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Vancouver home prices fall most since 2008, extending decline
Dec 17, 2018

Home prices in Vancouver fell 1.9 per cent in November from a month earlier, the most in a decade, extending a recent run of declines for Canada’s most expensive real estate market.

The figures suggest momentum earlier this year may have been just a blip, as consumers adjust to tougher federal mortgage qualification rules. After rebounding to a record in May, prices nationwide have dropped for six straight months, the Canadian Real Estate Association reported Monday, and are hovering at levels little changed from mid-2017, when interest rates started to rise.

“The decline in home ownership affordability caused by this year’s new mortgage stress-test remains very much in evidence,” said Gregory Klump, CREA’s Chief Economist. “While national home sales were anticipated to recover in the wake of a large drop in activity earlier this year due to the introduction of the stress-test, the rebound appears to have run its course.”

From a year earlier, prices fell 1.4 per cent to $1.04 million, CREA reported. That was the first year-over-year decline in five years, and it slowed the nationwide price increase to 2 per cent. Toronto benchmark prices advanced 2.7 per cent.

Nationwide, home resales declined 2.3 per cent in November from the previous month, the most since April, and are down 13 per cent from a year earlier.

The realtor group also now forecasts sales to fall 0.5 per cent next year. That compares with a September prediction that sales would increase by 2.1 per cent.

Source: Greg Quinn: Bloomberg News

Many Metro Vancouverites describe real estate sector as corrupt
Dec 17, 2018

Residents of Metro Vancouver do not have much faith in the integrity of the real estate industry, according to the results of a new Western Canadian poll on public perception of corruption.

Transparency International Canada this week published a wide-ranging survey on perception of corruption across all levels of government and across various business sectors.

According to the survey, 37 per cent of respondents in the Metro Vancouver area agree with the statement that the real estate sector is “extremely corrupt” – this compares with just 15 per cent of Western Canadian respondents outside Metro Vancouver who agree with this statement.

Transparency International Canada said in its report, “For years, real estate has been a dominant issue in Vancouver-area politics, with high housing prices a major public concern. These prices created lucrative opportunities for unethical conduct by real estate agents with conflicts of interest representing both buyers and sellers, enabled by lax and ineffective regulation, and a lack of transparency. While these practices have led to new rules and government regulation, allegations of conflicts of interest continue to be made against Vancouver politicians and the real estate industry. Reports have also made connections between foreign drug dealers, money laundering through B.C. casinos, and investment of laundered money in real estate.”

According to a report by CBC, B.C. Attorney General David Eby addressed the findings at a keynote speech December 13 in Vancouver for Transparency International Canada. “Money laundering has been ignored for too long and it is hurting our communities,” he said. “Our government is fighting money laundering on several fronts, including casinos and real estate, and its ties to organized crime, gang activity and violence.”

Eby has commissioned Dr Peter German, as well as striking an additional expert panel task force, to investigate the issue of so-called “dirty money” in B.C. real estate and other sectors. Both are due to issue their reports in March 2019.

Source: Joannah Connolly: VIA

Vancouver council votes to scrap school tax
Dec 13, 2018

VANCOUVER (NEWS 1130) – It’s the latest push-back against the province’s school tax, which would affect homes worth more than $3 million.

Vancouver City Council voted to ask the B.C. NDP to rethink the 0.2 per cent tax, which is supposed to go into effect next year. Wednesday morning, dozens of protesters filled council chambers, rallying against the tax and called the tax discriminatory because it targets a select group of people.

Green Coun. Pete Fry says the tax doesn’t actually making life more affordable in Vancouver. He says it doesn’t boost affordability as it targets homes worth more than $3 million.

“A lot of folks that have living in homes that they’ve been in for a while and they’ve seen a significant increase in the valuation of their land, land values have gone up to a point where suddenly they’re in a different tax bracket that may not be reflective of their income.”

It’s also another tax on top of others homeowner in Vancouver are already facing.

“Hydro rates are going up, gas rates will be going up,” he says. “A ‘death by a thousand cuts’ notion that are coming to Vancouver taxpayers. We are cognizant of that.”

He also adds that isn’t enough time to really break down the impacts of the tax.

“This represents a pretty big chunk of taxation being levelled on real property in the City of Vancouver, but then it leaves the City of Vancouver … and at the same time, we’re getting a lot of downloading of cost of services,” he says.

Mayor Kennedy Stewart will now write to the provincial government asking them to official withdraw the tax.

