Steve Randall
REP

The surge in new listings in the GTA in April may be short-lived as many sellers may have been “cashing in their chips.”

A new market report from RBC Economics suggests that the jump in sellers ‘selling off the news’ will quickly run its course with listings reversing in the coming months.

RBC’s research points towards the Fair Housing Plan creating a material change for the Greater Toronto Area, “at least for a period of time.” Its economists therefore expect further cooling of the market over the coming months.

Meanwhile, the report says that the cooling of the metro Vancouver market could be wearing off, as shown by a 15.6 per cent month-over-month rise in resales in April.

RBC Economics says that, with government policy taken into consideration, it forecasts national home resales to grow 5.3 per cent this year with prices up 4.8 per cent.

Copyright © 2017 Key Media Pty Ltd

Justin da Rosa
REP

With the Canadian Real Estate Board releasing its most interesting statistics in quite some time, big banks hone in on the big stories that will impact agents.

Home resales may have levelled off in April, but it’s the uptick in listings that was the big story, according to the Royal Bank of Canada.

“The more noteworthy market development in April was a sharp 10% rise in new listings in Canada, thereby representing the third significant increase in a row,” Robert Hogue, senior economist with RBC, wrote in a report. “Once again, it was Ontario (where new listings surged by 21.6% from the March level) that accounted for most of this increase.

“Within Ontario, the Toronto area saw an all-time high of 18,318 properties added to the for-sale inventory in April, or close to 5,000 more units than the monthly average during the past three years.”

Sellers – many of whom sat on the sidelines, content to ride out ever-increasing home appreciation – have now come out of the woodwork to list their homes.

And that means agents have more business opportunities in some markets.

TD Bank also made note of the uptick in listings in its own report.

“Canadian existing home sales fell 1.7% in April from record level set in the previous month, but remain still fairly elevated,” Diana Petramala, TD economist, wrote. “The bigger mover was a 10% increase in listings in the month, which helped bring down the sales-to-listings ratio to 60.1 from 67.3 in the prior month. While the market tightness eased substantially last month, the Canadian market as a whole is still in seller’s territory, albeit marginally.”

However, while listings may have been up in some major markets, a softening of demand from buyers was felt in Toronto due to last month’s housing policy announcement.

“The GTA weakness in April may have also been driven to buyers moving to the sidelines due to policy uncertainty as the Ontario government plans to implement new policy measures was anticipated well before the April 20th announcement,” Petramala wrote.

Copyright © 2017 Key Media Pty Ltd

Matthew Brockett
REP

In a report on house prices in G-10 nations — those with the 10 most-traded currencies in the world — Goldman Sachs finds they are most elevated in small, open economies such as Sweden and New Zealand. The investment bank said there is a 35-40 percent chance of a housing “bust” in each country over the next two years, which it defines as house prices falling five percent or more after adjustment for inflation.

Goldman compares house-price levels across economies using three standard metrics: the ratio of house prices to rent, the ratio of house prices to household income and house prices adjusted for inflation.

“Using an average of these measures, house prices in New Zealand appear the most over-valued, followed by Canada, Sweden, Australia and Norway,” it said. “According to the model, the probability of a housing bust over the next five to eight quarters is the highest in Sweden and New Zealand at 35 to 40 percent.”

A graph in the report shows that New Zealand’s probability of a housing bust is just above 40 percent, while Sweden’s is just above 35 percent. The risk of a bust in Canada is about 30 percent, while in Norway, Australia and Switzerland the probability is assessed at 20-25 percent.

New Zealand house prices have surged 60 percent since 2010, while Sweden’s have risen 41 percent, according to data compiled by the Bank for International Settlements. New Zealand’s central bank last week forecast house-price inflation would slow to 5 percent this year from 14 percent in 2016, but remain positive through mid-2020.

Goldman said the pace of credit growth over the prior five years is an important indicator of asset-price busts. Its housing bust model also includes the house price-to-rent ratio, past changes in real house prices, the investment-to-GDP ratio, real GDP growth, and inflation.

“The probability of a house-price bust has been picking up across the smaller G-10 markets in recent years — a result of rising prices and high credit growth,” it said.

Immigration, Low Rates

While residential investment in Sweden and New Zealand are high, immigration booms and population growth in both countries are supporting construction demand, Goldman said. “In contrast, Australia, Norway, and Canada appear overbuilt,” with home-building activity outstripping the demographic demand for housing, it said.

