Ephraim Vecina
Mortgage Broker News

New rules implemented by the Chinese government on those who are looking to exchange for yuans into foreign currencies might lead to a noticeable slowdown in the Canadian housing market, in which overseas investors are now playing a major part.
 
Beginning this month, mainland authorities will now be requiring documents providing details on the reasons for currency conversion, and when the money will be used. Improper use of the converted funds (e.g. the purchase of a residential property) will entail stiff penalties such as being banned from exchanging money, The Globe and Mail reported.
 
The stricter guidelines represent the culmination of the Chinese government’s months-long effort to moderate the outbound flow of funds, which has massively depleted its foreign reserves over the past few years.
 
Economist Andy Xie warned that the regulatory revision will lead to a “sharp” decline in housing markets dependent on foreign capital like Canada—a dangerous proposition when one of the nation’s erstwhile hottest cities (Vancouver) has already reached peak sales volume and prices in spring 2016.
 
However, Real Estate Board of Greater Vancouver president Dan Morrison said that it will still take some time until the effects of this development become apparent.
 
“There are so many factors in the housing market,” Morrison stated. “Vancouver is not a homogeneous market. Some people want to point to one easy problem or one easy solution, and there is no such thing.”

Copyright © 2017 Key Media Pty Ltd

Ephraim Vecina
Mortgage Broker News

Climbing interest rates along with recently enacted policies intended to moderate runaway price growth will introduce a strong element of unpredictability into the Canadian housing market this year, according to various observers.
 
“2017 is likely to see a tug of war between rising longer-term interest rates and market-cooling policy measures pulling affordability in opposite directions, the net effect of which is unclear at this point,” according to Royal Bank of Canada chief economist Craig Wright and senior economist Robert Hogue, as quoted by The Globe and Mail.
 
Fiscal uncertainty fueled by Donald Trump’s victory in the U.S. presidential elections has led to a significant increase in longer-term rates, which in turn have pushed Canadian yields upward.
 
“Canada’s extended housing boom and attendant surge in home prices have rendered home ownership costs very sensitive to changes in interest rates – especially so in high-priced markets such as Vancouver and Toronto,” the analyst duo said.
 
“Therefore, the recent jump in bond yields and the likelihood of further increases in the period ahead pose a material risk to housing affordability in Canada in the short to medium term.”
 
However, the introduction of major changes to federal mortgage rules late last year along with the B.C. government’s implementation of a 15 per cent foreign buyers’ tax in mid-2016 might lead to a cooling effect on Canadian markets.
 
“Rule changes also are poised to restrict or alter the pricing of certain mortgage options available in the marketplace, similarly constituting further impediments to ownership for some buyers.”
 
Toronto-Dominion Bank economists Beata Caranci, Michael Dolega, and Dina Ignjatovic agreed with the prognosis, forecasting a 7.5 per cent drop in Vancouver’s existing home sales in 2017 and 3.4 per cent in 2018. On the other hand, Toronto sales will fare a bit better with an increase of 1.9 per cent this year, but will decline by 9.4 per cent in 2018.
 
“The changes afoot reinforce our long-held view of a soft landing both nationally and in the two markets of Toronto and Vancouver,” the TD economists said. “While we’re comfortable with this thesis of an orderly slowdown, predicting the timing and extent of any slowdown (amid these numerous moving parts) is no easy feat.”

Copyright © 2017 Key Media Pty Ltd

Setting the mood in South Surrey

Mary Frances Hill
The Province

Westside at Orchard Grove

Where: 16422 26th Ave., South Surrey

What: 53 single-family detached homes

Residence sizes and prices: 2,667 — 4,282 square feet, starting from $1.245,000, including tax and finished basement

Developer and builder: Miracon

Sales centre: 16422 26th Ave., South Surrey

Hours: noon — 5 p.m., Sat — Thurs

Sometimes you can’t have too much of a good thing.

Designer Jas Rai illustrates this in her thoughtful use of wood to convey warmth and sophistication in contemporary and mid-century modern design at Westside at Orchard Grove.

Wood is a predominant material in Rai’s work on the interior designs in the display suites at Westside at Orchard Grove, Miracon’s community of single-family homes in South Surrey. In each of the three design schemes, the material tells a story and evokes a mood.

 In one, Miracon’s in-house designer shows the character of wood — one variation for flooring, a darker wood on banisters of a spacious show home, and a teak finish on living room side tables, lending the space its strong mid-century modern flair.

The cumulative effect of layers of wood meets her vision of a home that is elegant, comfortable and, she says, “cohesively eclectic”.

“I wanted the room to feel organic, as though a homeowner has been collecting various furniture pieces throughout their lifetime. Thus, the many different wood tones.”

