Ephraim Vecina
The Vancouver Sun

A recent survey by Royal LePage revealed that a significant proportion of real estate advisors in Canada’s metropolitan areas believe that approximately 25 per cent of the country’s luxury properties have been purchased by foreigners.

Pointing at the intensified flow of overseas capital into the Canadian housing sector, around 60 per cent of the survey respondents are expecting far greater sales and investment volume from foreigners this year.

“What we’re noticing of course is a radical increase in foreign buyers,” Toronto-based agent Diane Usher told CBC News, adding that this segment has fully upended the market—which traditionally relied on wealthy domestic investors.

To date, no official national figures on foreign ownership are available, and the Canada Mortgage and Housing Corporation is currently collaborating with other concerned agencies to trace the path of the money being funneled into the country.

Some industry professionals argued that pinning the blame on foreign buyers instead of addressing the housing sector’s fundamental affordability problem is a misguided mindset.

“And what better reason than a nameless, faceless person from another country,” Toronto-based agent and blogger David Fleming said.

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As Australian financial institutions crack down on lending to foreign buyers it has been revealed that Chinese interest in Australian property skyrocketed during 2015.

According to figures from Juwai.com, which markets international property to China, inquiries to real estate agents and property developers from Chinese buyers looking to purchase Australian residential real estate increased by 87.1% during 2015.

According to the Juwai.com figures, Chinese buyers enquired about US$34.9b worth of Australian housing during 2015.

Gavin Norris, head of Australia for Juwai.com, said the surge in interest in Australian real estate among Chinese buyers was no surprise given their demand for properties across the globe, however Australia shouldn’t assume it will always be a destination of choice.

“These results are no surprise. I would hesitate to make any short-term predictions, but by 2020 we expect Chinese buyers to set new records for international real estate investment,” Norris told Your Investment Property Magazine.

“How much of that money gets poured into the pockets of Australians depends in part on how successful the local industry is at marketing,” he said.

While the impact of this week’s announcement from Citigroup that it will no longer accept a number of foreign currencies, including the Chinese yuan, from people looking to purchase Australian property has yet to be felt, Norris said he doesn’t believe decisions by a number of Australian lenders to not allow foreign income streams in mortgage applications will scare of the Chinese.

“It is true [some lenders] found ‘some’ loans backed by ‘questionable documentation,’ but it appears those loans are still safer and less likely to default than loans made to Australian citizens,” Norris told Your Investment Property Magazine.

“Overall, we haven’t seen any firm impact on the demand for property from the curtailing by Australian banks of loans to those with offshore income. I don’t think they were issuing many such loans in the first place. Most Chinese pay in cash from their savings. Those who use leverage also have the option of relying on Chinese lenders they are already familiar with.”

Both ANZ and Westpac revealed this week they have uncovered mortgages that have been backed by questionable foreign-income documentation. 

While prestige and luxury Australian properties are popular among the Chinese, the Juwai.com figures show the majority are looking for Australian real estate in the US$200,000 to US$500,000 range.

“Some people think all Chinese buyers are palling around at private clubs and in $20-million mansions, but China is like Australia in that there are more middle class than filthy rich,” Norris said.

Melbourne was the most popular Australian city for Chinese buyers in 2015, with it attracting enquiries about US$11.5b worth of real estate in the Victorian capital.

Sydney was the second most popular city, with Chinese buyers enquiring about US$8.23b worth of real estate, followed by Brisbane with US$2.61b worth of enquiries.

There could be some reordering of those positions in 2016 however, following the Victorian government’s decision to levy additional fees on foreign buyers.

“The big question for 2016 is whether the higher stamp duty in Victoria will push buyers to more inviting cities, or even to other countries. The desire to invest and live in Victoria could win out over the extra cost. We’ll have to wait and see,” Norris said.

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Justin da Rosa
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Investors continue to cash in, with this red hot market continuing to break records.

“Housing demand is exceptionally strong across the southern regions of the province,” Cameron Muir, BCREA Chief Economist, said in a release. “Consumers appear to be particularly active in the Vancouver Island, the Fraser Valley and the Thompson/Okanagan regions.”

“Strong employment growth is helping underpin consumer confidence.”

According to the British Columbia Real Estate Association (BCREA), a record 12,969 residential sales were reported in April – a 30.3% increase year-over-year.

Total sales reached $9.64 billion in April, a 52.7% hike. To date, sales volume increased 64.3% this year to $31.2 billion. Total residential sales increased 36.2% to 28,028 units.

The average price, meanwhile, increased 17.2% year-over-year, reaching $743,640.

The BC economy added 78,000 jobs this year, representing a 3.5% year-over-year increase in job creation.

“Strong employment growth is helping underpin consumer confidence,” Muir said.

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More property sales records tumbled in April according to the British Columbia Real Estate Association. A release from the association says a record 12,969 homes were sold last month in B.C., a 30 per cent increase over the same period last year.

