Vancouver has been ranked the second most expensive housing market in the world in a report on international housing costs, second only to Hong Kong.

The annual Demographia survey looked at 360 housing markets and divided median housing prices against median gross household incomes. Houses in Hong Kong cost 15 times local median incomes, while houses in Vancouver cost 10 times median incomes.

All of Canada’s major metropolitan centers fared badly in the report, ranked as extremely unaffordable with Vancouver the most costly.

According to Tsur Somerville, director of the University of British Columbia Center for Urban Economics and Real Estate, the reason for Vancouver’s skyrocketing housing prices is simple — demand is larger than supply.

“Vancouver is a lovely place with limited land and people from all over the world want to live here,” he told Xinhua. “If you have an attractive area, naturally you’ll get people willing to pay a higher price to live there, willing to pay higher rents to live there and relative to their incomes, and you’re going to get an affordability challenge.”

Local realtors are predicting the days of purchasing a detached house for Cdn $600,000 (US $543,500) are now over in Vancouver. Earlier this month, a three-bedroom, two-bathroom house on the east side of the city marked as the cheapest on the market was sold for Cdn $643,000 (US $582,500).

Somerville also pointed out that immigration to Vancouver, Canada’s Asian gateway, stands at about 30,000 people per year and the resulting demand for housing will likely keep prices high.

“But I think as long as we’re getting an inflow of about 30,000 to 35,000 people a year, coming to Vancouver as part of coming to Canada, that’s going to be able to support the house prices.”

His view was echoed by Ross McCredie, director and CEO of Canada’s Sotheby’s International Realty. Since the flare up of the international financial crisis in 2008, housing prices in Vancouver have remained high compared to other large cities around North America.

He attributes house price stability in this market to the steady inflow of immigrants and investors not common to many other major cities around the continent.

“But certainly the foreign buyers are also an important part of this market and if we didn’t have those foreign buyers our market would have been in significant trouble through 2008,” McCredie told Xinhua.

He noted Vancouver is one of the most diverse and cosmopolitan cities in Canada with a good location and environment, which means that people will keep coming and will continue to buy-up the limited housing stock.

“Part of the problem with having a beautiful city, and a gateway, is that you have significant amount of demand from people who want to live here.”

Source: Fu Peng, Xinhua

Prices for all housing types are still on the rise in Vancouver, according to the Royal LePage House Price Survey which was released last week.

The report said year-over-year price increases were seen across all housing types in the city in 2014’s first quarter. Detached bungalows saw the biggest jump, with a 4.8% increase to $1,062,318. Standard two-storey homes increased 2.9% to $1,148,473 and standard condos grew 0.3% to $482,000

“The Vancouver real estate market was steady but balanced when compared to the same period of last year,” said Bill Binnie, broker and owner of Royal LePage North Shore.

“There is a healthy dose of momentum in the market right now, in large part because of the year-over-year increase in unit sales.”

Inventories for detached homes in Vancouver have been low lately, said Chris Simmons, owner and broker of Royal LePage Vancouver West Side and City Centre, meaning properties that are put on the market don’t stay there for very long.

“Builders are focused on developing multi-unit properties like condos, so inventory in that category remains fairly good,” Simmons said.

“On the other hand, there is a perpetual shortage of single-family homes, which is driving up prices for this property type.”

Simmons said the first quarter is consistent with how the January-to-March period usually plays out.

“In terms of unit sales, January and the beginning of February were slow, but more and more life came into the market in the end of February and through March.”

Prices also rose across Canada as a whole, with the average two-story home costing 5.4% more than one year prior, at $428,943. Detached bungalows grew 4.4% to $380,765 and standard condos increased 2.5% to $252,174.

Source: Emma Crawford Hampel, Business in Vancouver

The weather forecast for this weekend is sun, sun, sun (well, in Vancouver at any rate!). With the garden slowly waking up, our thoughts turn to creating beautiful outdoor spaces to enjoy for the next few months (until the rains come again).

Here’s a great article that I found on GalTime.com by Kathy Woodard, Home Decor Stylist, who shares tips on designing a warm and welcoming outdoor patio space as inviting as any interior room.

Patios allow you to enjoy the outdoors in comfort, and outdoor living has never been more a part of our everyday living. Even if your budget is tight and your space small, you can carve out a little oasis to whisk you away from the hustle of daily life for you and your loved ones.

