Vancouver condo market in demand

Neil Sharma
Canadian Real Estate Wealth

Vancouver’s condo market supply is lagging well behind demand, putting a major premium on units.

Royal LePage’s Randy Ryalls

Randy Ryalls, general manager of Royal LePage Sterling Realty in Port Moody, says one of the major reasons for the supply shortage is that the single-family market segment remains out of reach for most prospective homeowners, and developers haven’t been able to inject the marketplace with enough completed projects.

“In the condo market, it’s been a chronic situation over the years,” he said. “It takes a long time to get those units to market, and there’s lots of demand for them, so the developers can’t seem to keep up with the demand.”

“It’s a matter of years,” he continued. “If the developer buys a piece of land, the process can easily take them years to get approval, get the building up and get people moved into it. It’s a lengthy process.”

Royal LePage House Price Survey shed light on the pressure placed upon condo supply –and, by extension, buyers.

The report also revealed that the ‘move-up’ buying cohort, defined as sellers able to make a pretty penny and move into the single-family segment, are benefiting from Vancouver’s supply constraints. However, many more buyers are priced out of entry-level homes, namely condos, and, therefore, the market altogether.

“We’ve seen an interesting set of events going on where the detached market, because of price point, stalled a little bit because of price appreciation, but there’s still remarkable demand for condos because the price point is still affordable for much more people,” continued Ryalls. “The gap between the two is starting to close a little bit. It’s the first time in years condos are out-performing single-family homes, so the gap between the two is closing.

“If somebody has got a good amount of equity in a condo, for the first time in a long time they can sell that condo and do very well and have enough of a down payment to get into a single-family house.”

Managing Broker of REMAX Westcoast, Richard Laurendeau, pointed to the price index, wherein, by the end of September, condos averaged $635,800 – up from $522,300 a year ago – and townhouses averaged $786,600, up from $686,800 in September 2016.

“By most people’s measurements, that would be considered hefty gains and consistent with what we see in the marketplace with a reduction of inventory and upward pressure on price,” he said.

He added that the supply constraints in the condo market are creating fierce competition among buyers.

“I’ve seen with our realtors who work with buyers that they have experienced multiple examples of competing offers,” said Laurendeau. “In a rising market short of inventory, that’s a symptom that tends to follow along with it.”

Copyright © 2017 Key Media Pty Ltd

OSFI’s proposed mortgage measure unnecessary, harmful-Fraser Institute

Ephraim Vecina
REP

A new stress test for all uninsured mortgages is unnecessary and could increase costs for homebuyers, according to a recent report from the Fraser Institute.

Study author Neil Mohindra wrote the proposed stress test “will do more harm than good” by limiting access to mortgages for some homebuyers.

“The mandatory standard for stress testing could result in a less competitive and more concentrated mortgage market,” Mohindra stated, as quoted by The Canadian Press.

The study came amid news that the Office of the Superintendent of Financial Institutions is finalizing new lending guidelines.

Among the changes being considered is a requirement that homebuyers who have a down payment of 20% or more and do not require mortgage insurance still have to show they can make their payments if interest rates rise.

The head of OSFI has said that Canada’s banking regulator wants to reduce the risk of mortgage defaults because of high levels of household debt.

“We are not waiting to see those risks crystallize in rising arrears and defaults before we act,” OSFI head Jeremy Rudin said recently.

Canadian household debt compared with disposable income hit a record high in the second quarter. Statistics Canada reported last month that household credit market debt as a proportion of household disposable income increased to 167.8%, up from 166.6% in the first quarter.

However, Mohindra said that instead of a prescriptive test, OSFI could use its existing powers to fix what it believes are deficiencies in policies and procedures.

The Bank of Canada has raised its key interest rate target by a quarter of a percentage point twice this year.

The increases have pushed up the big bank prime lending rates which are used to determine rates for variable-rate mortgages and lines of credit.

Copyright © 2017 Key Media Pty Ltd

Using video to close deals

Neil Sharma
REP

BombBomb is fast becoming a favourite tool among sales agents to follow up on leads and close deals.

Rather than writing uninspired emails, as most professionals want to do, BombBomb allows users to send video messages instead, creating rapport with potential clients and, in some cases, vastly increasing business output.

Jason Doornbos, enterprise account executive of BombBomb, says text will always be inferior to face-to-face interactions, and in a profession predicated upon cultivating relationships, BombBomb is especially useful.

