Blog › July 2012
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This absolutely stunning 'Jahenny' built rancher has been meticulously pampered by its original owners. '8' years young...this beautiful home was built with the entertainer in mind. The grand entrance welcomes you in to this the open-concep t living plan. The home features three large bedroom suites, a private office/4th bedroom, an incredible gourmet kitchen attached to a warm and inviting great room, an extremely private patio and some of the finest finishing work you will ever see. Ranchers of this size are very rare, especially with an 'estate' feel. The home is centrally located and close to all of the amenities!! An absolute pleasure to show!
REW.ca, July 11, 2012
If you're looking for a real estate market with ever-increasing prices or dizzying drops in sales, better go somewhere else. There's no excitement here, folks.
MLS® house prices, sales and listings in the Fraser Valley have been chugging along like a diesel-powered delivery van all year... and isn't that refreshing!
- Sales-to-listings ratios have stayed in buyers' market territory since February, hovering between 14 and 15 per cent.
- Benchmark prices for townhouses and condos have basically been flat since mid-2009.
- Benchmark prices for detached homes have increased by a gentle 3.5 per cent in a year.
- Average time on market has been 44 days, give or take a day, for four months.
Sales and Listings
Overall sales are down, both month over month and year over year, but the decreases are modest compared to those of the Greater Vancouver real estate market:
- m/m -9.5 per cent compared to REBGV's -17.2 per cent
- y/y -7.9 per cent compared to REBGV's -27.6 per cent
|June2012/May2012||June 2012/ June 2011|
“Although our inventory is trending at historically high levels, sales have remained steady so we’re not seeing significant downward pressure on residential prices overall," says FVREB president Scott Olson.
MLS® Home Price Index & Benchmark Prices
The MLS Home Price Index for houses and townhouses continued to rise slightly in the Fraser Valley, compared to Greater Vancouver, where the HPI has dipped for all housing types. Looking at the breakdown for all housing types and areas, the changes on the HPI range from 1 per cent to -1 per cent, with only a few exceptions.
Townhouses were weakest, with the index dropping in six out of eight areas, including drops of 5.8 per cent in North Surrey, 3 per cent in Mission and 1.3 per cent in Langley.
|June 2012||May 2012||June 2011|
Jul 17, 2012 – 1:56 PM ET | Last Updated: Jul 17, 2012 2:06 PM ET
Sizzling hot markets in Toronto and Vancouver have fuelled a lot of debate lately about whether Canada’s housing market is overheated — and the jury is still out.
Whimper not a bang: David Rosenberg
Gluskin-Sheff economist David Rosenberg came down on the side of whimper today, after expressing concerns just last week that Canadian housing prices were looking unsustainable. The latest data from the Canadian Real Estate Association appears to have changed his mind.
“Prices are starting to deflate by 0.8% YoY, though more like air coming out a balloon slowly than a giant pop,” wrote Rosenberg Tuesday in his morning note.
“It is gradually becoming a buyer’s market with the inventory of unsold homes rising to six month’s supply, which is at the edge of a balanced market.”
Existing home sales dropped 1.3% in June from the month before and were down 4.4% from a year ago. A big part of the contraction was a 27.7% decline in the once heady Vancouver market and 7.9% slide in Toronto’s.
As tighter mortgage rules in Canada bite, sales and prices are likely to erode further, he said.
The new rules — introduced last month by Finance Minister Jim Flaherty to curb both a possible housing bubble and Canadians’ ballooning household debt — are equivalent to a 1% mortgage rate rise in dampening the market, he said.
- Borrowers will be allowed to use up to 80% of their property’s value as collateral for home-equity loans, down from 85%.
- The maximum amortization period dropped to 25 years from 30 years for government insured mortgages.
- Government-backed mortgage insurance will be limited to homes with a purchase price of less than $1 million.
Canada’s housing correction could see prices fall another 10% (some economists expect 15%) said Rosenberg, which could send some mortgage holders into a negative equity position.
But there is a silver lining for first-time homeowners, he said, who have been shut out of the market by the sharp price run-up in recent years.
Not everyone is convinced, however. Capital Economics in its global outlook Tuesday said the housing market still looms too large in the Canadian economy for comfort.
Housing investment accounts for a near record 7.2% of overall GDP and “when the bubble bursts, we suspect the contraction will be severe,” Capital economists said.
Did the Harper government blunder into overstimulating a housing market that it`s now in the process of squeezing at just the wrong time?
