Market takes another step towards normalcy as Canadian home sales fall again in June: CREA

Michelle McNally
Livabl

After a record-breaking spring for Canadian home sales, buying and selling activity across the country has continued to trend downward during the early summer months.

In its National Statistics report released today for June, the Canadian Real Estate Association (CREA) announced that Canadian home sales declined by 8.4 percent between May and June 2021.

This marks the third consecutive month of dwindling home sales since the market set an all-time record in March 2021, CREA said.

Following the springtime peak, CREA reports that sales are now down a cumulative 25 percent. However, June transactions still set a record, with the number of transactions up 13.6 percent year-over-year, a new high for the month.

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Although market activity remains robust in many communities, CREA’s chair Cliff Stevenson explained that conditions have “noticeably calmed down” during the past few months.

“There remains a shortage of supply in many parts of the country, but at least there isn’t the same level of competition among buyers we were seeing a few months ago,” said Stevenson in the news release that accompanied the June report.

The number of new properties that hit the market dropped 0.7 percent in June compared to the previous month. The national sales-to-new listings ratio was 69.2 percent last month, the lowest reading since August 2020, CREA reported. The long-term average for the national sales-to-new listings ratio was reported at 54.6 percent, and has been steadily moderating since peaking at 90.8 percent in January.

By the end of June, there was a 2.3-month supply of available inventory nationwide, a slight increase over  May’s 2.1 months of supply and the record-low of 1.8 months that was set in March.

With little change recorded on the national level for new home supply during June, CREA noted that about half of local markets saw gains, which is “welcome news for frustrated buyers.” When comparing sales-to-new listings ratio with long-term averages, more than half of local markets were also reported to be in balanced territory last month — a shake up from the past year when a larger portion of communities were in seller’s market territory, CREA said.

“It feels like maybe the theme of this summer is ‘slowly getting back to normal,’ in our own lives and for many housing markets across Canada as well,” said Shaun Cathcart, CREA’s Senior Economist, in the report.

“That said, it’s a long road to get back to normal, and for many housing markets the main issue is that supply shortages are as acute as ever,” he added.

Cathcart pointed out that the break we’ve seen in terms of population growth is likely coming to an end. While the “frenzy and emotion” of the earlier points of the pandemic have passed, Cathcart explained that the makings of a seller’s market are still in place.

Last month, the aggregate composite MLS Home Price Index (HPI) increased by 0.9 percent monthly, while the non-seasonally adjusted aggregate composite MLS HPI was up 24.4 percent annually.

The actual — not seasonally adjusted — average price of a home at the national level was a little over $679,000 in June, 25.9 percent higher than the same month in 2020. CREA noted that the average national home price is heavily influenced by Canada’s two most expensive markets, Greater Vancouver and the Greater Toronto Area. Factoring out these two regions would reduce the national average price by about $135,000, said CREA.

© 2020 BuzzBuzzHome Corp.

Book a private appointment to tour the newly-opened showhomes at Kai Kitsilano

Jim Pattison Developments LTD
Livabl

Now selling, Kai is a boutique collection of twelve modern townhomes located in the heart of Kitsilano, one of Vancouver’s most coveted neighbourhoods. Prospective buyers are now able to schedule a private appointment to tour the development’s two showhomes, providing a first-hand look at the contemporary finishes, thoughtful layouts and added conveniences that each three-bedroom plus flex townhome has to offer. 

 Kai will be move-in ready later this summer, meaning buyers won’t have to wait long to enjoy their brand new home by local developer, Vicini Homes. Priced from $1,850,000, the residences come in two sophisticated colour schemes curated by the award-winning interior designer Cristina Oberti.

The showhomes exhibit both options – the kitchen in 2123 West 7th Avenue (Townhome 11) features light wood-toned upper cabinets paired with crisp white lowers, while 2121 West 7th Avenue (Townhome 12) showcases all-white kitchen cabinets contrasted with walnut-stained wood accents.

 Ranging in size from 1,042 square feet up to 1,432 square feet, every townhome at Kai boasts an open-concept layout with continuous flow, oversized windows for ample natural light, engineered hardwood flooring throughout, and nine-foot ceilings in main living areas for an airy feel. The convenient flex space on the second level is perfect for a home office or additional storage.