Sales also eclipsed the record of 12,560 units set in March.

The release says $9.64 billion changed hands in April, a leap of almost 53 per cent compared to April 2015.

Year-over-year sales dollar volume rocketed to $31.2 billion, up 64 per cent.

The real estate association reports the average price of a home in B.C. nudged $744,000 last month, a 17 per cent hike in one year.

“Housing demand is exceptionally strong across the southern regions of the province,” said Cameron Muir, BCREA chief economist.

The Vancouver Island, Fraser Valley and Thompson/Okanagan regions are particularly active, he said. Modest movement away from Vancouver came as sky-high prices and a lack of properties were blamed by the Canadian Real Estate Association for a minor sales dip in the city in March, but experts see no end to healthy sales in B.C.

“Strong employment growth is helping underpin consumer confidence,” said Muir.

The BCREA points to statistics showing the provincial economy employed more than 78,000 additional workers during the first four months of 2016, up 3.5 per cent compared to last year.

Copyright © 2016 Key Media Pty Ltd

by Justin da Rosa
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The Crown Corporation released its long-term economic and housing forecast Wednesday morning. It expects housing starts to slowly decrease over the coming years.

“On an annual basis, housing starts are expected to range from 181,300 units to 192,300 units in 2016 and from 172,600 units to 183,000 units in 2017, a slight upward revision from our previous outlook, but a slowdown compared to 2015 when there were 195,535 starts,” CMHC said in the report.

Home sales, meanwhile, are expected to moderate or increase in 2016 over last year’s total and decrease next year.

“There were 505,673 Multiple Listing Service® (MLS®) sales recorded in 2015,” CMHC said. “Sales are expected to range from 501,700 units to 525,400 units in 2016, but are expected to be in a lower range of 485,500 units to 508,400 units in 2017.”

The average Canadian home price is expected to continue to increase in the next two years, meaning CMHC doesn’t expect any sort of wide-scale correction.

“The average MLS® price is forecast to be between $474,200 and $495,800 in 2016 and between $479,300 and $501,100 in 2017. These levels are higher than the 2015 average price of $442,999,” CMHC said.

When assembling its outlook, CMHC said it looks at global as well as Canadian-specific economic conditions.

While the global economic growth is expected to slow this year before rebounding in 2016, CMHC predicts Canada’s growth is expected to accelerate in 2016, led by manufacturing exports and increased public spending.

Employment, however, is expected to increase to 7.2% this year before dropping to 7% in 2017.

“As the economy adjusts to lower oil prices and with the announcements of higher public spending, employment trends are projected to improve in 2017,” CMHC said.

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The British Columbia Real Estate Association (BCREA) reports that a record 12,969 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in April, up 30.3 per cent from the same month last year. Home sales last month beat March’s record of 12,560 units. Total sales dollar volume was $9.64 billion in April, up 52.7 per cent compared to the previous year. The average MLS® residential price in the province was up 17.2 per cent year-over-year, to $743,640.

“Housing demand is exceptionally strong across the southern regions of the province,” said Cameron Muir, BCREA Chief Economist. “Consumers appear to be particularly active in the Vancouver Island, the Fraser Valley and the Thompson/Okanagan regions.”

“Strong employment growth is helping underpin consumer confidence,” added Muir. The BC economy employed more than 78,000 additional workers during the first four months of the year, an increase of 3.5 per cent compared to the same period last year.

The year-to-date, BC residential sales dollar volume increased 64.3 per cent to $31.2 billion, when compared with the same period in 2015. Residential unit sales climbed by 36.2 per cent to 28,028 units, while the average MLS® residential price was up 20.6 per cent to $761,860.

Combined residential transaction sales across all provincial real estate boards smashes records yet again, reports association

Joannah Connolly
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BC real estate boards posted a record-breaking total of 12,969 residential unit sales in April, up 30.3 per cent from the same month last year, according to BC Real Estate Association figured released May 13.

This follows March’s previous record sales of 12,560 units, which had been driven by record transactions in Greater Vancouver and the Fraser Valley.

However, unlike in Greater Vancouver and the Fraser Valley, BC’s April figures are even higher than March’s figures, pushed even higher by steep growth on Vancouver Island and in the Okanagan.

“Housing demand is exceptionally strong across the southern regions of the province,” said Cameron Muir, BCREA chief economist. “Consumers appear to be particularly active in the Vancouver Island, the Fraser Valley and the Thompson/Okanagan regions.”

BC’s total home sales dollar volume in April was naturally another record, at $9.64 billion in April, up 52.7 per cent compared with the same month last year. This is reflective of both increasing total transactions and the average MLS® BC home price in April rising 20.6 per cent year-over-year to $761,860.

“Strong employment growth is helping underpin consumer confidence,” added Muir.

The report noted that the BC economy employed more than 78,000 additional workers during the first four months of the year, a rise of 3.5 per cent over the same period last year.

