An interesting and informative video from BNN about the state of Canada’s condo and housing market and how much taxpayers could be on the hook if the market starts to cool faster than expected.
video: The state of Canada's condo market
New tax rules affect the sale price of new homes in BC
The rule changes are intended to keep the tax burden on most newly-constructed homes at the same level that they were under the old PST regime, that they are under the current HST and that they will be when the PST is reinstated on April Fool’s Day next year. But three provisions make this a sweeter deal for builders and buyers:
. The threshold for a substantial tax rebate has been raised from $525,000 – a ludicrously low amount in the Lower Mainland, which is Canada’s most expensive housing market – to $825,000.
. Buyers of higher-priced homes will also benefit because they’ll pay tax only on the amount over and above the exemption.
. Recreational homes in most of B.C. will be eligible for the tax break for the first time.
The increased exemption goes a long way to address one of the most serious criticisms of the well-structured but badly implemented HST that has caused the governing Liberals so much grief. The exemption was so low and homes are subjected to so many taxes that the HST became yet another driver of sky-high urban house prices.
Would British Columbians’ reaction to the HST have been less visceral and less powerful if measures like these had been adopted from the start?
We’ll never know.
But maybe, just maybe, this more realistic approach indicates the government at least learned a lesson from the voter rage that drove former premier Gordon Campbell from office.
Since houses take a long time to build, the policy recognizes that many will be started under one tax regime and finished and sold under another. Falcon said the objective is to keep the tax burden the same, regardless of the timing.
In the old PST era, there was no provincial tax on the selling price of a new home, but builders paid PST on materials they used. The PST added, on average, two per cent to the total cost of the home.
When the HST was implemented, the seven-per-cent provincial tax applied to the selling price of the house, but the government said it wanted to keep the tax burden at the same level as under the PST. So it implemented a rebate of up to $26,250 (now raised to $42,500) to bring the effective provincial tax rate down to two per cent on the first $525,000.
When the PST resumes next year, the assumption is that the PST will, once again, add about two per cent to the cost of each new home.
Those prices should all work out to be equal.
The problem Falcon had to address was what to do about houses started under one tax regime and finished under another.
Depending on the timing and the policy, it’s easy to come up with scenarios where buyers might be able to duck both taxes, or where they might be dinged with both.
Falcon’s solution is a two-per-cent transitional tax on homes built with tax-free materials and sold with no HST applied. It’s a bit more complex than that, because it has a provision to consider what portion of the materials are bought and what portion of the home is completed under each tax regime.
Complex tax policies always create opportunities for unfairness. But Janice Roper, a specialist on indirect taxes at the Vancouver office of Deloitte, tells me the rules appear to be comprehensive, fair and hard to manipulate.
Peter Simpson, president and CEO of the Greater Vancouver Home Builders’ Association, said they provide the certainty his builders want, and they were announced sooner and with better terms than expected.
So – thus far, at least – Falcon seems to be finding his way through the HST minefield he inherited with his new job.
Source: Don Cayo, The Vancouver Sun
Vancouver home prices fall
The number of houses sold in the Vancouver region through Multiple Listing Service was down 13.4 per cent in January from the same month last year, the industry group said Wednesday.
In addition, the average price of a Vancouver home declined slightly, from $762,562 in January 2011 to $752,380 this year – a difference of 1.3 per cent.
In the Fraser Valley, sales dipped by 3.1 per cent during the same time period. However, prices rose 6.4 per cent from an average of $441,544 last year to $469,635 in 2012.
Meanwhile, B.C.’s northwest and northeast regions, Kamloops and Victoria saw sales gains of more than 10 per cent.
The biggest jump occurred in B.C.’s northwest region, where the average house price increased 14.2 per cent – from $214,357 to $244,872 – in the 12 months from January 2011.
Powell River, with an average price of $209,636, recorded the least expensive homes in the province – a figure down 1.2 per cent ($212,078) over January 2011.
Cameron Muir, chief economist with the BCREA, said consumer demand driven by low mortgage interest rates saw modest improvements in January from a year ago, despite a decline in provincial sales activity.
Across Canada, home sales were down 4.5 per cent in January from the same month one year earlier, while the number of newly listed homes edged down 1.4 per cent.
“This marks the first monthly decline in national activity since August 2011 and the biggest monthly decline since July 2010,” the Canadian Real Estate Association stated.
“The monthly decline reversed a string of monthly increases over the closing months of last year, and returned national activity to where it stood at the end of the third quarter of 2011.