 In the chef-calibre kitchens, engineered quartz countertops are paired with a full-height quartz backsplash for a sleek, uniform look. The custom millwork cabinetry includes satin aluminum pulls, soft-close hardware and a space-maximizing pantry. Each townhome comes with full-size Miele stainless steel appliances, including a four-burner gas cooktop, convection wall oven and an integrated counter-depth refrigerator. And for easy cleanup, a deep undermount stainless steel sink is accented with a single-lever Grohe chrome faucet and a pull-out spray handle.

 The master retreat was designed with relaxation in mind, and comes complete with a private top-level deck, a spacious closet with a built-in organization system, and a spa-inspired ensuite bathroom featuring a quartz-topped double vanity, mirrored medicine cabinets, marble-inspired porcelain tiled walls, and a frameless glass shower with a rain showerhead and Grohe plumbing fixtures.

 Among the convenient extras are built-in air conditioning, a deluxe-stacked LG front-load washer and dryer, additional storage on the parkade level, and a natural gas barbecue outlet and hose bib on the private patio. The homes boast direct access to the secured underground parking, and include a secure underground bicycle locker and a 120/208 volt vehicle charging outlet.

 Kai is just a five-minute walk to vibrant West 4th Avenue, dotted with sportswear stores, coffee shops, must-try restaurants, lively pubs, yoga studios and much more. Kits Beach is also nearby, offering residents the opportunity to swim laps in the pool, plunge into the ocean, play tennis or simply watch the sunset. The neighbourhood touts a Walk Score of 96 and is mere moments away from the future Arbutus SkyTrain station.

With three homes already sold opening weekend and only nine remaining, don’t miss your opportunity to purchase a home within this exclusive collection. To schedule a private appointment to tour the showhomes located at 2121 West 7th Avenue in Vancouver, please contact Jenny Wun at [email protected] or call 604 961 3559.

For the latest news and updates, register your interest today at vicinihomes.com/kai.

Sales by Jenny Wun – Personal Real Estate Corporation with the West One Real Estate Team | Oakwyn Realty Ltd.

© 2020 BuzzBuzzHome Corp.

Vancouver Beach Avenue rental tower sells for $91 million

Avison Young
Western Investor

One of the biggest multi-family deals in Vancouver for 2021, the 151-unit, 21-storey landmark concrete tower is on Beach Avenue with unobstructed ocean views.

 

 

Property type: Multi-family rental
Location: 1155 Beach Avenue, Vancouver
Number of units: 151
Number of storeys: 21
Lot size: 37,179 square feet
Land size in acres: 0.85 acres
Date of sale: July 8, 2021
Brokerage: Avison Young, Vancouver (representing the purchaser).
Brokers: Carey Buntain, Rob Greer, Bijan Lalji and Chris Wieser.

© 2021 Western Investor

Aldergrove 4.4-acre land assembly sells for $7.6 million

Varing Marketing Group
Western Investor

Two adjacent properties assembled and sold as a package for residential development

Property type: Land
Location: 25639 and 26771 24 Avenue, Aldergrove, B.C
Size of land: 193,406 square feet
Size of land in acres: 4.44 acres
Zoning: SR-2 (suburban residential)
List price: $8 million
Sale price: $7.6 million
Brokerage: Varing Marketing Group, Surrey, B.C.
Broker: Joe Varing

© 2021 Western Investor

Surrey three-lot land assembly sells for $4.1 million

Home life Advantage
Western Investor

Located in the Guildford area, the 0.61-acre site has holding rental income and potential for multi-family development.

Type of property: Land assembly
Location: 10312 142 Street – 14237 103 Avenue, Surrey, B.C.
Land size: 26,825 square feet
Land size in acres: 0.61 acres
Zoning: RF (residential)
OCP: Multi-family
List price: $4.29 million
Sale price: $4.1 million
Brokerage: Homelife Advantage Realty Ltd., Chilliwack. B.C.
Broker: Rick Toor

© 2021 Western Investor

Chilliwack 0.2-acre downtown site sells for $1.52 million

Homelife Advantage Realty Ltd.
Western Investor

The site, currently with three commercial addresses, sold with development potential on a prime site in the downtown core.

