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Tuesday, 12 June 2007 |
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May benchmark average price for single family home breaks record Vancouver, B.C. June 4, 2007 -The Real Estate Board of Greater Vancouver (REBGV) reports that total residential sales for detached, attached and apartment properties reached 4,331 units in May 2007, a slight increase when compared to the 4,297 units sold in May 2006. This figure also represents a decrease of 2.3 per cent when compared to the 4,434 sales in May 2005. New listings for detached, attached and apartment properties increased by 6.2 per cent to 6,149 units compared to the 5,789 units listed in May 2006. The total number of active listings increased by 23.4 per cent to 11,749 units when compared to May 2006's 9,524 units. "Traditionally May is one of the busiest periods in our market, and this past month was no exception," says REBGV president Brian Naphtali. "REALTORS® throughout the Greater Vancouver area are reporting brisk sales and the MLS® system is showing us that the average days a property spent on market dropped again for the fourth consecutive month to 37 days. "The biggest story this month is the pricing and sales of single family detached homes. For the first time in our Board's history, the benchmark average price for a detached home passed the $700,000 mark. Greater Vancouver real estate is still a hot commodity and consumers are supporting that demand by investing in homes. This is supported by sales numbers as unit sales for detached homes also jumped significantly in a number of key reporting areas in May. These facts show us that despite continued price increases, appropriately priced properties are still finding the right buyers," explains Naphtali. "Anyone who is looking for guidance to help them make the best buying or selling decision should make an appointment with their local REALTOR®." According to Multiple Listings Service® (MLS®) data, sales of apartment properties increased by 1.6 per cent to 1,789 sales in May 2007 compared to 1,760 sales in May 2006. The benchmark price of an apartment property in Greater Vancouver, calculated by the MLSLink® Housing Price Index, is $358,428, up 11.5 per cent from one year ago. Sales of attached properties decreased by 4.5 per cent in May 2007 to 737 sales, compared to 772 sales in May 2006. The benchmark price of an attached unit is $439,317, up 10.8 per cent from a year ago. Sales of detached properties increased by 2.3 per cent in May 2007 to 1,805 sales, compared to 1,765 sales in May 2006. The benchmark price of a detached unit is $711,245, up 11.8 per cent from last year. Bright spots in Greater Vancouver in May 2007 compared to May 2006: | Detached: | | Delta South | up 22.6% (76 units sold, up from 62) | | Sunshine Coast | up 38.7% (104 units sold, up from 75) | | Vancouver East | up 11.2% (277 units sold, up from 249) | | Vancouver West | up 22.4% (246 units sold, up from 201) | | West Vancouver/Howe Sound | up 30% (104 units sold, up from 80) |
| Attached: | | Burnaby | up 30.3% (142 units sold, up from 109) | | Port Moody/Belcarra | up 64% (41 units sold, up from 25) |
| Apartments: | | Port Coquitlam | up 22.4% (60 units sold, up from 49) | | Port Moody/Belcarra | up 65.5% (48 units sold, up from 29) | | Squamish | up 128.6% (32 units sold, up from 14) |
The Real Estate industry is a key economic driver in British Columbia. In 2006, dollar volume sales of homes in Greater Vancouver set a new record at more than $18.2 billion. Based on this figure, Greater Vancouver home sales in 2006 generated over $922 million in spin-offs. The Real Estate Board of Greater Vancouver is an association representing more than 8,900 REALTORS® The Real Estate Board provides a variety of membership services, including the Multiple Listing Service®. For more information on real estate, statistics, and buying or selling a home, contact a local REALTOR® or visit www.realtylink.org. |
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Monday, 14 May 2007 |
