Sales activity down month-over-month in 60 per cent of Canadian markets ? an anticipated August lull for many, with the Lower Mainland a national anomaly

Joannah Connolly
REW

The number of home sales in Canada fell by 3.1 per cent compared with the month before, which was the largest monthly drop since December 2014, according to statistics released September 15 by the Canadian Real Estate Association (CREA).

This was led by a steep decline in Greater Vancouver following the introduction of a new property transfer tax on homes purchased by foreign buyers, said the association. CREA pointed out that August marked the sixth consecutive monthly decline for home sales in the Lower Mainland, as transactions in Greater Vancouver and the Fraser Valley had already been falling from their peak of spring 2016.

Much of the monthly declines in national sales in recent months reflect slowing activity in the Lower Mainland, added the report.

However, when home transactions are examined year-over-year, sales activity (not seasonally adjusted) was up 10.2 per cent across the country compared with August 2015. Sales were up from year-ago levels in about three-quarters of all Canadian markets, led by Greater Toronto. Greater Vancouver was not one of those markets, however, posting the largest year-over-year sales decline.

“The sudden introduction of the new property transfer tax on homes purchased by foreign buyers in Metro Vancouver has created a cloud of uncertainty among home buyers and sellers,” said Cliff Iverson, CREA president.

“That the tax applies to sales that had not yet closed shows how the details for a new tax policy can unnecessarily destabilize housing markets. More broadly, it speaks to the importance of evidence-based decision making to ensure that unintended consequences and collateral damage are minimized when new policies or tighter regulations affecting housing markets are being actively considered.”

Gregory Klump, CREA’s chief economist, pointed out, “Single family homes sales were already cooling before the new land transfer tax on foreign home buyers in Metro Vancouver came into effect. The surprise announcement of the new tax caused sales to brake hard.”

The national average price for homes sold in August 2016 was $456,722, up 5.4 per cent compared with the same month last year, which is the smallest annual increase since January 2015. CREA said that the national average price “continues to be pulled upward by sales activity in Greater Vancouver and Greater Toronto, which remain two of Canada’s tightest, most active and expensive housing markets.”

The report said that if Greater Vancouver and Greater Toronto are excluded from calculations, the average price is reduced by nearly $100,000 to $357,033.

However, the report added, “Greater Vancouver’s share of national sales activity has diminished, causing it to have less upward influence on the national average price.”

The slowing activity in the Lower Mainland was a driver in the CREA’s updated housing forecast for 2016, which was also issued September 15.

Home sales across Canada are forecast to rise by 6.0 per cent year over year to a record 535,900 units in 2016, which is just slightly down from CREA’s previously predicted sales increase of 6.1 per cent to 536,400 units this year. Strong gains in Ontario are expected to be offset by a slight decline in anticipated whole-year activity for BC.

Despite this, among the larger provinces, British Columbia is still forecast to post the largest annual increase in activity this year (up 14.6 per cent), even though “much of that strength is in the rearview mirror at this point,” according to the CREA.

© 2016 Real Estate Weekly

BURNABY: Planned Kings Crossing development caters to cooks, no matter how many are in the kitchen

Mary Frances Hill
The Province

Kings Crossing

Project size: 779 homes in three concrete construction towers, 28 — 36 storeys

Where: 7350 Edmonds St., Burnaby

Residence sizes and prices: 1 — 3 bed, 543 — 1,407 sq. ft., from $412,900

Developer and builder: Cressey Development Group

Sales centre: 7350 Kingsway (& 19th Ave.), Burnaby

Hours: noon — 5  p.m., Sat — Thurs

In any given household, the kitchen is usually more than a place to simply prepare meals. When there’s a welcoming layout, it’s also often a social space — the true heart of the home.
At Kings Crossing, Cressey Development’s planned Burnaby community, the developer and Insight Design took the renowned Cressey kitchen — noteworthy for its sleek look, integrated appliances and impressive storage — and expanded its possibilities to appeal to a range of buyers.

The show homes offer a choice of kitchen layouts: one to appeal to a single cook, the other with a layout that gives a comfortable berth to two people who wish to use the space at the same time, with free range of movement and comfort.

“We design each kitchen with careful consideration of the flow between working, cooking and storage zones,” says Emma Carter, who, with designer Linda Gallo, speaks on behalf of Insight Design on Kings Crossing.

“Once functionality and practicality have been addressed, we refine the details for a beautiful finished product.”
Indeed, function blends seamlessly with form at Kings Crossing in the kitchen and elsewhere: the designers leaned toward soft contrasts in kitchen finishes, combining wood and painted cabinetry.

In both show suites, the designers show a similar talent for combining practicality with personality.
To add character to the living room, Insight Design brought together light grey tones in the seating, artwork and rug to offset the floor’s dark shade. The contrast gives the room a warm, masculine vibe.
“We wanted to create visual interest and give the space character by combining light and dark elements,” adds Carter.

