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Low mortgage rates, increased consumer confidence cited

Keith Fraser
Province

Fuelled by low mortgage rates, increasing job growth and rising consumer confidence, Lower Mainland housing starts in October hit the highest levels in more than 20 years.

The Canada Mortgage and Housing Corp. released figures yesterday showing that a total of 1,981 units were started last month, up 116 per cent from October last year.

The only time October housing starts were higher was in 1980, with 2,194 unit starts.

Last month’s total housing starts were also the most for any month in the Lower Mainland since July 1996.

“It’s good news and all of our members are happy,” said Peter Simpson, chief operating officer of the Greater Vancouver Home Builders Association.

“There’s an overall consumer confidence boost in B.C. for a number of reasons. The Olympics are helping with people getting their heads into a positive mood. I think they’re happy business-wise in what’s happening in the province.”

First-time buyers taking advantage of the low rates and people purchasing homes for investments are the key buyers in the marketplace.

“They’re the lowest interest rates in some time,” said Simpson. “This has lowered the affordability threshold, particularly for first-time buyers. They’re able to trade their rent cheques for mortgage payments and, in many cases, for less than what they’ve been paying in rent. They’re in the market now and they’re gaining equity.”

Multiple starts — low and highrise buildings and townhouses — last month climbed 283 per cent to 1,553 units in the Lower Mainland, while home construction dipped 17 per cent to 428 units over the same period last year.

Year-to-date housing starts in Greater Vancouver have increased 25 per cent to 13,445 units, with homes up nine per cent to 4,570 units and multiple starts climbing 35 per cent to 8,885 units.

Province-wide total housing starts climbed 57 per cent to 2,865 units in October this year over last October and year-to-date figures were up 25 per cent to 20,846 units over the same period in 2002.

“To put a human face on that, the increase in housings starts this year, compared to last year, has added another 7,500 jobs in the construction industry in the Lower Mainland,” said Simpson.

One of the top growth areas is downtown Vancouver, with its massive increase in highrise residential construction, much of it already pre-sold.

“We heard a stat that there are 21 cranes at work right now, responsible for 2,700 housing units in the downtown alone,” said Simpson. “Of those 2,700 housing units under construction, less than 200 are available to be sold.”

Another big growth area is Surrey, with its strong single-family developments.

“That’s a response to Surrey having a very large land supply,” said Cameron Muir, market analyst for the CMHC. “Surrey accounts for about 25 per cent of all land starts across the Lower Mainland.”

Simpson noted that it’s more of a “steadily increasing market” than a boom, since the new totals are about 66 per cent of what they were in 1993.

Muir predicted that the housing increases will continue well into next year while mortgage rates stay low.

There will be a push for condo construction in Vancouver in the next few months before levies jump to $6,000 per unit from $2,500, he added.

© Copyright 2003 The Province

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We’re running short of listings in the $1-million to $2.5-million range, one realtor complains

Bruce Constantineau
Sun

B.C.’s most expensive neighbourhood became even pricier in October as the average selling price for a detached West Vancouver home topped $1 million for the second straight month.

West Vancouver realtor Malcolm Hasman said a dramatic surge in the sale of high-end luxury waterfront homes in recent months has pushed up the average selling price for all properties.

“Prices have definitely firmed up and, quite frankly, we’re starting to run short of good listings in the $1 million to $2.5 million range,” he said.

The Real Estate Board of Greater Vancouver reported this week the average selling price of a detached West Vancouver property rose to $1,070,900 on the Multiple Listings Service last month from $1,012,500 in September. The average price in August was $903,900.

The average selling price puts West Vancouver home values in the same bracket as two upscale Toronto neighbourhoods, as the average price of a Rosedale home in September was $1,052,300 while the average North Toronto (Bridal Path) price was $1,127,400.

Vancouver real estate board officials note that average selling price figures can be misleading because the sale of a few expensive properties can skew the numbers upwards. The average price is determined by adding the total value of all home sales and dividing it by the number of transactions that took place.

There were 23 properties sold in West Vancouver last month for more than $1 million.

The board said the price of a typical West Vancouver property last month was $756,600 — an increase of about 17 per cent in the past year.

Hasman, a leading West Vancouver realtor with Angell Hasman & Associates, said 2003 will be his busiest year ever, as he has already sold 45 properties for more than $1 million.

“This afternoon, I’m with buyers from California who are looking at homes priced up to $3 million,” he said. “On Saturday, I’m with buyers from Michigan who are looking at properties up to $5 million.”

