Fewer homes sales allowing a build up of inventory

Steve Randall
Canadian Real Estate Wealth

Fewer home sales in the Fraser Valley is allowing a build up of inventory in the region.

Sales of 1,290 units across all home types were recorded the Fraser Valley Real Estate Board’s MLS, down 33.4% year-over-year and down 11.2% month-over-month.

Active inventory grew by 3.6% month-over-month and 23.9% year-over-year to 7,399 listings. New listings gained 2,921, down 7% from the previous month and down 11.5% from July 2017.

“Despite a much healthier level of inventory, demand continues to be influenced by pricing and market barriers such as the mortgage stress test and rising interest rates,” remarked Board President John Barbisan. “On top of that, summer is busy for people and usually a slow season for real estate.”

Prices head lower HPI Benchmark Price Activity:

• Single Family Detached: At $1,017,400, the Benchmark price for a single family detached home in the Fraser Valley decreased 0.1% compared to June 2018 and increased 5.3% compared to July 2017.
• Townhomes: At $557,500, the Benchmark price for a townhome in the Fraser Valley in the Fraser Valley decreased 0.1% compared to June 2018 and increased 14.7% compared to July 2017.
• Apartments: At $450,400, the Benchmark price for apartments/condos in the Fraser Valley decreased 0.7% compared to June 2018 and increased 32% compared to July 2017.

Copyright © 2018 Key Media Pty Ltd

Demand outpaces supply for lower priced homes

Ephraim Vecina
Canadian Real Estate Wealth

A recent shrinkage in home prices across Metro Vancouver will not help improve the prospects of more affordable housing for first-time buyers, according to observers.

This is because properties are staying in the market longer, which gives buyers of single-family estates “the luxury of taking their time.”

“In particular, when you get into $2- and $3-million properties, buyers have a lot more choice… and they have the ability now to negotiate with sellers,” Canada Mortgage and Housing Corporation market analyst Eric Bond told CTV News Vancouver.

According to the Crown corporation, growth of demand continues to outpace supply for Vancouver homes valued lower than $1 million. Condo prices have also spiked upward across the region, up to as much as a 35% year-over-year increase in Langley.

However, while values at the very-high-end segment have shrunk, buyers with lower budgets should not hope for good news on the affordability front.

 “We are in no way on to levels of affordability for local incomes,” Simon Fraser University’s Andy Yan stated.

The analyst said that not even new construction will help moderate these conditions as a significant number of newer towers are aimed at higher-income consumers.

“Who are we building for? And how do we grow for the type of community that we want to grow and really flourish in the City of Vancouver?” Yan said.

Copyright © 2018 Key Media Pty Ltd

Who is to blame, 84% say it is foreign homebuyers

Steve Randall
REP

Whatever the official data may show, residents of Metro Vancouver overwhelmingly believe that foreign buyers are contributing to the current housing situation in the region.

A survey from Insights West asked residents if there is a housing crisis, 90% say there is including 64% who ‘strongly agree’ with that opinion. Those who are renting or earn less than $40K are most likely to concur.

When asked what or who is to blame, 84% say it is foreign homebuyers, with overall population growth in the metro area cited by 80%, and shadow flipping on 76%.

“There is no doubt that Metro Vancouver residents believe that we are in a major crisis when it comes to housing, and the issue is dominating public opinion and the public agenda,” says Steve Mossop, President of Insights West. “As the housing situation reaches crisis proportions, there is no shortage of scapegoats to blame, despite studies that show foreign buyers and money laundering are minor factors in the equation.”

Other factors are also concerning residents Outside of the top 3 factors that residents blame for the housing crisis, there are several others that are highly considered to be contributing to the issues.

Money laundering, city/municipal zoning bylaws, immigration, and lack of available land due to the natural geography, are all cited by more than half of respondents.

The biggest issue facing Metro Vancouver housing is affordability according to 48% of respondents with 18-34 year olds most concerned about this.

Even rising home equity is not seen as positive by most As home prices have risen sharply in recent years, homeowners have obviously seen increased equity but just 26% feel that the housing situation has been positive for them; as gains in personal wealth has been offset by higher assessments.

Copyright © 2018 Key Media Pty Ltd

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Torino to take its place in Richmond’s Capstan Village

Mary Frances Hill
The Province

Torino

What: 405 homes (185 in first tower)

Where: 8699 Hazelbridge Way, Richmond

Residence sizes and prices: Torino South homes range in size from 578 to 1,189 sq. ft., (with the exception of one home, at 1,855 sq. ft); starting at $579,900 for one-bedroom homes, $819,900 for two-bedroom homes and $998,900 for three-bedroom units

Developer and builder: Pinnacle International

Sales centre address: 3220 No. 3 Road, Richmond

Hours: noon — 5 p.m. (Fridays by appointment)

Telephone: 604 303-0148

The display home at Torino is reflective of its name, thanks to the careful attention of designer Rene Chang and developer Pinnacle International, who infused the contemporary interiors with sensual Italian influences, the look and feel of classic stone and creative work with glass and colour.

