As with Metro Vancouver, Kelowna, Penticton are out of reach of locals

Michael Kane
Sun

Average home prices across Metro Vancouver are expected to surpass $600,000 next year — and that’s in a market supposedly slowing down.

Kelowna-Central Okanagan is also a major front-runner for price appreciation, according to the Re/Max Housing Market Outlook 2008 released Wednesday.

Metro Vancouver prices are forecast to rise seven per cent next year from an estimated average of $560,000 for 2007. Kelowna-area prices are expected to climb nine per cent in 2008 to an average of $408,750.

While the Metro Vancouver market is slowing because fewer people can afford to buy, the Central Okanagan market is being turbocharged by retirees and buyers of recreational property, said Kelowna-based Re/Max executive Elton Ash.

Rising prices are squeezing out local residents and encouraging some to move to Alberta where they can earn more, Penticton Coun. Randy Manuel said in an interview.

Manuel still has two adult children, aged 24 and 27, living in his home because they can’t afford to buy in the region.

“Our young people can’t save up enough to put a down payment on anything because even a cheap motel in the wintertime is going to cost $900 to $1,100.”

To try to encourage construction of rental units, Penticton council is reducing charges and appealing for federal GST relief, but Mayor Jake Kimberley said the strong market is encouraging developers to build condos for sale.

“We’ve estimated in our community that there is a requirement for about 300 to 400 units immediately to accommodate families,” Kimberley said in an interview. “I think we’re all well aware that the cost of getting in to purchase a home now is beyond the means of most wage earners.”

The Re/Max report, which examines trends in 18 markets across the country, says higher mortgage rates and increased inventory levels failed to materialize in most major centres this year.

By year-end, housing values are expected to shatter existing records, with the highest increases forecast for Saskatoon (49 per cent), Edmonton (31.5 per cent), Regina (21 per cent), Calgary (20 per cent), Kelowna (19.5 per cent), Saint John (17 per cent), St. John’s (12 per cent), and Metro Vancouver (10 per cent).

While economic prospects are expected to continue to improve, the report says few major markets will exceed record sales levels set in 2007.

About half a million homes are expected to be sold next year, down from an estimated 545,000 this year.

The average Canadian home price is projected to rise nine per cent this year to $303,000, up about $25,000 over 2006 levels. Next year, prices are forecast to rise six per cent to an average $321,000.

Ash said the housing market cannot continue to sustain double-digit inflationary pricing.

“It’s not healthy. And then the Bank of Canada becomes concerned, and that could affect interest rates,” he said. “I think a stabilizing of overall unit sales which will stabilize prices next year is very healthy.”

As in 2007, inventory will be the major wild card next year, he added.

“A return to tight market conditions could mean all bets are off as buyers are forced to compete, creating increased market pressure.”

© The Vancouver Sun 2007

Canadian home sales to top 500,000 in 2007

Sun

After posting extraordinary gains in 2007, housing market performance will moderate in most major Canadian centres in 2008, according to a report released today by RE/MAX.

The RE/MAX Housing Market Outlook 2008 examined residential real estate trends in 18 markets across the country.  The report found that while economic prospects will continue to improve next year, few major markets are expected to exceed record sales levels set in 2007.  Winnipeg, Hamilton-Burlington, Kitchener-Waterloo, London-St. Thomas, Ottawa, Sudbury, Saint John, Halifax-Dartmouth, and St. John’s are all predicted to buck the trend in 2008, with appreciation ranging from one to seven per cent.  Average price is forecast to increase in 78 per cent of markets surveyed next year, with the lowest price increase expected in Edmonton and the highest in St. John’s.  

Nationally, the number of homes sold is expected to break through the half-million threshold in 2007, climbing 13 per cent to an estimated 545,400 units, up from 483,770 units one year ago.  Average price is projected to appreciate nine per cent to $303,000, up about $25,000 over 2006 levels.  In 2008, home sales are expected to retreat to 500,000 units while Canadian housing values are forecast to continue their ascent, rising six per cent to $321,000.

Clearly, economic prosperity has translated into increased housing sales and upward pressure on prices across the board.  The country’s economic engine fired on all cylinders throughout the year, despite dire conditions south of the border. As in 2007, inventory will be the major wildcard next year—the ultimate variable most expected to influence housing market conditions and performance. A return to tight market conditions could mean all bets are off as buyers are forced to compete, creating increased market pressure.

Major market frontrunners for price appreciation in 2008 include St. John’s (12 per cent), Regina and Kelowna – Central Okanagan (nine per cent), Hamilton-Burlington and Saint John (eight per cent) and Greater Vancouver (seven per cent).  Leading the country in sales growth next year will be Kitchener-Waterloo (seven per cent), followed by Hamilton-Burlington, London-St. Thomas, Sudbury and Halifax-Dartmouth, each forecasting a five per cent gain.                                   

Higher mortgage rates and increased inventory levels failed to materialize in most major centres, making 2007 a record year for real estate activity in Canada.  By year-end, housing values across the country are expected to shatter existing records.  Serious double-digit increases in average price are forecasted for Saskatoon (49), Edmonton (31.5), Regina (21), Calgary (20), Sudbury (20), Kelowna (19.5) Saint John (17), St. John’s (12), and Greater Vancouver (10).   

