Latest numbers from the Fraser Valley Real Estate Board (FVREB) revealed that B.C.’s southwestern region has experienced significant home price growth in February, indicating a possible companion to the red-hot Vancouver market in the near future. Last week, the Board revealed that the benchmark price for a single-family property in the Valley increased by 20.4 per cent year-over-year and 0.4 per cent compared to January, hitting $859,300.
“This is the kind of February we like to see. Last year at this time, the incredible demand created a market that was difficult for consumers,”
according to FVREB president Gopal Sahota, as quoted by CBC News.
“Now, we have sales moving upward from the winter months at a typical, healthy pace and a growing inventory to support it,” Sahota stated, adding that the numbers are so far showing a “return to normal historical sales numbers.” Apartment prices also rose sharply by 26 per cent compared to February 2016 and 1.8 per cent month-over-month, up to $267,000. Meanwhile, average townhome costs grew by 25 per cent year-over-year and 0.5 per cent since January, reaching $422,400. Recently, Finance Minister Bill Morneau assured that the federal government is still closely monitoring the Canadian housing market, amid seemingly inexorable price growth in Vancouver and Toronto.
“We continue to be very focused on thinking about how we can manage what is peoples’ most significant investment. And we do watch the level of indebtedness, in particular around housing,” Morneau stated, adding that “strong underlying markets” continue to drive the two cities’ outsized performance. “So in Toronto and Vancouver, unemployment is lower in those two places than it is in some other places. Incomes are higher. The economy is doing better. So there are underlying reasons for the housing markets to do better and we’ll continue to monitor, to work with provinces and municipalities who have an important role to play here to manage what we see [as] a challenge, but not one that isn’t manageable.”
The biggest challenge Canada faces in creating affordable housing is getting people to and from home and work.
"If you think housing prices are high now - just wait." - Heino Molls, REMonline
"Census Canada figures show that Canada’s population has rocketed past 35 million. In fact, that number is going to be 36 million before the ink is dry on this most recent report and it will, without a doubt, be going at light speed past 40 million way before 2020. That means a huge boost in housing demand. It means that the privilege of living in a home in Canada, not to mention an actual house in Canada is going to come with a high cost. You think the cost of a house in Toronto, Vancouver or Ottawa is high now, just wait.
Do the math on your own. Not the math of the naysayers, the doom and gloom crowd, the people who will show you diagrams and charts with circles and arrows that pinpoint the exact time and date of the collapse of the real estate market. Rather look around, see what is going on and add it up for yourself.
We are facing many problems in our country. There is not enough time and space here to discuss all the challenges of health care, especially mental health care, as well as housing for the poor and marginalized people in our society. Another major challenge that should be mentioned in the same conversation as housing and property value is public transit.
Our governments are scrambling to build new transit ways and highways to accommodate all the people who will be travelling to and from our inner cities for business, health care, restaurants and entertainment.
How Much is YOUR Home Worth?
Our biggest problem is going to be building transit, not just within our cities but also from the towns and satellite communities that will have even higher population growth in the coming years. Communities like Chilliwack and Abbotsford in B.C. and cities like Kitchener-Waterloo not far from Toronto. The same for all other cities in the country. Transit is going to be our biggest problem.
It turns out homebuyers are really into barn doors.
When Zillow looked at design features that sell homes at the best price and with the shortest listing time, that feature topped the list.
Anything craftsman-style, like rectangular farmhouse sinks, also got homes off the market at a premium.
Zillow Digs screened over 2 million listings for homes sold between January 2014 and March 2016 and looked for the keywords that had the best effect on how much more than the expected price and how much faster they sold.
Here are the top 15 design features:
Percent of homes that sell for above expected values: 3.7%
How many days faster than expected the home sells: 19
Tankless water heater
Percent of homes that sell for above expected values: 4%
How many days faster than expected the home sells: 43
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Percent of homes that sell for above expected values: 4.1%
How many days faster than expected the home sells: 46
Percent of homes that sell for above expected values: 4.1%
How many days faster than expected the home sells: 38
Percent of homes that sell for above expected values: 4.2%
How many days faster than expected the home sells: 42
Percent of homes that sell for above expected values: 4.3%
How many days faster than expected the home sells: 28
Percent of homes that sell for above expected values: 4.6%
How many days faster than expected the home sells: 38
Percent of homes that sell for above expected values: 4.6%
How many days faster than expected the home sells: 48
Percent of homes that sell for above expected values: 4.9%
How many days faster than expected the home sells: 36
Percent of homes that sell for above expected values: 5.4%
How many days faster than expected the home sells: 14
Percent of homes that sell for above expected values: 6.0%
How many days faster than expected the home sells: 50
Percent of homes that sell for above expected values: 6.9%
How many days faster than expected the home sells: 63
Percent of homes that sell for above expected values: 7.9%
How many days faster than expected the home sells: 58
Percent of homes that sell for above expected values: 9.6%
How many days faster than expected the home sells: 45
Percent of homes that sell for above expected values: 13.4%
How many days faster than expected the home sells: 57
Broker fears were confirmed Tuesday, with one big bank raising its prime rate less than a month following new mortgage rules. TD Canada Trust announced in a note to brokers Tuesday that it is changing its mortgage rates, including increasing its prime rate to 2.85%. The prime rate has been held at 2.70% for more than a year, according to the broker who shared the announcement with MortgageBrokerNews.ca on condition of anonymity.
