Steve Randall
Mortgage Broker News

The decline in home sales in Vancouver which seems to have been exacerbated by the tax on foreign buyers, does not reflect the wider provincial housing market.

The British Columbia Real Estate Association says that, although there are other cities showing declining sales, there are also areas showing continued growth.

“Housing demand in the province continued to trend lower in September,” said Cameron Muir, BCREA Chief Economist. “While Vancouver, Fraser Valley and the North experienced year-over-year declines last month, the rest of the province posted an increase in the number of residential transactions.”

Overall sales across BC were down 11.2 per cent year-over-year in September and the average MLS price slipped 3.2 per cent to $585,844.

“The average residential price in the province continued to reflect a change in the composition and location of homes sold,” added Muir. “However, the effect was less pronounced in September than in August, when detached home sales fell to just 28 per cent of total demand in Vancouver.”

The year-to-date sales data shows a rise of 18.5 per cent compared to the same period of 2015; 93,797 units sold with an average sales price of $703,986, up 12.7 per cent year-over-year.

Copyright © 2016 Key Media Pty Ltd

Affordable highrise close to Brentwood stores

MICHAEL BERNARD
The Vancouver Sun

Project: Fulton House

Project location: 2338 Madison Ave., Burnaby

Project size: 296 one- and two-bedroom apartment homes plus seven townhouses in a 41-storey concrete building just minutes from Brentwood shopping and SkyTrain stations. Over 28,000 square feet of clubhouse amenities, including an outdoor swimming pool, hot tub, sauna and fitness studio

 Prices:  One-bedroom homes from $399,900; two-bedroom residences from $529,900. Typical homes range from 540 to 919 square feet

Developer: Polygon Fulton House Ltd.

Architect: Buttjes Architecture

Interior Designer: Polygon Interior Design Ltd.

Sales centre: 2338 Madison Ave., Burnaby

Sales Phone: 604-299-8573

Hours: noon — 6 p.m., Sat — Thurs

Website: www.polyhomes.com 

For first-time buyer Michael Duong, choosing a home at Polygon’s Fulton House on the periphery of the Brentwood town centre was a well-reasoned decision.

It was affordable, in the same city as his parents, and offered great value with a feature-packed list of amenities, including a swimming pool, outdoor fitness equipment and hot tub. The 41-storey highrise also has views of downtown Vancouver and the North Shore mountains, and is a little removed from the hustle and bustle of the expanding Brentwood town centre.

“I liked that it was a really good location close to Brentwood Mall, and I knew that the area was up and coming, with lots of changes in the next few years,” said Duong, 27. “And when I looked inside, it looked really nice with all the amenities and the swimming pool. “I don’t mind being away from the mall which might have a lot of traffic.”

 Duong, a mobile mortgage specialist with a major bank, said he chose a pre-sale building because he could get in for a relatively small downpayment and a subsequent payment schedule that allows him to continue saving until he takes possession in spring 2019.

 The only thing he didn’t plan on was buying a two-bedroom home on the 38^th floor rather than on a lower floor. “But then I looked at the (computer-generated) view screen and was really attracted to being able to see downtown Vancouver,” he said.

Duong is typical of the buyers that Polygon has targeted with its newest and largest condominium project to date, says Goldie Alam, the developer’s senior vice-president of marketing.

“With this project we were really wanting to maximize affordability,” she said. “We were really conscious of making homes that were well designed, compact and at a price point that people could afford.”

That strategy dictated the size of the homes, which, except for a handful of townhouses and higher priced penthouses, are one- and two-bedroom units ranging from about 540 to 919 square feet, smaller units than those offered in some other Polygon developments. Prices for the one-bedroom homes start at $399,900 while the two-bedroom homes start at $529,900.

Fulton House, which is about a seven-minute walk to the Brentwood shopping centre, is an alternative to the highrise-studded 26-acre master-planned community planned for the town centre. “Some people don’t want to be in the centre of everything. They would rather be a distance from the mall.”

So far, Polygon’s approach has worked. Since its grand opening Sept. 24, the developer has sold more than 60 per cent of the 303 homes. “Here, it is all local buyers that we have been getting,” she said. “We have had a tremendous amount of interest.”

