Archive for December, 2018

Modest growth for Vancouver’s CRE market

Friday, December 7th, 2018

Retail real estate showed no change in Q3

Steve Randall
REP

A slowdown in retail real estate activity has exacerbated flat growth for the CRE sector.

The British Columbia Real Estate Association’s Commercial Leading Indicator (CLI) for the third quarter shows no significant change from the previous quarter and a 1.3% gain from Q3 2017.

Weak retail sales (down 2.3% quarter-over-quarter after adjusting for inflation and down 1.8% year-over-year) and reduced manufacturing shipments weighed on the CLI while increased office-based employment (up 14,000 quarter-over-quarter) and a slightly more favourable financial environment helped mitigate the weakness.

The gains in office employment pushed the CLI measure for this sector to a record high and, if the trend continues, would mean an increased need for office space in the future, leading to increased investment and leasing activity in the office sector.

“Slowing activity, particularly in the retail sector, led to a flattening of the CLI last quarter,” says BCREA Deputy Chief Economist Brendon Ogmundson. “A flattening index tends to point to a slower, yet still positive growth environment over the next year.”  

Copyright © 2018 Key Media Pty Ltd

Could this be the answer to Vancouver’s affordability crisis?

Friday, December 7th, 2018

A new approach to addressing Vancouver’s housing affordability crisis – change tax law

Steve Randall
REP

A new approach to addressing Vancouver’s housing affordability crisis has been proposed by an academic at UBC – but landlords may not like the ‘headline’ change.

Professor Thomas Davidoff says that Vancouver is a great place to buy property but not a great place to make a living in terms of tax policy.

“Generally, economists believe that taxes should be higher on goods that are supplied or demanded inelastically,” he said. “Because Vancouver has notoriously inelastic housing supply, one might expect property tax rates to be higher here than elsewhere in Canada; however, property taxes are actually very low in Vancouver. We have a high tax base because properties are expensive, but by any measure the property tax burden is low here.”

The professor’s model calls for changing the basis for taxation of rental homes from their value to their potential rent. This is based on his calculation that Vancouver’s property taxes should be four times higher than a typical Canadian city rather than lower.

Higher property tax for landlords, but cuts to other taxes “What I am proposing is a transfer from owners to renters, meaning property owners would pay more taxes and renters less, but everybody would pay less income and sales tax,” said Davidoff.

The plan would mean that those who are earning good incomes, on which they pay tax, along with high rents, would benefit. Property owners would pay more in property tax but would offset some of that with lower income and sales taxes.

However, Davidoff acknowledges that the proposal is politically tricky. Especially when considering views of older voters near or past retirement age.

“For them, raising property taxes means less money in their pocket, it means the value of their property falls, and given where they are in life, they’ve already paid most of their income and sales taxes, so they would perceive this as very unfair to them. Politicians that hope to implement something like a budget-neutral transfer of property to income and sales taxes have to be very careful how they do it.”

Copyright © 2018 Key Media Pty Ltd

Commercial real estate sales down across all sectors: REBGV

Friday, December 7th, 2018

Sales slowed nearly 20 per cent overall, with land sales posting the largest decrease quarter-over-quarter

Tanya Commisso
Western Investor

Commercial real estate sales across Greater Vancouver were down 19.5 per cent overall last quarter, according to the lastest statistics report from Real Estate Board of Greater Vancouver.

Slowing demand has impacting all commercial sectors, with land sales decreasing the most. Land sales declined 34.8 per cent this quarter, dropping from 305 sales in the second quarter of 2018 to 199 in the third. Office and retail sales decreased the least, down just 4.2 per cent quarter-over-quarter. 

“We’re seeing less demand across our commercial market compared to recent years and supply is beginning to ramp up with a number of projects expected to complete in our region over the next year,” said Phil Moore, REBGV president.

Total dollar volume of sales, however, barely decreased, down 0.9 per cent overall year-over-year. Office, retail and multi-family dollar volumes increased this quarter, up 45.5 per cent and 3.9 per cent, respectively. 