January’s sales declines were led by Greater Toronto and Montreal, as well as a softening in other major centres such as Greater Vancouver, the Fraser Valley, Calgary, Edmonton, Winnipeg and Ottawa.
Still, unadjusted sales last month were up four per cent from January 2011 and were even with the five-and 10-year averages for January sales, it said.
“The national housing market is stabilizing and remains well balanced,” said CREA president Gary Morse.
“That said, forecasts for economic and job growth going forward vary widely for different parts of the country, suggesting a possible continuation of a softening trend in some markets, as well as the potential that demand will pick up based on strong fundamentals in others.”
Source: The Vancouver Sun
Property sales in Vancouver
Vancouver Sun February 13th, 2012
6629 Laurel St., Vancouver
Type: 4-bedroom, 2-bathroom detached
Size: 2,700 sq. ft.
B.C. Assessment, 2012: $2,083,700
Listed for: $2,200,000
Sold for: $2,100,000
Sold on: Jan. 5
Days on market: 0
Listing agent: Daphne McFarland at Hugh & McKinnon Realty
Buyer’s agent: Charan Kamal Pannu at SRS Westside Realty
The big sell: The seller of this two-level rancher bought it in 1953 — the year it was built – and resided in it for the next 59 years. It is not uncommon to have original-owner homes of this age in Vancouver, but in these real-estate obsessed times, it is becoming less so. As the description on the MLS listing sheet states, this is a solid home, but the main value is in the large level lot. That land measures 54 by 144 feet and if redeveloped, could hold a property larger than the current residence. Adding to the attraction was the light-filled west-facing fenced back yard, the Oakridge neighbourhood, and the convenience of a location that’s near Oakridge shopping centre, Langara College, Churchill secondary and Jamieson elementary schools, and the Canada Line. All of this produced an accepted offer the day the property went on the market.
89 -9229 University Cres., Burnaby
Type: 3-bedroom, 2-bathroom townhouse
Size: 1,163 sq. ft.
B.C. Assessment, 2012: $392,000
Listed for: $449,000
Sold for: $438,000
Sold on: Jan. 12
Days on market: 58
Listing agent: Robert Crowe at RE/MAX Real Estate Services
Buyer’s agent: Robert Crowe and Ali Nimji at RE/MAX Real Estate Services
The big sell: SFU’s UniverCity development is a sustainable community that has evolved into a family-friendly complex high up on the campus grounds on Burnaby Mountain. Serenity was built by Polygon in 2006 and consists of 132 townhomes surrounded by forest walks, hiking and bike trails. One block away is the new University Highlands elementary school, and a new child care centre will be opening soon. This three-bedroom, two-level corner unit home enjoys an abundance of natural light and a large patio and garden area surrounded by thick conifers. The interior features a mix of flooring with wall-to-wall carpet, laminate hardwood and tiling. The kitchen has plenty of cupboard and counter space, birch-coloured cabinetry, a double sink, stainless-steel appliances, and a subway-tiled backsplash. An electric fireplace warms the living room and an oversized shower adds a spa-like quality to the ensuite bathroom. The home has designer colours throughout.
106-1040 West 8th Ave., Vancouver
Type: 1-bedroom, 1-bathroom apartment
Size: 692 sq. ft.
B.C. Assessment, 2012: $340,000
Listed for: $369,900
Sold for: $362,500
Sold on: Jan. 12
Days on market: 85
Listing agent: Paul Bale at Sutton Group – West Coast Realty
Buyer’s agent: George Winkler at Amex Broadway West Realty
The big sell: This home is just north of Broadway on the Fairview slopes, with Granville Island, the seawall, parks, shopping, and transportation minutes away. The ground-floor unit has a well-designed floor plan and a front door that opens to a 16-by-16-foot living room. That room has bright, arched windows that provide plenty of views of a partly covered garden patio. The home has a gas fireplace, in-suite laundry and storage areas, a 16-by-9-foot bedroom, and a secure underground parking stall. This is one of 28 units in the four-storey development, which was built in 1986 with the homes positioned around a central courtyard. The apartments have been rainscreened and are pet- and rental-friendly.
For the full story, please click on Real estate sales in Vancouver and Burnaby.
Compiled by Nicola Way of BestHomesBC.com and AssignmentsCanada.ca.
Realtors – send your recent sales to nicola@besthomesbc.com
© Copyright (c) The Vancouver Sun
Vancouver is not facing a housing bubble
Canada’s banks are in talks with the federal government about ways to curb mortgage lending in response to a “genuine concern” about the country’s housing boom and rising consumer debt levels, said TD Bank chief executive officer Edmund Clark.
