Posted on
October 26, 2012
by
Graham Higgins
BC Home Sales Forecast to Grow in 2013 BCREA 2012 Fourth Quarter Housing Forecast
Vancouver, BC – October 26, 2012. The British Columbia Real Estate Association (BCREA) released its 2012 Fourth Quarter Housing Forecast today.
BC Multiple Listing Service® (MLS®) residential sales are forecast to decline 9.8 per cent to 69,200 units this year, before increasing 8.3 per cent to 74,920 units in 2013. The fifteen-year average is 79,000 unit sales, while a record 106,300 MLS® residential sales were recorded in 2005.
"Despite stronger consumer demand in the interior, BC home sales will fall short of last year’s total,” said Cameron Muir, BCREA Chief Economist. “A moderating trend in Vancouver has recently been exacerbated by tighter high-ratio mortgage regulation. The resulting decline in purchasing power has squeezed some potential buyers out of the market. However, strong full-time employment growth, persistently low mortgage interest rates and an expanding population base point to more robust consumer demand in 2013."
"While the average MLS® residential price is forecast to decline 7.6 per cent to $518,600 this year, the change is largely the result of luxury home sales returning to more normal levels after an unusually active 2011,” added Muir. In addition, the Lower Mainland’s share of provincial home sales is expected to decline to 57 per cent this year from 62 per cent in 2011.The average MLS® residential price in BC is forecast to edge up 0.7 per cent to $522,000 in 2013.
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To view the full BCREA Housing Forecast, click here.
For more information, please contact:
Cameron Muir |
Damian Stathonikos |
Chief Economist |
Director of Communications and Public Affairs |
Direct: 604.742.2780 |
Direct: 604.742.2793 |
Mobile: 778.229.1884 |
Mobile: 778.990.1320 |
Email: cmuir@bcrea.bc.ca |
Email: dstathonikos@bcrea.bc.ca |
BCREA represents 11 member real estate boards and their approximately 18,000 REALTORS® on all provincial issues, providing an extensive communications network, standard forms, economic research and analysis, government relations, applied practice courses and continuing professional education (cpe).
To demonstrate the profession’s commitment to improving Quality of Lifein BC communities, BCREA supports policies that help ensure economic vitality, provide housing opportunities, preserve the environment, protect property owners and build better communities with good schools and safe neighbourhoods.
For detailed statistical information, contact your local real estate board. MLS® is a cooperative marketing system used only by Canada’s real estate boards to ensure maximum exposure of properties listed for sale.
To change your email address or subscribe to more BCREA publications, click here.
Posted on
October 24, 2012
by
Graham Higgins
The Bank of Canada once again opted to hold its target for the overnight rate at 1 per cent this morning. Interest rates have been held constant for over two years, the longest such period since the 1950s. The Bank somewhat tempered its bias for higher future interest rates, including a softer statement regarding the appropriateness of a gradual withdrawal of monetary stimulus as excess supply in the economy is absorbed. In a bit of a surprise, the Bank actually raised its forecast for the growth in the Canadian economy this year to 2.2 per cent, but kept its 2013 forecast at 2.3 per cent growth. The Bank judges that at that pace of growth, the Canadian economy will return to full capacity by the end of 2013.
It is our view that monetary policy at the Bank of Canada will continue to be constrained by external events in the global economy and household debt growth at home. While the Bank's preference for tighter policy is clear, it is difficult to make a case for higher interest rates when core inflation is below the Bank's 2 per cent target and already slow economic growth is threatened by global uncertainty. Therefore, we are forecasting that the Bank of Canada will hold its target overnight rate at 1 per cent until mid-to-late 2013 when, conditioned on an improved global economic outlook, it may test the water with a 25 basis point rate increase.
For more information, please contact:
Cameron Muir |
Brendon Ogmundson |
Chief Economist |
Economist |
Direct: 604.742.2780 |
Direct: 604.742.2796 |
Mobile: 778.229.1884 |
Mobile: 604.505.6793 |
Email: cmuir@bcrea.bc.ca |
Email: bogmundson@bcrea.bc.ca |
BCREA represents 11 member real estate boards and their approximately 18,000 REALTORS® on all provincial issues, providing an extensive communications network, standard forms, economic research and analysis, government relations, applied practice courses and continuing professional education (cpe).
“Copyright British Columbia Real Estate Association. Reprinted with permission.” BCREA makes no guarantees as to the accuracy or completeness of this information.
Posted on
October 19, 2012
by
Graham Higgins
The mortgage rules are about to change once more. As of November 1st 2012 all prospective buyers and I assume people transferring mortgages must be qualified at the 5 years posted rate which today is 5.25% a full 2.15% above most discounted 5 years rates. This will not at the moment apply to people taking a 5 years fixed term, so basically any one buying a home will have to get a 5 years fixed term mortgage which is not a bad thing at the moment. This of course only applies to the big 6 banks and a few other institutions, credit unions and many trust companies are not bound by the Federal rules.
