Surge of activity expected after Olympics slowdown

Province

Vancouver‘s average house price should rise by 7.2 per cent this year following substantial increases at the end of 2009, according to Royal LePage’s latest house price survey.

Bill Binnie, owner of Royal LePage North shore, predicts that house prices will move higher on renewed optimism among consumers and the Vancouver market’s large cross section of buyers.

“This January might be busier than we’ve seen previously,” Binnie said Thursday. “We expect a slowdown during the Olympic Games in February, followed by a surge in activity in the spring.”

The year-over-year price of standard condos in Vancouver rose 11.8 per cent to an average of $452,750 in the fourth quarter, Royal LePage said.

Detached bungalows in Vancouver changed hands for an average of $828,750 in the fourth quarter, up 11.4 per cent from a year earlier.

And Vancouver’s standard two-storey homes climbed 9.6 per cent year over year to an average of $917,500 in the quarter.

“There is a lot of confidence in the market from buyers and sellers,” said Chris Simmons, owner of Royal LePage Sunshine Coast.

“We saw a lot of activity before Christmas, which is unusual.”

Nationally, residential real estate has moved back into a seller’s market and will remain “unusually strong” through the first half of 2010 as economic conditions improve and low interest rates spur demand, according to Royal LePage.

“The Canadian real estate market enters 2010 with considerable momentum from an unusually strong finish to the previous year,” Royal LePage Real Estate Services president-CEO Phil Soper said.

“The stimulus effect of low borrowing costs has contributed to a sharp rise in demand that has driven activity levels to new highs. This demand, coupled with a typical seasonal under-supply of homes for sale, should cause home prices to continue to appreciate significantly during the early months of the year.”

The report comes hard on the heels of several others that show the market continuing to gather steam.

Soper said the market’s apparent froth should ease in the second half of 2010 as supply of listed homes increases and higher interest rates temper rising home prices.

After falling in late 2008 and early 2009, house prices in Canada appreciated in late 2009.

In the last quarter of 2009, the average price of detached bungalows rose six per cent to $315,055 compared with the same quarter in 2008.

The price of standard two-storey homes rose 5.2 per cent to $353,026, and the price of a standard condominium rose 6.4 per cent to $205,756.

The survey, which includes information on seven types of housing in more than 250 Canadian neighbourhoods, suggested regions that saw the biggest declines during the recession are now showing marked gains, including Vancouver and Toronto.

© Copyright (c) The Province

Alan Zibel, AP Real Estate Writer
USA Today

WASHINGTON — Rates for 30-year home loans inched downward this week, first decline in a month, but remained above last month’s record lows.

The average rate on a 30-year fixed mortgage was 5.09% this week, down from 5.14% a week earlier, mortgage company Freddie Mac said Thursday.

Rates dropped to a record low 4.71% in early December, pushed down by an aggressive government campaign to reduce consumers’ borrowing costs, but then rose steadily the rest of the month.

The average rate on a 15-year fixed-rate mortgage fell to 4.5% this week, from 4.54% last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.44%, unchanged from a week earlier. Rates on one-year, adjustable-rate mortgages fell to an average 4.31% from 4.33%.

The rates do not include add-on fees known as points. One point is equal to 1% of the total loan amount.

The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 point for 30-year and 15-year loans and 0.6 point for five-year and one-year loans.

Freddie Mac collects mortgage rates Monday through Wednesday each week from lenders around the country. Rates often fluctuate significantly, even within a day, often in line with interest rates on long-term Treasury bonds.

The Federal Reserve is pumping $1.25 trillion into mortgage-backed securities to try to bring down mortgage rates, but that money is set to run out in the spring. The goal of the program is to make home buying more affordable and prop up the housing market.

The central bank’s policymakers have been conflicted about whether to expand or cut back a program intended to drive down mortgage rates and bolster the housing market, according to meeting minutes released Wednesday.

Some Fed policymakers argued that the program might need to be expanded and extended beyond its current end date of March 31, arguing that the additional dose of stimulus would be especially needed if the economic recovery were to weaken.

However, one member thought the program could be scaled back given the improvement in economic and financial conditions.

Getting the housing market back on firm footing is key to a lasting recovery. The collapse of the housing market, which dragged down home prices, was the catalyst for the longest and worst recession to hit the country since the 1930s.

