Archive for April, 2013

The reasons some home sellers are desperate to sell

Tuesday, April 30th, 2013

Most homebuyers shopping in a choppy market are taking their time. But, if you’re in the minority of people who have a deadline – because of an impending birth or a new job – this environment offers both opportunities and challenges.

Some people who move too quickly are motivated by timing pressures related to relocation, while others worry they’ll be living with their parents because they’ve sold their home a bit faster than expected.

But the bigger issue is often with stressed sellers who are simply too anxious to get out in a hurry.

When a homeowner is desperate to sell and a buyer is ready to fork over the cash, the truth about a house is often swept under the rug, experts suggest.

As a result, novice homebuyers need to watch out for those little fibs when house shopping, says real estate expert Barbara Corcoran.

For instance, some ‘motivated’ sellers will tend to forget about items like:

* Personality of neighbors and the neighborhood
* Status of home repairs, particularly the roof
* Insect and rodent infestations
* Elevated radon levels
* Legal trouble, like unpaid taxes, liens, and outstanding judgements
* Excessive airplane noise overhead
* Trouble with the building department due to un-permitted renovations and additions
* Water damage and frequent basement flooding
* Quality of local schools and institutions
* Possibility of future disruptive construction in the area

To protect yourself, stay in the driver’s seat and question everything. You’re under no obligation to please the seller; don’t cave even if they act like they’re disappointed or claim they never noticed any of these items.

Source: Gordon Powers, MSN, Money

Vancouver’s housing market shows signs of improvement

Thursday, April 25th, 2013

Sandra Wyant has come across tantalizing clues that she believes point to a gradual turnaround in Vancouver’s tepid housing market.

The new president of the Real Estate Board of Greater Vancouver sees modest but encouraging signs of a stalemate easing between buyers and sellers. Sales volume in the Vancouver region fell 18.3 per cent in March, compared with the same month in 2012, but there is a silver lining: Decreases in year-over-year sales have slowed since last fall, when the number of homes sold tumbled nearly 27 per cent. Another clue? An industry statistic known as the sales-to-listings ratio has improved in Greater Vancouver. “There seems to be more of a meeting of minds going on,” Ms. Wyant said in an interview.

After a pricing slump that began in the spring of 2012, it means that a recovery – albeit tenuous – for Vancouver real estate is finally within sight, she said. After house prices in Greater Vancouver more than doubled from 2004 to 2011, they fell roughly 6 per cent last year. Prices are expected to be flat or slightly down this year, before a rebound in 2014, housing experts say.

Vancouver and Toronto have been the focus of Canada’s cooling housing market, with sales volume slumping in both markets. But it is in Vancouver where residential resale prices have fallen while Toronto has still managed to eke out small pricing gains.

To arrive at the sales-to-listings ratio, take the number of homes sold in a month and divide it by the number of active listings for that same month. With March’s 2,347 sales divided by 15,460 active listings, that equals a ratio of 15.2 per cent – a statistical reading for being a balanced market, but just barely.

Real estate agents consider it a balanced or neutral market in the Vancouver region when the ratio is between 15 per cent and 20 per cent. It is deemed a buyer’s market below 15 per cent and a seller’s above 20 per cent.

Cameron Muir, chief economist at the B.C. Real Estate Association, cautioned that such numbers are rough guidelines, and it’s too early to declare that Vancouver is swinging back toward a seller’s market, let alone becoming red-hot again. “I don’t think anyone expects to see prices accelerate any time soon like in the previous run-up,” Mr. Muir said.

Tsur Somerville, a professor at the University of British Columbia’s Sauder School of Business, said sluggish prices could be in store for Vancouver for the rest of 2013, but a crash landing is unlikely. “Given where interest rates are, it would be silly to expect a large change in prices,” he said. Still, Prof. Somerville cautioned that if interest rates skyrocket and if there is a major meltdown in financial markets, then Canada’s housing market, not just Vancouver’s, would face turmoil.

The Vancouver area’s residential sales volume began weakening in the fall of 2011. Buyers are waiting for further softening in the market while sellers are holding out for better bids or pulling their homes off the multiple listing service if no decent offers emerge. Benchmark house index prices in Greater Vancouver peaked at $625,100 last May for detached homes, townhouses and condos. Index prices (which strip out the most expensive properties) fell to $588,100 in January, a 5.9-per-cent drop from last May. Monthly prices edged up slightly to $590,400 in February and $593,100 in March. Last month’s index price is down 3.9 per cent from $617,100 in March, 2012.

