Tsawwassen, Fraser Valley, Surrey seeing record increases over the same period last year

The Province

The suburbs are hot. New sales figures show the heat of the housing market isn’t confined within Vancouver’s city limits, with suburban areas showing the largest increases in average home prices over the last year, and some regions soaring by more than 45 per cent.

All 20 regions tracked by the Real Estate Board of Greater Vancouver (REBGV) have seen significant price increases over the last year, according to data released Thursday, but nowhere has the surge been as sharp as in Tsawwassen. The benchmark price of a detached home in Tsawwassen is $1,257,100, REBGV reported, an increase of 48.2 per cent over the last year.

Tsawwassen is “absolutely smoking,” said Mark Wiens, a realtor with Sutton Group West Coast. “Values are skyrocketing now, activity is skyrocketing now.”

A few years ago, Wiens wouldn’t have thought of Tsawwassen, a community of about 21,000 in the southwestern corner of Delta, as a place for multimillion-dollar condos. But last month, Wiens listed a condo overlooking Tsawwassen Springs Golf Course for $3,968,000, which he expects to sell soon. The penthouse unit, described by Wiens as “the highest end of the highest end,” includes 2,757 square feet of patio space with a private putting green.

Wiens, who has listings around the Lower Mainland, said he’s seen a surge in buyer interest in Tsawwassen, especially in the last six months.

“As we start seeing some of the real estate markets slow down a little bit, in Tsawwassen there’s no sign of any slow down at all,” Wiens said. “A lot of it is from people who are so-called ‘cashing out’ in Vancouver. People are saying, ‘Hey look, I just sold my place in Vancouver and I have two months to buy a place. I’ve made this windfall, and therefore if I have to pay a little bit extra — which for someone in Tsawwassen who’s selling, it’s a large amount — it doesn’t really matter.’ ”

Farther east, Fraser Valley municipalities have been hot over the last year, with average house prices climbing faster than Vancouver or the North Shore.

The Fraser Valley Real Estate Board reported Thursday that the benchmark price of a Fraser Valley single-family detached home in May was $834,200, an increase of 38.3 per cent compared with May 2015 when it was $603,100. Sales volume increased 47.8 per cent over the same time.

Another report released Thursday from the B.C. Real Estate Association notes: “Current sales activity is at a record level, with the Fraser Valley and Chilliwack mirroring Vancouver’s breakneck pace of transactions.”

Gary Morris, managing broker with HomeLife Benchmark Realty, said “it’s been an incredible year” for his South Surrey office.

“It’s a rippling effect, it starts in Vancouver and it gradually moves out. What we’re finding now is people are even being priced out of South Surrey, so anybody looking for a single-family house in South Surrey, they have to pretty much start at a million dollars. So they move to Langley now. And now Langley is getting almost priced-out,” Morris said. “That’s what we’re finding now: people are waiting in lineups to buy condominiums in Langley — I mean, who ever heard of that?”

But the record-setting pace of property sales and price increases in Metro Vancouver could slow by next year, according to the BCREA forecast. The BCREA report predicts the average price of a detached home in Greater Vancouver will soar 30 per cent over the 2016 calendar year, but forecasts a hike of just 4.8 per cent in 2017. Similarly, the BCREA predicts the average price of detached homes in the Fraser Valley will surge 22.9 per cent in 2016, slowing to a 5.2-per-cent increase for 2017.

© Copyright (c) The Province

Jeff Lee
The Province

For more than a dozen years, Bob Rennie, Vancouver’s real estate guru, has annually taken the temperature of the city’s housing market and offered a numbers-numbing report to the Urban Development Institute.

This year he’s calling it quits, but not before he delivered a bare-all speech Thursday as Vancouver continues to wither under white hot sales that have made “housing affordability” two empty words.

Under his mantra of “it’s seriously time to change the narrative,” here’s five things Rennie said at the lunch.