Property type: Land

Location: 45951- 45963 Wellington Avenue, Chilliwack, B.C.

Number of units: 3

Size of property: 8,712 square feet

Land size in acres: 0.2 acres

Zoning: C3

List price: $1.59 million

Sale price: $1.52 million

Date of sale: June 29, 2021

Brokerage: Homelife Advantage Realty Ltd., Chilliwack. B.C.

Broker: Rick Toor

 

© 2021 Western Investor

Bank of Canada willing to let inflation run hot on road to ‘complete’ recovery

Kevin Carmichael
other

Kevin Carmichael: Policy-makers argue they’re taking a calculated risk — and one worth taking

 Bank of Canada Governor Tiff Macklem still plans to keep the benchmark interest rate pinned near zero until at least the second half of next year. Photo by Reuters/Blair Gable/File Photo

The Bank of Canada plans to let inflation run faster than its two-per-cent target through 2023, reinforcing governor Tiff Macklem’s pledge to orchestrate a “complete” recovery from the COVID-19 recession.

 

Canada’s central bank on July 14 published new forecasts predicting the country is on the verge of an impressive burst of economic growth that will offset a disappointing start to the year.

The projections weren’t strong enough to alter Macklem’s plan to keep the benchmark interest rate pinned near zero until at least the second half of next year, but evidence of gathering momentum prompted policy-makers to pare their weekly purchases of Government of Canada bonds to $2 billion, from $3 billion previously. 

 

“This adjustment reflects continued progress towards recovery and the bank’s increased confidence in the strength of the Canadian economic outlook,” Macklem and his deputies on the Governing Council said in a statement at the end of their latest round of interest-rate deliberations.

 

The decision to taper the bond-buying program was widely expected by observers of the central bank, as was an upward revision to growth projections for the second half of the year and 2022.

The short-term trajectory of the economy is correlated with vaccination rates and infections; the former in Canada are now among the world’s highest, and provinces have mostly relaxed the social-distancing measures they implemented to fight COVID-19’s third wave this spring.

Macklem’s forecasting team sees growth surging to an annual rate of 7.3 per cent in the third quarter, compared with two per cent between April and June, as consumers begin to spend some of the savings they accumulated during COVID-19 lockdowns.

The new prediction represents a shift in the central bank’s thinking about the recovery. Previously, officials assumed Canadians would keep whatever cash they accumulated during the pandemic in the bank. Now, they assume that we’ll spend about 20 per cent of that hoard, citing survey data that show households are keen to celebrate the pandemic’s end.

 

“Consumption is expected to continue to lead the recovery,” Macklem said in a statement about the Bank of Canada’s policy meeting and the new outlook.

The third wave of infections took a bigger toll on the economy than policy-makers thought it would at the time of their last forecast in April, forcing a downward revision of its outlook for economic growth this year to six per cent, from 6.5 per cent. But it assumes the economy will make up for it next year, when the central bank predicts gross domestic product will increase 4.6 per cent, compared with a previous estimate of 3.7 per cent.

Still, the good news related to an accelerating recovery could be partially offset by consternation over the inflation forecast, since it shows the central bank has chosen to put employment ahead of its target for annual increases in the Consumer Price Index.

 

The Bank of Canada’s two-year forecasts almost always have the CPI at two per cent at the end of the projection period, because, typically, interest rates would be adjusted to bring about that outcome. For now, the central bank predicts CPI inflation of three per cent this year, 2.4 per cent in 2022 and 2.2 per cent in 2023. 

 

The strategy is risky because households, executives and investors could start to assume the central bank has gone soft on inflation and adjust their own expectations accordingly. If that were to happen on a wide scale, upward pressure on prices would increase, pushing the CPI even higher. The central bank might have to raise interest rates more quickly than it would like, threatening a recession.

