Friday, March 14, 2014

February Home Sales Edge Lower

Vancouver, BC – March 14, 2014.  The British Columbia Real Estate Association (BCREA) reports that a total of 5,578 residential sales were recorded by the Multiple Listing Service® (MLS®) in February, up 24.9 per cent from February 2013. Total sales dollar volume was $3.4 billion, an increase of 43.1 per cent compared to a year ago. The average MLS® residential price in the province rose to $611,688, up 15.4 per cent from the same period last year.

"Consumer demand was much stronger in February compared to a year ago, but edged lower compared to January,” said Cameron Muir, BCREA Chief Economist. “Weak employment growth in 2013 has limited home sales so far this year to long-term average levels."

"Record low mortgage interest rates and population growth continue to underpin the housing market and most regions of the province are at or near balanced market conditions,” added Muir.

Year-to-date, BC residential sales dollar volume was up 10.1 per cent to $36.7 billion, compared to the same period last year. Residential unit sales were up 6 per cent to 68,510 units, while the average MLS® residential price was up 3.8 per cent at $535,411

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Friday, February 14, 2014

Strongest January Residential Sales Since 2010

Muted Impact Expected From Cancelled Investor Immigrant Program

Vancouver, BC – February 14, 2014.  The British Columbia Real Estate Association (BCREA) reports that a total of 4,244 residential sales were recorded by the Multiple Listing Service® (MLS®) in January, up 24.5 per cent from January 2013. Total sales dollar volume was $2.4 billion, an increase of 36.8 per cent compared to a year ago. The average MLS® residential price in the province rose to $565,036, up 9.9 per cent from the same period last year.

"Residential sales activity in the province posted the strongest January since 2010,” said Cameron Muir, BCREA Chief Economist. “Consumer demand has recovered from last year’s lower levels and is now trending at the long-term average.” The ten-year average for January is 4,276 unit sales.

"Stronger economic conditions are expected to underpin a modest uptick in home sales later this year,” added Muir.

The demise of the federal Immigrant Investor Program is expected to have little impact on the Metro Vancouver housing market. “The only impact we foresee is less pressure on the inventory of detached homes in Vancouver’s West Side, Richmond and West Vancouver,” said Muir.

The number of investor immigrant landings peaked at 5,876 in 2008 before declining to just 2,644 in 2012, with a similar number expected for 2013. These numbers include spouses and dependents. The total number of added households is estimated to be between 900 and 1,000 per year since 2011

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Wednesday, January 22, 2014

3 Bed room and den condo in Steveston Village, Richmond B.C.

The Village in Steveston, 3 Bedoom + Den
208 - 4211 Bayview St, Richmond, BC V7E 6T6
Bright, clean, spacious 3 bedroom and den in the heart of Steveston. Room for the family/grandkids here. Open floor plan with lots of windows, high end kitchen finished with granite counter tops and stainless steel appliances with gas range. The large covered deck overlooks the courtyard and the unit has a East and North exposure. Close to transit, both levels of schools and just steps to the waterfront boardwalk and the village shops. 2 pets are allowed and rentals are also allowed.
Asking Price: $620000
MLS: V1041203
Sq. Feet: 1373

Bedrooms: 3
Bathrooms: 2

Subdivision: The Village
Year Built: 2006


For pictures click below


Graham Higgins

Dir (604) 727-5385

Team 3000 Realty 


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Sunday, October 27, 2013

BC Home Sales on Upward Trajectory


Vancouver, BC – October 15, 2013.  The British Columbia Real Estate Association (BCREA) reports that a total of 6,498 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC during September, up 43.2 per cent from September 2012. Total sales dollar volume was 55.7 per cent higher than a year ago at $3.49 billion. The average MLS® residential price in the province was $537,458, up 8.8 per cent from September 2012.

"Consumer demand for housing in September was the strongest in four years,” said Cameron Muir, BCREA Chief Economist. “After declining for most of 2012, BC home sales have increased now for seven consecutive months."

"While a return to a more normal level of demand is good news for buyers and sellers, relatively weak economic conditions and muted provincial job growth will likely limit continued acceleration of home sales over the next few quarters,” added Muir.

Year-to-date, BC residential sales dollar volume was up 5.7 per cent to $30 billion, compared to the same period last year. Residential unit sales were up 3.1 per cent to 56,347 units, while the average MLS® residential price was up 2.6 per cent at $532,745.

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Wednesday, August 14, 2013

July Home Sales Highest Since 2007


Vancouver, BC – August 14, 2013.  The British Columbia Real Estate Association (BCREA) reports that a total of 7,650 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC for July, up 18 per cent from July of 2012. Total sales dollar volume was 32.8 per cent higher than a year ago at $4.09 billion. The average MLS® residential price in the province was $534,360, up 12.5 per cent from July 2012.

"Home sales in the province posted their strongest July since 2007,” said Cameron Muir, BCREA Chief Economist. “After six consecutive months of rising consumer demand, it’s now clear that BC housing markets are recovering from tighter lending regulations introduced last year,” added Muir.

"Rising home sales are unlikely to put any significant upward pressure on home prices,” cautioned Muir, “as the inventory of homes for sale is expected to keep pace with demand.” Many potential home sellers that have been holding off for improved market conditions are expected to put their homes on the market to meet the swelling ranks of home buyers.

Year-to-date, BC residential sales dollar volume was down 2.8 per cent to $22.9 billion, compared to the same period last year. Residential unit sales were down 4 per cent to 42,986 units, while the average MLS® residential price was up 1.3 per cent at $531,928.