Source: Taran Parmar: News1130

B.C. homeowners can expect a mixed bag of property values for 2019
Dec 07, 2018

B.C. homeowners will see overall “signs of moderation” in their upcoming property assessments, with some parts of the province seeing declines and others considerable increases, according to B.C. Assessment.

The property assessment organization said that many of Metro Vancouver’s detached homes have declined in value by five to 10 per cent over the past year. However, this is balanced out provincially by property value jumps in most of the rest of B.C.

Photo by Dan Toulgoet

“It’s a real mix in property value changes, but the market can best be summed up as showing signs of stability across most areas of the province,” said assessor Tina Ireland. “Changes in property assessments really depend on where you live. For example, assessed values for detached single family homes in many areas of Metro Vancouver may see a softening in value, while other markets and areas of the province will see modest increases over last year’s values.”

The Metro Vancouver areas most affected by detached home value declines are Vancouver, the North Shore, South Surrey, White Rock, South Delta and Richmond. Other parts of the Metro region were “relatively stable or even showing modest increases,” said the report.

B.C. Assessment said that the rest of the province could expect increases of five to 15 per cent for single family home values, including the Fraser Valley, Vancouver Island, Okanagan and Northern B.C. It added, “In many parts of central and northern Vancouver Island, values were increasing closer to 20 per cent. And, in Kitimat, the increases were even greater in response to activity within the resource sector.”

Despite the market slowdown, Metro Vancouver condo values generally increased on an annual basis. Vancouver, the North Shore and Burnaby saw the lowest rises in condo values, but condos in some parts of the eastern Fraser Valley increased by more than 20 per cent. Overall, condos around B.C. typically increased in value by 10 to 20 per cent across most areas.

B.C. Assessment added, “Additional price moderation has been seen later in the year, particularly in Metro Vancouver. However, to make sure property assessments are fair, they are all calculated based on the same date of July 1 every year.”

Ireland added, “When properties similar to your property are sold around July 1, those sales prices are used to calculate your assessed value. Our job is to make sure your assessment is fair and accurate as compared to your neighbours.”

All B.C. property owners will receive their annual property assessment notices in early January 2019.

Source: Joannah Connolly

November Stats
Dec 04, 2018
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December 4, 2018

Metro Vancouver homes sales down across all property types

Home buyer demand remains below long-term historical averages in the Metro Vancouver housing market.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales totalled 1,608 in the region in November 2018, a 42.5 per cent decrease from the 2,795 sales recorded in November 2017, and an 18.2 per cent decrease compared to October 2018 when 1,966 homes sold.

Last month’s sales were 34.7 per cent below the 10-year November sales average and was the lowest sales for the month since 2008.

“Home buyers have been taking a wait-and-see approach for most of 2018. This has allowed the number of homes available for sale in the region to return to more typical historical levels,” Phil Moore, REBGV president said. “This activity is helping home prices edge down, across all property types, from the record highs we’ve experienced over the last year.”

There were 3,461 detached, attached and apartment homes newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in November 2018. This represents a 15.8 per cent decrease compared to the 4,109 homes listed in November 2017 and a 29 per cent decrease compared to October 2018 when 4,873 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 12,307, a 40.7 per cent increase compared to November 2017 (8,747) and a 5.2 per cent decrease compared to October 2018 (12,984).

For all property types, the sales-to-active listings ratio for November 2018 is 13.1 per cent. By property type, the ratio is 8.9 per cent for detached homes, 14.7 per cent for townhomes, and 17.6 per cent for apartments.

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

“Home prices have declined between four and seven per cent over the last six months depending on property type. We’ll watch conditions in the first quarter of 2019 to see if home buyer demand picks up ahead of the traditionally more active spring market,“ Moore said.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,042,100. This represents a 1.4 per cent decrease over November 2017 and a 1.9 per cent decrease compared to October 2018.

Detached home sales in November 2018 reached 516, a 38.6 per cent decrease from the 841 detached sales recorded in November 2017. The benchmark price for detached homes is $1,500,100. This represents a 6.5 per cent decrease from November 2017 and a 1.6 per cent decrease compared to October 2018.

Apartment home sales reached 810 in November 2018, a 46.3 per cent decrease compared to the 1,508 sales in November 2017. The benchmark price of an apartment property is $667,800. This represents a 2.3 per cent increase from November 2017 and a 2.3 per cent decrease compared to October 2018.

Attached home sales in November 2018 totalled 282, a 36.8 per cent decrease compared to the 446 sales in November 2017. The benchmark price of an attached home is $818,500. This represents a 2.6 per cent increase from November 2017 and a 1.3 per cent decrease compared to October 2018.

