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/

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-/

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

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

That view, expressed recently by Business Council of B.C. executive vice-president Jock Ferguson, reflects the sentiments of many.

However, similar observations have been made in the past. Still, the cost of housing in the Vancouver area has kept climbing. It is impossible to predict when the pricing peak truly will be reached.

Greater Vancouver’s January home price index for a single detached home hit a record $1,010,000, up 8.4 per cent from one year earlier.

The rental market is equally daunting, with a low vacancy rate and hefty rents, especially for condo units.

Behind the problem of unaffordability is, and always has been, the law of supply and demand. There is no indication this force soon will be diminishing.

Greater Vancouver is attracting tens of thousands of newcomers a year, both from other countries and provinces.

For wealthy foreign migrants, the housing situation likely poses no obstacle. But most local buyers and renters, and migrants from other provinces, are not in a position to pay high rents or $1 million-plus to purchase.

Influential architect Michael Geller recently played host to a Simon Fraser University lecture, titled: 12 Affordable Housing Ideas For Vancouver. Unsurprisingly, it was so well attended that many would-be registrants were turned away.

Geller is calling for a two-pronged approach that would:

• have those wishing to live here reducing expectations about the size of housing they require and their need for two-car garages and granite countertops;

• have city planners become more creative and flexible with zoning, and building rules and regulations.

Specifically, Geller wants Vancouver-area planning departments to permit designs that maximize land use and have been tried successfully elsewhere.

Designs would, for example, allow construction of a cluster of small cottage-like homes on a single large residential lot; and designs that would extend construction of a house or apartment buildings right to side-lot property lines, as in dense European urban cores. Municipalities could more liberally permit construction and sale of micro suites of 300 to 400 square feet, laneway and coach houses and allow townhouses and duplexes to accommodate basements, which then could be rented as crucial mortgage helpers.

The city of Vancouver is well aware it has a severe housing affordability problem, having established an arm’s length affordable housing agency in 2014 to find ways of supplying more housing at more reasonable prices.

But the agency has yet to launch a much-needed public discussion about innovative proposals such as Geller’s. The public deserves a chance to digest the prospect of further densification.

Early action clearly is needed in the face of the ever-escalating property prices.

Source: Editorial, The Vancouver Sun

Housing prices in the Lower Mainland are predicted to rise a modest three per cent in 2015, while Canada’s highest prices, in Vancouver, will be sustained by demand from Mainland Chinese buyers.

That’s the view from RE/MAX’s 2015 national housing outlook, in a relatively optimistic report that suggests Greater Vancouver real estate is well supported by a variety of supply and demand factors.

RE/MAX’s report diverges strongly from a new Bank of Canada report that warns parts of Canada’s housing market are overvalued by 30 per cent.

RE/MAX’s report says average residential prices in Greater Vancouver increased from $781,517 in 2013 to $838,400, and are projected to rise to $863,600 in 2015.
Price gains in Vancouver will continue to be driven by hot demand and limited supply for detached homes in west-side neighbourhoods, RE/MAX predicts, while buyers who hoped to break into Vancouver’s market on the east side and lost multiple bid battles may drop out of the market in 2015.

Frustrated buyers won’t limit the market, though, because “the pipeline of demand for the region will continue to grow,” according to RE/MAX.

“Offshore buyer demand from Mainland China continued throughout the year,” the report says. “Demand for westside homes will continue to be driven by offshore buyers who can afford to pay the two million dollar-plus price tag.”

Cory Raven, managing broker at RE/MAX Select Realty in Vancouver, say agents report that “the mindset” of Mainland Chinese buyers focuses on “parking wealth” in Vancouver, rather than seeking price appreciation. That means a significant group of buyers in Vancouver is content to buy higher and higher, agents believe.

“Assuming that tap stays open, the higher end of the market will (continue to see aggressive gains),” Raven says.

There has been speculation that the flood of cash pouring from China into Vancouver real estate will be limited with the ending this year of a federal immigrant investor program. The South China Morning Post has reported a replacement program will be much smaller in scope, and will subject applicants to rigorous audits. But Raven says the perception among realtors is “the tap” will stay open.