I line with slowing sales activity, the B.C. Real Estate Association’s Commercial Leading Indicator (CLI) measuring economic activity in the province is down a modest 1.3 per cent year-over-year. Quarter-over-quarter, the CLI has measuring flattening growth, which points to a “continued positive, if somewhat slower, growth environment for commercial real estate activity.”

New Westminster industrial sales showed the biggest increase in dollar value of all sectors and regions in Greater Vancouver, increasing 1366 per cent over last quarter. Coquitlam multi-family sales posted the largest decrease in quarter-over-quarter dollar volume, decreasing 87.9 per cent.

© Copyright 2018 Western Investor

Vancouver’s new home market to remain stable in 2019

Friday, December 7th, 2018

Not too hot, not too cold: Vancouver’s new home market to remain stable in 2019

Josh Sherman
other

New home prices won’t collapse next year, nor will they begin surging again, predicts a market observer with about 30 years of experience in the industry.

“I certainly think prices are going to remain at a fairly stable range,” Cameron McNeill, executive director and partner at MLA Canada, a real estate marketing and insight company, tells Livabl.

Recently, market research firm Urban Analytics estimated new condo prices in Vancouver were between 5 and 15 percent off peak values, depending on the type of unit and location.

But McNeill suggests population growth in the province is supportive of market stability.

“We’re not seeing that our immigration numbers are slowing down. We’re still seeing positive growth in the province, and that’s continuing to put pressure on our… market,” says McNeill.

McNeill says international migrants often arrive with capital available for the purchase of property. However, interprovincial migration is also encouraging.

“Alberta’s economic woes don’t hurt us,” he explains. “People are not exiting BC to go to Alberta like they have in past economic cycles,” McNeill adds.

In the past when this has occurred, McNeill says there would be an exodus of 5,000 to 8,000 people annually. “And that’s meaningful for us,” he says.

McNeill’s comments on Alberta echo the opinion of Vancouver realtor Adil Dinani, who recently suggested slumping oil prices would benefit the city’s housing market.

“If we see a more suppressed resource market in the first quarter, we may not see the Bank of Canada move rates,” Dinani told Livabl this week. “We all know oxygen for the real estate market is low interest rates,” he adds.

© 2018 BuzzBuzzHome Corp

Fraser Valley sales in line with historic averages

Thursday, December 6th, 2018

Fraser Valley sales down 41% from 2017

Steve Randall
Canadian Real Estate Wealth

Home sales slipped back in the Fraser Valley last month but were broadly in line with historic averages for the time of year.

A total of 1,028 sales were recorded through the MLS system of the Fraser Valley Real Estate Board, including 383 residential detached homes, 241 townhouses, and 286 apartments.

This was a decline of 41% compared to the record high of November 2017 (1,743) and down 11% from October 2018.

“Lessening demand continues to impact our market significantly,” said John Barbisan, President of the Board. “In turn, that has given purchasing power back to buyers who now have more time and more options when it comes to making a decision.”

Although the number of active listings fell 5% month-over-month, buyers had 41% more choice than a year ago with 7,355 in the inventory. New listings totaled 2,077, down 25.2% from the previous month and down 10.6% from November 2017.

HPI benchmark prices varied FVREB’s HPI Benchmark Price across the three main home types in November were:

  • Single Family Detached: $976,200, down 1.1% from October but unchanged from November 2017.
  • Townhomes: $532,800, down 1% compared to October 2018 but up 5.4% year-over-year.
  • Apartments: $422,500, down 2.4% month-over-month but up 12.2% compared to November 2017.

“The market is shifting, albeit slowly. But while buyers are enjoying a more comfortable real estate environment, sellers will have to pay attention to how these changes will affect their chances at success,” added Barbisan.

Copyright © 2018 Key Media Pty Ltd

Any owner eligible for council

Thursday, December 6th, 2018

The Strata Property Act permits those with written assignment of the owner

Tony Gioventu
The Province

Dear Tony:

We are a mid-sized condo building in Penticton having a tough time getting people to sit on council. We would like to permit family members to be elected to our council, but our council president said it has to be a resident owner to be eligible for council.

