the year, much of the increase has already occurred.

Many real estate boards also release data that shows the Benchmark price of a home. This is a much more accurate look at the current state of the real estate market than the average price. The Benchmark price is the current price of an average home in a given market area rather than the average price of all of the homes in a given market area. The difference is subtle, but substantive. The average price simply takes the price of all units sold in a given market area and divides it by the number of units sold. It therefore can be skewed by a strong luxury market, like the one currently being experienced in many Metro Vancouver markets.

Remember to always read real estate statistics with an eye to these issues and you'll become a more accurate analyst of the market.

Cat: Vancouver Real Estate

The CREA updates resale housing forecast for April 2011

The Canadian Real Estate Association (CREA) has revised its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations for 2011 and 2012. National sales activity is now expected to reach 441,100 units in 2011, a decline of 1.3 per cent from 2010. This is a slight improvement from the 1.6 per cent decline forecast by CREA in February, due to stronger than expected activity in British Columbia in the first quarter of 2011.

Greater Vancouver housing market sees typical spring activity in April

VANCOUVER, B.C. – May 3, 2011 – Greater Vancouver saw a typical, solid month of residential home sales on the Multiple Listing Service® (MLS®) in April, in contrast to the near record pace witnessed in the two preceding months.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties in Greater Vancouver reached 3,225 in April 2011, an 8.2 per cent decrease compared to the 3,512 sales in April 2010 and a 21 per cent decline compared to the 4,080 sales in March 2011.

Looking back further, last month’s residential sales represent an 8.8 per cent increase over the 2,963 residential sales in April 2009, relatively unchanged compared to April 2008, and a 4.8 per cent decline compared to the 3,387 sales in April 2007.

“While it continues to be a seller’s market in Greater Vancouver, last month’s activity brought greater balance between supply and demand in the overall marketplace,” Rosario Setticasi, REBGV president said. “The year-over-year decline in April sales can be attributed to a less active condominium market on our MLS®, as there were more detached and townhome sales this April compared to last year.”

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,847 in April 2011. This represents a 23.5 per cent decline compared to April 2010 when 7,648 properties were listed for sale on the MLS®, which was an all-time record for April. Compared to March 2011, last month’s new listings total registered a 14 per cent decline.

At 14,187, the total number of residential property listings on the MLS® increased 8.2 per cent in April compared to last month and declined 10 per cent from this time last year.

“There’s considerable variation in activity within the communities in our region. This is causing home price trends to differ depending on the area,” Setticasi said. “Your local REALTOR® is a valuable resource for obtaining the most accurate, up-todate market evaluation.”

The MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 5 per cent to $622,991 in April 2011 from $593,419 in April 2010.

Sales of detached properties on the MLS® in April 2011 reached 1,402, an increase of 2.3 per cent from the 1,370 detached sales recorded in April 2010, and a 17.8 per cent increase from the 1,190 units sold in April 2009. The benchmark price for detached properties increased 7.4 per cent from April 2010 to $879,039.

Sales of apartment properties reached 1,201 in April 2011, a 21.3 per cent decrease compared to the 1,526 sales in April 2010, and an increase of 1.9 per cent compared to the 1,179 sales in April 2009. The benchmark price of an apartment property increased 2.9 per cent from April 2010 to $409,242.

Attached property sales in April 2011 totalled 622, a 1 per cent increase compared to the 616 sales in April 2010, and a 4.7 per cent increase from the 594 attached properties sold in April 2009. The benchmark price of an attached unit increased 2.4 per cent between April 2010 and 2011 to $514,670.

Cat: Vancouver Real Estate

Housing Market Update REBGV  (March 2011) – Real Estate Board of Greater Vancouver

First-time buyers in major Canadian markets move to get in ahead of higher interest rates, says RE/MAX

BC (April 5, 2011) -- Driven by the threat of higher interest rates down the road, first-time buyers are contributing to strong upward momentum in residential housing markets across the country, according to a report released today by RE/MAX.

