Archive for June, 2013

Average sale price of a Metro Vancouver home rises 4.8% in past year

Friday, June 28th, 2013

Balanced housing market conditions throughout Metro Vancouver and the Fraser Valley – with sales representing at least 15 per cent of listings – should ensure stable house prices for at least the next year, according to an article in today’s Vancouver Sun by Bruce Constantineau.

That was the consensus among real estate representatives Thursday after a Conference Board of Canada report revealed home sales rose in 24 of 28 Canadian markets between April and May this year.

Metro Vancouver sales on the Multiple Listing Service rose by nearly 10 per cent to 2,882 while Fraser Valley sales rose by one per cent to 1,379.

Sales in both jurisdictions fell from the same month last year and are well down from historical highs but the Conference Board noted the average selling price of a Metro Vancouver residential property rose by 4.8 per cent in the past year to $744,712. The average Fraser Valley price rose by two per cent to $486,072.

“Values might be up a little bit in some markets but for the most part, things are pretty steady and not going in a big direction either way,” Fraser Valley Real Estate Board president Ron Todson said in an interview.

“There’s no obvious reason to expect a quick jolt either way.”

He said balanced market conditions exist when sales represent anywhere from 15 to 25 per cent of total listings and that’s the situation in the Fraser Valley, with the sales-to-listings ratio ranging from 15 per cent in North Surrey to 25 per cent in Cloverdale.

Average MLS selling prices can be deceiving because the sale of a few high-priced luxury properties can skew the overall average price.

Real estate boards like to use “benchmark” prices to determine price trends and the benchmark price for a detached single-family home in the Fraser Valley was $549,200 in May – a 0.2-per-cent increase over the May 2012 price.

The composite benchmark price for all Metro Vancouver residential properties was $598,400 in May – a 4.3-percent drop from May 2012 but 1.8 per cent higher than January 2013.

The Metro Vancouver market switched from a buyers’ market to a balanced market in March, when the sales-to-listings ratio rose from 14 per cent to 15 per cent, where it still stands, said Real Estate Board of Greater Vancouver president-elect Ray Harris.

“Historically, we’re in some of the slowest times we’ve had over the past five to 10 years but the buyers’ market that existed for a couple of years has transitioned to a more balanced market with more stability,” he said.

Re/Max Westcoast manager Richard Laurendeau said Metro Vancouver sellers generally get about 95 or 96 per cent of their asking price now but it usually takes a few days longer for homes to sell. He said it took an average of 54 days to sell a home last month, compared with 45 days in May 2012.


Vancouver:       $744,712; up 4.8%

Fraser Valley:  $486,072; up 2%

Victoria:           $469,343; down 4.6%

Calgary:            $426,155; up 3.3%

Winnipeg:        $259,523; up 1.6%

Toronto:           $515,294; up 3.4%

Montreal:         $319,486; up 2.4%

Source: Conference Board of Canada

Which is the world’s most expensive city to live as an expat?

Friday, June 21st, 2013

Top 50 most expensive cities worldwide for international assignees

Tokyo, the long-standing costliest place in the world to be an expat, has finally been overtaken by Oslo, due in part to the strength of the Krone and the huge revenues the country brings in from its rich oil reserves.

These were among the findings of the latest cost of living research by ECA International, the world’s leader in providing solutions for the management of international assignments. The survey takes into account inflation, exchange rates, goods that expats typically buy and rental expenses to work out an average cost of living.

At the top of the global list, Oslo is followed by the Angolan capital of Luanda, where the goods and services commonly purchased by expatriates are difficult to access and command a premium. Stavanger (Norway), Juba (South Sudan) and Moscow (Russia) are also now more expensive than Tokyo. These cities make up the top 5 most expensive locations for expatriates globally.

“Tokyo has always been an expensive place for global companies to send staff, and, despite its five-place fall since last year, that remains the case,” said Anna Michielsen, ECA’s General Manager, Australia, New Zealand & Pacific. “The significant depreciation of the Yen against other major currencies in recent months is the primary reason for this drop. It means that for many companies, the cost of maintaining their assignees’ purchasing power while posted there has fallen. But it’s important not to exaggerate the position – Tokyo is still the world’s sixth most expensive city, and the most expensive in Asia.”

