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Canada's real estate market in full recovery mode as home sales rise
Oct 17, 2019

Canada’s realtors produced another strong month of sales and prices in September, with gains in most major markets in a sign of strength for the nation’s housing market.

The number of units sold rose 0.6 per cent last month, extending a recent jump in activity that have seen transactions jump 16 per cent from a year ago, the Canadian Real Estate Association said Tuesday. Benchmark home prices rose 0.5 per cent in September, and are up 2.3 per cent over the past four months. Markets in British Columbia led gains in both sales and prices last month, with the country’s oil-producing regions the only ones showing any weakness.

The report is in line with other recent indicators that suggest housing has fully recovered from a slump earlier this year, helped by falling mortgage rates. The run of robust housing data gives the Bank of Canada another reason — along with strong job gains — to hold interest rates steady, even as counterparts around the world tilt toward easing policy.

“Home sales activity and prices are improving after having weakened significantly in a number of housing markets,” Gregory Klump, chief economist at the Ottawa-based realtor group, said in a statement. “How long the current rebound continues depends on economic growth, which is being subdued by trade and business investment uncertainties.”

Source: Theophilos Argitis: Bloomberg News

The fall real-estate updates: Economists predict gradual rebound
Oct 03, 2019

Spring is usually the hottest season for real estate but that wasn't the case in 2019. We saw inventories build and prices trend downwards. However, things appear to have changed since then.

According to the Canadian Real Estate Association, national home prices have increased for six consecutive months. The national home price index is up by 0.9 per cent since August 2019.

Economists from RBC and Sotheby's have declared the housing correction over and expect a gradual rebound over the near term. Homes priced up to $1 million have seen an uptick in selling activity, whereas the higher priced luxury market, which has been hit the hardest, remains soft.  

Since the spring, sentiment around real estate has improved. Interest rates have been dropping and prices have adjusted downwards. This means that buyers can afford more "house" compared to last year.

There is also a greater sense of urgency to purchase compared to last spring due to the China/Hong Kong conflict. Some fear that if the conflict escalates, as many as 300,000 Hong Kong/Canadian dual citizens could flood our local market and drive up prices. 

It's hard to generalize our real estate market.  It isn't one "Lower Mainland" market — it is more like 30 submarkets. Overall, I'd say it is more or less balanced, with lots of hot and cold pockets. It really depends on the location and price point.   

Hurting markets

Pre-sales and newly built condos aren't selling very well. Not only is there currently a large number available on the market, there are more expected over the next year.

Several pre-sale projects have been cancelled due to a lack of demand with some developers needing to offer incentives to entice buyers. 

This past June, a developer was famously offering buyers a years' worth of avocado toast, but since then they have had to up the ante. Now, instead of toast, one developer is giving away a Telsa worth $55K with every home purchase.    

Another area not doing well is the luxury market. This has been the hardest hit with price drops, in some areas, of 40 per cent. The main reason for the lack of buyers is that, despite the 40 per cent price drop, the luxury market is still expensive. A home worth $7 million in 2017 would still cost over $4 million today, a price few can afford.  

Those buying in the luxury market in 2017 were often foreign buyers and that market has completely dried up. Many have suggested that foreign buyers used our real estate market as a bank account. Well, instead of making deposits, they are now making withdrawals. 

For the first time in decades, the Chinese have become net sellers of global assets, which includes Vancouver real estate. As a result of this behavioural change, the areas of our market that were popular with foreign investors are now struggling.  

Personal finance expert Mark Ting says it's difficult to predict how the 2019 federal election will affect housing. (Graham Hughes/The Canadian Press)

Election season

Another consideration that will have an impact on real estate is the upcoming election. Exactly how the election will affect housing is hard to quantify as we don't know who will win, whether they will follow through with their pre-election promises or, if they do, how fast they implement their plan.  

I'm not rushing into this market even if some experts say that it has bottomed. It can bounce along the bottom for quite some time. It is rare that you see a V-shaped recovery with real estate unless there was a major crash.    

