January « 2014 « Les Twarog Vancouver Real Estate and Condo Blog

Archive for January, 2014

Real estate boom continues in Canada’s largest cities

Monday, January 6th, 2014

Average Toronto prices up 5.2%, Vancouver up 2.1% and Calgary up 8.6%

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Repeated warnings of an overheated market failed to deter home buyers in Canada’s largest cities in 2013, with the number of Toronto home sales up two per cent over the previous year, Vancouver sales were up 14 per cent and Calgary sales rose 11 per cent.

Homes in the Greater Toronto Area continued their robust rise in price, up 5.2 per cent to an average price of $523,036 in December, compared to $497,130 in 2012, the Toronto Real Estate Board reports.

After a slow start to 2013, GTA housing sales picked up in the second half of the year. Total sales for 2013 were 87,111, compared to 85,496 transactions in 2012.

Even the condo market showed gains, with the average price in Toronto rising 7.6 per cent to $367,376 compared to December 2012, while detached homes prices rose by nearly 19 per cent to $864,351.

Although December sales tend to be slow, new listings were down almost four per cent in December, which helped fuel frantic bidding wars in some Toronto neighbourhoods close to the downtown and transit lines.

Pickup in Vancouver sales

For Metro Vancouver, total sales of detached, attached and apartment properties in 2013 reached 28,524, a 14 per cent increase from the 25,032 sales recorded in 2012.

But the number of residential properties listed for sale on the MLS declined 6.2 per cent in 2013 to 54,742, part of a trend in major cities as baby boomers hold onto their properties.

The average house price in the Greater Vancouver area was $603,400.

The price of a detached single family home rose 2.5 per cent to $927,000, while condo prices were up 1.8 per cent for the year to $367,800.

“It was a year of stability for the Greater Vancouver housing market,” said Sandra Wyant, Real Estate Board of Greater Vancouver president. “Balanced conditions allowed home prices in the region to remain steady, with just a modest increase over the last 12 months.”

Calgary sales powered by economy

In Calgary, 16,302 single family homes changed hands, an eight per cent increase, and 4,007 condos were sold, a 14 per cent rise.

The benchmark price for a single-family home was $472,200 in December, an 8.6 per cent increase from the previous year.

“Two consecutive years of elevated levels of net migration, combined with an improving job outlook and confidence surrounding long-term economic prospects, supported the demand growth,” said Ann-Marie Lurie, chief economist for the Calgary Real Estate Board.

How strong the housing market remains in 2014 depends on interest rates.

Finance Minister Jim Flaherty warned in an interview Sunday that Canada will face global pressure to raise rates in 2014 as the U.S. Federal Reserve pulls back on its stimulus efforts and the U.S. economy rebounds.

Toronto and Calgary prices to continue upward

The Toronto Real Estate Board predicts price growth will continue to exceed inflation in 2014, largely because demand for low-rise houses continues to far outstrip supply.

“The seller’s market conditions that drove price growth in the second half of 2013 will remain in place in many parts of the GTA,” said TREB senior manager of market analysis Jason Mercer.

“Some neighbourhoods, especially those characterized by low-rise house types like singles, semis and townhomes, will continue to have less than two months of inventory.”

In Calgary, both prices and numbers of sales are expected to rise in 2014, the Calgary real estate board said, but the increases are not likely to be as steep as in 2013.

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Vancouver condo market stays flat

Sunday, January 5th, 2014

FRANCES BULA
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Although Vancouver has a reputation as one of the most expensive cities in North America for housing, condo prices stayed flat or even dropped last year, according to recently released assessment numbers.

That follows several years of the same pattern, which means overall condo prices are now seven to eight per cent lower in inflation-adjusted dollars than they were at the recent peak of the condo market in 2009, says one analyst.

While that trend is not thrilling for pre-2009 buyers who had hoped to see big jumps in real-estate values, it’s relatively good news for new buyers trying to get into the market, says Cameron Muir, chief economist for the B.C. Real Estate Association.

“I don’t think there’s much speculation now,” he said. “It’s back to a market that is based on the fundamentals of population growth and income growth.”

Recently released figures from the B.C. Assessment Authority show that values of, for example, two-bedroom condos in Vancouver were down by almost $20,000 from the previous year in all parts of the city, whether it was on the west side (where a two-bedroom that was assessed at $599,000 in 2013 is now assessed at $571,000 for 2014), the east side ($383,000 now assessed at $364,000) or downtown.

Other parts of the region saw assessments for various types of condos drop by anywhere from a few hundred dollars to as much as $14,000.