Hasman said anywhere from 30 to 50 per cent of his high-end clients are from outside Canada and a majority of those are from the U.S.

“The big factor these days seems to be buyers from the United States who have children,” he said. “They’re moving here simply for a cleaner, safer, better way of life.”

Re/Max Real Estate Services executive David Andrews said the higher end of the real estate market was slower to respond to the drop in interest rates than the more affordable end of the market.

“But that has changed and the action has moved upwards,” he said. “I think we’re in the start of a fairly long up cycle.”

Hasman said a resurgence in the local mining market has helped West Vancouver home sales because so many area residents are involved in that business. He said record low interest rates can also help high-end buyers.

“You’d think that people buying a $2-million or $3-million house wouldn’t worry about interest rates, but I know that people are taking advantage of them,” he said. “If you can borrow $1 million for about $5,000 a month, why not do it and keep your money in your own personal investments?”

The cheapest detached home currently for sale in West Vancouver is a 75-year-old house in Horseshoe Bay with 2,700 square feet of living space, listed at $469,900.

The most expensive home for sale is a two-year-old home in the Canterbury area with six bedrooms, three ensuites and nearly 15,000 square feet of living space on three floors. The property is listed at $10.8 million.

Million-dollar residential properties could soon be coming to blue collar east Vancouver as well because a four-level, 6,600-square-foot home on Cambridge Street is expected to be listed for sale next year for about $1 million, Belair Realty agent Dennis Harland said Tuesday.

“It needs some work, like painting and trim work, before it gets listed but it has four suites in it and it may eventually [fetch that price,]” he said. “I’m not aware of anything else in east Vancouver that has sold in that range.”

© Copyright  2003 Vancouver Sun

Good times rolling as growth continues in construction, sales

Ashley Ford
Province

B.C.’s housing industry is riding a wave of activity not seen since the boom years of a decade ago.

Housing starts are leaping ahead and have been matched with steadily increasing sales, especially in the more affordable condominium market, in the Lower Mainland.

And this morning, Canada Mortgage and Housing Corporation’s annual housing outlook conference will be told the good times will roll into next year across B.C., the only province expected to show growth in both construction and sales.

The latest building permit numbers from Statistics Canada released yesterday show housing permits worth $435 million were issued in B.C. in September, a 23.5-per-cent increase over August.

The value of housing permits nationally rose 10 per cent to a record $2.9 billion, surpassing the previous record of $2.86 billion set in July.

“Yes, we are busy but it is still manageable. We are not at a crisis point by any means,” says Peter Simpson, chief operating officer of the Great Vancouver Home Builders’ Association. “Apart from the odd isolated incident we are not having any problems with closing dates, so homebuyers are not being inconvenienced with delivery delays,” he said.

“This still doesn’t compare with the boom of 1993 and most contractors who plan carefully are coping well,” he says. “You have to remember that in 1994 we had 21,300 starts, and this year we will have 14,500,” he said.

Neil Ziola, owner of Sure-Lok Homes who specializes in townhouse and apartment construction says the key is careful forward planning. “Most of the reputable contractors do that and are not running into major labour problems.”

However, Ziola acknowledged that pressure is starting to come on the wage front. “For years the wages for a carpenter were in the $20- to $24-per-hour range and they have risen by 20 per cent in the last 18 months. It’s the same right across the trades,” he says.

The building activity is being powered by the pace of home sales and continuing low mortgage rates. The Real Estate Board of Greater Vancouver, says overall sales increased by 31.4 per cent last month from a year ago, with 3,765 units selling compared with 2,866 a year ago.

While the pace was not as frenetic in the Fraser Valley, sales are running 21 per cent ahead of where they were a year ago.

REBGV president Bill Binnie says “condominium sales are significant. First-time homebuyers and seniors moving from the family home in particular, are choosing to purchase condos.”

Prices continue to spiral upwards. The benchmark price of an apartment now stands at $208,340, an increase of 16.4 per cent from a year ago. A single family home now stands at $444,890, an increase of 15.4 per cent, and a townhouse has risen 17.2 per cent from a year ago to $286,710.

Although the buying frenzy slowed a little in the valley last month — there was a two-per-cent drop in sales over September — Reg Davies, president of the Fraser Valley Real Estate Board says the activity still “reflects an optimistic consumer.”

In October, the average price of a single-family home was $309,746, a two-per-cent increase over September and a 14-per-cent climb from a year ago.

Townhouses went for an average $194,746, only a slight increase over September while apartments climbed by 4.5 per cent to $194,746 last month over September and are up 13.7 per cent from a year ago.

© Copyright 2003 The Province