1. Forget thinking homes in Vancouver can be affordable any more. Last year only 26 houses sold in Vancouver went for under $750,000, compared to 10,325 in Metro Vancouver. This year, 26 homes in East Vancouver sold for under $1 million, and only three on the west side sold for under $1.7 million. “The City of Vancouver should get out of the affordable ownership business.”
2. If not there, then where? It’s in the burbs, folks. “You know where the affordability is? It’s in our region. It’s in Burnaby, at 50 per cent of Vancouver prices, and it’s in Coquitlam, at 40 per cent of Vancouver prices, and it’s in Surrey, at 30 to 35 per cent of Vancouver prices.” Oh, and by the way, build more transit-oriented developments. “Any density solution in isolation of a transit solution won’t solve our problem.”
3. Vancouver neighbourhood groups are too white, too old and too resistant. “Neighbourhood groups seem to have lost their way and are prepared to sacrifice future generations by choking off supply and hurting affordability,” Rennie said. “The majority of participants in our planning processes are white male homeowners over the age of 55. Maybe it’s time to bring in some new stakeholders into the conversation. Neighbourhood groups require more diversity.”
4. Don’t blame China, and don’t tax foreign ownership. But a speculation tax? That’s OK. “Canada buys $6 billion a year in British Columbia exports. Are we going to tamper with those jobs and our economy? … A foreign ownership tax of 10 per cent on a $5-million home will not stop a sale or create affordability … It will only cause racially charged conversations to go beyond where they are now.” Rennie says he still believes a speculation tax aimed at buyers who flip a home would cool the market at the lower end.
5. There’s a glut of money heading for the market. With $197 billion in mortgage-free properties held by people over 55 ($66 billion of that with people over 75), there’s a lot of money available to help their children buy homes. But there’s no market or supply, so the result? Surging prices as people bid up those scarce listings.

© Copyright (c) The Province

Justin da Rosa
Canadian Real Estate Wealth

Worries around national average debt numbers are overblown, according to one real estate veteran who argues the stats could be inflated by mortgages held by foreigners.

“The national debt carried by Canadian consumers and the fact that Canada allows foreigners to borrow money for homes and that’s put into our debt [could have a major impact on debt levels],” Derek Austin, an agent with Century 21, told Canadian Real Estate Wealth. “Even 10 foreign borrowers taking out $10 million in mortgages each would throw the numbers out of whack.”

It’s an interesting take on the foreign investment trend and increased debt levels, which have both increasingly made headlines over the past year.

The average national household debt increased 5.1% in April, according to Statistics Canada. Mortgage debt showed the largest growth — up 6.2%.

And that trend is expected to continue, according to Doug Porter, chief economist for BMO Capital Markets.

“It’s tough to see anything turning this canoe around, as home prices continue to soar in Toronto and Vancouver, while there’s little prospect of a big bounce in personal incomes,” he told the Financial Post.

The impact foreign-owned mortgages have on national debt stats is unknown. Many may argue it has little effect, noting that many foreign buyers pay cash.

However, Austin isn’t so sure.

“The Royal Bank of Canada took away its limits on foreign mortgages,” he said. “Why would they do that if foreigners weren’t taking out mortgages?”

RBC announced in late 2015 that it will no longer limit mortgage size for immigrant buyers in Vancouver.

“We’re seeing a lot of affluent newcomers looking to buy high-purchase price homes,” Christine Shisler, RBC’s director of multicultural markets, told Reuters at the time. “Now we can actually service any mortgage amount.”

Copyright © 2016 Key Media Pty Ltd

Ephraim Vecina
REP

The Competition Tribunal’s recent ruling, which would compel professionals in the Toronto Real Estate Board’s jurisdiction to ensure public access to housing sales information, could actually lead to more informed purchases and less headaches on the realtors’ part, according to various observers.

As reported by Nicole Bogart of Global News, granting would-be buyers unrestricted access to MLS data would allow all parties involved in the prospective sale to avoid the red-hot bidding wars that characterize the country’s most in-demand housing markets—namely, Vancouver and Toronto.

“You could inform the buyer that based on prior data the seller has listed the home at a lower price point, based on what other homes in the area have sold for,” RedPin.com co-founder Rokham Fard said. “Then you wouldn’t get mentally drained from going into all of these bidding wars.”

The Toronto-based Spring Realty has taken the first steps in this direction by starting to develop an database that would use previous sales data to forecast which homes are most likely to sell.

“This is really the ‘Googlization’ of the real estate industry in Canada,” Spring Realty owner and broker Ara Mamourian said. “What we want to do is stop wasting people’s time. We want to narrow down on the number of people with a $700,000 budget looking at properties that sell for over $800,000.”

The Tribunal verdict held that the TREB violated competition rules by preventing access to property sales data, with the Board countering that making sales data widely accessible is a violation of clients’ privacy.

Copyright © 2016 Key Media Pty Ltd

Ephraim Vecina
Canadian Real Estate Wealth

A combination of generous exchange rates and relative stability has made Canadian real estate markets irresistible to Chinese investors, according to a long-time industry analyst.