One anomaly was Burnaby, where the assessment numbers showed a typical newer two-bedroom in north Burnaby up by $18,000 to $443,000 and a newer high-rise three-bedroom up by $40,000 to $477,000.

The overall trend in condo assessments, which are based on sale prices, is an important indicator for the real-estate market in a region where 95 per cent of all new housing is strata-owned condos or townhouses.

Analysts did note that the 2014 B.C. Assessment numbers looked at price changes between July of 2012 and July of 2013, which are a little deceptive.

Prices for all housing peaked in May of 2012 and then bottomed out in January, 2013, said Tsur Somerville, the director of the UBC Centre for Urban Economics and Real Estate.

“So you’re seeing the mini-downturn we had” reflected in the assessment numbers released in January, he said.

But the assessment numbers don’t account for the slight climb in real-estate prices in the second half of 2013.

In spite of the flat prices in condos, developers will not be slowing production, said Mr. Somerville and people in the industry.

“Builders don’t need price increases. They need activity. They care about the volume of purchases,” said Mr. Somerville.

Anne McMullin, who represents the province’s biggest builders’ group, said she doesn’t expect any slowdown.

In fact, she said, there’s likely going to be a slight increase in new projects, because people think the economy is going to improve slightly in the coming year.

That will, in turn, likely draw more people to the region.

“The last couple of years, there was a slight oversupply compared to population increase. We’re expecting that to reverse,” said Ms. McMullin, the executive director of the Urban Development Institute.

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Vancouver home sales surge 71 per cent in December

Friday, January 3rd, 2014

BRENT JANG
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Home sales soared 71 per cent in Greater Vancouver last month, though the gains are forecast to be more modest in 2014.

There were 1,953 properties that changed hands on the Multiple Listing Service in December, up sharply from 1,142 homes sold in December, 2012, the Real Estate Board of Greater Vancouver said Friday.

It marked the eighth consecutive month that the region has experienced a year-over-year gain in monthly sales, following a 19-month slump in volume before sales began picking up last May.

“It’s nice to be up that much, but December of 2012 was a pretty low number,” B.C. Real Estate Association chief economist Cameron Muir said in an interview. “What we’ve seen in 2013 is a bouncing back of demand towards more longer-term average levels.”

Sales last month were 8.1 per cent higher than the 10-year average of 1,807 for December. For the full 12 months in 2013, MLS sales for detached homes, condos and townhouses totalled 28,524, up 14 per cent from 25,032 sales in 2012.

Mr. Muir predicts that in 2014, Greater Vancouver’s annual sales volume will climb more than 8 per cent to 30,900, while prices rise almost 1 per cent.

Board president Sandra Wyant described 2013 as a year of stability, with modest price increases.

Benchmark index prices, which strip out the most expensive properties, were $603,400 last month for existing single-family detached homes, condos and townhouses – up 2.1 per cent from December, 2012. Benchmark prices for detached houses on Vancouver’s closely watched West Side climbed 5 per cent to more than $2.1-million, while prices rose 4.6 per cent to $867,200 on the East Side.

In the Fraser Valley, which includes the sprawling and less-expensive Vancouver suburb of Surrey, there were 890 homes that sold in December, up 34 per cent from the same month in 2012. Benchmark index prices were $422,100 for the three housing categories in December, up 0.4 per cent from the same month in 2012.

December’s single-family home index prices climbed 2 per cent in the Fraser Valley to $549,500. But prices for condos and townhouses in some districts remain soft amid new units hitting the market. In Mission, for instance, condo prices averaged $162,050 last year, off 0.4 per cent from 2012 and down 17.6 per cent from 2008. In Abbotsford, condo prices averaged $162,075, up 1.4 per cent over the past year but down 18 per cent since 2008.

Sales volume in the Fraser Valley totalled 13,663 last year for the three housing types, down 1.5 per cent from 2012. Prices for existing single-family detached homes averaged $615,852 last year, up 3 per cent from $597,608 in 2012. Average prices for townhouses slipped 0.7 per cent to $337,811 while condo prices fell 0.4 per cent to $219,196.

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Can the Government Seize My Home? and Other Property Assessment and Tax Questions

Wednesday, January 1st, 2014

Michelle Hopkins
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Many British Columbians dread the day the property assessment arrives in the mailbox. It means the municipal tax notice will soon follow, and if the assessment has gone up, the taxes probably will, too.

One long-time Prince George farmer saw his property assessment tax bill go from roughly $2,000 in 2011 to nearly $17,000 in 2013. He appealed the whopping increase and lost, though he did receive a small cut in his bill. He argued unsuccessfully that the properties sold for larger prices were located in areas zoned for industrial use, whereas his was still locked in the Agricultural Land Reserve.