At the end of the day I use spreadsheets. If the math works, be it a home for you to live in or a revenue property, then I would be inclined to go through with a deal. If the math doesn't work, then be patient and try again when the numbers make more sense.  

Source: Mark Ting, CBC News

September Stats
Oct 02, 2019

Increased demand helps housing market reach balanced territory

Home buyer demand has returned to more historically typical levels in Metro Vancouver over the last three months.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,333 in September 2019, a 46.3 per cent increase from the 1,595 sales recorded in September 2018, and a 4.6 per cent increase from the 2,231 homes sold in August 2019.

Last month’s sales were 1.7 per cent below the 10-year September sales average.

“We’re seeing more balanced housing market conditions over the last three months compared to what we saw at this time last year,” Ashley Smith, REBGV president said. “Home buyers are more willing to make offers today, particularly in the townhome and apartment markets.”

There were 4,866 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in September 2019. This represents a 7.8 per cent decrease compared to the 5,279 homes listed in September 2018 and a 29.9 per cent increase compared to August 2019 when 3,747 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 13,439, a 2.7 per cent increase compared to September 2018 (13,084) and a 0.3 per cent increase compared to August 2019 (13,396).

For all property types, the sales-to-active listings ratio for September 2019 is 17.4 per cent. By property type, the ratio is 12.7 per cent for detached homes, 18.9 per cent for townhomes, and 21.9 per cent for apartments.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“This is a more comfortable market for people on both sides of a real estate transaction,” said Smith. “Home sale and listing activity were both at typical levels for our region in September.”

The MLS® Home Price Index composite benchmark price for all residential homes in Metro Vancouver is currently $990,600. This represents a 7.3 per cent decrease over September 2018 and a 0.3 per cent decrease compared to August 2019.

Sales of detached homes in September 2019 reached 745, a 46.7 per cent increase from the 508 detached sales recorded in September 2018. The benchmark price for a detached home is $1,406,200. This represents an 8.6 per cent decrease from September 2018 and is virtually unchanged compared to August 2019.

Sales of apartment homes reached 1,166 in September 2019, a 43.6 per cent increase compared to the 812 sales in September 2018. The benchmark price of an apartment property is $651,500. This represents a 6.5 per cent decrease from September 2018 and a 0.4 per cent decrease compared to August 2019.

Attached home sales in September 2019 totalled 422, a 53.5 per cent increase compared to the 275 sales in September 2018. The benchmark price of an attached home is $767,500. This represents a 7.2 per cent decrease from September 2018 and a 0.6 per cent decrease compared to August 2019.

Download the September 2019 stats package

August Stats
Sep 04, 2019

Metro Vancouver housing market sees summer uptick in sales

Home buyer activity increased to more typical levels in Metro Vancouver throughout the summer months.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,231 in August 2019, a 15.7 per cent increase from the 1,929 sales recorded in August 2018, and a 12.7 per cent decrease from the 2,557 homes sold in July 2019.

Last month’s sales were 9.2 per cent below the 10-year August sales average.

“Home sales returned to more historically normal levels in July and August compared to what we saw in the first six months of the year,” said REBGV President Ashley Smith. 

There were 3,747 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in August 2019. This represents a 3.5 per cent decrease compared to the 3,881 homes listed in August 2018 and an 18.8 per cent decrease compared to July 2019 when 4,613 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 13,396, a 13.3 per cent increase compared to August 2018 (11,824) and a 5.9 per cent decrease compared to July 2019 (14,240).

For all property types, the sales-to-active listings ratio for August 2019 is 16.7 per cent. By property type, the ratio is 12 per cent for detached homes, 18.4 per cent for townhomes, and 21.2 per cent for apartments.

Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“With more demand from home buyers, the supply of homes listed for sale isn’t accumulating like earlier in the year. These changes are creating more balanced market conditions,” Smith said.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $993,300. This represents an 8.3 per cent decrease over August 2018 and a 0.2 per cent decrease compared to July 2019.