 

Policy-makers argued that they’re taking a calculated risk — and one worth taking. Investors and analysts tend to emphasize the inflation target, but the Bank of Canada actually gives itself more latitude than many believe. It aims for two per cent, but is comfortable with misses as high as three per cent and as low as one per cent. It still sees inflation staying within that comfort zone.

“I don’t know if they are going soft” on inflation, said Tom O’Gorman, director of fixed income at Franklin Templeton Canada, adding that inflation rarely breached two per cent before the pandemic, which some critics used as evidence that the Bank of Canada was too conservative. “For inflation to run a little hot with the pandemic and the supply-chain issues, it’s probably appropriate.”

 

Macklem argued that the strongest forces affecting prices will pass. Currently, the cost of gasoline is the biggest one, because production hasn’t yet caught up to the demand that has come with the global economic recovery. Supply constraints related to the crisis also are affecting inflation, and prices that plummeted during the recession are coming back as things return to normal.

Policy-makers emphasized that the recovery shouldn’t be taken for granted. They described the uncertainty over their outlook as “unusually high,” flagging four risks at the end of their quarterly economic report that could end up putting downward pressure on inflation, compared with two potential surprises that could lead to faster price increases.

 

But, ultimately, Macklem has chosen to err on the side of growth rather than striving to hit his inflation bullseye. The central bank noted that the economy is generating significantly less output than it could in normal circumstances, and, when considering population growth, employment is still 550,000 positions below its pre-pandemic trajectory.

“We have one target, and that’s inflation,” he told reporters. “If we have excess slack in the economy, that means we’re missing jobs, we’re missing income, we’re missing spending. That will put downward pressure on inflation and we won’t sustainably achieve our inflation target.”

• Email: [email protected] | Twitter: CarmichaelKevin

© 2022 Financial Post

B.C. builders weathered pandemic – but storm clouds are forming

Peter Mitham
Western Investor

‘Absolutely nothing has changed with us,’ says one Abbotsford contractor as provincial construction returns to its post-pandemic pace – but high demand is leading to skyrocketing costs and a lack of skilled trades

Rising lumber costs and a potential labour shortage cloud rosy outlook for B.C. construction. | Rob Kruyt

‘Absolutely nothing has changed with us,’ says one Abbotsford contractor as provincial construction returns to its post-pandemic pace – but high demand is leading to skyrocketing costs and a lack of skilled trades

Construction is one of the largest single sectors of the B.C. economy, accounting for nearly 10 per cent of the province’s GDP. The housing, institutional and infrastructure projects the sector’s 225,000 workers deliver each year made the sector an essential service when COVID-19 hit.

Now, as the economy returns to normal, it’s almost as if nothing has changed.

But warning flags are rising on input costs and a potential labour shortage.

According to the Independent Contractors and Businesses Association, construction activity fell by just under 10 per cent in 2020. But, by the end of the second quarter 2021, construction activity had snapped back to pre-pandemic levels.

The value of major projects proposed and on the go in the province increased 5 per cent to $349 billion in March versus a year ago. Statistics Canada is forecasting nearly $33.4 billion worth of new construction investment in B.C. this year, driven by the public and institutional sectors as well as transportation and logistics.

“Absolutely nothing has changed with us,” said Kevin Mierau, president of Mierau Contractors Ltd. in Abbotsford, which handles commercial projects as well as some multi-family construction.

A director of the Vancouver Regional Construction Association (VRCA) and the BC Construction Safety Alliance, Mierau said the industry was able to quickly implement safety protocols that complied with public health requirements. Those remain in place and have kept the industry working through the pandemic and into reopening.

“We really nailed down our process and protocol on site,” he said.

What has changed as the broader economy has returned to normal is construction costs. As construction returns to normal, demand has pushed prices for many materials sky-high. While lumber has grabbed headlines, almost all materials are affected.

According to Statistics Canada, costs for lumber and wood products were up 226 per cent in May relative to January 2020, while fabricated metal products and construction materials had increased 114.7 per cent. The cost of cement and glass was double that of January 2020.

“COVID protocols that have been put in place in a lot of manufacturing facilities quite simply reduced productivity,” Mierau said. “They’re producing less, but they’re having orders for more, so it comes to a point where no matter what the price is, [builders] just can’t get enough for what they need to build.”