At Torino, the second phase in Pinnacle’s Capstan Village community in Richmond, Chang covered an entire wall in the dining room with a glass mirror and placed a set of four pieces of similar artwork in a grid on top.

“The artwork was strategically placed over the dining side to define the space between the living and dining areas,” says Chang, who often works with Pinnacle. “The group of four similar pictures also pulls together the beige, yellow and blue touches featured in this suite, giving definition and unity at the same time.”

Chang, who’s a fan of the effect glass and mirrors can create in a space, also worked on the interiors at Sorrento, Pinnacle International’s first development at Capstan Village. By the time it’s complete in 2021, Capstan Village will include six residential towers and a mix of retail, office spaces, artist studios, hotel accommodation, a daycare and a public park.

Chang credits the Mediterranean-type touches in the exterior work with inspiring her to respond in kind within the suites.

“Torino’s exterior uses simple lines and features a welcoming array of coloured glass panels as highlights,” she notes. “The interior design follows through with this theme, [with] simplistic clean lines in furnishings with touches of colour in accessories to bring a feeling of warmth.”

Bathrooms include designer cabinetry and vanities, granite or quartz countertops and porcelain tile floors. These finishes were so popular at Sorrento, the developer used the same materials in Torino, says Grace Kwok of Anson Realty Ltd., which is marketing the development on behalf of Pinnacle International. At the same time, Torino stands apart from Sorrento by offering more kitchen colour-scheme options. “Beside the ‘classic’ and ‘couture’ schemes, we offer a white kitchen, which can be the choice for either of the two colour schemes,” Kwok says.

A glass partition separates the ensuite bathroom and the main bedroom, a feature familiar to buyers of Pinnacle International homes in downtown Vancouver and the North Shore. This feature is often found in many four- and five-star hotels in North America, Kwok adds.

© 2018 Postmedia Network Inc.

City sues for heritage mansion repairs

Keith Fraser
The Province

The City of Vancouver has asked the B.C. Supreme Court to order repairs to a fire-damaged $14-million Shaughnessy mansion with a colourful history.

In October, a fire that was suspicious in nature did extensive damage to the house at 3737 Angus Drive, which is owned by wealthy developers Miao Pan and Wen Yang.

According to a Vancouver Fire and Rescue Services report, the owners of the home, which was vacant and unfurnished, were called to the scene after the fire but a language barrier prevented any questioning and no translator was available. The report said the fire department asked for a Vancouver police arson investigator to be sent.

The fire caused major damage to the roof and walls of the heritage building and left it exposed to the elements.

The city’s chief building official ordered the owners to do repairs to prevent further damage caused by weather, infestation, rot or similar decay.

A Nov. 15 deadline for the repairs was set, but city officials extended the deadline twice at the request of the owners, with the final deadline being Feb. 16 this year, according to the petition filed in B.C. Supreme Court.

After the owners failed to meet the deadline, the matter was referred to city council for consideration and on May 14, council approved filing the lawsuit.

The city petition says that the heritage standards bylaw sets out a scheme to ensure the protection of heritage property that is within a heritage conservation area.

As the owners failed to bring the heritage building into compliance with the bylaw, the Vancouver Charter authorizes council to apply to the B.C. Supreme Court for an order “for compliance or restoration,” says the petition.

The city is asking for an order requiring the owners to submit an application to repair the heritage building within 15 days then make complete applications for building, plumbing, trades and electrical permits within 15 days of getting a city heritage alteration permit. The city also wants it to require a contractor be hired within 15 days of permits being issue. It also asks that the order require restoration work be completed within three months of the contractor being retained.

The city hired a heritage consultant to prepare a “statement of significance” about the property, described as a 2½-storey “grand residence” in the Arts and Crafts style.

The building, built in 1910, is valued for its association with Frank Rounsefell, a wealthy Vancouver businessman and prominent community leader in the late 19th and early 20th century, according to the statement.

It’s also valued because it was owned from 1955 to 1967 by Donald Cromie, who was owner and publisher of the Vancouver Sun from 1942 to 1964. He was known for holding big parties including one with Rudolf Nureyev and 200 ballet fans that had to be broken up by police because of the noise, says the statement.

No response has yet been filed to the petition, which contains allegations that have not been tested in court. Pan, who was in the news in November 2016 when he hosted a fundraiser for the federal Liberal party, and Yang could not be reached for comment.

© 2018 Postmedia Network Inc.

For neighbours, the dividends of selling homes together as part of a larger plot can be huge

Special to Financial Post
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A potential barrier to affordable housing presented by Vancouver City Council

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Presenting yet another potential barrier to housing affordability in the lower mainland, Vancouver City Council is planning to increase fees to developers, and it’s homebuyers who will really be paying the cost.

The council’s decision will be made next week, and, if approved, will take effect on September 30.

For each house or condo development, builders are responsible for paying something called development charges to the city. These charges often go toward things like infrastructure, public services or community enhancements like parks and public art. As it stands in Vancouver, for a 2,000 square-foot house, the charges are approximately $7,200. You can see how this can add up, especially once you’re talking about a multi-unit condominium tower. If city council approves the increase, development charges would spike to about $13,000.

