Despite efforts by government and regulators to curb Metro Vancouver’s hot housing market, new home prices have continued to climb in the past year.

Recently released data from Statistics Canada shows the overall price of brand new houses and townhomes in the region has soared 6.2 per cent in the 12 months since June 2016.

“Last time [the new house price index] grew larger than 6.2 per cent was in June of 2010,” said analyst Rohit Verma, adding prices rose 6.7 per cent.

The agency has numbers dating back to 1981.

Verma says the information is gathered through a monthly survey of home builders and their contractors, excluding new condominiums.

Across the country in the month of June, Metro Vancouver saw the greatest gain at 1.5 per cent overall. Ottawa-Gatineau, Ont. followed at 0.9 per cent.

Verma says the main reason cited for the increase was “improving market conditions.”

It’s more evidence of the resiliency of the region’s real estate market, despite government efforts at all levels to temper prices.

Last August, the previous Liberal government introduced a 15 per cent tax on foreign home buyers in Metro Vancouver.

Two months later, mortgage rules were tightened across Canada.

Home buyers applying for mortgages with less than a 20 per cent downpayment had to undergo a “stress test” to determine if they could afford to pay back a loan if interest rates rose.

And rates did rise.

Last month, the Bank of Canada raised its key interest rate by 0.25 percentage points — the first time it had increased it since 2010.

All of that hasn’t stopped the market from climbing or put affordable homes within the reach of most people.

Sales in July were 0.7 per cent above the 10-year sales average for the month, according to the BC. Real Estate Association.

The Multiple Listing Service Home Price Index composite benchmark price for all residential properties in Metro Vancouver is $1,019,400 — an 8.7 per cent increase compared to July 2016.

Source: Lien Yeung, CBC News

http://www.cbc.ca/news/canada/british-columbia/increase-in-new-home-prices-reaches-7-year-high-in-metro-vancouver-1.4244437

The slowdown of Vancouver home sales has helped affordability a bit, but we’re still the country’s costliest market by far.

Royal Bank research shows “Housing affordability improved in the Vancouver area for the first time in almost three years” during the fourth quarter of 2016. It says the slowdown in home resales that began last spring had a “cooling effect” on prices for single-detached homes by late in the year. The bank’s economists say the affordability of houses improved the most since the first quarter of 2009 when Canada was in a recession due to the financial crisis.

Nonetheless, RBC says it takes 84.8 per cent of the median household income to pay the costs of owning the average detached bungalow in Vancouver.

Condos are a different story, with RBC saying “No such affordability relief took place.” Its measure of condo affordability worsened slightly for the seventh quarter in a row. Condos costs are at 46.1 per cent of household income.

RBC also says there are signs that “affordability stress” is spreading to regions near Vancouver and Toronto, including Victoria which the bank says “has experienced booming demand in the past year which has propelled prices significantly higher,” pushing its afforability measure “well above its long-term average.”

Source: Richard Dettman, News 1130
http://www.news1130.com/2017/03/30/vancouver-still-number-one-unaffordable-homes-rbc/

More than 90 per cent of all detached homes in Vancouver are now worth more than $1 million, up from just 19 per cent a decade ago, a new study by a local urban planner has found, showing how rapidly housing prices have escalated in the Canadian city.

The biggest jump came in the last two years, with the proportion of million-dollar homes in the city climbing to 91 per cent in 2016 from just 59 per cent in 2014, according to the study by Andy Yan, acting director of Simon Fraser University’s City Program.

“This shows how what used to be the earnest product of a lifetime of local work is perhaps quickly becoming a leveraged and luxurious global commodity,” said Yan.

The median household income in Vancouver, meanwhile, rose just 8.6 per cent between 2009 to 2013, according to the most recent data from Statistics Canada. Adjusted for inflation, it would be about $77,000 a year in 2016.

That puts typical incomes well below the threshold needed to purchase million-dollar homes, said Yan, noting other factors must be driving the sharp increase in home values in Vancouver.

“It’s global cash, meeting cheap money, meeting limited supply,” he said, adding that all three factors are working to “magnify each other” and drive further speculation.

Foreign investment has long been blamed for soaring housing prices in Vancouver, with the most recent wave of offshore cash coming mostly from mainland China.

