Archive for January, 2012

The new MLS® Home Price Index: What’s new, what’s different?

Friday, January 13th, 2012

Other

As announced in December, a new national home price index will launch in February. This index will replace the MLS®Link Housing Price Index, which has been used by Greater Vancouver and Fraser Valley REALTORS® since the mid 1990s.

The new index was developed by five of Canada’s largest real estate boards – Greater Vancouver, Fraser Valley, Calgary, Toronto and Montreal – in partnership with the Canadian Real Estate Association and will be called the MLS® Home Price Index (MLS® HPI).

The six partners contracted with Altus Group to develop this new tool which, similar to the previous index, will allow housing price trends to be traced over time for different areas within participating board markets and for different property types. The MLS® HPI will also allow for comparisons between local and national markets.

Our current HPI – launched in 1995 in Fraser Valley and 1996 in Greater Vancouver – is widely recognized as providing the most accurate indication of housing price trends in our market, but it’s not usable outside of the Lower Mainland because no other market has comparable data.

“The MLS® HPI is a national collaboration intended to further position REALTORS® and the industry as the most credible and reliable source of real estate data in the country,” Rosario Setticasi, Board president said.
What will change?

The MLS® HPI will replace our existing MLS®Link Housing Price Index. MLS® HPI statistics should not be compared with previous MLS®Link HPI statistics. There will be a few notable changes to the index in the Greater Vancouver market.

Re-indexing

All indexes have a common base. The new MLS® HPI will be indexed to equal 100 in January 2005. The previous MLS®Link HPI was indexed to 2001. Sales prior to 2005 will not be considered in the MLS® HPI.

HPI values track relative price levels by comparing current prices to price levels in a base (reference) period. Because the base period is always 100, REALTORS® can quickly infer the extent to which prices have changed relative to the base period.

For example, if the MLS® HPI value for apartment units in September 2011 was 105.1, this indicates that apartment units in September 2011 had increased 5.1 per cent compared to 2005.

Property types

The MLS® HPI will provide benchmark price trend data for the three main property types: detached, attached, and apartment.

An expanded set of property categories will also be available to members, including one-storey and two-storey homes. A composite category has also been created to track residential activity across all property types in different areas within the region.

Areas

New property markets have been added to increase the scope of the HPI. Some HPI markets have also been redefined to produce more complete data.

Updating the “benchmark” home attributes

An HPI measures how home prices change over time and provides benchmark prices of homes with “typical” characteristics in a given area. It takes into consideration what averages and medians do not – items such as lot size, age, number of rooms, etc. The most commonly traded set of these attributes makes up the typical or ‘benchmark’ house. Prices paid for homes with these attributes determine benchmark home prices.

Similar to the MLS®Link HPI, MLS® HPI benchmark prices will represent the price of a typical property within a given area or sub-area. The typical or benchmark home attributes for the area and sub-areas within the Board have been updated and will be reflected in the MLS® HPI.

© Real Estate Board of Greater Vancouver.

Morgan Crossing Lifestyle in Surrey

Thursday, January 12th, 2012

More than a home, a true community

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Eager Buyers Keep Market Buoyant In 2012

Thursday, January 12th, 2012

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What Will Happen to Condo Sales in 2012

Monday, January 9th, 2012

2012 MLS Condo Market Forecast

Frank Schliewinsky
Other

This Greater Vancouver Condominium Market Overview for 2012 was compiled by Strategics, a Vancouver-based company providing information and analysis since 1981 helping to minimize marketing risk for apartment condominium developers, lenders, project marketers and investors.

After a year of double-digit increases, expect slower growth in the MLS® multi-family real estate market this coming year.

If you’re confused about what’s in store for the Vancouver condo market in 2012, you’re not alone. The forecasts appearing in the mainstream media are all over the map. The Conference Board predicts a 5% price increase. Merrill Lynch warns of a 10% price correction. TD economist predicts challenging markets, etc, etc. Housing bubble, no housing bubble, prices up, prices down have all been predicted for the Vancouver housing market, so take your pick.
Part of the problem with these diverging forecasts is that none of them are very precise as to what’s being forecast. Even though apartment and townhouse condominiums make up over half the sales (new and resale) in Greater Vancouver, much of the focus has been on the single family market, especially escalating prices in selected submarkets. And few of the forecasts seem to have incorporated two of the most important factors which will influence the Vancouver housing market in 2012: the slowdown in net migration to the Lower Mainland and the deflating real estate bubble in China.