In a NEWS 1130 report, Charlie Gillis of Maclean’s Magazine noted that in stark contrast to the situation back home, Chinese buyers are looking at Canada’s most active markets—namely Vancouver and Toronto—as bedrocks of long-term stability that make them safe investments.

“I think that it has more to do with what is going on in Mainland China and there is volatility all kinds of markets there, not least their real estate market,” Gillis explained. “[The] city of Shenzhen, which is one of their leading cities, saw a 60 per cent jump last year in home prices alone.”

Gillis pointed at the recent growth of foreign investment in Toronto and other Canadian locales as an indicator of continued trust in the country’s strength, insofar as real estate is concerned.

“In fact there is more interest on the part of people in China in terms of just searching properties in Toronto than there is in Vancouver. Also, they are searching other places; Ottawa comes up number four on that list,” Gillis said.

Latest National Bank figures put the proportion of Chinese residential property buyers at 33 per cent in the Lower Mainland area alone.

Over the past few years, various quarters have been calling for tighter federal and provincial regulation of the influx of overseas capital in Canada’s housing markets, alleging that the increased prominence of foreign investors is driving the out-of-control home price growth in Vancouver and Toronto.

Copyright © 2016 Key Media Pty Ltd

Residential sales across the province predicted to climb 12.3 per cent this year; prices to rise 20.4 per cent this year and 3.4 per cent in 2017, says association

Joannah Connolly
Other

Sales of homes across BC are forecast to reach a record 115,200 units this year, up 12.3 per cent from 2015, before pulling back by more than 8 per cent next year, according to a market analysis from the British Columbia Real Estate Association (BCREA) published June 2.

The association’s second-quarter report said, “While the frenetic pace of consumer demand this spring is unlikely to be sustained over the longer term, BC’s strong-performing economy is expected to backstop the market and keep demand for housing at an above-average level through 2017.”

Average prices across the province are predicted to rise, jumping 20.4 per cent in 2016 to $766,600 and then increasing at a much slower 3.4 per cent to $792,800 in 2017.

“Robust employment growth and a marked increase in migration from other provinces is buoying consumer confidence and housing demand in most regions of the province,” said Cameron Muir, BCREA’s chief economist. “Record housing demand has depleted inventories in many urban areas, and the resulting imbalance between supply and demand has pushed home prices considerably higher.”

The report said that new housing production has “ramped up” in order to meet the blistering demand for homes, suggesting that the new inventory will help bring down the rate of price growth when it comes on stream in 2017.

Housing starts in BC are forecast to climb 20 per cent to 37,800 units in 2016, with 34,200 new units predicted for 2017.

However, the report added that Metro Vancouver in particular may take some time to recover from its inventory shortage.

“The lengthy time lag between a housing start and its completion means that markets experiencing the most severe supply droughts, like Metro Vancouver, will likely remain in sellers’ market territory for the foreseeable future,” wrote the authors.

The BCREA’s report comes a couple of weeks after the Canada Mortgage and Housing Corporation’s forecast for Metro Vancouver’s market over the next two years, which predicted a very similar trend of home sales moderating next year as prices continued to rise at a slowing rate.

To see the full BCREA report, including forecasts for regional centres such as Vancouver Island, the Okanagan and Northern BC, click here. 

© 2016 Real Estate Weekly

BCREA
Other

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Residential real estate sales rise 17.6 per cent year-over-year, as demand continues to skyrocket, reports board

Joannah Connolly
REW

Last month the region’s residential real estate sales were 35.3 per cent above the 10-year sales average for May, but 0.3 per cent lower than April’s figures and again falling shy of March 2016’s all-time high.

The benchmark price of a home (composite property types) across all of Greater Vancouver set another new record, at $889,100 – a 29.7 per cent rise over May 2015. However, this number masks massive variations in typical prices between cities and neighbourhoods.

However, there was some good news in terms on inventory. The number of homes newly listed on the Greater Vancouver market increased, by 11.5 per cent compared with May 2015, to 6,289, which was also slightly higher than April 2016. This increase in new listings meant that total active listings at the end of May were higher than April’s active listings, although it was still down more than a third year over year, as demand continued to skyrocket.

Sales and Listings

May’s residential real estate sales totalled 4,769, a rise of 17.3 per cent year over year, but 0.3 per cent lower than April when 4,781 units were sold across the region. That April figure was a drop of 7.6 cent compared with March 2016, when an all-time high of 5,173 homes were sold in Greater Vancouver.