The first step in creating a stylish patio or outdoor room is to locate the right place for it. If you have a built-in covered porch or patio, you have a natural area. However, sometimes it’s nice to create a space farther away from buildings and the commotion of others, so feel free to look for unused spots under a tree in the garden or in a private side yard to create an unattached patio.

Once you have your chosen spot for your sanctuary, you need only follow a few easy steps to create a patio “room” that anyone would enjoy relaxing in after a long day.

Step One: Give Your Patio Room Floors, Walls and Ceilings

No, I’m not talking hiring a contractor here; there are easy ways to add the sense of boundaries and privacy without spending big bucks. Use inexpensive fabric panels or hanging planters to create a private wall on a porch, or trellising, evergreens in planters or hedging out in the garden. Trees, vine covered arbors, or the brilliant blue sky all make an excellent ceiling. Flooring can consist of grass, gravel, paving or decking. My favorite technique to dress up a plain concrete floor is to paint on a faux area rug. Clean the concrete first, paint and stencil your rug using masking tape and house paint, then seal with an exterior grade polyurethane.

Step Two: Add Furniture and Accessories

Even a simple chair tucked in a quiet corner can make your oasis special. Consider resin or aluminum furniture to keep costs down. Plastic or resin chairs can be spray painted with specialty paints to give them a more upscale look. Add a table for those glasses of lemonade! Don’t be afraid to bring traditional decorating items into your rooms. Pillows, throws and candles all make charming and useful additions, and add comfort to your space. If your room is open to the elements, you can either purchase weather resistant fabrics, or bring your fabric items indoors during bad weather. Remember you are in an outdoor room, so decorate with nature. Planters of flowers, garden signs, and even old tools, birdhouses and watering cans are at home in an outdoor room.

Step Three: Light Up the Night Sky

To make your special spot really magical, add lighting to create a nighttime glow. Strings of inexpensive white holiday lights can be wrapped around tree branches or decking, tiki torches and candles add a festive flair, and solar lights can accent the pathway or steps.

A report released today by Grosvenor’s research team suggests that Canadian cities are the best bet for long-term real estate investment, with Toronto, Vancouver and Calgary taking the first, second and third spots respectively. The research ranks 50 of the world’s top cities according to their resilience: a product of their environmental and social vulnerability and adaptive capacity, which covers community, infrastructure, resources, environmental and climatic factors.

“Toronto is no stranger to the importance of resiliency, having endured natural disasters such as the 1998 ice storm and even Hurricane Hazel, in 1954,” said Richard Barkham, Grosvenor’s Group Research Director. “The investment of city leaders in infrastructure and its commitment to upgrading it over the decades has put Toronto at the top of Grosvenor’s list of the world’s most resilient cities.”

“Canada, as a whole, is doing exceptionally well in developing resiliency. The top three most resilient cities in Grosvenor’s Resiliency index are Toronto, Vancouver and Calgary. For investors in property and real estate, it makes Canada a very sound long-term investment.”

Key findings from the research are:

* The most resilient cities are in Canada, with Toronto, Vancouver and Calgary taking the top three spots respectively.

* American cities are relatively vulnerable, but their capacity to adapt makes them fairly resilient. The lowest ranked cities are also those with the highest population forecast figures.

* The middle group of cities, ranked 11 to 30, are fairly close to the top 10 in their scores so must be considered resilient. Most European cities fall into this group. London is ranked 18th.

* The weakest 20 cities are in emerging markets and are considerably weaker than the top 30. Eight of these are in the so called BRIC countries. So far, blistering economic growth has not fed through into the quality and long term resilience of these cities.

Source: Marketwired

The Canadian Real Estate Association (CREA) has updated its forecast for home sales and prices, saying it expects transactions and values to increase during the spring months and into 2015.

The national average home price is forecast to rise by 3.8% to $397,000 in 2014, with similar sized gains in British Columbia, Alberta, and Ontario. Modest changes in average prices are forecast for all other provinces this year.

The national average price is forecast to rise a further 1.1% in 2015 to $401,400. Alberta is forecast to post the biggest rise in average price in 2015 at 2.5%, followed closely by Manitoba at 2%. Prices in Saskatchewan, Ontario, and Newfoundland and Labrador are forecast to grow by about 1% in 2015, with other provinces managing gains of close to 0.5%.