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April housing sales pick up, listing activity swells Vancouver, B.C. May 2, 2007 -The Real Estate Board of Greater Vancouver (REBGV) reports that total residential sales for detached, attached and apartment properties reached 3,387 units in April 2007, an increase of 1.3 per cent when compared to the 3,345 units sold in April 2006 and a decrease of 16.2 per cent when compared to the 4,043 sales in April 2005. New listings for detached, attached and apartment properties increased by 25.3 per cent to 5,580 units compared to the 4,452 units listed in April 2006. The total number of active listings increased by 25.8 per cent to 11,347 units when compared to April 2006's 9,022 units. "So far, the constants our market has experienced over the past five years are holding strong in 2007. We're still in one of the best markets real estate has ever had in Greater Vancouver. Sales are higher than historical norms and homes are selling very quickly, usually with multiple-offers," says REBGV president Brian Naphtali. "Last month, the average days a property spent on market dropped again, down to 39 days, compared to 43 days in March, 49 days in February, and 56 days in January. "There were a couple of surprises in April's market, particularly in attached housing sales throughout Greater Vancouver. Consumers buying townhomes in Richmond and Burnaby are clearly finding great value for their dollar as sales activity in those two cities came within a few units of breaking records," explains Naphtali. "We also saw a significant increase in both new listings and active listings inventory. To get a better idea of what sort of properties are now available in your community, set up a meeting with your local REALTOR®." According to Multiple Listings Service® (MLS®) data, sales of apartment properties decreased by 1.2 per cent to 1,350 sales in April 2007 compared to 1,366 sales in April 2006. The benchmark price of an apartment property in Greater Vancouver, calculated by the MLSLink® Housing Price Index, is $355,108, up 14.7 per cent from one year ago. Sales of attached properties increased by 17.6 per cent in April 2007 to 634 sales, compared to 539 sales in April 2006. The benchmark price of an attached unit is $432,490, up 13.8 per cent from a year ago. Sales of detached properties decreased by 2.6 per cent in April 2007 to 1,403 sales, compared to 1,440 sales in April 2006. The benchmark price of a detached unit is $695,069, up 11.9 per cent from last year. Bright spots in Greater Vancouver in April 2007 compared to April 2006: | Detached: | | Delta South | up 25% (60 units sold, up from 48) | | Port Moody/Belcarra | up 44.4% (26 units sold, up from 18) |
| Attached: | | Burnaby | up 39.2% (110 units sold, up from 79) | | Richmond | up 59.6% (158 units sold, up from 99) | | Vancouver West | up 21.3% (74 units sold, up from 61) |
| Apartments: | | Delta South | up 31.3% (21 units sold, up from 16) | | Port Moody/Belcarra | up 58.3% (38 units sold, up from 24) | | Vancouver West | up 9.1% (479 units sold, up from 439) |
The Real Estate industry is a key economic driver in British Columbia. In 2006, dollar volume sales of homes in Greater Vancouver set a new record at more than $18.2 billion. Based on this figure, Greater Vancouver home sales in 2006 generated over $922 million in spin-offs. The Real Estate Board of Greater Vancouver is an association representing more than 8,900 REALTORS® The Real Estate Board provides a variety of membership services, including the Multiple Listing Service®. For more information on real estate, statistics, and buying or selling a home, contact a local REALTOR® or visit www.realtylink.org. |
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Saturday, 28 April 2007 |
B.C. real estate slower but steady
B.C.'s real estate markets are no longer sellers' markets for the most part, although they aren't buyers' markets just yet, according to statistics compiled by the B.C. Real Estate Association.
The association released its first-quarter provincial sales report Thursday, which showed that the ratio of Multiple Listings Service real estate sales to the number of homes in the inventory declined to 29 per cent in March compared with 39 per cent in March of 2006.
"This year, at least for March, [the sales-to-listing ratio] is on the higher bounds of a balanced market," association chief economist Cameron Muir said in an interview.
That means there were enough people selling homes to meet the demand of buyers, though not so many that they flooded the market.
MLS-recorded sales declined six per cent to 22,198 units in the first quarter of 2007 compared with the same months of 2006, the real estate association reported.