The RE/MAX First-Time Buyers Report, highlighting trends and developments in nineteen major Canadian centres, found that low interest rates and balanced market conditions have provided significant impetus in 2011, particularly at lower price points. Just over 30 per cent of markets are reporting sales in excess of 2010 levels as a result, while almost 70 per cent have experienced an upswing in average price. Leading the country in terms of percentage increases in the number of homes sold are Western Canadian markets, including Saskatoon (up close to 15 per cent), Greater Vancouver (up close to 12 per cent), and Winnipeg (up just over 11 per cent). With an average price hike of close to 20 per cent year-to-date (February), Greater Vancouver continues to show unprecedented strength, followed by Hamilton-Burlington (eight per cent), Quebec City (seven per cent), Winnipeg (close to seven per cent), Greater Toronto (five per cent), and Greater Montreal (five per cent). 

“With the Canadian economy on firmer footing overall, residential real estate is well-positioned moving into the traditionally busy spring market,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “Consumer confidence is climbing in conjunction with economic performance, and concerns over a secondary recession fade with each passing day. The mood is cautiously optimistic as first-time buyers enter the market.”

Inventory levels, while tight in several larger centres, are more balanced overall, giving first-time buyers a good selection of housing product from which to choose. Not surprisingly, condominium apartments and town homes have become the first step for many entry-level purchasers, especially in Greater Vancouver, Victoria, Kelowna, Edmonton, Calgary, London-St. Thomas, Hamilton-Burlington, Greater Toronto, the Island of Montreal, and Halifax-Dartmouth where average prices have risen unabated in recent years.

“Despite homeownership rates approaching 70 per cent, there is clearly room for growth as entry-level buyers make their moves from coast-to-coast, undeterred by higher housing values and changes to lending criteria” says Michael Polzler, Executive Vice President, RE/MAX Ontario-Atlantic Canada. “Many purchasers intent on realizing homeownership are scaling back on expectations or are willing to sacrifice location, quality and/or size to make their dream a reality – not unlike generations before them.”

Changes to recent financing criteria have not created the anticipated run up in activity in most markets. From a financial standpoint, most rookie home buyers remain quite prudent. Those making the leap are not doing it lightly, buying within their means. While this most recent round of policy tightening will likely have a negligible effect on demand, the message is getting across. 

Affordability remains a growing concern in most markets, and—aside from first-time purchasers—no one is more in tune with that than housing planners and developers. In fact, the growing demand for reasonably-priced product is creating a shift in the country’s housing mix. That trend is expected to gain traction in coming years, as builders look to create greater options for those seeking to realize homeownership.    In recent years, builders have helped ease the move to homeownership by concentrating on intensification—condominium buildings with smaller suites and small-lot subdivisions offering detached, compact homes at a fraction of the cost of a traditional single-family home.   On the flip side, the affordability factor is also breathing new life into tired older neighborhoods, and that, in turn, is contributing to rising values. 

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

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

Cat: Vancouver Real Estate

Vancouver celebrates 125th birthday with street party

The City of Vancouver officially turns 125 years of age on Wednesday and thousands of people are expected to turn out for a giant street party downtown by the Olympic cauldron.

The free events are scheduled to run from 2 p.m. to 10 p.m. and include street hockey, live music, video and light installations. Vancouver Mayor and other dignitaries will also be on hand to cut up a massive birthday cake and light the Olympic cauldron.

About 8,000 people are expected at the celebrations and city staff are recommending anyone coming down take public transit, bike or walk to the outdoor plaza next to the Vancouver Convention Centre. Donations to the Food Bank are also being accepted at the site.

Aging and energy key to future

As the city celebrates its past, urban planners are already predicting what the city will be like in coming decades.

The city has frequently been ranked as one of the most livable in the world and one of the best places to visit, but two issues — energy consumption and an aging population — will have the biggest impact on Vancouver's future development, said UBC Professor of Landscape Architecture Patrick Condon.

"The over-65 demographic increases by 250 per cent," and will become the single largest population group in the city, said Condon.

'If you came back here in 50 years, the place would be recognizable certainly, but might have twice as many dwelling units.'— Professor of Landscape Architecture Patrick Condon

He said another dramatically increasing demographic will be adults who choose not to have children.

"Those two groups tend to need smaller units and seem to appreciate taking advantage of urban amenities, close to transit, easier to take care of, as opposed to large, single family homes."

Condon said the best place to put that large increase in housing would be along the city's major arteries, like Broadway, Main Street and Dunbar Street.

