Home prices will drop less than expected, real estate group says
By Derrick Penner, Vancouver SunMay 15, 2009
A recent surge in real estate sales has caused the Canadian Real Estate Association to sharply revise its expectations for price drops in British Columbia.
CREA, in its forecast released Thursday, estimated that B.C.'s average price will drop less than seven per cent over 2009, more than three percentage points off the 10.6-per-cent drop forecast in February.
CREA forecast that B.C.'s average price will drop to $423,300, instead of the $406,300 average it forecast earlier.
For 2010, CREA is now predicting that B.C. prices will start edging up again by almost two per cent compared with a 2010 drop of 0.6 per cent written into the February forecast.
"Monthly resale housing activity improved as the first quarter progressed," Gregory Klump, CREA's chief economist, said in a news release, "entering the second quarter on a rising trend [that is] closing in on levels last seen before [the sales trend] fell sharply late last year."
B.C. sales rose in April from the previous month, the B.C. Real Estate Association said Thursday in a news release, as buyers were drawn back into the market by lower prices and rock-bottom mortgage rates. And the inventory of unsold homes across the province dropped to the lowest level in 12 months, the association said, edging the ratio of sales to active listings close to the zone housing economists consider balanced between buyers and sellers.
"An increase in consumer demand combined with fewer homes for sale has trended the market near balanced conditions," Cameron Muir, chief economist for the B.C. Real Estate Association said in an interview.
Realtors counted 6,918 sales through the Multiple Listing Service in April, down 20 per cent from the same month a year ago. April was the third straight month that sales were higher than the previous month. However, to the end of the first four months, sales were still lower than a year ago with realtors counting 18,089 sales, a 35-per-cent reduction over the first four months of 2008.
The average house price across B.C. was $433,246 over the first four months, down almost nine per cent from a year ago.
Monday, May 18, 2009
2008 Rental Market Review
Vancouver’s real estate market got a little tougher for renters in 2008 as prices continued to rise and the vacancy rate dropped even further.
According to the latest Canada Mortgage and Housing Corporation Rental Market Report for Vancouver, the region’s vacancy rate fell from 0.7 to 0.5 per cent this year, while the cost of an average apartment jumped from $898 to $937.
“It’s obvious by the statistics that renters are continuing to get squeezed,” says Renters at Risk co-founder Sharon Isaak. “Rents are going up and availability is still a problem. The pressure is not easing for renters at all.”
The report says the strong pressure for rental housing was caused by an influx in migration to the region, a low unemployment rate and the high cost of home ownership. Along with Victoria (also at 0.5 per cent) Vancouver has one of the lowest vacancy rates in the country, with Kelowna leading the way at 0.3 per cent.
While the province’s Residential Tenancy Act kept landlords from raising rents more than 3.7 per cent to existing renters, rents still managed to rise four per cent in 2008. The report says rents increased higher than the legislated rate because of “major renovations performed on rental properties, and the increasing of monthly rents through unit turnover.”
Tenant advocacy groups have been calling on the provincial government for the past few years to close a loophole in the RTA that allows landlords to evict tenants for renovations and then raise rents to whatever they wish. Vision Vancouver Councillor Tim Stevenson is scheduled to put forward a motion at next Tuesday’s council meeting that would call on the province to change the RTA so tenants can reoccupy renovated suites at the same rent.
However, landlord groups have argued that closing the loophole will mean building owners stop making renovations, which will cause their buildings to become “slums."
Although the CMHC report predicts slower economic growth is expected to “ease” the pressure on the rental market next year, it still forecasts that Vancouver’s vacancy rate will remain below one per cent and that rental rates will rise another three to five per cent.
According to the latest Canada Mortgage and Housing Corporation Rental Market Report for Vancouver, the region’s vacancy rate fell from 0.7 to 0.5 per cent this year, while the cost of an average apartment jumped from $898 to $937.