As usual, the overall figures for the province obscure significant differences between various real estate markets across BC, although many previously poorly performing northern and interior markets turned around their declines last month.

Of the larger markets, the steepest annual growth in total unit sales was once more seen in the Fraser Valley, where transactions jumped 49.5 per cent compared with April 2015. As has been the case in the last couple of months, Victoria and Vancouver Island came next in terms of growth, both posting even steeper annual rises than Greater Vancouver’s 15 per cent jump, increasing 48.9 per cent and 44 per cent, respectively. Of all the boards, Chilliwack posted the sharpest rise in unit sales, at 88.6 per cent year over year, but this is from just 281 units last year to 530 this April.

Greater Vancouver’s 15 per cent annual rise in sales was also beaten out by Kamloops (up 39.7 per cent), Okanagan Mainline (34.3 per cent), Kootenay (29.3 per cent), South Okanagan (24.5 per cent) and Powell River (17.5 per cent – although its numbers are so small, the annual changes are highly volatile). In fact, Greater Vancouver’s sales growth was the third smallest of the 12 provincial boards.

However, Greater Vancouver remained the region deepest in seller’s market territory, with a sales-to-active-listings ratio of nearly 32 per cent, the province’s highest – having overtaken the Fraser Valley in this area last month.

After its slight recovery in March, the Fraser Valley’s ratio tightened up again to 29 per cent – still a great improvement over February’s near-60 per cent ratio, due to the spring market unleashing new listings over the past two months.

The large, active markets contrast starkly with some smaller regions in the north of the province. Frequent market stragglers Northern Lights and BC Northern both posted year-over-year drops in sales, of 4 per cent and 8.4 per cent respectively.

Northern Lights was also the only region to see a year-over-year average price drop, of nearly 23 per cent.

The Fraser Valley once more posted the sharpest average annual price increase, up 27.9 per cent, followed by Greater Vancouver, at 21.4 per cent, then Chilliwack, at just over 22.8 per cent.

To read the full BCREA report, click here.

© 2016 Real Estate Weekly

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Single-family home prices rose 1.2 per cent in April from the previous month. The Teranet-National Bank Composite House Price Index recorded the largest April increase since 2008.

Vancouver prices were up 2.2 per cent and in Toronto there was a 1.4 per cent gain. Calgary halted decline over the previous 6 months with a 0.2 per cent rise but Edmonton prices slipped 0.1 per cent.

Year-over-year the price of single-family homes nationwide were up 8 per cent.

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Luxury real estate in Metro Vancouver’s two most desirable areas more than doubled in price since 2005, driven by overseas buyers, says Royal LePage survey

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The average price of an luxury home in Point Grey or West Vancouver has increased 135 per cent over the past decade, according to the national Royal LePage Carriage Trade Luxury Properties Report, released May 12.

In a survey of its real estate advisors, Royal LePage found that in the region’s most expensive and internationally desirable neighbourhood of Point Grey, the average price of a 2,500-square-foot luxury detached house on an 11,500-square-foot lot rose from $3.4 million in 2005 to just over $8 million in 2015.

In the second-most toney area, West Vancouver, the average price for a luxury 3,400-square-foot home on an 18,000-square-foot lot went up from $2.6 million in 2005 to $6.1 million in 2015.

The report said that, when looking at the characteristics of typical luxury homebuyers in the region, 93 per cent of BC respondents said the most common buyers were a couple with children living away from home (64 per cent) or at home (43 per cent). In terms of age ranges, 38 per cent of respondents said that the age of the primary decision-maker in the purchase was most frequently between 45 and 54, and another 38 per cent said they were usually 55-64.

Some 83 per cent of the BC real estate advisors surveyed believe that luxury property sales activity has increased since January 2015 and 76 per cent believe activity will continue to increase over the remainder of 2016.  

Want more stats on Vancouver luxury real estate? Read Sotheby’s International Realty’s January 2016 report here

The survey also examine advisors’ opinions on the role that foreign buyers – those who live primarily overseas – plays in the luxury real estate market.

“We believe international interest is a significant factor driving [luxury home] price increases in the area, as foreign buyers view Vancouver as a ‘dream city’, as it is so beautiful. When visiting the region, they instantly fall in love,” said Jason Soprovich, real estate agent with Royal LePage Sussex.

Seventy-nine per cent of advisors polled said that overseas purchases of BC real estate have increased further since January 2015. The results suggested that buyers from China dominated these purchases, with 95 per cent of BC advisors selecting China as one of the top three countries from which buyers originate.

Across Canada, 66 per cent of real estate advisors believe foreign buyer activity has increased in their region since 2005. Almost a quarter (24 per cent) of respondents said they believe that 25 per cent or more of luxury properties in their area are purchased by foreign buyers. More than half of the advisors polled (51 per cent) said that China was the primary country generating Canadian real estate purchases. Some 60 per cent of advisors anticipate increased foreign buyer activity in their region this year (see infographic below).

© 2016 Real Estate Weekly