Broken down by property type, 1,865 single-family homes exchanged hands in May, which is a rise of 8.2 per cent from the 1,723 sales recorded in April 2015, but a 5.8 per cent drop compared with April’s 1,979 detached house sales.

Unlike in April, townhouse and other attached home transactions also increased year over year in May, totalling 754 sales. This was a lift of 2.9 per cent over the 733 units in May 2015, and a jump of 9.9 per cent compared with April’s 695 townhome sales.

Condo-apartment unit sales continued to see blistering annual increases, as 2,150 units exchanged hands in May 2016, a leap of 34.4 per cent compared with the 1,600 sales in May 2015. This was also a two per cent increase over April 2016’s figure or 2,107 sales.

Property inventory expanded somewhat in May, with new listings for all home types in Metro Vancouver up 11.5 per cent to 6,289, compared with the 5,641 properties listed in May 2015. This was a rise of 2.6 per cent compared with the 6,127 new listings in April 2016.

The improvement meant that total active listings as of the end of May were 7,726, up 2.3 per cent compared with April’s active listings, although the figure was still down 37.3 per cent year over year.

The sales-to-active listings ratio in Greater Vancouver as of May 2016 stands at 61.7 per cent. This is now the 15th consecutive month of the sales-to-active-listings ratio being above 30 per cent in Metro Vancouver – the percentage that indicates a strong seller’s market.

“Home sellers are becoming more active in recent months, although that activity is being outpaced by home buyer demand today,” said Dan Morrison, REBGV president.

Benchmark Prices

The combined residential property type benchmark price in Metro Vancouver raised the bar again in May, at $889,100 – a year-over-year rise of 29.7 per cent.

The region’s typical detached home is now priced at $1,513,800, a hike of 36.9 per cent compared with the same month last year, and yet again the sharpest price rise of all the home types. This was a rise of nearly 8 per cent since just the previous month. Again, these figures mask wide variation between areas, with Vancouver West’s family homes selling for a typical $3.4 million, and prices going down to a typical $445,000 on the Sunshine Coast.

Townhome or other attached unit benchmark prices in Greater Vancouver increased 24.9 per cent over May 2015 to $632,400, up 3.9 per cent compared with April.

Condo-apartment benchmark prices rose 22.3 per cent from May 2015 to $485,000. This property type increased in price by 2.1 per cent compared with April. West Vancouver posted the highest condo prices in May at $851,800, with condos in Maple Ridge typically going for $187,100.

Home prices vary widely throughout the REBGV region. To get a good idea of home prices in a specific location, check the detailed MLS® Home Price Index in the REBGV full statistics package. 

© 2016 Real Estate Weekly

GARY MASON, Dan Morrison
The Vancouver Sun

If you needed any further evidence of how badly broken and dysfunctional the real estate industry is in B.C., look no further than the case of Keith Roy.

Until last month, Mr. Roy was a member of the professional standards committee of the Real Estate Board of Greater Vancouver. He has said he was dumped because he pressed for greater accountability. One board member was upset enough over it to quit in protest. Mr. Roy told The Globe and Mail that it was divulged to him a board member said he “had it coming” because of his views.

Given the rogue nature of the industry in this province, I’m not surprised someone calling for more transparency and professionalism would be considered a threat. In a sector that often seems unregulated, it has never been easier to make gobs of cash – legally or illegally. Few want to jeopardize the dynamics that are allowing many to get filthy rich very quickly.

You might be wondering what radical suggestions Mr. Roy was proposing the board adopt. Glad you asked. In a letter to its president, Dan Morrison, the long-time real estate agent laid out his concerns. Among them: He said realtors who practice in Metro Vancouver should be proficient in English to serve their clients better. (Many new realtors speak Mandarin only.) He suggested the board end its relentless pursuit of new members and instead toughen standards and “start to focus on bringing in members who grow to become trusted advisors and consumer protection advocates.”

In his correspondence, Mr. Roy also advocated making public the board’s decisions on professional conduct – currently everything is conducted in secret. Consequently, people have no idea if the realtor they have just hired has been fined several times for infractions. (This scenario is not uncommon, according to Mr. Roy). He also suggested making it safe for whistle-blowers inside the business to express concerns. Right now, anyone who makes an internal complaint is subject to being investigated himself.

