Fiona Anderson
Sun

It’s official, the Lower Mainland’s residential real estate market is definitely slowing down.

In 2006, home sales in the Greater Vancouver area — which stretches from Whistler to Maple Ridge and Tsawwassen — were down 12.4 per cent from 2005 and two per cent below 2004 numbers. Sales in December were down 28 per cent compared to both a month and year earlier.

But the number of sales in December — 1,686 — is still considered a good market and nothing will compare to the phenomenal numbers of 2005, said Rick Valouche, president of the Real Estate Board of Greater Vancouver.

The beginning of 2006 also started at a blistering pace, but the second half of the year was “most definitely” slower, he said.

And while sales are down, prices continue upward, again at a slower pace, he said.

“We need that because we were just starting to get a little bit crazy,” Valouche said.

Average house prices ended the year at $775,700, up 24 per cent from $627,500 a year earlier. Attached homes went to $441,000 from $401,500, an increase of only 10 per cent, and apartments increased 14 per cent to $353,800 from $309,700.

Increased listings, usually a sign of a slowing market, failed to materialize in December, but Valouche was hopeful that will reverse this month. “I think we are continuing on the road toward balance,” he said.

David Rishel, president of the Fraser Valley Real Estate Board agreed that the market was different now than it was in the first six months of 2006.

“The first part of 2006 was very busy and it just slowly got a little bit quieter and a little bit quieter as the year went on,” Rishel said. “It’s a very balanced market now. People don’t have to make those rush decisions. They can take their time and be a little bit more well-informed.”

In the Fraser Valley area, which encompasses north Delta to Abbotsford on the south side of the Fraser River and Mission on the north side, sales were down almost 11 per cent from 2005, but still beat 2004 numbers, which at the time constituted a new record. Over the year, listings were up slightly but the number of active listings at the end of the year were 46-per-cent higher than a year earlier.

The average price for a townhouse in the area fell almost seven per cent in December compared to November, while apartment prices fell three per cent and house prices remained steady. But year over year, detached homes were up 19 per cent to $488,000 from $410,000, townhomes rose 10 per cent, from $259,000 to $285,000 and apartments increased 15 per cent, from $168,500 to $193,500.

Prices are not expected to drop.

Canada Mortgage and Housing Corp. predicts prices in the Vancouver area to increase between six and nine per cent in 2007, with the largest rise in apartments where there is still room for growth, CMHC’s market analyst Bryan Yu said.

That’s a slowdown from the double-digit increases the area has been seeing, Yu said.

HOME MARKET NOT THE PITS IN PITT MEADOWS

In the Real Estate Board of Greater Vancouver’s region, owners of single-family homes in Pitt Meadows emerge as big winners in 2006, with a 23.5% one-year increase in the benchmark price*.

But 2006 was not a great year for owners of single-family homes in Squamish, the only area where the benchmark price dropped, albeit slightly.

© The Vancouver Sun 2007

Derrick Penner
Sun

Lawyers who use the electronic filing system of B.C.’s Land Title Office love the faster process, a fact the province hopes will convince paper-dependent offices to switch.

A Mustel Group poll of existing electronic filing system users, commissioned by the provincial Land Title and Survey Authority and technology firm MacDonald Detwiler and Associates, showed that 96 per cent of firms liked the speed of e-filing and 99 per cent would recommend it to other legal professionals.

However, Darcy Hammett, director of strategic operations for the Land Title and Survey Authority, said only about one-quarter of law firms and notary public offices use the electronic filing system.

“For the people who represent that [remaining] 75 per cent, this will give them a lot of comfort knowing the folks who use it find it easy to use and they wouldn’t go back,” Hammett said.

The electronic filing of land transactions, from change of ownership and registration of mortgages to the addition of rights of way, easements or covenants to property titles has been possible since April 2005.

Hammett said they can’t do all possible land transactions electronically yet, but the range of documents that can be e-filed covers basic needs for real estate transactions.