Polygon is currently offering a promotion where buyers get $4,000 off the posted price of a one-bedroom home and an $8,000 discount off a two-bedroom home.

 The design of Fulton House has all one-bedroom homes on the 12th floor and below, with two-bedroom homes on the upper storeys. The pool and other amenities will be on the building’s landscaped podium.

“It’s basically a small park that is private, secure and safe,” she said. “We’ve created this little oasis down there, a green space tucked away from everything, yet you are only a five minute walk to Brentwood. You come home, and you don’t have to leave to go to the gym.”

Also included on the 28,000-square-foot platform are fitness machines both inside and outside, an infra-red sauna, a dog walk and grooming area, children’s play area, a lounge with pool table, and a one-bedroom guest suite.

Visitors will enter the building through a dramatic glass canopied entrance to a hotel-inspired lobby with three elevators. Individual suites have solid wood entrance doors with polished chrome hardware. Three colour schemes are available: mocha, grey and vanilla white. Ceilings rise to eight feet, six inches.

 All suites have generously sized balconies with sliding or opening doors.

 Kitchens are equipped with islands topped with engineered stone, flat-panelled cabinetry, integrated appliances, including 24-inch wide refrigerators for one-bedroom homes and 30-inch fridges for two-bedroom units, a 30-inch five-burner gas cooktop with wall oven, a retractable hood fan, a microwave built in the island, and under-cabinet lighting,

 Tucked behind panelled doors in the living room are a side-by-side washer and dryer in a spacious laundry cupboard with room to hang clothes.

 Master bedrooms are roughly the same size in both one- and two-bedroom units and are large enough to accommodate king-sized beds. They come with either walk-in style closets or his and hers divided wardrobe spaces. Master ensuites are equipped with spa-style frameless glass shower stalls with an engineered stone-topped bench, rainshower head fixtures, niches for toiletries and a floating vanity. Second bathrooms have deep soaker tubs.

 Each suite comes with a single parking space, and the garage has electric car charging stations, four car-wash stations and brightly lit areas with security cameras.

© 2016 Postmedia Network Inc.

B.C.?s 15 per cent tax appears to be sending offshore money to Toronto

GARRY MARR
The Vancouver Sun

Foreign homebuyers, frightened off by a 15 per cent property transfer tax in Vancouver, appear to be making their way to Toronto, according to a report published Friday.

But Diana Petramala, an economist with Toronto-Dominion Bank, and the author of the report, said the impact on Toronto is nowhere near what was happening in Vancouver. Canada Mortgage and Housing Corp. said at the peak, up to 20 per cent of Vancouver buyers were foreign when tax went into effect on Aug. 2.

“The million-dollar question now is whether foreign investment has shifted east and Toronto has become the new Vancouver,” Petramala said in the report. “With record immigration in 2016 and the strong growth in prime firsttime homebuyer population, the fundamental factors supporting housing activity appear stronger in Toronto than Vancouver — helping drive existing home sales and prices up.

“Having said that, the sales-to-population ratio in Toronto has risen sharply recently, suggesting that foreign investment and speculation are playing a part, albeit likely smaller than in Vancouver.”

Her comments come as the Canadian Real Estate Association released results for September showing the strength of the Toronto market continues to impact national sales figures just as Vancouver, which suffered almost a 33 per cent pullback in September sales compared to a year ago, retreats.

CREA, which represents about 100 boards across the country, said existing home sales rose 0.8 per cent in September from August on a seasonally adjusted basis, but remain 5.6 per cent below the high hit in April.

Ottawa’s changes to mortgage lending rules have injected uncertainty into the real estate market, CREA said. “The finance minister’s recent changes to regulations affecting mortgage lending has added to housing market uncertainty among buyers and sellers,” CREA president Cliff Iverson said in a statement. “For first-time home buyers, the stress test for those who need mortgage default insurance will cause them to rethink how much home they can afford to buy.”

