Vancouver home sales had a 46% gain in September

Ephraim Vecina
Mortgage Broker News

Amid falling prices, Vancouver’s home sales activity enjoyed a massive 46.3% year-over-year gain in September, according to the Real Estate Board of Greater Vancouver.

The market saw 2,333 homes getting sold in September, a sharp rise from the 1,595 sales during the same time last year.

Last month’s activity level ended up just 1.7% lower than the 10-year average for September.

REBGV added that the market is moving towards more balanced conditions. In terms of supply, a total of 4,866 homes were newly listed last month, representing a 29.9% increase compared to August, and a 7.8% annual decrease.

These trends accompanied overall lower prices. The composite benchmark price across all housing types in Metro Vancouver shrunk by 7.3% annually and 0.3% monthly in September, to end up at $990,600.

Single detached housing saw its benchmark price drop by 8.6% year-over-year, while condos had a 6.5% decrease. Attached home prices went down 7.2%.

Over the past few months, Vancouver prices have suffered declines while much of Canada has gone up.

The Teranet – National Bank of Canada House Price Index released last month showed that Vancouver’s average housing price (across all asset classes) fell by 6.63% year-over-year in August, bringing composite prices down by 6.96% from the peak seen in July 2018.

“The city’s index has shown negative growth every month this year,” Better Dwelling stated in its analysis of the data – an observation that has been mirrored in another study.

“In recent months, home prices have generally been stabilizing in British Columbia and the Prairies, a measure which had been falling until recently,” the CREA noted recently.

Copyright © 2019 Key Media

The best and worst cities for seniors to live

Steve Randall
REP

Canadian seniors considering a move south of the border may be tempted by the weather in Florida but a new report suggests other destinations may be better options.

With senior living requiring more than just sunny days, the Caring.com report acknowledges that the fast-rising seniors population in the US – set to make up more than 20% of the population by 2035 – requires appropriate housing options to address their needs and socio-economic conditions.

The report notes that some markets are better able to meet these needs than others and ranks the Best and Worst Cities for Seniors to Live based on healthcare, housing options, community engagement, transportation, quality of life and workforce development.

“This comprehensive study is designed to help families and seniors understand and discuss the landscape for senior living in specific states, while also supporting our nation’s communities in better serving the growing population of seniors,” explained Jason Persinger, Caring’s Chief Digital Officer.

Among the 70 factors that the report considers are the various types of senior care available across the 50 states and DC, along with an analysis of their costs.

It also considered the options for the many seniors that will keep working.

“In addition to healthcare and housing options, we also thought it was important to look at states and cities with the best workforce development programs,” says Persinger. “Although some people completely retire at age 65, many seniors are forced to work part-time or take on a second career just to make ends meet.”

Best and worst for seniors The 2019 Senior Living Report reveals that San Francisco is the best city for seniors followed by Fredericksburg and Washington, DC. The best states are New York, Massachusetts, and New Jersey.

Top 10 Best Cities for Seniors to Live in the United States

1st – San Francisco

2nd – Fredericksburg

3rd – Washington DC

4th – Boston

5th – Brooklyn

6th – Woodland Hills

7th – Chapel Hill

8th – Santa Monica

9th – Queens

10th – New York

Top 10 Worst Cities for Seniors to Live in the United States

302nd – Rio Rancho

301st – Hemet

300th – Stockton

299th – Port Charlotte

298th – Cape Coral

297th – Prescott

296th – El Paso

295th – Cheyenne

294th – Palm Coast

293rd – Port St. Lucie

The full report can be seen here.

Copyright © 2019 Key Media Pty Ltd

To flip or not to flip?

Natalka Falcomer
REM

Ever since Toronto’s real estate boom began, pre-construction has been one of the most popular forms of investment. This is because investors assume that the value of a future project will continue to increase. Pre-construction is also an attractive investment because it isn’t as risky or costly as buying a “run down” home (requiring a huge deposit) and renovating it (more money spent than expected!) and then hoping to sell it for a profit.

