Steve Randall
Canadian Real Estate Wealth

Homes sales fell by almost a quarter in British Columbia last month but supply remained tight and prices increased.

Figures from the British Columbia Real Estate Association (BCREA) show that sales of 7,409 in March meant a 24.6% decrease from a year earlier while prices gained 5.3% to an average price of $726,930.

More burdensome mortgage qualifications are having the predictable effect of swiftly curbing housing demand,” said Cameron Muir, BCREA Chief Economist. “You simply cannot pull as much as 20% of the purchasing power away from conventional mortgage borrowers and not create a downturn in consumer demand.”

Even with lower demand, supply of homes remains low across most of the province, with little change from a year ago and total inventory at or near a 12-year low.

Year-to-date, BC residential sales dollar volume was down 1.7 per cent to $13.9 billion, compared with the same period in 2017. Residential unit sales decreased 9.4 per cent to 18,927 units, while the average MLS® residential price was up 8.5 per cent to $732,243.

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B.C. home prices continue to climb as sales plummet on ‘burdensome’ mortgage rules

CAMERON MUIR
The Province

Sales figures released by the association for March show 7,409 homes changed hands last month, a decline of 24.6 per cent over March 2017, while average property prices climbed 5.3 per cent over the same period.

A news release from the association says the average home sold for $726,930 last month and it blames persistently high prices on the lack of properties available.

It says total active listings have changed very little since March 2017, nudging a 12-year low across B.C.

Association chief economist Cameron Muir forecasts prices will continue to climb as long as the trend continues.

He is also critical of what he calls the “burdensome” mortgage qualification rules that took effect in January, saying they have had the “predictable effect of swiftly curbing housing demand.”

“You simply cannot pull as much as 20 per cent of the purchasing power away from conventional mortgage borrowers and not create a downturn in consumer demand,” Muir says in the release.

B.C. home sales in March tallied $5.39 billion, a 20.6-per-cent tumble compared with March 2017, while the association says sales dollar volumes since January slipped 1.7 per cent to $13.9 billion, compared with the first quarter of last year.

Residential sales also fell 9.4 per cent during the first three months of this year, while the association reports the average price of a home increased 8.5 per cent to just over $732,000 during the same period.

© 2018 Postmedia Network Inc.

Prices immutable, reports BCREA

REP

Home sales in British Columbia plummeted last month compared with March of last year, but the B.C. Real Estate Association says the decline was not reflected in prices.

Sales figures released by the association for March show 7,409 homes changed hands last month, a decline of 24.6 per cent over March 2017, while average property prices climbed 5.3 per cent over the same period.

A news release from the association says the average home sold for $726,930 last month and it blames persistently high prices on the lack of properties available for sale.

It says total active listings have changed very little since March of 2017, nudging a 12-year low across B.C.

Association chief economist Cameron Muir forecasts prices will continue to climb as long as the trend continues.

He is also critical of what he calls the “burdensome” mortgage qualification rules that took effect in January, saying they have had the “predictable effect of swiftly curbing housing demand.”

“You simply cannot pull as much as 20 per cent of the purchasing power away from conventional mortgage borrowers and not create a downturn in consumer demand,” Muir says in the release.

B.C. home sales in March tallied $5.39 billion, a 20.6 per cent tumble compared with March 2017, while the association says sales dollar volumes since January slipped 1.7 per cent to $13.9 billion, compared with the first quarter of last year.

Residential sales also fell 9.4 per cent during the first three months of this year, while the association reports the average price of a home increased 8.5 per cent to just over $732,000 during the same period.

Copyright © 2018 Key Media Pty Ltd

REP

Canada’s real estate industry organization says the number of homes sold in March plunged 22.7 per cent and the national average price was down 10.4 per cent from the same month last year.

The Canadian Real Estate Association says the sales activity marked a four-year low for the month of March and was seven per cent below the 10-year average.

The national average price for all types of residential property was about $491,000, which was down 10.4 per cent from March of last year _ with the Vancouver and Toronto markets causing most of the drag.

Excluding Canada’s two most expensive real estate markets, the national average price would be $383,000 _ a decline of two per cent from March 2017.

March had the third consecutive double-digit decline compared with the comparable months last year, when prices in the Greater Toronto Area soared to record highs.

CREA says activity was below year-ago levels in more than 80 per cent of all local markets, in all major urban centres except for Montreal and Ottawa, with the vast majority of year-over-year declines well into double digits.