“The cooler grey tones work really well with the warmth of the walnut-looking floors.”

In the one-bedroom display suite, they turned a niche between the dining and living areas into a “functional work of art,” according to Carter. The niche shows the ways even design in limited spaces can be as functional as it is attractive.

“To optimize personal storage, we combined different mounting devices of one colour and strategically organized them in such a way to create graphic pattern and balance.”
Insight Design’s work in both these suites provide great details that any homeowner can mimic. For instance, in narrower rooms, mirrors and polished materials can be used to reflect light and open up a space, while built-in millwork helps use every inch of space for storage. Carter advises homeowners to be fearless about mixing up styles.

An attractive dining area with chairs that contrast with the table is an object lesson for exploring beyond the usual matching table-and-chairs dinette set.
“We always combine different pieces together as it creates a more interesting and collected look, and gives the space more personality.”

© 2016 Postmedia Network Inc.

 

Nationally home sales have declined for the 4th month

Justin da Rosa
Canadian Real Estate Wealth

National home sales have declined for the fourth straight month, according to the Canadian Real Estate Association.
On a national level, sales fell 3.1% month-over-month in August. However, they were up 10.2% year-over-year.

Sales were down in 60% of the country’s markets, with the Greater Vancouver Area showing the most precipitous decline.

“The sudden introduction of the new property transfer tax on homes purchased by foreign buyers in Metro Vancouver has created a cloud of uncertainty among home buyers and sellers,” CREA President Cliff Iverson said. “That the tax applies to sales that had not yet closed shows how the details for a new tax policy can unnecessarily destabilize housing markets. More broadly, it speaks to the importance of evidence-based decision making to ensure that unintended consequences and collateral damage are minimized when new policies or tighter regulations affecting housing markets are being actively considered.”

Last month was the sixth month in a row sales declined in the Lower Mainland in B.C.

Again, CREA blames the newly-enacted foreign sales tax.

“Single family homes sales were already cooling before the new land transfer tax on foreign home buyers in Metro Vancouver came into effect,” Gregory Klump, CREA’s chief economist, said. “The surprise announcement of the new tax caused sales to brake hard.”

On the price side, August marked the seventh consecutive month of year-over-year price growth.

“Two-storey single family home prices posted a 16.3 percent year-over-year increase in August 2016, as did townhouse/row units,” CREA said in the release. “One-storey single family homes followed close behind with a y-o-y increase of 14.4 percent, while apartment unit prices rose 11.7 percent y-o-y.”

Copyright © 2016 Key Media Pty Ltd

Home sales in Vancouver that dropped 18% after the foreign-buyer tax was brought in are weighing down the national index

The Vancouver Sun

OTTAWA — The Canadian Real Estate Association says national home sales dropped 3.1 per cent in August from July for the fourth straight monthly decline, as some markets have started to slow dramatically.

The association said Thursday that much of the downward movement reflects the slowing activity in British Columbia’s Lower Mainland, where a foreign-buyer tax introduced last month contributed to an 18.6-per-cent drop in activity from a month earlier.

The monthly drop helped lead to a 24.5-per-cent year-over-year activity decline in Vancouver, and further split it from the trend in Toronto — where activity climbed two per cent in the month and is up 22.7 per cent from a year earlier.

“Vancouver has gone cold, while Toronto is heating up to a rolling boil,” said Robert Kavcic of BMO Capital Markets in an analyst note.

The swing in activity led CREA to also revise down expected B.C. sales because Lower Mainland activity has “braked more abruptly than anticipated,” while increasing the forecast in Ontario where sales “have yet to show signs of cooling.”

The association now expects B.C. to see a 14.6-per-cent increase in activity this year, down from the 20 per cent it forecast in June. Ontario activity is expected to increase 7.1 per cent, despite constrained supply, up from an expected 5.2 per cent.

The swings in the two markets largely balanced out the national figures, which are still expected to see sales increase by about six per cent this year to 535,900 units for a record high if population growth isn’t factored in.

That annual increase is anticipated despite recent numbers trending down, with national sales activity now 6.9 per cent below the record set in April. Compared to a year earlier, activity was still up 10.2 per cent.

Housing prices were up from a year ago, with the average price of a home sold in August at $456,722, up 5.4 per cent from a year earlier. However, CREA said it was the smallest increase since January 2015.

Excluding Greater Vancouver and Greater Toronto, the average price of a home sold in August was $357,033.

CREA’s MLS home price index was up 14.7 per cent year over year as Vancouver and Toronto also pulled up the average.

With the decline in August, national sales have dropped 6.9 per cent below the record set in April, but were still 10.2 per cent above August 2015.