National resale housing activity started 2014 at lower levels compared to previous years and CREA explained that this partly reflected stronger levels of activity recorded last summer and autumn when buyers with pre-approved mortgage financing advanced home purchases before their lower pre-approved rates expired.

It also likely reflects the deferral of some activity due to what has been an exceptionally tough winter in many parts of the country. Taking this into consideration, and with mortgage rates having edged lower, home sales are expected to trend higher and be further supported over the second half of 2014 by a widely anticipated pick up in Canadian economic growth.

‘I expect fixed mortgage rates will edge marginally higher in the second half of 2014 as evidence confirms an anticipated pick up in economic growth,’ said Gregory Klump, CREA’s chief economist.

‘Marginally higher mortgage rates are likely to counterbalance the lift provided by stronger economic and continuing job growth, and restrain the momentum for sales activity,’ he added.

He explained that, on balance, the combination of these two opposing factors is expected to most benefit housing markets where sales are currently weak but prices remain more affordable. Sales in relatively less affordable housing markets are likely to be more sensitive to higher fixed mortgage rates, whether from the standpoint of higher monthly mortgage payments or qualification for mortgage financing based on the posted five year rate.

Sales are forecast to reach 463,700 units in 2014, an increase of 1.3% from 2013. This would place sales in line with their 10 year average, and hold national activity to within fairly short reach of the 450,000 mark for the seventh year in a row.

British Columbia is forecast to post the largest year-on-year increase in activity at 8.3% and make the biggest contribution to the increase in national sales activity. The increase in 2014 sales activity reflects slow sales for the province in early 2013 and a replay of that weakness is not expected this year.

Annual changes in activity in other provinces are forecast to range between plus and minus 3% in 2014 with the exception of a slightly larger decline in Nova Scotia.

In 2015, national activity is forecast to edge up a further 1.2% to 469,400 units. Affordability is expected to restrain activity in Canada’s most expensive markets, with annual sales forecast to decline marginally in British Columbia, and hold just below 200,000 units in Ontario for the fourth consecutive year. Alberta is the notable exception, where it is anticipated that strong economic and job growth combined with supportive demographic trends will result in strengthening annual sales activity.

CREA also said that average prices have remained firm and continue to reflect a rise in the share of national sales among some of Canada’s most active and expensive markets compared to last year. Also, prices have been heating up in some markets, particularly in Calgary and Toronto where single family properties are in short supply.

Source: PropertyWire

Maybe it’s the sky-rocketing home prices in key markets, but Canadians are saying sayonara to the traditional way of buying a home and are either going in alone or doubling up with friends or relatives.

A quarter of Canadians who’ve bought a home in the last two years made the significant financial move on their own, while four in ten Canadians believe purchasing a home with friends and family is a great way to access the housing market, according to a survey by TD.

Households comprising of single Canadians make up 27.6 per cent of all homes, according to Statistics Canada. And it looks like young, single women are dominating the solo route in Canadian cities. Women, especially those in their 20s, represent one-third of all condo sales in Montreal and Toronto, according to the Globe and Mail newspaper. Single women are more likely than men to be solo first-time home buyers thanks to changes in income levels and demographic shift, according to RBC’s 19th annual Homeownership Poll.

“Women are being more cautious than men, weighing cost, affordability and job security before buying a home,” Marcia Moffat, head of home equity financing for RBC, said in a recent release.

But there are those who are less comfortable making the investment without a safety net or financial support. Toronto resident Mike McCann went the non-traditional route, purchasing a property with multiple buyers because of the security it offered.

“For larger properties I would work within a partnership for financial reasons,” McCann says.

If you are buying alone or with a partner, many of the guiding principles that exist for traditional, nuclear families still apply. For instance, you need to know how much you are comfortable spending and what your budget will look like once home-associated costs are accounted for.

“Once homebuyers set their budget and down payment, they can take their prospective monthly mortgage payment for a test-drive and ‘pay’ into a TFSA or savings account,” says Michelle Snow, associate vice president, retail products at TD in a release.

