The luxury home market taking a tumble

David Molko
other

When it comes to some high-end mansions in the tony West Vancouver community called British Properties, it turns out looks can be deceiving.

Case in point, the 9,000+-square-foot home perched on Eyremount Drive, with an infinity swimming pool fit for a resort and a view over the water that seems to stretch past the horizon.

And that’s before we even get into the circular staircase, double kitchen, home movie theatre, wine cellar, or any of the six bedrooms or seven-and-a-half bathrooms.

Real estate records show the mansion last sold for over $11.2 million in 2015, as a new build.

And, according to the listing agent, it just sold again last week. The price tag: $5.5 million.

Longtime realtor Brent Eilers who’s watched the ups and down for nearly four decades called the 50 per cent drop “extreme,” but wagered that with the slow-down, which means West Vancouver properties above $5 million are now sitting on the market for three plus years, it’s a case of an investor jumping ship, rather than an owner who’s out of options.

“If your mindset is, ‘how can I make money?’ then you’re probably a little less emotionally invested in the real estate,” said Eilers, with RE/MAX Masters. “It becomes a money decision.”

Just down the ridge, there’s a five bedroom, seven bath modernist mansion on Chartwell Drive which boasts an equally enviable view.

The story here, records show, appears to be of a seller who first listed the new build in 2017 for nearly $16 million. The listing expired. It was relisted at $13.9 million, then $11.8 million, and finally this year at $8.8 million. It sold in just eight days. The sale price: $7 million.

Mortgage consultant Robert Mogensen called it “a type of carnage that’s occurring after a ridiculous ramp up in prices over the last several years.”

And no surprise, it’s become harder to get financing on high-end properties, Mogensen said. Before, lenders would consider 25 or 30 per cent down.

“Now you’ll see private lenders wanting to go no lower than 50 per cent on a down payment,” he said, “and some of the banks won’t even look at these deals.”

So if you’re not a cash buyer, could now be the time to score the deal of your dreams?

Eilers suggested being cautious, and Mogensen said he felt “leery,” but both acknowledged there are deals to be found, if you know how and where to find them.

“I suspect that prices will continue to soften,” said Eilers, a life member of the Greater Vancouver Real Estate Board. “And where will they go? They’ll go as far as it takes to get the local buyer into the market from a qualification point of view.”

Mogensen echoed that prospective buyers on the upper end should get pre-qualified, and still remember to do their homework.

“You’ve never had a better opportunity to negotiate with the owner, and negotiate really hard.”

© 2019 BellMedia

ARGUS Cloud investment tool enhanced

Ephraim Vecina
Mortgage Broker News

Altus Group has announced the latest edition of its ARGUS Cloud commercial real estate investment tool, which will feature new cloud-enabled solutions and capabilities.

Introduced late last year, the centralized storage platform helps industry clients with their decision-making processes by facilitating collaboration and improving the efficiency of workflows.

The company said that ARGUS Cloud will now come with fresh, powerful features, including the “Cloud-Only Deployment” of its industry-standard ARGUS Enterprise. The move is intended to assist users looking to streamline operational costs by “storing all of their data in the cloud while still supporting full integration with existing on-premise AE users.”

“The ARGUS Cloud platform leverages the intelligence of AE to both support existing on-premise solutions and power a series of new critical web-based applications designed to better manage the challenges facing today’s CRE professionals.”

The new edition of the tool will also allow users to migrate multiple server instances of AE to a single cloud database, improving file accessibility and visibility in clients’ organizations.

“Centrally located models allow users to collaborate more easily across their business and with partners which simplifies workflow processes and ensures a consistent view of assets throughout their lifecycle.”

Other crucial additions are benchmarking and reporting capabilities.

ARGUS Cloud will now allow “customers to utilize comparables and dashboards to efficiently benchmark existing assets and portfolios to support enhanced analysis and effective decision-making. Future functionality will enable benchmarking with third-party data and aggregated AE peer data.”

Copyright © 2019 Key Media

The stress test has about 40,000 fewer home sales

Ephraim Vecina
Mortgage Broker News

While it was a well-intentioned policy crafted in a time of seemingly uncontrollable price growth in Canada’s largest housing markets, B-20 actually led to approximately 40,000 fewer home sales nationwide (on an annual basis) during the final quarter of last year, according to Toronto-Dominion economists Rishi Sondhi, Ksenia Bushmeneva, and Derek Burleton.

In a client note earlier this week, the trio argued that the impact of the stress testing has been far more enduring and extensive than anticipated.

To illustrate just how significant B-20 has been, the economists said that an immediate nullification of the regulations would boost Canadian home prices by around 6%, which will be additional to TD Bank’s 4% increase forecast, by the end of next year.

The market is now at a stage where the federal government should begin considering a more laid-back approach to the issue, TD Bank stated.

“Right now it’s a one-size-fits all type of policy, and borrowers differ in their ability to service their mortgage, and they’re different in terms of their risks,” Bushmeneva said in an interview with Bloomberg, adding that particular attention should be paid towards relaxing the “somewhat arbitrary” 200-basis-point limit on new uninsured mortgages.

Ontario Real Estate Association CEO Tim Hudak expressed similar sentiments in his piece for Financial Post published earlier this week, noting that B-20 has done damage to the market “beyond what many thought was the worst case.”

Hudak cited official figures stating that nationwide housing resale volume fell 11% year-over-year in 2018, the first year of the stress testing’s implementation.

“Not only are many people unable to become home owners at all; others can’t upgrade as their families grow, which in turn means they aren’t selling their starter homes to people trying to buy for the first time,” Hudak wrote.

Copyright © 2019 Key Media