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Royal LePage winter recreational property survey
Nov 28, 2018

In an effort to provide the media with a seasonal release and build additional content around the Royal LePage brand and network, theRoyal LePage Winter Recreational Properties Survey was released to media early this morning. The survey includes median prices for some of the most popular winter recreational real estate markets in Canada, and more particularly those near ski mountains, from Whistler (BC) to Mont-Tremblant (QC), Canmore (AB) and Collingwood (ON), to name only a few.

Key highlights from the national release include:

  • According to Royal LePage, prices in many key winter recreational real estate markets are experiencing healthy year-over-year price appreciation, as retirees, investors and buyers looking for winter getaways continue to spur demand
  • Whistler and Mont-Tremblant (Station) median condo prices surge over 20%
  • Quebec's healthy economy and strong consumer confidence result in price gains for the majority of markets studied in the region
  • Collingwood's healthy home price gains reflect continued strong demand from buyers in Ontario's Golden Horseshoe

Source: Royal LePage

Vacancy control could be the "death knell" for for 12,000 new rental units
Nov 22, 2018

More than 12,000 new rental units under development would be at risk of cancellation if the oft-mooted “vacancy control” mechanism were to be implemented, according to a new Urban Development Institute (UDI) survey released November 21.

Photo Dan Toulgoet

Vacancy control is a form of rent control that is linked to a unit rather than a tenant – meaning that the landlord would be restricted in the amount they could raise the rent between tenancies. As of 2019, rent control has been capped at the inflation rate, set at 2.5 per cent, which means B.C. landlords can only raise rents by 2.5 per cent for sitting tenants.

However, currently landlords may raise the rent by however much they wish between rental leases, which has prompted calls for a vacancy control system tying rental increase caps to the unit. Tenants’ right advocates such as Vancouver’s COPE councllor Jean Swanson have argued that vacancy control is essential to prevent renovictions and stop landlords jacking up rents between tenancies. Such concerns are being heard by the B.C. Rental Housing Taskforce, which is set to release its next set of recommended changes to the Tenancy Act on November 30. The possibility of imminent changes prompted the UDI to survey its members on the outcome of a vacancy control.

The UDI found that thirty of B.C.’s major rental home builders were strongly against the introduction of “vacancy control” over fears that would make building new projects unviable, and therefore dramatically reduce supply. With respondents reporting 19,972 rental homes currently in development, the survey found that 12,631 of those would be at risk of delay or outright cancellation if vacancy control were implemented. This would reduce the already low vacancy rate, said the UDI, which is below one per cent in a number of communities across the province.

“British Columbians desperately need more rental homes,” said Anne McMullin, UDI Pacific Region president and CEO. “Rental home builders agreed that vacancy control would be the death knell for rental home construction. This is not the time for new restrictions that could result in the cancellation of important rental home projects in communities across British Columbia.”

In addition to making new projects financially unviable, a vacancy control that restricts rental price uplift between tenancies could result in units and buildings not being maintained properly, according to the UDI. McMullin added, “If strict limits are placed on rent, building owners simply won’t be able to afford upgraded elevators, new appliances or replaced carpets. Buildings will fall into disrepair and that’s not what British Columbians deserve.”

Rental housing needed in emerging areas

The survey release comes on opening day of the new 146-unit rental building FUSION in Surrey, which is Surrey’s first purpose-built rental building in more than 30 years. Janai York, sales and marketing director at developer WestStone Group, said that new purpose-built rental housing is needed now more than ever.

York told Glacier Media, “Particularly in emerging areas, like in Surrey’s technology district where FUSION is, there’s a lot of companies moving in and offering jobs, and a lot of people moving in from outside the area. They might not want to buy right away and you have to supply a rental option. At FUSION we have people who are moving from the Prairies and from back east who are RCMP officers and nurses taking local jobs.”

York said that new rental projects depend on being financially viable through the life of the building. “As a developer, we always look at the viability of a project to assess what type of project it will be, whether mixed-use, rental or market condos. When we start looking at the long-term impact of not being able to keep up with the costs of maintenance, suddenly the viability of doing rentals changes, because it’s much riskier. So then you have to decide perhaps not to do that, perhaps do a for-sale-to-market building instead. We have to take all of those things into consideration.”

The UDI survey also asked its members what other factors are inhibiting the building of new rental apartments. Responses included rapidly rising construction costs, increasing interest rates and taxes, and lengthy municipal approval processes.