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Wednesday, May 15, 2013

Housing Market Conditions Improve on the South Coast



Vancouver, BC – May 15, 2013.  The British Columbia Real Estate Association (BCREA) reports that a total of 6,904 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC during April, up 1.9 per cent from March on a seasonally adjusted basis, but down 2.2 per cent compared to April 2012. Total sales dollar volume declined 3 per cent to $3.65 billion. The average MLS® residential price in the province was $528,507, down 0.8 per cent from a year ago.

"BC home sales trended higher again in April, with seasonally adjusted unit sales now 8 per cent higher since the beginning of the year," said Cameron Muir, BCREA Chief Economist. "Market conditions were at or near balanced conditions in Victoria, Vancouver, the Fraser Valley and the North last month, leading to a firming up of home prices." The MLS® Home Price Index edged up 0.7 per cent over the past month in the Lower Mainland, and 1.5 per cent over the past three months.

Year-to-date, BC residential sales dollar volume was down 16.6 per cent to $10.8 billion, compared to the same period last year. Residential unit sales dipped 13.9 per cent to 20,476 units, while the average MLS® residential price was down 3.1 per cent at $529,785.


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: Email:

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 Life in 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 subscribe to receive BCREA publications such as this one, or to update your email address or current subscriptions, click here.

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Tuesday, April 23, 2013

Get ready condo flippers, Canada Revenue Agency is hunting you

You just sold your condo, you made a hefty profit and know you have to pay your taxes.
The bill might be more than you think.
If it’s your principal residence, there’s no tax, as long as you have the paperwork to prove it. The Canada Revenue Agency is taking a closer look at the condominium sector in what some in the industry have dubbed the “Condo Project.”
You might want to think very carefully about how you record that housing sale you made in 2012
Let’s say your gain is $100,000 and your tax bracket is 46%. Capital gains are taxed at 50% so you would only owe $23,000 on that profit.
Not so fast! If the CRA says you are in the business of flipping condominiums, get ready to pay based on the gain being counted as income for a tax bill of twice the amount at $46,000. And, it gets worse. You could also face a fine of up to 50% of the tax owed for making a false disclosure.
With the deadline for filing taxes coming up April 30, you might want to think very carefully about how you record that housing sale you made in 2012.
Sam Papadopoulous, senior public affairs advisor-manager with CRA’s Ontario region, acknowledges that the strength of the condo sector has attracted the attention of the taxman.
“We do from time to time target some sectors more closely than others,” he said. “We look at the real estate market in general. Of course, [there is more focus], it’s a hot market.”
People in the industry have a different view.
Some suggest it fits in with the recent budget when Jim Flaherty, the finance minister, announced his government was taking a closer look at loopholes and tax cheats — hoping to shrink its deficit in the process.
One of the issues attracting the attention of the CRA is assignment clauses, where one person agrees to purchase a condo before it is built but ultimately sells his or her right to buy that condo before the building is even registered.
Builders usually collect a fee for that privilege but ultimately when title is registered at the land registry office the original purchaser’s name is nowhere to be found.
While most builders are unlikely to voluntarily supply a list of properties in their building that were assigned, they could be forced to cough it up if they are audited by the CRA.
Those people who have assigned their units to another buyer are going to be hard pressed to prove they planned to use the unit as an investment property rather just flipping — meaning the CRA is highly unlikely to allow them to count money made at the lower capital gains rate.
“If you keep [assigning property] then it is not capital gains, that’s trade and that’s income,” said Mr. Papadopoulous, adding you do it a “couple of times” and it’s income. “Of course, that’s part of [what they are investigating].”
The warning to people flipping property and thinking they can get away without reporting the gain is pretty clear.
“We live in the information technology age,” said Mr. Papadopoulous, who wouldn’t get into how CRA is tracking down the tax evaders. “We are putting our resources to work and following the trail where we can.”
The tree is capital and it produces a fruit and the income is the profit that is derived when that fruit is sold
Robert Kepes, a Toronto tax lawyer at Morris Kepes Winters, said he’s seen the CRA go after people who have been living in a property and still question it as a principal residence.
CRA starts with a letter to a taxpayer asking them for details about when and why they sold their property and people often fill out the questionnaire without legal advice.
The issue goes all the way back to 1971 when there was no tax at all on capital gains so everybody tried to avoid counting gains as income.
Mr. Kepes says the distinction between income and capital is as simple as the difference between a tree and the fruit that it bears.
The tree is capital and it produces a fruit and the income is the profit that is derived when that fruit is sold,” he says.
If your condo is that tree and your rental income is the fruit and you make a profit from that rental income, that’s taxed as full income. You eventually sell the tree for more money and that’s just a capital gain, taxed at the 50% rate.
If your entire businesses is just trading trees and not producing fruit, that’s business income.
“The Income Tax Act asks what was your intention when you bought that condo,” said Mr. Kepes. “These principles are easy to describe but harder to prove in fact.”
If you never actually moved into the condo, it’s going to be tough to prove that it was principal residence
The law is like a civil case, a judge doesn’t have to believe you beyond a reasonable doubt, but a judge does have to conclude you are more believable than the CRA.
“We have to bring all kinds of intrinsic evidence,” says Mr. Kepes, noting some clients will produce something as simple as a change in address on their driver’s licence to show they were using their condo as a principal residence.
If you never actually moved into the condo, it’s going to be tough to prove that it was principal residence.
You may never have produced income from the profit but that’s not to say you didn’t plan to, so perhaps you could get the capital gains exemption.
“The question can be ‘how did they come to sell the property,’” said Mr. Kepes, adding the CRA might look at whether you were advertising the property for sale.
Brian Johnston, chief operating officer of Mattamy Corp., says the CRA has ways to get information on sales.
“They audit real estate companies, look at the name on the contract and look at the final deed and see a difference,” said Mr. Johnston. “They see Bill Smith bought it and Joe Blow is on the deed. They want to know how this happened and follow the paper trail.”
He has some sympathy for consumers confused about the whole process.
“I think the government should make it a little simpler in terms of filing for principle residence exemption,” said Mr. Johnston. “It’s a real gray area of the law. The government has not done a good job for Canadians trying to specifically identify all the rules around [selling homes and paying taxes]. People might have inadvertently made mistakes.”
Condominium developer Brad Lamb, who has been audited several times, said ultimately it’s better to be more conservative when you’re filing — meaning just count the gain as income if you are in doubt.
“If you are prolific buyer or seller of properties, whether it’s condos or not, you have to govern yourself accordingly. If you don’t, you’ll get caught and be fined,” said Mr. Lamb. “I decided many years ago when I started buying condominiums, after talking with my accountant, you can pay [lower tax] or you can fight 50 years with Revenue Canada.”