Steady demand, however, continued pushing prices up in the same period to hit $415,765, which is 12 per cent higher than the same point last year. So the total value of real-estate transactions for the quarter reached $9.2 billion, some $462 million higher than the total in the first quarter of 2006.
Muir added that provincial unemployment remains at a record low (3.9 per cent at the end of March), the economy is growing and still adding jobs, average wages are rising faster than inflation and mortgage rates remain relatively low and are not projected to rise quickly.
"Those are all positive for the housing market," Muir said.
"What's not as positive is [high] home prices. Low-equity buyers, typically younger people buying their first home, some of them are facing a price-lead affordability squeeze."
That, Muir added, is cutting into demand.
Robert Helsley, an economist and professor in the Sauder School of Business at the University of B.C. said the sales-to-listings data reported by the B.C. Real Estate Association is the best evidence that real estate markets are slowing.
However, Helsley added that the provincial economy is still doing well and the prospects for population growth, particularly in Vancouver, are so strong "it is hard to forecast a substantial softening."
It would take a sudden rise in interest rates or a large global economic shock to shake B.C. into a real estate downturn, Helsley said, and the meltdown of subprime mortgage markets in the United States won't be it.
"Markets are somewhat softer than they were a year ago, sort of taking a breather," Helsley added. "But it certainly doesn't appear to have turned down, at least in terms of price."
(prepared by Derrick Penner/Vancouver Sun)
SALES RATIOS DECLINE
Fewer real estate sales and an increase in property listings in March brought a sales-to-active-listing ratio (percentage of listed properties that sold) that balances out better for buyers. Below are some examples from markets around the province.
2007 / 2006
B.C. 29% / 39%
Greater Vancouver 33% / 44%
Fraser Valley 27% / 48%
Chilliwack 33% / 35%
Victoria 34% / 39%
Vancouver Island 21% / 30%
B.C. Northern 24% / 78%
South Okanagan 18% / 27%
Okanagan Mainline 28% / 27%
(Source: B.C. Real Estate Association)
SHUSWAP area
March 1-31 2007 (2006) % increase
UNITS LISTED: 264 (208 )26.92%
UNITS SOLD: 137 (98) 39.80%
LIST/SELL RATIO: 95.60% (95.79%)
DAYS TO SELL: 112 (107) 4.67%
ACTIVE LISTINGS: 848 (767) 10.56%
(Source: Okanagan Mainline Real Estate Board)
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Saturday, 10 February 2007 |
Condos new standard housing stock
One of the largest mortgage insurance companies in Canada has looked into the future of housing and it's dominated by a small box in a high rise.
The condominium market is not slowing in the country's six largest cities, says a new study prepared by Genworth Financial Canada and the Conference Board of Canada. If anything, condominium apartments are becoming the standard for housing stock in Canada.
"People want the condo lifestyle. As they get older they want the lock-and-go condo lifestyle as opposed to cutting the grass," said Peter Vukanovich, president of Genworth Financial, which controls 30% of the mortgage insurance market in Canada.
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In some key markets, condo sales are expected to soon account for 75% of the new housing.
Peter J. Thompson, National Post
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Font: ****The study found that in Montreal, Ottawa, Toronto, Calgary, Edmonton and Vancouver sales of condominiums have been growing annually in the range of 9% to 20% from 1996 to 2005.
In some key markets, condo sales are soon expected to account for 75% of the new housing stock. Almost every city shows the condominium market share rising rapidly.
"It's a much cheaper lifestyle than a single-detached home," said Mr. Vukanovich, in explaining part of the reason for the preference. The average price of a condominium tends to be much lower than a detached home.
About the only cloud that continues to hang over the sector is this vague concept that the condo market is somehow headed for a crash, said Mr. Vukanovich, noting that people see these condos being built and they figure this all has to end.
"We have a report coming out on renters and the No. 1 concern they have is a fear of the price of what they are going to buy is going to come down," he said.