“When a bank changes their ‘version’ of bank prime it also serves as an invitation for the other banks to join in and do the same,” the broker said. “Naturally if they all change the public is screwed and all the banks make more profit. “You see by effectively changing the goal posts on the rate the bank can continue to say: ‘we are prime less 0.50% which is a good deal.’ So as you can see this a clever move if it works.” See the new rate sheet below.
The announcement also confirms what one economist speculated – that big banks could influence the market by altering its posted rates. The new mortgage rate stress test, which forces all holders of insured mortgages to qualify at the Bank of Canada’s benchmark five-year rate. The Bank of Canada’s benchmark rate is closely tied to big bank posted rates. And that relationship could allow lenders to tinker with their posted rates in a bid to influence the BoC’s, thereby allowing them to also influence the ease with which homebuyers can qualify for an insured mortgage.
“Another possible solution is that posted rates could fall, reducing the impacts of the stress tests. Since they are not set by the market, lenders could decide to lower them if, for example, they find that they are saying “no” to too much good business,” Will Dunning, chief economist of Mortgage Professionals Canada, wrote in a research paper entitled Slamming on the Brakes: Assessing the Impact of Changed Criteria for Mortgage Qualification. “The posted rates are set administratively by the lenders, based on their assessments of what is in their best interests, and their assessments could change.”
Foreign buyer tax has resulted in “policy shock,” but market will quickly recover to see prices higher than they are now, predicts Central 1 Credit Union chief economist
Courtesy of Joannah Connolly REW.ca September 20, 2016
Left to right: Tom Davidoff of UBC, Helmut Pastrick of Central 1 Credit Union and Tsur Sommerville of UBC listen to Arnon Dachner of Dentons at the UDI's September16 lunch panel on the Foreign Buyer Tax — Ryan Broda Photography
The “policy shock” of the new foreign buyer tax has created a “temporary market disruption” that will play out over the next three to six months, after which “market fundamentals” will mean the market recovers, according to a leading economist.
Speaking to a sold-out audience at the Urban Development Institute’s Foreign Buyer Tax luncheon and panel debate September 16, Helmut Pastrick, chief economist at Central 1 Credit Union, said that he expects house prices to recover so that they are higher this time next year than they are today.
Pastrick said, “I fully expect September’s sales to be down again, year-over-year, probably by 30 or 35 per cent compared with last September. The average price will probably fall again, relative to August, and this will play out over the next three to six months – it’s a temporary market disruption.
“After the market has absorbed this new tax regime, we will begin to see other market fundamentals come into effect. Prices will then continue to rise, and they will be higher this time next year.”
Pastrick’s fellow panellist at the UDI lunch, Tsur Sommerville, associate professor at UBC’s Centre for Urban Economics and Real Estate, added, “In other markets where a foreign buyer tax was introduced, such as Hong Kong and Singapore, in both those markets, prices continued to rise.”
Pastrick said later in the discussion, “I think home prices will begin to increase again, but at a slower rate. I expect to see higher prices until this economic cycle comes to an end, as all cycles do… But recessions only last a short while, and the cycle begins again. And in the long term, I would expect that over the next two or three decades, [Vancouver real estate] prices will double again, if not more than double. But there will be more economic cycles between now and then.”
He added, “Right now we don’t see any signs of an economic recession due to a shock event – we’re in a strong economic cycle.”
Sommerville added, “In terms of the demand side, you’ve got the combination of the strong economic cycle, low interest rates, and a demographic profile where you’ve got a large number of young people ramping up into home ownership. There are more Millennials than any other group, so you’re going to have a huge increase in housing demand, in a market where the ability to respond on the supply side is securely constrained.”
Sommerville’s colleague Tom Davidoff, associate professor at UBC’s Sauder School of Business, who was also on the luncheon panel, said that despite the strength of the economy and demand, there was still a significant risk of a sharp correction in home prices due to the foreign buyer tax.