A widespread corruption crackdown launched by Chinese president Xi Jinping in late 2012 has led to massive currency outflows, which have coincided with a sharp jump in housing prices in Vancouver’s prime neighborhoods.

The new data comes as Canadian Prime Minister Justin Trudeau is in Vancouver for a two-day visit. Trudeau on Thursday said that his government needs to take measures to ensure residents of cities like Vancouver and Toronto can afford housing.

Yan’s study looked at provincial assessment data, which lags sales data by several months, and was focused exclusively on the roughly 67,000 detached homes in the City of Vancouver. All values were adjusted for inflation.

Region-wide, the price of a detached home soared 130 per cent over the last 10 years to hit $1.5 million in May, according to the local real estate board. Adding in apartments and townhomes, the typical home in Greater Vancouver now costs $889,100.

Source: Julie Gordon, Reuters
http://business.financialpost.com/personal-finance/mortgages-real-estate/nine-out-of-10-vancouver-houses-now-worth-more-than-1-million-study-finds

Real estate prices in key global cities are rising at a slow, moderate pace, particularly in Europe.

According to new research published by international real estate consultant Knight Frank, 35 of the world’s most important cities saw an average price increase of 3.6% in the year to March 2016.

“Since 2014 the index has consistently seen annual growth of 3-4%, with no city recording double-digit annual price declines since the second quarter of 2015,” notes Kate Everett-Allen of Knight Frank, who carried out the study.

However, Everett-Allen found some notable differences both between regions and within them. In North America, for example, New York, Miami and Los Angeles grew by 2.3%, 3.8% and 5.1% respectively but Vancouver saw a spectacular 26% rise in real estate prices — despite a 1% increase in land transfer tax on purchases above CAD2M.

Australasia was more homogeneous, with both Sydney and Melbourne posting a 12% rise. The two African hubs were also in positive territory, albeit with some difference between the two—Cape Town went up 6.9% and Nairobi up 3.3%. Asia was rather more of a mixed bill, with excellent growth in Shanghai (to the tune of 20%) but sizeable drops in Hong Kong and Taipei (down 6.4% and 7.6% respectively.

In Europe, real estate growth was modest and fairly consistent across the majority of cities, with prices either remaining flat or recording small rises of less than 3%. Only Moscow, Paris, Milan and Monaco bucked the trend. The first three saw dips (of 5.9%, 2.7% and 1.2% respectively) while Monaco recorded a 4.9% rise.

However, says Everett-Allen, some of these numbers need to be analysed in the context of past performance. Prices in London, for example, only grew by 0.8% in the year to March, the lowest figure since October 2009
 — but the British capital had experienced a period of exceptional growth in earlier years so a slowdown was natural.

Interestingly, the Knight Frank study also showed that, across the world, the impact of new transparency rules, new taxes or fees for foreign buyers—all of which are seeing a surge in global hubs—varies hugely depending on the pre-existing fundamentals and market cycles.

Thus, the land transfer tax rise had no depressive effect in Vancouver, nor did new transparency rules for cash buyers affect the New York and Miami markets. In London, by contrast, a series of changes to stamp duty land tax and to purchases by non-domiciled residents, have amplified the market cycle and helped slow down price growth.

Source: Carla Passino, Forbes http://www.forbes.com/sites/carlapassino/2016/05/19/slow-and-steady-real-estate-growth-in-world-cities-is-an-exercise-in-moderation/#108e2b7349c6

A total of 12,560 homes were sold across the province in March, up 38 per cent year-over-year, according to British Columbia Real Estate Association data released April 15.

This figure shatters the previous record, which was set in May 2007 when 11,683 units were sold in B.C.

“Housing demand has never been stronger in the province,” said BCREA chief economist Cameron Muir. “Most large population centres of the province are now experiencing record levels of housing demand.”

Muir credits strong employment growth, increasing wages and growing inter-provincial migration into B.C. for the increase.

Demand is so high, inventory levels are now a decade-lows in some areas across the province.

In Vancouver alone, sales increased 28.3 per cent to 5,301 units, compared with 4,132 units last year. The benchmark price increased 22.6 per cent to $1,093,267, compared with $891,652 last year.