Among the changes are that all mortgage insurance backed by Ottawa include a provision that the borrower be forced to qualify for a loan based on the much higher posted rates of the major banks for a five-year fixed-rate mortgage, now 4.6 per cent. Instead of 1.95 per cent, the lowest rate for a fixed five-year mortgage, according to ratespy.com, consumers must now use the higher rate and get a smaller loan or not qualify at all. Those new loan figures go into effect Monday and they could impact about one-third of all new borrowers, according to some estimates. Petramala said the regulations could take some steam out of the market and is predicting a 10 per cent decline in sales next year and a one per cent reduction in prices.

“This is the sixth time in eight years that the government has tightened mortgage regulation, and in each event, sales have fallen between six per cent and 14 per cent in the following three to six months,” she said. “The difference this time around is that the rules are more broadly targeted at insured borrowers (raising the bar on income testing), lenders (restricting the use of portfolio insurance) and foreign investors and speculators (increasing oversight of capital gain taxes on real estate and restricting non-residents from taking advantage of the principal residence exemption).”

Doug Porter, an economist with Bank of Montreal, sees similar storm clouds on the horizon.

“Prior to the new mortgage rules, the dominant story in Canada’s housing market was the diverging paths of previously white-hot Vancouver and still piping-hot Toronto. We are all along the market watchtower now, though, looking for some broad softening in sales in the wake of Ottawa’s new measures,” said Porter, who expects a five per cent drop in sales in 2017 and only a one to two per cent gain in prices next year after a 12 per cent rise in 2016.

© 2016 Postmedia Network

Foreign buyers tax, new mortgage rules, realtor reform among variables

JOANNE LEE-YOUNG
The Vancouver Sun

Metro Vancouver’s stratospheric real estate market is showing signs of slowing, as properties are sitting longer and some prices are falling even as official benchmarks hang onto their highs.

One central bank economist predicts a six-month to year-long correction, after which sales and prices could rebound. Others deem it the popping of the biggest housing bubble on the planet.

In the meantime, there remain a few bothersome loose ends in all the market craziness.

Low interest rates and tight supply contributed to skyrocketing prices — over 40 per cent a year in some areas. But they did so in tandem with the fuel of foreign money, unscrupulous agents, lightningfast deals and lax regulation.

So, are buyers just sitting on the sidelines in the aftermath of the foreign buyers tax? Where are we now with realty firms that were being investigated for questionable practices? How about the more nebulous task of clamping down on unlicensed sales? What about the future of real estate boards, and their stranglehold on market information in a time of digital transactions? How is the provincial government moving in with tighter oversight after having declared the real estate industry unfit to regulate itself?

FOREIGN BUYERS TAX

Observers say that the housing market had already been slowing from unheard-of highs, but there’s no doubt the so-called foreign buyers tax of an extra 15 per cent charged by the province starting Aug. 2 on buyers of Metro Vancouver properties who are not Canadian citizens or permanent residents has jolted the market.

Sales numbers in the initial weeks following the tax fell off a cliff in neighbourhoods with higher percentages of buyers declaring themselves as non-citizens and residents. But almost every pundit also says it will take at least six to 12 months for the market to digest the real impact of the tax, as well as new, tighter guidelines for mortgages, on both local and foreign buying appetite.

REALTORS UNDER INVESTIGATION

As home prices hit record highs over the last few years, stories emerged of realtors engaging in dubious practices ranging from “shadow flipping” to counselling clients on how to avoid a new tax on foreign homebuyers. A number of realtors and realty companies were put under investigation by the Real Estate Council of B.C.

Among the highest-profile targets for investigation is New Coast Realty, described as a fast-growing, Richmond-based firm. In April, the company was put under a series of so-called “licence conditions” by the Real Estate Council after the Globe and Mail published allegations that company owner Ze Yu Wu was training his agents to secure deals with tactics in violation of their fiduciary responsibility to clients. New Coast has also come under fire for its alleged aggressive shadow flipping of homes.

The Real Estate Council said this week it “could not give updates on its active, ongoing investigation” into New Coast.

UNLICENSED ACTIVITY

Dubious practices of licensed realtors are one thing, but there is also the pressing issue of residential real estate being promoted by “agents,” who profit off fees they or their associates or partners charge, but who do not have realtor licences.