Household debt relative to disposable income stands at record levels in all the countries it looked at, but Goldman said debt servicing ratios have remained relatively low due to record-low interest rates.

The bank said its model is “just one tool” and has “a few key drawbacks,” including predicting housing busts too often.

However, taking the model output and other data into account, “we see reason for some concern about house-price developments in the small open G-10 economies,” it said. “Prices do appear overvalued and credit growth has been high — traditional warning signs of real house-price declines.”

Copyright Bloomberg 2017

Steve Randall
REP

There was a 23.9 per cent drop in home sales in British Columbia in April compared to a year earlier but there are signs of a more positive trend.

The British Columbia Real Estate Association reports 9,865 residential sales in April with an average MLS price of $728,955 in the province, down 2 per cent from April 2016.

However, BCREA chief economist Cameron Muir says that things are looking up.

“BC home sales are on an upward trend this spring, led by a sharp increase in consumer demand in the Lower Mainland,” said Muir. “The seasonally adjusted annual rate (SAAR) of home sales was over 106,000 units in April, significantly above the five-year SAAR for April of 89,000 units.

There was a 17 per cent drop in the supply of homes for sale with active listings at their lowest level in over 20 years; this is impacting affordability as prices continue to rise.

Copyright © 2017 Key Media Pty Ltd

Justin da Rosa
REP

A comprehensive new report tells agents what makes these clients tick.

Genworth Canada, one of the country’s mortgage default insurers, released a study on first-time homebuyers to help the industry, including real estate agents, gain insight into those homebuyers purchasing habits. 

“From the perspective of a mortgage insurer, these first-time homebuyers possess a positive profile which includes full-time jobs and incomes to support their monthly mortgage payments,” Stuart Levings, President and CEO, Genworth Canada, said. They are financially responsible and looking for the benefits associated with long-term homeownership.”

The study found 48% of first-time homeowners feel they are in “good financial shape.”

First-time homebuyers are usually fully employed (84%) and many (48%) work in a private business.

The majority (61%) have a university degree.

“The results of the study in 2017 compared to 2015, showed a slight decline in the perception that owning a home was a wise financial decision (49% down from 53%) likely due to current house prices being much higher than in 2015,” Genworth said in a release. “In addition, first-time homebuyers were less confident they could afford a home (39% down from 44%).”

Due to stricter qualification rules for buying homes with less than 20% down, 57% of respondents said it’s more difficult to buy a home today than it was in the past.

The study, which included 1,803 interviews conducted earlier this year with people aged 25-40 who had purchased their first home within the past two years, also found 51% of first-timers view that purchase as a mere starter home.

Toronto-based buyers, however, are more likely (57%) to view their home as a starter.

Buyer sin Alberta outside of Calgary are more likely to see their home as permanent but needing renovation (28%) compared to the rest of the country (18%).

The study also found the median price paid for a home is $310,000 and that the median downpayment is $35,000.

The median mortgage size, meanwhile, is $254,000 at 12% of the total home cost.

Copyright © 2017 Key Media Pty Ltd

Justin da Rosa
REP

Home sales decline in April, with both Toronto and Vancouver experienced diminishing activity.

“Sales in Vancouver are down from record levels in the first half of last year but the gap has started to close,” CREA President Andrew Peck. “Meanwhile, sales are up in Calgary and Edmonton from last year’s lows and trending higher in Ottawa and Montreal.”

National home sales fell 1.7% month-over-month in April and 7.5% year-over-year.

Newly listed homes, meanwhile, were up 10% month-over-month.

Unsurprisingly, the recently announced Ontario housing plan created some uneasiness for both buyers and sellers.

“Homebuyers and sellers both reacted to the recent Ontario government policy announcement aimed at cooling housing markets in and around Toronto,” said Gregory Klump, CREA’s Chief Economist. “The number of new listings in April spiked to record levels in the GTA, Oakville-Milton, Hamilton-Burlington and Kitchener-Waterloo, where there had been a severe supply shortage. And with only ten days to go between the announcement and the end of the month, sales in each of these markets were down from the previous month. It suggests these housing markets have started to cool.”