Along with lower sales, the number of newly listed homes dropped by 2.7 per cent in August compared with July, to keep the sales-to-new-listings ratio at what’s considered a sellers market at about 62 per cent.

© 2016 Postmedia Network Inc.

Gregor Robertson reveals more details of proposed new vacant home tax, which is to go before council next week

Joannah Connolly
REW

Further details of the propsed new vacant home tax for empty homes in Vancouver were revealed by Mayor Gregor Robertson and Kathleen Llewellyn-Thomas, general manager of community services, at a press conference September 14.

The new tax is intended to motivate owners of empty homes to release their properties into the rental pool – thereby improving Vancouver’s ultra-low rental supply – rather than having to pay the tax.

It is slated to begin in the 2017 tax year, with the first payments to be made in 2018, and will rely on a self-declaration system – “just like income tax,” said Llewellyn-Thomas. Homeowners will be sent a form to complete each year, and will have to declare whether the home is their primary residence, and if not, whether it is rented out – and if not, whether they qualify for an exemption.

The payable amount of the tax is yet to be decided, but Llewellyn-Thomas said it could be as low as 0.5 per cent and as high as two per cent of the assessed value of the home, payable on an annual basis. Robertson said, “Some people who can afford [the tax] and don’t want to rent out their homes, they’re going to make a generous contribution towards affordable housing in the city.”

Robertson added that most Vancouverites will not have to pay the tax, which is specifically targeting owners of homes that are empty 12 months a year and being used as holding properties. Snowbirds or those who are away several months of the year will be exempt, he said. However, when asked whether somebody who is using their Vancouver home for just one month a year would be exempt, Llewellyn-Thomas was unable to give a clear answer, saying only that the City would hope the property would be rented out as much as possible.

Auditing of the self-declaration process will be carried out by a new office at City Hall, with additional staffing, and will be carried out on a random and complaints-driven basis, said Llewellyn-Thomas. She added, “We certainly expect the cost of this administration to be below the minimum of $2 million a year that we expect to raise from the tax.”

The Mayor’s office is set to issue a report on the proposal today, which will go before council next week and then be subject to a “robust” public consultation process, according to Llewellyn-Thomas.

Part of the consultation process will be working out more complex exemption scenarios, such as those in which homes are left empty year-round for a valid reason and therefore should be exempt from the tax. This could be because the home is awaiting development permits or is in probate, or the owner is in care, for example. The Mayor’s office expects that a wider range of scenarios will emerge from the consultation.

Mayor Robertson told the media conference, “We’re going to use every tool that we have to make more rental housing available, whether we have to create it or with incentives to developers… secondary suites and laneway homes… We have to go further, though, we have to look at AirBnB and short-term rentals that are taking away a lot of long-term rental opportunities. So we’re using all of our tools, and they’re not just symbolic – these are tangible tools that we believe can shift more homes into rental.”

© 2016 Real Estate Weekly

Plan is to put tax in place by 2017 and tax 10,800 homes

Glen Korstrom
Vancouver Courier

Vancouver’s long discussed tax on empty homes is inching closer to reality.

Mayor Gregor Robertson held a Sept. 14 press conference to discuss the tax, which Vancouver city council is expected to discuss and enact next week.

The tax would be on empty and “underutilized” homes and be in place by the end of the year.

The tax rate is yet to be determined although staff earlier this year proposed a rate between 0.5 per cent and two per cent of assessed property value per year.

The proposed tax targets about 10,800 empty Vancouver homes that are known to the city and is intended to act as an incentive for owners to rent out their secondary and investment properties.

City staff estimate that if the tax is collected on five per cent of those homes, it could raise $2 million in annual revenue, which Robertson wants to invest in affordable housing initiatives. 
The city’s rental vacancy rate has been hovering slightly above zero.

“Vancouver’s dangerously low vacancy rate is putting our renters in crisis,” Robertson said.

“Our proposed empty homes tax is first and foremost about bringing rental homes back into the market. We need to ensure the best use of all our housing. Empty and underutilized investment properties are holding back badly needed homes for thousands of renters who are struggling to find a secure and accessible place to live in a tight rental market.”

The city will administer the tax by using what it calls “self-declaration, audit and complaint response.”

Principal residences — either by owner, licensee (such as a family member), or tenanted– generally will not be subject to the tax.

Owners will be required to declare their principal residence or tenancy, similar to declaring the home owner grant.

If audited, owners will have to prove that the home was a principal residence for the owner, a tenant or a licensee, by using either a B.C. driver’s licence, BCID, a completed home owner grant, a tenancy agreement or similar documentation.

If the owner is unable to prove the home was a principal residence for a minimum number of days in the previous year the tax will apply.

Exactly how city staff will make that determination is expected to be determined through consultation this fall.