Saskatchewan dominated real estate news in 2007, reporting some of the highest percentage increases in unit sales.  The number of homes sold in Regina by year-end is expected to top 35 per cent, bringing sales to an estimated 4,000 units.   Neighbouring Saskatoon is forecast to climb 28 per cent to 4,400 units in 2007.  Other centres expected to post double-digit gains in activity include Saint John (19 per cent) Kitchener-Waterloo (13 per cent), Halifax-Dartmouth (12 per cent), St. John’s (11 per cent), and Toronto (10 per cent).

Western markets were first out of the gate in 2007, but those in the East followed suit.  By year-end, some of the most impressive gains in home sales will be realized in Ontario and Atlantic Canada. Solid economic fundamentals, including billions of dollars in capital projects, a positive unemployment outlook, and solid consumer confidence levels will propel markets forward.  A slow and steady growth trajectory, minus the peaks and valleys experienced in 2007, is forecast for next year.

 RE/MAX of Western Canada (1998) Inc. Housing Market Outlook 2008 Report issued October 17^th, 2007

123 houses sell for more than $3 million in Vancouver area alone

Frank Luba
Province

A $25-million home in Shaughnessy.

Sales of luxury homes in B.C. are hot.

So far this year 59 homes have sold for more than $3 million in West Vancouver, and 64 on Vancouver’s west side.

In all of 2006, just 50 sold for more than $3 million in West Vancouver, and 64 on the west side.

There’s more demand than supply, top-end realtor Allan Mark Angell, who usually has 35 to 50 luxury listings, said yesterday.

“I have 17 to 18 right now,” said Angell, who specializes in luxury sales in West Vancouver and the west side.

“I’m knocking on doors to find expensive houses.

“The reason it’s kept going is lack of product. If you want oceanfront in close, good luck in trying to find one. After one that’s $14.8 million, that’s it.”

B.C. leads Canada in asking prices, with 124 properties listed on MLS.ca at $5 million or more. Ontario has 45 properties at that level and Alberta 22.

Topping the list of B.C.’s most expensive homes is a $28.5-million waterfront home in the Uplands neighbourhood of Oak Bay. Others among Canada‘s top 10 include a $25-million Shaughnessy estate in Vancouver; an oceanfront home in Metchosin for $24 million; two Whistler homes valued at $22 million and $20 million; and one in Saanich at $18.5 million.

Angell said he knows a property in West Vancouver that closed in March for $5.3 million. Two months later he brought the owner an offer for $7.2 million that he rejected.

In Whistler, Ann Chiasson of Sea to Sky Premier Properties said: “The big picture on the luxury market is it’s good.”

Angell, a realtor when prices crashed in 1981, saw lots of product and interest rates at 18 per cent.

“Now our rates are still good and we don’t have a big increase in product,” he said. “So what’s going to change the market?

“I don’t see anything on the horizon that’s going to change it. Yet everybody is saying it’s about to.”

Senior market analyst Robyn Adamache of the Canadian Housing and Mortgage Corp. said population growth and jobs are driving B.C.’s strong housing market.

“We’re still seeing very high demand for housing and that’s being fuelled mainly by strong levels of migration coming into the region, as well as a vibrant economy that’s creating a lot of jobs,” said Adamache.

“We’ve had about 35,000 jobs created this year in Greater Vancouver.”

© The Vancouver Province 2007

Hot Water Tanks: Strata councils must take an active role in maintenance

Tony Gioventu
Province

Dear Condo Smarts:

We live in an apartment building in Campbell River in which each unit has its own hot water tank. Now that the building is over 10 years old, the tanks are starting to fail and the strata corporation is paying significant losses for water insurance deductibles and damages.

Is there any way the strata can either take control of the hot water tanks or force owners to buy insurance to cover the damages these old tanks are causing?

We are slowly being bankrupted and our insurance company has told us our deductible cost for water escape will be rising to $25,000 on renewal in December.

— Marj Austin

Dear Marj:

There are probably more than 250,000 units across the province that have hot water tanks in each strata lot, and they are in both apartment-style condos, townhouses and detached buildings.

The big question: Who’s responsible for those tanks?

If the tanks are contained within the strata lots or limited common property allocated to those strata lots or for their exclusive use, they are almost always the responsibility of the strata-lot owner.

Therein lies the greatest problem. Most people don’t replace/

repair their tanks until they fail and a flood occurs.

Strata councils and managers need to take an active role with the obligations of maintenance and repair.

Educate your owners. When you send out your annual notice to the strata owners, include a notice reminding owners about their responsibility to maintain and repair their hot water tanks, gas fireplaces, furnaces and any other appliances in their units.

Owners also need to be reminded that they could be responsible for the deductible amount of a claim.

To alleviate the obligations, several strata corporations have created a bylaw where the strata is responsible for maintaining and repairing hot water tanks as part of the strata lot.

This way, the tanks are routinely serviced and changed before they fail and the long-term financial picture is much better for everyone involved.

© The Vancouver Province 2007