He made other recommendations of a similar commonsense variety, the kind of proposals that would be considered standard practice in many other lines of work. But that is not how the real estate industry in this province operates. At least, certainly not the Real Estate Board of Greater Vancouver, an old boys’ club if there ever was one.

Mr. Morrison told The Globe and Mail that Mr. Roy’s dismissal from the board’s professional standards committee had nothing to do with his advocacy for more openness and stricter standards. No, rather it was because Mr. Roy worked for Re/Max and too many people from that firm were on the board. Strictly a numbers game. Nothing more.

What a complete and utter sham this whole industry is. We have three separate real estate associations in the province, all over-lapping. We have real estate boards and the provincial real estate council, all with the power to discipline real estate agents. In practice, all are lame, ineffective overseers of an industry that has failed repeatedly to put the consumer first.

At the heart of the problem are real estate boards (B.C. has 11) that derive their power from the local MLS systems, which they control.

Why boards are allowed to control these listings fails me. The Competition Bureau of Canada takes a similar view. The bureau argues that realtor boards limit competition and artificially keep costs high by preventing the public from having access to data on the Multiple Listing Service, which is used for the preponderance of real estate transactions in this country.

In fact, the country’s competition tribunal (an appeal body) recently upheld the bureau’s position on this matter in an ongoing dispute with the Toronto Real Estate board. The board had argued it owned the MLS data and needed to restrict access to it for privacy reasons. It is unclear as yet just what the ramifications of the tribunal’s decision could be nationally. Let’s hope it ends the monopoly boards currently enjoy over this information.

Meantime in B.C., we await the results of an advisory group headed by Carolyn Rogers, the province’s superintendent of real estate, which is looking at bringing regulatory change to the industry. Ms. Rogers is making the right sounds about what she would like to see done, including having the real estate council, not the boards, handle complaints from the public.

Ultimately, the provincial government will make the final call. And given all the donations the industry has given to the governing Liberals, I would think it has to be feeling pretty good about the future.

Copyright 2016 The Globe and Mail Inc.

President Dan Morrison issued the following statement regarding an article in today’s Globe and Mail:

Gary Mason assumes recent allegations in the media about the Real Estate Board of Greater Vancouver are true. They are not. He failed to ask us for our perspective.

The Real Estate Board of Greater Vancouver is a not-for-profit professional association that represents over 12,800 realtors in the region. We have a long history of advocating in the interest of home owners, buyers and sellers. We support stronger public protections and measures to improve affordability. We help our members serve the real estate needs of their communities. And we enforce a code of ethics and standards of business practices.

We understand that one of our members contacted the media to express concern that he was not re-appointed to our professional conduct committee, which oversees enforcement of our code of ethics and business practices. The same member believes we made this decision because he’s been calling for reforms. The facts say otherwise.

Our organization makes numerous volunteer committee appointments each year based on qualifications, diversity, office composition, performance, and experience. We followed our normal rigorous process in the case at hand. When our member learned about the decision not to re-appoint him, he called several people on our Board of Directors to have it overturned. He also threatened to go to the media. We took great care to review the situation and chose to support the original decision. 

The public is best served by fair and even-handed reporting of issues. Having not had the opportunity to give our perspective, we offer it here. For Mr. Mason to characterize the values of our association without speaking with us demonstrates bias.

Dan Morrison President, REBGV

Doug Alexander
Other

Hot housing markets in Vancouver and Toronto prompted Bank of Nova Scotia to ease off on mortgage lending in those cities, Chief Executive Officer Brian Porter said.

“We’re a little concerned about housing prices in the greater Vancouver area and Toronto,” Porter, 58, said Tuesday in an interview on Bloomberg TV Canada. “We just took our foot off the gas the last couple quarters in terms of mortgage growth for the reasons I cited, in terms of Vancouver and Toronto.”

Nationwide home sales in April jumped 10.3 percent from a year earlier, the most activity for that month and the second-highest level ever, according to the Canadian Real Estate Association. In Vancouver, prices rallied 25 percent in the month to an average of C$844,800 ($643,000) and sales climbed 15 percent. Toronto prices jumped 13 percent to C$614,700 and sales rose 7 percent, the association said.

Scotiabank, Canada’s third-largest lender by assets, had less growth in mortgage loans in the quarter, Porter said. Still, the quality of the loans and trends remain strong and the bank is comfortable with its position, he said.

“Generally, Canadians have a strong ability to self regulate and they’ve demonstrated that before,” Porter said.

Copyright © 2016 Key Media Pty Ltd