Source: Brent Jang, The Globe and Mail

Canadian house prices still increasing but bidding wars are less likely

Tuesday, April 23rd, 2013

Most Canadian home shoppers are not willing to get pulled into a bidding war to get the perfect place, although first-time buyers are more likely to pay above the asking price, says a poll released Tuesday.

According to a Bank of Montreal Home Buying report, 28 per cent of Canadians surveyed said they would enter a bidding war for a house or condo. That figure was higher among first-time buyers, with 39 per cent saying they would engage in a battle with multiple offers, which most often drives up home prices – to the delight of sellers.

There are indications that the housing market in Canada is finally slowing, although prices are still edging higher. Back when the market was red-hot, holding back bids and entertaining multiple offers was commonplace. Now, there are signs that in certain markets, some of the bargaining power is back in the hands of home buyers.

“Panic is normally part of a bidding war, on the part of the buyer. People get desperate, they think if they don’t get this house, they won’t get the next one, too. That sounds like the housing market of 2005 and 2006,” says Tsur Somerville, director of the Centre for Urban Economics and Real Estate at the University of British Columbia in Vancouver.

While bidding wars still happen, they tend to be focused on exceptional properties, he says. “The types of conditions that lead to bidding wars, the idea that affordability will get worse – that is no longer the case.”

Laura Parsons, a mortgage expert with BMO in Calgary, says first-time buyers – whose average age is 29 – can be inexperienced and less patient when it comes to housing. “In many cases, when they find a home they love they get excited and emotionally attached. So they can get caught up in the moment more than seasoned buyers.”

The biggest danger, she says, is overspending. Her advice to home buyers? “Don’t go past your budget. Do your homework before you go looking and make sure that you should even be bidding on this house. Know what your maximum is and stick with it.”

Lured by low mortgage rates, Canadians have taken on large mortgages. Economists and financial advisers are worried about debt levels among Canadians, and how they will be able to make their monthly mortgage payments once interest rates rise. In the BMO report, Ms. Parsons noted that total housing costs should not consume more than one-third of a household’s income.

Regionally, home hunters in Manitoba and Saskatchewan were most likely to engage in a bidding war, at 35 per cent. That compares with 29 per cent in Ontario, 30 per cent in British Columbia, 31 per cent in Atlantic Canada and 32 per cent in Alberta. Quebec had the lowest average, at 21 per cent.

Mr. Somerville says he’s not surprised that bidding war intentions are highest in the Prairies. “They have seen price appreciation and an increase of population recently, so the mismatch is greatest there.”

Nearly one in four, 23 per cent, of aspiring Canadian buyers polled by BMO said they are willing to make a bully bid – a strategy that involves putting in an offer before the appointed day, normally above the asking price. Toronto buyers were the most willing to make bully bids, at 30 per cent.

From the home sellers perspective, only 15 per cent of those polled said they would be willing to under-price their home to spark a bidding war, with owners in Toronto and Vancouver most likely to do so. Age played a factor, with 25 per cent of home owners under 35 expressing a willingness to do so compared with 8 per cent of those 65 and over.

The problem with buying a home through a bidding war is that it doesn’t give people enough time to evaluate the property – do important things like get a home inspection and think about the purchase, says Mr. Somerville. “It exposes the buyer to more risk than they should take on.”

The panic and stress that home buyers experience when competing in a bidding frenzy for a property is dangerous, he added. “When you are making a major financial investment, desperation is not something you should be going into it with.”

Source: Roma Luciw, The Globe and Mail

If you sold a condo in 2012, how should you record it on your tax return?

Monday, April 22nd, 2013

You just sold your condo, you made a hefty profit and know you have to pay your taxes.

The bill might be more than you think.

If it’s your principal residence, there’s no tax, as long as you have the paperwork to prove it. The Canada Revenue Agency is taking a closer look at the condominium sector in what some in the industry have dubbed the “Condo Project.”

Even if you own up to it being an investment property, you may not be allowed the capital gains tax break and that means a bigger hunk of your profit going to Ottawa.

Let’s say your gain is $100,000 and your tax bracket is 46%. Capital gains are taxed at 50% so you would only owe $23,000 on that profit.

Not so fast! If the CRA says you are in the business of flipping condominiums, get ready to pay based on the gain being counted as income for a tax bill of twice the amount at $46,000. And, it gets worse. You could also face a fine of up to 50% of the tax owed for making a false disclosure.

