Province

November blew a deepening chill into the Lower Mainland realestate market, figures released yesterday show.

Year-over-year home sales in Greater Vancouver plunged by 69.7 per cent in November from the same month a year earlier, the Real Estate Board of Greater Vancouver said yesterday.

The benchmark pr ice f o r detached homes, condos and townhomes in Greater Vancouver fell 12.8 per cent between May and November 2008, the board said.

New listings in all three categories of homes fell 10.8 per cent between November and the same month in 2007, the board said.

Board president Dave Watt said that while the local market is not impervious to global economic challenges, those same difficulties have opened a purchasing window.

“For those whose personal f i n a n c e s allow them t o g e t involved, there are opportunities in today’s housing market that have not been seen in many years,” Watt said.

Year-over-year home sales in the Fraser Valley fell by 62 per cent in November, the Fraser Valley Real Estate Board said.

The average price of a singlefamily detached home in the Fraser Valley rose by 0.1 per cent to $511,698 from the same month a year earlier, the board said.

But that price is down 6.8 per cent from the market’s peak in May, the board said.

Although average prices are stable or slightly lower than last year the benchmark price — the price of a typical home in the valley — declined by larger margins, it said.

“The benchmark price for single-family detached decreased by 6.6 per cent in one year, townhomes decreased by five per cent and apartments by 6.1 per cent,” the board said.

Fraser Valley board president Kelvin Neufeld said moderating prices have given buyers a chance to upgrade in size, location, or type of home.

“This is an excellent market in which to find quality properties because fewer people are buying,” Kelvin said.

DERRICK PENNER
Sun

Canada is in the grip of a recession that will see housing prices deflate about 10 per cent nationally and perh a p s u p to 20 p e r ce n t i n B r i t i s h Columbia, according to Benjamin Tal, a senior economist at CIBC World Markets.

“ People say we are entering a recession, I’m saying we’re in a recession,” Tal said in an interview Monday following a presentation to the Canadian Association of Accredited Mortgage Professionals ( CAAMP).

He said Canada’s recession was sparked by slowing growth in the wake of the meltdown of U. S. housing markets. The economy will not begin to recover until American real estate bottoms out, the financial sector stabilizes and until government economic stimulus packages take hold.

Tal said that could be sometime around May next year.

He cautioned that recovery will not be a robust “ V-shaped” bounce-back. Rather it will take more of a “ U-shape” and will take some time.

Tal said Canada’s housing downturn is a recession-led correction rather than the kind of meltdown that brought U. S. markets low when large numbers of high-risk borrowers defaulted on their loans.

Tal said B. C. is likely to see deeper corrections in real estate prices, largely because values here shot up so much higher and more quickly that in other parts of the country.

“ When you double the value of your real estate over the course of breakfast, then you pay the price,” Tal said.

He said the recession still has to run its course, and was in the equivalent of “ the sixth or seventh inning” of a baseball game.

Tal told about 1,800 mortgage brokers at the Vancouver Convention and Exhibition Centre that people need a context to give them an overall picture of all the bad economic news.

The prominent economist started his presentation with a subtle joke. He launched into a recitation of the gloomy headlines about the world, the United States, Europe and even Canada being in recession, about the 1.5 million jobs lost in the U. S. and the American meltdown. He followed that up with a cheery, “ Good morning, everyone.”

Tal said the world is dealing with its biggest financial crisis since the Great Depression, but that doesn’t mean the impact will be as significant as that of the Depression.

One reason is that the U. S. Federal Reserve, the Bank of Canada and European banks stepped in quickly with bailout packages and assistance for the financial sector, he said, and governments have also been fast off the mark proposing stimulus spending on infrastructure projects.

Those measures will buy the jobs needed to get countries out of recession, he said.

However, given that the recession was caused by a buildup in American real estate markets that took 15 years to develop, “ the recovery will not be strong,” he said. “ It will be a much more modest recovery, because you cannot undo 15 years of bad economic management in one or two years.”

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Projects list grows ahead of storm

DERRICK PENNER
Sun

Wall Centre Richmond – $250 Million

Hotel Georgia redevelopment – $400 Million

UBC-Okanagan engineering management building

BC Place Stadium upgrades

Grand Villa Casino expansion, Burnaby

NewPort Village, Port Moody

Developers started work on 31 large projects worth almost $ 2.4 billion in construction value from July to September, the provincial government reported Monday in its major projects inventory.

Just before the meltdown of world financial markets, proponents piled on another 47 projects worth $ 5.5 billion, raising the inventory of projects planned and underway to 843 projects worth almost $ 175 billion.

However, a construction industry official said he expects a slowdown because of tight credit, projects being put on hold and poor commodity markets.

Economic Development Minister Ida Chong said the state of financial markets does spark concerns about the future health of the inventory, but added that the province remains confident construction can remain robust.

“ There are still investors out there,” Chong said in an interview, “ and they need to know that if they actually look at Canada and British Columbia, that we make sure they are aware of British Columbia’s situation.”

She said that situation includes a deficit-free provincial budget, political stability and a solid labour market.

Chong said ministry officials thought the major projects inventory might shrink a bit, since many projects related to the 2010 Olympics wrapped up in the third quarter.

The fact that it didn’t “ shows there is healthy construction activity in the province,” she said.

The inventory tracks projects worth $ 15 million or more outside of the Lower Mainland and $ 20 million or more within the Lower Mainland. Chong noted that it has increased in value for 21 consecutive quarters.

Some 379 projects worth almost $ 66 billion are under construction, and Manley McLachlan, president of the B. C. Construction Association, said that’s enough to give building contractors steady work for the next six to eight months.

However, employment in the sector beyond that time frame will depend on how many proposed projects go ahead. “ If we’re not seeing a lot of new projects rolled out, then we will see layoffs of a substantial nature.”

McLachlan said he expects some slowing of construction activity. Some of the projects on the list are resource-related and dependent not only on the availability of credit, but also on the health of commodity sectors that are being deeply hurt by the economic downturn.

However, McLachlan added that because the inventory grew in the last quarter, “ we should still take comfort in what that says about the intent of investors. It still paints a pretty good picture of the province as a place to invest.”

The construction industry also likes Premier Gordon Campbell’s statement last month that the province intends to ramp up its capital spending.

McLachlan acknowledged conditions will change, but the prospect of the province fast-tracking projects “ gives us confidence that we’re not going to see this huge drop in activity levels.”

Chong said provincial efforts will be aimed at accelerating projects that are on the books but have been delayed by other factors.