“It’s a very complicated case, and although he lost, our department is still reviewing the issue,” says Brian Currie, manager for Property Assessment Services, Ministry of Community, Sport and Cultural Development.

This is one of nearly 20,000 complaints that Property Assessment Services receives each year. “From those, about 2,000 to 3,000 go to the appeal board,” says Currie. “Some do win, but it depends on the evidence put forward and how well prepared a home owner is.”

Here’s a quick FAQ on property assessment and taxation in BC.

How does my assessment relate to my property taxes?

Property taxation is done separately and independently by local taxing authorities such as municipalities. BC Assessment’s role is to prepare an annual roll of all property values.

“We then provide this roll to the taxing authorities for the purposes of preparing their budgets, tax rates, tax distribution and property tax notices,” says Tim Morrison, senior communications advisor, BC Assessment.

How is my assessment calculated?

Your property is assessed according to its value on July 1 of the previous year.

To establish the market value, BC Assessment looks at a number of components in the same way a prospective home buyer looks at the size, layout, shape, age, finish, quality, number of carports, garages, sun decks of a home. Location, views, available services and the neighbourhood itself also influence your property’s assessed value.

BC Assessment appraisers analyze all sales in your area and develop common comparisons and equivalent values. After reviewing similarities and differences between properties, they arrive at a specific assessed value for each property.

Will someone inspect my home?

An appraiser has the right to enter your home to conduct property inspections to ensure that the description and condition of a property is correct on your Property Assessment Notice, but that seldom happens.

“Technically an appraiser is allowed into your home, but if a property owner is very resistant they don’t push the point,” says Brian Currie. “BC Assessment very rarely goes into people’s homes. Perhaps if a property is under appeal or a real change has occurred on the property, such as major renovations or a new, expensive deck, they might conduct an inspection. Again, it’s very rare.”

It’s more likely that BC Assessment will use a street-level camera system, like Google Maps, to check out a property for any changes. However, there are many privacy issues they must adhere to.

What if I don’t agree with my assessment?

You have the right to appeal that assessment by a deadline of January 31. There are four basic steps in the assessment appeal process.

Contact BC Assessment to discuss the particulars of your assessment and learn how the current assessment was arrived at.
If you are not satisfied with what transpires in the conversation, then your next step is to file a complaint with the Property Assessment Review Panel by January 31. The information on filing a complaint is included on the Assessment Notice.
After you receive the panel’s decision and you still aren’t satisfied, an appeal can be made to the Property Assessment Appeal Board. The board will facilitate discussions between you, the property owner, and BC Assessment. The Board can then proceed with more formal written submissions or in some cases with an in-person hearing.“The Panel and the Board processes depend on evidence so it is necessary that the property owner prepare for either process,” says Currie.
If you are still dissatisfied with the Board decision, an appeal can be made to the BC Supreme Court on matters of law only. Ultimately appeals could be made all the way up to the Supreme Court of Canada; however cases rarely reach this stage.

Most residential appeals are settled within the year.

What if I can’t pay my property tax?

“If a property owner has any issues with property taxes, that is a matter strictly between the property owner and the taxing authority (i.e., municipality),” says Tim Morrison. “In addition to home owner grants, the provincial government has some property tax deferment programs for those who are having a hard time paying.”

According to the BC government’s website, once you’ve received your property tax notice and you don’t have the funds to pay it, you can submit an application to defer your property taxes. If your application is approved, the provincial government will pay your current year’s unpaid property taxes on your behalf. You can only defer the portion of your residential (class 1) or residential and farm (class 1 and 9) property taxes after the home owner grant is deducted. If you qualify for the home owner grant, you must apply for it annually before the property tax deadline.

“The government holds a lien on your property for the taxes they pay on your behalf and that lien stays on your property until the full balance owing has been paid,” adds Currie.

Can the government seize my home?

The short answer is, yes.

“If you don’t pay for two years, the city has the right to sell your home for back taxes due,” says Currie. “However, if your home sells, the title doesn’t change until the end of the year. That gives the home owner one more opportunity to pay the back taxes, plus a few costs incurred to sell it, and get their home back.

“Typically, every October local newspapers will advertise a list of foreclosures (due to non-payment of property taxes) up for sale.”

This is done at a municipal level and the same set of rules applies to all cities.

Bargains? Possibly, but Currie says, “If a bank has a mortgage on the property, they usually will buy the home and sell it themselves to recoup for the outstanding mortgage amount.”