Mike Rooney : Dexter Associates Realty


REBGV Residential Average Sale Prices

February 2016


New mortgage rules kick in as Ottawa looks to cool Toronto, Vancouver markets

By Alexandra Posadzki, The Canadian Press

February 15, 2016

Canadians looking to buy homes between $500,000 and $1 million will have to put down larger down payments as new federal rules took effect Monday.

Under the changes, homebuyers must now put at least 10 per cent down on the portion of a home that costs more than $500,000.

Buyers can still put down five per cent on the first $500,000 of a home purchase. Homes that cost more than $1 million still require a 20 per cent down payment.

Phil Soper, president and CEO of Royal LePage, says the new rules aim to slow the breakneck pace of price growth in the red-hot markets of Toronto and Vancouver without affecting markets that are lagging, such as those in oil-dependent provinces.

“The problem with monetary policy is that it impacts the struggling Calgary market or the just fine Winnipeg market and the overheated Vancouver market in equal amounts,” Soper said.

“If you lower interest rates, you lower interest rates for all. And that’s not what the country needed. This change … is the first attempt to recognize the fact that some parts of the country are in need of a mild tap on the break, while other parts of the country really need to continue to receive stimulus.”

When the new rules were announced in December, Finance Minister Bill Morneau said he estimated they would affect about one per cent of the overall real estate market. Some industry observers predicted a surge in sales activity as homebuyers would look to pre-empt bigger down payment requirements.

Soper says real estate markets in Ontario, B.C. and Quebec have been “boisterous” in the first five weeks of the year — but he says it’s unlikely that the new mortgage rules are responsible.

“I think it has much more to do with clean sidewalks from a mild winter and low mortgage rates than it does with impending changes that tweak mortgage insurance regulations,” Soper said.

“It’s just not a big enough change to have materially impacted home sales volumes in the country.”

Ottawa tightened rules for new insurable loans four times between 2008 and 2012, including upping the minimum down payment to five per cent and reducing the maximum amortization period in stages to 25 years from 40 years.


Vancouver’s real estate forecast to stay hot into next year, study finds

Bullish outlook: Don’t expect housing market to cool any time soon


By Barbara Yaffe, Vancouver Sun columnist

October 31, 2014

Foreign money and a robust provincial economy will preclude any cooling of Vancouver’s red-hot property market next year, according to a major real estate study being released Wednesday.

Office space is the one real-estate category where an oversupply is forecast in the city, to be accompanied by potential downward pressure on pricing.

That assessment comes courtesy of a voluminous annual report, titled Emerging Real Estate Trends 2015, issued jointly by the Urban Land Institute and PricewaterhouseCoopers.

It describes Vancouver’s market as one of the country’s “best bets” in 2015, fourth strongest in the country in terms of investment, development and housing.

Vancouver trails Calgary and Edmonton, boosted by Alberta’s resource industry, and Toronto, where a still-strong condo market is being bolstered by people flocking to live downtown, in more compact spaces.

The report’s bullishness on Vancouver is tied to a recent Conference Board of Canada prediction that, during the next three years, the West Coast city will lead all other major urban centres in economic growth — with a 3.2-per-cent annual increase in output.

The report also cites the role being played by Greater Vancouver’s relatively new tech industry.

And, of course, Vancouver is “a hedge city.”

It “lacks the cachet of Paris or Milan,” opines the report. “But it does offer … a place for the world’s super-rich to park sizable funds in local real estate as a hedge against risk.

“Returns aren’t the point; safety of capital is, and a $5-million condo is more insurance policy than investment.”

The report also notes that foreign buyers, mainly from Hong Kong and China, account for the purchase of about 40 per cent of the luxury homes and are “one of the key reasons Vancouver real estate prices continue to rise.”

With the economy on a roll and so many foreign buyers, the city has issued a record number of building permits in 2014.

The report identifies a concern about a possible office-space glut resulting from several new office towers being completed.

“Some foresee AAA space leasing at B rates.”

No such discount rates are anticipated in the residential sector. The report features a chart showing Vancouverites in 2015 will spend more than 50 per cent of household income on shelter — significantly more than in other cities, even Toronto where just more than 30 per cent will go to housing next year.