The question springs to mind now that new numbers show that Canada`s housing market showed signs of significant softness in June, with sales falling 4.4 per cent below their year-earlier level _ the first such drop in a year _ as the national average home price edged down by nearly one per cent.
This comes just as new, tighter mortgage-lending rules went into effect early in July, the key change being a shortening of the allowed repayment period on a government-backed insured mortgage to 25 years from 30.
The result jacks up the monthly payment on a mortgage by about 10 per cent if the buyer was originally hoping to use the longer 30-year repayment option.
This is just the right medicine for an overheating real-estate market, but much more dubious when demand is already weakening. It will price some buyers, especially first-time ones, right out of the market.
Analysts, including some who favoured the tightening, are a little worried.
There was already a recent undercurrent of concern as home prices moved inexorably higher in the winter and spring: was the market setting itself for a painful fall? At the TD Bank, chief economist Craig Alexander predicts an average price drop of 10 to 15 per cent per cent over the next two to three years.
Most analysts didn`t see such a big correction, although many think the priciest markets, Vancouver especially, are overdue for a dip.
But, warns economist Robert Hogue at the Royal Bank, ``the risks are higher now than they were before.'' Hogue thought markets were cooling nicely even before the stricter rules came in. Now, he worries, ``this may give a push beyond what the market needs.''
Douglas Porter, deputy chief economist at BMO Capital Markets, thinks the market will probably adjust without too much trouble _ but acknowledges that he too feels a little tug of concern. ``This may have been one turn of the screw too many,'' he says. ``That`s the risk.''
The irony is that it was under this same Harper government that Canada loosened its mortgage rules so much that by late 2006, you could borrow for 40 years with nothing down. The then-governor of the Bank of Canada, David Dodge saw this as so irresponsible that he broke the central bank`s usual rule against criticizing government policy.
It`s what foolish governments often do: curry favour by loosening policy too much in good times, only to have to tighten as conditions worsen.
So far, though, the market still appears to be healthy, with modest price gains in most big cities across Canada, but a downtrend in sales pointing to the possibility of further cooling in the very costly Vancouver and Toronto markets.
Indeed, in the country`s priciest market, Vancouver, prices actually fell by nearly one per cent last month, according to the Home Price Index compiled by the Canadian Real Estate Association. Over the entire past year, Vancouver prices are only up by a modest 1.7 per cent.
This evaporation of price gains in a market that was red-hot last year was so dramatic that it helped stabilize the entire Canadian market. While the average Canadian price fell by 0.8 per cent from a year ago, once you remove Vancouver from the numbers, the average price elsewhere goes up by 3.2 per cent, not down.
This resulted from the unwinding of frenzied demand early last year for some of the highest-priced homes on the Vancouver market, said economist Robert Hogue at the Royal Bank. Possibly because foreign demand waned, such homes are now much slower to sell.
Toronto prices barely moved last month, edging up by 0.2 per cent, although earlier gains pushed the average up by a strong 7.9 per cent year-over-year.
Montreal, where last month`s gain was a modest 0.3 per cent, is ahead by a total of 2.7 per cent over the past year, according to the Home Price Index, which, unlike simple price averages, seeks to eliminate the distortions caused by varying numbers of high-priced and lower-priced homes sold in different months.
Calgary stands out as the only city where the number of sales went up significantly _ by a robust 17 per cent, in fact _ but prices rose by a more modest 5.3 per cent.
This is a once in a lifetime opportunity to own a new custom home in finest area of South Surrey/White Rock. Plus applicable taxes
Home sales in the region fell 17.2 percent from May to June, and a 27.6 percent decline from 2011, hitting a ten year low.
VANCOUVER – Buyers again can try low ball offers and have a better chance of landing a price to their liking after steady declines over last year in the local housing makrker.
The Greater Vancouver Real Estate Board reports that residential property sales of detached, attached and apartment properties reached just over 2300 last month – compared to slightly more than 3200 a year ago.
Board president Eugen Klein told CTV news buyers are facing less competition and have more selection to choose from compared to earlier in the year.
The Real Estate Board of Greater Vancouver has declared a buyer’s market after property sales hit a 10-year low in June.
House and apartment sales reached just 2,362 last month, according to a board report released Wednesday morning, representing a 17.2 per cent drop from May and a 27.6 per cent decline from the 3,262 sales in June 2011.
“Overall conditions have trended in favour of buyers in our marketplace in recent months,” board president Eugen Klein said in a statement. “This means buyers are facing less competition and have more selection to choose from.”
The report says prices have remained relatively stable, however.