Sydney remains the most expensive Australian location surveyed. It is the 17th most costly location for expatriate globally followed by Canberra (23rd), Perth (27th), Melbourne (28th), Adelaide (30th), Darwin (34th) and Brisbane (35th).

Within Europe, the Norwegian capital is followed by Stavanger (3rd globally) and Moscow (5th). The Russian Rouble has weakened between surveys against major currencies but the cost of goods and services in ECA’s basket in Moscow has nevertheless increased more than 10% again this year.

Despite falls in prices and the Swiss Franc weakening against other major currencies over the past year, Swiss locations remain among the top ten most expensive locations for expatriates in the world.

Despite dropping down the ranking, Caracas, ranked 33rd globally, remains the most expensive location in the Americas for international assignees. Manhattan and Vancouver follow, ranking 43rd and 51st respectively.

Indian locations continue to be among the region’s cheapest in terms of cost of living for international assignees. New Delhi, ranked 200th globally is followed by Mumbai (215th). Karachi, ranked 256th globally, is the least expensive Asian location for expatriates.

Source: ECA International. For the full summary, please see World’s most expensive expat cities.

What is forecast to happen to Canada’s housing market? It’s all looking good

Wednesday, June 19th, 2013

Not so fast. The purported collapse of Canada’s housing market does not appear to be in sight, and any correction down the road could likely be a mild one.

Recent data have defied warnings from market watchers of an impending plunge – caused mainly by the impact of tighter mortgage rules imposed by the federal government last summer to slow the race by consumers for record-low lending rates.

The latest figures show sales of existing homes strengthened for a second month in May, up by a seasonally adjusted 3.6 per cent, after declining 10 per cent between July and March.

The Canadian Real Estate Association, in a report Monday, also said home prices were up 3.7 per cent in May from the same month a year earlier, to a national average of $388,910.

For all of this year, CREA pegs the average price rise at 2.1 per cent, to $370,900, weaker but far removed from correction territory. And in 2014, the average value is expected to rise 1.8 per cent to $377,700, the Ottawa-based industry group said.

“Prices remain stable, perhaps maddeningly so for the legions of bubble mongers,” said Douglas Porter, chief economist at BMO Capital Markets.

Porter noted the May data show “housing remains on track for a fabled soft landing … making a mockery of talk of an imminent collapse.”

While CREA still anticipates sales to fall 2.5 per cent in total during 2013 compared to 2012 – to 443,400 units from 454,573 – home buying should rebound to 464,300 units in 2014, a jump of 4.7 per cent.

Last July, Finance Minister Jim Flaherty announced stricter mortgage lending rules, the fourth such move in four years. The changes included a shorter amortization period for mortgages insured by government-owned Canada Mortgage and Housing Corp. in an effort to limit lending to those least able to afford it.

Flaherty went even further, subsequently warning banks not to pursue “race-to-the-bottom” rates for mortgages that could further pile on household debt beyond already record-high levels and reignite those concerns over a possible housing bubble.

Much of his expressed concern was focused on condominium building in Toronto and Vancouver, which it was feared might result in a glut and possible crash in those markets.

“History tells us that the impact from changes to mortgage insurance rules tend to be temporary, lasting up to three quarters,” said Diana Petra-mala, at TD Economics.

Petramala agrees Canada’s housing market appears to be headed for a soft landing, “with sales and prices growing at more sustainable levels than had been the case through 2010 and 2011.”

The spark that helped ignite the housing frenzy initially came from policy-makers at the Bank of Canada. Led by then-governor Mark Carney, the bank slashed its trendsetting lending rate to 25 basis points in 2009 to spur spending by households and businesses coming out of the recession.

While that rate was subsequently raised to one per cent in September 2010, it has not been adjusted since. Many economists do not expect that to change until at least late 2014.

“As long as interest rates stay low, affordability will remain relatively high. We have many times changed the mortgage rules, and we were attacking the wrong source of the problem,” said Charles St-Arnaud, an economist at Nomura Global Economics in New York.

“The reason why the housing market was so strong was, basically, interest rates were so low. The issue was not the availability of credit, it was the price at which it was given,” he said.

