CMHC show a slight housing start increase

Steve Randall
REP

There was an improvement in the 6-month moving average of Canadian housing starts last month.

Figures from CMHC show a seasonally adjusted annual rate of units of 210,038, up from 204,460 in the previous month and ending four months of declines.

“The national trend in housing starts increased in November, following four consecutive months of decline,” said Bob Dugan, CMHC’s chief economist. “While single-detached starts continued to trend lower in November, this was more than offset by a gain in the trend of multi-unit starts following several months of weakness.”

The rise in condo apartments was highly evident in Toronto where the sector drove the housing starts trend to its highest level so far in 2018.

Meanwhile, year-to-date total housing starts in the Vancouver CMA have decreased 9% compared to the same period in 2017.

There were gains overall in Calgary, Kelowna, Winnipeg, Windsor, and PEI; while starts were lower in Quebec and Hamilton.

Total housing starts trended higher in the Oshawa CMA which saw the most starts for the month of November in almost three decades, driven by strong multi-unit starts, particularly in the City of Oshawa, offset the decline in the single-detached starts trend.

Copyright © 2018 Key Media Pty Ltd

An aggressive buyer agent may contact you to register on your new listing what has become known as a ?bully offer?

Ross Wilson
REM

In this third and final segment on the hot subject of bidding wars, I draw some conclusions that lead to more questions. But consider that before we have the answers, we must ask the questions.

During my career, I orchestrated many multiple offer scenarios for my sellers. In earlier days, board rules permitted us to delay the showing commencement date as well as offers. I’d organize showings to begin – and offers to be presented – on the same day, usually a Saturday. On that first day, the property was usually a buzzing beehive of activity, with appointments scheduled every half hour, sometimes overlapping. Aside from the first and last showings of the day, the lockbox usually remained untouched, with business cards being exchanged between agents arriving and departing.

I also occasionally threw a public open house into the mix. Typically, during the presentation that same evening, the street was clogged with cars, anxious agents and lingering buyers, all caught up in the competitive frenzy. Even back then, though, some agent would seek to sneak in early with an offer conditional on satisfactory buyer inspection. Thankfully, my vendors normally adhered to the plan and rebuffed them. And did those overtly aggressive agents show up at offer time? Always.  I don’t recall ever losing one.

Ignoring your carefully formulated plans, with the deliberate intent to avoid a competition, an aggressive buyer agent may contact you to register on your new listing what has become known as a “bully offer”. They demand an appointment prior to the officially announced presentation date. Since you’re convinced of the merits of your marketing strategy, you encourage your seller to make this insistent agent wait.

A seller certainly has the right to refuse to see this “short-circuit” offer, but curiosity sometimes gets the best of them. It’s mystifying why they’d sacrifice an opportunity for multiple showings and offers by surrendering to a bully’s attempt to evade a fair competition. Obviously, you must comply with your principle’s instruction. However, before committing to an earlier date and all that entails, ask the buyer agent about the offer. If the major terms are unacceptable, advise your seller to stick to the original plan. But if it’s full asking price or more, with no conditions, they may not gamble losing it.

In accordance with industry rules – and prior to viewing the bully offer – the MLS listing must immediately be amended with the new presentation date and time. Plus all agents who have already shown the property, have confirmed but outstanding appointments or have expressed interest, must be promptly informed of the new arrangements. If they haven’t already done so, all buyer candidates must quickly scramble to view the property and register their offers. Unfortunately, some may be unable to act swiftly enough. So, your seller might lose them. By caving to a bully’s demand, they’ll never know if that lost buyer might have been The One.

Given such short notice, the buyers who weren’t able to act in time are grievously disappointed and sometimes very angry with our industry and its members. It could be argued that your seller was formally tendering for competitive bids, but at the last moment, chose to dishonour their commitment to await all comers. What can a disappointed buyer do about it? Well, it’s been opined that an aggrieved buyer could sue the seller and their agent for damages. I’m unaware of any precedent-setting court case to date, but it could happen anytime. All it will take is a sufficiently disturbed buyer with deep pockets. Listing agents beware.

Does greed get the best of people? Yes, I suppose it sometimes does. Some argue that buyers who dodge the rules of fair play for their own advantage are indeed avaricious and iniquitous. Is a bully buyer innocent? Do they have the right to be aggressive? Obviously, the technical answer is yes, for they certainly have the right to buy at the lowest possible price. The same argument could be made for an aggressive seller who wants the highest price possible. But if a bully buyer deliberately ignores a seller’s clearly stated procedural request regarding the marketing of their own property and attempts to circumvent the system, are they behaving morally? I suggest that they’re demonstrating a complete lack of respect for not only the seller’s wishes, but potentially our rules of service. In my view, this is not representative of innocence. Bully buyers are no different from movie patrons who butt into line ahead of other people patiently waiting their turn.