Those fears appear to be unfounded based on the study, which shows prices rising by 3% to 5% annually well into 2011 across the six cities studied.
Alberta is the lone exception. Calgary and Edmonton are expected to see double-digit price increases.
On a city-by-city basis, Vancouver has become the condo capital of Canada. Dating back to 2001, Vancouver condos accounted for about 35% of all new construction. Condos are expected to have grabbed 75% of the annual residential construction market by 2011.
The study says pent-up demand from the 1990s, when housing in Vancouver slumped, has driven the market the past five years. Condominiums have become an attractive alternative in the city where bungalows routinely sell for $750,000.
The Conference Board says the average price of a condo, just $214,031 in 2004, will climb to $364,689 by 2011. Genworth says there is something about the city's makeup that has led to residents embracing condo life.
"You can't underestimate the Asian influence and they are very comfortable with the condo lifestyle, whether they are living in Hong Kong or Shanghai," said Mr. Vukanovich. "They are coming here and buying condos."
Toronto and Ottawa-Gatineau are the only markets where the condo share of overall construction seems to be levelling off. But despite that, condos account for almost 40% of new house sales in Toronto and 20% in Ottawa- Gatineau.
"It sure looks like everybody is going to be in condos. This is definitely not going away," said Mr. Vukanovich
(prepared by Garry Marr/Financial Post)
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Monday, 08 January 2007 |
Economic forecasts indicate that 2007 will not be a champagne year.
You might want to think twice before you slap down $750 for a bottle of the exquisite Krug Clos du Mesnil champagne (1995) to ring in the new year. There might not be much to celebrate.
The forecasters are nearly unanimous: The Canadian economy will not grow as quickly in 2007 as it did in 2006 or in 2005 and the slowdown might make it difficult for Ottawa to deliver on promises of tax relief.
The writing has been on the wall through most of 2006, most dramatically so in September when the Gross Domestic Product actually declined by 0.3 per cent, dragging growth in the third quarter to an annualized rate of 1.7 per cent, the slowest pace in three years. That's down from 3.8 per cent in the first quarter and two per cent in the second.
The slowing pace was inevitable as the drivers of economic growth shifted into low gear. For example, gross fixed investment -- one of the prerequisites for long-term economic expansion -- grew by 8.0 per cent in 2004, 7.1 per cent in 2005 and 6.3 per cent in 2006, but is expected to grow by only 3.4 per cent in 2007, according to the Organization for Economic Cooperation and Development.
In its semiannual economic outlook, the OECD forecast growth of Canadian GDP of 2.7 per cent in 2007, down from an estimated 3.1 per cent in 2006, largely as a result of the cooling economy in the United States and an accompanying decline in energy and other commodity prices. (For the record, the Bank of Canada forecasts GDP growth of 2.5 per cent in 2007 while the finance ministry agrees with the OECD figure.)
Whatever numbers you choose to believe, the softening of the Canadian economy is clearly becoming more pronounced. The Toronto Dominion Bank expects four quarters of what it calls "below trend" growth. However, the good news is that, while most anticipate weakness, none expects a recession.
The Conference Board of Canada sees a healthy economic future for British Columbia as a preferred retirement haven for baby boomers and looks for average annual GDP growth of 2.3 per cent over the long term.
Meanwhile, mining and construction should keep the province humming in the short term, although not at the frenetic pace of the last few years. The Bank of Montreal expects B.C. will grow at 3.4 per cent a year in the 2008 to 2010 period, a faster clip than any province besides Alberta.
The TD Bank predicts the slowdown of the Canadian economy will be short lived as the U.S. economy recovers through 2007 and the Bank of Canada provides some monetary stimulus in the second half of the year to move things along. A rate cut from the current 4.25 per cent might not only loosen credit but knock a few points from our near-90-cent US dollar to boost exports. Indeed, the Royal Bank of Canada attributes the strong dollar to high energy prices and predicts it will drop to 80.6 cents US by year-end 2007 as commodity prices slip below historic highs.