“We make it easier for agents to build relationships and to get face-to-face with clients more often, because agents, and sales professionals in general, know they’re more effective face-to-face than in plain text email,” said Doornbos. “If you think about it, this is exactly why emojis were made – to put emotion into text – and even that doesn’t portray what you would be saying face-to-face.”

BombBomb is also used by sales agents to record their listings. Doornbos says that video has become an essential component of any sales agent’s repertoire, but being able to gauge a video listing’s interest is a major advantage.

“If you’re using BombBomb to send listing videos, you can see who watched it and for how long,” he said. “It gives agents a better gauge on how to prospect.”

Additionally, the platform can be used to for lead generation. BombBomb allows users to see when their messages have been viewer, which is essential for knowing when to follow up.

“If hot leads go cold or anything like that, it’s the best way to re-engage them,” said Doornbos. “If you’re calling while they’re watching your video, you’re not interrupting their time. It’s also harder to say no to a person when you’re face-to-face than it is by plain text email. Psychologically, us humans tend not to shy away from people when we speak to them directly, but if somebody texted you or wrote you, you could respond in your own time or ignore it. It’s just harder to say no to a face.”

Doornbos also said brokerages are using BombBomb as a way to recruit new talent.

“It’s one of the best ways brokers will use bombbomb.”

Copyright © 2017 Key Media Pty Ltd

Imperial townhomes have plenty of space, with three levels and up to five bedrooms

Michael Bernard
The Vancouver Sun

Imperial

Project location: 15633 Mountain View Dr., Surrey

Project scope: 87 four- and five-bedroom three-level townhomes on six acres. Homes range from 2,000 to 2,500 sq. ft. Close to Morgan Crossing shopping centre, the new Grandview Heights Aquatic Centre, and several golf courses

Prices: from $800,000

Developer: T.M. Crest Homes

Architect: Barnett Dembek

Interior Design: In house

Sales centre: 15633 Mountain View Dr., Surrey

Hours: Noon — 6 p.m., Sat — Thurs

Telephone: 778-547-0593

Website: http://www.liveatimperial.ca

Completion date: End of 2017

Gurveer Samra learned the homebuilding business quite literally from the ground up — on the Surrey properties where his dad has built homes for the past 40 years.

“I was raised on a construction site,” said Samra with a laugh.

“My three sisters and I would go after school and help my dad to clean up a construction site,” he said. “Dad always wanted to train us from the bottom up and we tried to learn as much as we could from start to finish by doing a lot of it ourselves.”

That kind of practical experience has been a major asset as the family business, T. M. Crest, builds its second multi-family project — the 87-unit Imperial — on six acres in South Surrey. The firm is focusing on the market that wants and needs larger homes with ample space: Imperial homes have four or five bedrooms and range between 2,000 and 2,500 square feet.

The homes are designed with low-pitch roofs and many have small front yards with white picket fences. The community with two acres of landscaped green space and lighted pathways is a two-minute walk to shopping at Morgan Creek and other area amenities.

Many are equipped with the kind of features that the Samras have observed are popular these days, such as nine-foot ceilings, and some with a master bedroom on the main floor.

“It’s really something we are producing for people in the area where we feel that convenience and spacious living need to be melded into one. We feel this product is exactly what people need.”

Samra said the project expects to attract people from two or three demographic groups: Downsizers who want a more maintenance-free life, but don’t necessarily want to cut down on their living space, young families with children who want to also consider making room in their home for their own parents, and childless couples who simply want more living space.

“There are downsizers who are selling homes ranging between $1 million and $1.5 million in places like Langley. They are in that time of their life when they want something a little easier to maintain and space that they can feel comfortable in. They are used to living in a single-family home.”

The extra bedrooms also serve a new emerging extended family model, one that his own family grew up with, Samra said.

“It’s a win-win for the parents and for their own children,” Samra said, noting that he now raises his own family with his mother helping with child care. “It makes it a lot easier for my dad and I to focus on our goal (to build the family business).”

“We also think there are young professionals who are weary of the dense living in Burnaby and Vancouver who want to move into the suburbs where they have a bit more space to themselves and and there is a quieter pace of life,” he said. With four or five bedrooms, childless couples could dedicate bedrooms to his-and-her home offices, a media room or gathering place for socializing,  Samra said.

One prospective buyer, Gay Aronovich and her husband Gabriel, are actually looking to upsize by moving to Imperial, so that they can play host to family when they visit.

“Right now, we are living in a two-bedroom [home] of 1,400 square feet in Surrey and the home at Imperial is substantially bigger, which is was we are looking for,” she said. She looks forward to when her daughter and three grandchildren, who live in Florida, can come and stay with them rather than book a hotel room.