The Real Estate Council has investigated and disciplined some players associated with Vanfun. com, a Chinese-language website run by a Shanghai-based company that lists and arranges tours for its clients, who are based in mainland China, of single-family homes, as well as showrooms for major presale condo developments, in Vancouver. They don’t have licences to promote or sell B.C. real estate, but instead work and split commission fees with local agents, who do.

REAL ESTATE BOARDS: BIGGER IS BETTER?

There has been a plan for B.C.’s 11 regional real estate boards and the B.C. Real Estate Association to merge in order to “reduce overlap and maintain high and consistent professional standards,” but there is at least some disagreement on whether one big board is better than many smaller ones.

These associations represent the interests of their members, who are real estate agents, but some have been criticized for not making disciplinary decisions public.

The BCREA has said that merging the boards will better “address the current fragmented decision making that slows the industry’s ability to foresee and address issues in a timely manner.” It maintains the proposed amalgamation could also eliminate duplication of operations and possibly reduce the overall cost of running these boards by $10 million a year.

On Dec. 6, six real estate boards, including the Real Estate Board of Greater Vancouver and the Fraser Valley Real Estate Board, will vote. More than 15,000 members and the BCREA must vote in favour in order for the merger to happen.

But, in June, five boards opted out of even participating in the vote. They include the Chilliwack and District Real Estate Board, Kootenay Real Estate Board, Powell River and Sunshine Coast Real Estate Board, Vancouver Island Real Estate Board, and the Victoria Real Estate Board.

“Our board is very well run and makes quick, good decisions. We have a good CEO and we haven’t had any main issues to justify changing,” said Margo Hoffman, president of the Vancouver Island Real Estate Board. “We haven’t had the same issues that ( boards in Metro Vancouver have seen). We have a business practices committee and there were not six complaints last year, and they were minor.”

Proponents say having one voice speaking on behalf of all realtors in the province would be an advantage for an amalgamated board, but others point out the wide discrepancy between the different boards in terms of the number of members they have and the kinds of transactions they handle.

“I think the Real Estate Board of Greater Vancouver should spend its time improving consumer protection, which is the best way to protect the reputation of real estate agents in the Lower Mainland,” said Re/Max agent Keith Roy.

MLS INFORMATION HELD BY BOARDS

One reason real estate boards matter so much is their control of the Multiple Listing Services database, which allows real estate agents to see sales and pricing information as it is logged as soon as deals are firm and “under contract,” but before they “close” and details are recorded in land titles.

Once a month, the boards release a snapshot of this sales information and also its MLS Home Price Index.

This measures the rate of price change for so-called “typical” homes in different categories that are picked every year for being “in the middle of the pack” compared to the majority of homes in their category.

The use of “typical” homes has been in place since 1996 because the boards believe averages can easily be skewed by higher- or lower-end property sales.

But with residential real estate selling as quickly as copies of documents can be sent by a smartphone swipe, there is growing interest in real-time data that might show interest in a specific type of property in a certain neighbourhood such as provided by Zolo, a national real estate brokerage.

A few agents have also taken to publishing information about sales gleaned from MLS information the public can’t easily access.

Vancouver real estate agent Steve Saretsky posted last week: “More realtor complaints regarding my tweets and blogs.”

He declined to elaborate, but had been posting screenshots of interesting sales as they were appearing on the MLS site that only realtors can access. Saretsky has also blogged about his count of condos selling for over the asking price each month, and how this number has been falling. For example, in October, six out of 43 listed condos, or only 14 per cent, sold over asking, compared to much higher numbers and percentages in April, May and June, when 58 out of 89 listed condos, or 65 per cent, sold over the asking price.

“Apparently, (I) can do that, because it doesn’t give a specific address (that might breach privacy rules or jeopardize a deal), but (even) when it comes to stats and numbers (like this) a lot of realtors don’t like it being out there,” said Saretsky.

“I’m a firm believer that the real estate boards need to be more transparent, and one way to do that is for sales data to be available to the public. You lose your value proposition if you are a gatekeeper to information. In an information age, to be hoarding information is not a true value proposition. Realtors need to diversify their services.”