Pre-construction, in contrast, divvies up the deposit and the developer takes care of the construction. Having said that, while pre-construction flipping appears simpler than flipping a home, it’s simply not the case. There are numerous complications regarding developer charges, carrying costs and charges for upgrades that are added to the initial purchase price.

What’s more, certain pre-construction projects in Toronto can cost more than a resale condominium.  Here are just three of the many financial impediments that may make your flip a flop.

Loss of incentives:

Agreements of Purchase and Sale are typically drafted by the developer and are very developer friendly with respect to assigning your agreement. Apart from the general fees and legal fees that the original purchaser (“assignor”) will likely have to pay to the developer for the ability to assign the agreement, the assignor may also lose certain financial incentives. For example, the caps on development charge levies or credits for future common expenses may be lost in the event of an assignment. The loss of these incentives makes the assignment much less attractive for the second buyer (“assignee”).

It’s obvious that failure to address such loss of incentives before anyone enters into any agreement will lead to a dead deal or a lawsuit. It’s imperative to take the following steps to prevent a dispute and failed flip because of a loss in incentives:

• The assignor should negotiate better assignment terms before signing the original agreement with the developer;
• Both the assignor and assignee should review the agreement with a lawyer prior to entering into an assignment agreement; and
• Depending on what the lawyer finds in the agreement, include a clause to address the potential for a loss of incentives. For example, if you’re representing the assignor, draft a clause for the assignment agreement that states that the assignee recognizes that incentives may be removed and if such incentives are removed then the assignee agrees to continue with the completion of the assignment at no cost to the assignor. If you’re representing the assignee, however, modify it to state that any reduction in incentives will be deducted from the purchase price.

Fees, fees and more fees:

Apart from paying the developer’s costs for the assignment (yes, this includes legal fees!), there are several other costs that the assignor and assignee need to consider.

For example, who gets the benefit of the interest on the deposit? The assignor must also consider how HST will be treated on the profit of the sale as it may be considered a “flip” and therefore a taxable gain at different rates. Assignees, on the other hand, will want to ensure that they have the capital to not only pay for the deposit to the assignor for the assignment when it becomes firm, but also the deposit that the assignor already paid to the developer. This is particularly crucial as lenders will not provide financing for an assignment prior to the completion date.

Assignees should also get their financing in order prior to accepting an assignment because some lenders refuse to provide a loan based on the assignment purchase price. Finally, assignors and assignees must be clear as to whether or not the price paid by the assignee includes the fees that the developer charged for the assignment; who will be responsible for adjustments that are paid to the developer before the project closes; and who pays for any upcoming fees for upgrades.

The best way to mitigate for these financial surprises is to ensure a lawyer carefully combs through the original agreement and sets out all past, current and future fees in the assignment agreement, as well as who pays for what and when.

When can you assign?

Many developers now prohibit purchasers from assigning their unit until the developer has sold a certain percentage of the total development. The threshold in Toronto can be between 85 per cent and 90 per cent of the development. This means that, if the market slows and the developer can’t meet the threshold or if the developer goes bankrupt in its effort to meet the threshold, then the assignor may be stuck with a project that she cannot sell or with no project at all.

As such, it’s critical for investors to carefully review any restrictions on when the assignor may assign the agreement, as well as the integrity and financial strength of the developer.

Central Toronto’s condominium prices continue to accelerate, making it no surprise that, despite these potential problems, investors continue to buy pre-construction and make a profit. Having said that, it’s imperative to understand fluctuations in the market and the legal terms and financial terms of an agreement.

© 2019 REM Real Estate Magazine

Certain detractors can lower your home’s resale value

Kelsey Pudloski
Livabl

The goal of home ownership — beyond the ‘keeping a roof over your head’ bit — is to make a return on your investment. You purchase a starter home in an up-and-coming neighborhood, live in it for at least five years, make a few upgrades, and voilà! You’ve got enough cash on hand to move into your forever home. We all want to sell our homes for the most money possible, but certain factors — or shall we say detractors — can lower your home’s resale value. Opendoor, an online real estate marketplace, analyzed data from actual home offers in 20 US housing markets between June 2018 and June 2019 to pinpoint the most costly culprits. Keep scrolling to find out if your home is at risk of devaluation.