The senior couple also enjoy the area and the proximity to shopping, as well as air conditioning, which they don’t have in their current home.

The Samras have incorporated other practical, cost-saving features into the Imperial. For instance, forced-air Carrier-brand natural gas furnaces and air conditioning are standard.

“The whole home is ducted for direct-vent heating and air conditioning from the bedroom to the basement,” he said. “There is no electric baseboard heating or those ghastly air conditioning units hanging out the window.”

Supplied laundry units are side-by-side rather than the stackable style, providing more space for folding clothing, he said. Other popular standard features are seats in ensuite showers and natural gas outlets for barbecues, which means no hauling propane tanks upstairs.

The Imperial offers buyers 10 distinct floor plans in light and lighter tones. All homes feature kitchens with islands, quartz countertops with glass backsplashes and Shaker-style cabinets. Appliance packages are by KitchenAid. Each home comes with a 50-inch-wide LED fireplace with reflective firebox, and powder rooms on the main level.

Bathrooms are equipped with large-format 12-by-24-inch porcelain tiles, and master ensuites have a built-in makeup vanity. Shower stalls in selected plans are liberally sized in four-foot or five-foot-wide dimensions. Bedroom ensuites include a five-foot soaker tub and “his-and -her” vanities in master ensuites.

Flooring is wide-plank laminate on the main and lower levels with short-fibre carpeting on bedroom levels. Semi-transparent blinds are a standard fixture. Master bedrooms feature walk-in closets with built-in closet organizers.

There are some options for buyers, including completed alarm and vacuum systems, installed and painted crown moulding, laminate flooring instead of carpeting and an optional wall installed in the lower level for an entertainment space.

Homeowner costs are kept down — strata fees will run between $150 and 200 a month — by having a relatively modest amenity building with two floors with bathrooms and kitchens on each level for birthday parties or other events.

All homes are covered by the 2/5/10 year Travelers Guarantee Co. of Canada home warranty protection.

© 2017 Postmedia Network Inc.

Realtors contribute millions to charity and give countless volunteer hours to a range of causes

ROBIN BRUNET
The Vancouver Sun

Arguably, no other professional group has a firmer grip on the pulse of communities than Realtors. Their job is, after all, to find homes for clients, a service that requires deep knowledge about the health and needs of their neighbourhoods.

Realtors are often on the front lines of charitable activity. Since it began tracking its members’ contributions in 2007, the Real Estate Board of Greater Vancouver (REBGV) has identified $43.4 million in charitable giving. REBGV is the professional organization representing over 14,000 Realtors in Metro Vancouver.

Last year, member contributions amounted to $2.2 million, a figure that only tells part of the charitable story, says Jill Oudil, REBGV president.

These donations were accompanied by countless volunteer hours to a wide range of causes, including the Ride to Conquer Cancer, the Children’s Miracle Network, the Richmond Hospital Foundation, Backpack Buddies and more.

Oudil says: “Our members are community builders. To be successful in real estate, you need to know your community. That means getting involved and helping out where you can. That’s what Realtors do. It’s innate to many of us in the profession.”

On occasion, Realtor contributions can be spectacular. In 2012, long-time REBGV member William P.J. McCarthy made the single-largest charitable bequest to a sole beneficiary in B.C.’s history: $21.4 million to the BC Cancer Foundation via the JamborMcCarthy Legacy Fund.

Other initiatives are more grassroots. Each November, the Realtors Care Blanket Drive collects clothes and blankets for the working poor and homeless. (The 23rd annual REALTORS Care Blanket Drive takes place Nov. 14 to 21.)

“Originally, Realtors collected and donated excess items from clients moving from one location to another,” Oudil says. “Today, that process is facilitated by volunteers at over 100 drop-off locations at real estate offices across the Lower Mainland.”

The program is the largest and longestrunning blanket drive in British Columbia. Since it began in 1994, it has helped more than 300,000 people in our communities. Charitable organizations across the Lower Mainland rely on the Blanket Drive to help them keep people warm and dry during the winter months.

The fact that Realtors spend much of their working days within the communities they serve has also proven beneficial to making the Lower Mainland a little safer.

The Realty Watch program is a partnership between local police departments, the RCMP and more than 17,000 Realtors across the region.

In emergency situations, Realtors respond to police requests to search for missing or abducted persons.

In July 2016, Port Coquitlam Realtor Risa Bassetto was integral to finding a missing person.

She checked her Realty Watch fan-out, requested by police and sent by REBGV, and discovered it was a Vancouver resident who’d been reported missing.