The boards have previously said that their members pay fees for exclusive access to the MLS information.

THE PROVINCE TAKES OVER ENFORCING RULES

The province’s newly appointed superintendent of real estate, Michael Noseworthy, takes office on Oct. 19. Last week, the government started naming members to a Real Estate Council that used to be selfregulated, but will now fall under Noseworthy’s watch. The aim will be to begin implementing changes to the industry, many of them as recommended by an independent advisory group in late June.

© 2016 Postmedia Network

Justin da Rosa
Canadian Real Estate Wealth

One of the country’s largest brokerages has released a province-by-province forecast. What does the future hold for each housing market?

British Columbia
Uncertainty is the adjective to use when describing Canada’s western-most province, according to Royal LePage.

“New government taxation and regulations within the region have also introduced a great deal of uncertainty into the market, as purchasers have begun to take a wait-and-see approach, putting downward pressure on sales activity,” Royal LePage said in its Q3 forecast. “While this did not significantly impact year-over-year home prices during the third quarter, it could very well result in a more balanced market moving forward.”

Alberta
“The majority of economic forecasters watching the province have predicted that the Alberta economy will contract by approximately two percentage points in 2016, making it one of the most significant downturns in the province’s history,” Royal LePage said. “The economic drop in the region has directly impacted housing prices in the province’s key markets, however, not nearly to the degree many observers anticipated.”

Despite this, Royal LePage suggests Alberta has already been through the worst of the market decline, and it could all be up from here.

Saskatchewan
“Effects can be observed in the employment sector, as the province lost 6,500 jobs in September when compared to the same period in 2015. Employment insurance recipients are up, earnings are falling and payroll employment is down,” the brokerage said. “Despite the traditionally negative effects of a poor economy on the housing market, the region’s home prices have remained relatively stable; aggregate house prices in Regina increased year-over-year by 0.6 per cent to $332,540.”

Manitoba
Manitoba’s economy is holding strong, according to the agency.

“This is favouring well with the housing marketing in Winnipeg, as the aggregate price of a home in the region increased 2.3 per cent year-over-year to $291,426,”Royal LePage said. “Forecasting strong population increases for the coming years, the City of Winnipeg announced recently that it projects it will exceed the one-million resident mark by 2035 and that demand for housing will grow as a result.”

Ontario
Following British Columbia’s lead, Ontario is poised to continue to be one of the country’s fastest growing economies.
And housing appreciation is the major trend on all industry payers’ minds.

“In the Greater Toronto Area, house values continue to climb. Aggregate house prices in Toronto grew year-over-year by 12.1 per cent to $714,002,” according to the brokerage. “House prices in surrounding region Kitchener/Waterloo/Cambridge are also appreciating, posting a year-over-year increase in aggregate house price of 9.1 per cent to $371,474.

“Hamilton, which stands above the provincial average in retaining and attracting millennials, had year-over-year growth in its aggregate house price of 10.3 per cent to $419,830. The aggregate house price in Ottawa saw moderate year-over-year growth of 3.6 per cent to $411,654.”

Quebec
Export volumes may be down, but the economy in La belle province remains steady.

It’s ahead of its economic targets, according to a number of reports, and its unemployment level is below the national average.

“These factors remained supportive of the residential housing sector in the third quarter, with the aggregate house price in the Greater Montreal Area increasing by 4.9 per cent year-over-year to $352,798,” the brokerage said.

Atlantic Canada
The major concern out east is the possibility of a recession, as the flagging oil industry continues to take its hits.

And it’s not just due to declining oil prices; with many of the area’s working-age citizens relying on work in that field, fewer prospects mean more struggle.

“As a result, St. John’s was the only city studied in the Royal LePage Composite to decline in Atlantic Canada, with the aggregate home price dropping -3.2 per cent to $332,597 year-over-year,” Royal LePage said. “Meanwhile, Moncton and Halifax showed slight year-over-year increases in aggregate house prices of 1.5 per cent to $182,529 and 0.8 per cent to $308,017, respectively. Similarly, aggregate house prices in Charlottetown and Fredericton increased year-over-year by 2.3 per cent to $224,219 and 2.9 per cent to $246,696, respectively.”