© 2016 Vancouver Courier

The empty homes tax to be in place in 2017

Canadian Real Estate Wealth

Vancouver is proposing to tax homeowners by as much as two per cent of assessed value for units that they declare as vacant.

Mayor Gregor Robertson announced new details of the tax ahead of its introduction to city council next week, with the aim to have it in place in 2017.

He says the most conservative estimate of what the tax could generate is $2 million, which will primarily go towards cost recovery to administer the tax.

The purpose of the tax is to encourage owners to rent out their empty homes in an effort to improve Vancouver’s vacancy rate, which has hovered near zero for years.

In July, the British Columbia government gave the city the authority to create the tax, which is separate from the province’s 15-per-cent tax on foreign purchases of Metro Vancouver real estate.

A study commissioned by the city earlier this year found that as many as 10,800 homes were sitting empty in Vancouver, most of them condominiums.

Copyright © 2016 Key Media Pty Ltd

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Vancouver Poised to Take Next Steps on Empty Homes Tax City on track to implement proposed tax by 2017, aiming to put 10,000+ empty and underutilized homes back into Vancouver’s rental market September 14, 2016 (Vancouver, BC) – Vancouver is on track to implement a tax on empty and underutilized homes before the end of the year, Council will hear next week [hyperlink to report]. The proposed tax targets Vancouver’s known 10,800 empty homes, incentivizing owners to rent out their secondary and investment properties as the city’s rental vacancy rate continues to hover near-zero. “Vancouver’s dangerously low vacancy rate is putting our renters in crisis. Our proposed empty homes tax is first and foremost about bringing rental homes back into the market,” says Mayor Gregor Robertson. “We need to ensure the best use of all our housing. Empty and underutilized investment properties are holding back badly needed homes for thousands of renters who are struggling to find a secure and accessible place to live in a tight rental market.” The proposed tax targets residential properties left empty or underutilized and used as a business holding that could be returned to the rental market, and will be administered using self-declaration, audit and complaint response: * Principal residences – either by owner, licensee (such as a family member), or tenanted- generally will not be subject to the tax. Owners will be required to declare their principal residence (or tenancy), similar to declaring the Home Owner Grant. * If audited, owners will have to prove that the home was a principal residence for the owner, a tenant or a licensee, via a BC Driver’s licence or BCID, a completed Home Owner Grant, a tenancy agreement or similar documentation. * If the owner is unable to prove the home was a principal residence for a minimum number of days in the previous year (to be determined by staff through consultation this fall), the tax will apply. * If a declaration is not made, legislation allows for owners to automatically be charged the empty homes tax. Some homes will be subject to exemptions under the new tax, which will be determined this fall through public consultation. The proposed empty homes tax rate (earlier proposed by staff between 0.5%-2% of assessed property value per year) will be determined over the coming weeks through further public consultation. Staff conservatively estimate the proposed empty homes tax, if collected on 5% of the known 10,800 empty homes, could raise approximately $2 million in annual revenue, which will be re-invested into the City’s affordable housing initiatives. Staff will report back to Council in November with the final proposed tax by-law, in time for implementation in 2017. Since 2011, Vancouver has enabled over 12,000 affordable homes. The proposed empty homes tax is part of a suite of steps Council is pursuing to relieve pressure on Vancouver’s housing market, including: * Directing staff to bring forward steps to regulate short-term rentals, like Airbnb, this fall; * Pursuing modular housing on city-owned sites for temporary affordable housing; * Offering 20 sites of City-owned land worth $250 Million to senior governments to use for affordable housing; * Calling for both a speculation tax and a luxury sales tax to create a more level playing field in the housing market; * Increasing family home requirements in new housing projects to 35%; and * Providing four City-owned sites to enable Vancouver’s first Community Land Trust. For more information on the proposed empty homes tax, and to be added to future communications and engagement on the tax, visit Vancouver.ca/emptyhomes

 

The empty homes tax to be in place in 2017

Mortgage Broker News

Vancouver is proposing to tax homeowners by as much as two per cent of assessed value for units that they declare as vacant.

Mayor Gregor Robertson announced new details of the tax ahead of its introduction to city council next week, with the aim to have it in place in 2017.

He says the most conservative estimate of what the tax could generate is $2 million, which will primarily go towards cost recovery to administer the tax.

The purpose of the tax is to encourage owners to rent out their empty homes in an effort to improve Vancouver’s vacancy rate, which has hovered near zero for years.

In July, the British Columbia government gave the city the authority to create the tax, which is separate from the province’s 15-per-cent tax on foreign purchases of Metro Vancouver real estate.

A study commissioned by the city earlier this year found that as many as 10,800 homes were sitting empty in Vancouver, most of them condominiums.

Copyright © 2016 Key Media Pty Ltd