It’s no secret that Mainland Chinese buyers have been the driving force behind price increases seen in selected condo markets over the past 12 months. A major impetus for these buyers has been the desire to invest their money abroad and Vancouver trophy properties and million dollar plus condos have been favourite targets. But sales to wealthy Chinese buyers are likely to decline in 2012. The Chinese real estate bubble, which has stimulated much of the off shore Chinese real estate investments, is deflating at a very rapid rate.

Reports from China indicate a major drop in residential real estate sales and prices (see: China Data: Real Estate Downturn  And, problems in the major Chinese housing markets have increased since mid-2011. Top property developers are reporting major increases in unsold inventories and are under increasing pressures to liquidate these inventories for cash. In Shanghai, developers slashed prices by 25% and similar problems are reported for Beijing and Hong Kong.

A downturn in the Chinese real estate market will have a negative wealth effect on Chinese real estate investors and will redirect their attention to the home front. The same thing happened when the Japanese real estate bubble burst in the early 90’s, and after the Asian economic crises in 1997. The spill over from these crises for the Vancouver condo market resulted in reduced sales and prices. The same thing is likely to happen in response to the problems with the Chinese real estate market.

A general slowdown in the BC economy has already resulted in a net loss in inter provincial migration to BC in 2011 and a 30% drop in international migration. And the drop in net migration will continue into 2012. The combination of slower population growth and a reduction in Chinese property purchases will mean a drop in MLS condo sales in 2012 in most Greater Vancouver markets and fewer million dollar plus sales. This will bring down average prices but will not necessarily result in actual price reductions for individual units.

High Rise Market Forecast

MLS high rise sales did better than expected in 2011 thanks to strong sales during the first half of the year. But sales slowed during the second half and this slowdown is forecast to continue into 2012. Overall, MLS high rise sales in 2012 are forecast to be close to 4,250 units; a 4% decline from 2011.

While there was much media hype about soaring real estate prices during the past 12 months, the average price per square foot for high rise condos sold through MLS increased by 6% in 2011. The average price per square foot controls for unit size and is less affected by sales of large luxury units. The average price per square foot for MLS high rise condos is forecast to increase by 3% to $596 in 2012 for Greater Vancouver as a whole but forecast price changes vary by major market area.

MLS sales in major high rise markets in Downtown and Westside Vancouver, Burnaby and Richmond are all expected to slow in 2012. High rise sales trends in Downtown Vancouver and Burnaby indicate little or no increase from 2011 after experiencing double digit increases in 2011. Fewer MLS high rise sales are expected in Westside Vancouver and Richmond in 2012. Sales in Richmond could be off by as much as 33%.

A decline in average price per square foot is not expected in these high rise markets but the rate of increase will be less than in 2011. However, this could change if investors need to pull their money out of the Vancouver market. Over the past three months there has been a huge increase in the gap between average MLS selling price and average list price for Downtown high rise condos. At the end of 2011, the average selling price for high rise condos in the Downtown market was $639,000 and the average list price was $1,076,000. There’ll be some motivated sellers of downtown luxury condos in 2012.

Low Rise Market Forecast

Looks like the MLS low rise market will give up any gains in sales it made during the past 12 months. Overall MLS low rise sale sin 2012 are forecast to be 4,400 units, a 4% decline from 2011. The average price per square foot for MLS low rise sales increased by 2% in 2011 and is expected to increase by a similar amount in 2012 to $375 per square foot.

Fewer MLS sales of low rise condos are forecast for almost all market areas. If present trends continue, Richmond low rise sales could be off by as much as 18% in 2012 and Coquitlam-Port Moody-PoCo sales could be down by 12%. The only markets showing an increase in sales are North Vancouver and Pitt Meadows-Maple Ridge, but Pitt Meadows-Maple Ridge is such a small market that 26% increase means another 5 sales per month.

The price trend in most low rise markets is fairly flat and the average price per square foot in 2012 will be close to what it was in 2011. The only drop in average price per square foot is likely to be in South Surrey-White Rock. In 2011, the average price per square foot was down by 1% and a 3% decline is forecast for 2012.

