Canada Mortgage and Housing Corporation is forecasting a stable housing market for British Columbia with light upticks in sales numbers, average prices and housing starts in 2013.

“Factors in 2013 driving the housing market are expected to be a little bit stronger,” Carol Frketich, B.C. regional economist for CMHC said. “There is expected to be a bit of a pick up in job growth next year, economic growth and demographic growth as well.”

Housing starts will increase to 28,500 homes for this year in B.C., from 26,400 starts in 2011, and then rise to 30,100 homes in 2013, CMHC said.

Most of the growth in housing starts for 2012 has been in multiple-family housing, but in 2013, multiple-family housing starts will level off, while single-detached homes start to rise, Frketich said.

“We tend to see more single-detached home starts when resale market conditions are stronger, so that’s why we’ve got that stable level of single-detached this year,” Frketich said. People who are looking to buy can find homes on the resale market.”

She said CMHC expects 9,900 single-detached housing starts in 2013, up from 8,900 this year. That compares to 11,500 in 2010.

Average prices, which are down about five per cent in Vancouver this year from last year, are expected to climb about 2.6 per cent by 2013, both in Vancouver and across B.C., Frketich said.

The average MLS price in B.C. is forecast to be $522,200 for 2012, down 7 per cent from 2011, but should increase to $537,700 as resale activity picks up next year, CMHC forecast. The resale market in B.C. will maintain balanced supply and demand conditions through 2013, CMHC said. The number of sales will continue to moderate through 2012, but should also pick up in 2013, Frketich said.

Vancouver renters will be looking at lower vacancy rates and higher rents for the fall, Frketich said. The vacancy rate is projected to fall to 1.1 per cent in October from 1.4 per cent in October 2011, while the average rent for a one-bedroom apartment will climb to $1,005 from $964 in the same time period.

Nationally, the CMHC is forecasting a moderate slowdown in new-home construction starts as well as sales of existing houses.

The CMHC national forecast suggests next year will be somewhat softer than estimates the federal agency issued in June, while 2012 may be somewhat stronger nationally than previously expected.

Nationally, CMHC estimates there will be between 196,800 and 217,000 units of housing started in 2012. In 2013, CMHC now estimates national housing starts will be in the range of 173,000 to 207,400 units.

The national average price for property sales through CREA members is forecast to be between $351,300 and $378,400 in 2012 and between $358,000 and $395,800 in 2013, CMHC said Tuesday.

Source: Tracy Sherlock, Vancouver Sun

Three Canadian cities have again cracked the top five on a ranking of the world’s most liveable places.

In the latest report from the Economist Intelligence Unit released Tuesday, Vancouver ranked third, followed by Toronto and Calgary in fourth and fifth respectively.

The Canadian cities were bested only by Vienna in second and Melbourne, which topped The Economist’s Liveability Ranking.

The annual survey of 140 cities uses more than 30 factors to gauge the state of healthcare, education, infrastructure, stability, culture and environment — rendering a score out of 100.

Vancouver lost marks only for petty crime rates, availability of quality housing and congested road networks, with report authors citing a series of infrastructure projects such as the new Evergreen transit line “that will no doubt have a long-term benefit, but in the short-term they can be disruptive.”

Toronto received a “Tolerable” rating (as opposed to Acceptable) for roads, public transit and housing while Calgary waned in temperature ratings.

Calgary Mayor Naheed Nenshi mused that his city’s spot on the ranking proves a “thriving business community, and a vibrant cultural scene that is attracting people from around the world” ­— echoing comments from Stephen Harper’s speech at the Stampede last month when the Prime Minister declared the Alberta metropolis as the greatest city in Canada.

The only other Canadian city to make the Economist list was Montreal in the 16th position.

Australia was the only country to outperform Canada, posting four cities in the top 10. The authors say the trend among the most liveable cities shows a preference for “mid-sized cities in wealthier countries with a relatively low population density.” Canada’s density is 3.40 people per square kilometre, while Australia’s is 2.88.

The results vary little from the last ranking released six months ago, with Vancouver maintaining the third spot after slipping from first place in 2011.