Sales of detached homes in August 2019 reached 706, a 24.5 per cent increase from the 567 detached sales recorded in August 2018. The benchmark price for detached homes is $1,406,700. This represents a 9.8 per cent decrease from August 2018 and a 0.7 per cent decrease compared to July 2019.

Sales of apartment homes reached 1,116 in August 2019, an 8.9 per cent increase compared to the 1,025 sales in August 2018. The benchmark price of an apartment property is $771,000. This represents a 7.4 per cent decrease from August 2018 and a 0.1 per cent increase compared to July 2019.

Attached home sales in August 2019 totalled 409, a 21.4 per cent increase compared to the 337 sales in August 2018. The benchmark price of an attached unit is $654,000. This represents a 7.8 per cent decrease from August 2018, a 0.2 per cent increase compared to July 2019.

Download the August 2019 stats package. 

Canadian home prices set to rise, but by how much?
Aug 20, 2019

There are signs that Canada’s housing market is about to get hotter.

At least that’s what Capital Economics, a UK-headquartered economic-research firm, is suggesting.

In a recent report, Stephen Brown, Capital Economics’ senior Canadian economist, notes that the country’s sales-to-new listing ratio has returned to 60 percent.

That means that for every 10 homes that are listed, six are sold — and in the past, this level of activity has corresponded with year-over-year price increases of 10 percent.

Ratios over 60 percent generally indicate a seller’s market, where increased competition for properties drives land values up.

“As the ratio has overstated gains in the last year, we doubt house price inflation will accelerate quite that far,” says Brown.

So double-digit price growth doesn’t look like it’s in the cards.

However, Capital Economics forecasts Canadian home prices will begin to increase at an annual rate of between 3 and 5 percent by early next year.

Declining interest rates have helped Canada’s housing market rebound, and there is no indication that this will change any time soon.

Capital Economics says mortgage shoppers were being offered average promotional five-year fixed rates of 2.65 percent in July, compared with 3.43 percent in March.

“That means buyers can afford to pay 19% more than they could in March for a given monthly mortgage payment,” Brown explains.

But the mortgage stress test that was introduced in January 2018 remains a hurdle, and mortgage rates have yet to return to 2017 lows.

For now, Canadian home prices remain muted even as sales activity picks up. According to the Canadian Real Estate Association, the index price of a Canadian home was up 0.2 percent annually in July, while sales surged 12.6 percent.

“While the Bank of Canada will welcome the rebound in home sales to more normal levels, officials are unlikely to want to see house price inflation materially outpacing income growth again. Unless sales rise much further in the coming months, however, we don’t think such concerns will prevent the Bank from cutting interest rates this year,” says Brown.

Source: Josh Sherman: Livabl

Vancouver showing promising recovery signs
Aug 14, 2019

While it’s early days yet, Vancouver’s real estate market seems to be coming back to life.

July sales figures released by the Real Estate Board of Greater Vancouver revealed a 23.5% year-over-year increase, as regional residential home sales totalled 2,557, trumping last year’s 2,070. It also marked a 23.1% increase over the 2,077 home sales recorded in June 2019.

And while sales in July were 7.8% below the 10-year average for the month, Jason Turcotte, Cressey Development Group’s VP of development, notes the last decade has been an aberration.

“The 10-year averaged a number we will always struggle to meet because those were unprecedented 10 years,” he said. “I think the whole dynamic of the marketplace has changed in Vancouver, and what it shows us is that with ‘normal’ buying activity we see prices hold.”

Juxtaposed with a year ago, when nobody knew where the Vancouver market was headed, consumer confidence has returned to the market. As evidence, Turcotte points to the city’s single-family detached market.

“A year ago, the single-family market was virtually non-existent,” he said of the 32% year-over-year sales increase. “Now there’s reason to be cautiously optimistic because it’s a sign that comfort has returned to the market and we’re seeing ‘normal’ activity.”