Townhouse Market Forecast

MLS townhouse sales have been on a downward trend over the past 12 months and if this continues, MLS townhouse sales in 2012 could be down to 3,700 units; a 11% decline from 2011. A decline in MLS townhouse sales is forecast for all the major markets with increasing declines in Richmond, North Surrey and Langley.

Price increases over the past year in these townhouse markets probably hasn’t helped improve sales but it now looks as if 2012 will be a year of low or no price increases. Overall, the average price per square foot for MLS townhouse condos is forecast to average $316 in 2012; a 1% increase from 2011.

Detailed Market Trends

[Downtown High Rise    [Westside High Rise   [Eastside High Rise

[Burnaby High Rise      [New West High Rise    [Tri-Cities High Rise

[North Van High Rise    [Richmond High Rise     [North Surrey High Rise

[Westside Low Rise      [Eastside Low Rise       [Burnaby Low Rise

[New West Low Rise     [Tri-Cities Low Rise       [Maple Meadows Low Rise

[North Van Low Rise     [Richmond Low Rise     [North Surrey Low Rise

[South Surrey Low Rise     [Langley Low Rise     [Westside Townhouse

[Burnaby Townhouse     [Tri-Cities Townhouse     [Maple Meadows Townhouse

[North Van Townhouse     [Richmond Townhouse     [North Surrey Townhouse

[South Surrey Townhouse    [Langley Townhouse


More detailed information on sales and price trends is available from Strategics for individual markets and sub-markets.  Contact Strategics for more information.

phone/fax  +1-604-608-3192 (voice mail)
email         [email protected]
skype        frank.schliewinsky
mobile       +60-17-429-7064 /+66-81-080-5717

 

Cambie Corridor plans put Vancouverism to the test

Wednesday, January 4th, 2012

Hadani Ditmars
Other

For all its charms – its seaside and mountain views, greenery and fresh air – Vancouver remains a decidedly suburban city. It’s traditionally been much more about CPR land transformed into residential enclaves than the right blend of high-density, mixed use and transit access that defines urbanism.

But with the high cost of housing and dwindling supply, a growing and aging population and an exodus of youth who can’t afford to live in the city, the game plan is changing.

While there have been other arbiters of civic sea change, the most exciting game changer in recent years has been the Canada Line that has spurred densification of the Cambie Corridor.

The unassuming north-south corridor, largely composed of single-family bungalows – now worth an average of $1.5-million – has always been a rather sleepy, suburban feeling enclave, where young families and empty nesters resided. But now both of those groups have changing housing needs that are being addressed by two groundbreaking developments – a mixed-use project on the site of the Oakridge Shopping Mall at 41st and Cambie and the new Marine Gateway project at the southern tip of the corridor.

The increase in density and new transit access have contributed to a dramatic rise in real estate prices, with some homes around the Oakridge area recently tripling in price. But while some long-term residents have expressed concern about rapid change in their neighbourhood, others are excited by the possibilities it will bring for more affordable housing and more urban amenities. The Cambie Corridor plan allows buildings up to 12 storeys in height, with allowances for greater height around the Oakridge Mall and at the southern end of Cambie Street near Marine Drive.

Patrick Condon, a planner and professor of landscape architecture at UBC and author of Seven Rules for Sustainable Communities, says that densification of the Cambie Corridor will help address the city’s “urgent housing needs.”

He contends that the city’s plan for the corridor, which aims to bring 15,000 more people to the area, is “the best of its kind in North America.”

“It’s the first corridor plan I’ve ever seen that focuses so much on what the buildings are going to look like rather than being just a zoning plan.”

Mr. Condon supports the largely mid-rise development plan that does not concentrate density exclusively around stations, saying “a more evenly distributed density is best as it supports a finer grain commercial activity and in many ways leads to a more sustainable city.”

Mr. Condon, who worked with students to produce a comprehensive masterplan of what Vancouver will look like by the year 2050, notes that in less than 40 years, 25 per cent of the population will be over age 65, a “ 250 per cent increase over what it is now.”

The plans for higher density housing along the Cambie Corridor, he contends, will benefit the “over-65s” who will be “increasingly mobility impaired and the ones who will be the largest group needing housing.”