“Risa was instrumental in finding this elderly person,” says Vancouver Police Department Detective Const. Raymond Payette.

As REBGV members continue making their communities stronger and safer, Oudil reflects on their efforts.

“The volunteering spirit within our Realtor community is widespread. In fact, it would be difficult to find a local charitable event, a parent advisory committee, a youth sports team or other volunteer group that doesn’t have a Realtor involved. Giving back is second nature to our members and I don’t think they realize how powerful a force they are across our communities.”

© 2017 Postmedia Network Inc.

Ephraim Vecina
Canadian Real Estate Wealth

Work on what is set to become the tallest liveable building nationwide has begun in Toronto last week, the structure’s developer announced.

The One, touted by developer Foster + Partners as a state-of-the-art building combining residential and commercial spaces, is an 85-storey, 306-metre structure situated at the border of the downtown area and the Yorkville neighbourhood.

The tower is designed as a “clearly articulated building” that will offer commercial units at lower levels and residential apartments at the higher floors.

“The structural frame is clearly expressed on the façade creating a distinctive series of vertical, horizontal and diagonal framing elements that are clad in a champagne bronze colour,” Foster + Partners stated. “The building is further articulated with the introduction of horizontal bands at regular intervals where mechanical floors are located. By expressing the functions and its distinctive structure, the building acquires a unique identity, becoming an outstanding new addition to the Toronto skyline.”

“The residential floors are based on consistent 57 square-metre (620-square-foot) planning modules, allowing for flexible configurations throughout. The tower is topped by a series of duplex penthouses, which have sweeping views across Lake Ontario and beyond,” the developer added.

“The One is the final piece of the jigsaw in the tower cluster at the Yonge and Bloor node – one of the most prominent intersections in the city. The project creates a new anchor for high-end retail along Bloor Street West, while respecting the urban scale of Yonge Street. The design is respectful of the legacy of the William Luke Buildings, and incorporates the historic 19th century brick structures within the larger development,” Foster + Partners senior partner Giles Robinson said.

“The One will set new standards for commercial and retail developments in Canada.”

Copyright © 2017 Key Media Pty Ltd

Steve Randall
REP

House prices in Canada’s five most populated housing markets rose at a balanced, healthy pace in the third quarter of 2017, the first time in six years that this has happened.

Home prices in the Greater Toronto Area, Greater Vancouver, Greater Montreal Area, Calgary and Ottawa gained between 1.5% and 3.5% year-over-year according to Royal LePage.

Across the 53 markets analyzed by the firm’s House Price Composite, median prices were up 13.3% year-over-year in the third quarter of 2017 to $628,411.

Standard two-storey homes rose 13.9% to a median $748,049; bungalows were up 9.5% to $525,781; and condos were up 15.2% to $413,670.

Prices in the GTA continued to lead the increases year-over-year with a 21.7% rise, Montreal was up 14.3%, Ottawa rose 7.9%, Calgary was up 5% and Greater Vancouver was up 2.5%.

“For now, the Toronto and Vancouver housing markets have returned to earth,” said Royal LePage CEO Phil Soper. “After a period of unsustainable price inflation and sharp market corrections, we are seeing low single digit appreciation in each. Calgary has shaken off the oil-bust blues and Montreal appears to be at the beginning of a new era of economic prosperity. Rounding out the ‘big five,’ the Ottawa market is behaving like it usually does – a picture of healthy market growth.”

Soper says that rising borrowing costs and weakened foreign buyer interest will keep a lid on rising prices in the major markets.

Copyright © 2017 Key Media Pty Ltd

Tiffany Crawford
The Province

Metro Vancouver condo prices surged in the third quarter, according to a new real estate price survey released Thursday.

Royal Lepage’s survey found the median price of a condominium rose by 17.6 per cent year-over-year to $622,392, while the cost of a two-storey detached home dropped by 1.1 per cent to $1,532,849 over the same period. The price of a bungalow, however, went up 3.5 per cent to $1,422,458. 

The survey showed the biggest jump in condo prices in Metro Vancouver was in North Vancouver, with prices rising 25.2 per cent year-over-year to $614,173.

Following North Vancouver were Burnaby at 24.6 per cent to $561,558 and Coquitlam at 23.8 per cent to $471,749.

The Royal Lepage survey came the same day as the British Columbia Real Estate Association released monthly statistics that showed home sales and average prices rose in B.C. in September. 

The BCREA figures showed a total of 8,340 residential unit sales were recorded by the Multiple Listing Service during the month, an increase of 9.9 per cent from the same period last year.

