Real Estate News

Sale Price Averages - 1977 through April 2013

Mon, 03 Jun 2013 04:58:00 GMT

The following graph shows the average residential sale prices from the REBGV, 1977 through April 2013.

First Quarter Sales Stats for 2013

Fri, 26 Apr 2013 20:10:00 GMT

Here are the released sales stats for the first quarter of 2013, courtesy of REBGV. Please click any of the images below to open a full-sized PDF copy.

Client Outlook - Special Series, 3 of 3

Thu, 21 Mar 2013 01:05:00 GMT

"Leith Wheeler is one of Canada's leading Investment Groups. They are who I have trusted with my investments for the past several years. Mike Job has generously offered the his opinion below.

As always, please feel free to send me your comments."

Canadian Housing Bubble?

Contributed by Micheal Job

At Leith Wheeler, we are value investors that are keenly concerned about the valuation of assets. But as stock and bond investors why would we bother looking at the real estate market? In short, because it is an important factor in the economy and can have a large, indirect impact on other asset prices.

To conduct our analysis on the Canadian real estate market, we looked at 40 years of housing fundamentals in 21 OECD countries to see how house prices interacted with inflation, household incomes and rents. Over the sample period 1970-2012, prices went up most of the time. However, we concluded that in the long run, prices go up primarily because incomes and rents go up, mostly due to inflation.

When we used a combination of price-to-rent and price-to-income ratios to analyze the Canadian real estate market, our straightforward conclusion was that Canadian housing needs to unwind about 30% from the current valuation ratios. That’s not the same thing as prices crashing by 30%! Importantly, if rents and incomes continue to go up, prices may not need to drop that much. In fact, annual growth in income and rents of 3% would deflate half of the valuation bubble over seven years. It is also conceivable that we don’t revert all the way back down. A modest price decline coupled with gains in rents and incomes, called a soft landing, is exactly what the central bank and federal government is aiming for. However, watch out for weaker inflation or income gains, particularly as the economy adjusts to slower housing activity, as they represent the primary threats to a soft landing.

In conclusion, a housing bubble is hard to define, but we see it in Canada right now. However this doesn’t have to mean financial disaster is around the corner. In fact, our research indicates that housing is almost always either inflating or deflating and while it is a very important factor for the economy, as most Canadian homeowners know, moderate price changes are not the end of the world.

Client Outlook - Special Series, 2 of 3

Thu, 07 Mar 2013 08:56:00 GMT

"Mr. Horner has been a client for many years. At times I've questioned the timing of his real estate decisions... sometimes with a raised eye brow but he has an impressive score card and I am grateful for his insight. He has been gracious enough to contribute. I hope you find his thoughts as useful as I have!

I look forward to your comments and input!"

Economy/Economic Thoughts

Contributed by Mr. Horner

Recreational Property

BC Recreational property underwent a major transition in 2008. The value of waterfront (salt or fresh) along with other recreational venues basically collapsed. I saw my own waterfront property (which we have owned for ten years), triple in value then drop down to a number above what we invested but not a lot more considering ten years has gone by. The increase in the Canadian dollar along with the incredible drop in US property values made properties in the sunny south of the US available for pocket change relative to BC. This is not going to change soon, however, the recovery of the US housing market, the realities many are learning of property ownership and risk in the US, aging boomers needing greater access to our low cost medical system (and facing increasing fees for insurance) and perhaps a weakening Canadian economy and dollar will shift the focus home…….eventually. So now may be a good time to invest in the BC recreational property market, but no need to rush, this is a decade long value recovery. We have passed the bottom of this market but it is still very much a buyers’ market in this area and recovery will be slow.

The Economy

While US companies are reporting good earnings this season I am still very cautious about the overall global economy. I believe we are in for continuing instability. Europe, while currently quiet, is still a major financial mess with overspending on farm subsidies, early pensions, unaffordable social programs and fat government bureaucracies. While we usually think of Greece when talking of these issues Greece is not the only problem, it is widespread. So Europe is going to underperform and the rest of the world will suffer with them. The emerging nations depend on the western consumers to support their massive growth plans, until they develop their own middle class they could be a bubble in waiting. Canada is dependent on global growth to fuel our natural resources exports so we are on shaky ground as well. So I think we are still in for a rocky and uncertain ride. I continue to be cautious, invest in good companies that make real things and pay dividends and have a lot in fixed income and preferred shares, again in good companies/institutions with a long future.