VRCA vice-chair Craig Mitchell of Black Box Modular Solutions in Vancouver says the situation means builders need to take what’s available rather than be choosy. This is the case for everything from pipes to electrical panels.

“Right now we’re just telling owners, ‘This is what you get; you don’t get a choice anymore,’” he said. “To keep projects moving, it’s whatever is in stock that doesn’t affect schedule is pretty much what a lot of owners are having to go with now.”

While lumber prices could come back to more acceptable levels by the end of the year, Mitchell expects supply chains to be challenged well into 2022 and potentially beyond. With housing in demand and infrastructure projects such as the Broadway subway project in Vancouver starting up, building materials will be in high demand.

“There’s going to be a lot of construction for the next two years here, and that’s just going to put further pressure on the supply chain,” he said.

The good news is that money is cheap thanks to low interest rates, keeping projects moving. While this could stoke inflationary pressure, core inflation has shown few signs of budging. Moreover, end-users – at least of housing – have been willing to absorb the increases.

“People are willing to pay that price in this market, and that’s going to be the driver,” Mitchell said. “We’re seeing pressure on pricing in construction materials, but … I haven’t seen a slowdown.”

Higher prices for materials are compounding elevated prices for labour, an issue that persisted through the pandemic. The industry continues to face a shortage of new skilled workers to meet the projected demand of 60,000 workers by 2030.

ICBA president Chris Gardner said a new compulsory training regimen the province is introducing for trades adds to the regulatory burden on builders. A recent World Bank study ranked Canada 64th for permitting times, and new regulations as well as rising construction costs will further hamper new development.

“The dramatic and rapid price increases on nearly every construction material has been staggering,” Gardner said. “Owners are seeing bids for projects skyrocket and contractors are no longer able to provide fixed price quotes for work. If the situation does not ease, there could be a knock-on effect of project delays compounding cost and affordability pressures.”

The impacts are already being felt, Mierau said.

“Every project that’s over budget takes a little more from the pot for the next ones,” Mierau said. “We’re that next round away from seeing cutbacks, or things slowing down, in what conceivably should be a hot market.” 

© 2021 Western Investor

Centurion sues over vacant Langford rental building

Roxanne Egan-Elliott
Western Investor

 The 11-storey multi-family rental tower vacant since December 2019 when the city revoked its occupancy permit after Centurion Properties had bought it

90-unit Danbrook One rental tower in Langford has sat vacant for 18 months. | Darren Stone, Times Colonist

The 11-storey multi-family rental tower vacant since December 2019 when the city revoked its occupancy permit after Centurion Properties had bought it

The owner of an 11-storey multi-family rental building in Langford, B.C., near Victoria, that has sat mostly vacant for a year and a half since the city revoked the occupancy permit is suing the seller, builder, structural engineer and engineering firm, and the City of Langford for what they claim is negligence causing dangerous defects in the building.

Toronto-based Centurion Property Associates bought Danbrook One at 2766 Claude Rd. in late August 2019 and began renting the units.

Four months later, in mid-December 2019, Langford revoked the building’s occupancy permit and urged tenants to move out after an engineering report for the municipality confirmed serious safety concerns. At the time, 86 of 90 units were rented. Tenants were temporarily put up in hotels paid for by the city while they searched for new homes. Some struggled to find apartments at a similar price and remained in the building for two months after the occupancy permit was revoked.

The building remains vacant.

Months before Centurion bought the building, a structural engineer who was not involved in the project raised concerns related to its seismic and structural integrity, in a formal complaint to the Association of Professional Engineers and Geoscientists, according to Centurion’s civil claim. Leon Plett, a structural engineer and principal of RJC Engineers, also expressed concern that the project drawings might have been copied from an RJC project.

The building’s defects include deficiencies in the foundation, lateral system and gravity column, according to Centurion’s claim. They allege the parties involved in design and construction were aware of problems prior to the sale and that the issues “pose a danger to person or property.”

The engineering firm Sorensen Trilogy Engineering Ltd. and its lead structural engineer on the project, Brian McClure are named in the suit, along with the builder, Langford-based DB Services; the seller, Loco Investments; Margaret McKay, the director of both DB Services and Loco; and the City of Langford.