Total sales amounted to $5.8 billion, up 30.2 per cent from September 2016, and the average MLS residential price was $693,774, up 18.5 per cent.

The BCREA also said residential unit sales declined 13 per cent year-to-date to 81,608 units while the average price was down 0.2 per cent to $705,501.

Randy Ryalls, general manager of Royal LePage Sterling Realty, said the high price of detached homes and tighter mortgage restrictions has pushed buyers into the condo market, placing a severe strain on inventory and driving competition.

As prices rise, and the affordability deteriorates, Ryalls, said buyers are returning to the market in fear of being permanently priced out.

“Despite having already taken 30 to 40 per cent of entry-level buyers out of the marketplace entirely, the new mortgage regulations, and requisite stress tests, have helped to significantly drive condominium prices up,” said Ryalls, in a statement. “The cost of a down payment for a detached property in Greater Vancouver has already surpassed the average home price in many markets in Canada.”

He added that there is not enough supply to satisfy demand levels, noting that a balanced market needs about 14,000 to 15,000 listings, much more than the current 9,000 listings.

Overall, the aggregate price of a home in Metro Vancouver increased 2.5 per cent year-over-year to $1,229,133. Over the same period, the City of Vancouver saw an increase of 2.2 per cent to $1,439,652.

Langley, Surrey, North Vancouver, and Richmond saw third quarter price increases of 9.2 per cent, 6.3 per cent, 4.5 per cent and 1.4 per cent, to $831,283, $796,466, $1,417,226, and $1,103,064, respectively, according to the survey.

Cameron Muir, the association’s chief economist, said B.C. home sales rose nearly five per cent from August on a seasonally adjusted basis.

“Total active listings on the market continue to trend at 10-year lows in most B.C. regions, limiting unit sales and pushing home prices higher,: he said.

“While the economic fundamentals support elevated housing demand, rising home prices are eroding affordability, particularly for first-time buyers.”

© 2017 Postmedia Network Inc.

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Joannah Connolly
REW

The number of homes sold on the Multiple Listing Service® in BC in September rose nearly 10% year over year, and 5% from August, according to a report by the British Columbia Real Estate Association (BCREA) published October 12.

Because there was also an increase in sale prices, that lead September’s total sales dollar volume to rise by a whopping 30.2% compared with the same month last year.

The average resale price of a home in the province last month was 18.5% higher than one year previously, at $693,774, which is up 2.3% in a single month since August’s average of $678,168.

The annual jump in homes exchanging hands across the province is largely driven by increased activity in the Lower Mainland, which has seen a recovery from the effects of the Metro Vancouver foreign buyer tax introduction last August. Of the larger markets, Greater Vancouver and the Fraser Valley posted the largest annual sales gains, both up around 25%, whereas Victoria saw the province’s biggest year-over-year slide in unit transactions, down 16.6%.

Some of the Interior and smaller markets also saw annual sales declines, although Kamloops and Chilliwack both had a strong showing, up 8.2% and 7.7% respectively.

The annual price rises seen by the different boards also varied, but did not necessarily mirror sales patterns. Nine out of the 11 BC boards reported year-over-year average price increases. Of the larger markets, where price changes are less volatile, the Fraser Valley and Greater Vancouver saw the biggest price gains, up 18.2% and 17.7% respectively. But Victoria, where sales dropped, posted an average price increase of 12.5%. Only the very small markets of BC Northern and Norther Lights saw minor annual average sale price declines.

Eight of the 11 boards posted year-over-year declines in the number of active listings in September, although Greater Vancouver was not one of them.

“Total active listings on the market continue to trend at 10-year lows in most BC regions, limiting unit sales and pushing home prices higher,” said Cameron Muir, BCREA chief economist.

“While the economic fundamentals support elevated housing demand, rising home prices are eroding affordability, particularly for first-time buyers.”

The BCREA report was issued on the same day as Royal LePage’s 2017 Q3 House Price Survey, which looks at quarterly price activity in Canada’s major urban markets. The report said that during the third quarter, the aggregate home price in Greater Vancouver rose year over year by a “modest, but healthy” 2.5% to $1,229,133.

However, when broken out by housing type, the brokerage found that the median price of a Greater Vancouver condo increased 17.6% year-over-year to $622,392. The median price of a bungalow had a much more reasonable increase, up 3.5% year-over-year to $1,422,458, but the median price of a standard two-storey home fell 1.1% to $1,532,849 in the same period.

For a breakdown of local BC board statistics in September, read the full BCREA report.

© 2017 REW.ca