Vancouver Housing

Clearly the buzz has come off Vancouver but I still think this market will do nothing but go up in the long term. The place to be, I believe, is the lower mainland “inside the bridges” and Vancouver in particular. Our reputation as a great place to live, multiculturalism, closeness to growing Asian wealth and natural beauty will sustain us pretty much regardless of the long term global economic trends. There will be ups and downs but the trend will be up over the decade. Why “inside the bridges” , well I believe the future holds nothing but increasing tolls, fees on cars, transit costs, fuel costs and traffic congestion. All of these factors will increase the cost of living outside of Vancouver so property values in the city will maintain and grow. Increased population density that will be driven by these factors as the cost of land rises will maintain Vancouver as the social, cultural and business center of the region which will, in turn, help keep values intact and growing.

Client Outlook - Special Series, 1 of 3

Wed, 27 Feb 2013 08:56:00 GMT

"Over the past several years I have had the distinct pleasure to work with many great people. My client base contains countless individuals that have not only experienced great success buying & selling local real estate but also have success in diverse areas of finance, business and investment.

Three of these clients have graciously agreed to share their perspective on the current Real Estate market. Throughout the years, I have always found their insights extremely valuable and I hope that you do as well!"

Always look forward to your comments!

Gold & Real Estate

Contributed by Ralph B. - 20 years experience Gold Mining

For more than 6000 years gold and other precious metals have been money for various civilizations. These civilizations, who in complete isolation from one another, came to the same conclusion. That mainly gold and much later silver became the currency of choice. There are several reasons for this. To be a good currency it must be rare so a small amount can represent a considerable amount of wealth. Being rare protected it from being depreciated by large amounts entering circulation causing ones gold to be worth less - what we know as inflation. Despite this the powers that ruled always created currencies that were not 100 % gold. Hundreds of these Fiat (faith based) currencies have failed. The average life expectancy of a fiat currency was around 40 years. They always fail for the same reason.

The ruling power, due to wars or simply to try and create wealth out of thin air, issues ever increasing amounts of paper to meet their needs but without a limiting factor like gold backed currency. This always seems to spiral out of control until the currency is worthless. It is after all the amount of money in circulation that determines its worth. There are numerous examples this happening. One of the most notable was the Weimar republic which was set up with a fiat currency after World War 1. In order to make war reparations set out in the Treaty of Versailles the Germans had to print massive amounts of marks.

The price of a meal went up while people were eating it. Working people got paid twice a day so they could run out at noon and buy something because in the evening it would be worth considerably more. Everyone was finally a trillionaire but could buy a loaf of bread with it. But one thing did retain its value during this hyper inflation. An entire city block in Berlin could be purchased for ten ounces of gold. Finally a new currency had to be issued. A bank holiday was declared and a new currency the Reich mark was issued. It was backed by land because the German gold was a spoil of war and had disappeared a few years earlier.

We might think that this is a rare occurrence but this has happened dozens of times since. Most lately Zimbabwe whose treasury had around 200 us dollars as of a couple of weeks ago. Everyone in Zimbabwe has trillions in Zimbabwe paper but can’t buy anything with it. They have taken to trading with placer gold which is always been the competing currency to printed money. Our current financial system can be traced back to 1913. And the creation of the Federal Reserve which is a privately controlled central bank.

Canada has its own central bank as does England and any other western country has the same. Gold was fixed at just over 16 dollars an ounce and a dollar had the words pay the bearer on demand. If you gave any bank 16 dollars and a bit of change they would give you an ounce of gold in return. Remember this 16 dollar an ounce number. In 1913 it bought you a nice suit or food for a family for a month. World War 1 caused a lot of money printing mainly by the British who tried to fix their currency to the prewar fix. But due to the amount of money now in circulation this didn't work. England experienced a depression largely because of this.