With the deadline for filing taxes coming up April 30, you might want to think very carefully about how you record that housing sale you made in 2012.

Sam Papadopoulous, senior public affairs advisor-manager with CRA’s Ontario region, acknowledges that the strength of the condo sector has attracted the attention of the taxman.

“We do from time to time target some sectors more closely than others,” he said. “We look at the real estate market in general. Of course, [there is more focus], it’s a hot market.”

People in the industry have a different view.

Some suggest it fits in with the recent budget when Jim Flaherty, the finance minister, announced his government was taking a closer look at loopholes and tax cheats — hoping to shrink its deficit in the process.

One of the issues attracting the attention of the CRA is assignment clauses, where one person agrees to purchase a condo before it is built but ultimately sells his or her right to buy that condo before the building is even registered.

Builders usually collect a fee for that privilege but ultimately when title is registered at the land registry office the original purchaser’s name is nowhere to be found.

While most builders are unlikely to voluntarily supply a list of properties in their building that were assigned, they could be forced to cough it up if they are audited by the CRA.

Those people who have assigned their units to another buyer are going to be hard pressed to prove they planned to use the unit as an investment property rather just flipping — meaning the CRA is highly unlikely to allow them to count money made at the lower capital gains rate.

“If you keep [assigning property] then it is not capital gains, that’s trade and that’s income,” said Mr. Papadopoulous, adding you do it a “couple of times” and it’s income. “Of course, that’s part of [what they are investigating].”

The warning to people flipping property and thinking they can get away without reporting the gain is pretty clear.

“We live in the information technology age,” said Mr. Papadopoulous, who wouldn’t get into how CRA is tracking down the tax evaders. “We are putting our resources to work and following the trail where we can.”

Robert Kepes, a Toronto tax lawyer at Morris Kepes Winters, said he’s seen the CRA go after people who have been living in a property and still question it as a principal residence.

CRA starts with a letter to a taxpayer asking them for details about when and why they sold their property and people often fill out the questionnaire without legal advice.

The issue goes all the way back to 1971 when there was no tax at all on capital gains so everybody tried to avoid counting gains as income.

Mr. Kepes says the distinction between income and capital is as simple as the difference between a tree and the fruit that it bears.

“The tree is capital and it produces a fruit and the income is the profit that is derived when that fruit is sold,” he says.

If your condo is that tree and your rental income is the fruit and you make a profit from that rental income, that’s taxed as full income. You eventually sell the tree for more money and that’s just a capital gain, taxed at the 50% rate.

If your entire businesses is just trading trees and not producing fruit, that’s business income.

“The Income Tax Act asks what was your intention when you bought that condo,” said Mr. Kepes. “These principles are easy to describe but harder to prove in fact.”

The law is like a civil case, a judge doesn’t have to believe you beyond a reasonable doubt, but a judge does have to conclude you are more believable than the CRA.

“We have to bring all kinds of intrinsic evidence,” says Mr. Kepes, noting some clients will produce something as simple as a change in address on their driver’s licence to show they were using their condo as a principal residence.

If you never actually moved into the condo, it’s going to be tough to prove that it was principal residence.

You may never have produced income from the profit but that’s not to say you didn’t plan to, so perhaps you could get the capital gains exemption.

“The question can be ‘how did they come to sell the property,’” said Mr. Kepes, adding the CRA might look at whether you were advertising the property for sale.

Brian Johnston, chief operating officer of Mattamy Corp., says the CRA has ways to get information on sales.

“They audit real estate companies, look at the name on the contract and look at the final deed and see a difference,” said Mr. Johnston. “They see Bill Smith bought it and Joe Blow is on the deed. They want to know how this happened and follow the paper trail.”

He has some sympathy for consumers confused about the whole process.

“I think the government should make it a little simpler in terms of filing for principle residence exemption,” said Mr. Johnston. “It’s a real gray area of the law. The government has not done a good job for Canadians trying to specifically identify all the rules around [selling homes and paying taxes]. People might have inadvertently made mistakes.”

Condominium developer Brad Lamb, who has been audited several times, said ultimately it’s better to be more conservative when you’re filing — meaning just count the gain as income if you are in doubt.

“If you are prolific buyer or seller of properties, whether it’s condos or not, you have to govern yourself accordingly. If you don’t, you’ll get caught and be fined,” said Mr. Lamb. “I decided many years ago when I started buying condominiums, after talking with my accountant, you can pay [lower tax] or you can fight 50 years with Revenue Canada.”