It’s also been said that sellers could refuse to comply with a bully’s demand, that those who agree to this marketing strategy are also selfish and greedy and knowingly contribute to the inflation of market values, not to mention a highly stressful and potentially devastating experience for many buyers.

Some have suggested that sellers can be bullies too. However, they’re certainly entitled to attempt to maximize the sale price of their own property by any available legal means. And by agreeing to a viewing period and delayed offer presentation day, are they not being fair by providing all interested buyers an opportunity to make a bid?

Further, is it not a major responsibility for a listing representative to do everything legally and ethically possible to get the best terms for their seller client? The strategy is designed to stimulate fair competition, which should result in a fair sale price based on supply and demand in a free democratic society.

Is the bully offer system undermining consumer confidence? Absolutely, especially with buyers willing to respectfully comply with the posted protocol but who are caught with their pants down by a bully jumping the queue. Nevertheless, until the rules change yet again, fair buyers must be prepared to respond to bully offer scenarios by viewing the property at the earliest opportunity.

As their representative, you should have your buyer’s offer documents prepared in advance and ready for presentation on short notice. To contribute to consumer confidence in our industry, listing agents who practice this legitimate hot-market strategy, which is more prevalent for city or suburban than rural, should carefully prepare their new seller for the distinct possibility of a bully offer. Ask your seller to adhere to the plan or risk trouble for both you and them. The reputation of our industry is at stake.

© 2017 REM Real Estate Magazine

Royal Lepage says market will continue to ease

Steve Randall
REP

Following several years of rising prices – sharply rising in some cases – home price growth will continue to ease in 2019 according to a new report from Royal LePage.

“Markets aren’t perfect. They overshoot and then they must correct,” said Phil Soper, President and CEO, Royal LePage. “The Canadian housing market in 2019 will remain in the correctional cycle that began in 2018, where price gains and sales activity are below the long term norm, after a few years of uncomfortably high major market price increases.”

The two hottest markets will see among the slowest appreciation in the coming year with Greater Vancouver prices rising just 0.6% and the Greater Toronto Area gaining 1.3%.

“Compared to the record pace of home appreciation seen in 2016 and 2017, the GTA housing market is now positioned for much healthier and sustainable growth in future years,” said Chris Slightham, broker and owner, Royal LePage Signature Realty. “Potential home buyers who were shut out of the market have an opportunity to catch up and we are expecting increased sales activity this spring compared to last year.”

Montreal to lead price gains The Greater Montreal Area will lead price growth in 2019 with 3% while Ottawa (2.5%), Halifax (1.6%), and Winnipeg (1.3%) will also see increases.

“With healthy price increases projected in 2019, we’re forecasting the housing market in the Greater Montreal Area to outperform other Canadian urban centres,” said Dominic St-Pierre, Vice President and General Manager, Royal LePage, for the Quebec region.

“While previous interest rate hikes by the Bank of Canada and the tightened 2018 OSFI mortgage rules spared the province’s real estate market in 2018, we may see some effects in 2019 as more homeowners renew their mortgage loans,” said St-Pierre. “On the upside, this should help stabilize inventory. We anticipate a 2.0 per cent increase in sales in the Greater Montreal Area.”

Painful year for Regina However, prices will fall by 1.9% in Edmonton, 2.3% in Calgary and 4.7% in Regina.

“The challenges that plagued the Regina real estate market in 2018 may have ‘touched the bottom’ on our localized recession.  Provincial GDP and hiring trends indicate that we may see a rebound by the second quarter of 2019,” said Mike Duggleby, broker and owner, Royal LePage Regina Realty. “Those looking to buy are finding excellent selection, reduced competition from other buyers and affordable prices.”

Overall, Canadian home prices are forecast to gain 1.2% in 2019 and Phil Soper says there are two factors influencing the firm’s forecast that deserve special consideration.

“Firstly, home prices are appreciating, albeit at a snail’s pace. Secondly, the Canadian market is supported by strong economic fundamentals, including a robust rate of new household formation and excellent employment growth,” he said. “

However, the future may be too bright says Soper. As more people are employed and looking for a roof over their heads, supply issues will weigh on markets.

“More than an affordable housing problem, we will once again be facing an overall housing supply crisis,” said Soper.

