Higher number of homes on the market means buyers can take more time, realtor says

Gillian Shaw
Sun

Real estate sales in Greater Vancouver and in the Fraser Valley dipped more than 25 per cent in May compared to the same month a year ago while the number of new listings climbed.

The increase in listings combined with the slowing sales has cooled price increases which are now mostly in the single digit range across the two real estate boards. Abbotsford is the exception, where the average price for single-family detached homes rose more than 11 per cent in May compared to May 2007.

In the greater Vancouver area sales in May dropped more than 30 per cent to 3,002 from May 2007 when they totaled 4,331.

New listings for greater Vancouver were up 20.2 per cent in May to 7,390 compared to last year at the same time when there were 6,149 new listings for detached, attached and apartment properties.

The Real Estate Board of Greater Vancouver says price increases now are in the single digit range.

“With more property listings and a decline in the number of sales, prices are not increasing as rapidly, now down to single digits overall, which is good news from an affordability standpoint,” REBGV president Dave Watt said in a release. “The housing market is at a balanced state, sellers have more competition and buyers have more selection to choose from.”

Detached property sales dropped more than 33 per cent in May of this year, down to 1,203 from 1,805 in May, 2008.

Despite the decline, the benchmark price for detached homes in greater Vancouver was up 8.4 per cent over the same period last year to $771,250

Apartment sales dropped more than 30 per cent last month from the same period a year ago with the benchmark price climbing 8.7 per cent to $389,668 compared to May of 2007.

Two areas bucked the trend in May, with attached home sales in Coquitlam up 45 per cent and apartment sales in New Westminster up almost 14 per cent.

In the Fraser Valley, sellers are also facing more competition with sales down 26 per cent in May to 1,599 compared to 2,152 sales in May 2007.

New listings jumped 33 per cent in the valley to 3,941, up from 8,381 in May 2007.

“We’re experiencing a return to more normal market conditions,” Kelvin Neufeld, president of the Fraser Valley Real Estate Board said in a release. “In a balanced market, we can generally advise our clients to take a little longer, look at a wider variety of properties and negotiate harder when it comes to price.”

Neufeld said there are some areas though where buyers are facing more competition for available properties. Abbotsford single home prices were up more than other areas.

© The Vancouver Sun 2008

Massive jump in values over past 10 years

Wendy McLellan
Province

City and suburban home prices in the Lower Mainland have doubled over the past 10 years, following the national trend in Canada‘s major real estate markets, according to a Royal LePage report released yesterday.

Across the country, urban properties have increased by a slightly larger amount in most cities compared with the first quarter of 1998, but suburban homes have kept pace as homebuyers look for bigger — and more affordable — backyards, the report said.

In Vancouver, the average single-family bungalow increased this year to $723,250 from $366,250 in 1998, and two-storey homes rose 117 per cent to $809,500 from $372,500.

The price of an average suburban bungalow in the Lower Mainland was $493,2333, up from $240,000, and two-storey homes in the suburbs increased to $485,000 from $254,967. City condo prices rose 127.5 per cent, and suburban condo prices climbed 55.5 per cent.

Canada‘s housing market has been in a decade-long growth spurt –the longest cycle in the country’s history — which ended earlier this year, the report said.

“A look back at the last 10 years in Canadian real estate growth reveals that typically, home prices in urban markets have grown faster than those in the suburbs, with both areas showing impressive appreciation,” said Phil Soper, president and CEO of Royal LePage Real Estate Services.

Nationally, the average price of a standard two-storey home in an urban neighbourhood increased 129.2 per cent compared with 1998, while a similar home in the suburbs is up 110.1 per cent. City condo prices rose 131.5 per cent while suburban condos increased 103.7 per cent to $212,323.

While housing prices are expected to increase slightly this year, the Lower Mainland’s real estate market has cooled with fewer sales and more properties listed for sale.

Residential sales declined by 30.7 per cent last month compared with May 2007, while new listings were up 20 per cent, according to statistics from the Real Estate Board of Greater Vancouver.

Still, the price for detached properties rose 8.4 per cent; apartment prices were up by 8.7 per cent and townhouse prices climbed by nine per cent.

In the Fraser Valley, real estate sales dropped by 26 per cent last month compared to May 2007, and listings were up by 33 per cent compared with a year earlier.

© The Vancouver Province 2008

 

Kent Spencer
Province

Homeowners wanting to defer their property taxes can do so from age 55, instead of at age 60. The provincial program was changed last year to help those on lower incomes.