Source: Garry Marr, Financial Post

Singapore bungalow on the market for a record S$300 million

Wednesday, April 17th, 2013

Chairman Cheng Wai Keung is seeking a record S$300 million (US$242 million) for a home near Singapore’s Orchard Road shopping belt, betting that developers may profit from dividing the site.

The 85,000-square-foot site on an elevated lot at 33 Nassim Road, near the city’s Botanic Gardens, includes a two-story home, swimming pool and tennis court, according to Jones Lang LaSalle Inc., the sole marketing agent.

“These kinds of assets come onto the market once in 10, 15 or even 20 years,” Karamjit Singh, head of investments and residential at Jones Lang LaSalle in Singapore, said in a phone interview yesterday. “The potential buyers of this league would be able to recognize the opportunity.”

Singh estimated the property in an area that includes the residence of the British high commissioner and embassies of Japan and Russia could fetch between S$250 million to S$300 million. The site may be sold as two lots, which can yield a total of five homes, he said.

“This is beyond economics, it’s mind boggling and probably one of the highest in the world,” said Alan Cheong, senior director of research and consultancy at broker Savills (Singapore) Pte. “It’s no small change even for the ultra high net worth. It could be an Indian tycoon or a Russian oligarch that might bid for it.”

The price is 79 percent higher than the $135 million listing for the Crespi-Hicks Estate in Dallas, according to broker Douglas Newby, which is marketing the property. The home on the 25-acre site, owned by former Texas Rangers owner Tom Hicks, is touted as the most expensive property for sale in the U.S., according to a report by Time Magazine on Jan. 31.

“The primary value of a property is based on the land value,” Newby said in a phone interview yesterday. For the Singapore property, “if the land is worth $150 million to $200 million, then this might be a legitimate buy.”

Mukesh Ambani, India’s richest man who’s ranked the 28th richest on the Bloomberg Billionaires Index, owns a 27-story home in Mumbai valued at about $500 million, adding to his $22.4 billion net worth.

Residential prices in Singapore climbed to a record in the first quarter as an increase in the number of millionaires drove up demand. Singapore is Asia’s most-expensive housing market after Hong Kong, according to a Knight Frank LLP and Citi Private Bank report released last year that compared 63 locations globally.

Increasing wealth in the island-state has contributed to rising property prices. Singapore’s millionaire households rose 14 percent in 2011, according to a Boston Consulting study. The proportion of millionaire homes in the city of 5.3 million people was 17 percent, the highest in the world, followed by Qatar and Kuwait.

Source: Pooja Thakur, Bloomberg

Vancouver places fifth in American Cities of the Future 2013/14

Friday, April 12th, 2013

New York City has once again claimed the title as the top city in the Americas for attractiveness for inward investment, but the fast-rising São Paulo is proving a fierce competitor.

Uncertainty characterises the current global economic climate. With a 16% decline in FDI in 2012, investment agencies are facing greater competition to attract FDI projects. Yet New York has remained a top global destination for FDI, and was named as fDi Magazine’s American Cities of the Future 2013/14, with São Paulo coming in second and Toronto in third.

New York, the global hub of international business and commerce, grabbed the title for the second time in a row. Despite a knock or two, the city has continued to show its strength in surviving disasters both economic (Wall Street bail out) and natural (Hurricane Sandy). The city remains one of the world’s top destinations for investors, attracting 1.08% of global FDI. The total number of FDI projects into New York increased in 2012 with figures up 10.4% on the previous year.

But a South American competitor is nipping closely at its heels. For the first time in fDi Magazine’s bi-annual rankings, the Brazilian city of São Paulo has not only entered the top 10, but it ranked second overall, just ahead of Toronto. São Paulo is a key player in the global FDI arena, reaching sixth place worldwide in 2012, and attracting 1.19% of FDI projects. FDI into the city has increased year on year since 2004, according to greenfield investment monitor fDi Markets, which is part of the same division of the Financial Times as fDi Magazine, fDi Intelligence.

Canadian cities Toronto, Montreal and Vancouver ranked third, fourth and fifth, respectively, and performed particularly well in the attraction of knowledge-intensive FDI. All three locations were among the top 20 key destination and source cities for FDI. With the exception of New York, Montreal-based companies invested in more FDI projects than other city in the Americas region.