“It’s obvious by the statistics that renters are continuing to get squeezed,” says Renters at Risk co-founder Sharon Isaak. “Rents are going up and availability is still a problem. The pressure is not easing for renters at all.”
The report says the strong pressure for rental housing was caused by an influx in migration to the region, a low unemployment rate and the high cost of home ownership. Along with Victoria (also at 0.5 per cent) Vancouver has one of the lowest vacancy rates in the country, with Kelowna leading the way at 0.3 per cent.
While the province’s Residential Tenancy Act kept landlords from raising rents more than 3.7 per cent to existing renters, rents still managed to rise four per cent in 2008. The report says rents increased higher than the legislated rate because of “major renovations performed on rental properties, and the increasing of monthly rents through unit turnover.”
Tenant advocacy groups have been calling on the provincial government for the past few years to close a loophole in the RTA that allows landlords to evict tenants for renovations and then raise rents to whatever they wish. Vision Vancouver Councillor Tim Stevenson is scheduled to put forward a motion at next Tuesday’s council meeting that would call on the province to change the RTA so tenants can reoccupy renovated suites at the same rent.
However, landlord groups have argued that closing the loophole will mean building owners stop making renovations, which will cause their buildings to become “slums."
Although the CMHC report predicts slower economic growth is expected to “ease” the pressure on the rental market next year, it still forecasts that Vancouver’s vacancy rate will remain below one per cent and that rental rates will rise another three to five per cent.
Friday, May 15, 2009
IBPA Luncheon at The Ismaili Centre
Yesterday I attended the IBPA Luncheon at the gorgeous Islaimi Jamatkhana in Burnaby, BC. The event was hosted by Mr Rahim Rajwani and featured guest speaker Mr Al Kanji, Partner, Corporate Finance with KPMG.
Mr Kanji addressed our current economic position after the recession from Sept 08 when Backs and Institutions began going bankrupt. He points out that the world's tremendous financial growth in the past 30 years with aid us in turning toady's economy around and preventing a depression. Mr Kanji spoke about the contagion effect globally as banks sold debt to conduits to free up their balance sheets and take on more loans. Banks and financiers were very creative in the secondary markets to control exposure to their clients. Mutual Funds, Hedge Funds, and Insurance companies bought up CLO's and CDO's in the trillions. Then the sub prime problem due to liberal policies and irresponsible practices created the financial and real estate crash in the US and the Euros who implemented US strategies. The TARP bill had to be passed to bail out banks and prevent complete chaos and a mass cash withdrawal form the banking system. Canada, on the other hand, stayed conservative with tight bank regulations, and thus have seen 20% depreciation, not 65% such as in Arizona.
Mr Kanji closed with the TD economist outlook of steady 2% growth, especially as consumer confidence returns and the $3.7 trillion on the sidelines will get reinvested in the equity and real estate markets to beat inflation. He addressed the recent gains in the real estate market and insisted innovation and productivity must drive the Canadian economy to retain a strong Canadian dollar, not reliance on trade due to our weak dollar.
"A time of crisis is a time of opportunity." -Chinese Proverb
Mr Kanji addressed our current economic position after the recession from Sept 08 when Backs and Institutions began going bankrupt. He points out that the world's tremendous financial growth in the past 30 years with aid us in turning toady's economy around and preventing a depression. Mr Kanji spoke about the contagion effect globally as banks sold debt to conduits to free up their balance sheets and take on more loans. Banks and financiers were very creative in the secondary markets to control exposure to their clients. Mutual Funds, Hedge Funds, and Insurance companies bought up CLO's and CDO's in the trillions. Then the sub prime problem due to liberal policies and irresponsible practices created the financial and real estate crash in the US and the Euros who implemented US strategies. The TARP bill had to be passed to bail out banks and prevent complete chaos and a mass cash withdrawal form the banking system. Canada, on the other hand, stayed conservative with tight bank regulations, and thus have seen 20% depreciation, not 65% such as in Arizona.