Back in North America things were booming with fractional reserve banking and buying on margin driving the stock market bubble. Bubble is great until they pop and in the Fall of 1929 it collapsed. The very thing that the Federal Reserve was set up to prevent. One might argue that they even caused it by contracting the money supply. This quickly led to the depression. In 1933 in order to improve the American economy Roosevelt declared it illegal for Americans to own gold. He didn't want the Americans to have a viable competing currency for what was coming next. Less than 10000 dollar fines and 10 year imprisonment the Americans turned their gold in for the gold fix of the day. After the due date expired the gold was revalued at 35 dollar an ounce essentially devaluing the dollar and making American exports much cheaper. This is also an interesting time as the gold that the treasury had backed the m2 money supply 100 %. The Dow was at 35 dollars as well. If you had, but you were not allowed to own it, 150 ounces of gold then you could buy a nice house outright. The dollars lost the words "pay the bearer on demand". The depression dragged on despite Roosevelt's and the feds efforts. One could say only World War 2 ended the depression. Then came Breton woods in 1945. The western powers knew that the war was theirs to win. So before it was even over they went about designing a new financial system for the world. It was decided that they had 18000 tons of gold in reserve and they would back the USA dollar with that and the US dollar would in turn be the reserve currency for every other country in the world.

This all worked well for the usual 30 to 40 year life expectancy of a currency system. But in this case it was only 28 due to the cost of Vietnam, a large trade deficit between the USA and other countries occurred and they wanted the gold now instead of paper they were supposed to be happy with. Nixon closed the gold window for all countries as the USA approached 8000 tons of gold left. And at that instant all the currencies in the world became a fiat currency like Weimar or Zimbabwe. Gold rose until in 1980 it peaked at 800 which are what the Dow was, and silver rose to 50 dollars. The price of a median home in the USA was around 120 ounces of gold. An ounce of gold also bought a nice suit or a month’s worth of groceries for a family. And the USA could go on a 100% gold backed currency backing M2. Fast forward to today. If history were to repeat itself. Gold is at 1560 the Dow 14000 and in order for gold to back the M2 money supply 100% gold would have to rise to 15000 dollars an ounce. And a median priced home 120 ounces at 15000 sounds absurd. Don’t forget that the money supply has increased by around 400% since 2008.

The money isn’t out bidding up real-estate or a suit or groceries. It’s fuelling a bond bubble. And if that much money goes into real estate a 2 million median home isn’t out of the question. It sounds absurd but that is what the guy who bought a city block in Berlin for 10 ounces of gold thought too.

Reminder - HST

Wed, 06 Feb 2013 08:57:00 GMT

On April 1, 2013 the Harmonized Sales Tax (HST) will cease to exist and the Provincial Sales Tax (PST) will be re-implemented in BC. As of April 1, 2013 the 12% HST will no longer be charged on real estate commissions. Instead, only the 5% GST will apply.

We will provide more information @ www.weSellvancouver.ca in the next few weeks. Please also keep the change in mind when reviewing any articles or booklets on this website.

Prices hold firm as home buyers and sellers conclude 2012 from the sidelines

Thu, 03 Jan 2013 08:57:00 GMT

The Greater Vancouver housing market experienced below average home sale totals, typical home listing activity and modest declines in home prices in 2012.

The Real Estate Board of Greater Vancouver (REBGV) reports that total sales of detached, attached and apartment properties in 2012 reached 25,032, a 22.7 per cent decline from the 32,387 sales recorded in 2011, and an 18.2 per cent decrease from the 30,595 residential sales in 2010. Last year’s home sale total was 25.7 per cent below the ten-year average for annual Multiple Listing Service® (MLS®) sales in the region.

The number of residential properties listed for sale on the MLS® in Greater Vancouver declined 2 per cent in 2012 to 58,379 compared to the 59,539 properties listed in 2011. Looking back further, last year’s total represents a 0.6 per cent increase compared to the 58,009 residential properties listed in 2010. Last year’s listing total was 6.1 per cent above the ten-year average for annual MLS® property listings in the region.

Residential property sales in Greater Vancouver totalled 1,142 in December 2012, a decrease of 31.1 per cent from the 1,658 sales recorded in December 2011 and a 32.3 per cent decline compared to November 2012 when 1,686 home sales occurred.

December sales were 38.4 per cent below the 10-year December sales average of 1,855.