Centurion is suing for damages relating to remediation work needed to bring the building up to code and address safety concerns, estimated at more than $1 million as well as lost rental income estimated to be about $200,000 per month. Just over 18 months have passed since the city revoked the occupancy permit. Centurion reimbursed tenants any rent paid for the period after the permit was revoked.

Before purchasing the building, Centurion contacted the city, which issued a “comfort letter” in late June 2019 to Centurion that did not mention the engineer’s complaint despite being informed by the association in early April 2019, Centurion says in its civil claim.

Langford denies they were made aware of defects related to the building when the engineering association contacted the municipality in April 2019 for documents.

“By letter dated April 4, 2019, EGBC wrote to Langford to advise that [it] was currently conducting an investigation in relation to the building regarding potential violations of the Engineers and Geoscientists Act,” Langford said in its response to Centurion’s civil claim. The letter “did not disclose the existence of the dangerous defects, nor did EGBC advise Langford that any safety concerns or dangers existed.”

The city says it was not aware of problems when it wrote a comfort letter to Centurion, and did not become aware until Dec. 3, 2019, when the association shared details of the complaint.

Centurion alleges DB Services encouraged parties involved in construction to “fast-track” their work, which led to Sorensen Trilogy Engineering failing to obtain a required independent review of its building design work.

The narrative outlined in Centurion’s civil claim lines up with the details in documents and emails related to the engineering association’s investigation obtained from the City of Langford by the Times Colonist through a freedom of information request.

Centurion claims they demanded that DB Services pay for all remediation work required, but the firm only installed temporary shoring.

DB Services denies defects exist and that construction was fast-tracked. It also claims a warranty did not transfer to Centurion in the sale.

Sorensen Trilogy Engineering says DB Services was to be fully responsible to Centurion “for acts and omissions” of the firm and McClure, and that neither DB Services nor Centurion paid for the liability insurance required by the contract, which would have protected Sorensen Trilogy.

None of the allegations have been tested in court.

An investigation by the engineering association is ongoing.

© 2021 Western Investor

Clive at Collingwood provides neighborhood transit and amenities at your doorstep

Livabl Staff
other

A new series of modern homes will connect future residents to the sought-after amenities and conveniences of Vancouver’s Collingwood community.
Clive at Collingwood is a collection of 68 design-minded condos and townhomes coming soon to Clive Avenue and Spencer Street. Created by the locally-based Nexst Properties, this six-storey development will root itself in the neighbourhood’s culture and community, lending easy access to local transit, eateries and so much more.
Prospective purchasers will have their pick from various home layouts ranging from 400 to 1,700 square feet in size. You can register now to find out more about sales at cliveliving.com.

Gathering places and facilities suited to all of your needs can be found right at home. Mingle with family and friends in the common courtyard or share a meal together on the rooftop barbecue terrace. The office centre is equipped to accommodate your busy nine-to-five work schedule, plus handy bicycle storage, electric vehicle charging and an Amazon Hub for secure package delivery will be available on-site at Clive at Collingwood for your convenience.

Step out into Collingwood and discover a variety of offerings at your door. Play a game on the sport courts and let the little ones explore the playground at the nearby Gaston and Melbourne parks. You’ll find cafes, restaurants, grocery stores and all of your must-have essentials just south of Clive at Collingwood along Kingsway, plus local schools, services and businesses in the surrounding area.

Walk to the Joyce–Collingwood or 29th Avenue SkyTrain stations for an easy connection to Metrotown, downtown Vancouver and adjacent neighbourhoods. Two stops to the east will bring you to Metropolis at Metrotown, where you can find all of your favourite big-name retailers like UNIQLO, Hudson’s Bay, Indigo and Winners.
Proximity to Kingsway, Boundary Road and the local bus route can also transport you to Burnaby, New Westminster and beyond.
Interested buyers are invited to learn more about Clive at Collingwood by calling 604 787 7009 or sending an email to [email protected].
For the latest information and news, register your interest today at cliveliving.com.

© 2020 BuzzBuzzHome Corp.