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Thursday, March 14, 2013

Home Sales Continue at Modest Pace: Pent-Up Demand Growing

Vancouver, BC – March 14, 2013. The British Columbia Real Estate Association (BCREA) reports that a total of 4,501 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC during February, down 23.6 per cent compared to February 2012. Total sales dollar volume was down 29.9 per cent to $2.39 million. The average MLS® residential price in the province was $514,134, up 3.1 per cent from January, but down 8.1 per cent from a year ago.

Right-click here to download pictures. To help protect your privacy, Outlook prevented automatic download of this picture from the Internet.

"BC home sales continued at a modest pace in February,” said Cameron Muir, BCREA Chief Economist. “Despite improved affordability, many potential buyers and sellers remain in a holding pattern. With pent up demand now becoming latent in the market, it’s not a matter of if, but when home sales rise above their current pace."

“An unusual spike in the average MLS® residential price in February 2012 is largely responsible for the year-over-year percentage change,” added Muir. “Most BC markets have experienced relatively stable price levels during the first two months of the year.”

Year-to-date, BC residential sales dollar volume declined 24.6 per cent to $4.1 billion, compared to the same period last year. Residential unit sales dipped 19.6 per cent to 7,911 units, while the average MLS® residential price was down 6.2 per cent at $523,117

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Friday, March 8, 2013

Canadian Building Permits - March 7, 2013Copyright British Columbia Real Estate Association. Reprinted with permission

Canadian building permits rose 1.7 per cent in January, following an 11 per cent decline in December. Higher building permits in the residential sector offset a decline in non-residential permits.

BC posted a 10.9 per cent increase in construction intentions compared with December 2012, and a 4.5 per cent increase over January 2012. Residential permits rose nearly 16 per cent over December while non-residential permits dipped 2 per cent lower.

Permit activity in BC's four major metropolitan areas was varied in January. Construction intentions in the Kelowna CMA fell by nearly half from a relatively high level in December but were up 63 per cent over January 2012. Permit values were 14 per cent lower month-over-month in the Abbotsford CMA but rose nearly 25 per cent in the Vancouver CMA and 44 per cent in the Victoria CMA

Copyright British Columbia Real Estate Association. Reprinted with permission 

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Monday, March 4, 2013

Foreclosed Properties By CMHC

It’s Now An Optional Disclosure By Quebec Realtors


Financial Post revealed that CMHC had been asking Quebec Realtors to keep quiet about whether the home being sold is a foreclosure, disclosure normally considered mandatory. Quebec Federation of Real Estate Boards which oversees 12 real estate boards in the province, eventually agreed the Crown corporation reached a compromise with the Quebec Realtors to leaves it up to the real estate professional to decide whether to put that fact on the MLS system for buyers, including investors, to see.


Why the new ruling?

The CMHC stance has industry experts divided, with some wondering whether the corporation is hoping to dodge low-ball offers by avoiding disclosure, or preparing for a housing market collapse.

For investors and buyers, not knowing a deal is a foreclosure can make the difference between offering market price or going in with a low offer many buyer for a distressed property. When CMHC takes over the responsibility of recovering money loaned to a home owner who defaulted on his or her loan is determined by the financial institution that issued the loan and CMHC.


How most banks deal with their foreclosed properties now?


When a bank takes over a loan in default through a power of sale or foreclosure, the process is very formal and a process is in place how the property is disposed. First, three appraisals or evaluations are done to establish the value of the property. The property is listed on the mls system indicating the bank as the owner of the property. When an offer is submitted which falls within 5% of that value, a date is booked to deal with the sale through the court. If no offer is forth coming after a period of time the bank might drop the list price by 5% and then wait for an offer within 5% of the new list price.


Any low ball offers below the 5% listing price will not trigger an acceptance by the bank. This process safeguards the sale and disposal of the foreclosed property below the price expectation of the bank. An investor or home buyer can submit a low ball offer, but they will be just wasting their time and energy.


Loaming danger faced by CMHC


In today’s market when home prices are down by 10% or more, CMHC has on it’s book many properties that are worth less than their loan values. CMHC is in danger of holding thousands of properties and tens of millions in potential losses if home owners default on their loans. CMHC’s concern is on too many foreclosed properties undermining the value of all the other properties which they are guaranteeing under their insurance program.


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Thursday, February 28, 2013

BC Proposes Community Safety Act in Legislature

Community Safety Act

On February 21, Minister of Justice and Attorney General Shirley Bond tabled the Community Safety Act in the legislature. If passed, it will enable people to submit confidential complaints to a new provincial unit charged with investigating, mediating and working with property owners to curb various threatening and dangerous activities. The bill targets the sites of specific criminal and nuisance activities, including drug production and trafficking, prostitution, unlawful liquor sales, child abuse, possession of unlawful weapons or explosives, and activities conducted by or on behalf of gangs and organized crime.