The advantage, he added, is that title changes can be made as quickly as documents can be filled out online, and lawyers or notaries don’t have to rely on couriers to make filing deadlines.

Hammett said the title and survey office will post the poll results on its website as a marketing tool to persuade non-users to give EFS a try.

© The Vancouver Sun 2007

Rise in B.C. property assessments means almost twice as many live in million-dollar homes

Derrick Penner
Sun

Data from the 2007 property assessments, crunched by Landcor Data Corp., shows that B.C. is home to 51,059 residential properties valued at more than $1 million. Photograph by : Vancouver Sun file

The number of real-estate millionaires in B.C.’s real estate market nearly doubled in 2006.

Data from the 2007 property assessments, crunched by Landcor Data Corp., shows that B.C. is home to 51,059 residential properties valued at more than $1 million.

That figure was 26,557 in 2006.

Most new paper millionaires own single-family houses. There are 38,027 such homes worth more than $1 million according to 2007 property assessments — 18,459 more than a year ago.

And the number of condominiums assessed at more than $1 million increased by almost three quarters to 3,260 properties.

The B.C. Assessment Authority released its 2007 assessments earlier this week, based on property values as of July 1, 2006.

Provincewide, the data extracted by Landcor showed that single-family-home assessments increased just over 20 per cent on average, with many communities seeing increases that were much larger.

The average house in Tumbler Ridge in B.C.’s northeast shot up almost 73 per cent to $158,384.

Since Vancouver’s average house assessment was up 23 per cent to $896,979, Cameron Muir, chief economist for the B.C. Real Estate Association, said people shouldn’t be surprised by the dramatic increase in million-dollar homes.

The run-up in real estate prices over the past few years had pushed many homes into the $800,000 to $900,000 range already, which “all bumped up over the year into the million-dollar range,” Muir said.

As well, Muir said, BC Assessment’s valuations cover the period between July 1, 2005 and July 1, 2006, which was “one of the strongest 12-month periods” as there has been in the current real estate market cycle.

Muir added that assessment increases are only “paper profits.”

“It’s the equity in your home. Today it may be high, [but] the market may change and it may not be so high in a few years,” he said.

However, Muir added that home-equity gains do help fuel the economy in so far as homeowners feel wealthier and are willing to spend some of that perceived wealth.

That notion is called the wealth effect, Muir said: Typically, people are likely to spend five cents of every dollar that their net worth increases.

Muir added that there is no reason for that wealth effect to drop off. Though real estate sales over the last half of 2006 slowed and price gains have slowed, they haven’t stopped.

And Muir believes the economy is still performing well enough with enough job and income growth to support real estate markets through 2007.

Landcor president Rudy Nielsen said there are also significant outside influences in B.C. real estate. Albertans, he said, bought about $1.5 billion worth of second homes in the province making B.C. “Alberta’s playground.”

Nielsen, who also heads the recreational-real-estate firm NIHO Land and Cattle Co., said he has also seen a big increase in the number of Americans from the San Francisco and Los Angeles areas buying recreational homes for more than recreational purposes.

“They’re buying secondary homes, what I call safe houses,” Nielsen added. They see B.C. as a safe haven from their fears over global terrorism.

Andrey Pavlov, a Simon Fraser University business professor currently a visiting scholar at the Wharton School of Business at the University of Pennsylvania, said expensive real estate has shot up in value the world over and Vancouver is no exception.

“Within Vancouver, the expensive areas have increased mort than proportionally,” Pavlov said.

He added that real-estate gains “reflect the increasingly skewed distribution of income.”

The rich are getting richer faster than incomes of the less wealthy are rising.

“There is income inequality in the U.S., around the world and in Canada,” Pavlov said. “And [the inequality] is increasing. Because of that, there is increased demand for [real estate], especially in those very desirable areas.”

© The Vancouver Sun 2007