He maintains that “it’s logical to put housing close to services and ways of getting around – unless you want the elderly to be imprisoned within their buildings or complexes – which is true in many parts of North America but hopefully not true here.”

At the same time, he says, the new housing will benefit young people and young families. “There were many young people at the public hearings,” he relates, “saying ‘yes, I need housing and I need it to be affordable and I need it to be in Vancouver – and if I can’t get it I will be forced to move to Maple Ridge – where I don’t want to go.’”

The alternative to high density mixed use housing developments he says, “is an older city where we will have fewer and fewer young people able to afford to live here – making it impossible for younger families to exist. How can someone take a job at less than $40,000 a year and pay more than half a million for a very simple place to live?” The equation is simple, he says, higher density housing means more affordable housing.

He thinks the Oakridge Mall area in particular is ideal as it “upgrades what is now an auto oriented shopping mall into an urban, attractive place.”

“I think the idea of barnacling on appendages to shopping centres is a logical and sensible strategy. Without losing the substantial commercial value that’s already in that location – it makes it a more mixed use complex that’s not entirely about driving the car to a parking lot but part of a transit accessible, complete neighbourhood.”

He also thinks that the new development could be “groundbreaking”

“In urban design circles, there’s been talk about changing shopping malls into urban places for decades.” The Oakridge development has all the potential, he says, “to become a demonstration of a successful strategy that could be applied throughout North America.”

Ivanhoe Cambridge, which owns the 28.3-acre parcel that comprises Oakridge shopping centre, secured city council approval in 2007 for a policy plan that forsees 1.8-million square feet of new density. The site already contains 50,000 square feet of residential, and plans are afoot to add 1.2-million square feet of housing.

According to Gordon Wylie, senior director of development at Ivanhoe Cambridge, 50 per cent of the housing will be town homes and midrise development, and 50 per cent will be high rise – with the policy currently allowing for nine towers on site.

As well as the planned 350,000 square feet of new retail and 200,000 square feet of new office space, Mr. Wylie says ample community space – in addition to the existing library, school and seniors centre – will be added to the site.

“Our vision is to create a complete and sustainable community,” he says, adding that the scale and mass of the unique site that remains Vancouver’s “single largest parcel of privately owned land next to a transit hub that can be redeveloped,” could even allow for exploration of district energy supply.

But Mr. Condon is sympathetic to some area residents concerned about rapid change in their neighbourhood.

“Usually residents don’t oppose density per se – they oppose things in their neighbourhood that are unlike their neighbourhood. Sensitive architects understand this.”

For Andrew Grant, president of PCI developments who received unanimous approval from the Urban Design Panel last month, for ambitious plans to build the new Marine Gateway community at Cambie’s southern tip, the key was “maintaining the character of the neighbourhood.”

In this case, Marpole’s “urban village” vibe was accentuated throughout the design of the project built to LEED Gold standards that will incorporate two high rises on top of a three-storey podium, 415 market condos, 46 rental housing units, a separate 240,000-square-foot office building, and a 220,000-square-foot cinema – all perched on top of a Canada Line station.

“From the start,” explains Mr. Grant, “the concept was a high street that ran down the centre of the site. All of our uses will access that – including transit, the office component, the cinema and the housing units. They’ll all come through the centre of the site and maximize concentration of foot traffic through that area – which will be people friendly and conducive to interaction. It will help integrate use and break down scale. Maintaining that neighbourhood feel – through the high street but also through details like architectural finishes – has been an essential part of our design.”

“There’s no doubt,” says Mr. Grant, “that the Canada Line will change the shape of the city. Vancouver is under tremendous pressure for additional housing to meet the demand – and our prices are being pushed up accordingly.”

Since many people can longer afford to own both a car and a home, “people have become less reliant on automobiles – so locating housing and retail and work spaces close to each other and to transit hubs makes sense.”

In many ways, densification of the Cambie Corridor will be a true test of Vancouverism’s – the much lauded high density, car free phenomenon so celebrated in the city’s downtown – mettle. Whether it can be successfully managed in the city’s southern corridors will make the difference between Vancouver remaining suburbia by the sea – or becoming a truly urban model.

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