One problem with increased charges like this is that they’re reflected in the purchase price of homes and condos, so it’s buyers who are really dealing with the consequences. This makes it challenging for developers to build more affordable projects. In a recent study by the C.D. Howe Institute, the team found that when development charges in Ontario were increased, the price of homes went up, not just for new builds, but for homes of all types. Unfortunately, this is likely to happen here too, should Vancouver City Council decide to approve the fee hike.

While it’s true that with the increase in density comes a need for enhanced infrastructure, requiring developers to fund increasingly more of that is actually detrimental to the idea of housing affordability. To make expansion work, the city needs to figure out a way to disperse the costs fairly. Otherwise, it’s homeowners who really pay the price.

Abana Capital © 2018

Hot weather, cool real estate market ? but what about prices? It depends on the neighbourhood

Joannah Connolly
Western Investor

July may have been scorching in terms of the weather, but the residential real estate market was decidedly cool, according to the latest report from the Real Estate Board of Greater Vancouver (REBGV).

Metro Vancouver saw the lowest number of July home sales since July 2000, with 2,070 homes trading hands on the Multiple Listings Service. That’s a 30.1 per cent drop compared with July 2017, and a decrease of 14.6 per cent in a single month since June 2018.

That total is also a whopping 29.3 per cent below the 10-year July sales average.

However, the REBGV president pointed out that the month-over-month decline is standard, as July always sees slower home sales. “Summer is traditionally a quieter time of year in real estate. This is particularly true this year,” said Phil Moore. “With increased mortgage rates and stricter lending requirements, buyers and sellers are opting to take a wait-and-see approach for the time being.”

The market was also affected by a lack of inventory, with fewer new home listings as sellers adopted that “wait-and-see approach.” There were 4,770 homes newly listed for sale on the MLS in July, a 9.2 per cent year-over-year decline and a 9.6 per cent decrease compared with June 2018.

However, the sluggish absorption of new and existing inventory meant that July saw a year-over-year jump in total listings by the end of the month. The 12,137 homes available as of the end of July is a 32 per cent increase compared with the same month last year.

This puts the region firmly into overall balanced-market territory with a sales-to-listings ratio of 17.1 per cent. However, by property type, the ratio is a strong buyer’s market at 9.9 per cent for detached homes, creeping towards a balanced market at 20.2 per cent for townhomes, and still a seller’s market at 27.3 per cent for condos.

So what does all this cooling do for home prices?

It seems price growth has finally stalled and even slightly reversed, depending on your area. The overall benchmark price – all home types across the region – now stands at $1,087,500. This is a 6.7 per cent year-over-year increase over July 2017 but a small decline of 0.6 per cent compared with June this year.

However, breaking sales and prices down by property type and neighbourhood, as ever, reveals wide variations.

Moore added, “With fewer buyers active in today’s market, we’re seeing less upward pressure on home prices across the region. This is most pronounced in the detached home market, but demand in the townhome and apartment markets is also relenting from the more frenetic pace experienced over the last few years.”

Sales and prices by property type

A total of 637 detached Metro Vancouver homes traded on the MLS in July, a drop of 32.9 per cent year over year and a slide of 16.8 per cent since June this year.

Single-family home prices fell across the region, with the benchmark price now at $1,588,400. This is 1.5 per cent decrease from July 2017 and a 0.6 per cent slip compared with June.

However, detached home prices on Bowen Island are up 11.5 per cent over one year ago, and up 10.3 per cent on the Sunshine Coast and in Maple Ridge. This compares with annual price declines of 8.4 per cent for Vancouver West’s detached homes, and 8.3 per cent in West Vancouver.

Sales of attached homes such as duplexes, townhomes and row homes fell even further, dropping 34.8 per cent year over year to 543 sales in July. However, this was an improvement on the dismal 419 attached sales in June this year.

Typical townhome prices across the region were still 12.1 per cent higher than this time last year, with the benchmark price of an attached unit now at $856,000 – a small slip of 0.4 per cent compared with June 2018. Vancouver East saw the weakest annual price growth in this home type at 4.4 per cent, whereas Whistler townhomes are 34.9 per cent more expensive than a year ago, followed by Squamish, up 30.6 per cent.

Greater Vancouver condo sales totalled 1,079 in July 2018, which is 26.5 per cent lower than the 1,468 sales in July 2017 and down nearly 13 per cent month over month.

With the strongest price growth over the past year, the benchmark price of an apartment property is $700,500, 13.6 per cent up from July 2017, although a 0.5 per cent decline compared with June 2018. By area, annual condo price rises range from 36.9 per cent in Maple Ridge and 33.7 per cent in Pitt Meadows to a low of 6.6 per cent in Vancouver West.

Home prices vary widely in different areas throughout the region. To get a good idea of home prices in a specific location and by property type, check the detailed MLS® Home Price Index in the full REBGV statistics package.

Copyright © 2018 Western Investor