If your New Year’s dreams include buying a home in B.C., don’t expect it to get much easier in 2018, according to one expert.

“The best guess for where prices are going to be a year from now is about where they are today,” said Tom Davidoff, associate professor at the University of B.C.’s Sauder School of Business

Davidoff says there are some changes coming that could slow things down — stricter mortgage regulations that take effect  Jan. 1, for one — but overall he predicts prices will keep climbing.

“Fifty years from now, I would be very surprised if Vancouver is anything other than an extremely, extremely difficult place to buy or to rent,” he said.

“You have to think supply is pretty constrained by geography. We can build more condos, but it’s hard to add land. We’re hemmed in by oceans and mountains and those are beautiful oceans and mountains, and rich people all over the world keep getting richer and a lot of them want to come to Canada.”

In the short run, though, Davidoff says there could be a some relief.

“There’s a lot of construction going on,” he said.

“Some people believe it’s international flippers buying these condos. They may not want to hold them once the building’s complete. If we see the flippers actually flip these new units before they’re completed, as they start to come online, that could create lower prices and lower rents as people move in.”

He argues that communities around the Lower Mainland need to maintain such construction in a variety of neighbourhoods.

“Adding more townhomes and apartments in neighbourhoods where there’s single family homes would really help in coming years,” he said.

He’d also like to see the province make more of an effort on tax reform.

​Although housing affordability was a key election issue, Premier John Horgan has admitted his new government hasn’t made much movement on this — yet.

But Horgan is promising there will be progress with the government’s budget in February.

Davidoff says the way people are taxed in B.C. needs to change if we want to become a more affordable place to live.

Property taxes are going up in Vancouver in 2018, but Davidoff says they’re still much too low.

“Our property tax rate is something like four-tenths, maybe three-tenths of a per cent in the City of Vancouver. It would not be uncommon to see one-and-a-half or even two per cent in other big North American cities,” he said.

Davidoff would like to see that reversed.

“Send the message — we want you to live and work here. So we’re going to have high property taxes, low income and sales taxes. Hopefully the NDP moves in that direction,” he said.

For any younger people considering trying to buy into the Vancouver market, Davidoff warns spending everything you have on a down payment for a highly leveraged asset is risky, but not crazy — especially if you’re very attached to the city.

“In the long run it’ll probably work out, it might even be a great idea in the short run, but there’s certainly a possibility that you’re going to feel very stupid if prices fall 20 per cent right after you’ve bought,” he said.

Still, he says, if you feel like your job prospects or quality of life might be better elsewhere, packing up might be the way to go.

“The option to leave is really an important option.”

Source: Stephanie Mercier, CBC News

http://www.cbc.ca/news/canada/british-columbia/hoping-to-buy-a-home-in-b-c-sorry-it-s-not-likely-to-get-much-cheaper-1.4457160

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/

Sales fell 26 per cent last month in Greater Vancouver’s real estate market while prices hit new highs or stayed near records in the wake of a new tax on foreign buyers in the region.

There were 2,489 detached houses, condos and town homes in the region that sold in August, compared with 3,362 properties in the same month of 2015, the Real Estate Board of Greater Vancouver said Friday.

Industry observers had predicted a slowdown in transactions after the introduction of a new 15-per-cent tax on foreign buyers that took effect on Aug. 2 for purchases registered with the province’s land title office. The B.C. government announced the change on July 25 to the province’s property transfer tax, affecting foreign buyers who acquire homes in the political entity known as Metro Vancouver.

In Greater Vancouver, which covers a large portion of Metro Vancouver, the benchmark price of detached houses, condos and town homes reached a record $933,100, up 31.4 per cent from a year earlier and an increase of 0.3 per cent from July.

The benchmark price is a representation of the typical property sold in an area, excluding the most expensive transactions on the Multiple Listing Service.

Home sales in the region were already beginning to slow this summer after a record-breaking spring.

Sales of detached houses, condos and town homes in Greater Vancouver fell 18.9 per cent in July from a year earlier. The drop was concentrated among sales of detached properties, which declined 30.9 per cent from July last year, following an 18.6 per cent annualized drop in June.

March, April and May are traditionally the busiest months for sales of existing properties, with activity slowing from June until mid-September.

The number of new listings has been on the rise since February, although the market has remained tight because of strong sales activity.

While the focus has been on an influx of buyers from China into several neighbourhoods on Vancouver’s west side, some industry observers say there are other contributing factors such as low interest rates, population growth and limited housing supply.