“Increasing property values and municipal taxes have put pressure on the budgets of some British Columbians, particularly lower-income seniors and those on fixed incomes,” says Rick Thorpe, Minister of Small Business and Revenue.

Vancouver Coun. Suzanne Anton said deferment can make sense for those who are cash-poor but house-rich. “For seniors, it can delay the taxes,” she said. “The elderly . . . should be using their assets.”

The provincially funded program loans money to homeowners at annual interest rates, set every six months and currently four per cent.

Municipalities receive replacement funds from the province: $39 million in 2006; $52 million in 2007.

More than 1,600 Vancouver residents claimed $6.5 million in deferments last year, the most in B.C. They were followed by 1,200 West Vancouverites claiming $5.6 million and 1,100 in North Vancouver District claiming $3.7 million.

The debt is registered as a claim on the property at the land-title office. The home may not be sold or transferred until the debt is paid, except as a transfer to a surviving spouse.

User-pay utilities such as water, sewer, drainage and garbage pickup are still payable directly to the homeowner’s municipality.

© The Vancouver Province 2008

 

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.C.’s residential construction investment is the highest in the country, survey shows

Brian Morton
Sun

B.C. has recorded Canada‘s biggest increases in residential construction investment this year despite indications that home sales are leveling off.

However, Greater Vancouver Home Builders’ Association chief executive officer Peter Simpson said he’s not surprised.

“Right now, we’re actually ahead of last year’s pace,” Simpson said in an interview about housing starts, which are up 16 per cent for the first four months of 2008 to 6,691, from 5,757 starts for the same period in 2007. “But sales have definitely softened over the last few months. So we might see some easing of housing starts as we move through the year.”

Simpson also said another reason for the increased investment is that construction costs continue to rise for builders.

According to a Statistics Canada survey released Monday, B.C. saw a 21.2-per-cent increase in the first quarter of 2008 over the first quarter of 2007 to $4.0 billion in residential construction investment. That represented an increase of approximately $700 million from $3.3 billion in 2006.

That compares to a national increase of 7.5 per cent to a total value of $19.8 billion. Outside of B.C., the biggest increases were in Alberta (a 9.1-per-cent increase to $3.5 billion, up by $292 million over the same period in 2006) and Ontario (a 4.0-per-cent to $6.9 billion, up by $264 million). Quebec, Prince Edward Island and the three territories reported decreases.

Statistics Canada attributed the increase in Western Canada, which included money spent on renovations, to a favourable job market, growth in disposable income, flexible financing options and the strength of the economy. As well, the increase coincided with a rise in the price of houses, up six per cent in the first quarter of 2008 compared to the same quarter in 2007.

Despite the construction investment increases,the Fraser Valley hit a near-record high for total inventory of homes for sale in April and Greater Vancouver listings also took a substantial jump as markets continued to slow.

The Fraser Valley Real Estate Board reported 4,458 new listings added to the Multiple Listing Service in April, a 53-per-cent increase from the same month a year ago. Total listings of 11,111 is up 43 per cent from a year ago.

In Greater Vancouver, new listings added to inventory were up almost 26 per cent to 7,010 units. Total inventory stood at 13,575 at the end of April, up 18 per cent from last year.

Greater Vancouver‘s MLS sales of 3,218 were down five per cent from the same month a year ago.

As well, Greater Vancouver closed March with its slowest first-quarter for sales since 2001.

According to the StatsCan survey, new housing investment increased by 8.8 per cent compared with the first quarter of 2007 to $9.7 billion. Investment in apartment and condominium construction contributed the most to the increase in this component, with spending on apartments increasing by 17.5 per cent to $2.6 billion. Construction spending on single-family housing rose by 3.7 per cent to $5.6 billion.

In constant dollars, investment in new apartments and condominiums increased 6.4 per cent, while spending on the construction of new single-family homes dropped 1.1 per cent.

Renovation spending came to $8.4 billion, a 7.2-per-cent increase compared with the first quarter of 2007. Renovation spending represented 42.4 per cent of total residential construction investments.

© The Vancouver Sun 2008

Province

B.C. posted Canada‘s largest increase in residential-construction investment between the first quarter of 2008 and the same period a year earlier, Statistics Canada says.

Residential investment in B.C. rose $697.9 million, or 21.2 per cent, to $3.98 billion over this period, the federal agency said yesterday.

Behind B.C. came Alberta, up 9.1 per cent to $3.52 billion, and Ontario, up four per cent to $6.86 billion. Quebec, Prince Edward Island, the Yukon, Northwest Territories and Nunavut saw declines in investment.