1. Living next door to an unsightly commercial property, -$9,600

Your neighbors are Joe and Sue McDonald? That’s all well and good, they seem nice. A continually crowded McDonald’s drive-thru? Not so much. The irresistible smell of french fries might seem like a selling point, but it could slash your resale value by nearly $10,000.

2. Having a treacherously sloped backyard, -$7,000

Everyone dreams of a sprawling backyard where their dog can run with abandon or their kid can kick around a soccer ball. A sloped backyard, on the other hand, can pose safety risks and requires extensive landscaping to be made functional.

3. Dealing with a neighbor’s eyesore property, -$5,200

Even if you’ve invested in the curb appeal of your own home — adding potted plants and a couple patio chairs — your neighbor’s unmowed lawn and peeling exterior paint could negatively affect your final sale price. Unfortunately, there’s not much that can be done to remedy this factor, unless your neighbor is willing to accept some free yard work from a volunteer (yes, that means you). 

4. Having inexpensive laminate or tile countertops, -$4,600

Laminate countertops are cheap, but they’re certainly not chic. While you may have chosen versatile Formica for its ease of maintenance and wallet-friendly price tag, the decision could come back to haunt you at closing time. Once popular in the 70s and 80s, tile countertops now have a dingey and dated appearance. Upgrade your kitchen countertops to durable quartz or beautiful butcher block to increase your return. 

5. Bearing wall-to-wall carpeting, -$3,900

Carpet harbors dust and allergens, requires regular cleaning, and is more susceptible to changing design trends. As a home seller, you can usually get away with it in children’s bedrooms or a finished basement, but if carpet is used throughout your main floor, be prepared to knock down the price of your home.

6. Having carpet flooring in the master bedroom, -$3,800

Again, carpet is very much a personal choice. Some people crave the warmth and comfort it provides underfoot, while others, especially those who live in humid climates, think of it as a breeding ground for mold. As a home seller, you want to appeal to the widest audience, and in 2019, most buyers favor hardwood flooring.

7. Residing on a street with a high traffic volume, -$3,800

When you live in a busy area, finding parking for your guests is a total crapshoot, crossing the street is like playing a game of chicken, and traffic noises can keep you up at night. But hey, being within walking distance of bars and restaurants might be well worth it. For families with young children, though, the frenzy of activity could be a total dealbreaker.

8. Possessing low-quality kitchen cabinetry, -$3,000

If you’ve ever lived in a rental apartment, you’re probably familiar with particle board cabinetry. It’s cheap, which is why landlords love it, and is prone to warping, water damage and peeling. Cabinets are expensive to replace, or even reface, so a potential buyer may pass on a home that would require significant kitchen upgrades.

9. Living in close proximity to power lines, -$2,700

Despite scientific evidence that proves otherwise, many people falsely believe that living near high voltage power lines causes cancer. Others simply see them as an eyesore and would prefer to live in a neighborhood where power lines have been buried. Again, this is a factor that may lower your home’s value, but it’s not something you can change. 

10. Having a characterless, unlandscaped backyard, -$2,600

A useable outdoor space adds square footage to your property. Prospective buyers might picture themselves dining alfresco on a stone patio or hosting a backyard movie night under the stars. If your backyard is unkempt and unlandscaped, those dreams are dashed.

11. Living at the top of a sloped driveway, -$2,400

A sloped driveway can lead to a slew of problems: Rainwater drainage issues, cracks in the pavement, scraping under your vehicle, and slippery conditions during inclimate weather. It’s not ideal for families, either — kids can’t easily ride their bikes or draw with chalk on an incline.