“This two-fold solution allows the homebuyer to see how comfortable the monthly mortgage payment is before locking in, and save for a larger down payment at the same time. For co-purchasers, it opens the line of communication to talk about how these monthly payments will work after the purchase.”

Communication will be key in any alternative purchasing plan, especially when it comes to the purchase price, which is a motivating factor for pooling capital and seeking alternative home buying strategies in the first place.

“I think it is predominantly due to an increase in property prices and tighter lending requirements,” Snow says of the influx of co-purchasers.

For example, 96 per cent of Ontario-based home buyers consider the price of the home the most important factor when purchasing property, according to research from the Real Estate Council of Ontario. The national average purchase price for a single-family home in Canada now sits at $406, 372, which is a 10 per cent increase from the same month year-over-year (February), according to the Canadian Real Estate Association.

From an ownership standpoint, buying a home by yourself or with a group isn’t necessarily better than what has been traditionally observed in the Canadian housing market says Chris Allen a Toronto-based realtor.

Then again “If you have the capital then absolutely go ahead and put it in your name and finance the property yourself or with your friends and family,” says Allen. “The trend with ‘team buying’ is a good thing if you’ve done your due diligence with your friend, you don’t want to get into a business relationship without nailing down all of the facts.”

Consider this before you buy a home with your group of besties: If you are buying a home there should be some legally-binding agreement that protects home buyers from one of the other members leaving the arrangement, cautions certified financial planner Margaret Richards.

“[Traditionally] if you are married there is family law to protect you,” says Richards.

Source: Haaruun Dhubat, Yahoo! Canada Finance

Unlike a lot of first-time home buyers, in 2009 Jesse MacNevin decided to go for a house that was less than the amount he was approved for.

“I started doing the numbers and talked to a few real estate agents,” he says. “Then I went to my credit union for a pre-approval. I realized then that I needed to focus more on what I could actually afford versus how much they would give me.”

While he was given the green light to aim for a $350,000 home, he settled on a condo for just under $260,000 instead. “I didn’t want home ownership at the expense of everything else. I remember looking at my budget at the time and thinking the last thing I wanted was not to be able to travel. It wasn’t exactly what I wanted, but it was cheaper and fulfilled all my needs. In hindsight, it was a good move.”

MacNevin says having a good real estate agent and lawyer helped him determine what he could really afford, where there might be potential problems and the ins and outs of closing the deal. A mortgage broker was also important when it came to the signing process and making sure there was flexibility in his mortgage terms.

Not everyone entering the home buying market is so diligent.

When doing the mortgage math, it’s not enough to plug some numbers into an online estimator, says David Stafford, managing director, real estate secured lending, for Scotiabank in Toronto. “This is probably the largest single financial transaction that most people do in their lives, and it can get very complicated. Online estimators typically won’t give you the full picture.”

He says buyers need to look beyond the actual purchase price and factor in a percentage (typically 1.5 per cent of the purchase price) for closing expenses from the outset. “Land transfer taxes, legal fees, title insurance and other things are all part of the math.” They also need to consider ongoing expenses that will be over and above monthly mortgage payments, such as utilities, property taxes, insurance, maintenance and condo fees.

Sometimes there are additional surprises that come into play in the initial stages of home ownership, such as reimbursement fees if the former owner has prepaid their property taxes and moving costs, says Toronto-based Richard Desrocher, a general legal practitioner and former real estate broker.

The immediate financial aspects are only part of the process, which is why a home inspection is a good idea, he says. “You won’t know what’s going on behind the walls and on the roof. It’s pretty scary after you close a deal to have to deal with drain problems.”

There are also ways people can reduce their costs if they talk to the right people, Desrocher says. “A lot don’t realize that many financial institutions are willing to negotiate down from their published rates. A mortgage broker is much better informed about where the best deals are and can shop the market for you.”

Source: Denise Deveau, Postmedia News

Property prices in Canada increased by 10.1% compared with a year earlier, taking the national average price for homes sold in February to $406,372, according to the latest figures from the Canadian Real Estate Association.

CREA says that the size of year on year average price gains continues to reflect the decline in sales activity in February of last year among some of Canada’s most active and expensive markets, which dropped the national average at that time. This phenomenon was particularly clear this month, with Greater Vancouver having posted the biggest year on year increase in activity by a large margin.