Since reaching a peak in May of $625,100, the MLS® Home Price Index composite benchmark price for all residential properties in Greater Vancouver has declined 5.8 per cent to $590,800. This represents a 2.3 per cent decline when compared to this time last year.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 1,380 in December 2012. This represents a 15.3 per cent decline compared to the 1,629 units listed in December 2011 and a 50 per cent decline compared to November 2012 when 2,758 properties were listed.

Sales of detached properties in December 2012 reached 425, a decrease of 32.5 per cent from the 630 detached sales recorded in December 2011, and a 44.7 per cent decrease from the 769 units sold in December 2010. The benchmark price for detached properties decreased 2.7 per cent from December 2011 to $904,200. Since reaching a peak in May, the benchmark price of a detached property has declined 6.5%.

Sales of apartment properties reached 504 in December 2012, a decline of 34.9 per cent compared to the 774 sales in December 2011, and a decrease of 37.9 per cent compared to the 811 sales in December 2010.The benchmark price of an apartment property decreased 1.9 per cent from December 2011 to $361,200. Since reaching a peak in May, the benchmark price of an apartment property has declined 12.8%.

Attached property sales in December 2012 totalled 213, a decline of 16.1 per cent compared to the 254 sales in December 2011, and a 33.2 per cent decrease from the 319 attached properties sold in December 2010. The benchmark price of an attached unit decreased 2.6 per cent between December 2011 and 2012 to $450,900. Since reaching a peak in April, the benchmark price of an attached property has declined 4.4%.

source: REBGV

Seasons Greetings & a Happy New Year!

Mon, 24 Dec 2012 20:06:00 GMT

From all of us at weSellvancouver, we wish you and your families all the best for the holidays and a prosperous 2013!

Vancouver beats NYC as most expensive city in North America?

Wed, 19 Dec 2012 20:09:00 GMT

	vs.
Vancouver Downtown		Manhattan

According to this ECA International article, Vancouver is North America’s most expensive location for the second year in a row. The article ranks the city 35th globally, followed by Manhattan. The strengthening of the US dollar against major currencies has led to all of the US locations surveyed moving up the ranking in the past 12 months – despite cost of living items increasing at a slower rate than many other parts of the world.

You can read the full release HERE.

Transition Provisions Relating to HST and GST/PST

Mon, 17 Dec 2012 23:31:00 GMT

The Government of BC has published information about transitioning from the Harmonized Sales Tax back to the Provincial Sales Tax and Goods and Services Tax at this link: HERE. The New Housing Transition Tax and Rebate Act covering the temporary housing transition tax and the temporary housing transition rebate came into effect on December 1, 2012.

Due to the complexity of the transition provisions and the potentially significant implications for sellers and buyers, clients are advised to seek appropriate and timely tax advice if there is any doubt as to whether these provisions may apply.

Variable Mortgage - what does it mean? Most people don't know and wont ask

Fri, 30 Nov 2012 19:31:00 GMT

What is a variable interest rate mortgage?
A variable interest rate mortgage is a mortgage loan with an interest rate that can change during the term. The interest rate varies with changes in market interest rates (typically the bank's prime lending rate). The mortgage payments can be fixed, or they could change if the interest rate changes — it depends on the lender and type of product.

What are the benefits?
If market interest rates are stable or go down during your term, you could pay less in interest than with a fixed interest rate mortgage. By the end of your term, it is possible that you could have paid more toward your principal than expected and less towards interest, which would reduce the balance owing and shorten the time needed to pay off your mortgage.

What are the risks?
If market interest rates go up during your term, your interest rate would increase and you would pay more in interest to the lender. As a result, by the end of the term, you might have paid more in interest than if you had chosen a fixed interest rate mortgage. It also means that by the end of your term, you might pay less of the principal than expected, which would lengthen the time needed to pay off the mortgage.

Depending on the lender and the terms of the variable rate mortgage, another risk is that your payment could increase if the interest rates increase. Consider how much of an increase in mortgage payments you could handle. If you don't think you can handle the risk of your mortgage payment increasing, or do not have enough cash flow, you may be better off with a fixed interest rate mortgage. Below, you can see an example of how interest rate changes can affect a mortgage.