Copyright © 2018 Key Media Pty Ltd

BC Assessments based on July 1st value

Steve Randall
REP

Property taxes in British Columbia have been generally trending higher for years but the softening market in many parts of the province is set to snap that trend.

BC Assessment bases its assessments on values on July 1st each year and says that when assessments begin to reach households early in January, many will see a reduction.

“It’s a real mix in property value changes, but the market can best be summed up as showing signs of stability across most areas of the province,” says Assessor Tina Ireland. “Changes in property assessments really depend on where you live. For example, assessed values for detached single family homes in many areas of Metro Vancouver may see a softening in value, while other markets and areas of the province will see modest increases over last year’s values.”

On July 1, some Metro Vancouver detached single family homes were showing decreases in value of 5-10% over last year, including in areas of Vancouver, the North Shore, South Surrey, White Rock, South Delta and Richmond. Other areas were relatively stable or even showing modest increases.

But there could be increases of 5-15% in other parts of the province including the Fraser Valley, Vancouver Island, Okanagan and the North. And in central and northern Vancouver, increases were near 20%.

Condo values increased 10-20% in most of the province with Vancouver, the North Shore and Burnaby increasing by slightly less than this range while the eastern Fraser Valley may see some assessments above this range.

Copyright © 2018 Key Media Pty Ltd

Three new brokerages join Zillow

Ephraim Vecina
REP

Last week, U.S.-based real estate and rental portal Zillow announced that it has further expanded its network in Canada with the confirmation of listing agreements with 3 more brokerages.

The marketplace’s newest alliances are with HomeLife Real Estate Canada, Sage Real Estate, and Your Choice Realty.

These add to Zillow’s already substantial network – which represented more than 50,000 Canadian listings as of October – as the company steps up its efforts to establish a firm base north of the border.

The partners’ listings, accompanied with critical information such as property particulars and brokerage contact information, will be available to view on Zillow’s website and mobile app. This ensures these Canadian properties’ visibility and accessibility to the marketplace’s more than 100 million non-U.S. visitors per year.

“We’re thrilled each time we welcome more Canadian partners in displaying their listings on Zillow.com, because it’s a win for brokers, agents and consumers. Our Canadian partnerships are already driving increased traffic to Zillow, with more than half a million Canadian home shoppers visiting each month,” said Errol Samuelson, Zillow Group chief industry Development Officer.

Copyright © 2018 Key Media Pty Ltd

Commercial real estate sales in the Lower Mainland fell almost 20 per cent

Steve Randall
REP

Commercial real estate sales in the Lower Mainland fell almost 20% in the third quarter of 2018 compared to a year earlier.

There were 565 CRE sales according to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV).

otal dollar volume was down 0.9% to $3.903 billion.

“We’re seeing less demand across our commercial market compared to recent years and supply is beginning to ramp up with a number of projects expected to complete in our region over the next year,” said Phil Moore, REBGV president.

Sales by type
There were 199 commercial land sales in BC in the third quarter, down 34.8% year-over-year while total dollar volume fell 14.8% to $2.007 billion.

Office and retail sales were down 4.2% to 229 with a total dollar value of $1.377 a 45.5% increase from a year earlier.

There were 118 industrial land sales, down 12.6% year-over-year and the dollar value of industrial sales was $290 million in Q3 2018, a 30.1% year-over-year.

Nineteen multi-family land sales represented a 17.4% decrease Q3 2017. The dollar value of multi-family sales was $230 million, up 3.9% increase from a year earlier.

Copyright © 2018 Key Media Pty Ltd

Court takes an amenity-rich Abbotsford location

Simon Briault
The Vancouver Sun

Court

Project location: 2814 Gladwin Road

Project size: 153 homes ranging in size from approximately 600 to 1,750 square feet. There are studios, one- and two-bedroom homes and larger units with two bedrooms plus flex spaces. Prices start at $299,900 for one-bedroom homes and $399,900 for two-bedroom plans

Developer: Heinrichs Developments

Architect: David Tyrell Architecture

Interior designer: i3 Design

Sales centre: 33323 South Fraser Way

Hours: noon — 5 p.m., Sat — Thurs

Telephone: 604-621-5888

Website: courtliving.ca

The builders responsible for Court, a new condo project in the heart of Abbotsford, are quite happy being small players in the residential development market. In fact, the website for Heinrichs Developments highlights how the small team helps the company to be “approachable, efficient and cost effective” in the way that it operates.