We have several long-term tenants in the building and their landlords who would be willing to help out, but he keeps refusing their nomination or election at our annual meeting. 

We are concerned that fewer owners are willing to be on council and the balance of power is left in the hands of our condo bully. How do we get more people to be on council?

Mary F.

Dear Mary: 

There are several classes of people under the Strata Property Act who are permitted to be elected to council: owners who are those persons registered on the title,  tenants who have been given the written assignment of the owner, family tenants who are granted an assignment under the act and have provided written verification of their family status and assignment, and assigned representatives of a strata lot owned by a corporation. 

In addition, a strata corporation may also adopt bylaws that permit other classes of people eligible for council, such as a spouse of an owner who is not registered on title or a family member who is not a resident of the building.

Any owner, regardless of their residency status, is eligible to be on council. You might find this surprising, but the president of council, when acting as the chair, or any person acting as the chair of a general meeting, has very little authority to make decisions.

The act establishes that matters at general meetings are decided by a majority vote, unless a three-quarters vote, 80-per-cent vote or unanimous vote is specifically required.  This section of the act tells us it is the owners in person or by proxy at the meeting who routinely make decisions on matters such as the approval or amendment of: the previous minutes, the agenda, the annual budget, the nomination of council members and their election, and the termination of the meeting.

The same rule applies to council meetings. At a council meeting, it is a majority of the council quorum that makes decisions, not the president.

Strata owners do not have to be bullied. Stand up and motion for the nominations of other eligible owners and tenants at the meeting. If the chair refuses to accept the nominations, the owners, by majority vote, may challenge the chair and override that decision. Bullies only have power if your community surrenders it.

Consider applying a nominating or invitation process for council before its annual meeting to fill the vacant positions to encourage owners and eligible tenants to volunteer for council. It is a great time to source out people with a variety of experiences to contribute to your operations and management of your community. Landlords and their tenants have just as much interest in a well-run property as a resident owner, and landlords carry all of the liability of the tenants as well as their own. Their contributions to council are just as valuable. 

© 2018 Postmedia Network Inc.

Metrotown high-density development site sold for $43.27M

Thursday, December 6th, 2018

BURNABY METROTOWN HIGHRISE-ZONED DEVELOPMENT SITE SELLS FOR $43.2 MILLION

Western Investor

Well-located residential development sites continue to attract investors in Metro Vancouver, witnessed by the December sale of a 35,580-square-foot highrise-zoned residential parcel in Burnaby for $43.2 million.

That price pencils out to about $1,214 per square foot in gross land costs. Density on the site allows for a potential of 5.0 floor space ratio (FSR) for residential and 1.3 FSR for commercial density (assuming assembly with the corner site) for a total of 6.3 FSR, or 224,154 square feet of potential build-able.  Based upon the base density (1.6 FSR was purchased from the city) under Burnaby’s Metro-town official community plan, this equates to a per-buildable-square-foot cost of approximately $258.  Using only the base density of 3.4 FSR, the price per buildable square foot is $357.

The parcel is composed of two lots that are currently improved with two rental apartment build-ings providing holding income during the rezoning process: 6675 Dow (23 units) and 6691 Dow (15 units).

The Goodman team at HQ Commercial and NAI Commercial acted as brokers on this done deal.

Copyright © Western Investor

U.S.-based real estate marketplace expands further in Canada

Thursday, December 6th, 2018

Zillow pushing further into Canada

Ephraim Vecina
Mortgage Broker News

U.S.-based real estate and rental marketplace Zillow announced earlier this week that it has cemented listing agreements with yet more brokerages and networks in Canada, further expanding its reach north of the border.

The portal’s newest Canada-based partners are HomeLife Real Estate Canada, Sage Real Estate, and Your Choice Realty. The affiliates will have their listings – as well as crucial information like property particulars and brokerage contact information – go up on Zillow’s website and mobile app, thus giving these an even larger foreign audience.