“Household debt numbers are coming up to U.S. levels, so that is causing us a concern,” said Clark.
The banks have responded by restricting some lending and raising prices on higher-risk borrowers.
TD Bank joined Royal Bank of Canada this week in ending a promotional 2.99 per cent four-year mortgage rate, three weeks before it was set to expire.
Although the Vancouver housing market may be out of equilibrium, a significant correction is not expected, said Tsur Somerville, director at the University of B.C. Centre for Urban Economics and Real Estate at the Sauder School of Business.
“I think there’s some concern that prices don’t get so far out of whack that there’s a substantial correction,” Somerville said. “All you have to do is look around and you’ll see that if [a substantial correction] does happen, that would be a real big problem. So let’s not let the housing market be driven by a wave of cheap and easy-to-access money.”
The Bank of Canada is trying to reduce the exposure to mortgage debt and put the brakes on the housing market without using “really, really big hammers,” like raising interest rates, Somervilles said.
“The government has already taken steps to control mortgage lending through its regulations and I think there’s a wariness about tightening those too much, so they’re encouraging the banks to look at their mortgage book more closely.”
However, an expectation that mortgage rates will stay low is taking the sizzle out of Vancouver’s housing prices, Reuters reported.
“Since October, it was like someone turned off the tap. It became absolutely dead,” said longtime realtor Pam Allen.
At the same time, Chinese investors, who have long helped to underpin the city’s red-hot market, are holding back because property market curbs back home means they have less cash available.
But with immigrants still streaming in from China and elsewhere, and the city frequently rated one of the most livable on the planet, most experts see prices fizzling rather than imploding with a bang.
Vancouver price rises peaked at a stunning 19.8 per cent in 2006, dipped in 2009, and came roaring back with double-digit growth in both 2010 and 2011.
A house bought for $500,000 in 2001 would have fetched about $1.2 million a decade later, based on average price changes.
But the latest month-to-month figures show Vancouver prices fell in five of seven months from last June to December, including drops of more than 5 per cent in November and December.
Source: Bloomberg News with files from Reuters and Tracy Sherlock, Vancouver Sun
Lower Mainland property prices increased in 2011
Of course, Vancouver’s real estate market played a significant role.
The gain was bigger in the western half of the region, with the Real Estate Board of Greater Vancouver reporting detached house prices typically rose 11.2 per cent for the year to $887,000.
Of interest is that the hottest gain was a 34 per cent jump in Port Moody home prices, where the Evergreen Line is now assured to pass through after funding for the SkyTrain extension was secured in recent months.
House prices on the west side of Vancouver also gained 20 per cent, while the east side, West Vancouver, North Vancouver, Burnaby and South Delta all saw benchmark house prices gain 13 to 16 per cent.
Attached homes and condos gained more modestly, up roughly four per cent on average.
The Fraser Valley Real Estate Board (FVREB), which covers Surrey, White Rock and North Delta, reported benchmark house prices gained 3.3 per cent in 2011 to $523,000.
Townhouses and condos dipped, however, declining 2.1 per cent (to $315,000) and 1.2 per cent (to $237,000) respectively.
“One trend from 2011 that is clear was the preference for single family homes,” FVREB president Sukh Sidhu said. “For the most part in our region, both sales and prices of townhomes and condos either stayed on par with 2010 or decreased.”
The hottest area was White Rock and South Surrey, where sales were strong and prices of benchmark detached houses climbed 10.8 per cent to $818,000.
The most expensive cities in which to buy property across the Lower Mainland remained the west side of Vancouver with benchmark detached houses nearing the $2 million level, West Vancouver houses at nearly $1.7 million and Richmond, at $1.07 million.
Benchmark houses can still be found for under $600,000 in areas like Maple Ridge, Pitt Meadows, North Delta, Surrey, Port Coquitlam and Langley in Metro Vancouver. In the Fraser Valley, equivalent prices are $424,000 in Abbotsford and $344,000 in Mission.
The Greater Vancouver statistics show the average residential property bought five years ago has gained almost 30 per cent since then.
Detached houses performed slightly better (up 38 per cent) than condos or townhouses (both up just over 20 per cent) over the five years.
Median prices of detached houses in the Fraser Valley are up 26 per cent over five years.
Source: Jeff Nagel, Surrey North Delta Leader
Recent condo sale in Chinatown
Vancouver Sun January 14th, 2012
1704 – 550 Taylor Street, Vancouver
Type: 2-bedroom, 2-bathroom apartment
Size: 785 sq. ft.
