Olivia D’Orazio
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If you need even more proof that the housing market’s hot, consider this: million-dollar homes are hardly considered luxury properties in many of Canada’s larger metropolitans.

“It isn’t what we would consider luxury,” Fran Bennett, an agent with Sotheby’s in Toronto, tells REP. “It’s comfortable living, but it’s not what we call luxury.”

With demand that increasingly outpaces supply, especially in larger cities like Vancouver and Toronto, housing prices have been on the fritz, rising to astonishing levels. For example, the average price of a detached home in Vancouver topped $1 million in December. In Toronto, that figure is slightly lower, at $934,039.

“Once considered ‘luxury’ and therefore a more limited market segment, $1 – 2 million dollar homes are now sought after by average homebuyers seeking conventional single family homes within city limits,” Sotheby’s International wrote in its annual Top Tier Report. “Low inventory and strong demand has led to a higher percentage of homes in the $1 – 2 million range being sold above the list price in all markets in the last six months of the year.”

Indeed, that’s the cost of living in some of Canada’s more bustling cities. And that’s one trend that isn’t likely to let up in 2015.

“All signs are pointing to this market, the pace of the market will continue certainly into the spring of 2015,” Bennett says. “We don’t see any slowdown. We’re so short of properties and there’s such a demand. Buyers are moving up and down in price range. And in the City of Toronto, that’s not going to change any time soon.”

Copyright © 2015 Key Media Pty Ltd

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Property owners received their 2015 assessment notices the first week of January from BC Assessment (BCA).

This notice is BCA’s estimate of a property’s value as of July 1, 2014, and for new construction or substantially renovated homes, the physical condition as of October 31, 2014.

BCA is the provincial Crown corporation responsible for determining and reporting property value estimates for the 1,974,120 properties in its database, an increase of 1% from 2014.

BCA has produced the assessment roll since 1974. Local and provincial taxing authorities will use the roll to raise $6.8 billion in property taxes in 2015.

Where you can view your assessment

BCA’s website includes e-valueBC at http://evaluebc.bcassessment.ca.

e-valueBC provides details about every property, including a photo, a property description (land and buildings), the total assessed value, the previous year value, the legal description and property ID.

e-valueBC lets users compare neighbouring properties and sample sold properties to decide whether their property has been correctly assessed.

Useful features on BCA’s website

BCA’s website offers useful features, including:

·         an interactive map of BC showing the percentage change for residential and for business property types by community, 2015 compared to 2014. View the map at www.bcassessment.ca/Pages/ChangeInAssessmentRollMap.aspx;

·         real estate market trend graphs with statistics such as median sales prices by quarter for single family homes and strata properties. Visit: www.bcassessment.ca/Pages/AssessmentRollInformation.aspx and select province-wide property trend graphs;

·         property identifiers (PID) and the legal descriptions; and

·         videos about BC’s 10 assessment areas at www.bcassessment.ca under Social Media.

BCA’s assessment and a REALTOR’S® assessment — why the difference?

BCA’s assessment and the market value determined by a REALTOR® may be different. Why?

Both BCA assessors and REALTORS® calculate market value by analyzing sales of comparable homes within a local market, and look at factors that affect value such as size of home, view, location such as on a busy or quiet street, number of bedrooms, construction quality, floor level, and garage or parking stalls.

Where every lot and every home on a street are typically the same, both BCA’s value and a REALTOR’S® value will be similar during stable market conditions.

Differences occur in neighbourhoods where lots have been rezoned or are different shapes and sizes, where architecture and views are unique, and where owners have made changes that BCA hasn’t yet taken into account.

Deadline to appeal assessment is February 2, 2015

Property owners who disagree with their assessment should do homework by:

·         comparing their assessment with neighbouring properties; and

·         contacting BCA at 1-866-valueBC (1-866-825-8322) and talking to staff who can make adjustments if there is an obvious error, for example if BCA included a complete renovation, when it was merely a spruce-up.

Property owners who decide to appeal their property assessment must complete a Notice of Complaint (Appeal) form available on www.bcassessment.ca. Under the For Public menu option, select Notice of Complaint (Appeal) Process or go directly to www.bcassessment.ca/public/Pages/AppealingyourAssessment.aspx.

The deadline to file the appeal is February 2, 2015.

Each year less than 1% of BC property owners appeal their assessment.

Note: you can’t appeal your taxes, you can only appeal your assessment.

For information about BC Assessment and to access e-valueBC visit: www.bcassessment.ca or phone 1-866-valueBC (1-866–825–8322) or contact Harriet Permut, Manager, Government Relations at: [email protected].