Dr. Andrey Pavlov, finance professor at Simon Fraser University’s Beedie School of Business, said, “We need to remove the countless government barriers to increasing supply. Rent controls feel good for the moment, but hurt everyone, including renters, in the long-term.”

Source: Joannah Connolly

 

Canada's housing market shows increasing signs of soft landing
Nov 15, 2018

Canada’s once-lofty housing market is achieving a best-case soft landing for policy makers trying to cool things down without triggering a collapse.

The latest string of data indicates the market is experiencing only a modest adjustment in prices in the face of higher interest rates and tougher regulations brought in to tackle a boom that saw values more than double in Toronto and Vancouver since 2009.

It’s a Goldilocks scenario that reduces risk in what had become the economy’s main vulnerability -- an impressive achievement only a year after the country suffered a crisis of investor confidence because of debt and housing worries.

“It’s a pretty good spot to be in, avoiding boom but avoiding bust as well,” Eric Lascelles, chief economist at Royal Bank of Canada Global Asset Management in Toronto, said in a phone interview Thursday. “The rule changes that have been made have been effective in cooling these markets down.”

Canada’s housing boom appears to have come to an end in the middle of last year, following an eight-year ascent that saw national home prices rise by nearly 80 percent. Since then, they’ve been little changed even as market transactions have fallen sharply.

To be sure, risks remain. Young home buyers have never faced anything other than historically low mortgage rates and many will have to refinance over the next few years, while policy makers remain concerned about a cluster of highly indebted borrowers.

Growing signs of a sustainable housing market allow the Bank of Canada to keep moving ahead with modest interest-rate increases in an economy that’s otherwise at full capacity. Government officials can also hold back on new interventions that could spook households.

“It looks like we’re settling into this environment in Canada where price growth is going to be flat in real terms,” something that hasn’t happened outside of a recession since the 1990s, Bank of Montreal Senior Economist Robert Kavcic said by phone from Toronto.

Prices and sales showed modest gains or losses for October in reports Thursday from the Canadian Real Estate Association and from the Teranet land registry. That’s a switch from most of the last year where they swung in response to tougher mortgage qualification rules and the first interest-rate hiking cycle from the central bank in almost a decade.

‘Medicine Is Working’

Home sales held close to their 10-year average after falling for a second month in October, the realtor group said. Benchmark prices rose 2.3 per cent from a year earlier, and gains in Vancouver and Toronto were close to the national average.

Canada would stand out if it comes through its housing boom without a crash like those seen in the U.S., the U.K. or Spain. “Overall, yes the medicine is working,” Benjamin Tal, deputy chief economist at the Canadian Imperial Bank of Commerce, said in a phone interview.

“We are reaching some sort of landing, how soft it will be I don’t know, but we aren’t in a free-fall by any stretch of the imagination,” Tal said.

Even with the latest figures showing stability, it could take years to unwind the imbalances that have built up. The rise of the million-dollar home in some of Canada’s biggest cities has also created affordability challenges for buyers as builders struggle to offer new supply.

“Its absolutely fair to say the Canadian housing market is off the boil,” Lascelles said, adding a note of caution: “There is no pre-ordained conclusion here.”

Source: Greg Quinn; bloomberg News--With assistance from Erik Hertzberg.

October Stats
Nov 02, 2018
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November 2, 2018

Home listings at four-year October high as sales remain below typical levels

Home sale activity across Metro Vancouver* remained below long-term historical averages in October.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,966 in October 2018, a 34.9 per cent decrease from the 3,022 sales recorded in October 2017, and a 23.3 per cent increase compared to September 2018 when 1,595 homes sold.

Last month’s sales were 26.8 per cent below the 10-year October sales average.

“The supply of homes for sale today is beginning to return to levels that we haven’t seen in our market in about four years,” Phil Moore, REBGV president said. “For home buyers, this means you have more selection to choose from. For sellers, it means your home may face more competition, from other listings, in the marketplace.”

There were 4,873 detached, attached and apartment homes newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in October 2018. This represents a 7.4 per cent increase compared to the 4,539 homes listed in October 2017 and a 7.7 per cent decrease compared to September 2018 when 5,279 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 12,984, a 42.1 per cent increase compared to October 2017 (9,137) and a 0.8 per cent decrease compared to September 2018 (13,084).

For all property types, the sales-to-active listings ratio for October 2018 is 15.1 per cent. By property type, the ratio is 10.3 per cent for detached homes, 17.3 per cent for townhomes, and 20.6 per cent for condominiums.