Combine this with the recent immigrant c rule changes, all immigrants must live in the country for 5 years before they can get a mortgage for more than 65% of house value and there will be another dent in the house sales after I suspect a little rush at the beginning of November. If you are in the market for a mortgage get pre approved before November 1st 2012 and use a mortgage broker, someone who can deal with more that 1 financial institution at a time.
Posted on
October 18, 2012
by
Graham Higgins
After six months of stability during the first half of 2012, property sales in the Fraser Valley dropped by 40 per cent in two months. Why the sudden change? How long will the slowdown continue? For answers, we turned to BCREA Senior Economist Cameron Muir.
Q: For six months, our sales to actives listings ratio in the Fraser Valley ranged from 13 to 15 per cent. It dropped to 8 per cent last month. What happened?
A: Home sales in the Fraser Valley began to trend lower at the beginning of the year, with a more significant downturn taking place in August and September. While there is no proverbial smoking gun, there are a number of factors at play in the market:
- The fourth round of high-ratio credit tightening that began in 2008 was implemented in July. All of the credit loosening by the federal government in 2006 has now been pulled back. The big change in July was reducing maximum amortizations from 30 to 25 years. This was the equivalent to a 100 basis point increase in the interest rate for a first time buyer. All four rounds of credit tightening have been followed by a marked decline in BC MLS® residential sales within three months. Sales declined by 11 per cent three months following first round, 25 per cent following the second, 12 per cent following the third, and 19 per cent two months after the most recent round.
- An unusual spike in high-end detached home sales in 2011 was not repeated this year, impacting both sales levels and average price statistics.
- Little gains in equity and real estate markets have stalled growth in household wealth, limiting some of the positive spinoffs of the wealth effect such as second home purchases.
- A negative spillover from an anemic 0.8 per cent employment growth in BC last year may also be exacerbating the lull in consumer demand.
Q: How does it compare to the market downturn after the 2008 recession?
A: To date, seasonally adjusted home sales look remarkably like 2008. However, the financial crisis was just beginning to bubble to the surface in September 2008; homes sales are unlikely to fall to levels recorded October 2008 through January 2009.
Q: How long do you project this slowdown to continue?
A: It's impossible to ascertain exactly when a market turning point will occur. However, per capita home sales are currently underperforming the economic fundamentals. I expect unit sales to rebound back to 10-year average levels over the next few quarters. There are three main reasons we can anticipate improved housing demand:
- BC employment growth was 1.9 per cent through August this year, double the 0.8 per cent growth rate in 2011. More importantly, full-time employment has increased by 3.2 per cent, while part-time employment has fallen 2.5 per cent. This means many part-time jobs are being rolled into full-time work, a strong indicator of business profits and confidence. In Metro Vancouver, full-time employment has increased at a 3.5 – 4.0 per cent pace so far this year, the largest growth rate since the middle of the last decade.
- Mortgage interest rates remain at or near historic lows.
- The population base is expanding. The latest migration figures indicate 11,500 international migrants landed in BC on a net basis during the second quarter, most of whom will reside in Metro Vancouver.
Q: What are you projecting the effect will be on home prices? Why?
A: Home prices are likely to remain flat over the medium term, with some relatively small declines (2 to 5 per cent in the Benchmark) in some markets and product types. Buyers to balanced market conditions are likely to be commonplace over the next 18 months. However, I do not expect any substantial price declines in the absence of a macro-economic shock. Large price declines are typically the result of household financial disaster writ large. The typical culprit is a deep recession. I do not know of any reputable economist in Canada that expects a deep recession ahead.
Cameron Muir is BCREA's Senior Economist. His next forecast will be released at the end of October.
A reminder that registration is open for CMHC's 18th Annual Housing Outlook Conference on Tuesday, November 13 from 7:30 am to 12 noon at the Hyatt Regency Vancouver, 655 Burrard Street.
This is the real estate industry's premier event in the Lower Mainland that provides strategic information to plan for the year ahead. It sells out every year. Members can register online or by telephone: 1.800.668.2642.
Posted on
October 14, 2012
by
Graham Higgins
Global TV (BC) made a lead story on their news casts this week the probable rise in strata fees due to the deprecation reports that are now required by law to be filed by the end of 2013. They are at least 6 months late with this breaking story and if was proposed in early 2011 as part 2 of the shiny new strata act to be enacted after discussion with stakeholders.
In some cases this may be true but already many stratas have been steadily raising strata fees to build contingency funds to acceptable levels. There are some stratas though that still seem to take great pride in having the lowest strata fees; these are the ones that could see substantial rises in fees. There is an out in the legislation however once the report is done it has to be voted on by the owners and they can decide not to accept the report and not do anything choosing instead to rely on special assessments when ever needed.