What makes variable interest rate mortgages attractive?
The interest rates on variable rate mortgages are often lower than the fixed interest rate offered at the time you sign the contract. However, whether you are better off with a variable interest rate mortgage compared to a fixed interest rate mortgage depends on the movement of market interest rates during the life of your mortgage, called the "term". This movement is difficult to predict. For example, between 2000 and 2009, the Bank of Canada Bank Rate varied from 0.5% to 6.00%.

What happens to mortgage payments when interest rates change?
When interest rates change, depending on the lender and the terms of your mortgage, the following scenarios are possible:

Your payment goes up or down each time market interest rates change.
Your payment stays the same when market interest rates go down, but increases when market interest rates go up. In this scenario, more of your payment goes toward paying down the principal when the interest rate falls.
Your payment does not change unless market interest rates increase to a "trigger" point (shown in your mortgage agreement). Only at that point will the lender increase your payment.

Example:John takes a mortgage with variable interest rate and the following terms and conditions:

principal amount borrowed: $200,000
term (length of the mortgage agreement): 5 years
amortization period: 25 years
interest rate: variable, initially set at 3.00 %
monthly payment: variable.

The lender explains to John that his payments will go up and down with the interest rates. At first, John's interest rate is stable at 3.00 percent %. Starting in the second year, market interest rates begin to climb and so do his payments.

	Interest rate¹	Monthly payment	Interest paid	Principal paid
(1) In this scenario, interest rate changes happen at the beginning of the year
Year 1	Initial interest rate: 3.00%	$946	$5,889	$5,469
Year 2	rises to 3.50%	$997	$6,676	$5,285
Year 3	rises to 4.00%	$1,046	$7,415	$5,143
Year 4	rises to 4.50%	$1,096	$8,106	$5,041
Year 5	rises to 5.00%	$1,144	$8,749	$4,978
TOTAL	-	-	$36,834	$25,916

In this example, the interest rate goes up 2% over the five-year term. Keep in mind that interest rates could go up or down more or less than 2% over that period, and those changes would affect calculations.

John's alternative at the time was a five-year fixed-rate mortgage. In the example below, the bank offered him a fixed rate of 4.00 percent for five years.

	Interest rate	Monthly payment	Interest paid	Principal paid
Years 1 to 5	4.00%	$1,052	$37,230	$25,892

After five years the amount of interest and the amount of principal John paid with a fixed or variable rate mortgage would be almost the same. The main difference is that with a variable rate mortgage, John's monthly payments would change from year to year, but with a fixed interest rate John would know that his payments would stay the same for the full five-year term.

Protecting yourself against a rise in interest rates
Some lenders offer interest rate caps or convertibility features on their mortgages. These features can offer some protection if interest rates go up. You can only get these features when you sign a new mortgage agreement that includes them.

A cap is the maximum interest rate that can be charged on a mortgage, regardless of the rise in market interest rates. For these types of mortgages, usually the payment amount is based on the cap rate and will stay the same for the term.

If you have a mortgage with a convertibility feature, you can change it to a fixed interest rate mortgage during the term. Although the lender will usually not charge a penalty for doing this, conditions may apply—check with the lender.

Questions to ask a mortgage lender

How often could my payments change — each time the interest changes, or on what other basis?
If the interest rate goes up by 1.00% during the term of my mortgage, how much would my payments increase based on my current mortgage balance? If the rate increased by 2.00%, how much would my payments increase?
If my interest rate increases, can I choose to increase my payment so that the length of time to pay off my mortgage stays the same?
Are there any conditions under which the payments would stay the same? For example, is there a minimum interest rate increase required to trigger an increase in my mortgage payments?
If there is a "trigger" interest rate, how would I be notified of the increase in mortgage payments?
Do you offer mortgages with interest rate caps or convertibility features? What are the conditions of using these features?

Mobile Searches Currently Not Functioning

Fri, 16 Nov 2012 23:50:00 GMT

There is a currently an issue with the Mobile Searches portion of our website. This search feature immediately activates for any device that triggers the Mobile Searches portion of our website (iPhone, Android Tablet, etc). Unfortunately, there is no work around but technicians are looking into the issue.

Searches from Desktop computers and laptops should not be affected.

In the meantime, please feel free to contact us directly if you require detailed information on any property. Thanks.