“If you were to give the same availability but, let’s say, 200 basis points higher, I don’t think we would be here in terms of the housing market.”

Carney has also been adamant – along with Flaherty – that consumers need to tighten their belts, warning household debt posed the biggest threat to the Canadian economy.

That mantle of concern has been passed to Stephen Poloz, who on June 3 replaced Carney – soon to be the new Bank of England governor.

Source: Gordon Isfeld, Financial Post

Which countries have seen the highest rise in property prices?

Tuesday, June 18th, 2013

Worldwide residential property prices have risen 6.6% in the year to March, the highest rate for three years, says a new survey.

Hong Kong led the way in the Knight Frank Global House Price Index, with prices rising 28% year-on-year – but it looks set to be knocked-off the top spot in future.

Prices in Beijing and Shanghai, China, rose 23.8% in the last year and 21.1% in Dubai, according to the Knight Frank figures.

This was before the recent government housing market cooling measures took effect and separate data for April and May shows price declines in Hong Kong and falling growth in China, as OPP Connect has reported.

Knight Frank’s Residential Research specialist Kate Everett-Allen says, “Property prices in all world regions, except Europe, increased in the year to March, with the Middle East performing best, rising by 10.6% on average.”

The Knight Frank Global House Price Index rose by 2% in the first quarter and China’s prices rose the most over the three months, by 10.7%.

For the third quarter running, Greece saw the largest annual fall in mainstream prices, declining 11.8%.

It was followed by Hungary, down 9%, and the Netherlands, down 8.3%, in the bottom three rankings this quarter. The Dutch fall was driven down by rising household debt and growing unemployment.

Prices in Ireland fell again, but the 3% decline was much less than previous double-digit losses.

The only countries outside Europe that saw falls were Japan (-2.9% year-on-year) and South Korea (-2.2% year on year.)

Columbia, up 16.6% on year, Brazil and Taiwan, up 12.2%, Turkey, up 11.5%, South Africa, up 11.3% Indonesia, up 11.2% and America, up 10.2% – its best annual performance since 2006 – made up the rest of the top 10 performers.

Thirty five of the 55 housing markets in Knight Frank’s Global House Price Index saw price rises in the year to March. The index now stands 14.7% above its recessional low in the first three months of 2009.

Among the improvers was the UK’s property market, where prices rose by 0.2% in the year to March and are 8.9% above their 2009 low.

South Africa was among the best performers, seeing an increase of 11.3%, boosted by increasingly wealthy middle class who are tapping into the rising confidence of the wider African continent and are keen to get on the property ladder.

Source: OPP Connect

Are you a first-time homebuyer wondering where to live in Metro Vancouver?

Monday, June 17th, 2013

If you’re a young twentysomething first-time homebuyer looking to get on the property ladder in Metro Vancouver, where should you start looking for a home that you can afford?

I recently came across this article by Michael Ferreira of Urban Analytics which could help to point you in the right direction.

Generation Y has many advantages over others, but when it comes to buying a first home it appears the “good old days” truly did belong to baby boomers.

Today’s twentysomethings are not only having trouble earning meaningful pay cheques to put toward a mortgage, but the Canadian government has made it even tougher by tightening lending rules to keep a leash on the housing market. Combine this with a decade-long rise in house prices across Canada, it’s no surprise Gen Y is feeling down about buying their first home.

While it’s a discouraging time for young people with a dream of owning their first home, it’s not impossible for Gen Y to buy. At Vancouver-based Urban Analytics, we’ve watched the evolving first-time homebuyer market for years and can offer some advice to young people – Metro Vancouver in particular – who are contemplating buying their first home.

Tip #1 – Consider “best buy” locations (not the electronics store)
By “best buy” we mean the five areas in Metro Vancouver with the largest selection of new condos and townhomes. These include: Richmond, Coquitlam, Southeast False Creek, Surrey Central, and neighbourhoods south of the Fraser. In fact, Richmond is now the most competitive new condominium market in the region as developers have become increasingly aggressive in their fight for market share. Six major new condo projects totaling more than 1,000 units have launched in Richmond in the past two months alone. Another five condo projects are potentially launching in the next few months. Now may be the time to invest in Richmond.