“Supply [in Vancouver] simply can’t keep up with demand, be it domestic or foreign, and the sales-to-new listings ratio remains a sky-high 86 per cent,” said BMO Financial Group senior economist Robert Kavcic.

“In other words, almost every new listing is getting absorbed within the month.”

Kavcic points out that even condo prices—up 19 per cent year-over-year—are increasing at a rate similar to those for detached homes.

Across Canada, home sales increased 12.2 per cent in the 12 months to March and prices were up 15.7 per cent. This growth is due almost entirely to the market strength in Toronto, where prices increased 12.1 per cent and sales grew 15.5 per cent, and Vancouver.

“With supply in the two hot markets extremely tight, prices are likely to push even higher through the always-important spring selling season,” Kavcic said.

“The question is, will policymakers in B.C. and Ontario do anything to quell the fires?”

Kavcic said the data from these two cities is making up for losses in centres in oil-dependent Alberta, most notably Calgary, where home sales fell 11.7 per cent. That city was the only one in Canada to see a drop in prices over the period, although the decrease was small (down 0.5 per cent).

Teranet also released its Home Price Index April 15. This measure showed price increases of 17.3 per cent over the year in Vancouver and 7 per cent across the country. Teranet uses statistics compiled from public land registries using a repeat-sales methodology; this means it looks at sales of homes that have been sold at least twice since 1990.

Source: Emma Crawford Hampel, Business in Vancouver
http://www.vancourier.com/news/b-c-real-estate-sales-break-another-record-as-demand-soars-1.2232731#sthash.wMXe3y27.dpuf

In a red-hot real estate market where inventory is low, prices are high and competition is fierce, the seller holds exponentially much more power than the buyer.

Multiple offers have become the new normal in the Vancouver market, with many properties selling for hundreds of thousands of dollars over the asking price.

Those bidding wars have buyers going to extraordinary lengths just to get a chance at getting into a market that’s really out of control.

CTV Vancouver has compiled a list of expert tips to help you get the property you want, if you’re faced with a multiple offer situation.

1. Unconditional offer

Gone are the days where offers can be subject to financing, inspection or lengthy waiting periods. The key to winning a bid now is going in with zero conditions attached. That means having your financing in place well ahead of even going to see properties. It can also mean having a bank draft deposit in hand to present to the realtor and homeowners.

Realtor Gary Serra says it can also help to make sure that deposit is bigger than your competitor’s.

“I think in some cases people are coming in with a higher deposit because, again, if you want to stand out compared to other offers – obviously people will notice that,” he told CTV Vancouver.

2. Do your home inspection early

It used to be that you could include a home inspection in a conditional offer, but that practice all but gone by the wayside in this frantic market. Many potential homeowners are now opting to take their home inspector with them to open houses, where dozens of other buyers are doing the same thing.

“It’s really crazy,” said home inspector Shawn Anderson. “I was just in one recently where it was so packed it was like they were giving away free wine.”

With some people putting in bids on multiple properties before actually winning a bidding war, this can add up to thousands of dollars in extra costs during house hunting.

3. Write a personal letter

Although it’s far from a requirement to pen a magnum opus to the current owner of the home, Metro Vancouver realtors say it’s worth the effort in a bid to make a personal connection to the seller.

Serra said explaining why you want the home can give interested parties an advantage over others.

“We want to appeal to the seller and make sure our offer stands out over someone else’s,” he said.

In its tips for writing a letter, Realtor.com says homebuyers should use flattery whenever possible, and compliment the current owner on the condition or décor of their home. In a market like Vancouver, where many heritage homes are torn down to make way for newer buildings, it can help to mention if you’re planning to keep the home intact.

4. Appeal to the seller’s timeline

Your needs should come last when it comes to the real estate sale, says Serra. Home sellers don’t want to be bogged down while interested parties secure a mortgage or sell their current home, so try to make things work in the timeline they want. They may have purchased another property and don’t want to wait around to get out of their current residence.

New buyer Kyle Gould says he’ll take any advice he can get. Just moving to B.C. from Ontario, Gould says he has been hit by “sticker shock” and a big reality check about the market.

“It kind of smacked me in the face that it’s a wild game out here,” he said.