October Market Recap

Fri, 16 Nov 2012 23:39:00 GMT

“Buyer demand increased slightly in October compared to the previous few months,” Sandra Wyant, REBGV president-elect said. “Overall conditions in today’s market remain in favour of buyers, with low interest rates, more choice, and less time pressure in terms of decision-making. This translates into a calmer atmosphere for those looking to buy a home and it places more onus on sellers to ensure their homes are priced to compete in today’s marketplace.”

Warren Buffett Betting On The US Housing Market

Wed, 14 Nov 2012 15:38:00 GMT

Perhaps the most bullish indicator for U.S. housing is Warren Buffett. The legendary investor has been buying up real-estate brokerages around the country as he bets on a housing turnaround. Now, he is partnering with Brookfield Asset Management, a Canadian real-estate investor, to more than double the size of his brokerage business.

Berkshire’s HomeServices of America Inc. unit will be the majority owner of the venture to manage a U.S. residential real-estate affiliate network, according to a statement on the new company’s website. The firms plan to offer a new franchise brand, Berkshire Hathaway Home Services, starting next year. Brookfield’s network has operated under the Prudential Real Estate and Real Living Real Estate brands.

Berkshire’s managers have been positioning the firm to benefit as the U.S. home market recovers from its worst slump in seven decades. The Omaha, Nebraska-based company has bought a brickmaker, won the loan portfolio of bankrupt mortgage lender Residential Capital LLC at auction and built its HomeServices unit by agreeing to acquire real-estate brokerages in states including Oregon and Connecticut.

The press release says the brokerages that will make up the new company did a combined $72 billion in sales in 2011. That's more than twice the $32 billion in sales that Berkshire did in 2011 without the new brokerages.

The combined networks of more than 53,000 Prudential Real Estate and Real Living Real Estate agents generated in excess of $72 billion in residential real estate sales volume in 2011, and operate across more than 1,700 U.S. locations.

“Berkshire Hathaway HomeServices is a new franchise brand built upon the financial strength and leadership of Brookfield and HomeServices,” said Warren Buffett, chairman and CEO of Berkshire Hathaway Inc. “I am confident that these partners will deliver value to the residential real estate industry, and I am pleased to have Berkshire Hathaway be a part of the new brand.”

...

“The strength of the Berkshire Hathaway name, coupled with the operational excellence of HomeServices and the franchising experience of Brookfield, positions Berkshire Hathaway HomeServices® as a leading real estate franchise in the U.S., building on our traditions of exceptional client service and innovation. Brookfield is excited to be a partner in creating a home for the best real estate brokers and agents in the country,” said Bruce Flatt, Brookfield Asset Management CEO.

Buffett has been public about his bullish housing call for a while as he's built his residential real-estate brokerage business, but this is a big addition.

Source: Business Insider

A Happy Halloween to all!

Wed, 31 Oct 2012 21:48:00 GMT

An Alternate Strategy for Vancouver’s Affordable Housing Crunch

Mon, 29 Oct 2012 17:03:00 GMT

David & Mark Goodman, The Goodman Report

Vancouver’s affordable housing initiative recently proposed by Mayor Robertson has triggered heated debate amongst its citizenry, especially those residing in single-family neighbourhoods. While most support the search for financially reasonable solutions to alleviate our well-publicized housing shortages and sky-high costs (amongst the highest in North America), there are those determined not to accept change particularly if it affects them directly.

It appears the City’s new direction with the support of the newly created Housing Task Force, is that the creation of new rental supply or affordable housing will move adjacent to traditionally single-family communities and along arterial routes (i.e., Dunbar). The City intends to solicit proposals for increased densities and height to allow for new six-storey rentals, stacked townhouses and row housing.

We are disappointed that the Mayor and Council have solely targeted our single-family districts for their densification strategy instead of focusing on the existing dedicated RM, CD, FM (Multi-Family) zones and the WED (West End District) zones that have existed for decades.