The benchmark price for an apartment property increased 0.3 per cent from the previous year to $376,200, while detached properties increased 3.3 per cent to $961,600. The benchmark price for attached properties decreased just 0.1 per cent down to $468,400.
According to the board, June saw the lowest monthly sales total in the region since 2000, a number 32.2 per cent below the 10-year June sales average of 3,484.
Meanwhile the number of property listings, at 18,493, represented a 22 per cent increase over the same month last year.
“Our sales-to-active ratio sits at 13 per cent, which puts us at the lower end of a balanced market,” Klein said. “This ration has been declining in our market since March when it was 19 per cent.”
There were 5,617 new listings in Metro Vancouver last month, marking a slight decrease from June 2011’s numbers.
June’s sales consisted of 1,016 apartments, 921 detached houses and 415 attached.
B.C issues highest number of building permits since 2007 - Permits reached $4.4 billion up to May this year.
British Columbia municipalities issued building permits in the first five months of 2012 at levels not seen since before the global recession.
Up to May of this year, permits reached $4.4 billion in B.C., a level not seen since the same period in 2007 when permits were more than $5 billion, according to Statistics Canada figures.
Building permits — which indicate an intent to build, not actual construction — sunk to $2.4 billion in the first five months of 2009.
The value of building permits in May this year alone, at $1.09 billion, accounted for nearly half of the 2009 five-month total. The value of the May 2012 permits is an increase of 35.8 per cent over the same month in 2011.
The increase in the value of permits in May this year was even greater in residential construction in B.C., hitting $660 million, a 45.6 per cent increase from May 2011.
The increase in total building permits in the Vancouver metro area in May year over year jumped a whopping 112.3 per cent to $781.8 million, according to Statistics Canada.
“It’s a sign of optimism, certainly in the Lower Mainland. People don’t build or invest in construction services unless they are confident in the future,” said Independent Contractors and Businesses Association president Philip Hochstein.
“I think if you look around the world, British Columbia is a bit of an oasis in the [economic] storm ... That’s translated into people interested in construction [here],” he said.
An indication of the construction interest — beyond the permit numbers — is the number of cranes that are going up in the Lower Mainland, added Hochstein.
The independent contractors association estimates the number of cranes will peak at 142 in the Lower Mainland in November 2013, well above the 78 cranes that were counted in 2005-2006 before the financial meltdown.
The Marine Gateway, located near the Canada Line on Marine Drive, and Telus Gardens downtown are among major projects announced recently.
Hochstein noted that with an average of 136 workers from the major trades working under each crane, more than 19,000 skilled workers would be on those construction sites.
Statistics Canada said the gain in building permits in May in B.C. was mainly attributable to multi-family housing and institutional building.
The Vancouver Regional Construction Association (VRCA) said notwithstanding external risks such as the European debt crisis, it is forecasting building permits to grow 10 per cent for the full year over 2011.
The association noted institutional construction in the Lower Mainland and southwest B.C., at nearly $200 million, reaching a level not seen since 1993.
“While we don’t expect monthly gains to continue at this level next month, these numbers are a positive indication for investment in the region,” said VRCA president Keith Sashaw.
Peter Simpson, president and CEO of the Greater Vancouver Homebuilders’ Association, said the reason B.C. is rebounding faster than other areas of the globe, including the United States, is because Canada suffered less under its more prudent banking system and many economic sectors in the province are firing on all cylinders.
“I think in many industries we’re going to have a shortage of skilled labour, and that will attract more people to come to our province as well,” he added.
Not all building construction observers are convinced there is reason for unbridled optimism.
Tsur Somerville, a professor at the Sauder School of Business at the University of B.C., said he finds it surprising residential permit levels in the Lower Mainland have increased.
Recent changes tightening mortgage down payments and the general economic climate are not likely to increase people’s interest in purchasing a home, said Somerville, the director of UBC’s Centre for Urban Economics and Real Estate.
During the global financial crisis, value of building permits in the Vancouver area dropped to a low of $300 million in May
New rules to trim growth
New mortgage rules unveiled last week by the Canadian government will ripple through the economy and ultimately trim its growth, a new forecast say.
LET'S TALK INVESTING
The study released today by Toronto-Dominion Bank projects the combined impact on home construction and consumer spending will probably take between 0.1 and 0.2 of a percentage point off economic growth this year and next.
Last week, Finance Minister Jim Flaherty tightened up on mortgages for the fourth time, a move aimed at cooling some residential markets and pushing consumers to scale back on their debt burdens.