Copyright © 2018 Key Media Pty Ltd

One project calls for 100 new homes built at Lakeview United Church on Semlin Drive

Mike Howell
Vancouver Courier

The provincial government will spend $12.4 million to help the B.C. Conference of the United Church of Canada redevelop some of its land in Vancouver, Coquitlam, Nanaimo and Richmond into a total of 414 new “affordable” rental homes.

The homes will be geared to individuals, families and seniors who earn between $50,000 and $120,000 and rents will range between $700 and $3,000 per month, according to information released by the government Friday following Premier John Horgan’s announcement in Coquitlam.

Horgan announced the funding at the Como Lake United Church in Coquitlam, which will see 75 homes built on the property. A project in Nanaimo at Brechin United Church calls for 74 units and 165 more will be built at Brighhouse United Church in Richmond.

In Vancouver, Lakeview United Church at 2776 Semlin Dr. is expected to begin construction on 100 new units in July 2020. The homes will be offered to people with incomes ranging between $48,520 and $108,994. Rents will begin at $1,200 and climb to $2,700 per month, depending on size of the unit.

“Single-bedroom condos in the sky are not for everyone, and although that’s an important part of the housing stock, there’s a whole bunch of other housing that needs to be built,” Horgan told the crowd at the church, which included Housing Minister Selina Robinson and the three mayors of the Tri-Cities.

The projects are part of the government’s newly created “HousingHub,” which aims to broker agreements with non-profits, developers, faith groups, property owners, local and federal governments and Indigenous organizations to locate, use or redevelop land in communities where affordability is an issue.

“The province is backstopping the start [of the projects], and the developer will build it and will be compensated by the owner of the land, who will be compensated at the sale of the property,” Horgan said.

Developers will receive low-cost financing in exchange for building the housing, some of which will also be available for purchase through a government program. The Housing Hub is part of the government’s 30-point housing plan announced in February and is being overseen by the City of Vancouver’s former head of real estate services, Michael Flanigan.

Terry Harrison of the B.C. Conference of the United Church of Canada pointed out their churches are getting old and congregations are decreasing in numbers. Harrison said the church’s agreement with the government is part of a province-wide strategy to repurpose under-used properties.

“Since the United Church is blessed with so much property, and property is integral to affordable housing, it’s an approach that makes a lot of sense,” Harrison said. “While it’s imperative that we use these assets for the United Church, we must also provide practical benefits for the wider community. That’s sort of our ying-yang. Our faith teaches us to serve those in need. And here and now, one of the greatest needs is affordable housing for middle-income families.”

Glacier Community Media © Copyright ® 2013 – 2018

BCREA

The British Columbia Real Estate Association (BCREA) reports that a total of 7,409 residential unit sales were recorded by the Multiple Listing Service® (MLS®) across the province in March, a 24.6 per cent decrease from the same month last year. The average MLS® residential price in BC was $726,930, up 5.3 per cent from the previous year. Total sales dollar volume was $5.39 billion, a 20.6 per cent decline from March 2017.

“More burdensome mortgage qualifications are having the predictable effect of swiftly curbing housing demand,” said Cameron Muir, BCREA Chief Economist. “You simply cannot pull as much as 20 per cent of the purchasing power away from conventional mortgage borrowers and not create a downturn in consumer demand.”

Despite the decline in consumer demand, the supply of homes for sale remains low in most BC regions. Total active listings on the market are essentially unchanged from March 2017, and are at or near a 12-year low across the province. As a result, home prices are expected to continue an upward trajectory.

Year-to-date, BC residential sales dollar volume was down 1.7 per cent to $13.9 billion, compared with the same period in 2017. Residential unit sales decreased 9.4 per cent to 18,927 units, while the average MLS® residential price was up 8.5 per cent to $732,243.

Copyright ©2018 BCREA

Steve Randall
REP

A quarter of Canadian homebuyers say they are feeling pinched by the new mortgage stress test that came into effect in January, but the spring season is still looking positive.

A survey conducted by Leger for RE/MAX shows that most markets are set to remain stable or improve, and there is overall optimism

The report says that the average home sale price in the GTA was down almost 10% in January and February from a year earlier, and many areas surrounding the GTA are also more affordable for young families hoping to become first-time buyers.

Western Canada is seeing strong price growth with the average sales price in Greater Vancouver up 11% in January and February to $1,051,513. Victoria has also seen a rise to $831,000 in January and February this year compared to $761,000 in the same period of 2017.

However, the region has other issues on top of the rising prices which may affect spring sales.

