Garry Marr
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Vancouver sales jumped 14% last month compared to a year ago but still remain 6.5% below the 10-year sales average for the month of May.

The Real Estate Board of Greater Vancouver said there were 3,286 sales last month in Greater Vancouver across the Multiple Listing Service, up from 2,882 sales recorded in May 2013. Sales jumped 7.7% from the 3,050 in April, 2014.

The board’s MLS home price index composite benchmark price for all residential properties in the metro region was up 4.3% in May from a year ago to $624,000.

“Home prices have experienced consistent yet modest increases in our region since the beginning of 2013,” said Ray Harris, president of REBGV, in a release Tuesday. “Our MLS statistics tell us that there’s more home buyer demand today than at any point over the last three years.”

The sales-to-active listing ratio is now 20.4% in Greater Vancouver, the first time is has been above 20% since June, 2011.

New listings for detached, attached and apartment properties reach 5,936 in Greater Vancouver in May, a 5% increase from a year ago. It was a 0.2% decline from a month earlier.

The total number of properties listed for sale on the MLS system in Greater Vancouver was 16,072, a 6.7% decline from a year ago and a 3.6% increase from a month ago.

© 2014 National Post

Brent Jang
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It’s a seller’s market in Greater Vancouver for the first time in three years.

A gauge closely monitored by the real estate sector, called the sales-to-active-listings ratio, reached 20.4 per cent last month – the first time since June, 2011 that Greater Vancouver’s housing market has crossed into seller’s territory.

The industry deems it a balanced market when the ratio ranges from 15 per cent to 20 per cent. It is considered a buyer’s market below 15 per cent and a seller’s market above 20 per cent.

The number of properties changing hands is edging up while active listings are slipping, the Real Estate Board of Greater Vancouver said Tuesday.

Residential housing sales rose to 3,286 in May, up 14 per cent from 2,882 resale properties that sold a year earlier. Despite the rebound, the latest monthly sales still lagged the 10-year average of 3,514 for May. There were a total of 16,072 active listings last month, down 6.7 per cent from May, 2013.

Some housing watchers have said Ottawa’s shutdown of the federal immigrant investor program in February might erode sales volume, especially for high-end properties. But so far, the impact has been muted, said Shaadi Faris, vice-president at Vancouver-based Intergulf Development Group.

“The perception about people who have no connection to B.C. arriving to flood the market with investment properties is overblown,” he said in an interview. “The immigrant investor program being removed didn’t have as large a ripple as some might have thought.”

Greater Vancouver’s average price for single-family detached homes sold last month was $1,218,772, up 4.2 per cent from a year earlier.

Mr. Faris said that as prices for detached houses continue their march upward, prospective first-time buyers are increasingly looking for townhouses and condos in the suburbs.

Intergulf oversees the Grand Central condo project in Coquitlam, where the developer completed the first high-rise in 2009 and the second in 2012. A third tower, the highest at 37 storeys, is set for completion later this year.

“Three or four years ago, there were a lot of new projects that came on. There was an oversupply in Coquitlam, and it took time to get through that inventory,” Mr. Faris said.

Coquitlam condo prices have dipped 4.1 per cent since May, 2011, but have risen 3 per cent in the past year. The Evergreen SkyTrain line, scheduled to open in the summer of 2016, will have a stop near the Coquitlam Centre shopping mall. “Evergreen isn’t pie in the sky any more,” Mr. Faris said.

Combined index prices, which strip out the most expensive resale properties on the Multiple Listing Service, climbed 4.3 per cent year-over-year to $624,000 last month for Greater Vancouver’s detached homes, condos and townhouses. The index price for detached homes in May was $966,500, up 5.4 per cent over the past 12 months. The townhouse index price gained 3.1 per cent to $469,100, while the condo index price rose 3.2 per cent to $377,500.

Ray Harris, president of the Real Estate Board of Greater Vancouver, said statistics on existing homes sold show that demand is strong. The region’s housing market is the most active it has been since the spring of 2011, he said.

For detached properties, three neighbourhoods made the million-dollar club in May’s home price index: Vancouver’s West Side saw its price index increase 7.8 per cent over the past year to $2,229,800, West Vancouver’s gained 8.1 per cent to $2,009,200 while Burnaby South’s advanced 4.7 per cent to $1,007,400.

In the Fraser Valley, total residential, commercial and retail sales last month climbed to 1,633, up 18.4 per cent from May, 2013. Last month’s index price for detached homes in Fraser Valley, which includes the sprawling suburb of Surrey, rose 3.1 per cent to $566,400.

© Copyright 2014 The Globe and Mail Inc.

Real estate sales in May rose 14 per cent over the same month last year

Other

Vancouver real estate may finally be headed towards a seller’s market, as the Real Estate Board of Greater Vancouver announces a 14 per cent rise in sales this May over the same month last year.

According to the REBGV, the sale of detached homes also increased 19.9 per cent and apartment sales are up 13.2 per cent.

A seller’s market refers to the ratio of listings to sales, where for every five homes on the market in one month, at least three are sold.

REBGV president Ray Harris said Vancouver’s housing market is now the most active it has been in three years.

“We have been in a balanced market now for about six to seven months. Last month was our first move and this is the second move into a seller’s market,” he said.

“We’re looking forward to seeing if the move towards a seller’s market is really going to have an impact on price.” 

Realtor Wayne Hamill, who sells homes on the west side of Vancouver, says there is also a greater sense of competitiveness among buyers.

“They don’t mind competing. They don’t mind being one of many offers,” he said.

“They certainly don’t mind paying over asking, if that’s what it takes to get the property. That has been a big change over the last year.” 

Hamill said a home he put on the market on Monday for an asking price of $2.8 million has already had two offers.