The varied woods work together because they’re all simple and help ground the lightness of the walls and the 10-foot ceilings, she adds.

“Through their natural grains and tones, the various woods add warmth, texture and character to the room, and keep everything balanced.”

The side tables, an attractive wing-chair and the gentle grey tones in the square angles of the sofa were natural additions to the suite, considering that Westside’s floor plans lend themselves to this style marked by clean lines, open floor plans and curved shapes, features that appeal to homeowners today as well, she says.

“The tapered legs and sleek lines on the furnishings, strong characteristics of mid-century modern design, appear to float the pieces and create an open and airy feel in the space. Using the warm earthy tones, also a hallmark of the mid-century palette, combined with the simplicity and form of the furnishings, allow the room to feel nostalgic and inviting, but in a modern retro way. “

“Inviting and warm” define every décor scheme at Westside at Orchard Grove, and motivated Rai in furnishing choices. Rai says she was drawn to using a round table, over the more conventional rectangular version, because the shape denotes warmth, comfort and a sense of family. The shape fits perfectly into Rai’s mission to create visual interest, by using shapes, and to create a contrast with the square dining area and linear island bar.

“The round table setting encourages closeness between family and guests and creates an intimate dining experience. Everyone is able to equally participate in conversations and shared dishes are easy to reach.”

© 2017 Postmedia Network Inc

Metro home-price gains among world?s highest

Joanne Lee-Young
The Province

Metro Vancouver’s residential real estate story was a tale of two halves in 2016.

There were scorching sales leading into summer, a cooling off, and then a marked retreat after the province imposed a 15 per cent foreign buyers tax in August. 

Many big-picture pundits say it will take another six months or more to fairly assess the impact of the tax. Others point to falling sales, and in some cases prices, as a small number of deals eke on.

Despite this, in 2016, Vancouver residential prices moved up 18 per cent, according to the Real Estate Board of Greater Vancouver’s composite benchmark price report released on Wednesday. Most of the gains were notched in the first half of the year, with the index moving back 2.2 per cent in the second half, according to the board’s report.

The number of sales — including detached houses, condos and townhomes — came in as the third-highest on record for Vancouver in 2016, falling 5.6 per cent from a record year in 2015.

Digging into the latest report, there are early signs of a bounce if you look at median prices. With so few listings, and as such, sales, some prefer to use this gauge, which means the “in the middle price” where half the homes sold went for above this mark and half for below as opposed to taking the average of only a handful of sales, where the result could be easily skewed by one very expensive or slumped sale.

For example, the median price for detached homes is steadying because it has been sitting in the $1.275 million to $1.3 million range for the last four months. Meanwhile, the median price for town homes, at $659,000, is now nearly at its June peak median price of $666,000. Condo median prices show an even stronger stride, hitting a new high of $495,000.

To put the slowdown into perspective, consider Knight Frank’s latest Prime Global Cities Index, which tracks the prices of the top five per cent of homes in metro areas of 35 cities around the world. Vancouver outstripped all other contenders in 2015 and in September 2016 it was still at the top, posting a 32 per cent change year-on-year.

Knight Frank’s Global Residential Cities Index — which more widely tracks “city house prices” in 150 locations — showed Vancouver was the highest ranking city outside of mainland China.

“Urbanization and rising household wealth are behind the surge in Chinese prices,” wrote Knight Frank researcher Kate Everett-Allen. “Vancouver, a longtime front-runner, slid down the rankings this quarter, from fifth to ninth position. This shift is not as a result of slowing prices, annual growth is much the same as in June, close to 24%, but due to the phenomenal ascent of the Chinese cities which have supplanted it.”

Overall, house prices increased in more than 75 per cent of the 150 cities surveyed, year-on-year, but only in 13 of them did the increase in prices exceed 20 per cent. Victoria, B.C. just missed being one of those cities on the list, coming in 15th on the list with an 18 per cent gain.

It’s an “interesting report. I really like the global comparison that it facilitates,” said Andrey Pavlov, who specializes in real estate finance at Simon Fraser University’s Beedie School of Business. However, he cautioned that: “First, the data is as of end of September, 2016. This was still very close to the peak, which occurred around June or July. Second, the report uses year-over-year increases, and all of the Vancouver increases occurred earlier in 2016, and some in 2015. With this in mind, the report captures historical trends, but does not really address the recent developments in our market.” 

© 2017 Postmedia Network Inc.

Property assessment out of whack? Here are some steps you can take

Derrick Penner
The Province

Now that Lower Mainland homeowners have their 2017 property assessments in hand they may have lingering questions about how those values soared so high — single-family homeowners typically saw increases of 30 to 50 per cent — and what to do if they disagree with the results.