“Many realtors have told me that the way business is done (in China) is very different, and the wealthy can always find a way to get their money out.”

Meanwhile, in a new report, the Bank of Canada studied worrying debt loads carried by homeowners across Canada, and calculated that some markets are at risk of correction, with homes overvalued by up to 30 per cent.

But Helmut Pastrick, chief economist of Central 1 credit union, says he believes the Bank of Canada’s data and study method is “constrained” and does not account for unique supply and demand factors in Vancouver’s housing market.

Pastrick says limited land supply in Vancouver is the main factor justifying high housing prices, and demand from Chinese buyers impacts Vancouver’s west side, and West Vancouver. But even if the flow of investment from offshore were to end, according to Pastrick, there would not be a significant drop in Greater Vancouver home prices.

Pastrick says he sees RE/MAX’s prediction of a three-per-cent rise in home prices across the region as reasonable.

“This market is not booming, but it is pretty solid,” he said. “It certainly is not a bubble.”

Pastrick says while U.S. officials appear ready to raise historically low interest rates within half a year, the Bank of Canada probably will not raise rates until late 2015 or longer.

While the Bank of Canada warns that high home prices and heavily indebted households raise risks of a housing correction, Pastrick believes the only real risk is an economic recession.

A drastic fall in oil prices that caught almost all economists by surprise will impact Alberta and other areas of Canada, but actually could support provincial economies such as B.C. that are net importers of oil, Pastrick believes. At this point, he sees no recession risk for B.C. on the horizon.

Source: Sam Cooper, The Province

The benchmark price for a typical detached home – a gauge that omits the most expensive properties – is approaching $1-million in Greater Vancouver.

The Real Estate Board of Greater Vancouver uses the resale home price index (HPI), which strips out the priciest properties, because it asserts that calculation serves as a better barometer of trends than average prices.

On Tuesday, the board reported that the HPI for single-family detached houses reached a record-high $997,800 last month, up 7.9 per cent from November, 2013.

The HPI for detached homes on Vancouver’s west side hit $2,323,300 last month, up 10.9 per cent from November, 2013, while the index for Vancouver’s east side reached $957,300, up 11.9 per cent from a year earlier. Both of those prices also set records.

The average price for detached homes sold in the region has risen 1.2 per cent over the past year to $1,274,904.

Over all, the HPI for detached houses, townhouses and condos rose to $637,300 last month in Greater Vancouver, up 5.7 per cent from a year earlier.

Greater Vancouver had 2,516 housing sales last month, up 8.4 per cent from November, 2013, and 6.9 per cent higher than the 10-year average for that month. “It’s been a more active fall than we typically see,” board president Ray Harris said in a statement.

In the Fraser Valley, which includes the sprawling and less expensive Vancouver suburb of Surrey, there were 1,136 residential sales on the Multiple Listing Service in November, up 15.2 per cent from 986 properties sold in the same month last year.

November’s HPI for Fraser Valley detached homes climbed to $575,400, up 4.6 per cent year-over-year.

Source: Brent Jang, The Globe and Mail

The total number of home sales in Greater Vancouver is expected to hit 33,800 units by the end of 2014, the British Columbia Real Estate Association announced November 18 in its housing forecast.

This is 16.6% higher than the number of units sold in 2013 (28,985).

The association anticipates that unit sales will see a modest increase of 0.6% in 2015, bringing total sales to 34,000 in that year.

The average home price in Greater Vancouver is forecast to be $814,000 in 2014 – up 5.2% compared with $767,765 in 2013. The BCREA anticipates a slight increase of 0.1% in 2015 to $815,000.

Across B.C., home sales will reach 83,940 units by the end of this year. This is more than 15% higher than the number of units sold in 2013. It is also almost 5% higher than the number of 2014 sales forecast by the association in July, which, at 80,100 units, would be the first time since 2009 that sales were expected to exceed 80,000 units.

In 2015, strengthening economic conditions will push sales upward, but this will be offset in part by increasing interest rates, forecasts the BCREA.