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Friday, February 8, 2013

Home sales slow to near historic levels in Fraser Valley as buyers watch and wait from the sidelines

A total of 617 sales were processed through the Fraser Valley Real Estate Board’s Multiple Listing Service (MLS®) in January, a decrease of 23 per cent compared to 799 sales during the same month last year. January 2013 ranks as the second slowest for that month in the last thirteen years, second only to January 2009 during the global recession.

Scott Olson, president of the board, says there is a distinction between what REALTORS® saw four years ago compared to today. “People want to buy. We’re already seeing early signs of a typical spring market with more foot traffic at open houses and an increase in calls.

“Buyers have been holding off in hopes that prices will drop more, however it’s become clear that sellers are only willing to go so far. Prices for typical homes in the Fraser Valley have decreased by only two to three per cent in the last six months and in January we’re starting to see a reversal of that – in half of our communities prices have crept back up.”


Olson suspects the market stalemate may be coming to an end. “The number one reason people buy a home is a lifestyle decision – you need a bigger home, a smaller one, closer to work or school – so when the right home comes along you can only wait so long.

“With interest rates as low as they are, our local economy as strong as it is and prices so tenacious I think we’ll see the effects of this pent-up demand and a return to more balance in the market.”

In the last six months, prices for all three residential property types combined have decreased by 2.5 per cent while year over year they’re on par, showing an increase of 0.7 per cent. Of the three property types, prices of single family detached homes have been the most resilient, increasing 1.5 per cent in the last year going from $532,700 in January 2012 to $540,500 last month.

For townhouses, the benchmark price in January was $293,700, a decrease of 2.0 per cent compared to $299,800 during the same month last year. The benchmark price of apartments in Fraser Valley in January was $200,400, an increase of 1.2 per cent compared to $198,000 in January 2012.

REALTORS® added 2,643 new listings in January, 4 per cent fewer than the same month last year. This decreased the number of properties available in the Fraser Valley to 8,031, a decrease of 3.5 percent compared to January 2012. By historical comparison, January 2013 ranks as the third highest in terms of active listings in the last decade

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Thursday, February 7, 2013

Crucial bit of missing information may be driving Canadian home prices

TAVIA GRANT, The Globe and Mail


Canada’s housing market is a bubble about to burst in some cities, or in the midst of a soft landing. Either way, a crucial piece of information on just what’s driving the market is missing in action 

Unlike in other countries such as the United States and Australia, neither the Canadian federal government nor industry keeps track of the numbers of foreign buyers or where they come from. Anecdotal evidence about foreign buyers abounds, yet hard evidence is lacking.

It’s a crucial bit of missing information. Understanding what’s sparking demand in real estate can offer insights into the health of the market and what’s driving prices, and to better predict cycles – by knowing, for example, how a slowdown in China’s economy might affect local markets.

It can also help politicians make wiser decisions about the sector, such as whether restrictions may be needed if speculation becomes too high.

“It’s very hard to have a policy debate about what we should do when we don’t really know what’s going on,” said Tsur Somerville, director of the University of British Columbia’s centre for urban economics and real estate.

On a quiet leafy street north of Toronto, Mr. Zhang – who asked that his full name not be used – taps the walls and inspects the furnace of a $2.68-million home.

He’s got five days in the city to make his decision. This five-bedroom house, with Jatoba cherry wood floors and a home theatre, is a little over his $2-million budget, but he’ll see half a dozen others this week before making a selection.

He’s looking to buy because his 15-year-old daughter will be attending private school in Canada later this year. The owner of a steel business in Beijing has applied to immigrate to Canada, and figures he may as well purchase a home now.

“Canada is a beautiful country. It is good for living, for higher education and it is not that populated,” said Mr. Zhang, who ultimately bought a $2.2-million home in Oakville, Ont.

Rumours are rife about foreign buyers. In Toronto, Russian and Iranian buyers, flush with cash, are snapping up condos. In Vancouver, Chinese investors are buying luxury apartments. In the Maritimes, wealthy Americans and Europeans are acquiring coastal vacation property.

Estimates of the level of foreign buying are all over the map. In the Toronto and Vancouver markets, they can range from 3 per cent to – in some pockets of the condo market – upward of 60 per cent.

Debate percolated last year about whether Canada should place restrictions or slap fees on non-residents who buy property in the country. But “we definitely had policy recommendations in advance of knowledge,” Mr. Somerville said.

Published stats would help analyze ebbs and flows of demand, occupied units versus vacant ones, and the dynamics of over-supply – how foreigners factor in to the equation of household formation to new construction.

Shifts in the housing market can have huge spillover effects on the broader economy, on everything from retail sales to employment and the building of new shopping malls.

And yet, “we’re missing quite a meaningful part of housing activity in this country,” said Sherry Cooper, chief economist at Bank of Montreal.

Canada’s housing market has boomed since the recession, until lately. Without knowledge of the source of buying, Ms. Cooper said, “we have difficulty assessing just how sticky this money is, how vulnerable we might be to international capital flow changes, or what are the fundamentals that determine what has been extraordinary building and buying in our major cities.”

Canadians, meanwhile, are flocking to the U.S. market, snapping up holiday homes in the sun. They are now, by far, the biggest bunch of foreign buyers of American real estate.

Just how do we know this? Each year, the National Association of Realtors publishes a study on international buying activity in the U.S. It shows who the biggest buyers are, the fastest-growing nationalities of buyers (Canada, China), where they’re buying (Florida, California), why (bargain vacation homes!) and how levels of foreign buying change from year to year.