The MLS Home Price Index, regarded as providing a better gauge of price trends because it is not affected by changes in the mix of sales activity the way that average price is, rose 5.05% on a year on year basis in February, up from a 4.83% gain in January. Year on year price growth picked up among all property types tracked by the index.

Price increases were led by two storey single family homes with growth of 5.84% and one storey single family homes at 5.4%. This was closely followed by price increases for town house and terraced units up 4.05% and apartment units up 3.74%.

The biggest gains were recorded in Calgary where prices jumped 9.1% and Greater Toronto with growth of 7.28%. Greater Vancouver’s recorded a fourth consecutive year on year increase of 3.17% while prices in Victoria remained lower than year ago levels, down 1.01%, the smallest in more than three years.

Sales were largely unchanged with an increase of just 0.3% compared to January but the slight rise follows five straight monthly declines and means that transactions are 9.3% below the peak reached in August 2013.

The number of local housing markets where February sales were up ran roughly even with the number of markets where sales declined, with little change in activity among most of Canada’s large urban markets.

‘Sales in February rebounded in some of the smaller local markets where activity was impacted by harsh winter weather in January. The strength of sales activity during the crucial spring market period will be influenced by the availability of listings, which varies considerably from market to market,’ said CREA president Laura Leyser.

Sales activity this spring will be supported by the recent decline in the benchmark five year conventional mortgage rate, according to Gregory Klump, CREA’s chief economist.

‘That’s because buyers needing mortgage default insurance who opt for a term of less than five years must qualify for mortgage financing based on that rate, and not a discounted rate that their lender may be offering. The support will be of particular importance in some of Canada’s larger urban markets where home prices are higher than those in smaller markets,’ he added.

The number of newly listed homes was also little changed in February, having edged up 0.6% on a month on month basis. As with sales activity, there was a roughly even split between the number of local markets where new listings were up from the previous month and those where they were down.

The number of new listings nationally would have declined had it not been for a 7.8% increase in Greater Toronto, where new listings in January had dropped to the lowest level in more than three years. The rise in new listings in Greater Toronto was offset by monthly declines in new listings in Greater Vancouver and Edmonton.

With sales and new listings having both edged slightly higher in February, the national sales to new listings ratio was 52.1%, virtually unchanged from 52.3% in January. Since early 2010, the ratio has remained firmly entrenched within the range from 40 to 60% that marks balanced territory. Just under two thirds of all local markets posted a sales to new listings ratio in this range in February.

The number of months of inventory is another important measure of balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity.

There were 6.4 months of inventory at the national level at the end of February 2014, down slightly from 6.5 months at the end of January. As with the sales to new listings ratio, the months of inventory measure continues to point to a well balanced housing market at the national level.

Source: Property Wire

You don’t have to believe in superstition for it to hex your house, if the results of a forthcoming Canadian study are any indication.

Reporting in the journal Economic Inquiry, researchers uncover enormous costs associated with “magical thinking” in real estate transactions in neighbourhoods with a high concentration of Chinese residents. The good news, however, is that they also identify payoffs — on average, around five figures — when superstitions run in a seller’s favour.

“We do find premiums and penalties associated with numbers that are thought to be lucky or unlucky in the Chinese culture,” said lead author Nicole Fortin, a professor at the University of British Columbia’s Vancouver School of Economics. “And these are really sizable transactions.”

Analyzing nearly 117,000 home sales between 2000 and 2005, researchers discovered that in areas whose share of Chinese residents exceeded the metro average, houses with address numbers ending in ‘4’ were sold at a 2.2-per-cent discount while those with numbers ending in ‘8’ were sold at a 2.5-per-cent premium. Four is associated with death in Chinese culture, and eight with prosperity.

Given the average house price of $400,000 during the study period, Fortin said superstition ultimately meant the difference between an $8,000 loss or a $10,000 gain in comparison to houses with addresses ending with any other digit.

“Real estate agents are very aware of this, and they exploit it,” Fortin said.

In one Vancouver ad, for example, she found eight of 20 homes aimed at buyers from mainland China ended in ‘8,’ as did the asking price of 11 of the homes. Similarly, a 2012 analysis by Trulia.com found that in Asian-majority neighbourhoods, the last non-zero digit of an asking price ended with ‘8’ in 20 per cent of listings — and 37 per cent of those priced at a million or higher — versus just four per cent for other areas.