Below are five things you should know about your property assessment and how to dispute what you think is inaccurate.

“The first question you want to ask yourself is, as of July 1, 2016, is this a reasonable expectation for what I could have sold my property for?,” said Jason Grant, B.C. Assessment’s area assessor for Greater Vancouver.

1 – Your assessment is essentially an appraisal of your property’s value, considering both changes in land value, including things such as rezoning nearby, and improvements to the building, set by the B.C. Assessment Authority as of July 1 every year.

“Whatever (market) changes happened after July 1, 2016, will be factored into 2018 assessments,” Grant said.

2 – Municipalities use assessments to adjust property-tax rates to account for changes in assessed values for various property classes. The concern for homeowners is whether their assessment rose by more than the average for their property class. If so, Grant said, they will see a tax increase larger than a municipality’s general increase. Homeowners whose assessments rose by less than the average will get a tax break.

3 – The provincial government uses property assessments to establish eligibility for the B.C. Homeowners Grant (the $570 per household grant offered to help defray property taxes on homes that are their principal residence). The threshold value for 2016 was set at $1.2 million, above which the grant is reduced $5 per $1,000 value. However, Finance Minister Mike de Jong said Tuesday that the province is reviewing the threshold considering soaring assessments.

4 – Homeowners with questions about their assessments can go online at B.C. Assessment’s e-valueBC site to check how their assessment compares with their neighbours and comparable property sales that would have been used in setting the value. If that doesn’t answer questions, they’re welcome to call B.C. Assessment, said Brian Smith, deputy assessor for the Fraser Valley. It gives assessors a chance to figure out if there are any discrepancies. 

“We always encourage people to call us first,” Smith said. “Sometimes it’s something we’re able to easily resolve, or with a potential better understanding of where their assessment does come from, people are more content with having seen that type of increase.”

5 – Homeowners have the right to formally appeal their assessments if they still disagree with the result, said Grant. “Failing an understanding at that level, (homeowners) can certainly file an independent complaint,” he said. Those are heard by three-member independent, property assessment review panels in each community. The deadline to appeal is Jan. 31. Typically, one to two per cent of homeowners appeal assessments, Grant said.

© 2017 Postmedia Network Inc.

REP

The Toronto Real Estate Board says the GTA’s average home price soared to $730,472 last month, up 20 per cent from December 2015.

The board says strong December sales volume helped make 2016 a record year for realtors in the Greater Toronto Area.

There were 5,338 sales transactions for all types of residential property last month including condo units and fully detached houses.

That was up 8.6 per cent compared with December 2015 despite a tight supply of properties for sale.
The board’s MLS house price index, which adjusts for the different types of properties was up 21 per cent in December.

For the full year, TREB members had 113,133 sales through the MLS system up 11.8 per cent compared with 2015, which had the previous record high.

“A relatively strong regional economy, low unemployment and very low borrowing costs kept the demand for ownership housing strong in the GTA, as the region’s population continued to grow in 2016,” TREB president Larry Cerqua said in a statement Thursday.

The board says upward momentum on pricing accelerated as the year progressed and the overall average selling price for the calendar year was $729,922 up 17.3 per cent compared with 2015.

Another factor affecting prices was a constrained supply of active listings, which hit a 15-year low in December.

“Total new listings for 2016 were down by almost four per cent,” said TREB’s director of market analysis, Jason Mercer.

Mercer added that government rule changes and policy debates have focused on high demand but “what we really need is more policy focus on issues impacting the lack of homes available for sale.”

In October, the federal government made a number of changes aimed at stabilizing the country’s real estate markets, including requiring stress tests for all insured mortgages.

The stress test change was intended to ensure that Canadians don’t take on larger mortgages than they can handle, particularly in markets such as Toronto and Vancouver where affordability is stretched.

On Wednesday, the Real Estate Board of Greater Vancouver reported that home sales in Metro Vancouver, one of the country’s most watched housing markets, fell 5.6 per cent last year.

Meanwhile, the composite benchmark price for all residential properties in Metro Vancouver, as measured by the Multiple Listing Service home price index, tumbled to $897,600 last month. That’s down 17.8 per cent compared to December 2015.

Copyright © 2017 Key Media Pty Ltd

Steve Randall
REP

Last year broke records in several Canadian housing markets and one Ontario region reached a milestone in achieving more than 10,000 home sales in a year.

London St. Thomas Association of Realtors reported that 10,193 homes were sold by its members during 2016, up almost 9 per cent from the previous year.