Sample changes year over year
Location	2015 Assessment Roll (Valuation date of July 1, 2014)	2014 Assessment Roll (Valuation date of July 1, 2013)	$ Change	% Change
Burnaby (Capitol Hill, detached)	$760,000	$718,000	$42,000	5.8%
Coquitlam (Maillardville, detached)	$739,000	$719,000	$20,000	2.8%
Ladner (Detached)	$760,000	$759,000	$1,000	0.1%
Maple Ridge (Detached)	$425,000	$408,000	$17,000	4.2%
New Westminster (Sapperton, detached)	$561,000	$537,000	$24,000	4.5%
North Vancouver, District (Lynn Valley, detached)	$993,000	$893,700	$99,300	11.0%
Pemberton (detached)	$505,000	$499,000	$1,000	1.2%
Pitt Meadows (detached)	$546,000	$525,000	$21,000	4.0%
Port Coquitlam (Lincoln Park, detached)	$534,000	$523,000	$11,000	2.1%
Richmond (Steveston, detached)	$852,000	$777,700	$74,300	9.6%
Squamish (Garibaldi Highlands, detached)	$543,000	$504,000	$39,000	7.7%
Vancouver (Downtown, 2-bedroom apartment)	$553,000	$543,000	$10,000	1.8%
Vancouver (East side, detached, 33’ lot)	$993,000	$892,000	$101,000	11.3%
Vancouver (West side, detached 50’ lot)	$1,812,000	$1,610,200	$201,800	12.5%
West Vancouver (Ambleside, detached)	$1,856,000	$1,629,300	$226,700	13.9%
Whistler (White Gold, detached)	$1,061,000	$988,000	$73,000	7.4%

Source: BC Assessment

© Real Estate Board of Greater Vancouver

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Jamie Henry / Andy Kiersz
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There’s always plenty of debate when economists suggest that Canada’s housing is over-valued by 20 per cent so how do you feel about this one? Deutsche Bank has published an overview of some of the world’s real estate markets and says that Canada’s in over-valued by a massive 63 per cent! That’s more than double the figure that the Bank of Canada estimated in December. The bank’s calculations include comparison between median house price and median household income and house prices in relation to rents. The report also takes into consideration the high levels of household debt and the possibility of price correction.

Deutsche Bank’s chief international economist Torsten Sløk has circulated a chart deck looking at global housing markets, and Canada stands out as having quite a few problems.

According to the report, homes in Canada are 63 per cent overvalued, greater than the 50 per cent levels in Australia and Norway, Deutsche Bank AG said in a report Thursday.

Values in Canada are 35 per cent higher when the median house price is compared to the median household income than the historical average and 91 per cent higher compared with average rentals.

Sløk dedicated seven charts to the country.

Simply put, debt levels are very high, and with sky-high home prices cooling off, we could see pressure on the Canadian financial system and the labour markets.

© 2015 National Post

Olivia D’Orazio
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Housing starts in Canada were trending slightly lower in December as developers work to stabilize the pace of new home construction, and by extension the supposedly overheated housing market.
 
According to the Canada Mortgage and Housing Corp., the trend measure of Canadian housing starts in December was 192,047, down 1.4 per cent from December a year ago. The trend represents a six-month moving average of seasonally adjusted housing starts.
 
“The modest decline in the trend in December reflected lower levels of both multiple and single-detached starts,” said Bob Dugan, the chief economist for the CMHC. “Overall, activity in 2014 continued to be supported by employment growth and migration with [seasonally adjusted annual rates of] starts remaining essentially unchanged at 189,401 compared to 187,923 in 2013. These factors are expected to continue to promote stability in the pace of new home construction during 2015.”
 
Seasonally adjusted rural starts fell 9.8 per cent from the month before to 17,645 in December, while total urban starts fell 6.2 per cent from November, to 162,915. That included just 59,681 starts of single-detached properties, highlighting the national shift to multi-unit properties.
 
In Vancouver, however, housing starts trended up 2.7 per cent to 20,030 in December, mainly on actual starts of single-detached homes, which spiked 25 per cent over the year to 372 starts for the month of December. Seasonally adjusted starts in the West Coast city rose slightly to 21,325 in December.
 
“The trend measure of housing starts moved higher in December due to small increases in construction of all types of homes except town houses,” said Robyn Adamache, CMHC’s senior market analyst. “The actual number of housing starts in 2014 totalled 19,212 units, a slight increase over the previous year. Single-detached homebuilding accounted for most of this increase and was concentrated in the cities of Burnaby, Coquitlam, Richmond, Surrey and Vancouver.”
 