Housing remains the dark cloud over what would otherwise likely be a benign economic pause. The Royal Bank of Canada noted that in the U.S. sales of existing and new homes were 13 per cent and 20 per cent lower respectively from the peak of recent months and that the correction is likely to continue through 2007. Home sales in Canada have weakened as well, though not as sharply, and the real estate industry is watching anxiously for more fallout. Canada Housing and Mortgage Corp. has forecast a six-per-cent increase in the average resale house price but prices could just as easily drop that much in an overheated market like Vancouver.
Against this economic backdrop, a New Year's toast with Henkel Trocken (about $22.50) rather than the pricier bubbly might be in keeping with the more austere 2007 economists anticipate.
(Source: Vancouver Sun editorial)
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Thursday, 21 December 2006 |
Mortgage rates drop in minor tweeking
Canadian mortgage rates dropped a tenth of a percentage point today -- a minor tweaking that keeps one-year and five-year fixed rates abnormally close to each other.
"There's an inverted yield curve now and many lenders don't want to lend money on a short-term basis," said mortgage broker Kris Budisa, regional manager of Mortgage Alliance. "They're doing whatever they can to get clients to take longer terms of five years or more."
(An inverted yield curve happens when long-term debt instruments have lower yields than short-term instruments, a situation that's considered to forecast an economic downturn.)
At TD Canada Trust, the fixed rate on a one-year closed mortgage fell a tenth of a point to 6.4 per cent while the rate on a five-year term dropped a twentieth of a point to 6.45 per cent. Under normal conditions, the five-year rate would be at least a percentage point higher than the one-year.
The bank's variable-rate mortgage, which moves with the Bank of Canada rate, was unchanged at 5.5 per cent.
Budisa said the five-year fixed-rate mortgage remains the most popular choice by far, even though it's not always the best option for everyone.
"A lot of people don't understand their options so they just keep doing what they've always done, which is to take a five-year term," he said. "But if you look back over the past 80 years, going with a five-year rate is not always the best choice for many clients."
Current mortgage rates generally are less than a percentage point higher than they were a year ago and Budisa doesn't expect they will go a lot higher in the near future, noting banks continue to offer "incredibly good rates" on 10-year mortgages (7.05 per cent at TD Canada Trust).
"That tells you where they think rates are going to be 10 years from now -- modestly increasing but with no huge spikes in store," he said.
VanCity Credit Union chief operating officer Ian Warner said there appeared to be no huge advantage this year for borrowers who chose either a variable or a fixed-rate mortgage. A year ago, a variable-rate mortgage was available for 5.25 per cent but it averaged 5.06 per cent over the year, compared with 5.1 per cent on a fixed-rate mortgage.
Warner said mortgage lending activity has slowed down recently as the housing market takes a breather. But he noted house prices continue to rise, which increases the demand for higher-value mortgages.
"We still expect to do very well next year," he said. "We might write fewer mortgages but there should be a higher dollar value per mortgage."
Warner said mortgages with 30-year and 35-year amortization periods remain popular among many buyers striving to make a home purchase as affordable as possible.
Credit Union Central of B.C. chief economist Helmut Pastrick said stronger economic growth in the second half of 2007 should put upward pressure on long-term mortgage rates next year, with five-year rates being as much as half a percentage point above current levels. He said shorter-term rates will remain in a fairly tight range.
Pastrick expects mortgage rates will remain at levels low enough to support a healthy housing industry, with B.C. housing sales declining by about five per cent next year while housing starts drop by just one per cent.
He said the choice between a variable-rate or fixed-rate mortgage next year will depend on a person's individual circumstance.
"If a person is a new buyer and relatively new to the job market, it probably makes more sense to go for three or five years at a fixed rate," he said.
(prepared by Bruce Constantineau/Vancouver Sun)
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