He said, “A potential collapse in foreign buyer demand… could result in a less-bad version of what happened in the United States [in the sub-prime crisis of 2008]. There is a significant risk of an over-correction in prices – but I wouldn’t say that is the most likely outcome.”
The fourth member of the panel was lawyer Arnon Dachner, a partner at Dentons LLP, who warned delegates that tactics to avoid paying the foreign buyer tax – even seemingly legal approaches, such as contract reassignment – could be defined as an “avoidance transaction” that could leave the party still liable for the payable tax or other monies lost to the BC government.
The panel debate was moderated by Neil Chrystal, president and CEO of Polygon Homes, who recently told REW.ca that that he thought the overseas buyers’ tax was “morally and ethically wrong” and added, “I wouldn't be surprised if it was challenged legally.”
Joannah Connolly is the editor and content manager of REW.ca and Real Estate Weekly newspaper, and editor-in-chief of Western Investor and West Coast Condominium. She also moonlights as the host of the Real Estate Therapist call-in show on Roundhouse Radio 98.3FM every Saturday, 9-10am. A dual Canadian-British citizen, Joannah has 20 years of media experience in Vancouver and London, with a background in construction, architecture and business media. Like many of the residents of her newly adopted town, Joannah has a decidedly unhealthy passion for Vancouver real estate and is often to be found scouring property listings well above her pay grade.
The Bank of Canada will maintain its target for the overnight rate at 1/2%.
The Bank of Canada announced this morning that it is maintaining its overnight rate at 0.5 per cent. In the press release accompanying the decision, the Bank noted that inflation is evolving as expected with total CPI continuing to test the bottom of the Bank's 1-3 per cent target range due to low energy prices. However, the Bank expects that inflation will rise over the next year, reaching its 2 per cent target by mid-2017. On the economy, the Bank sees economic growth firming after a slowdown in the fourth quarter of last year. The Bank projects that the Canadian economy will grow a modest 1.5 per cent this year before strengthening to 2.5 per cent in 2017.
In not moving on interest rates this morning, the Bank is recognizing that there is little that monetary policy can do to offset a significant supply-side shock such as the dramatic decline in oil prices. Indeed, given Canada's floating exchange rate, the loonie has already adjusted to help partially absorb the negative impact of falling commodity prices on exports. Keeping in mind that the Canadian economy is still projected to grow at a rate very close to its somewhat diminished potential for 2016 and that inflation will be spurred by a dramatically lower Canadian dollar, we anticipate that the Bank will reassess the need for monetary stimulus once the worst of the oil-shock had passed. That means, barring a significant deterioration in the economy, the Bank will more than likely remain sidelined for 2016.
Continuing low interest rates and a healthy stream of newcomers will ensure the good times keep rolling in 2015
BY BARBARA YAFFE, VANCOUVER SUN COLUMNIST JANUARY 26, 2015
Photograph by: ian lindsay , Vancouver Sun
Residential construction, and densification, in the Lower Mainland will keep rolling along in 2015.
VANCOUVER — Continuing low interest rates and a healthy stream of newcomers will ensure the good times keep rolling in 2015 for the Lower Mainland’s property development industry. But it also means pricing will continue to pose a challenge.
Three of B.C.’s biggest developers used adjectives like “great” and “incredibly positive” as they delivered a forecast last week to more than 1,100 industry insiders and politicians attending an Urban Development Institute luncheon.
“Vancouver is going to do well, everyone wants to be here,” declared David Negrin, president of Aquilini Development.
He said a recent crackdown on democracy protesters in Hong Kong is likely to enhance Vancouver’s prospects. “We’re very positive on Vancouver, and it’s going to continue for some time.”
Added Neil Chrystal, CEO of Polygon Homes: “We’re picturesque, have a healthy environment, we’re a clean, safe city offering excellent health care and educational opportunities. We are politically stable and close to Asia.
“I see no sign of the residential market slowing down. ... The market will remain balanced and stable in the year ahead.”
B.C. will experience net immigration in 2015 of some 34,600 immigrants and 2,600 provincial migrants, according to research by Mac Marketing Solutions, a company that plans and markets housing projects.
Mac, with offices in Vancouver and Calgary, forecasts that in subsequent years even larger numbers of both immigrants and Canadians will arrive, noting Alberta’s economic slowdown will make heading further west all the more attractive.
So, while a total of 37,200 newcomers are expected this year, the number should grow to 53,200 by 2018.
Combine that trend with low interest rates and a low vacancy rate in the region, and you have a recipe for continuing strong growth in the property development and real estate sectors. Unfortunately, that does not augur well for affordability.