Copyright 2010 The Associated Press. All rights reserved

Fairmont Pacific Rim, Coast Coal Harbour, Pinnacle hotels work on final touches

Bruce Constantineau
Sun

Walk by the luxurious Fairmont Pacific Rim Hotel set to open soon near Canada Place and you’d swear the late-January-opening deadline is preposterous.

Construction workers are still hard at it. Hotel supplies and operating equipment have to be moved in. A water feature near the main entrance still has to be finished.

But hotel general manager Randy Zupanski insists the 377-room property will indeed open by the end of this month. It has to. Its first Olympic guests arrive in early February and the hotel is fully booked during the 17-day Games period.

“Every hotel opening is the same,” Zupanski said in an interview. “Things get pushed right to the wire.”

The Fairmont Pacific Rim is one of three brand new hotels scurrying now to put the finishing touches on their properties before opening in time to meet their Olympic commitments.

The 220-room Coast Coal Harbour Hotel opens at 1180 West Hastings on Jan. 15, the same opening date as the 105-room Pinnacle Hotel at the Pier near Lonsdale Quay in North Vancouver.

All will be bursting at the seams with Games visitors next month.

Zupanski said he has managed this kind of intense deadline pressure before and has no doubt the new hotel will deliver superb service to the Olympic sponsors and dignitaries scheduled to stay there.

He opened a hotel in Shanghai located inside an 80,000-seat stadium that was built for the 1997 Chinese National Games.

“So the first day we opened, we were full,” he said. “I’m not going to say it’s easy but if you have experienced people, you can deliver.”

More than 5,000 people applied for 350 jobs at the new Burrard-and-Canada-Place-Way property and workers are now training at the nearby Fairmont Waterfront hotel. Many experienced staff from other Fairmont properties have been brought in to work at the hotel during the busy Games period.

Zupanski said the hotel has been built to the highest standards and hopes it can achieve a coveted five-diamond rating one day from the influential American Automobile Association. The Sutton Place Hotel is the only Vancouver property with a five-diamond rating from the AAA.

Hotel features include a lobby lounge with a custom-designed, $225,000 Fazioli piano, a 15,000-square-foot spa/fitness centre, 42-inch LCD TVs in every room and 37 suites–including a 3,000-square-foot “presidential suite” on the 22nd floor.

The hotel occupies the first 22 floors of a 48-storey luxury condo project that commanded asking prices of about $2,300 a square foot. One buyer paid more than $15 million for a 6,000-square-foot penthouse suite.

Condo owners can use hotel offerings such as room service, valet parking, housekeeping service and a downtown car service that uses a fleet of BMWs.

Pinnacle Hotel at the Pier general manager Dale Dyck said his hotel is just about ready to welcome its first guests late next week.

“The rooms are all ready and decorated,” he said. “We’re just going through them one more time to look for nicks in the paint and that sort of thing before we put everything in its final position.”

Dyck said the mid-January opening should give his staff of 100 enough time to “kick the tires a bit and make sure everything works” before Olympic guests arrive early next month. About 20 per cent of the rooms have been set aside for Cultural Olympiad participants.

“We’re asking people to work at their peak performance while they’re really still in a learning curve — that’s the biggest challenge,” Dyck said.

But he stressed the slowing economy and rising unemployment rate meant the hotel was able to hire many “really qualified workers” so he expects they will meet that challenge.

Dyck said with the Olympics approaching, opening the hotel any later than mid-January was never an option.

“If we had been delayed, I don’t know what plan B would have been,” he said.

Coast Coal Harbour Hotel general manager Hans von Bloedau said rooms at the West Hastings property will be filled with various groups during the Olympics. He said there are both good and bad sides to opening a new hotel just before such a huge event.

“There’s a bit of competition for staff because everyone will be so busy,” von Bloedau said. “But there’s lots of excitement now so everyone is really geared up and that creates tremendous enthusiasm.”

© Copyright (c) The Vancouver Sun

 

Seller’s market in most Metro areas expected to continue until mid-2010

Derrick Penner
Sun

After plummeting to lows not seen since the 1980s, Lower Mainland real estate markets saw a rush in the second half of 2009 that pushed sales well above an economically challenged 2008 and prices back on an upward slope toward previous peaks.

Aided by the slashing of mortgage rates, cut to the bone in step with the Bank of Canada’s measures to stimulate the economy, new buyers poured into the market.

The recovery wasn’t equally shared among Lower Mainland municipalities, but Robyn Adamache, a market analyst for Canada Mortgage and Housing Corp., said most communities are in seller’s market conditions, which she expects will continue until mid-2010 when an expected rise in mortgage rates takes hold.