Source: CTV Vancouver
http://bc.ctvnews.ca/how-to-win-a-real-estate-bidding-war-in-metro-vancouver-1.2804164

Vancouver’s hot real estate market isn’t showing signs of slowing. January saw year-over-year growth of more than 20 per cent for the Metro region, according to the Canadian Real Estate Association.

That brings the average price of a home in Metro Vancouver to $775,300.

Thanks to hot markets in B.C. and Ontario, the national average home price grew a staggering 17 per cent to $470,297 – but without those two provinces, there would have been a decline of 0.3 per cent to $286,911.

“January 2016 picked up where 2015 left off, with single family homes in the GTA and Greater Vancouver in short supply amid strong demand standing in contrast to sidelined home buyers and ample supply in a number of Alberta housing markets,” said Gregory Klump, CREA’s Chief Economist in a statement.

“Tighter mortgage regulations that take effect in February may shrink the pool of prospective home buyers who qualify for mortgage financing and cause national sales activity to ease in the months ahead.”

New rules for mortgage rates took effect on Tuesday. Canadians are now required to put down a minimum of 5 per cent for the first $500,000 and 10 per cent for every dollar amount after that.

Two-storey single family homes posted the largest year-over-year gains nationally of nearly 10 per cent, followed by one-storey homes at 6.9 per cent, townhouses at 6.5 per cent and apartments at 5.2 per cent.

In stark contrast to Vancouver and Toronto’s housing markets, average home prices in Calgary saw a decline of three per cent year-over-year.

Nationally, the number of newly listed homes in January fell five per cent compared to December, and Canada’s largest housing markets such as Vancouver, Toronto, Montreal, Calgary, and Edmonton were to blame.

Source: Lauren Sundstrom, Vancity Buzz

Assessed values of both Vancouver east and west side single-family properties climbed dramatically over the past year, according to B.C. Assessment.

It released its annual assessment figures January 4 and it provided a few examples of some individual assessments including one for an East Side, single-family, 33-foot lot, which jumped by 28% from $993,000 to $1,267,000, and one for a West Side, single-family, 33-foot lot that rose by 23% from $1,575,000 to $1,940,000.

Assessed values for strata properties didn’t grow nearly as significantly. In one example provided by B.C. Assessment, a West Side low-rise strata unit increased by 8% from $615,000 to $662,000, while the value of an East Side high-rise strata increased 6% from $381,000 to $405,000.

“The real standout [in Vancouver] this year would be the market movement for single-family properties. You would probably have to go back — if you went back to 1980, there’s probably only two or three other times when single-family properties in Vancouver have moved by this much this quickly,” Jason Grant, regional assessor for B.C. Assessment, told the Courier.

“What really contrasts this year as well is the strata market would really be down in that five to 10% range, so it’s not moving the same amount. It’s a significant contrast this year.”

Grant added that in any given year there might be extreme pockets of movement, but what’s notable this year is that the assessed value of the majority of single-family properties across Vancouver climbed by between 15 and 25% — and some in excess of that figure.

The fact many East Side residential properties, on a percentage basis, outperformed West Side ones also doesn’t happen very often, he said.

Property owners should note that the assessment roll reflects market values as of July 2015 and the value of many single-family properties have grown — in some cases significantly — since then.

“So the other big difference this year is people might open their assessment and it’s reflecting July values and their values might have risen fairly dramatically since then depending on whereabouts they’re located. That also doesn’t happen very often to that degree,” Grant said.

B.C. Assessment sent 37,000 warning letters, in a province of more than 2,000,000 property owners, advising of extreme changes in assessments — that is, if a property’s assessed value was going up more than 15% above the typical for the taxation jurisdiction.

Grant said 22,000 of those letters went to property owners in the Greater Vancouver region.

“If the typical was 25% in a particular jurisdiction, we would send letters to people who went up 40% or above,” he explained. “… You probably wouldn’t get a letter in Vancouver unless you were going up more than about 40%. If you’re in the 20 to 30% range or the 25-35% range that, believe it or not, is fairly typical.”