Copyright © 2016 Key Media Pty Ltd

Ephraim Vecina
Mortgage Broker News

Canadian consumers and home owners must brace themselves for the effects of the recently announced changes to federal mortgages rules, as these will directly affect the main drivers of dynamism in the country’s real estate sector.
 
In a contribution piece for Maclean’s, renowned financial advisor and author Hilliard MacBeth noted that the new requirement to test insured mortgages against the major banks’ 5-year posted rate of 4.64 per cent will impact hundreds of thousands of consumers as “collateral damage”. Prior to the announcement, the qualifying rate went as low as 2.17 per cent.
 
“For a household with $100,000 in total income the stress test could mean a 20 percent drop in approved mortgage value,” MacBeth warned. “The Bank of Canada estimated that more than 20 percent of all insured mortgages were contracted by households that have loan-to-income ratios of more than 450 percent.”
 
“Home buyers in Vancouver, Toronto, Victoria, Calgary and Edmonton are at the head of this class of risky borrowers. The slowdown in new money from this second source of buying power will have a large impact, especially on new home builders in those centres.”
 
Moreover, MacBeth stated that residential real estate now stands together with the manufacturing and energy sectors as major components of the national GDP, and the sudden changes announced by Finance Minister Bill Morneau last week could impair this vital component of the national economy.
 
“Any serious attempt to change the rules around insured mortgages could roil share prices of publicly-listed Canadian lenders as well as disrupt financing for housing. The availability of mortgage credit could dry up and conditions would be much more difficult for many buyers.”
 
And with the abruptness of these regulatory changes, MacBeth encouraged Canadian consumers to hold on and remain vigilant.
 
“[The] adjustments to the rules could engender an orderly transition to a more balanced system and soft landing for house prices. But, while hoping for the best, Canadians would be wise to prepare for something worse than the oft-touted transition to stability,” the analyst concluded.
 
“A painful unwinding of elevated leverage in the Canadian financial system is the most likely outcome, based on observation of similar adjustments in the U.S., Ireland and Spain.”

Copyright © 2016 Key Media Pty Ltd

Ephraim Vecina
Mortgage Broker News

In the wake of Finance Minister Bill Morneau’s announcement of new federal rules governing mortgages, a fresh RBC Economics report offered a silver lining around current developments, reflecting in many ways Chinese would-be buyers’ optimism towards Canada’s priciest city.
 
According to the report, once the market has adjusted to the regulatory changes, Vancouver will prove to be just as enticing to wealthy Chinese investors as it was before the announcement of the new rules.
 
“Vancouver offers a sought-after lifestyle and prestige for wealthy Chinese that only a handful of other international cities can boast,” the RBC report noted, as published by the South China Morning Post.
 
And while the 15 per cent foreign home buyers’ tax implemented on August has slowed down Vancouver sales, the impact on the luxury market of all these measures would be negligible.
 
“High net worth individuals are drawn to Vancouver for the same reasons as foreign investors, as well as other factors such as good schools, clean environment and the ‘global passport’ that Canadian citizenship offers,” the report added.
 
In a recent statement, RBC Capital Markets predicted that housing and consumer spending will together account for 1.1 per cent GDP growth next year. This is in contrast to the 1.7 per cent average over the past 24 months.

Copyright © 2016 Key Media Pty Ltd

Ephraim Vecina
Mortgage Broker News

With new federal rules setting tighter requirements set for borrowers, Canadian banks will be closely monitoring movement in the national markets, starting with updated data to be released today by the Canadian Real Estate Association (CREA).

The Bank of America adjusted its initial Canadian real estate growth predictions of 1.6 per cent down to 1.4 per cent during this quarter and 1.5 per cent in the next.

“The new rules will likely slow down the housing market, which could weigh on growth,” Bank of America economist Emanuella Enenajor told the Financial Post.

Despite the slight downgrade, however, Enenajor stated that the Bank of America is “in the camp that the moves won’t trigger a severe downturn in housing but rather a temporary period of slowing activity.”