B.C. Assessment, 2012: $498,000
Listed for: $499,000
Sold for: $490,000
Sold on: Nov. 30
Days on market: 42
Listing agent: Natalia Antosh at HomeLife Benchmark Realty
Buyers agent: Seth Baker at Royal LePage Westside
The big sell: Chinatown, with its unique Vancouver heritage, has a growing interest among buyers who enjoy the eclectic neighbourhood and access to downtown. Buyer’s agent Seth Baker reports that his clients grew up in the area, and having witnessed its ongoing evolution, were looking to return. This corner unit in the Taylor building impressed them with its 17th-floor panoramic vistas over Chinatown, the docks and the North Shore. In fact, every window has a view. Since its construction in 2005, the home had been totally redone with an upscale kitchen, track lighting and concrete floors. The dining room was built to entertain, with 7-by-17-foot dimensions that will accommodate “house-sized” furniture. There is a den, separate storage both inside and outside the apartment, and parking. The SkyTrain, Costco, Andy Livingstone Park, and Tinseltown are all within walking distance.
305 — 1425 Cypress Street, Vancouver
Type: 1-bedroom, 1-bathroom apartment
Size: 700 sq. ft.
B.C. Assessment, 2012: $392,500
Listed for: $409,000
Sold for: $410,000
Sold on: Dec. 5
Days on market: 6
Listing agent: Pamela Smith at Macdonald Realty
Buyers agent: Amanda Crosby at RE/MAX Select Properties
The big sell: Properties that come on the market in the Kits point neighbourhood usually attract attention because of their proximity to the beach, downtown and the amenities on Fourth Avenue. Listing agent Pamela Smith reports that the first — and only — open house that she held for this loft-style condo was packed with potential purchasers. A multiple-offer situation resulted in an accepted, subject-free bid slightly over the asking price. In addition to the location of the home, the main attraction was in the renovated interior. It has wall-to-wall California closets in the 14-by-17-foot mezzanine bedroom, two skylights, a remodelled bathroom with an extra-large soaker tub, undermount sinks, granite countertops, an open-plan kitchen with a centre island that also houses an electric fireplace built into the end-facing living room, a walk-in pantry, and new hardwood flooring and carpet throughout. The building is pet- and rental-friendly.
1159 West Keith Road, North Vancouver
Type: 5-bedroom, 5-bathroom detached
Size: 4,587 sq. ft.
BC Assessment, 2012: $1.123 million
Listed for: $1.188 million
Sold for: $1.125 million
Sold on: Dec. 14
Days on market: 78
Listing agent: Karim Virani at Virani Real Estate Advisors
Buyers agent: Carole Yang at Sutton Group – West Coast Realty
The big sell: This impressive Pemberton Heights view property was built in 1983 and renovated in 2007, presenting the owners with accommodation that can suit any living situation. The four levels hold a plethora of bedrooms and bathrooms, as well as two kitchens, a family room, office, storage room and separate living and dining areas, all finished to exacting standards. The uppermost floor has a modern open-concept kitchen with stainless steel appliances and custom cabinetry. The southern exposure and multiple decks ensure that all occupants can enjoy the views and the garden on the 50-by-126-foot lot. With a potential rental income of $5,000-plus per month, this could be a good investment opportunity. Pemberton Heights is an area of North Vancouver east of Capilano Road and south of the Trans-Canada Highway, with easy access to Lions Gate Bridge and numerous schools, parks and trails.
For the full story, please click on Real estate sales in downtown Vancouver, Kitsilano and North Vancouver.
Compiled by Nicola Way of BestHomesBC.com and AssignmentsCanada.ca.
Realtors – send your recent sales to nicola@besthomesbc.com
© Copyright (c) The Vancouver Sun
Recent property sale in Port Moody
Vancouver Sun January 7th, 2012
430 Carlsen Place, Port Moody
Type: 3-bedroom, 3-bathroom townhouse
Size: 1,749 sq. ft.