12. Working with outdated kitchen cabinets, -$2,100

Honey oak cabinets are a telltale sign of a 90s kitchen. Fortunately, they can be painted over, but some buyers are reluctant to purchase a home that isn’t turnkey. Before listing your home on the market, it’s a good idea to give those dated cabinets a fresh coat of white paint and swap out the hardware for something sleek and minimal.

13. Having (gasp!) black or white appliances, -$2,000

As a nation, we are obsessed with stainless steel appliances. There’s no compelling reason for this — black and white appliances function just as well, but stainless steel has become the de facto upgrade for modern kitchens. With a $2,000 devaluation, in this case it’s probably better to cut your losses than splurge on a stainless steel appliance package worth the same amount, if not more.

© 2019 BuzzBuzzHome Corp.

Metro Vancouver back to normal level of sales

Steve Randall
Canadian Real Estate Wealth

The more normal level of sales activity in Metro Vancouver continued in September with a 46.3% increase year-over-year.

There were 2,333 homes sold in the region, 4.6% more than in August and just 1.7% below the 10-year September sales average.

Real Estate Board of Greater Vancouver said that demand in the market is helping sales to return to more balanced territory.

“We’re seeing more balanced housing market conditions over the last three months compared to what we saw at this time last year,” Ashley Smith, REBGV president said. “Home buyers are more willing to make offers today, particularly in the townhome and apartment markets.”

New listings were 7.8% lower than a year ago but up 29.9% from August, with 4,866 homes newly listed for sale; inventory was 13,439, up 2.7% year-over-year and up 0.3% month-over-month.

For all property types, the sales-to-active listings ratio for September 2019 is 17.4 per cent. By property type, the ratio is 12.7% for detached homes, 18.9% for townhomes, and 21.9% for apartments.

“This is a more comfortable market for people on both sides of a real estate transaction,” said Smith. “Home sale and listing activity were both at typical levels for our region in September.”

Prices are still trending lower with the MLS® Home Price Index composite benchmark price for all residential homes in Metro Vancouver is currently $990,600, a decrease of 7.3% year-over-year and of 0.3% month-over-month.

Stats by property type Sales of detached homes in September 2019 reached 745, a 46.7% increase from the 508 detached sales recorded in September 2018. The benchmark price for a detached home is $1,406,200, down 8.6% from September 2018 and virtually unchanged from August 2019.

Sales of apartment homes reached 1,166 in September 2019; a 43.6% increase compared to September 2018. The benchmark price of an apartment property is $651,500, down 6.5% from September 2018 and a 0.4% decrease from August 2019.

Attached home sales in September 2019 totalled 422, a 53.5% increase compared to September 2018. The benchmark price of an attached home is $767,500, down 7.2% from September 2018 and a 0.6% decrease compared to August 2019.