“Consumer demand has ratcheted up this year and is expected to remain at a more elevated level through 2015,” said Cameron Muir, BCREA Chief Economist.

“While historically low mortgage rates support demand, the housing market is also being underpinned by a more robust economy and associated job growth, strong net migration and consumer confidence.”

The average home sale price across the province will be 568,800 in 2014, forecasts the association. This is 6% higher than the average of $537,414 in 2013. Prices in 2015 are expected to grow a further 0.8% to an average of $574,300.

The average number of units sold provincially over the past 15 years was 80,400. In 2005, sales hit a record 106,300 units.

Source: Emma Crawford Hampel, Business in Vancouver

The average price of a home sold through the Multiple Listing Service last month was $419,699 – up 7.1 per cent from $391,931 in October 2013. That’s according to new numbers from the Canadian Real Estate Association (CREA), which reports on the market each month.

Such high costs have many wondering whether it’s a good idea to buy and what they should watch out for.

While everyone’s decision-making process will be different, here are a few things worth considering when shopping for a home.

The market could fall

Many people who bought homes in Canada in the past decade have profited from rising house prices.

But home prices sometimes fall, says Paul Anglin, a real estate professor from the University of Guelph.

“Most people get excited about the rising part,” he says. “They forget about the falling part.”

Fresh in the minds of many is the 2008 U.S. housing market crash, which left millions of Americans with homes worth less than they had paid. Prices have mostly recovered, but many lost money in the meantime.

Markets have crashed in Canada, too. For example, from 1990 to 1996, prices dropped every year in Toronto.

Both The Bank of Canada and Moody’s have warned recently that a crash could happen again in Canada, especially if the economy slows down.

Local markets differ

Housing markets tracked by CREA vary widely by city. Prices are up 9.5 per cent year-over-year in Calgary, 8.3 per cent in the Greater Toronto Area and six per cent in Greater Vancouver.

However, they were flat in Saskatoon, Ottawa, Greater Montreal and Greater Moncton – and down 3.4 per cent in Regina.

The eye-popping increases in Toronto and Vancouver are likely because “lots of people want to move there and there’s limited space,” says Anglin.

Calgary is a different story, however, because it’s highly dependent on the success of the local oil extraction economy, which is tied to the global price of oil.

Although Calgary has been booming for years, global oil prices have recently started to fall. “If the price of oil stays low, then [a crash in Calgary] is exactly what you would expect,” says Anglin.

Transit lines can boost value

Living close to good rapid transit options can boost the value of a property for obvious reasons – people want the shortest possible commutes.

“You want to be in a place that is convenient – or that will be convenient,” says Anglin. In other words, don’t just consider existing transit lines, but also where proposed transit could be built.

Think about SmartTrack in Toronto or the Broadway Subway proposal in Vancouver.

“But you also need to figure out how much inconvenience there will be during construction phase,” says Anglin. Buyers who end up too close to a new train station might have to put up with years of dust and noise.

Buying an unbuilt home can be risky

Buying pre-construction can be appealing, because everything will be new once the home is done.

It can also be risky.

“If you’re buying from a plan, you don’t know what will actually be there,” says Anglin.

For example, those who buy a condo from a plan, do not know who else will be in the building, he says.

Some buildings have a large proportion of renters, who may be noisier or dirtier than owners who live in their homes.

It’s also worth keeping in mind that condo fees are more predictable after a building has been up and running for a few years, says Anglin.

And while buyers used to get a discount in exchange for the unpredictability, as TD Bank pointed out earlier this year, resale condos may now be a better deal.

How long do you plan to stay?

Potential buyers need to ask themselves how long they plan to stay, because the longer they are willing to stay, the lower the risk of being forced to sell when prices are low.

“If you plan to be in some place for a year, maybe you should be renting,” says Anglin.

“If you plan to be there for 10 years,” he says, “the monthly wiggles on the average price probably don’t matter, because 10 years from now, economic conditions will be very different.”