Fortin cites important public policy repercussions, noting that some people will petition to change their addresses — often by subdividing or via another legal loophole — to make their properties “luckier.” One of her own neighbours, in fact, had the last number of his home altered from a four to a six.

“I wondered why he didn’t get an ‘8.’ He probably tried,” Fortin said. “But should municipalities allow people to change their address just because they don’t like the number?”

In Canada, where people of Chinese descent account for five per cent of the population, Fortin said the implication is that something as seemingly innocuous as a home address could affect whether a property flourishes or is left to deteriorate.

To wit, study co-author Andrew Hill emphasized that disbelief in such superstitions doesn’t inoculate against them.

“If everyone knows that these belief premiums and penalties are going to persist — even if they don’t believe in (the same thing) — it can have an effect,” said Hill, assistant professor of economics at the University of South Carolina. “As a property investor, it just makes no sense to have a house number that could lose you money.”

Importantly, however, Edmonton real estate agent Taylor Hack said emotion can overcome reason in almost any purchase of a principal residence, regardless of cultural background.

“We have to take that into consideration when working with anyone,” said Hack, of Remax River City. “Everybody has their own level of superstition. If some people were aware that a traumatic incident happened in the home, they’d have trouble with it.”

Source: Misty Harris, PostMedia

The Conference Board isn’t buying the notion that Canada’s housing market will suddenly crumble, saying the most likely outlook is for a modest decline nationally and in some specific markets.

The Ottawa-based think-tank argues in a comprehensive new look at real estate in Canada that the conditions for a crash simply don’t exist, despite numerous reports that the market is overbuilt and overvalued.

Rather, the report argues that with the possible exception of Toronto, housing starts the past three years have been roughly in line with the 20-year average.

Even in Toronto, there is only a “borderline” case that it could be overbuilt.

“At this point in the housing cycle, there is a risk that Canadian housing prices in some market segments are due for a modest correction,” the report states.

“Nevertheless, we believe that continued population growth, additional employment gains and modest mortgage rate increases will limit potential price declines in 2014 and 2015.”

There is a case for more dramatic price adjustment further out if higher mortgage rates start crimping affordability, the Conference Board says, but even then it is likely to be a soft rather than a hard landing.

In recent years, some economists and international organizations such as the OECD, the IMF, Deutsche Bank and The Economist magazine have described Canada’s housing market in stark terms, characterizing it as among the priciest in the world based on historical averages and other metrics.

But the consensus of economists within Canada has tended to be more subdued. Last week, the Canadian Real Estate Association also predicted a slowdown as mortgage rates start edging up later in the year, but it still saw the market overall growing in 2014 and 2015.

The Conference Board says fears of a housing bubble about to burst in Canada are exaggerated.

It says some of the evidence cited by correction hawks, including comparing home prices as a multiple of rental costs, don’t take into account historically-low mortgage rates that keeps affordability steady. Citing Toronto, it notes that in 2013 mortgage payments consumed less than 20 per cent of average household income, the same as in 1993.

“Mortgage costs, not just house prices, are the principal deciding factor for potential homebuyers,” says Robin Wiebe, the think-tank’s senior economist.

Even when mortgage rates do start rising, the Conference Board believes it will happen gradually and over an extended period. For instance, it forecasts rates with only a gain of 200 basis points — two percentage points — by 2017 or 2018.

But at current low rates, the typical homeowner on a posted five-year rate will have paid down $42,104 principal on a $100,000 in mortgage debt, so affordability won’t be seriously impacted once it comes time to renew at a higher rate.

The Conference Board provides an outlook on six major cities:

— Vancouver: Moved back into balance last spring. Recent price gains will give way to slower advances in 2014.

— Calgary: A approaching sellers’ conditions, noting strong price gains last year.

— Edmonton: Balanced, with brisk resale and price growth activity last year.

— Toronto: Balanced with healthy price growth. A major correction is difficult to see given solid employment and population growth.

— Ottawa: Market cooling due to falling employment from the government sector, flatter sales and tempered prices.

— Montreal: Flirting with buyer’s market conditions with sales and average prices having dropped somewhat last year.

Source: Julian Beltrame, The Canadian Press