Copyright © 2019 Key Media Pty Ltd

October 2019 Market Report

other

MARKET SUMMARY With the federal election around the corner, British Columbian’s have a lot on their mind. From the troubled forestry industry putting thousands of workers out of work to the ongoing issues related to housing affordability and even the environment, political leaders will have to bring their “A” game to the table to win voter support. The Conservatives have responded by announcing that they plan to eliminate the mortgage stress test while also increasing the amortization periods on insured mortgages to 30 years for first-time homebuyers, which will ultimately lower monthly payments. The Liberals have announced their owns plans whereby they plan to expand the First-Time Home Buyer Incentive to cover homes valued up to $789,000 compared to the current $480,000, which effectively provided no support for Metro Vancouver residents. Despite the challenges faced by the province, British Columbia is on track to perform better than its counterparts. Additionally, with the Trans Mountain Pipeline construction underway along with several major infrastructure projects about to begin, 2020 will likely provide a better outlook for the province. Furthermore, building permits in July were up 10.5% in the province compared to the previous month, indicating that additional construction activity will soon be underway. This increase represented over one-third of the national increase, with much of the increase derived from the multifamily and office segments. Although increased construction activity is expected within the multifamily segment, listings of multifamily rental buildings have been on the rise, partially due to landlord frustrations with provincial legislation and caps on rent increases of 2.5% in 2019 and 2.6% in 2020. This combined with soaring property taxes across the region have made it extremely difficult for landlords to maintain their properties. If a landlord decides to “renovict” their tenants they are also now required under the Tenant Relocation and Protection Policy to pay one full year of rent to those tenants who have resided in the unit for over 20 years or more. For those that have rented for up to five years, tenants are now entitled to four months of rent for their troubles. Although there remains demand for these assets, the new legislation is making it even harder to make sense of these deals, and as a result sales have been on the decline since the second quarter of 2018 when sales reached over $547 million. Results from the third quarter indicate that sales volume only reached $124 million. Expect listings of older buildings to increase over time and will likely be acquired by larger institutional buyers who have the ability to redevelop the sites at higher densities while also having the cash flow to compensate existing tenants to vacate their units. With the third quarter of 2019 behind us, the Metro Vancouver office market closed the quarter with a vacancy rate of 3.1% and is expected to decline by an additional 30 bps by the end of the year to 2.8%. Much of the decline can be attributed to continued demand in the downtown core as vacancy in this submarket dropped an additional 50 bps quarter-over-quarter to 1.9% at the end of the third quarter. The suburban market also remains tight, but vacancy remained at 3.8%. Much of the demand for office space in suburban markets has been concentrated in Burnaby and Surrey where gross rents can be as much as $15 per square foot lower than in the downtown core. However, this has not stopped rents from increasing by 3.8% over the past 12 months. Construction activity has picked up during the third quarter with 1.3 million square feet of office space breaking ground, bringing the total level of construction activity across Metro Vancouver to 6.2 million square feet. Expect rents to remain high for these new builds as 67% of this construction activity will be located in the downtown core where average gross rents closed the quarter at $52.26 per square foot. In contrast, construction starts in the industrial sector have been limited during the third quarter with only 367,300 square feet breaking ground, when the last four quarters have averaged 594,700 square feet of construction starts per quarter. An influx of a new deliveries are expected by the end of year with 2.4 million square feet arriving on the market, however as expected the majority of this space is already pre-leased. This will include the opening of the new 500,000 square foot Amazon Fulfilment Centre in Tsawwassen where hiring is already underway. Since construction cannot keep pace and many firms deciding to pre-lease, those existing industrial spaces on the market have now seen rents increase by 9.1% year-over-year, while rents for distribution and logistics facilities have increased by a whopping 10.3% over the same time frame. Although retail sales were down in July by 0.8% in the province and 1.0% in Metro Vancouver compared to July 2018, the retail sector is still holding strong. In fact, retail e-commerce sales have increased by 32.8% compared to the same time last year and now represent 3.2% of total retail trade across the country. Demand for retail space remains strong in Metro Vancouver as third quarter sales volume topped $243 million, similar to sales results in the third quarter of 2018. This included the portfolio sale of Cottonwood Mall, where Nicola Wealth Management in partnership with PCI Developments purchased the 263,000 square foot property for $78.4 million. Luxury retailers also continue to open or expand operations in the downtown core, which include the newly opened 6,000 square foot flagship Hermès store on the corner of Burrard and Georgia. Despite weakness in retail sales, rents within Metro Vancouver were up by 5.5% year-over-year in the third quarter, and rents within malls in the Lower Mainland increased by 7.8% over the same period. These insights are made possible through CoStar, the largest commercial real estate source for property listings for sale or lease in Canada. CoStar enables users to gain insight into over 25,236 properties currently tracked in the Greater Vancouver Area, which include 903 properties for sale and 2,590 spaces for lease. CoStar conducts constant, proactive research with a team of 60+ researchers making over 12,000 database updates each day.

 

Buy it right, avoid regret

Mike Holmes
The Province

For most of us, buying a house is the biggest investment we’ll ever make. Whether we’re buying our first homes, expanding to a bigger space to accommodate a growing family, or downsizing as we age – my advice is the same: make sure you buy it right. There are a few steps that every potential homeowner at any life stage should take.