Meanwhile, in Toronto, the six-month trend for starts in Toronto was essentially flat at 25,509. Seasonally adjusted starts, however, rose 9.9 per cent to 26,398 in December, compared to the year-ago period. Actual starts of single-detached homes did not fare as well as in Vancouver, falling 14 per cent to just 690 starts in December.
 
“Toronto housing starts stabilized in December after trending lower for most of the second half of the year, said Andrew Scott, CMHC’s Toronto senior market analyst. “Toronto posted 28,929 new housing starts in 2014, a decline of 14 per cent from 2013, which is mainly attributable to a downturn in condominium apartment pre-construction sales between mid-2012 and mid-2013. Nonetheless, stronger pre-construction sales in 2014, supportive economic conditions and mortgage rates near historic lows will likely translate into higher starts in 2015 for the GTA”.

Copyright © 2015 Key Media Pty Ltd

More reports of overvaluation? Add it to the list

Olivia D’Orazio
Other

Deutsche Bank in Germany is the latest to join a chorus of financial institutions urging caution amid reports of market overvaluation in Canada – this time by 63 per cent.
 
The bank’s international economist, Torsten Slok, released a series of charts looking at global housing markets. Seven of those charts were focused on Canada, and painted a particularly bleak picture of the housing landscape – one of those charts, in fact, was titled, “Canada is in serious trouble”.
 
In addition to his analysis claiming the market is overvalued by 63 per cent – compared to New Zealand, which is overvalued by 56 per cent; Belgium, which is overvalued by 53 per cent; and Australia, which is overvalued by 49 per cent – Slok showed Canada’s debt-to-income ratio at 150 per cent. That’s still better than StatsCan’s suggestion that the ratio is actually closer to 162 per cent.
 
The Bank of Canada also added its hat to the pile late last year, claiming the market is overvalued by up to 30 per cent. But, despite this prediction, the central bank said the probability of a severe market correction is low.
 
“Highly-indebted households would have [difficulty] servicing their debt if they were to face a sharp decline in their incomes or a sharp rise in interest rates,” said the BoC’s Governor Stephen Poloz in a press release. “This situation raises the risk that a shock to the economy could trigger a correction in house prices. The probability of this risk materializing is low, but if it did occur, the effect on the economy would be severe.”
 
Still, the German bank cited a 35 per cent overvaluation compared to incomes, and a 91 per cent overvaluation compared to rents. Particularly troubling, it said, is the fact that as mortgage debt slows, other consumer debt – including credit cards, lines of credit and auto loans – are rapidly increasing. Canadians have recognized that, and are the least optimistic about price growth in the housing market since May 2013.
 
Further, Deutsche Bank said multi-unit construction is at a historical high. As a result, some seven per cent of the workforce relies on construction. That could have a cataclysmic impact on the larger economy in the event of a slowdown, which the bank said is already underway in Toronto.
 
However, agents on the ground don’t seem to be too upset by bearish reports. One commenter in the REP forum pointed to the cyclical nature of the market.
 
“What information are these experts basing their predictions and assumptions on,” asks Jackie Laurin. “These people (doomsayers) are not in the industry nor working the industry . What do they know about over-valued properties? The properties which I follow regularly in most provinces have no over-heated exaggerated house pricings… The markets are balanced.”

Copyright © 2015 Key Media Pty Ltd

Yaletown Feel Without The Price Tag

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Joannah Connolly
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Despite resale property prices on a seemingly unending upward trend, the price of a new home in Vancouver fell 0.2 per cent month-over-month in November 2014 – the first monthly price drop since July, according to Statistics Canada figures released January 8.

November’s new home price index also dropped 0.6 per cent year over year, as builders reported a decrease in negotiated selling prices in Vancouver, which was one of only seven cities to post a decline. The drop was attributed entirely to a fall in the property values, which fell 1.1 per cent, while land values stayed flat.

Victoria saw the country’s second-largest annual drop in its new home index (after Charlottetown), falling 1.1 per cent year over year.

Across BC, the new home price index also fell, dropping 0.7 per cent year over year.

Nationwide it was a different story, as the average cost of a new home in Canada increased 1.7 per cent year over year to November.

Calgary again saw the largest uptick in new home prices, rising 6.5 per cent year over year.

The index tracks the price of new single-family detached homes, townhouses and duplexes, but does not factor in new condo selling prices.

© 2014 Real Estate Weekly