The industry has collected this info for more than five years, gleaned from questionnaires and followup emails to 50,000 real-estate agents. It’s valuable information for the public, government officials – and the industry itself, helping realtors better understand their markets, says Jed Smith, the association’s Washington-based economist.

Australia, for its part, tightened its rules in 2010 to ensure that investment in its market by foreign non-residents “doesn’t place pressure on housing availability for Australians.”

In London, U.K. property broker Savills asks its clients about their nationality and why they’re buying. Its latest report shows foreigners now comprise a third of buyers of prime residential properties, up from a quarter in 2007. It also found the biggest buyers are Western Europeans It’s a contrast to Canada. CMHC does not monitor or compile data on foreign investors. Its mortgage loan insurance isn’t available for foreign buyers, meaning someone outside the country would need a down payment of at least 20 per cent, and have to get conventional financing . The Canadian Bankers Association doesn’t keep data on this. Nor does the Canadian Real Estate Association. The Bank of Canada doesn’t track it, though Governor Mark Carney has noted that heavy investor demand – much of it foreign – “reinforces the possibility of an overshoot in the condo market in some major cities.”

He has implied that the bank could compile data if it chose to. “We have, through partners, access to all mortgage insurance transactions and all real estate, effectively all real estate transactions, the residency of those transactions, and we can do deeper drills in various areas, if we wish, to establish that.”

As for the federal government, Finance Minister Jim Flaherty told The Globe and Mail last April that it doesn’t have a good handle on the amount of foreign money in the country’s housing market. “It’s mainly anecdotal, so I don’t have a statistical grasp of it, no,” he said, adding that he hears about lots of people in emerging economies paying cash for condos in Toronto and Vancouver .

Monitoring foreign buying in Canada poses challenges. Some buyers purchase homes through local family or a lawyer’s office, so on paper they appear to be living in the country. Plus there may be privacy concerns around asking buyers where they come from or why they’re buying.

Still, Lawrence Kobescak, mortgage agent at Ontario Mortgage, is among many who’d like more clarity on the trends. “Without a clear picture of foreign ownership in the residential market in Canada, we cannot predict the impact shifting foreign investor sentiment may have on the Canadian housing market,” he said.

For example, it’s tough to gauge whether Canada’s hot market since 2008 partly stemmed from a flight to security by foreign investors. Conversely, a global recovery could spur interest rate hikes, put the squeeze among foreign investors’ returns and cause them to retrench. “Without accurate statistics of foreign ownership of residential properties in 2008 and in 2012, we would only be guessing.”

International interest in Canadian property is unlikely to abate any time soon. Volatile stock markets and Canada’s reputation for economic stability are luring investors. So are housing prices that are still lower than other major global centres. And, unlike many countries such as Australia and Switzerland, foreigners face no restrictions on home buying.

Interest in Canadian residential real estate among foreign buyers has been steady in recent years, with particular interest from Asia, says Luis Lopez, head of business development, credit, international private banking for RBC Wealth Management. “The investment dollars are coming here and we are seeing them stay here, it is not for the short term,” he said. adding that “much remains to be seen” on how China’s slowdown will affect real-estate markets in Vancouver and Toronto .

There’s also more wealth sloshing around, looking for a safe place to park. Globally, 175,000 people crossed the millionaire threshold last year, led by growth in emerging markets like China and India, according to Boston Consulting. In China alone, the number of millionaires hit 1.4-million in 2011 from 1.2-million the year before, and that number will keep growing “strongly” in the coming years, it said. Investors from mainland China tend to see Canada as one of the top destinations for real-estate investment, according to real estate services provider Colliers International.

“Most Mainland Chinese investors buy properties in Canada because their children study there,” said Derek Lai, director of international properties, last year. “Now we also witness an emerging trend of younger buyers, such as Chinese students, purchasing bigger apartments or luxury properties.”

Foreign appetite for Canadian homes will persist, says Michael Adelson, Toronto-based sales rep for ReMax Realtron, who recently represented a seller that sold their bungalow for $421,800 over asking to a foreign buyer.

He has worked in the industry for 25 years, and seen interest from Hong Kong, Korea and Iran flourish. As someone in the industry, he’s happy to see such strong demand. As a citizen, he’s worried some local people might be getting priced out of the market.

“People have recognized this is a relatively cheap country to buy,” he says. “I think it will continue unless they put some controls in place.”

Tony Ma agrees. The agent in Markham, Ont., has hosted several groups of visiting Chinese buyers in recent months alone. They typically buy a house for $1-million or $2-million, either to live or as an offshore investment. Canada’s multicultural communities, affordability and democratic system will continue to lure buyers, he says. “I don’t see this market cooling any time soon.”

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Tuesday, January 29, 2013

Vancouver Housing Bubble: Why Chinese Investors Will Return Posted: 01/23/2013 7:41 pm


Huffpost British Comumbia..Posted: 01/23/2013 


Bloomberg recently published a chart highlighting the relationship between Vancouver real estate and China's economy, suggesting that what happens in China has as much influence on the city's housing market as Canada's own economic policies.

Bloomberg pointed out that China's gross domestic product expanded by an annual rate of 7.9 per cent in the fourth quarter of 2012 — up from 7.4 per cent in the prior quarter and the economy's first acceleration in two years.

Their graph established a direct correlation between China's GDP and Vancouver's housing prices — as China's GDP rose, so did Vancouver's real estate prices. If the trend holds, Bloomberg predicts, Vancouver's real estate prices should also soon rise.

Correlation isn't causation — and Vancouver's real estate market is certainly complex — but the Bloomberg research supports my prediction that Chinese buyers will be back to Vancouver real estate sooner rather than later.

Some background: Over the past year, mainland Chinese investor buyers all but disappeared from Vancouver's real estate marketplace, contributing to what was already a softening market in metro Vancouver.