Buying the wrong home is a complete nightmare. It could be a poorly built money pit that costs way more than the sticker price. I don’t like hearing from homeowners who are going bankrupt due to one bad decision. So how do you make sure you buy the right home?

Here are my tips to buy it right.

Take Your Time

I always say I’d rather not buy a house than buy the wrong one. It’s pretty easy to make a house look appealing (all that lipstick and mascara), but who knows what’s hiding behind the walls. Unfortunately, in a lot of cases, it’s buyer beware when it comes to real estate. If you haven’t done the due diligence to asses the state of the home behind the walls, you could wind up with an expensive lemon.

How do we avoid this? To me, a home inspection is some of the smartest money you can spend on your future home. Compared to the price tag of the home, this is a low ticket process that can help you assess the true state of the home. They can help assess the state of the roof, determine if there is fluctuating temperature differences behind the walls, and help find the source of hidden leaks. You can even have the indoor air quality tested for things like radon, volatile organic compounds (VOCs), and more. Finding these issues isn’t meant to deter you from buying the home – but if does arm you with the knowledge that you may need to make some upgrades after you buy. Depending on the market you live in, this may give you some negotiating power.

If you can, I recommend doing the walkthrough with the inspector. It’s your opportunity to ask them questions and get things from their perspective. Either way, they will provide you with a report at the end of the inspection. Whether you were on site for the inspection or not – make sure to read through that report carefully!

Spotting Red Flags

Your inspector can offer some great insight into the state of the home, but you can do some detective work on your own to sniff out some pretty big red flags.

One piece of advice I like to remind homeowners of is to ask for copies of previous energy bills. This can give you a general idea of what it takes to keep the home comfortable. If they seem abnormally high, to me, that’s a sign that the home isn’t energy efficient. That could mean the home has poor insulation, an unoptimized HVAC system, or some bad windows. None of those will be an inexpensive fix.

There’s something to be said for adding a fresh coat of paint to your home to make it more appealing for prospective buyers. However, if you’re going through a home, and only one wall, or certain sections of wall have new paint? To me, that could be a sign that they’re trying to cover up an issue.

Finally, if you’re looking at a house that’s been renovated – you’ll be able to contact your local municipality to pull the permits for it. A building permit signifies that the work done on the home was properly inspected, and done to code. When the building inspector (which is different from your home inspector) signs off on the renovation – you know it should be safe. If it was done without permits, it could still be fine, but like I said, buyer beware. Can you afford to buy a home that needs a lot of work?

© 2019 National Post, a division of Postmedia Network Inc.

North Van site key to the appeal of Ebb and Flow

Simon Briault
The Province

For as long as anyone can remember, Greater Vancouver homebuilders have touted the ability of residents to live and work in a modern, cosmopolitan setting, yet within minutes find themselves hiking on a nature trail, sunning themselves on a beach or playing in the snow on top of a mountain.

It’s in this context that Jamie Howard, president and principal of Woodbridge Homes, believes he’s on to a winner with Ebb & Flow, a 109-home development from Woodbridge and Citimark at Lions Gate Village in North Vancouver.

“The community is on the Capilano River and all the trails that go up and down the river will be seconds from your front door,” said Howard.

“You can get very quickly into downtown – if you work there, for example – and very quickly back home again and into the natural beauty and recreational opportunities that the North Shore is famous for.”

But location is not the only thing that the development has going for it, according to Paul Riches, a resident of North Vancouver who has bought a townhome with his family.

“The modern, contemporary style of the homes is very attractive,” said Riches. “They’re spacious, well laid-out, well-designed and they’re using good building materials.”

Ebb & Flow offers three distinct types of homes: single-level garden homes, two-storey city homes and three-story townhomes.

“We pride ourselves on being very diligent professionals,” said Howard. “We spend a lot of time on design so that by the time the homeowner moves in they know that everything is going to work, that the rooms are going to be adequate sizes and they’re not going to have any nasty surprises.”