“Overall, it was an incredible year for residential real estate in our region,” said Stacey Evoy, LSTAR 2016 President. “Throughout 2016, we observed high demand with low supply that contributed to a very robust marketplace. Six months of the year saw their best sales since LSTAR has been tracking data, which speaks to why the industry thrived in 2016.”

Detached homes made up the bulk of sales (8,260) with a 9 per cent rise while condos saw a 7 per cent increase.

Although listings were up by more than 10 per cent, the region saw a 39 per cent drop in inventory year-over-year with average sales prices up 5.5 per cent to $279,057.

Copyright © 2017 Key Media Pty Ltd

Steve Randall
Canadian Real Estate Wealth

 

Home sales in Metro Vancouver closed out 2016 with a slump but the year was still the third best on record behind 2015 and 2005.

Real Estate Board of Greater Vancouver reports that there were 39,943 units sold in 2016, down 5.6 per cent on 2015 but more than 20 per cent above 2014’s sales.

In December, sales slumped 39.4 per cent from a year earlier with 1,714 units. That was 22.6 per cent below the November 2016 total and 8 per cent lower than the 10-year average for December.

The December drop was driven by single-family detached house sales which halved from a year earlier.

“It was an eventful year for real estate in Metro Vancouver. Escalating prices caused by low supply and strong home buyer demand brought more attention to the market than ever before,” Dan Morrison, Real Estate Board of Greater Vancouver (REBGV) president said.

The board’s home price index at the end of 2016 stood at $897,600 which is down 2.2 per cent over the past six months but 17.8 per cent up on the end of 2015.

“As prices rose in the first half of the year, public debate waged about what was fuelling demand and what should be done to stop it. This led to multiple government interventions into the market,” added Morrison. “The long-term effects of these actions won’t be fully understood for some time.”

Copyright © 2017 Key Media Pty Ltd

The Province

I just read the article on the new tax assessments. I took a look at the assessment online for our average, modest, 30-year-old Burnaby home. Our property assessment went up by $400,000 in one year, and as a result we have lost our homeowners grant. Having just retired, and with my husband about to retire, our grant was important to us, now and in the future.

Yes, I understand that I can defer taxes, but I view this as gambling with the value of our home. Having lived through the plunging values of the 1980s, I am unwilling to do that.

I am especially irate at the fact that the provincial Liberal government has chosen to hand out “loans” to first-time homebuyers, using tax money that will be gathered at the expense of longtime residents and seniors. I am encouraging everyone I know to write to their MLA. One thing politicians understand is losing an election, and I think Christy Clark just lost her next one.

Katy Alkins-Jang, Burnaby

Low taxes benefit Horgan

Re: Clark on the offensive with timely ad blitz, Column, Dec. 29

It is time for NDP Leader John Horgan to face the fact that B.C. taxpayers pay the second-lowest provincial income taxes in the country. Horgan is paid a taxpayer-funded salary of $156,014.49 per year — $104,009.66 for his MLA salary and an additional $52,004.83 for the job of official Opposition leader.

With an annual income of $156,014.49, Horgan would pay provincial income taxes of $15,647 in B.C., $16,282 in Alberta, $19,961 in Saskatchewan, $23,426 in Manitoba, $14,099 in Ontario, $40,173 in Quebec, $22,920 in Prince Edward Island, $23,900 in Nova Scotia, $22,785 in New Brunswick, and $20,481 in Newfoundland. John also benefits from the additional two-per-cent discount applied to all B.C. citizens with a yearly income over $106,543.

Joe Sawchuk, Duncan

Make services affordable

The year 2017 will greet us with increases in medical premiums, ICBC rates, transit fares and probably many others. Nevertheless, our premier is hinting that the provincial “surplus” may be used to cut taxes. Is this a bit of “trickle back?” Am I supposed to be grateful? Instead of electioneering, why not show care and consideration for the people who chose to elect this government by making these very important services more affordable. Valorie Watson, Osoyoos

We need to balance budget

When the NDP took power in 1991, our provincial debt was $17 billion. Ten years later when the Liberals took over, it was $33.5 billion. Almost double. Scary, huh? From 2001 to July 2013, it rose to $57 billion — an increase of only $24 billion, not bad for 12 years, but still $24 billion more. It’s only $2 billion a year.

But Christy Clark has increased the debt by $9 billion in just three and a half years. That’s $214 million per month. So the Liberals are now on par with the NDP — each party has grown our debt by $33 billion.

Clark will tell you that we have one of the lowest debts in Canada. We in fact are fifth. Hardly the lowest. Whichever party gets elected, we need one with fiscal responsibility. I belong to no political party, and just want a leader who can create a balanced budget. A real balanced budget where all provincial expenses match the income.

Ted Taylor, Surrey

© 2017 Postmedia Network Inc