“While the stress test did not impact Western Canada’s major markets as much as other parts of the country, the foreign buyer’s tax and proposed speculation tax in B.C. have remained a concern for buyers,” says Elton Ash, Regional Executive Vice President, RE/MAX of Western Canada. “In recent weeks, the speculation tax has actually made some buyers hold off on purchasing which may affect the housing market in the next few months.”

The result of the stress test and other policy changes is that 1 in 4 homebuyers say they have compromised on the size of their new home while 18% made concessions on the location.

Even so, 55% said they feel they can buy a home that fits their needs, up form 46% a year ago.

“The stress test, along with rising prices over the last two years, has contributed to the evolution of the Canadian homebuyer, and has prompted them to change their perceptions of ‘must-haves’ such as size and location,” says Christopher Alexander, Executive Vice President and Regional Director, RE/MAX INTEGRA Ontario-Atlantic Canada Region. “Homebuyers impacted by regulatory changes beyond their control have adapted to the circumstances and still, more than half feel like they can purchase the right home to suit their needs.”

Although prices in Alberta and Atlantic Canada are seeing increases, they are still relatively affordable and first-time buyers are showing interest.

Copyright © 2018 Key Media Pty Ltd

Armina Ligaya
The Vancouver Sun

Nearly half of all existing mortgages in Canada will need to be renewed this year, substantially more than in prior years, according to a new report, amid rising interest rates and new rules that make it tougher for some borrowers to shop around.

A CIBC Capital Markets report suggests an estimated 47 per cent of all existing mortgages will need to be refinanced in 2018, up from the 25 to 35 per cent range in a typical year.

The increase is an unintended consequence of various rounds of regulatory changes in the past few years aimed at reducing risk coupled with rising house prices that made it harder for homebuyers to qualify, said Ian Pollick, CIBC’s executive director and head of North American Rates Strategy in a report released Tuesday.

“Over the past two to three years, as home prices have risen unchecked, you’ve had people trying to get into the housing market unable to afford longer term mortgages and taken out short-term mortgages,” he said in an interview. “And in 2018, everything is falling on top of one another.”

The increase in renewals comes as mortgage rates have been rising.

Recent Bank of Canada interest rate hikes have pushed up variable rate mortgage rates, while five-year fixed rates up about half a percentage point compared with a year ago as yields on the bond market, where the big banks raise money, have been on the rise since late last year due to an improved economic outlook.

Meanwhile, new lending guidelines introduced this year stipulate that homeowners looking to renew their uninsured mortgages are subject to a new stress test, unless they stick with their existing provider, hobbling their ability to seek out a more competitive rate.

Under the tighter lending guidelines, known as B20, homebuyers seeking a loan from a federally regulated lender must prove they can service their uninsured mortgage at a qualifying rate of the greater of the contractual mortgage rate plus two percentage points or the five-year benchmark rate published by the Bank of Canada. An existing stress test already requires those with insured mortgages to qualify at the central bank’s benchmark five-year mortgage rule.

However, borrowers who renew their uninsured mortgage with their existing lender are not subject to the new stress test, which took effect Jan. 1.

In turn, there is less incentive for lenders to offer lower rates to compete for market share, as they did during the so-called “mortgage wars” roughly five years ago.

“Some of their customers won’t be able to leave the bank,” said Scott Hannah, president and chief executive of the Credit Counselling Society. “Where is the motivation for financial institutions to offer the best rate?”

Craig Alexander, chief economist for the Conference Board of Canada, said the new underwriting guidelines were necessary to limit the growth in household debt and contain the associated risks.

“It’s just going to be a shock for some Canadians when they go shopping for a mortgage,” he said.

Mortgage broker network Dominion Lending Centres spokesman Dave Teixeira said clients looking to switch do have other options, such as credit unions which are provincially regulated and not required to implement the stress test. However, it is taking longer for its brokers to find another suitable lender, he added.

Alexander said Canadians will likely renew their mortgages at rates higher than they have currently, which will have a financial impact. He expects the share of income going towards servicing household debt to rise over the coming year, contributing to the trend of slowing consumer spending.

However, the economist stressed that interest rates still remain “incredibly low” and he does not expect the central bank to raise rates until next year.

“They have increased from where they were, but when you look at debt service costs for Canadians, they’re still quite manageable, except for a very small portion of the population,” Alexander said.

Research conducted by CIBC Economics suggests that just 20 per cent of all outstanding mortgage and non-mortgage debt is exposed to higher rates, said Pollick.

“This is a small proportion and, should have limited near-term ramifications,” he said. “Over time, as interest rates continue to rise, it will at some point in the future restrict consumption patterns.”

© 2018 National Post