But why did Chinese investors disappear in the first place? During the first decade of the new millennium, real estate prices in China were astronomic — even more expensive than Vancouver. In 2009, China introduced a policy designed to cool investor speculation in real estate. This policy, which was meant to help ordinary citizens buy their own home, stipulated that buyers could purchase their first home with 30 per cent cash down, but if they bought a second property, a whopping 60 per cent down payment is required. As a result of the policy, prices in major cities such as Beijing dropped by 30 to 40 per cent, effectively halting the investor market in the country.

What the policy did was greatly reduce the amount of cash investors had to invest in real estate, both in China and overseas.

Typically, Chinese New Year is when Chinese investors visit Vancouver and go on a shopping spree, but last year, Vancouver real-estate developers and marketers noticed the absence of the mainland Chinese buyer, a telltale sign that China's policy was working and that the overall economy was slowing down.

Here's why I think Chinese investors will return. In China, the real-estate industry accounts for 11 per cent of the country's overall GDP. Including related industries like appliances and furniture, you're looking at a hefty 22 to 25 per cent of the country's GDP. The People's Republic of China simply cannot afford to have this important industry stall, which is why I believe that the Chinese government will relax the restrictive lending policies, investors will start getting back into the market and, as their assets become more liquid, we'll see them return to Vancouver.

The brisk return of China's real-estate market means many Chinese will once again look for a safe haven to park their newly regained wealth.

While China's policy change has impacted investors' cash flow in the short term, it hasn't curbed their enthusiasm for Vancouver real estate. The sudden rise and fall in real estate prices that we're seeing now in China, as well as fluctuations in the overall economy, mean that people view investing there as no less risky than placing bets on a baccarat table. For many Chinese investors, parking money in Vancouver feels as safe as investing in treasury bills.

The People's Republic of China has a new leader in Xi Jinping and historically every change in leadership brings with it new policies to create its own legacy. I believe that with this leadership change, we will see major changes in the country's mortgage-lending policies and a renewed interest in real estate investing.

Experts predict that Vancouver's real estate market in 2013 will decline slightly, not crash. And with the likely return of the Chinese investor and the news that the Bank of Canada will hold the interest rate at one per cent, the future of Vancouver's real estate may not be as bad as what the headlines would have you believe


A version of this article first appeared in B.C. Business.

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Wednesday, January 23, 2013

Bank of Canada Interest Rate Announcement - January 23, 2013

It may be a new year but it is the same story this morning from the Bank of Canada which once again held its target for the overnight rate at 1 per cent. The statement released in support of the interest rate decision noted that the global economic outlook is weaker than the Bank previously projected, though risk of a severe external shock to the economy has diminished. As a result, the slowdown in the Canadian economy in the second half of 2012 was more pronounced than the Bank had anticipated. The Bank has revised its estimate for economic growth in 2012 lower, to 1.9 per cent, and now forecasts 2 per cent growth in 2013 before an acceleration to 2.7 per cent in 2014. Importantly, the Bank has also shifted its expectation that the economy will reach full capacity out to the second half of 2014. On inflation, the Bank expects growth in consumer prices to run significantly below its 2 per cent target for much of 2013 before gradually rising to target in 2014.

Following two years of overly optimistic forecasts, the Bank has struck a slightly more dour tone in its outlook. The gloomier growth forecast and positive signs that households are reigning in household debt have prompted the Bank to revise its language on the gradual withdrawal of monetary stimulus. In its concluding statement accompanying the rate decision, a key focus of monetary policy watchers over the past year, the Bank continued to note that a withdrawal of stimulus would likely be required over time, but that the timing of any such withdrawal is less imminent than previously anticipated. This strongly suggests that interest rates will remain constant at 1 per cent for all of 2013.


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: Email:

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. 

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Tuesday, January 22, 2013

Canadian Retail Sales - January 22, 2013

Canadian retail sales increased a slight 0.2 per cent in November, the fifth consecutive monthly increase. However sales were higher in just 4 of 11 retail sub-sectors, representing only 32 per cent of all retail trade. In volume terms, retail sales were actually higher than in dollar terms, up 0.8 per cent, likely due to holiday sales discounts.

Retail sales in British Columbia were up 0.3 per cent in November but were 0.8 per cent lower year-over-year. BC consumers, perhaps feeling the weight of elevated household debt burdens, were not in the mood to spend in 2012. Through November, BC retail sales were up just 2.4 per cent, an even slower pace of sales than 2011's already weak 3 per cent growth. We anticipate that this weakness will continue into the first half of 2013 before growing employment and better overall economic conditions spur the economy in the second half of the year and into 2014.

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: Email:

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. 

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Tuesday, January 22, 2013

Rapid bus for King George, light rail for Fraser?


A retail leasing document for PCI’s King George Station development is revealing new details about the City’s rapid transit future. Retail floorplans in the document show that the mixed-use, transit-oriented development has been planned to accommodate two rapid transit stations. On the north end of the property, adjacent to the SkyTrain, a light rail station is being planned, with service east to Langley along Fraser Highway. The development also re-orients King George Boulevard, reducing the northbound roadway to two lanes, while re-allocating the remaining space to two bus-only lanes. A station on the western edge of the property will be reserved for a bus rapid transit service down King George to South Surrey/White Rock.

Major developments like this spend a lot of time working with staff and planners to accommodate the City’s anticipated needs, like rapid transit stations, well before the application comes to Council, meaning it is in here for a reason.

This new information points to a softening in positions by both the City and TransLink. Up until now, the City has firmly supported Light Rail, insisting that it is the only technology able to shape growth and serve growing transit demand today and tomorrow. Meanwhile, TransLink has been adamant that Bus Rapid Transit is sufficient to support the South Fraser out to 2040.