Kitchens feature Bosch appliance packages, including gas cooktops, convection wall ovens, integrated refrigerators, stainless steel dishwashers and hood fans. There are Panasonic microwaves, wood-tone cabinetry with soft-close mechanisms and quartz countertops with tile backsplashes.

Bathrooms have polished quartz countertops on vanities equipped with deep drawers for ample storage. There are medicine cabinets with integrated lighting above the vanities in master ensuites, and porcelain tiled floors and herringbone accent walls in the showers.

“The biggest attraction for many of the homes are the rooftop decks,” said Howard. “All the two- and three-level homes have them and it allows people to significantly expand their living spaces.”

Many of those roof decks will overlook the river and Howard said this tidal waterway is part of the reason why the development is called Ebb & Flow.

As for Riches, the townhome he’s bought at Ebb & Flow represents the continuation of a love affair with North Vancouver that began when he visited the city from the UK with his family 12 years ago and decided to make it his home.

“I remember looking across from the city to North Vancouver and you could see this wonderful scene of the mountains,” he said. “I could not believe I was in a city – that mountain view across the water, just a few minutes away.”

Ebb & Flow

What: 109 homes one to three bedrooms

Where: Lions Gate Village, North Vancouver (at Glenaire Drive & Fullerton Avenue)

Residence size and prices: 506 to 1,610 square feet; priced from $479,900

Developer: Woodbridge Homes and Citimark

Sales centre: 108-1171 Marine Drive, North Vancouver

Sales centre hours: noon to 5 p.m., Sat — Thurs

Sales phone: 604-818-1177

© 2019 Postmedia Network Inc

Number of realtors in BC up and down with the market

Joannah Connolly
Western Investor

As the Lower Mainland of B.C.’s real estate market boomed between 2014 and 2017, so too did the number of realtors in the region, rising to more than 13,500 by 2017.

Now, since the fortunes of the region’s housing market reversed, so has the number of realtors, according to a new study by real estate marketing firm Roomvu in collaboration with the University of British Columbia‘s Sauder School of Business.

The researchers found that there were fewer than 7,000 realtors operating in Greater Vancouver and the Fraser Valley in 2000. By 2017, that number had doubled to more than 13,500, with numbers increasing each year apart from small drops during the financial crises of 2001 and 2008. This increase was much more extreme than the rise in general population (see graph below).

Sam Mehrbod, CEO of Roomvu and a realtor in Greater Vancouver, said that this increase correlated with the region’s booming housing market.

“Cities like Vancouver, where housing is expensive, have a higher number of realtors than cities like Halifax, for example,” said Mehrbod. “As home prices go up, so does the financial incentive to take advantage of higher commission prices.”

Over the past two years, since the real estate market began its downturn, the number of agents has been dropping, according to the study — thus far by approximately 1,000 agents.

The report said, “The year 2018 saw the introduction of several federal, provincial and municipal measures to curb housing prices. The B20 [mortgage] stress test, empty homes tax, foreign buyers tax, speculation tax, provincial school tax, limits to, and taxes on, short-term rentals, have all had a decided impact on the housing market in 2018, 2019.”

Mehrbod said, “As the number of transactions fall, many realtors start to give up their licenses, since the fees associated with keeping the license start to outweigh the revenue generated by being a realtor This was evident in 2018, and our data predict that this trend will continue into 2019 and beyond.”

The report authors added, “The data doesn’t necessarily suggest a mass exodus from the realtor market, or at least, not yet. Perhaps the decline in the number of realtors is simply a market correction, much like the correction in home prices.”

Roomvu has also studied the number of realtors per capita in major cities. Langley, B.C., was found to have the most agents, with one realtor for every six residents. Burnaby had the second highest at one agent per 31 people, and Vancouver proper was in third with one agent for every group of 61 residents. This compares with cities such as Ottawa, where there is one agent for 496 residents, and Halifax, where a whopping 894 residents have to share one agent.

© Copyright 2019 Western Investor