Meanwhile, Conference Board of Canada chief economist Craig Alexander said that spending on household times like furniture and appliances might taper down, as the new federal rules will require a significant number of families to pay more for their home purchases.

“Consumer spending growth is going to continue to be a solid contributor to Canada, it’s just not going to be capable of providing strong economic growth,” Alexander stated.

Under the stricter regulations, households might lose as much as 20 per cent of their purchasing power. For instance, a family earning $100,000 would be approved to buy a $490,000 home—a far lower value than the $580,000 home they could have procured prior to the new rules.

RBC Capital Markets agreed with the forecasts of a slight slowdown, predicting that housing and consumer spending will together account for 1.1 per cent growth next year. This is in contrast to the 1.7 per cent average over the past 24 months.

Copyright © 2016 Key Media Pty Ltd

other

Government is appointing nine public-interest members to the Real Estate Council of British Columbia, increasing its accountability and objectivity in fulfilling its role of protecting the public interest, Finance Minister Michael de Jong announced today.

Robert D. Holmes is appointed as chair of the council. Holmes brings a wealth of legal expertise to the council, having worked as a litigation and arbitration lawyer for more than 32 years. He also served as president of the Trial Lawyers Association of B.C., president of the BC Civil Liberties Association and on provincial council of the B.C. Branch of the Canadian Bar Association.

The B.C. government has taken significant action to protect real estate consumers and safeguard the public interest, overhauling the regulatory framework and strengthening oversight and accountability of the sector. Self-regulation of the industry is ended with these appointments. A second set of government-appointed members will follow.  

The Real Estate Council of British Columbia is now one part of a broader system of organizations responsible for supervising the real estate industry. The council continues to be responsible for licensing, investigating complaints, enforcing licensee rules and disciplining licensees found to be breaching their obligations.

Newly appointed superintendent of real estate Mike Noseworthy will assume leadership of the Office of the Superintendent of Real Estate on Oct. 19, 2016. Changes to the regulatory framework for the real estate industry increase the superintendent’s oversight of and authority over the council. These and other changes to the Real Estate Services Act to significantly strengthen consumer protection took effect on Sept. 30, 2016.

Other steps that are strengthening real-estate regulation include increasing the maximum penalty for misconduct to $250,000 from $10,000 for individual misconduct, and to $500,000 from $25,000 for brokerage misconduct, allowing for commissions from licensees and brokerages engaging in misconduct to be taken back to council for licensee and public education, transferring rule-making authority from council to the superintendent, and allowing owners to train and supervise licensees only if they themselves are licensees.

Premier Christy Clark has laid out six principles to guide government’s decisions in addressing housing affordability in the Lower Mainland:

1. Ensuring the dream of home ownership remains within reach of the middle class
2. Increasing housing supply
3. Transit expansion
4. Supporting first-time home buyers
5. Ensuring consumer protection
6. Increasing rental supply

A number of changes put in place by the provincial government are already working to help make housing more affordable for middle-class families, and further steps will be announced in the coming weeks.

To date, the Province has:

• Committed $855 million this year to support the construction of rental housing throughout British Columbia, in addition to other housing affordability actions.
• Implemented a 15% additional property transfer tax that applies to foreign purchasers of residential real estate in Metro Vancouver.
• Strengthened consumer protection in British Columbia’s real estate market through increased oversight and accountability of real-estate licensees.
• Introduced a luxury tax on properties that sell for more than $2 million.
• Introduced a Newly Built Homes exemption, which has helped nearly 6,400 families save an average of $7,500 on their newly built homes.

Quotes:

Finance Minister Michael de Jong –

“As consumers, we expect to be treated fairly and with integrity, especially when making the important decision to purchase a home. These changes are part of government’s broader efforts to restore public confidence and trust in the system.”

Quick Facts:

• The Real Estate Council of British Columbia’s mandate is to protect the public interest by enforcing the licensing and licensee conduct requirements of the Real Estate Services Act.
• Government will appoint a total of 16 members to council. A second set of appointments will follow.
• Members are appointed for terms ranging from one to two years.