Perhaps this new solution – one LRT and one BRT – is a new compromise both parties can agree to. Light Rail on Fraser would support TransLink’s regional goals of faster and better connections to Regional Town Centres, while still improving transit on the busy King George route. Surrey would be able to obtain at least one Light Rail line, showcasing the technology and its possibilities for future routes. A busway on King George could be adapted to LRT relatively easily at a later date if public demand warrants it.

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Saturday, January 19, 2013

Canadians can still buy a house without saving their pennies


Special to The Globe and Mail

It would seem that regulators want to dissuade Canadians from buying homes with nothing down. Yet despite all of the recent changes, buyers can still get into the real estate market with little cash on hand Ottawa did away with Canada Mortgage and Housing Corp .-insured 100 per cent financing back in 2008. Home buyers with few savings searching for an alternative were left with cash-back down payment mortgages. (That’s where a lender gives you your 5 per cent required down payment, in exchange for a higher rate.) But those didn’t last long because in 2012, regulators barred banks from offering cash back for down payments.


Purchasing a home without your own down payment is often risky. One exception is when a borrower is well-qualified (apart from the down payment), has enough potential resources to withstand a loss of income and falling home prices, and is better off owning than renting. But exceptions are just that, and not the rule.

Young people use alternative down payment sources more often than most. Why? The main reason is a lack of savings. At a time when the average national home price has jumped to $356,687, the Canadian Association of Accredited Mortgage Professionals finds that more than one in four renters have less than $5,000 saved for a down payment. Yet, many of these folks are dead set on owning a home, so they end up using one of the down payment methods listed below.

Borrowing from other credit sources When buying a home, you generally need at least 5 per cent of the purchase price as a down payment. Ottawa prohibits you from borrowing that 5 per cent from your mortgage lender if that lender is a bank or federal trust company.

Meanwhile, you’re free to borrow your down payment from a line of credit, personal loan or even a credit card. That’s right, if you’re creditworthy you can throw your down payment on a VISA at 20 per cent interest. Mind you, not all lenders allow this and the ones that do check that you can afford the extra debt payment.

One obvious problem with borrowing your down payment is the higher interest cost. Even if you use a line of credit, the interest rate on your down payment loan can be much higher than a regular mortgage, or have a riskier variable rate.

“Borrowing a down payment from less suitable sources is a potential issue,” acknowledges Gord McCallum, broker and president of First Foundation Inc. “Often times, with new mortgage regulations there can be unintended consequences that are worse than the problem they’re purported to solve, and this may be one of them.”

Getting a cash-back down payment mortgage In many provinces, lenders that aren’t federally regulated (like credit unions) can still offer cash-back down payment mortgages. The few that actually do will give you 5 per cent cash to use for your down payment. You then need to cough up only your closing costs, which include legal and inspection fees, the land transfer tax and so on.

Not surprisingly, the interest rate on cash-back mortgages is well above a normal mortgage. But when you factor in the “free” cash, the overall borrowing cost isn’t that horrible. The main downside of a cash-back mortgage is that you have little equity cushion if home prices fall and you need to sell. And if you break the mortgage early, your lender can take back much or all of the cash it gave you.

Going forward, the days of cash-back down payment mortgages may be numbered. There is speculation that they’ll be eliminated in 2013–by either mortgage insurers, provincial regulators or both. For now, however, a handful of credit unions still offer them to people with strong credit, with Ontario-based Meridian Credit Union being the biggest such lender.

Using a gifted down payment If you’re a young home buyer with a generous relative, you may be lucky enough to get your down payment as a gift. Most lenders will consider a gifted down payment if the donor is a parent, grandparent or sibling.

Unfortunately, while not an epidemic problem, it’s no secret that a small number of borrowers fraudulently claim their down payments as “gifts,” even though they fully intend to repay the money. That raises the risk level for lenders because the borrower’s debt obligations increase. Of course, both the borrower and giftor must attest in writing to gifted funds being non-repayable, but that is hard to police after closing.

RRSP Home Buyers Plan (HBP) First-time buyers can borrow up to $25,000 from their RRSP as a down payment. But this is a very different kind of loan, for three reasons:

1. You’re borrowing from your own retirement savings, as opposed to a third party.

2. You don’t have to start repaying the loan until the second year after the year you make your withdrawal.

3. Even though Revenue Canada wants the funds paid back in 15 annual instalments, lenders don’t include those repayments in a borrower’s debt calculations. As a result, some people get approved for a mortgage only to find themselves caught in an annual cash crunch because they didn’t budget for their HBP payment.

The RRSP HBP comes with other perils. By draining your retirement savings, you risk losing years of tax-deferred investment gains. That’s a decision that some will later regret.

Moreover, any instalments that aren’t paid back on time are taxed as income in that year. And as many as one-quarter of HBP participants have missed or underpaid their instalments in the past.

Special lender and government programs Various provinces and municipalities provide down payment assistance grants. These programs are typically for people with low or moderate income. Despite these borrowers being higher risk, in some cases, they’re permitted to buy a home with nothing down.

There are also specialized programs at individual lenders. For example, Canada’s biggest credit union, Vancity, currently finances an affordable condo project in Vancouver whereby it lends 90 per cent of the purchase price while the developer provides a 10 per cent second mortgage with no interest and no payments.

All of these down payment alternatives have one thing in common. They all come with some degree of added risk. It’s curious how Ottawa encourages people to have their own skin in the game, yet sanctions various substitutes to the traditional 5 per cent down payment.

If you do use one of these down payment alternatives, remember these two things: Buying a home without your own cash is not a decision to take lightly. And qualifying for a mortgage doesn’t mean can successfully carry one.