Nationally, residential investment hit $19.78 billion in the first quarter of 2008, up 7.5 per cent from the same period last year, StatsCan said.

“The favourable job situation, growth in disposable income, flexible financing options and the strength of the economy in Western Canada continued to support the demand for housing,” StatsCan said.

Residential construction investment includes new-home construction, renovations and acquisition costs — the value of services associated with the sale of new dwellings.

New-housing investment, stoked by apartment and condo building, rose 8.8 per cent to $9.7 billion during this period.

Spending on renovations jumped 7.2 per cent to $8.4 billion from the first quarter last year.

Reno spending accounted for 42.4 per cent of total residential-construction investment.

Acquisition costs climbed 1.3 per cent to $1.7 billion.

Residential-construction investment increases depend on house prices rising. The New Housing Price Index climbed by six per cent between the first quarter of this year and the same period in 2007.

© The Vancouver Province 2008

 

Ian Austin
Province

Self-contained suites, condos and cabins are the fastest-growing accommodation choice for visitors to B.C.

A study of short-term rentals by BCStats shows that the so-called ‘vacation rentals’ tripled in value from 1995 to 2007, more than twice the increase for hotels, motels and other accommodation.

“Unlike hotels and motels, vacation rentals are typically furnished residences that include kitchen facilities and other amenities that provide a ‘home away from home,'” the BCStats study said.

“These properties are often located in a non-urban setting and may provide access to private beaches, fishing and skiing opportunities.

“Condominiums, cottages and cabins are common types of vacation rentals.”

Tourism Vancouver spokesman Walt Judas speculated the increase is due in part to two factors — the coming 2010 Winter Olympics and the large number of feature films now shot in B.C.

“If you look at VANOC, they’ll be here for two years, then they’ll be off to the next Olympic city,” said Judas. “They’re often referred to as gypsies.

“Then you look at the film crews. Except for the A-list actors, they typically can’t afford hotel accommodations.”

Judas said that vacation rentals are prevalent in ski resorts such as Whistler, where most of the accommodation is privately-owned rental chalets. “In Whistler, most of the inventory is owned by individuals,” he said.

“When you’re renting, you may be renting from someone who has a quarter-share in a property.”

The BCStats study found that the Kootenay region showed the largest increase in revenues from 1995 to 2007 — 362 per cent — while the Vancouver Island-Coast region has nearly one-third of all the vacation rentals in the province, centred largely in resort areas such as the Gulf Islands, Tofino and Ucluelet.

The market outlook is strong for such non-traditional accommodation, the study said.

“Since 1995, vacation rentals have increased their share of total room revenues in most regions of the province,” it said.

“Strong demand for this type of non-standard accommodation, coupled with the revenue potential for the owners of these properties, will likely encourage the continued expansion of B.C.’s vacation rental market.”

© The Vancouver Province 2008

 

Bills of single-family Vancouverites jump 14.2 per cent

Kent Spencer
Province

Mario Tomsich is one of thousands of single-family Vancouver homeowners whose property taxes have surged an average of 14.2 per cent, seven times the rate of inflation.

“The taxes are just skyrocketing because of the value of the property,” the 75-year-old Vancouver landlord said yesterday. “If it keeps going like this, I would have to do something about it. People have been forced to sell their homes.”

The assessed value of Tomsich’s Point Grey home went up by 44 per cent last year, to $1.72 million; his bill for city services increased by 28 per cent, to $4,236.

He’s paying $919 more this year for police, fire, roads, parks, city government, water, sewer, drainage, garbage pickup and recycling. When school, regional and transit levies are added, his total municipal bill is $7,942.

The huge increases came to light during The Province’s annual survey of Metro Vancouver.

The 17 municipalities in the survey averaged increases of 4.81 per cent, 2.4 times the 2007 Consumer Price Index for Vancouver, which was two per cent.

In the survey, Vancouver residents came out with the lowest percentage increase of any city — 0.1.

Vancouver budget director Annette Klein said the 1.23-per-cent tax increase approved by city council was not reflected for single-family dwellings because their assessed values shot up 30 per cent.

They jumped 15 per cent above the average for the residential class, including condos. Property taxes are based on assessed values.

“Single-family homes are picking up more of the overall [tax] revenue,” Klein said. “They are compensating for slower growth in condos.”

Tomsich owns two homes overlooking English Bay in the 4500 block West 2nd.

“I’m not complaining,” he said. “I came here as a lifeguard in 1951 and dreamed of owning a home in Point Grey. This is paradise.