This can be very shortsighted though as most buyers will ignore these stratas or severely discount the selling price to take into account the possibility of special assessments. This in my opinion will create a 2 tiered sales market and I can see investors leaning to the assessment model as it is a tax write off for them and can maximize their monthly income by keeping fees low. This will not help resident home owners in these stratas though and potential buyers and their Realtors should steer well clear of these units.
I have found these sites interesting reading for strata owners.
http://strataadvocate.ca/
http://stratawatch.ca/
http://www.choa.bc.ca/
Thinking of buying or selling a strata unit, call (604-727-5385) or e mail me to receive a copy of my strata buyers book or the strata sellers book. Lots of information in these for BC
Posted on
October 12, 2012
by
Graham Higgins
Please visit our Open House at 212 15388 101 AVE in SURREY.
Open House on Sunday, October 14, 2012 2:00 pm - 4:00 pm
Wonderful open plan 2 bedroom/2 full bath suite at ESCADA built by ONNI, 'Great room' concept w/ living, dining, kitchen all open w/ 9 ft. ceilings, oversized windows, abundant natural light, f/p, dark laminate floors, and ceramic tile inkitchen and bathrooms.. Deluxe kitchen, granite counters, breakfast bar seating, stainless appliances. Master features walk-in closet, ensuite w/ soaker tub & separate shower. The other good sized bedroom has a walk in closet. Balance of new home warranty, secured parking, live-in caretaker, lounge/rec room & gym. Walking distance to Guildford Mall, Empire Cinemas, library, rec centre, transit, and schools. Easy access to Hwy #1. City utilities included in strata fee
Posted on
October 11, 2012
by
Graham Higgins
Finally some one has woken up to the fact an electronic appraisal is not as accurate as an appraiser physically visiting the property and actually appraising the property. (Globe and Mail October 11th)
For years now the many financial institutions and CHMC have been using Emili (a computer based appraisal system) to set the mortgage value of a home. The problem has always been that 2 homes on the same block are normally not the same, they may have 3 bedrooms and 2 bathrooms and be almost the same size but one could have been meticulously cared for and the other lived in and not in the same condition. Emili does not know and has been used to approve mortgage values based on basically averages for the area. As a Realtor I don’t remember the last time an appraiser showed up at a residential listing that I had sold and this is probably done originally to save someone the appraisal fee. As a buyer I would be very comforted by the fact the my new home was appraised physically and I got the mortgage.
Only an appraiser physically looking at the house could discern the difference and that difference could be thousands of dollars. The Real Estate industry might not like the fact that maybe bank appraisers will kill some deals because the buyers have been talked into paying too much. This often happens when the buyer decides to throw all their legal protection (in BC) to the wind and deal with the listing Realtor in the hopes of getting a better deal.
Posted on
October 4, 2012
by
Graham Higgins
Working in N Surrey this week shopping 2 bedroom condos 2 bath. All of a sudden they are selling admittedly for less than the seller might like but they are getting offers. I tried to show 5 yesterday and 3 have accepted offers since the weekend.
I wonder if the 2.99% interest rate offered by 1 banks mobile people and several trust companies has kicked some buyers of the fence.
There seem to be a fair amount of people looking in the last month or so but as the dismal September figures say not many were buying. Hopefully for the Realtors and sellers this will signal a turn around but only time will tell
Posted on
October 2, 2012
by
Graham Higgins
With the mortgage low interest rates (even 1 bank can give 2.99% for 5 years with no strings attached) the market is very good for the sharp investor.
With over 10,000 properties listed and only just over 800 selling in September in the Fraser Valley there will be some deals to be had for a sharp investor. Just don’t try to find them your self as they may go within days of hitting MLS I saw one in Surrey go one the sale day it appeared on the MLS computer,. If you are relying on Realtor.ca to find anything they you would have missed this one.
If you are fed up with the banks paying peanuts for interest and a low vacancy rate you can find properties that will carry them selves, or you can complain in the future that you should have bought in 2012. Your choice.
Posted on
October 2, 2012
by
Graham Higgins
I have listed a new property at 212 15388 101 AVE in SURREY.
Wonderful open plan 2 bedroom/2 full bath suite at ESCADA built by ONNI, 'Great room' concept w/ living, dining, kitchen all open w/ 9 ft. ceilings, oversized windows, abundant natural light, f/p, dark laminate floors, and ceramic tile in kitchen and bathrooms.. Deluxe kitchen, granite counters, breakfast bar seating, stainless appliances. Master features walk-in closet, ensuite w/ soaker tub & separate shower. The other good sized bedroom has a walk in, Balance of new home warranty, secured parking, live-in caretaker, lounge/rec room & gym. Walking distance to Guildford Mall, Empire Cinemas, library, rec centre, transit, and schools. Easy access to Hwy #1. City utilities included in strata fee
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