Rob McLister. "Canadians can still buy a house without saving their pennies." January 18, 2013.

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Monday, January 14, 2013

BC Home Sales Decline in 2012

Vancouver, BC –January 14, 2013. The British Columbia Real Estate Association (BCREA) reports that a total of 67,637 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC during 2012, a decline of 11.8 per cent compared to 2011. Total sales dollar volume declined 19.1 per cent to $34.8 billion over the same period. The annual average MLS® residential price in the province was $514,836 in 2012, down 8.3 per cent from 2011.

"A notable pullback in consumer demand in Vancouver and the Fraser Valley during 2012 was more than enough to offset increases in home sales in the Okanagan, Kootenays and BC Northern regions,” said Cameron Muir, BCREA Chief Economist.

“At least half of the 8 per cent decline in the BC average home price was the result of fewer luxury homes selling in Vancouver and fewer overall Vancouver home sales relative to the rest of the province in 2012.”

In December, BC residential sales dollar volume was down 28.6 per cent to $1.5 billion, compared to December 2011. Residential unit sales declined 26.4 per cent to 3,011 units, while the average MLS® residential price was down 3 per cent to $498,205 over the same period.


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: Email:

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).

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Saturday, January 12, 2013

You’re busted!

by Eric Putnam, PFP, RQIC

A September 2012 Harris/Decima survey asked Canadians how confident they were about being able to raise $2,000 within a month if an unexpected need arose. Some 92 per cent said they’d have to consider borrowing to come up with some of the cash, and only 45 per cent said they’d never faced a debt problem. The poll results come as Canadian debt-to-income ratios sit at a record 152 per cent and officials issue warnings to start paying down debt before interest rates rise. But those survey findings suggest consumers have been unmoved by warnings and that the resulting financial burden could sink some households This is the third part of a CMP series regarding debt solutions. Based upon discussions our team has had with mortgage professionals acrossCanada, there are many myths regarding how debt solutions affect Canadians’ finances and their credit profiles. We hope to clarify these myths so as a trusted adviser you are better prepared to assist your clients.

The truth on Credit Counselling and Debt Management Plans

Non-profit credit counselling agencies offer “debt management plans” (or DMPs) generally collect fees of up to $49 per month from consumer for 36 - 60 months until 100per cent of the enrolled debt is repaid. Each lender determines a “fair-share contribution” as a percentage of what is remitted by the agency. Creditors are not required to participate.

Impact on credit bureaus: Enrolled debts are reported by lenders to credit reporting agencies as R-7 or I-7. As per their purge rules, Equifax will remove a debt in a DMP three years after completion and TransUnion will remove it two years after completion.

The truth on Debt Settlement
Debt settlement firms have become active inCanada following their development in theUnited States.Alberta andManitoba passed legislation pertaining to debt settlement firms after the U.S. Federal Trade Commission passed regulations in 2010 that banned upfront fees to protect consumers. Unless a “bad debt,” it is often unlikely a creditor will approve a settlement offer. Creditors can refuse to participate and still pursue legal action to collect.

Impact on credit bureaus: If successful, a debt is reported by lender as “settled” and rated as R-9 or I-9. As per Equifax’s and TransUnion’s purge rules, the debt will remain as a trade line for six years from the date that the final payment is reported as “received,” whether settled or not.

The truth on Consumer Proposals

To qualify for a consumer proposal regulated by the federal government’s Office of Superintendant of Bankruptcy (OSB), Canadians must be “insolvent.” The OSB defines insolvency as “the condition of being unable to pay one’s debts as they become due, or in the ordinary course of business or having liabilities that exceed the total value of assets.” (In simple terms a consumer proposal could be considered a court-protected form of debt settlement.)

Consumer proposals have been an alternative to bankruptcy since 1992 inCanada. A trustee, licensed by the OSB, must show the consumer’s unsecured creditors they will receive more by accepting a proposal than a bankruptcy. If creditors representing the majority of dollars owed vote to accept the proposal all other unsecured creditors are bound under the same terms regardless of their vote.

A mortgage or other secured loan cannot be “called” due to filing a proposal. Mortgages for those consumers in a proposal are most often renewed by the current lender as long as they are paid as required.

Interest stops on filing and repayment can be for a maximum of 5 years. Payments can accommodate seasonal income, commissions, etc.Saleof an exempt asset or assistance from family can be used to partially or fully fund a proposal.

Unless co-signed filing of a proposal does not affect a spouse.
Impact on credit bureaus: Debts included in a proposal are rated R-7 or I-7 and remain on credit reports for 3 years after completion per Equifax and TransUnion’s purge rules.

The truth on Bankruptcy

Since September 2009, a first bankruptcy with surplus income as defined by the OSB guidelines is not discharged for 21 months. Canadians filing bankruptcy can keep assets exempt from seizure as set by the resident province or territory. Since 2008, RRSP contributions more than 12 month prior to filing any insolvency are exempt from seizure. Many are able to keep “non-exempt” assets by paying the trustee the asset value on a payment plan. A second-time bankruptcy will not be discharged for at least 36 months.

Impact on credit bureaus: Per Equifax and TransUnion’s purge rules, first-time bankruptcy remains on credit reports for six years from the date of discharge and a second bankruptcy remains for 14 years.

The truth on Statute of limitations

Each province’s statute of limitation determines how long a lender has to take legal action to collect consumer debt. For example, inOntarioandAlbertalenders cannot obtain judgment where nothing has been paid within 24 months prior. Other provinces vary from three to six years. Note the debt remains on credit reports for six years from date of last payment or activity per Equifax and TransUnion collection purge rules.



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