It was in 1989 (over 23 years ago) that Vancouver first implemented a temporary moratorium on the demolition of rental apartments in the West End in order to prevent the “erosion of rental stock”—this “temporary” moratorium is still in place. In 2007, the City followed up with further restrictions by expanding this program and imposing Rate of Change regulations throughout the rest of Vancouver—namely Kitsilano, South Granville, Kerrisdale, East Vancouver and Marpole for all buildings 6 suites or more. We were in attendance in 2007 at City Hall when Staff clearly told Council that the proposal to establish the permitted Rate of Change at zero was to be for a period of 2 ½ years until they completed a rental housing strategy. We have now entered the 5th year with no end in sight. It is the City’s stated policy that existing rental buildings are to be protected at all costs. Unfortunately these “costs” are being borne by apartment owners. Many of these buildings are at or near the end of their economic life. Meanwhile owners are increasingly being forced to absorb significant capital expenses for roofs, piping, windows, heating systems, balcony and suite upgrades in buildings that most rational citizens would agree should be redeveloped.

Vancouver has approximately 1,780 apartment properties (6 suites or more) of which 280 are mid/high-rise buildings. By our calculations and based on the data and statistical research developed over thirty years of apartment sales and publishing The Goodman Report, it’s estimated that there are probably 4,300 acres of multi-family zoned land devoted to the remaining 1,500 or so rental buildings consisting of 2-4 storey low density wood-frame buildings averaging over 50 years of age. By virtue of the City’s restrictive policies, namely their misguided and politically expedient goal of chasing the tenant vote, property owners in the multi-family zones are no longer permitted to redevelop their property unless the rentals are replaced on a one-for-one basis. Unfortunately, Council refuses to rezone these existing areas outright which would provide for an increase in the allowable height and densities required to make the development of replacement rentals financially viable.

Other than a small handful of proposals under the STIR program, there are virtually no examples of purpose-built rentals being developed that could undoubtedly assist typical tenants looking for choice and quality. By the way, STIR projects were not permitted on sites where existing rental housing would be demolished.

The City has repeatedly rejected proposals from building owners in these higher density zoned areas for creative new housing forms that would allow for a viable mixture of rental and market housing options (now known as “inclusionary housing”). Perhaps Council should explain why they reject outright the idea of replacing an outdated and aging 100-unit rental building with a new 250-unit rental/market building? Why wouldn’t the City accept the benefits of the trickle-up effect? With the delivery of new pricier rentals being occupied by tenants able to afford better and more expensive digs, the supply of more affordable suites is clearly increased. In addition, CMHC confirms that over 30% of all new strata units are rented by investors. It is our view that this underutilized resource (~4,300 acres) found in the existing multi-family zones should be the main focus of the City’s desire to create supply and affordability—not moving to our single family neighbourhoods.

As Nathan Edelson and Mark Guslits, members of the Mayor’s Task Force of Affordable Housing, wrote in their Letter to the Editor, Vancouver Sun, Oct 17th, 2012, “An honorable dialogue relies on factual information.” We would certainly agree. It’s also noted in their letter, with some irony, that only one of the eighteen members of the Task Force is a developer. Why was the development community so poorly represented? Who do you think will finance and build all these housing projects while expecting some reasonable return on investment? Unfortunately for us taxpayers, Council’s latest response could well be: “We don’t know, so let’s create a new City paid bureaucracy with no experience to take on the financial and development risk just like we managed the Olympic Village development.”

source: The Goodman Report

Website Changes

Thu, 25 Oct 2012 01:44:00 GMT

We are changing some portions of the website over the next few days. Certain functions may not work intermittently. If you encounter any issues, feel free to let us know. We expect to be done and back to normal by Friday, October 26th.

ECONOMICS NOW

Tue, 23 Oct 2012 17:17:00 GMT

Bank of Canada Interest Rate Announcement - October 23, 2012

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.

source: BCREA

Grant for new secondary or recreational homes available

Mon, 22 Oct 2012 21:52:00 GMT

If a client buys a new or substantially renovated secondary or recreational home in BC, but outside of Greater Vancouver or Victoria, before April 1, 2013, they may qualify for a provincial grant for the Harmonized Sales Tax (HST).

The grant for new secondary or recreational housing is directly administered by the BC Ministry of Finance. This grant should not be confused with the BC New Housing Rebate available for new residential homes bought as a primary residence, and administered by Canada Revenue Agency (CRA).