B.C. Assessment, 2011: $370,000
Listed for: $399,800
Sold for: $389,000
Sold on: Nov. 28
Days on market: 7
Listing agent: Terry Osti at RE/MAX Crest Realty Westside
Buyers agent: Nick Parente at Prudential United Realty
The big sell: One of the reasons this three-bedroom townhome in Port Moody’s Eagle Point complex sold in seven days can be attributed to simple math: With a sale price of $389,000, the cost per square foot for the three-level property works out to $222.41 — about half the cost of a similar-sized townhouse in Vancouver. Other attractions are its comprehensive renovations: there’s a gourmet kitchen with dark wood cabinets accented by a glass tile backsplash; a designer colour scheme throughout; new flooring that’s a mix of laminate, tile and carpet; three new bathrooms; and custom-made blinds. As well, there is a private detached garage, and green space to the front and rear of the home. The building has recently benefited from updated windows and a new roof, deck and paintwork, and the communal amenities include an outdoor swimming pool and playgrounds. The property is close to shops, restaurants, Eagle Ridge Hospital, Port Moody’s Civic Centre, the Inlet Theatre and Galleria, and schools and transportation.
6984 Rupert St., Vancouver
Type: 5-bedroom, 2-bathroom detached
Size: 2,250 sq. ft.
B.C. Assessment, 2011: $875,100
Listed for: $974,800
Sold for: $976,000
Sold on: Dec. 5
Days on market: 8
Listing agent: Joanne Taylor at Sutton Group – West Coast Realty
Buyers agent: John Lee at Royal Pacific Realty
The big sell: According to agent Joanne Taylor, there are specific reasons why this 50-year-old rancher achieved multiple offers the day after its first — and only — open house, offers that resulted in a winning bid over the asking price. Vancouver’s Killarney area is of particular interest to property purchasers due to its proximity to Fraserview Golf Course, Champlain Mall, and other community amenities. The fact that it is one of the last areas in the city that is yet to be fully developed also increases its appeal to buyers and investors. This home had been well maintained. It has an updated kitchen, a fully finished basement with a 1,125-square-foot suite, original hardwood flooring protected under the carpet, a two-year-old roof, two gas fireplaces, and a fully fenced 143-foot-deep back yard with room for a fish pond, patio, storage shed and two-car garage.
4 — 3160 West 4th Ave., Vancouver
Type: 2-bedroom, 1-bathroom townhouse
Size: 832 sq. ft.
B.C. Assessment, 2011: $516,000
Listed for: $514,800
Sold for: $500,000
Sold on: Dec. 4
Days on market: 29
Listing agent: Colette Gerber at RE/MAX Select Properties
Buyers agent: Ruthie Shugarman at Dexter Associates Realty
The big sell: This townhouse in the Avanti complex on Vancouver’s West Fourth Avenue is accessed via an inner courtyard, and according to agent Colette Gerber, that acts as a buffer against the traffic noise and creates a much quieter interior. Since it was built in 2000, the seller has upgraded the unit and installed some mirror arrangements that give the illusion of a much larger space. The home has a gas fireplace, engineered hardwood flooring, and has been painted in designer hues. The rear patio — with its south-facing exposure — ensures that maximum light enters the home. Both bedrooms are upstairs; the front one has been transformed into an office/guest room through the addition of a Murphy bed and a built-in desk and shelving. There is a large in-suite storage area, underground parking, and the building is pet- and rental-friendly.
For the full story, please click on Real estate sales in Vancouver and Port Moody.
Compiled by Nicola Way of BestHomesBC.com and AssignmentsCanada.ca.
Realtors – send your recent sales to nicola@besthomesbc.com
© Copyright (c) The Vancouver Sun
Canada's house prices are set to go up in 2012
Low mortgage rates will continue underpinning housing demand despite the weakening economy, said Royal LePage Real Estate Services in its annual housing outlook Thursday.
LePage president and CEO Phil Soper said that predictions from housing experts and economists for a drop in prices for 2012 are wrong as mortgage rates remain near record lows.
“Interest rates are the primary driver behind activity levels in the marketplace,” Soper said. “People buy homes on the payments that they will be making, not on the sticker price of a particular home.”
Most experts believe interest rates will remain stable for this year and well into next as the economy expands sluggishly, but eventually rates should rise with stronger growth.
Royal LePage, which franchises real estate agencies across the country, predicted the national average price for resale homes will rise 2.8 per cent by the end of the year.
The forecast follows a gain of 4.2 per cent in the national average price for a standard two-storey home to $375,427 in the just completed fourth quarter of 2011.
In Vancouver, a standard two-storey home had an average price of $1.1 million in the fourth quarter, up 10.9 per cent from a year earlier, while Toronto saw a home in the same category gain 4.2 per cent to $629,000.
But for 2012, Royal LePage expects prices in Vancouver to gain about 2.3 per cent, while Toronto is expected to see growth of 2.6 per cent.