"That would be the most fundamental change in the city such that if you came back here in 50 years, the place would be recognizable certainly, but might have twice as many dwelling units in it as it does right now."

Condon said the other major issue influencing development in the coming decades would be energy conservation.

Vancouver is working towards a goal of cutting emissions by 80 per cent by 2050 and that means a transportation shift, he said.

"We need a virtually zero greenhouse-gas way of getting around. The transit part of that trip needs to be in some kind of electrified transit."

He said if the city and region plan properly for these two factors, we can expect to see streetcars replacing diesel buses in the coming years.

Courtesy of CBCnews.

Vancouver pulls up national average home price in February to record $365,000

TORONTO - Sizzling sales and pumped up prices in the Vancouver real estate market drove up average home prices last month, but the increases will begin to recede as new mortgage rules further cool demand, according to the Canadian Real Estate Association.

Home sales in Vancouver skyrocketed 24.7 per cent over a year ago, but nationally, Canadians saw a decrease of 6.3 per cent year-over-year, CREA said in its February sales report released Tuesday.

A record number of multimillion-dollar home sales in Vancouver drove the national average home price up 8.8 per cent year-over-year to a record $365,192 in February, it said. But excluding Vancouver —where the average home price is $790,380—the year-over-year national average price actually dropped 3.4 per cent.

CREA said prices are still stronger than those seen in the past six months, but national average price gains will creep backward after new mortgage regulations that tighten borrowing limits take effect Friday.

"You're going to be looking at fewer sales of higher priced homes and that's going to skew the average lower, and for that reason we say average price increases on a year-over-year basis may soften," said CREA's chief economist Gregory Klump.

The rules cut the longest possible amortization period from 35 years to 30 years, and are designed to curb high-risk borrowing, which could force some potential buyers out of the market.

Doug Porter, deputy chief economist at BMO Capital Markets, said activity in the national housing market appears to be simmering down just as the tighter mortgage rules are set to take effect and stressed that Tuesday's figures would have been even softer if it had not been for strength in Vancouver.

He said he wouldn't call the Vancouver activity a bubble, but said the city is seeing a huge wave of buying activity.

"A bubble is in the eye of the beholder to a large extent, but there's no question that what's going on in the Vancouver market is special and it's not being repeated across the country," he said.

"While it's a very powerful force, it likely can't last forever and at some point we will see a pull back."

Klump said wealthy immigrants and Chinese investors who see Canada as a safe haven for their money are snapping up high-priced Vancouver real estate without taking out mortgages.

He said a bubble is caused when the value of homes have reached unsustainable levels relative to incomes and economic principles, but this isn't happening in the case of Vancouver where home buyers are paying cash.

Overall, CREA said national resale housing activity in February ran close to the five-year average for the month.

Seasonally adjusted home sales were down 1.6 per cent nationally over January, as sales eased off in about two-thirds of markets, offsetting increases in activity in Vancouver and Calgary.

About 41,283 homes were sold last month across the country on CREA's Multiple Listing Services, down 2.2 per cent from the 42,230 sold in January.

The number of new listings was up 1.5 per cent in February, as higher demand and stable prices lured sellers into listing their homes after reluctance amid the softer housing market last summer.

CREA said the housing market remained balanced —leaning towards neither buyer nor seller— in February as sales activity and supply remained stable. It said its national measure of market balance remained little changed from the previous four months.

However, the new mortgage rules may alter the market dynamic.

The rules will make the maximum payback period 30 years — resulting in somewhat higher regular payments than with the 35-year amortization that has been the choice of about 30 per cent of home buyers.

The rule changes will increase the monthly payment on a $300,000 mortgage at four per cent interest by $105 — but will also reduce total interest paid by $42,288 over the life of a mortgage because it's repaid five years sooner.

"That's going to take some buyers out of the market and its likely to lead to somewhat lower prices that these buyers can offer," Porter said.

"I think it's likely to shave the increase in home prices we see this year. We think prices will actually struggle to post any gain through the rest of the year."

Real Estate Board of Greater Vancouver Housing Market Update - Feb 2011

Property sales rise ahead of mortgage changes

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

By Sharon Singleton, QMI Agency

Condo Boom in Vancouver

The Sovereign Condominiums in Burnaby by Bosa Properties sells out in 1 day