“But the city has no scruples. They keep building unnecessary things. They want to put another lane on the Burrard Bridge for cyclists for $40 million. How do you justify that? Not that many people ride bikes.”

As a senior, Tomsich is able to defer his tax bills; he won’t have to pay until the properties are sold or he dies.

Dunbar home owner Sean O’Mahony, whose taxes went up in the 25-per-cent range, said there was no advance notice from the city.

“They just jacked it up and away we go,” he said. “Everyone scuttles into work for a few extra hours to pay for the bloody increase.”

Vancouver Coun. Suzanne Anton, who was surprised by the 14.2-per-cent hike, blamed the B.C. Assessment Authority for rising bills.

“You get the feeling that the assessors hadn’t gone through for a couple of years and the assessments went way up,” she said.

“The good news is the equity went way up. The bad news is you’re paying more tax. If the house is worth a lot more money and taxes have gone up a couple of thousand [dollars], you’re still ahead of the game.

“The scheme is about as fair as it can be. B.C. Assessment is an independent authority.

“The bills are hard on some people. If taxes go up quite high and you don’t have a lot of income, then it’s hard on you,” Anton said.

The increases also came as a result of council’s policy to transfer part of the tax burden from businesses to residents, Anton said.

Tax critic Maureen Bader said municipal costs will keep rising until councils’ budgets are based on revenue instead of spending.

“Some municipalities are very irresponsible, with spending on things like stadiums, arenas and the Olympics,” said Bader, B.C. director of the Canadian Taxpayers Federation. “Taxpayers can expect it to get worse.”

© The Vancouver Province 2008

HOUSE MARKET: Sprucing it up really pays off

KATE WEBB
Province

“All the world’s a stage,” Shakespeare once wisely mused, and that timeless maxim applies especially when it comes to homes for sale.

According to statistics compiled by the U.S. National Association of Realtors, homeowners who spend the extra time and money to “stage” their home — essentially, to make it look like something out of a Martha Stewart magazine — typically sell their homes for seven to 11 per cent more than non-staged homes, and in half the time.

“If you stage it and you play up your home’s good features, you’ll get a faster sale, very likely with multiple offers, which of course means you’ll get a higher selling price,” explains Brent Melnychuk, an interior decorator with 17 years experience who stages homes for Vancouver-based staging firm Dekora.

“How much time it takes depends on how much of a junk collector you are. I would say in most cases, anywhere from two to four weeks.”

For the uninitiated, the prospect of undertaking such painstaking prep work can seem both daunting and expensive. But the first thing anxious deed-holders should remember, Melnychuk says, is that it’s worth it.

Serious sellers, he says, should consider spending at least one to two per cent of their asking price to get their place ready for market.

Melnychuk’s No. 1 tip for owners attempting their own staging is to break out the elbow grease — either their own or by hiring a cleaning service.

“People generally don’t clean their houses thoroughly enough, and buyers look in every nook and cranny,” he says. “They open closets and cabinets . . . and they’ll look in every drawer.”

Next on his long list of selling no-nos is too much clutter. “I bet most people could remove a third of what they have in their rooms,” Melnychuk says, adding that moving is the best time to purge build-ups of belongings anyway.

One of the other basic mistakes motivated sellers make is not taking the time to do the little, irksome home repairs that they’ve never bothered with — but that might really bother some prospective buyers.

“Small things really do make a difference, so if there are light switches or door knobs that aren’t working, fix them, because buyers will flip on all the switches and try everything to make sure it works, and if a light bulb is out they might go, ‘well, what else isn’t working?'” the designer explains.

And, finally, he says, it is absolutely essential to de-personalize the space. That means taking down all your family photos and painting over that brash red feature wall you love so much because ultimately, buyers are looking for a place they can personalize for themselves.

“You want the buyer to envision themselves living in the space,” says Melnychuk. “You want to neutralize your colours so they appeal to the widest possible demographic, because if you neutralize it there’s nothing to complain about.”

Once you’ve done the big clean-up and you’re staring at a blank canvas, it’s time to get creative.

“You do want to add punches of colour. If you have a neutral or taupe sofa, you can easily put some ruby red cushions on it, or add a vase of red tulips on the coffee table,” Melnychuk says. “So it’s really about suggestion. You don’t want to have too much of a good thing.”

He says a house with ample lighting and furniture also always sells much quicker, and for more than a vacant one, because buyers often need a visual aid to help them imagine what and where furniture could go and are instinctively drawn to brighter spaces.

© The Vancouver Province 2008