Overall in Canada, the property market is expected to be steady, with urbanization being the “new normal. People are flooding into city cores to live close to both work and the lifestyle they crave.”

Retailers and companies are following them with some builders incorporating stores and offices into their centrally located residential housing developments.

Western Canada’s real-estate market will continue to be the most robust, with the region acting as “the country’s economic engine.”

In a separate analysis on Wednesday that focused exclusively on the Vancouver market, Urban Analytics Managing principal Mike Ferreira told a downtown luncheon audience of realtors and developers that not since 2014 have sales for multi-family housing been so strong.

The real estate strategist said investors comprise a significant portion of condo buyers in Vancouver and Burnaby, but purchasing also has been strong among first-time buyers “with help from mom and dad, and low interest rates” and mature buyers, downsizing from single-family homes.

Ferreira told his audience the Chinese are a strong component of the market “and I suspect we will see more impact from that buyer group as we go along, especially with (the political instability) we are seeing in Hong Kong.”

Greater Vancouver’s Real Estate Rally Extends into 2014


VANCOUVER — The Globe and Mail


Last updated

A rally in housing sales and prices in Greater Vancouver has extended into 2014, keeping young buyers focused on modest-sized accommodation.

In January, 1,760 residential properties changed hands, up 30.3 per cent from 1,351 in the same month in 2013, the Real Estate Board of Greater Vancouver said on Tuesday.

It is the ninth consecutive month that the area has had a year-over-year gain in monthly sales, after a 19-month slump in volume before sales began increasing last May.

Dan Scarrow, vice-president of corporate strategy at Macdonald Realty Ltd., said he sympathizes with parents who worry their children cannot buy a home in the Vancouver region.

Some first-time buyers can get into the market with help from parents who sold their detached homes at good prices, although in today’s housing market, young couples from Vancouver still must buy outside the neighbourhoods they grew up in, he said.

“In an ideal situation, every local Vancouverite could sell their home for $5-million and their kids could buy the home for $300,000, but that isn’t going to work,” Mr. Scarrow said in an interview. “The reason prices are expensive here is that it is a good place to live. A tangible way to reduce real estate prices is to make it an undesirable place to live, and that isn’t a very palatable solution.”

Real estate observers say living in Canada’s most expensive housing market has forced young buyers to focus on condos and townhouses.

Greater Vancouver’s residential composite price index rose to $606,800 in January, up 3.2 per cent from a year earlier.

The benchmark price for single-family detached homes reached $929,700 in January, also a gain of 3.2 per cent. Benchmark prices, which strip out the most expensive resale properties, climbed 6.1 per cent to $869,000 over the past year for detached properties on Vancouver’s East Side, while they jumped 7.5 per cent on the West Side to $2.14-million.

The rally includes the suburban market, with price increases for detached homes of at least 5 per cent in Burnaby East, Burnaby South and Port Moody.

In the B.C. Fraser Valley, 772 properties sold in January, up 25 per cent from same month in 2013. The Multiple Listing Service home price index rose 0.9 per cent year-over-year to $424,500 in the Fraser Valley, which includes the sprawling and less-expensive Vancouver suburb of Surrey.

Benchmark index prices for condos in Greater Vancouver increased 3.7 per cent over the past year to $371,500, while townhouse prices gained 1.7 per cent to $457,700. In the Fraser Valley, index prices for condos decreased 4 per cent to $192,300, while townhouse prices rose 1.3 per cent to $297,600.

“If you’re looking to sell your home in a balanced market, it’s critical that your list price is reflective of current market conditions,” Greater Vancouver board president Sandra Wyant said in a statement.

A measurement known as the sales-to-active-listings ratio, which is closely watched by the real estate industry, registered 14 per cent in Greater Vancouver last month. B.C. real estate agents consider a market balanced when the ratio ranges from 15 to 20 per cent. It is deemed a buyer’s market at below 15 per cent and a seller’s market above 20 per cent in the Vancouver region. A total of 12,602 listings were active last month, down 4.9 per cent from a year earlier.