Source: Brent Jang and Tamsin McMahon, Globe and Mail
http://www.theglobeandmail.com/real-estate/the-market/vancouver-sales-dropped-26-in-wake-of-foreign-buyers-tax/article31688214/

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

Home sales in Greater Vancouver are on a hot streak, and the professional association representing all the real estate boards in the province is bumping up its forecast for 2016, predicting escalating prices and a jump in the number of homes sold.

The British Columbia Real Estate Association forecasts unit sales in the Greater Vancouver region will increase 8.9% in 2016, from 43,145 homes sold in 2015 to 47,000 this year.

For B.C. as a whole, unit sales are forecast to increase 12.3% to 115,200 units, breaking the previous record of 106,310 units sold in 2005.

“Robust employment growth and a marked increase in migration from other provinces is buoying consumer confidence and housing demand in most regions of the province,” said BCREA chief economist Cameron Muir.

“Record housing demand has depleted inventories in many urban areas, and the resulting imbalance between supply and demand has pushed home prices considerably higher.”

The average sales price for homes in Greater Vancouver is expected to reach $1.125 million this year, up 24.6% from $902,801 in 2015. Across the province, the average price is forecast to increase 20.4% this year, from $636,600 last year to $766,600 in 2016.

This latest forecast is in sharp contrast to the BCREA’s previous release, in which it had predicted an 8.2% drop in unit sales across Greater Vancouver and a 6.2% decline across the province as a whole.

The BCREA had previously said home sales would fall because of a lack of supply. It now says a jump in new home construction is set to help meet demand.

“Waning inventories of newly completed and unoccupied units are being offset by a market increase in the number of homes under construction,” the BCREA said in a news release.

“Total housing starts in the province are forecast to climb 20% to 37,800 units this year, before edging back to 34,200 units in 2017.”

Source: Emma Crawford Hampel, Business in Vancouver
https://www.biv.com/article/2016/6/greater-vancouver-home-sales-and-prices-soar-2016-/

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

The insanity, it seems, is not over.

Despite ongoing warnings from the CMHC that the Vancouver housing prices are overvalued and have outpaced the economic fundamentals in the city, they keep climbing.

In the past year, the benchmark price for a detached home in the region — not just the City of Vancouver itself — has climbed 30.1 per cent, to $1.4-million, according to new numbers from the Real Estate Board of Greater Vancouver.

The “benchmark” price is a measure used by the board to describe what it calls a “typical property” in the market, taking into account bedrooms, lot size, and other factors, and is not an average or median price.

To put that in context, the median family income in the Vancouver metropolitan area is $73,390 — lower than the Canadian average, according to the latest census numbers available.

The highest benchmark price for a detached home is still Vancouver’s west side, at $3.2-million, which is up 172 per cent over ten years, and 28.4 per cent in the past year.

But the largest increases in house prices in the past year are outside Vancouver:

Tsawwassen up 41 per cent to $1.16-million.
Richmond up 36.5 per cent to $1.5-million.
Ladner up 35 per cent to $971,500.

Apartment and townhouse listings went up 20.6 and 22.1 per cent, respectively, in the past year in Greater Vancouver.

The Real Estate Board of Greater Vancouver covers Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, North Vancouver, West Vancouver, Squamish, Whistler, Sunshine Coast, Pitt Meadows, Maple Ridge, and South Delta.

The benchmark detached home price in the Fraser Valley also rose 30 per cent over the last year, to $776,500, according to the Fraser Valley Real Estate Board.

That area includes Surrey, White Rock, Langley, North Delta, Abbotsford and Mission.

The price increases are, not surprisingly, driven by a strong demand with not much supply.

There was a slight increase in residential listings last month, but not enough to keep up, said Greater Vancouver Real Estate Board president Dan Morrison in a release.

“While we’re seeing more homes listed for sale in recent months, supply is still chasing this unprecedented surge of demand in our marketplace,” he said.

In April 2016, sales of all properties (not just detached homes) in Metro Vancouver were 41.7 per cent above the 10-year sales average for the month.

Meanwhile, the total number of properties currently listed in Metro Vancouver is down 38.3 per cent from last year.

That means the sales-to-active listings ratio — a measure analysts use take the temperature of a market — was 63 per cent in April 2016, the sign of a seller’s market.

Home prices tend to experience upward pressure when that ratio is just 20 or 22 per cent, according to the board.

Source: CBC News http://www.cbc.ca/news/canada/british-columbia/vancouver-real-estate-house-prices-1.3564528

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

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