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

“Home prices have edged down between three and five per cent, depending on housing type, in our region since June,” said Moore. “This is providing a little relief for those looking to buy compared to the all-time highs we’ve experienced over the last year.”

The MLS® Home Price Index composite benchmark price for all residential homes in Metro Vancouver is currently $1,062,100. This represents a one per cent increase over October 2017 and a 3.3 per cent decrease over the last three months.

Sales of detached homes in October 2018 reached 637, a 32.2 per cent decrease from the 940 detached sales recorded in October 2017. The benchmark price for detached properties is $1,524,000. This represents a 5.1 per cent decrease from October 2017 and a 3.9 per cent decrease over the last three months.

Sales of apartments reached 985 in October 2018, a 35.7 per cent decrease compared to the 1,532 sales in October 2017. The benchmark price of an apartment property is $683,500. This represents a 5.8 per cent increase from October 2017 and a 3.1 per cent decrease over the last three months.

Attached homes sales in October 2018 totalled 344, a 37.5 per cent decrease compared to the 550 sales in October 2017. The benchmark price of an attached home is $829,200. This represents a 4.4 per cent increase from October 2017 and a 2.8 per cent decrease over the last three months.

Click here to download the full package.

What hot trends will affect the Vancouver real estate market in 2019?
Oct 31, 2018

Three emerging factors are set to disrupt and transform the real estate market in the near future, according to a new report by Montréal-based real estate website Shupilov.com.

Remote working and self-employment, disruptive technology such as autonomous vehicles and virtual reality, and lack of affordable housing are the three key trends that will affect the real estate market next year and into the future, said the report.

Across Canada, builders are seeing more demand for loft spaces that easily convert from home to work space, according to a report by Shupilov.com

Home as office, business or service

The blurring of live-work boundaries and changing social needs are affecting the kinds of homes buyers want, especially as more and more people work remotely or are self-employed, according to the report.. This creates a need for work spaces in the home, whether that’s home office space or a live-work unit. Added to that need is an increased desire for homes – or spaces within homes – that can be rented out as short-term rentals on websites such as Airbnb.

“Builders are seeing more demand from the self-employed – who prioritize loft-like spaces that easily convert into home offices and workspaces – and Airbnb hosts – who prioritize ‘socially-focused’ architectural design such as open-concept living spaces and common areas, as well as smart security technology,” wrote the report authors. “‘Experience-based’ architecture is what provides leverage to real-estate-as-service companies such as WeWork and Airbnb, where design is carefully curated in response to particular demographic lifestyles.” (Check out the ‘Smart Thinking’ article on page 24 of the latest edition of West Coast Condo for more on home technology.)

Remote working also means that there is less of a need to live close to downtown cores, and buyers may choose to gain more space in homes further away from urban hubs.

Disruptive technologies

The trend of moving further out of city centres could be reinforced by another of the disruptive technologies affecting real estate – the emergence of autonomous vehicles.

The report said, “As self-driven cars reduce ease commuting time and the burden of gridlock, will suburban living become more popular among the younger generation? Better connectivity in urban transportation may, in coming years, shift buyer desirability in favour of larger spaces, further away from the city core.” (More on the potential impact of autonomous vehicles on real estate here.)

Another major technology affecting real estate is virtual reality. Already being used to allow buyers to remotely view properties for sale or as-yet-unbuilt new homes, the use of VR could be expanded in future to let owners redesign their homes to suit their needs, said Shupilov.com. “In the future, the same technology could conceivably be used as an interactive way of allowing consumers to participate in the design of their living spaces, providing highly tailored end products at a residential or retail level.” The report also predicted that 3D printing could play a role in this home design and product tailoring, with the ability to create one-off products in a cost-effective way.

The affordability factor

The final major factor that will hugely affect real estate in 2019 and beyond is already here, and that’s affordability, or lack thereof. With the cost of housing in major Canadian urban centres having soared in recent years, and even with some market correction unlikely to return to its former values, the market is forced to respond and adapt.

This largely looks like a continued dominance of the condo market, with many buyers priced out of the single-family and even townhome market, according to the report. But even within the condo market, which is itself much more expensive than a few years ago, innovative solutions will be needed to make or keep homes affordable.

“The condominium market speaks to the affordability crunch, and has topped sales statistics in most Canadian cities this year. In 2019, condominium developers will need provide unique products in response to competition, and find innovative technologies that will help reduce cost at the construction and administrative level.”

Source: Joannah Connolly: Glacier Media Real Estate

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