“We’re thrilled each time we welcome more Canadian partners in displaying their listings on Zillow.com, because it’s a win for brokers, agents and consumers. Our Canadian partnerships are already driving increased traffic to Zillow, with more than half a million Canadian home shoppers visiting each month,” said Errol Samuelson, Zillow Group chief industry Development Officer.

The additions came as the latest step in Zillow’s drive to establish a firm foothold in the Canadian market.

As of October, the Canadian alliances represented more than 50,000 listings, visible and accessible to the marketplace’s more than 100 million non-U.S. visitors per year.

Vancouver sales, prices decelerating due to various pressures

Wednesday, December 5th, 2018

Slow activity has gradually decelerated home sales

Ephraim Vecina
Mortgage Broker News

Slower overall activity has spurred the gradual deceleration of both home sales volume and prices in Vancouver, according to the region’s real estate association.

November’s sales numbers were 42.5% lower on a year-over-year basis, and 34.7% below the 10-year average, data from the Real Estate Board of Greater Vancouver indicated.

Board president Phil Moore attributed this and the lower prices across all property types to a “wait-and-see approach” that a substantial proportion of would-be buyers and investors have adopted for most of 2018.

Last month, the average price of Vancouver detached homes stood at just over $1.5 million, while apartments were at $667,800 (2.3% annual decrease).

As a whole, Western Canada has been seeing a downward trend in demand. This was most pronounced in October, according to Canadian Real Estate Association.

The CREA’s October measurement of the nationwide sales-to-new-listings ratio showed that Vancouver experienced a 26.22% year-over-year shrinkage in this metric to reach 48.4.

This also made the city’s demand levels the third lowest in Western Canada, a situation that might only get worse due to the fact that only 1 out of 10 current renters in the city are expecting to have their own homes next year.

“While homebuying intentions are up among current home buyers [14% in 2017 to 19% this year], this has been offset by weaker intentions among current renters – the latter being the primary pool for potential first-time buyers. Affordability remains a challenge for first-time buyers in the Vancouver market,” according to the Altus Group’s Vancouver Flash Report 2018.

Copyright © 2018 Key Media

Vancouver sales slump continued in November

Wednesday, December 5th, 2018

Metro Vancouver at a 10-year low

Steve Randall
REP

November was another lean month for the Vancouver residential real estate market.

Home sales totaled 1,606 across the Metro Vancouver area, down 18.2% from October and down 42.5% year-over-year. The total is 34.7% below the 10-year average for November.

“Home buyers have been taking a wait-and-see approach for most of 2018. This has allowed the number of homes available for sale in the region to return to more typical historical levels,” Phil Moore, REBGV president said. “This activity is helping home prices edge down, across all property types, from the record highs we’ve experienced over the last year.”

Listings were also down, with 3,461 units added to the MLS in November, 15.8% lower than a year earlier and 29% below October 2018’s total. However, there were 12,307 homes available for sale, down 5.2% from October but up 40.7% from November 2017.

Hoping for better things in 2019 The MLS Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,042,100, that’s a 1.4% decrease over November 2017 and a 1.9% decrease compared to October 2018.

“Home prices have declined between four and seven per cent over the last six months depending on property type. We’ll watch conditions in the first quarter of 2019 to see if home buyer demand picks up ahead of the traditionally more active spring market,” Moore said.

Stats by property type Detached home sales in November 2018 reached 516, down 38.6% from the 841 detached sales recorded in November 2017. The benchmark price for detached homes is $1,500,100, down 6.5% from November 2017 and a 1.6% decrease compared to October 2018.

Apartment home sales reached 810 in November 2018, a 46.3% decrease compared to the 1,508 sales in November 2017. The benchmark price of an apartment property is $667,800, up 2.3% from November 2017 but a 2.3% decrease compared to October 2018.

Attached home sales in November 2018 totalled 282, a 36.8% decrease compared to the 446 sales in November 2017. The benchmark price of an attached home is $818,500, a 2.6% increase from November 2017 but a 1.3% decrease compared to October 2018.

Copyright © 2018 Key Media Pty Ltd