The benchmark price for detached properties remains exorbitant at $1,417,000, however, it’s a 10.5% year-over-year decrease from July 2018 and a 0.5% drop from the previous month. Moreover, the Canada Mortgage and Housing Corporation just designated Vancouver’s housing market stability as moderate after being “highly vulnerable” for the past three years.

“When they talk about prices and affordability, it’s still very much in their red zone,” said Turcotte. “The reason the designation had to do with the slowing pace of sales and the slight reduction of pricing, but the latter alone wouldn’t have done it. It’s not an overheated marketplace where demand exceeds supply, which drives prices up at unprecedented levels. If we look at prices relative to local incomes, they’re still unaffordable and there’s no question we have to recognize we’re not only a local economy: we have global appeal with growth of high-income immigration. The strong demand here will, from a global interest perspective, keep prices high.”

Source: Neil Sharma: Mortgage Broker News

July Stats
Aug 02, 2019

Home sales increase in July

Home buyer demand picked up across Metro Vancouver last month, making July, a traditionally quieter month in real estate, the second highest selling month so far this year.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,557 in July 2019, a 23.5 per cent increase from the 2,070 sales recorded in July 2018, and a 23.1 per cent increase from the 2,077 homes sold in June 2019.

Last month’s sales were 7.8 per cent below the 10-year July sales average.

“While home sale activity remains below long-term averages, we saw an increase in sales in July compared to the less active spring we experienced,” Ashley Smith, REBGV president said. “Those looking to buy today continue to benefit from low interest rates, increased selection, and reduced prices compared to the heated market a few years ago.”

There were 4,613 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in July 2019. This represents a 3.3 per cent decrease compared to the 4,770 homes listed in July 2018 and a 2.9 per cent decrease compared to June 2019 when 4,751 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 14,240, a 17.3 per cent increase compared to July 2018 (12,137) and a 4.9 per cent decrease compared to June 2019 (14,968).

For all property types, the sales-to-active listings ratio for July 2019 is 18 per cent. By property type, the ratio is 13.5 per cent for detached homes, 20 per cent for townhomes, and 22 per cent for apartments.

Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“To better understand conditions in your property type or neighbourhood of choice, it’s important to work with your local REALTOR®. They can help you develop a strategy to reach your long-term real estate goals,“ Smith said.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $995,200. This represents a 9.4 per cent decrease over July 2018 and a 0.3 per cent decrease compared to June 2019.

Sales of detached homes in July 2019 reached 841, a 32 per cent increase from the 637 detached sales recorded in July 2018. The benchmark price for detached properties is $1,417,000. This represents a 10.5 per cent decrease from July 2018, and a 0.5 per cent decrease compared to June 2019.

Sales of apartment homes reached 1,243 in July 2019, a 15.2 per cent increase compared to the 1,079 sales in July 2018. The benchmark price of an apartment property is $653,200. This represents an 8.8 per cent decrease from July 2018, and a 0.2 per cent decrease compared to June 2019.

Attached home sales in July 2019 totalled 473, a 33.6 per cent increase compared to the 354 sales in July 2018. The benchmark price of an attached unit is $770,000. This represents a nine per cent decrease from July 2018, and a 0.6 per cent decrease compared to June 2019.

Download the July 2019 stats package.

Property taxes could increase by as much as 10% in Vancouver next year
Jul 22, 2019

A new city staff report states that property taxes in Vancouver next year could increase as much as 10%, to help cover the costs of city council motions that have been put forward “over the past months, some of which will have budget implications over the next few years.”

The report said that a preliminary scan of the budget numbers “indicates that expenditure pressures will exceed those estimated in the 2019-2024 Five-Year Financial Plan.”

That plan estimated a 4.9% property tax increase to balance the budget. However, “the 2020-2024 outlook indicates that the pressure would require a higher tax increase of 6% to 7% to balance and could be as high as 10% to implement all of the various council motions.”