Assessments for single-family properties in many Lower Mainland communities including North Vancouver, West Vancouver, Burnaby, Tri-cities, New Westminster and Squamish also saw large assessment increases in the 15 to 25% range, but assessed values of single-family and strata properties outside the Lower Mainland didn’t grow as much. They ranged from 0-10%.

Overall, the Greater Vancouver region’s total assessments increased from $546.7 billion in 2015 to $636.2 billion this year.

Assessments are in the mail this week, but they can be found online already. B.C. Assessments’ e-valueBC service went live January 1.

It’s been overhauled since last year. Now it’s map-based, so you don’t have to know the address of a property — you can simply click on it. The site allows users to check other properties’ assessed values and compare them to their own.

Typically, only 1-2% of property owners ask for a review of their assessment, a figure that usually doesn’t change even in years where assessment values rise significantly. A notice of appeal must be filed by February 1.

Grant said changes in assessments don’t automatically translate into a corresponding change in taxes.

“It’s going to depend on where you are relative to the average,” he said.

So, what should property owners expect next year?

“We are already, believe it or not, six months in towards our next valuation cut off of July 2016 and the market has moved significantly already since July. So if it keeps on this trajectory, there will be an increase again next year for 2017,” Grant said.

Source: Naoibh O’Connor, Vancouver Courier

B.C. is buoying the country’s residential real estate market, according to a forecast update from the Canadian Real Estate Association (CREA). Prices increased 11.5 per cent, significantly bolstering the national average, while sales activity increased 21.4 per cent in 2015 over 2014 – and those figures aren’t just for Vancouver. The association, however, expects increases in sale prices in B.C. to continue but to drop to a more modest two per cent next year, down from an unprecedented 11.5 per cent in 2015.

Over the last 12 months, the Lower Mainland has bucked up not just the provincial average but also the national average. Prices increased 18 per cent over the last year in Greater Vancouver and 12.3 per cent in the Fraser Valley. The benchmark price for a property in the city of Vancouver, which includes condos and townhouses, hit $930,000. Even on Vancouver Island, which hadn’t seen a full recovery since the 2009 recession, prices fluctuated at between six and eight per cent higher last month over November 2014.

The CREA, which represents the country’s realtors, also laid out its analysis of the recent changes to Canada’s mortgage rules, which affect properties sold for over $500,000. “Larger more expensive housing markets will be affected most,” said Gregory Klump, CREA’s chief economist, in a statement. “Unfortunately, the regulatory changes will also cause unintended collateral damage to housing markets beyond Toronto and Vancouver, including places that are facing economic headwinds from the collapse in oil prices.”

Source: Jacob Parry, BC Business

Home real estate sales jump 37% across Metro Vancouver in April. There are more people trying to buy than there are people trying to sell their homes in Metro Vancouver. The Real Estate Board of Greater Vancouver has found sales for all types of homes in April were 30 per cent higher than the ten-year average.

Sales of detached properties were up 37 per cent when compared to last April 2014. That breaks the record for April set only last year. Apartments and townhouses are also selling. Sales of apartments this April are up 34.7 per cent compared to last.

Demand is continuing to push prices even higher. The REBGV says the average price for all types of homes is up 8.5 per cent. The average detached home now sells for $1,078,900.

Board President Darcy McLeod says low interest rates are fueling this, coupled with a larger number of interested first time buyers. He says some are selling to take advantage of already high prices. “We’re also seeing a lot of movement around the region. For example, people that may live in North Vancouver now where we’re seeing densification might be moving out to Coquitlam or even Pitt Meadows and Maple Ridge where they can still buy a detached home for a reasonable amount of money and do fairly well on selling their home in North Van or in some cases, Burnaby.”

Real Estate Board of Great Vancouver president Darcy McLeod says demand is outpacing supply. “We’re seeing a lot of frustrated buyers that have been looking for some time that just haven’t been able to find the right home or they’ve lost out in a number of multiple offer situations. So there still is quite a strong pent-up demand in the market.”

McLeod recommends coming up with a strategy with a realtor before trying to buy.

The Fraser Valley Real Estate Board is also reporting a big sales increase for April. Sales were up 37 per cent this April compared to April 2014. It says this April is the third highest of all time for the month. A single family home in the valley now sells for $595,600 on average.

Source: Jill Drews, News1130