A sound financial system, relatively low corporation tax rates and an open and affluent economy have resulted in Canadian cities dominating the category for business friendliness across all city sizes. However, a high concentration of top global companies, top world banks and continued expansion of existing FDI activities have helped New York win the award of Best Major American City for Business Friendliness 2013/14. Of the Financial Times’ Global 500 companies, 25 were headquartered in New York, along with 14 of the world’s top 1000 banks, according to The Banker magazine’s annual ranking.

Coming in second, Toronto’s business-friendly environment is encapsulated in Invest Toronto’s American Cities of the Future submission, which states: “When stable, transparent financial and regulatory systems combine with a society that enjoys some of the most advanced freedoms in the world, it creates an environment for success.” Placed in third, Montreal’s success lies in retaining and developing relationships with existing investments – data from fDi Markets shows that one in five FDI projects since 2003 were expansions.

With virtually no restrictions on foreign investment, low corporation tax rates and high levels of economic freedom, Santiago in Chile was ranked the fourth most business-friendly city across the Americas region, and the top in Latin America among major cities. Santiago utilises this advantage to encourage potential investors, as is evident in its American Cities of the Future submission: “Santiago is viewed today as a haven for foreign capital in times of crisis due to its characteristics: security and transparency, as well as its competitiveness and excellent business projections.”

Canadian cities were awarded top positions for business friendliness in various city size categories: Vancouver ranked top of the large cities, with Mississauga top of the mid-sized cities. Victoria came top among small cities, and Waterloo was positioned just ahead of Delta in the micro cities.

Source: Jacqueline Walls, FDI Intelligence

See which parts of Canada are seeing new home price gains

Thursday, April 11th, 2013

New home prices in Canada rose by 0.2% in February, the 23rd consecutive month-on-month increase, pushed up by a buoyant market in Calgary, Statistics Canada said on today.

The advance matched analysts’ expectations. Calgary prices rose 1.0% from January — the largest month-over-month increase since May 2007 — on higher material and labour costs. Calgary is the center of Canada’s booming energy industry.

Overall, prices rose in 10 cities, stayed unchanged in nine and fell in two. On a year-over-year basis new housing prices in Canada rose by 2.1% in February, down from 2.2% in January.

The Canadian government, which imposed tighter mortgage rules last July, and the Bank of Canada have long expressed concerns the housing market might overheat.

The new housing price index excludes condominiums, which the government says are a particular cause for concern.

The largest monthly price advances in February came in Regina, where prices were up 1.4%, and in Halifax, where prices were up 0.9% from January.

The Regina increase was largely the result of higher operating costs for builders and a shortage of developed land, while builders cited higher costs for materials, labour and developed land as the primary reasons for the Halifax increase.

Monthly prices declined 0.2% in Ottawa—Gatineau for the second month in a row, while prices fell 0.1% in St. John’s.

Prices remained unchanged in the combined metropolitan region of Toronto and Oshawa following six consecutive months of increases.

Prices were also unchanged in eight other metropolitan regions surveyed.

Source: National Post Wire Services

First-time homebuyers expect to spend $300,000 on first property

Tuesday, April 9th, 2013

The average first-time homebuyer in Canada is 29 years old and expects to be able to put down a down payment of $48,000 on $300,000 home, according to a recent poll by the Bank of Montreal.

But the study, released Tuesday, also found that price expectations vary widely, depending on where the homebuyer lives in.

Those in Atlantic Canada say they expect to spend an average of $224,000 on a first home, while those in British Columbia anticipate to pay an average of $454,000.

Vancouver topped the survey as the most expensive city, with buyers there saying they’re going to shell out an average of $539,000 for a home, followed by Calgary at $474,000 and Toronto at $446,000.

BMO mortgage expert Laura Parsons says like with any major purchase, it’s important for people be realistic and prepared.

“What we tend to do is jump in the market when we’re ready, instead of starting a plan now,” she said from Calgary.

“Let’s start getting ready for it so we can start giving you good advice all along the way. Don’t be afraid to get things going.”

And while a large down payment is impressive, it does not necessarily mean that young people are diligently saving for their first home. Instead, many may be getting help from their Baby Boomer parents or friends, said Parsons.

Forty-six per cent of those surveyed also they’ll choose a fixed mortgage rate when they buy, versus 20% who will choose a variable rate.

The study also found that the average first-time homebuyer plans on paying off the mortgage on their home within two decades, with 20% anticipating they’ll be mortgage-free even earlier than that.

Twenty-three per cent of those surveyed say they will still have a mortgage within 25 years; 16% say within 20 to 24 years and 20% say within 10 to 19 years.