“There seems to be this non-stop supply of people from different parts of the world and I guess compared to other parts of the world, we are still good value.”

The benchmark price to buy a detached home in Greater Vancouver is now slightly less than $1 million, but homes south of the Fraser River are moving fast too.

Realtors in the Fraser Valley have had their busiest May in seven years.

Cloverdale Realtor Jonathan Erickson believes it is a result of the upturn in the Greater Vancouver market.

“The Fraser Valley is getting the benefit of buyers coming from other areas of New West, Coquitlam, Burnaby … utilizing the new Port Mann. And moving out to the friendly Fraser Valley.”

Real estate analysts warn this doesn’t necessarily indicate a long term trend of increasing prices and it is more likely a market correction from poor sales in previous years.

Copyright © CBC 2014

Tara Perkins
Other

More than one-third of first-time home buyers say they would take a longer amortization period on their mortgage if they could, according to a Google Consumer Survey that was done for The Globe and Mail.

Long amortizations are controversial. There was a period around 2006 when Canadians were able to obtain 40-year mortgages that were covered by government-backed mortgage insurance. The U.S. subprime crisis scared former Finance Minister Jim Flaherty into changing that, and in a series of steps, he ultimately capped the length of insured mortgages at 25 years, a change that took effect in mid-2012. The longer the amortization, the greater the amount of interest that the consumer is on the hook for. But consumers sometimes prefer lengthier mortgages because their monthly payments are smaller.

Mr. Flaherty’s changes only applied to borrowers who have down payments of less than 20 per cent, because those are the borrowers for whom mortgage insurance is mandatory. Banks are still offering 30-year amortizations to borrowers who have a down payment of at least 20 per cent. Canada’s banking regulator spent considerable effort last year gathering detailed information from banks as it contemplated barring them from offering 30-year uninsured mortgages. So far it has decided not to act.

Sean Amato-Gauci, senior vice-president of home equity financing at Royal Bank of Canada, the country’s largest mortgage lender, says RBC has found that the proportion of consumers with 40-year mortgages who default is greater than the proportion of those with shorter amortizations who default. But he says there’s not much difference in the default rates between 25- and 30-year mortgages.

“We look at the individual components of the applicant and the deal, and we structure it in a way that is the best for the consumer and for ourselves,” he says. “In some cases you curb amortization, in some cases you actually curb on loan-to-value, but our analysis has shown there’s no increased risk between 25 and 30 years. Above 30 years there was. And we still see in our relatively small cohort of clients that were acquired in the era where you had the 35- and 40-year (amortizations) that there’s definitely a difference in terms of performance.”

The No. 1 reason cited by the first-time buyers who wished they had a longer amortization was to save for retirement, according to the Google survey.

It found that 35.9 per cent of first-time buyers have a 25-year amortization, and that 19.3 per cent have a 30-year amortization. Perhaps not surprisingly, younger respondents tended to have longer amortizations.

The majority of first-time buyers said they would not take a longer amortization because they want to be mortgage-free quickly.

© Copyright 2014 The Globe and Mail Inc.

Other

In more big news Friday, two of Canada’s most historic hotels—the Royal York Hotel in Toronto and Hotel Vancouver—were listed. The seller, Quebec pension fund Caisse de dépôt et placement du Québec, is scaling back its hotel business. Both properties are managed by Fairmont Hotels and Resorts. The Royal York was built in 1929, the Hotel Vancouver, on Burrard, was built in 1939. Hotel industry analyst Monique Rosszell from HVS says both properties will have plenty of suitors.

The probable buyers will emerge from private investment funds, a REIT, or an ownership group looking to supplement its national portfolio, or looking to enter the Canadian marketplace. (Or just someone who clicks the wrong button on Priceline.) “Certainly with the large Asian population and proximity to Asia, Vancouver will attract Asian interest, as real estate investments are very safe in spite of hotels being considered more risky than other asset classes,” Monique says. She points out that there are many Asian hotel brands, but only Shangri-La has made its debut in the Canadian marketplace

Given the strength of the market, this is a good time for Ivanhoe Cambridge (which manages the pension fund’s retail assets) to sell, she says. Not a surprise, she adds, since the company has been divesting its hotel portfolio outside of Quebec, recently selling a portfolio of 19 hotels in Europe. “The performance of these two hotels could both benefit from major capital upgrading, however, unless an owner is planning a long-term hold, such an investment may not be financially justified,” Monique says.

© 2013, Bisnow LLC

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This morning, JLL’s SVP Mark Lester, who’s been finalizing the sale for some time, shared details with us—at least what he can share. The deal closed Friday, and the seller has a non-disclosure agreement with the buyer. The 250-acre resort was listed for close to $15M and sits on 5k feet of waterfront.

Can you find Waldo? How about the golf course, marina, spa accommodations, and food and drink service? The purchaser is from Mainland China, another sign that Chinese investment is pushing more into these specialized, recreational-type property deals, Mark says, the type of transactions he specializes in for JLL

Other recent transactions featuring buyers from mainland China include the 43-acre Fox Island on the southern B.C. coast, for $2.5M, and the Fairmeade Farm in Langley for $5.5M. As for Lake Okanagan, “It is my understanding that the intention is to operate the resort and cater to Chinese tourism,” Mark tells us. In a rarity, another deal came down the same day last week. (When it rains, it pours. And it always pours when we go to resorts.) Mark informs us of the sale of Carmel Cove Resort (image) to a Vancouver-based development company. This was a court-ordered deal, which closed at $4.1M. The property is on Shuswap Male in B.C.’s interior. The purchaser’s intention is to sell off the units, Mark says.

If the sale of Lake Okanagan Resort is any indicator, Chinese investors want the same thing we do. Sun rays and pool time.

Frank O’Brien
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