Regina is expected to lead the country with gains of five per cent for the year, reflecting the sharp growth in Saskatchewan, a province rich in potash, oil, uranium and other resources.
Soper noted that affordability in Vancouver is “on a knife’s edge” as people spend upwards of 70 per cent of their post-tax income on their mortgage, property taxes and utilities.
The economic slowdown in China may also affect the market in Vancouver, which has a large Chinese-Canadian population with economic and business ties to China.
“If the investment from China slows, it will change the high-end and certain neighbourhoods,” Soper said, noting that the west side of Vancouver, West Vancouver and Richmond have all seen in influx of wealthy Chinese buyers.
The International Monetary Fund has said that Canadian homes on average are 10 per cent overpriced and warned it may be a factor that puts the country’s economic recovery at risk.
The Bank of Canada has also repeatedly cautioned prospective buyers to guard against being lured by low mortgage costs because interest rates and therefore monthly payments, will eventually increase as the economy gets stronger.
However Soper suggested that moves made by Ottawa to tighten mortgage lending rules have helped limit the risks.
“The government has made small but significant regulatory changes that have restricted access to the more risky mortgage products post the recession,” he said.
The Royal LePage forecast came as the Statistics Canada reported the price of new homes rose again in November, led by gains in Toronto and Montreal.
The government agency’s new housing price index rose 0.3 per cent in November, after a 0.2 per cent increase in October. On an annual basis, the index was 2.5 per cent higher in November compared with November 2010.
The largest year-over-year price increases reported by Statistics Canada were in Toronto and Oshawa, Ont., where they were up 6.2 per cent.
In the fourth quarter, the average price for detached bungalows rose 7.2 per cent from a year earlier to $532,137; prices for standard two-storey homes rose 4.2 per cent to $629,188 and standard condos rose 3.4 per cent to $347,659.
In Victoria and Saint John, N.B., house prices were flat or slightly down in the fourth quarter year over year.
In Saint John, detached bungalows fell 2.2 per cent year-over-year to $179,946, while standard two-storey properties slipped 0.3 per cent to $298,076. Condos were the exception, with average prices climbing 16.1 per cent year-over-year to $159,370, although LePage said those increases weren’t typical.
In Victoria, standard two-storey homes were unchanged, with prices remaining at $480,000 while detached bungalows slipped 0.8 per cent to $486,000 and condos dropping 1.1 per cent to $282,000.
Source: Craig Wong, The Canadian Press
Toronto's real estate market is leading Canada
However, that may be somewhat of a booby prize, as the Canadian market, following a 13-year boom, is cooling overall – and Toronto is expected to follow suit, he added.
The Toronto Real Estate Board said Thursday that Greater Toronto real estate agents reported 4,718 sales in December, up 10.1 per cent from the same period in 2010. The average selling price was $451,436, up 4 per cent year over year.
That capped off the second-best year on record under the board’s current boundaries, dating to 1994. “Low borrowing costs kept buyers confident in their ability to comfortably cover their mortgage payments along with other major housing costs,” board president Richard Silver said in a release. The board said buyers were held back by a shortage of listings, while tight market conditions kept upward pressure on selling prices.
It’s a different story for Vancouver’s real estate market, where the number of residential sales in December tumbled by 12.7 per cent over the same period a year earlier, according to figures released this week by the Real Estate Board of Greater Vancouver. Sales for 2011 were 5.9 per cent above 2010 levels but 9.2 per cent below 2009. The overall residential benchmark price, as measured by the MLSLink Housing Price Index, has also dropped by 1.5 per cent since June.
Earlier this week, TD senior economist Jacques Marcil predicted both B.C. and Ontario could face challenging housing markets over the next two years.
Mr. Kavcic said the ratio of sales to new listings in Toronto and throughout Ontario “is pretty much in line with historical norms,” but noted that the number of starts for new multiple-unit dwellings (largely condos) in Ontario over the past 12 months had outpaced single family homes by a factor of 1.5 to 1, up from a ratio of close to 1 to 1 over the past decade and “pretty well the largest discrepancy we’ve seen in a long time.”
As a result, “to the extent where there is downward pressure on prices, the condo market is more at risk” in Toronto, he said.
Merrill Lynch warned last month that housing prices could correct by as much as 10 per cent in the next two years in Canada because of weakness in the economy, expressing particular concern about Toronto’s condo market. The Bank of Canada also warned the Toronto market looks overbuilt and could see prices drop.
Source: Sean Silcoff, Globe and Mail