On the opposite end of the spectrum, seven per cent say it’ll take them more than 25 years to fully own their home, while 3% say it’ll take them between 1 year to 9 years to pay it off.

The survey also found that 31% admit they really don’t know when they’ll be able to stop making mortgage payments.

Source: Linda Nguyen, Canadian Press

For sale: $125-million New York City penthouse!

Thursday, April 4th, 2013

Not for the faint hearted – the US $125-million price tag makes this residence the most expensive public listing in New York City!

The triplex penthouse located at The Pierre Hotel encompasses the entire 41st, 42nd, and 43rd floors. The residence encompasses 16 grand rooms, including a living room considered the most magnificent privately owned room in the world. There are four adjoining terraces, five master bedrooms, six full baths and three half-bathrooms, five working fireplaces, separate guest suites plus staff accommodations, and sweeping 360-degree views of Central Park and the surrounding city. The spread, formerly home to the hotel’s Pierre Roof restaurant, also touts a 3,500-square foot grand salon, once used as a ballroom.

Owned by the estate of late finance maven Martin Zweig, the triplex apartment is expected to officially hit the sale block before week’s end, according to multiple sources.

At $125-million, the Pierre penthouse would be the most expensive home publicly listed for sale in NYC, trumping the $100-million CitySpire penthouse and the reported $115-million Bloomberg Tower duplex owned by billionaire Steve Cohen. The $125-million price tag would also make it one of the top three priciest residential properties in America, behind a Dallas estate currently asking $135-million and tied with Los Angeles’ $125-million Fleur de Lys.

Still, for all its grandeur, several luxury brokers who have toured the space with clients suggest the unit may be in need of a little updating.

The Pierre is a white-glove building situated on East 61st Street, near Fifth Avenue. It’s comprised of a five-star hotel and 75 co-op apartments. Residents enjoy hotel amenities like room service — which even caters to pets — and twice-daily maid service, included in hefty monthly maintenance payments. As of 2006, annual maintenance for the penthouse was $464,600.

Residences in the building must be purchased all-cash and potential buyers must pass the stringent co-op board, a factor that typically lessens the possibility of a foreign buyer.

Source: Morgan Brennan, Forbes

See what’s in store for Metro Vancouver’s real estate market

Wednesday, April 3rd, 2013

Real estate has been slumping in the Lower Mainland, with sales volumes off by a third from long-term averages and prices down about five per cent from their peak.

Central 1 Credit Union is predicting a slow, weak recovery for real estate in British Columbia, saying it expects a flat market for both unit sales and prices for the next few years.

In its annual forecast released last week, the credit union predicts home sales in the province will gather a bit of strength this fall and hold steady for the rest of the year.

“The year-long correction in home sales is likely to bottom out in the first quarter of 2013, and we’ll see a slow recovery through the rest of the year. But the gains will be modest,” said Bryan Yu, an economist with the credit union.

Yu said there is always a market for homes that are priced well or have a special selling point.

“There’s always going to be some properties that sell quickly, if they’re priced well, or under-priced, perhaps,” Yu said. “But we’re not seeing that reflection in the over-all market that it’s anywhere near a strong market. Listings are high, overall sales levels are low and the reality is the price trends have been negative over the past couple of quarters.”

Yu said it is normal for the real estate market to become busier in the spring.

135 single-family homes have sold on the west side of Vancouver this March, which should result in 160 sales once the month is done; in March 2012, there were 152 sales.

Last year hit a 12-year low in sales, with only 64,400 sold (compared with 76,817 in 2011), and Yu anticipates there will be slightly fewer homes sold this year.

Yu said the resale housing market is hampered by sluggish employment and population growth as well as tighter mortgage requirements that have pushed some first-time buyers out of the market.

Following 2012’s four-per-cent decline, the credit union expects the province’s median annual price to slip five per cent in 2013 to about $363,000, a level last seen in 2009.

In Greater Vancouver, annual resale activity is forecast to decline about four per cent this year to 31,500 homes. The median price will dip six per cent to $474,000 but is expected to rise by the end of 2013, according to the forecast.

The report also says house sales in the Okanagan, Kootenay and Vancouver Island are expected to rise but for now remain near recessionary levels because of weak demand and excess inventory.

The forecast calls for an uptick of 13 per cent in unit sales in 2014 and a further eight per cent in 2015 as the economy improves and consumer confidence grows. Yu expects prices to remain flat through 2015.

Source: Tracy Sherlock/Tiffany Crawford Vancouver Sun

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