“Prices are expected to continue rising as well,” Adamache said, “and that will be cutting out the benefit [the market has experienced] from lower prices combined with low interest rates.”

The area of Metro covered by the Real Estate Board of Greater Vancouver recorded 35,669 sales through the realtor-controlled Multiple Listing Service in 2009, a 45-per-cent increase from 2008.

And the benchmark price, an average price for the typical property sold, hit $562,463 in December, up some 16 per cent from December 2008, when prices had fallen considerably from their peak.

Scott Russell, president of the Vancouver board, said realtors experienced record or near-record sales for each month in the second half of 2009, with December 2009 the organization’s third busiest December on record.

However, price performance varied from community to community.

“Some areas have shown larger increases than others, the west side of Vancouver being one of them,” Russell said.

Detached homes on Vancouver’s west side, for instance, hit a benchmark average of $1.5 million in December, up 30 per cent from the same month a year ago.

“Vancouver’s west side, when the market becomes stronger, historically is always the leader,” he added.

In the Fraser Valley, realtors racked up 16,721 sales in 2009, up 26 per cent over 2008.

And by December, the average price for a Fraser Valley home hit $430,827, not quite at the peak of value, but still 7.3 per cent ahead of December 2008.

Board president Paul Penner said that in the span of 12 months, the valley went from “the worst January in 20 years to the third-best December.”

Penner said Fraser Valley sales figures from July onward were consistently higher, month by month, compared with the region’s 10-year average for sales.

“It’s not just a blip that developed,” he said, “It’s not a spike.”

The poorest month for sales in 2009 was January, when there were 762 sales in Vancouver and 389 in the Fraser Valley. The best month in Vancouver was June, with 4,529 sales, while the Fraser Valley’s best month was July, with 2,089 sales.

December saw 2,515 MLS sales in the Vancouver board area, which includes most of Metro Vancouver except for Surrey. In the Fraser Valley, realtors saw 1,260 sales.

The Fraser Valley also saw some regional differences in the strength of the market, with single-family home sales in White Rock, Surrey and Langley showing better results than Abbotsford or Mission.

“It seems to be that if you’re closer to Vancouver, the market has been hotter,” Penner said, “which is the same kind of story I’m hearing from [B. C. Real Estate Association economist] Cameron Muir about provincial sales as well.

“Vancouver and the Lower Mainland are the hottest part of the market.”

On balance, however, inventories of unsold homes in Lower Mainland markets continue to shrink as strong sales eat up the active listings faster than new listings are added.

The Vancouver board’s inventory of 8,939 active listings is some 41 per cent lower than the number of unsold homes on the market in December of 2008, and is even 19 per cent lower than the previous month.

“The number of homes listed for sale on our MLS has been in decline in Greater Vancouver for eight of the last nine months, which results in upward pressure on home prices,” Russell added.

Adamache noted that the number of listings in Vancouver amounts to just over a three months’ supply at the current pace of sales, a far cry from the 10 months’ supply in the market in December of 2008.

© Copyright (c) The Vancouver Sun

First-time homebuyers help boost sales by substantial numbers

Province

The Lower Mainland’s real-estate market veered from bust to boom last year.

Year-over-year sales in the Real Estate Board of Greater Vancouver soared 172.2 per cent last month, the board said Tuesday.

The Fraser Valley Real Estate Board reported a similarly dramatic rise last month — 148 per cent from December 2008.

“In 12 months, we went from the worst January in 20 years to the third best December,” Fraser Valley board president Paul Penner said.

Penner and Greater Vancouver board president Scott Russell said low interest rates, a recovering economy and resurgent consumer confidence fuelled housing markets’ strength.

First-time homebuyers were a key factor, Penner said.

“An informal poll of our members in December revealed 40 per cent of home sales were by first-time buyers when it would normally be in the 25-per-cent range,” Penner said.

For the Greater Vancouver board, the benchmark price for detached homes rose 18.3 per cent to $766,816 between December 2009 and the same month a year earlier.

The Fraser Valley board’s benchmark price for detached homes rose 7.2 per cent to $497,732 in December from the same month a year earlier.

For the full year, overall sales in Greater Vancouver climbed 44.8 per cent, while those for the Fraser Valley increased 26 per cent.

The Fraser Valley board had 15-per-cent fewer new listings last year. This decrease in listings helped to put upward pressure on home prices, especially in the lower to mid-range part of the market, Penner said.

© Copyright (c) The Province