While the market may have cooled in terms of home sales — which were down 3.8% year-over-year — the Greater Toronto Area’s home prices continued their impossible trajectory.

The average cost of a home in Toronto jumped 24.6% year-over-year to $920,791.

“Policy makers will no doubt continue to keep a close eye on the combined effect of federal and provincial measures aimed at cooling housing markets of particular concern, while avoiding further regulatory changes that risk producing collateral damage in communities where the housing market is well balanced or already favours buyers,” Klump said.
Meanwhile, Vancouver sales were down 26.2% y/y but prices rebounded back above the $1 million mark, jumping from an average of $991,690 in March to $1,056,136 in April.

The national average home price jumped 10.4% year-over-year to $559,317.

Copyright © 2017 Key Media Pty Ltd

Bosa Properties poised to complete its Miramar Village project in White Rock

Simon Briault
The Vancouver Sun

Miramar Village

Project location: Johnston Road and Thrift Avenue, White Rock

Project size: 229 homes; one to three bedrooms; 550 to 2,700 square feet

Developer: Bosa Properties

Architect: NSDA Architects

Interior designer: BYU Design

Sales centre: 1425 Johnston Road; Opening for previews on May 20, noon — 6 p.m.

Telephone: 604-542-8882

Pricing: Available after May 20

Website: bosaproperties.com/miramar

Occupancy: Spring 2020

When you have a winning location, 15,000 square feet of private rooftop terrace overlooking the ocean and 229 units to play with, it makes sense to offer as many residential options as possible. That’s the thinking behind the final phase of Miramar Village, a landmark development in White Rock from Bosa Properties.

“It might seem presumptuous for me to say that our customers will be everybody, but because we have such a wide range of home sizes and styles, there really will be options for pretty much every kind of buyer,” said Daryl Simpson, Bosa’s senior vice-president. “We’ve got one-bedroom homes at 550 square feet all the way up to penthouses at around 2,700 square feet and pretty much everything in between.”

The first two towers of Miramar Village were completed in 2008. A mall owned by Bosa made up the rest of the site and the company chose to keep it running until now. Simpson explained the decision to expand the development had followed interest from new tenants and new retailers, as well as a healthy demand for more homes in the area.

There will be two towers in this final phase. The homes will be built above a 50,000-square-foot retail village that will include a grocery store, restaurant, coffee shop, dentist’s office, drug store and yoga practice area.

Miramar Village is a short walk from the White Rock pier and promenade, as well as the boutiques and cafés along Marine Drive. In the surrounding area, there are multiple restaurants, 10 public parks and plentiful shopping outlets, as well as golf courses, schools and other amenities.

“It’s in a pretty compelling location on the slope of the Semiahmoo Peninsula looking down to the bay,” Simpson said. “There are incredible views of the water and Mount Baker.”

Simpson said that Bosa has designed the homes to be attractive to end users, with suites being larger than what you would typically find in a suburban highrise condo development.

“We’ve certainly had a significant amount of interest from people living on the peninsula, people who’ve been in single-family homes and are looking to downsize,” he added. “Every year there are fewer and fewer single-family homes on the market because they get eaten up for townhouses and condo projects. So those homebuyers who are thinking of cashing out of the single-family home and buying in a development like Miramar Village are in a very good position right now. That’s reflected in the registrations we’ve had on our website.”

Bosa has also had inquiries from people who are living in Vancouver, Burnaby or Richmond who want to cash out and move out.

“We’re even seeing interest from North Vancouver,” Simpson said. “Maybe it has something to do with the rain; it’s amazing how much more sun you get in White Rock compared with downtown Vancouver.”

The project’s website mentions this last point in particular, describing the area as “Metro Vancouver’s answer to California.” There is 20 per cent more sunshine in White Rock than other parts of the region and temperatures are higher on average.

Buyers at Miramar Village will be able to make the most of the weather with a private rooftop amenity, which includes an outdoor pool, a hot tub and sun loungers, a fireside lounge, a barbecue and dining area, a green space and a putting green. There’s also an indoor entertainment lounge, a yoga space and a gym and health club.

 “It’s been a long time since a developer has offered luxury highrise homes south of the Fraser River and we believe there’s a fair amount of pent-up demand,” Simpson said. “Often in our business, the word luxury gets thrown around too easily. But Miramar Village is not a typical suburban highrise. Italian cabinetry, Bosch appliances, heated floors in the bathrooms and air conditioning are just some of the luxury features we’re offering.”