The report said the capital budget will reflect the second year of the four-year capital plan approved in 2018.

Initial estimates for 2020 are to bring forward projects of approximately $450 million or 20% of the four year plan, “with higher levels expected in future years as planning and design are completed and construction begins on major projects,” it said.

“Following this high level scan, staff will undertake the process of reviewing costs and revenues, including utilities and fees, in developing a proposed budget.”

This, the report noted, will include consideration of increased revenues and revenue sources, cost savings through technology, process improvement or service changes, and other opportunities to deliver services and programs.

Between now and when the draft budget is presented to council in late fall, the city will embark on its annual public engagement process for the budget.

Starting in mid-August, the public will have opportunities — online, in person, in workshops, etc. — to share their thoughts on the budget with city council, “as well as their own priorities for the services and programs we should fund more―or less,” the report added.

Last year, Vancouver city council approved a 4.5% property tax increase, as part of the city’s $1.513 million operating budget for 2019 and a $365.8 million capital budget for new projects in 2019.

Source: Eric Zimmer: Daily Hive

Royal LePage 2019 housing price survey and forecast
Jul 18, 2019

Read the latest update on housing prices and forecast across Canada:

https://www.royallepage.ca/en/realestate/news/canadian-real-estate-market-shows-signs-of-a-sustainable-recovery-with-modest-price-gain-of-1-1-in-second-quarter/

June Stats
Jul 03, 2019

Housing supply up, home sales and prices down in June

With home buyer demand below long-term historical averages in June, the supply of homes for sale continued to accumulate in Metro Vancouver.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 2,077 in June 2019, a 14.4 per cent decrease from the 2,425 sales recorded in June 2018 and a 21.3 per cent decrease from the 2,638 homes sold in May 2019.

Last month’s sales were 34.7 per cent below the 10-year June sales average. This is the lowest total for the month since 1998.

“We’re continuing to see an expectation gap between home buyers and sellers in Metro Vancouver,” said Ashley Smith, REBGV president. “Sellers are often trying to get yesterday’s values for their homes while buyers are taking a cautious, wait-and-see approach.”

On the supply side, there were 4,751 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in June 2019. This represents a 10 per cent decrease compared to the 5,279 homes listed in June 2018 and an 18.9 per cent decrease compared to May 2019 when 5,861 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 14,968, a 25.3 per cent increase compared to June 2018 (11,947) and a 1.9 per cent increase compared to May 2019 (14,685).

“Home buyers haven’t had this much selection to choose from in five years,” Smith said. “For sellers to be successful in today’s market, it’s important to work with your local REALTOR® to make sure you’re pricing your home for these conditions.”

For all property types, the sales-to-active listings ratio for June 2019 is 13.9 per cent. By property type, the ratio is 11.4 per cent for detached homes, 15.8 per cent for townhomes, and 15.7 per cent for apartments.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $998,700. This represents a 9.6 per cent decrease over June 2018 and a 0.8 per cent decrease compared to May 2019.

This is the first time the composite benchmark has been below $1 million since May 2017.

Sales of detached homes in June 2019 reached 746, a 2.6 per cent decrease from the 766 detached sales recorded in June 2018. The benchmark price for detached properties is $1,423,500. This represents a 10.9 per cent decrease from June 2018 and a 0.1 per cent increase compared to May 2019.

Sales of apartment homes reached 941 in June 2019, a 24.1 per cent decrease compared to the 1,240 sales in June 2018. The benchmark price of an apartment property is $654,700. This represents an 8.9 per cent decrease from June 2018 and a 1.4 per cent decrease compared to May 2019.

Attached home sales in June 2019 totalled 390, a 6.9 per cent decrease compared to the 419 sales in June 2018. The benchmark price of an attached unit is $774,700. This represents an 8.6 per cent decrease from June 2018 and a 0.6 per cent decrease compared to May 2019.

Download the June 2019 stats package.

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