Most of the top-tier countries are separated by fractions of a percentage — the first-ranked Melbourne is scored 97.5, only 1.8 points higher than 10th-place Auckland, N.Z. The Economist Information Unit uses the ranking to provide suggestions on how businesses should compensate employees working abroad in cities “where living conditions are particularly difficult.”

It’s one of several studies of its kind, but economic development experts in the listed Canadian cities say The Economist report’s catering to business communities could lead to tangible benefits.

“It’s certainly circulated to an audience of potential investors and investors that may be interested in relocating to our city,” said Randy McLean, a strategy director at the City of Toronto, adding good scores in categories like education will help attract top management talent and their families.

Source: Jake Edmiston, National Post

The Real Estate Board of Greater Vancouver (REBGV) is heralding a buyer’s market in Vancouver, but if prices are still going up, how can this be true?

The following is part of an article written by Harvey Enchin for the Vancouver Sun:

A buyer’s market is loosely defined as a market condition in which supply exceeds demand.

So, the REBGV was technically correct in declaring Vancouver a buyer’s market this week. Sales of houses, townhomes and apartments dropped 27.6 per cent last month to 2,362, units from 3,262 in June 2011.

While it may be true that buyers were presented with more choice and faced fewer rival bidders than a year ago, the fact that sales volumes were down is meaningless without an accompanying downward adjustment in price. And that hasn’t happened.

Metro Vancouver prices were up on average by 2.6 per cent from January to June, while West Vancouver and Whistler were up 7.1 per cent. In fact, the benchmark price for a detached home in Vancouver is up 3.3 per cent from a year ago to $961,600, or roughly 14 times the annual median household income. The average ratio of house prices to median income in Canada at the start of 2012 was 4.6 times.

Just because the real estate industry has heralded a buyer’s market, doesn’t mean it’s time to buy.

CREA’s forecast earlier this year called for a slight dip in property prices in 2012 — which is looking increasingly unlikely — and a rebound in 2013. However, TD Bank sees a price decline of up to 15 per cent over the next two to three years.

Academics who specialize in real estate finance — namely Tsur Somerville at the University of British Columbia and Andrey Pavlov at Simon Fraser University — are on record saying price changes won’t happen overnight. It might take six months for sellers to lower their expectations. Neither deigned to declare the current state of affairs a buyer’s market.

Eventually, tighter mortgage rules, high household debt, rising interest rates, overbuilding of condominiums and townhomes, and a slowdown in offshore investment will begin to bite and prices should start to decline.

The economic model of supply and demand is supposed to be a determinant of price, so unless practitioners of the dismal science have got it all wrong, the price of real estate — even in Vancouver — should soften sooner or later. Probably later.

One can understand the real estate industry’s hope for a buyer’s market — its members need sales to earn a living. But existing conditions in Vancouver, and other places in B.C., constitute a buyer’s market only if money is no object.

Source: Harvey Enchin, Vancouver Sun

The number of residential property sales has hit a 10-year low in Metro Vancouver leading the Real Estate Board of Greater Vancouver to declare a buyer’s market.

The announcement is significant since the board has in recent months been calling the market “balanced.”

According to the board’s June report, sales of houses and apartments dropped to 2,362 last month, a 27.6 per cent decline compared with 3,262 sales in June 2011, and a 17.2 per cent drop over the previous month of May.

“Overall conditions have trended in favour of buyers in our marketplace in recent months,” said Eugene Klein, the board’s president, in a news release today.

“This means buyers are facing less competition and have more selection to choose from compared to earlier in the year.”

June sales were the lowest total for the month in the region since 2000 and 32.2 per cent below the 10-year June sales average of 3,484, the report shows.

New listings for detached, attached and apartment properties totaled 5,617 in June, a three per cent drop from the year before and an 18.9 per cent decline compared with the 6,927 new listings reported in May 2012.

“Today, our sales-to-active-listings ratio sits at 13 per cent, which puts us in the lower end of a balanced market,” said Klein.

He said the ratio has been declining in the market since March when it was 19 per cent.

The benchmark price for detached properties increased 3.3 per cent from June 2011 to $961,600, while apartments increased 0.3 per cent to $376,200.

Source: Tiffany Crawford, Vancouver Sun

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