Learn More:

• Read about government’s appointment of the superintendent of real estate: https://news.gov.bc.ca/releases/2016FIN0039-001723\
• Learn about how the Province is working to make housing more affordable for British Columbia families: http://housingaffordability.gov.bc.ca/
• Visit the Real Estate Council of British Columbia’s website: https://www.recbc.ca/

Effects of Lower Mainland slowdown take their toll on province-wide real estate transactions, as smaller Interior markets come out on top with big sales rises

Joannah Connolly
REW

“Housing demand in the province continued to trend lower in September,” said Cameron Muir, BCREA chief economist. “While Vancouver, Fraser Valley and the North experienced year-over-year declines, the rest of the province posted an increase in the number of residential transactions.”

In September, the Interior boards took over as the fastest-growing markets, with the highest year-over-year rises in sales seen in the South Okanagan (+35.8 per cent), Kootenay (+26.1 per cent) and Okanagan Mainline (+25.4 per cent) regions. Growth slowed somewhat in Vancouver Island and Victoria compared with recent months, but both boards still posted annual sales increases, at 18.6 and 10.5 per cent respectively.

But unlike in August, those increases were not enough to offset declines seen in the larger markets of  Greater Vancouver and the Fraser Valley, which saw annual drops in home sales of 32.7 and 23.2 per cent respectively.

The average sale price of a home in BC fell a relatively modest 3.2 per cent year over year to $585,844, resulting in the total dollar volume of home sales in September dropping 14.1 per cent compared with a year earlier, to $4.45 billion.

However, the average MLS® sale price in September was 2.9 per cent higher than August 2016’s $569,393 – a figure that was pulled down by a hiatus in the number of higher-end detached homes exchanging hands, immediately following the introduction of the overseas buyer tax August 2.

“The average residential price in the province continued to reflect a change in the composition and location of homes sold,” added Muir. “However, the effect was less pronounced in September than in August, when detached home sales fell to just 28 per cent of total demand in Vancouver.”

Despite the declines, because of the scorching sales and prices seen in the spring and summer, year-to-date BC residential sales dollar volume totalled $66 billion, which is an increase of 33.5 per cent compared with January-September 2015. Total residential unit sales in 2016 so far have increased 18.5 per cent over 2015’s January-September sales, to 93,797 units, keeping the province on track to fulfill predictions of more than 100,000 sales this year.

Across the whole of Canada, it was a different story for September’s sales figures, with residential transaction rising slightly compares with one year ago, according to the Canadian Real Estate Association’s (CREA) statistics, also released October 14.

National home sales totalled 44,096 in September, a 4.2 per cent rise compared with one year previously and a 0.8 increase over August’s transactions.

The national MLS® Home Price index was up 14.4 per cent year-over-year in September to $576,100.

The CREA report said, “Continuing recent trends, sales climbed further in and around the Greater Toronto Area (GTA) and fell further in and around the Lower Mainland of British Columbia.

“As previously reported, Greater Vancouver and Fraser Valley home sales had retreated sharply for five months straight before the new foreign buyers’ tax in Metro Vancouver was announced in August. Activity has returned to more normal levels after having peaked at the start of this year. Indeed, most of the decline since the April peak in national sales reflects the rapid drop in activity in and around BC’s Lower Mainland.”

CREA President Cliff Iverson took the opportunity to comment on the new mortgage qualification rules introduced recently by federal finance minister Bill Morneau.

“The Finance Minister’s recent changes to regulations affecting mortgage lending has added to housing market uncertainty among buyers and sellers,” said Iverson. “For first-time home buyers, the stress test for those who need mortgage default insurance will cause them to rethink how much home they can afford to buy.”

Gregory Klump, CREA’s chief economist, added, “First-time home buyers, particularly in housing markets with a lack of affordable inventory of single-family homes, may be priced out of the market by the new regulations that take effect on October 17. First-time buyers support a cascade of other homes changing hands, making them the linchpin of the housing market.”

To read the full BCREA report, click here.

To read the full CREA report, click here.

© 2016 Real Estate Weekly