Tip #2 – Think like Donald Trump: Negotiate

When it comes to buying a new condo unit from a plan, don’t be afraid to ask for a discount or for an upgrade feature to be included. Your real estate agent can also do this for you – just let them know what you want. Some developers are more willing to negotiate than others, depending on their sales targets or those of their lender, so it never hurts to make a pitch.

More and more developers are offering incentives these days. Some include: Bohème on East Hastings where buyers of units more than $330,000 receive either a new Fiat car or $15,000 in cash; at The Rolston in downtown Vancouver, renters who buy in the building receive $1,000 off their mortgage payments for three years, or $500 off for six years; at the Wall Centre Central Park in Burnaby, buyers receive a 3.2-per-cent credit off purchase price. These incentives result in significant savings.

Tip #3 – Tis’ the Season? Or is it?
Spring typically brings with it a sense of renewal, which seems to get more people thinking of buying a new home, is a traditionally strong home-buying season. That means more competition for properties, and less incentive from sellers to offer discounts. Unless your timing is tight, consider buying during traditionally slower times of the year such as mid-summer when there are fewer buyers, and sellers and developers may be more willing to negotiate.

Tip #4 – Become a Landlord

Buying a house doesn’t have to mean carrying the entire mortgage on your own. A lot of first-time homebuyers purchase properties with two or more bedrooms or units, and rent out the extras to roommates or tenants. Becoming a landlord isn’t for everyone, but if you’re up for a little extra work, and some company, it could make the difference between changing your status from renter to buyer.

What sells condos? Apparently grocery stores

Wednesday, June 12th, 2013

Across Vancouver, mixed-use development – especially ones with specialty food markets or full-service grocery stores on the ground level – are popping up like mushrooms after a spring rain.

Condo purchasers want a new kind of lifestyle – one of convenience. As living space shifts downtown, municipalities are shedding old zoning models in which homes were placed in one spot, retail in another, industry in yet another, and everyone drove from one to the other. In Toronto, the movement is ramping up. In Vancouver, where space is at a premium, it’s rampant.

Yaletown was a decaying industrial area before Vancouver designated it as a mixed-use residential-commercial hub and made it a priority for redevelopment in the late 1990s. First, a highrise condo went up, then Choices Markets Ltd. won the lease to provide groceries in a structure adjacent to the residential building.

“The original developer approached us for tenancy as both a means of providing service to the neighbourhood and adding a selling feature for their condo development,” says Tyler Romano, director of marketing for Choices, a retailer known for natural and organic foods.

The developer approached national chains, but at the time they did not have a format for a grocery store with a smaller footprint. Choices won them over with plans to stock the shelves in only 11,500 square feet, a 10th of the size of a suburban big-box grocery store.

Over the past 13 years, as at least 15 condo towers were added, the area has morphed into a vibrant, upscale oasis, “a perfect fit for our brand of socially conscious, community-minded green retailing,” Mr. Romano says. “This works perfectly for the car-less urban dweller who adheres to the two-bags, six-blocks shopping pattern.”

The grocer has adapted its offerings for the clientele – many of them younger single people and busy professionals who want to pick up dinner right where they live – with grab-and-go items from the salad bar and deli making up a high proportion of sales.

“It’s unbelievably convenient when it’s nine o’clock at night and all you have to do is go straight down the stairs and walk into a store and grab products,” Mr. Romano adds.

In Toronto, grocery was always part of the plan of the massive Concord CityPlace development which, when complete, will be home to 20,000 people. Tucked in a downtown corner off Spadina Avenue, a vibrant 20,000-square-foot Sobeys grocery store offers benches outside for patrons to take the sun, with a flower shop up front.

“It’s quite quickly becoming the heart and soul of CityPlace,” says Gabriel Leung, director of development for Concord Adex. “Financially, if we could have landed a retailer sooner, we could have leveraged on that and included it in our marketing materials. People always appreciate these kind of things in an urban centre.”

Concord Park Place, the developer’s second Toronto highrise neighbourhood at Sheppard and Leslie streets in Toronto’s North York area that will boast 10,000 units when complete in 2018, does not yet have a grocer. “We’ve been talking to a few other mainstream operators,” Mr. Leung says, adding that it takes a long time to negotiate with national chains.