Source: Josh Dehaas, CTVNews.ca

House prices in Canada continue to climb[/caption]Home prices in Canada’s major cities are running at a rate many economists just don’t think is sustainable.

We won’t get a complete picture of sales and prices in August for a couple of weeks, but preliminary figures from local real estate boards suggest there’s plenty of momentum. And that has some economists wondering about how long this will last.

“Existing-home sales remained strong in a number of major cities in August and prices continued to outrun income,” Bank of Montreal economist Sal Guatieri wrote in a research note. “How long prices can continue to outpace family income in these major cities is unknown, but it can’t go on forever. The longer it does, the greater the risk of a correction when interest rates rise.”

Falling mortgage rates helped make homes more affordable heading into the summer, according to Royal Bank of Canada. And a recent survey by real estate consulting and research firm Altus Group found home buying intentions everywhere except B.C. were up this summer compared with a year ago. “While first-time buyer intentions are down slightly, homeowners with mortgages are showing more interest,” Altus Group said.

Policy-makers probably won’t do anything to cool prices now, since many smaller housing markets aren’t running as hot as Toronto, Calgary and Vancouver.

Here’s a look at how some markets across the country performed in August, according to data released this week by their local real estate boards.

TORONTO

– 7,600 homes sold on the MLS, up 2.8 per cent from a year earlier, and well above the 10-year average sales level of 7,059 for August.

– the average selling price of all types of homes in Greater Toronto was $546,303, up 8.9 per cent from a year earlier.

– the average price of detached homes in the downtown area covered by the 416 area code was $902,428, up 14.7 per cent; for condos it was $370,899, up 4.1 per cent; for townhouses it was $463,798, up 11.7 per cent.

CALGARY

– 2,267 homes sold on the MLS, up 3.4 per cent from a year earlier; condo sales were up 14 per cent and townhouse sales up 20 per cent, sales of single-family homes fell 2.4 per cent.

– the average price of a single-family home was $545,238, up 5.42 per cent, and the benchmark price of a single-family home was $512,300, up 10.24 per cent; the average price of a condo apartment was $332,006, up 11.48 per cent, and the benchmark price of a condo apartment was $298,200, up 10.2 per cent.

– the average number of days a home spent on the market before selling dropped to 39, from 45 a year earlier.

VANCOUVER

– 2,771 homes sold on the Multiple Listing Service, up 10.2 per cent from a year earlier and 4.3 per cent above the 10-year average for August.

– the benchmark price of all types of homes in Metro Vancouver rose 5 per cent to $631,600 (the benchmark seeks to create a more apples-to-apples comparison than the average price, which can be distorted by changes in the size or location of homes that are selling.)

– the benchmark price of detached properties rose 6.6 per cent to $984,300; the benchmark price of apartment properties rose 3.6 per cent to $379,200; the benchmark price of attached properties rose 3.9 per cent to $474,900.

OTTAWA

– 1,203 homes sold on the MLS, down 1.1 per cent from a year earlier, but a tiny bit above the five-year average of 1,199.

– the average sale price for all types of homes was $360,214, up 3.4 per cent.

– the average price for a condo was $263,996, up 2.7 per cent, while the average price of other types of homes was $381,628, up 1.9 per cent.

EDMONTON

– 1,552 homes sold over the MLS, down 6 per cent from a year earlier.

– the average selling price of all types of homes was up 5 per cent to $368,597, the median selling price was up 5.7 per cent to $348,900.

– the median price of a single-family home rose 5.8 per cent to $402,750, while the median price of a condo fell by 0.6 per cent to $228,500.

REGINA

– 348 homes sold over the MLS in the Regina area, down 8 per cent from a year ago. That was below the five-year average of 365 but above the ten-year average of 336.

– inventory levels are the highest they’ve been in more than 20 years. The number of properties for sale at the end of August was 223 per cent higher than two years earlier.

– the benchmark price was $299,600, down 2.4 per cent from $307,000 a year earlier and homes sat on the market for an average of 48 days before selling, compared with 32 days a year earlier.

Source: Tara Perkins, The Globe and Mail