The new rules, effective July 9, will reduce maximum amortization on government-insured mortgages to 25 years from 30 years. They also cut the amount of equity homeowners can pull out of their properties.
At the same time, the country's bank regulator, the Office of the Superintendent of Financial Institutions, unveiled final rules on home equity lines of credit and other products.
"While these new lending rules are not intended to severely impede household spending and housing demand, their impact will be substantial," warned economists Craig Alexander, Derek Burleton and Diana Petramala.
"In particular, the previous rule changes had a significant impact on home sales, particularly in the six months following implementation," they said in their report.
"The policy changes, combined with modestly higher interest rates and a gradual deterioration in affordability, are expected to trigger a welcomed unwinding of excesses in the Canadian housing market."
TD believes average house prices will probably decline by 10 per cent to 15 per cent over the next two years.
As the market slows, consumers will pull back, while housing-related industries, such as renovation, also feel the pinch.
"Overall, housing-related consumer purchases account for just under 10 per cent of overall personal consumption expenditure," the economists said.
"In addition, the blend of softer sales and rising inventories of unsold new homes is likely to bring down the pace of homebuilding activity starting in the second half of this year, with residential construction expected to detract from growth in 2013."
Overall, TD expects economic growth of about 2 per cent a year over the next couple of years.
- Toronto condo boom prompted new mortgage rules, Flaherty says
- Tightened lending for mortgages will cool market, but by how much?
- Mortgage rules to sink home prices, deter use of houses 'as ATMs'
- For many, new mortgage rules put home ownership out of reach
- Ottawa's new mortgage rules will lead to 'long-term stability': Carney
- Rob Carrick: Ottawa's new mortgage rules save us from ourselves
- Boyd Erman's Streetwise: Shrinking CMHC, the beast at the centre of housing market
- Toronto, Vancouver house prices to sink 15% over 2-3 years, TD warns
- Debt growth slows, but income growth slows even more
VANCOUVER -- The number of residential property sales in Metro Vancouver hit a 10-year low in June, prompting the Real Estate Board of Greater Vancouver to declare a buyers' market.
According to a board report released Wednesday, sales of houses, townhomes and apartments dropped to 2,362 last month, a 27.6-per-cent decline compared with 3,262 sales in June 2011.
"Overall conditions have trended in favour of buyers in our marketplace in recent months," said Eugen Klein, the board's president, in a news release. "This means buyers are facing less competition and have more selection to choose from compared to earlier in the year."
Despite the claim, prices for single-detached homes continues to rise in most Metro Vancouver markets, with some increasing by as much as 7.1 per cent in the past six months.
June sales were the lowest total for the month in the region since 2000 and 32.2 per cent below the 10-year June sales average of 3,484, the report shows.
New listings for detached, attached and apartment properties totalled 5,617 in June, down three per cent from the year before. That brought the market's total inventory to 18,493 units, which is up 22 per cent from the same point in 2011.
Meanwhile, the report noted, some of the hottest areas a year ago were among the coolest markets after the first six months of 2012.
Vancouver's west side, for instance, saw 769 single-detached homes sell in the first six months of 2012, down substantially from the 1,310 that sold there in the red-hot first half of 2011.
Vancouver's east side similarly saw 767 single-detached sales in the first half of 2012 compared with 1,053 in the first six months of 2011.
Richmond, another of 2011's Metro Vancouver's hot spots, saw 603 single-detached sales from January to June compared with 1,111 for the same period of 2011.
Vancouver West and Richmond, for example, saw benchmark prices — the cost of a typical home — for all forms of housing stay relatively flat from January to June, with Vancouver West recording a 2.5-per-cent increase to $823,000 and Richmond's benchmark price dropping 0.6 per cent to $590,000.
Metro Vancouver as a whole saw benchmark prices rise 2.6 per cent in the six-month period to $621,000.
However, West Vancouver and Whistler led the way with hikes in the benchmark price of 7.1 per cent each to $1.65 million in West Vancouver and $594,000 in Whistler from January to June.
The board's June report said that Squamish — a town that saw prices stagnate in recent years — was third, recording a 6.4-per-cent increase in its benchmark price to $405,000.
Other communities that saw overall price hikes from January to June included Port Moody (5.2 per cent to $513,000), East Vancouver (4.7 per cent to $622,000) and Tsawwassen (4.4 per cent to $616,000).
Read more: http://www.vancouversun.com/business/commercial-real-estate/Vancouver+sales+year+real+estate+board+declares+buyer+market/6882325/story.html#ixzz1zmTJjdbf