Mr Kanji closed with the TD economist outlook of steady 2% growth, especially as consumer confidence returns and the $3.7 trillion on the sidelines will get reinvested in the equity and real estate markets to beat inflation. He addressed the recent gains in the real estate market and insisted innovation and productivity must drive the Canadian economy to retain a strong Canadian dollar, not reliance on trade due to our weak dollar.
"A time of crisis is a time of opportunity." -Chinese Proverb
Thursday, May 14, 2009
Weekend Opens May 16-17!
This Saturday, May 16th, I will be hosting an Open House at 6786 Marine Dr, West Vancouver near Whyteclyff Park from 2-4pm!This beautiful private home was fully renovated 6 years ago, updates include new kitchen, cedar siding throughout the exterior of the home, and iced maple laminate floors. This is a perfect family home with massive sun drenched decks, your own private garden oasis, and generous sized bedrooms. A stones throw away from the beach, park, community center, and Gleneagles Golf Course while walking distance to Gleneagles Elementary and Horseshoe Bay. Come say hi and view this outstanding value on Saturday, 2510 sq ft for $1,120,000!
On Sunday, May 17th, I will be hosting an open house at 4105 St Albans Ave, North Vancouver in Upper Lonsdale!
A fabulous custom residence situated on a private west-facing sun-filled property with spectacular south westerly water & city views. This gorgeous like new Upper Lonsdale home offers a fantastic spacious floor plan with over 4800 sqft on three levels perfect for entertaining and family living. Enjoy 4 bdrms (potential for 5), 3.5 bathrooms, private den, huge recroom, exercise/media room, and private sun-drenched decks and patio with a hot tub. The luxurious master is complete with sitting area, spa-like ensuite and magnificent view deck. Proudly offered for $1,598,000!
Bob Rennie speaks with The Pacific Club
I attended Bob Rennie's talk Wednesday evening with The Pacific Club, hosted by the The Vancouver Club at 915 W Hastings. Bob Rennie spoke about his life's trail to success and his outlook on the Vancouver Real Estate Market. He made very insightful points as to the importance of Hard Assets in light of foreseeable rapid depreciation of global currencies due to irresponsible cash printing and spending. He predicts Hard Assets such as art, precious metals and jewels, and real estate will continue to appreciate. Bob continued on how strong our fundamentals are.
Vancouver has the #1 Banking system in the World relative to the USA, #40; demand and immigration outlook is very strong; mortgage rates are extremely low 3.49 % vs 5.5% a year ago; Vancouver also has a limited supply, as new housing starts have decreased. For the sixth consecutive month, new listings for detached, attached and apartment properties declined in Greater Vancouver, down 33.7 % to 4,649 in April 2009 compared to April 2008, when 7,010 new units were listed.
The Real Estate Board of Greater Vancouver (REBGV) reports that Residential Property sales in Greater Vancouver were 2,963 in April 2009, an increase of 31 % compared March 2009. Residential property sales in Greater Vancouver totalled 2,963 in April 2009, an increase of 31 % compared to March 2009. Sales of detached properties totaled 1,190, the average price is $675,268. Sales of Apartment Properties in April 2009 1,179 with an average price of $431,759. Attached property sales in April 2009 totalled 594, with an average price of $431,759.
Detached Vancouver West up 59.5 %, Attached Vancouver West up 46.3%, and North Vancouver Apartments up 29.2 %.
Bob concluded that the only fundamental the Vancouver Housing Market lacks is the Confidence Factor. Bob stated that he senses an emergence with positive action such as the recent $90 million sale of The Grovesnor Building, and announced May 21st would be his major return to our local marketing media. Dr Rennie predicted a 6-12 month period for savvy buyers to enter the market at fantastic prices for premium properties at very low interest rates.
With any questions or concerns I invite you to contact me at any time.
Best Regards,
Stu Bell
Prudential Sussex Realty
Call 604-562-0632
Fax 604-925-3002
Write stu@stubell.com
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