Specifically, the imported Italian kitchens will feature chimney hood fans, composite quartz countertops and under-mounted 18-gauge stainless steel sinks with solid brass Hansgrohe kitchen faucets and integral toggle sprays. There are premium, full-sized Bosch appliance packages and USB charging plugs in all kitchens and workstations.

Buyers will have a choice of three colour palettes and there are Nest Learning Thermostats included in all homes.

Bathrooms feature rectangular soaker tubs with polished chrome fixtures by Hansgrohe, floating wood-grain vanities with storage drawers and under-mounted lighting, complete with stone countertops and undermount sinks in vitreous china. There are custom vanity cabinets with sliding mirrors, built-in lighting, and shelving for extra storage. The bathrooms also include stone tile flooring, polished chrome towel bars and paper holders, dual-flush water closets and Nuheat Radiant under-floor heating.

Homes will have between one and three bedrooms and completion is expected for the spring of 2020.

© 2017 Postmedia Network Inc.

Ephraim Vecina
Canadian Real Estate Wealth

The Ontario government has recently passed the Home Inspection Act 2017, which introduces minimum standards for home inspection contracts, home inspection reports, disclosures, and the performance of home inspections.

The legislation will now require professionals to be licensed and insured before conducting home inspection. Moreover, written contracts must be signed with the owners of the inspected properties, and written reports must be delivered after inspection.

Industry players lauded the enactment of the bill.

“This is a crucial, necessary step,” according to Dan Steward, president and CEO of Toronto-based firm Pillar To Post Home Inspectors.

“Can you imagine finding out that your dentist took a one day course in dentistry? Your home is your single biggest investment so you absolutely have to protect it with a thorough home inspection before putting down your hard earned money,” Steward added.

“It’s also crucial to have the inspection before you buy, but with the current situation we see many would-be homeowners bypassing the inspection process and foregoing the contingency so they don’t lose the home to another bidder.”

Canadian Association of Home and Property Inspectors president Graham Clarke noted that the legislation will hopefully pave the way towards a greater emphasis on inspections as a vital part of the purchase process.

“Missing major items can cause a lot of issues,” Clarke said. “This is such an important issue at the moment in so many Canadian markets that we are emphasizing special offers to realtors to have one of our home inspectors come out to the new homeowner right after closing. If they find problems early enough, repairs can be, hopefully limited to a minimum.”

“With such a supply and demand issue, it is a real dilemma for realtors as well. They want to protect their buyer clients from making a huge mistake which could mean thousands of dollars in repairs later down the road, but they also don’t want to lose the insistent client. They can only do their best to assert their warning on the dangers of buying without a home inspection,” Clarke concluded.

Copyright © 2017 Key Media Pty Ltd

Justin da Rosa
Canadian Real Estate Wealth

Investors may have a few new markets to target, according to a recent report.

Vancouver’s sky-high home prices have created a spill-over effect in outlying markets, with varying degrees of impact based on proximity to the city centre.

“Price changes in the City of Vancouver are linked to prices in other municipalities, both on the way up and on the way down,” Braden Batch, Senior Market Analyst, Market Analysis Centre at CMHC, said. “The spillover effects take years to fully work through other markets and have varying degrees of strength.”

Vancouver’s influence is obviously most-felt in regions within commuting distance to the major city, but markets outside that range are also being impacted, according to CMHC’s latest Housing Market Insight report.

“The exact causes of spillover effects are complex and change over time,” CMHC said in the report. “There are other factors that may have cancelled out past spillover effects or amplified them, depending on the particular example. These results are based on changes in the City of Vancouver home prices in isolation of other factors that would lead house prices to fluctuate jointly in several B.C. centres.”

The fact that prices around Vancouver are increasing should come as no surprise, with many potential buyers and, indeed, investors setting their sights on more affordable pastures.

And that trend will likely continue, with Vancouver prices expected to continue to increase.

“Home prices will likely continue to increase until we see more housing supply coming on to the market,” Jill Oudil, Real Estate Board of Greater Vancouver president, said.

The benchmark price for a home in the Greater Vancouver area was $919,300 in March, up 12.7% year-over-year.

Copyright © 2017 Key Media Pty Ltd