Originally, though, the grocery store was not part of the plan. Home Depot Inc., which had wanted to get closer to the downtown condo market, had signed a lease agreement with developer RioCan Real Estate Investment Trust, but when the economy in the United States sharply contracted in 2008, the hardware giant was forced to lay off employees and close stores. It broke its lease with RioCan. Almost immediately grocery stores lined up to fill the vacancy.

David Speigel, vice-president of operations at Tribute Communities, which partnered with RioCan to work on the residential portion of the project, recalls welcoming the switch to a grocery store. Tribute wasn’t keen to have residents live on top of a hardware store.

Mr. Speigel thinks residential can co-exist right next to retail – although mixed-use planning is more complex and there are few developers with the expertise to construct both. “It becomes very complicated because you have floors that are servicing both retail and residential.”

A small development, epecially, makes more sense financially when combined with retail stores beneath, Mr. Speigel said. “It’s less important when you have a 40-storey building; the retail at the bottom of it becomes less significant.”

He maintains downtown condo buyers are happy to live above the grocery store. He even knows of one, happy to wander down to the store to grab his dinner in his “boxers and flip flops” on a cold winter day.

Source: Beverley Smith, The Globe and Mail

Canada’s new home construction is on the rise, showing our real estate market is regaining momentum

Monday, June 10th, 2013

The Canadian dollar rose against the majority of its most traded peers as a report showed new home construction increased more than forecast in May, adding to evidence the housing market is regaining momentum.

Canadian housing starts rose at their fastest pace in more than a year in May on a surge in condominium construction, Ottawa-based Canada Mortgage & Housing Corp. said on its website Monday.

The currency rose for a third day against its U.S. counterpart after its biggest gain in a year and a half versus its U.S. peer last week as a surge of hiring in construction led to Canada posting its biggest jobs gain in a decade in May. Canadian housing starts were 200,178 units at a seasonally adjusted annual pace in May, according to the Ottawa-based Canada Mortgage & Housing Corp.

“May’s increase in homebuilding suggests overall housing construction continues to garner support from condominium-related building, although the overall levels are still off from the highs seen in mid-2012 when the market was more frothy,” said CIBC World Markets economist Emanuella Enenajor.

“Today’s data could mean that homebuilding activity in the second quarter could be less of a drag than seen in the prior quarter.”

Housing-market data are showing few signs of a sharp correction even amid warnings from analysts and policy makers that a bubble may have been forming. Finance Minister Jim Flaherty tightened mortgage rules for a fourth time last year on concern that an overbuilding of condos could lead to sharp price declines. Former Bank of Canada Governor Mark Carney identified record household debt as the biggest domestic risk to the economy.

The loonie rose 0.1% to C$1.0184 per U.S. dollar at 8:19 a.m. in Toronto. One loonie buys 98.19 U.S. cents.

Economists forecast a reading of 179,100 housing starts, according to the median of 18 responses to a Bloomberg News survey.

Home construction, which helped lift Canada’s economy out of recession, has been a drag on growth over the past year, according to Statistics Canada data. Construction fell in the first quarter at an annualized 4.7% pace, the third- straight drop, the Statistics Agency reported May 31.

Multiple-unit housing starts in urban areas rose 22.2% in May to a pace of 114,346 units, according to the CMHC report, while single-unit work increased by 3% to 62,888 units.

Source: Ari Altstedter, National Post Wire Services

Sales of homes in Vancouver are increasing

Wednesday, June 5th, 2013

Home sales increased in May for the first time since September 2011, the Real Estate Board of Greater Vancouver reported Tuesday.

The year-over-year increase is small at just one per cent, and the number of sales is still 19.4 per cent below the 10-year average, but sales jumped 9.7 per cent when compared to April, the board reported.

Even though historically (sales) are still low, they are still improved,” said Sandra Wyant, president of the Greater Vancouver board.

The number of listings is 18 per cent below the number of listings last year and the sales-to-listings ratio for May was 17 per cent, whereas in January it was just 12 per cent, Wyant said.