Between 2006 and 2014, benchmark prices for all types of real estate in Metro Vancouver saw significant price jumps, according to Mac research, with the greatest increase — 46 per cent — recorded in Vancouver’s east side. West Vancouver and Vancouver’s west side both saw increases of 41 per cent.
Referencing the retail sector, Kevin Layden, CEO of Wesbild, said North American stores are downsizing as they move online. But even here, Vancouver is well positioned, never having enthusiastically adopted a big-box retail model.
The city has 13 square feet of retail space per capita, compared to a Canadian per capita rate of 19 square feet and the U.S.’s 30 square feet.
Commenting on Vancouver’s affordability crisis, Negrin cited the high cost of land and remarked: “Everyone is frustrated.” The only way to keep prices down is to increase density, he said.
Yet a Demographia study released last week on housing affordability argues density and urban land containment boost housing prices by restricting development of cheaper perimeter lands.
Chrystal argued development is being constrained by an overly complex and time-consuming municipal approval process. At UBC, he reported, the development approval process takes six months, compared to 12 to 30 months elsewhere in the region.
Added Negrin: “We have to find a way to streamline the process. Anything over one year is too long.”
Chrystal pointed to another challenge for Lower Mainland developers — offshore buyers are starting to purchase land for development that he said could lead to oversupply in certain markets.
They are also posing a challenge in terms of what they are prepared to pay for land acquisitions. “They may be parking money from offshore. We can’t compete on price.”
The developers complained of increasing costs for building materials and a stronger U.S. dollar, forcing higher costs. Prices for drywall, windows and steel were cited.
My neighbour asked me this the other day. It was 3 p.m. and I was checking the mail.
He came over and said, “Busy day today, I see. Are we lounging this afternoon again? It must be nice to sell a few houses and make the big bucks and then lounge from home all day.”
I smiled and changed the subject. There’s no need to try to convince him otherwise.
Then he said, “What do you really do all day? There are some days that I don’t even see your Jeep leave the driveway. Seriously … what do you do all day?”
I smiled again and explained that I spend a lot of time in front of the computer, on the phone and answering texts. I found myself trying too hard to convince him that I really do work hard, and I work a lot of hours. I ended the conversation and went back inside. No harm, no foul.
His question really got me thinking.
What do Realtors really do all day?
Time to break out my calendar and explain what I do all day.
Monday: I met with a Mortgage Broker at my office in the morning. He was explaining what products he had to offer. That was followed by a lunch with a Real State Lawyer, a listing appointment that afternoon, and a few showings that evening. Tuesday: I was sick on the couch (that’s rare!), but I was still able to get up and around by the evening to show view properties. I had to cancel a pretty big real estate webinar that day, though. Bummer. Wednesday: I blogged a lot and spent a good part of the afternoon working on real estate videos. That evening I showed a home to some seller/buyers, and then showed homes to another buyer. We found the one and will be writing an offer today. Thursday: Right now it’s 9:17 a.m. I just finished my smoothie, got a great blog idea, and then I’m going for a bike ride. Then I need to schedule three closings for next week followed by another listing appointment tonight. I may try to squeeze nine holes of golf in before my listing presentation tonight. Friday: More videos during the morning followed by an afternoon of phone calls to past clients. Friday night will consist of me showing a few more homes to yet another buyer client. Saturday: There’s a possibility that we’ll have a listing appointment followed by dinner with past clients. (See, we work our sphere of influence and past client base to not only say hello and catch up, but to ask for referrals to grow our business.) Sunday: We have yet another new listing appointment that afternoon. Hopefully, that will end the work week and I can watch some hockey with my boys.
Don’t forget all of the phone calls, texts, and all of the emails we receive throughout the day and evening. Oh, and don’t forget about the interaction on Facebook and all of the other social media sites that bring in business. I do most of that in the evenings.
Oh, and don’t forget that we also touch base with each and every seller on a weekly basis, and our Monthly Newsletter that we take time to prepare, and our mail marketing that we work on weekly, and …
Are you catching my drift here?
Being two full-time Realtors with a thriving and growing business is more than a full-time job. We don’t clock out as much as we should. We live and breathe real estate almost every day and almost every evening.
Sure, it may look like we have it easy, and to be honest, sometimes I think we do. Doing what you love rarely feels like work.
But it is work.
Time for me to log off, go push some weights and hit the cardio, and then get back to my life of leisure, fun in the sun, and my daily massages and mojitos.
Or something …
This was originally posted by our associates, Amanda and Jared Christiansen on ActiveRain. The Christiansens specialize in Fort Wayne, Ind., real estate for Century 21.