The grant for new secondary or recreation housing is 71.43% of the provincial portion of the HST paid on the new home up to a maximum rebate of $42,500. Secondary or recreational homes priced at $850,000 or more are eligible for a flat grant of $42,500. To be eligible, the secondary or recreational home must be:

• a new home (detached, semi-detached, duplex, condominium, townhouse) constructed or substantially renovated (more than 90%) together with land bought from a builder;
• a new home together with leased land;
• a new mobile home or float home;
• a new home bought through shares in a housing cooperative; or
• a new home constructed or substantially renovated (more than 90%) by the owner builder. To be eligible, buyers must meet all of the following conditions:
• the HST was paid on or after April 1, 2012 and before April 1, 2013 on the purchase of a new or substantially renovated house, or to build or substantially renovate a house;
• the buyer or a family member will use the house as a secondary or recreational residence;
• the home is located outside the Capital Regional District and the Greater Vancouver Regional District;
• the buyer (or any other co-owners) or family are the first occupants of the home, or in the case of a substantial renovation, are the first occupants after the renovation; and
• the home will not be used for commercial purposes (vacation rentals, bed & breakfast, small business) by an owner who is an HST registrant claiming input tax credits for some or all of the HST paid on the home.

In addition to the general qualifications above, buyers must meet other conditions depending on the type of home and whether the client buys or builds the house alone or with others. For example, if two or more individuals buy a new secondary or recreational home, or build or substantially renovate a home, each buyer must meet all eligibility conditions, but only one may apply for the grant as the claimant.

You do not have to be a BC resident to be eligible for the grant. Buyers of secondary or recreational homes must complete an application form and provide supporting documents within six months from the date the HST was paid and before October 1, 2013 (whichever date is earliest).

To learn more, contact:
1.877.388.4440 or visit www.fin.gov.bc.ca/rev.htm and in the search box type in HST Notice #13. For application forms, in the search box type in “grant new secondary residence.”

source: realtorlink

Market update from wesellvancouver

Tue, 02 Oct 2012 03:17:00 GMT

Market update from wesellvancouver

Conditions continue to favour buyers in the Greater Vancouver housing market

The summer of 2012 drew to a close in September with home sale activity well below historical averages in the Greater Vancouver housing market.
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties reached 1,516 in September, a 32.5 per cent decline compared to the 2,246 sales in September 2011 and an 8.1 per cent decline compared to the 1,649 sales in August 2012.

September sales were 41.6 per cent below the 10-year September sales average of 2,597.

wesellvancouver wants to inform people that there has been a clear reduction in the demand the past three months since the federal government made the decision to eliminate the availability of a 30-year amortization on government-insured mortgages which is now making homes less affordable for the people in the region.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,321 in September. This represents a 6.3 per cent decline compared to September 2011 when 5,680 properties were listed for sale on the MLS® and a 31.6 per cent increase compared to the 4,044 new listings in August 2012.

At 18,350, the total number of residential property listings on the MLS® increased 14.1 per cent from this time last year and increased 4.5 per cent compared to August 2012.

Since March our sales-to-active listing ratio was 19 percent because this ratio has been declining and now our current ratio sits at 8 percent which puts us into a buyer’s market.

The MLS HPI® composite benchmark price for all residential properties in Greater Vancouver is $606,100. This represents a decline of 0.8 per cent compared to this time last year and a decline of 2.3 per cent over last three months.

Sales of detached properties on the MLS® in September 2012 reached 594, a decrease of 37.9 per cent from the 957 detached sales recorded in September 2011, and a 31.4 per cent decrease from the 866 units sold in September 2010. The benchmark price for detached properties decreased 0.5 per cent from September 2011 to $935,600.

Sales of apartment properties reached 676 in September 2012, a 26.7 per cent decrease compared to the 922 sales in September 2011, and a decrease of 30.4 per cent compared to the 971 sales in September 2010. The benchmark price of an apartment property decreased 0.7 per cent from September 2011 to $368,600.

Attached property sales in September 2012 totalled 246, a 33 per cent decrease compared to the 367 sales in September 2011, and a 35.8 per cent decrease from the 383 attached properties sold in September 2010. The benchmark price of an attached unit decreased 2.7 per cent between September 2011 and 2012 to $458,600.

Amalia Liapis states, “While I expect the market to remain slow, I do believe we will see a slight increase in activity mid to late October, lasting until sometime in November. From there, I anticipate the market to remain quiet until the end of February. Now is a great opportunity for Buyers looking to upgrade, as prices have trended downwards and interest rates remain low”.