“We’ve seen some steadying trends over the last three months,” Wyant said. “The number of homes listed for sale has been keeping pace with the number of property sales, leading to a balanced sales-to-listings ratio. This is having a stabilizing influence on home price activity.”

Meanwhile, home sales in the Fraser Valley were the slowest they’ve been in May since 2001, the Fraser Valley Real Estate Board reported Tuesday.

Sales were down 15 per cent compared with sales in May last year, but up one per cent from this April.

The number of properties for sale was also the highest it’s been this year, but slightly lower than the number for sale last year.

Ron Todson, president of the Fraser Valley board, called it a “transitioning market.”

“Sales are about 20-per-cent lower than normal for this time of year, while the number of new listings coming on stream is right on average,” Todson said.

The composite benchmark price in May for detached homes in Greater Vancouver dropped 5.2 per cent from May 2012 to $917,200, while the benchmark price of an apartment dropped 3.7 per cent to $365,600 and for a townhome fell 3.2 per cent to $454,900, the board reported.

Despite the low numbers of sales, prices are stable in the Fraser Valley, Todson said.

The benchmark price of a single family detached home in the Fraser Valley was $549,200 in May, an increase of 0.2 per cent from the same month last year. The benchmark price of a townhouse is $298,000, down 2.9 per cent year-over-year, while the benchmark price of an apartment was virtually unchanged at $203,400, the Fraser Valley board reported.

Source: Tracy Sherlock, Vancouver Sun

See why “branded homes” are becoming popular with buyers

Monday, June 3rd, 2013

“Branded” properties could become the norm as demand for high standards of design, leisure and labeled property increases among the rich in both established and emerging markets, according to the latest report from property group Knight Frank.

Celebrities and global companies are endorsing properties around the globe with Virgin in Moscow, Versace in Dubai and Bulgari in London’s Knightsbridge just some of the high profile companies that are engaging in “branding” properties.

Global research conducted by Knight Frank shows that developers can increase profits by around a third by building “branded homes,” fully-serviced designer luxury pads that separate them from the rest of the real estate pack and appeal to an aspirational clientele.

“Originally, branded residences were simply residential developments linked to an adjacent hotel. However, the provision of hotel services is now only part of the concept,” Liam Bailey, head of Residential Research at Knight Frank and the author of the report said.

Now, wealthy consumers are demanding designer developments with restaurants, bars and leisure facilities on site – and a well known, “trusted” brand name associated with their property, especially in emerging markets such as Russia and South America where “swathes” of new millionaires have been created, the report says.

The report states that the increase in the number of wealthy people — and the rise in the value of their assets — has coincided with a shift in their investment requirements. The group’s data confirms that several years of chaotic financial markets have convinced many in this group that they ought to invest a greater share of their wealth portfolio in tangible assets, including residential property.

The emerging market partiality to “brands” and luxury goods as trusted names, however, has added a new dimension to branded property development.

“Evidence from the development of the luxury consumer goods market confirms the importance placed on brands in these markets as a means of confirming provenance, security and trust. It seems likely that as global wealth creation expands, the demand for high quality residential development property in key global centers will undoubtedly rise,” Bailey states.

Using globally known designers such as Philippe Starck or celebrities such as Jade Jagger, daughter of Rolling Stones’ singer Mick Jagger, developers operating in the competitive global property marketplace view branded residences as a way to give their developments the edge.

Yoo, a luxury property developer cited in Knight Frank’s report has branded and designed more than 10,000 homes, hotels and commercial projects in 37 cities, working with designers such as Marcel Wanders, Jade Jagger and Anouska Hempel.

Yoo chairman John Hitchcox said a name — and its associations with style — appeals to consumers.

“It lends credibility, endorsement and identification, in that the buyer is identifying with a certain lifestyle and taste. Jade Jagger isn’t a designer in the traditional sense but her bohemian lifestyle and taste are very well recognized and there is an alignment there with people who buy schemes that Jade has been involved with,” Hitchcox notes.

“Just as when you walk into an Apple Store you do so with certain expectations of freedom and service, so people look to premium homes with similarly high expectations,”

“Some areas of the world are becoming overheated [in the property market and having something extra to differentiate oneself from competitors is becoming more and more vital.”

Source: Holly Ellyatt, Assistant News Editor,

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