“Gerald Heinrichs, my uncle, has been in the industry for about 25 years, building both in the Okanagan area and also in the Fraser Valley,” said Andrew Heinrichs, the company’s development manager. “He’s kind of a rags-to-riches story. He started out framing and worked his way up in the industry by building his own companies. Heinrichs Developments is the latest iteration of that.

“His idea with these companies is that he likes to have a very tight-knit team that he uses as a focal point,” Heinrichs added. “The owners who buy our homes are looked after by Heinrichs representatives, who know everything about the product. We’re physically building the home and then handing you the keys as well, rather than keeping buyers at arm’s length by bringing in multiple third parties.”

The result, according to Heinrichs, is a superior end product and a higher level of customer service than you might expect from a homebuilder.

“I myself do the walk-throughs and I also work on project scheduling and budgeting,” Heinrichs said. “We’re a very grassroots and down-to-earth company. It’s easier to answer the questions that buyers have when we’re the ones who are, for example, ordering the building materials or getting the warranties for their appliances.”

With an address of 2814 Gladwin Road – right in the heart of Abbotsford’s rapidly growing downtown – Court comprises two six-storey condo buildings and a total of 153 homes. Units range in size from approximately 600 to 1,750 square feet. There are studios, one- and two-bedroom homes and larger units with two bedrooms plus flex spaces. Prices start at $299,900 for one-bedroom homes and $399,900 for two-bedroom plans.

Kitchens at Court feature flat-panel cabinetry with soft-close doors and drawers, recessed pot lighting and polished quartz countertops accented by stacked vertical porcelain tile backsplashes. There are single-basin stainless steel undermounted sinks featuring modern matte black nickel faucets with pull-down sprays. The stainless-steel appliance packages are by Whirlpool.

Bathrooms have flat-panel cabinetry with soft-close doors and drawers, polished quartz countertops with undermount porcelain sinks and oversized geometric floor tiles in matte porcelain. There are large-format porcelain tile shower surrounds with polished chrome rain shower heads and fixtures, high-efficiency dual-flush toilets and double vanities and seamless glass shower enclosures in

master ensuites.

When it comes to the floor plans at Court, there will be plenty of variation on offer. Along the Gladwin Road and Landeau Place sides of the development will be multi-level units with big loft spaces inspired by a Scandinavian, industrial feel. These will include exposed brickwork and glass railings overlooking the spaces below. This type of design is not the kind of thing that’s been brought to Abbotsford before, according to Heinrichs.

“We’re right near the main shopping corridor in Abbotsford,” he added. “We’re just off South Fraser Way, which the City of Abbotsford has determined in its community plan to be the central corridor. It’s in a very central, interconnected, walkable and transit-friendly location.”

The brochure for Court lists no fewer than 43 amenities in the local area – everything from restaurants, shopping and schools to health and wellness outlets. The development is within easy reach of Mill Lake Park, which includes an outdoor pool, a water park, three separate playgrounds, several picnic areas and rest stops, as well as a small dock. The University of the Fraser Valley’s main campus is also nearby.

“The homes are definitely at an affordable price point for many people,” said Heinrichs. “We’re trying to cater to both entry-level homebuyers and the investor market, as well.”

Sandy Chang, who has bought a two-bathroom home on the third floor, fits the bill perfectly.

“I was born and raised in Vancouver and me and my best friend bought this place as an investment because we know that the market is heading out east,” she said. “We plan to rent it out, probably to students. We knew that Abbotsford is a growing city and there could be a lot of new development coming to the area so we wanted to get in early.”

“It was a super easy process,” Chang added. “We made two trips out there, the first one to get a glimpse at the neighbourhood and to talk with staff at the showroom. When we first saw what they were offering, we liked it so much we knew we were going to go to the bank and try to make this work. The second time we went it was just to sign the papers. They were very accommodating. It was a really good experience.”

© 2018 Postmedia Network Inc

Commercial real estate sales decline and price activity varies across the Lower Mainland

other

Commercial real estate sales in the Lower Mainland declined in the third quarter (Q3) of 2018 compared to the elevated activity experienced in recent years.

There were 565 commercial real estate sales in the Lower Mainland in Q3 2018, a 19.5 per cent decrease from 702 sales in Q3 2017, according to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV).

The total dollar value of commercial real estate sales in the Lower Mainland reached $3.903 billion in Q3 2018, a 0.9 per cent decrease from $3.938 billion in Q3 2017.

“We’re seeing less demand across our commercial market compared to recent years and supply is beginning to ramp up with a number of projects expected to complete in our region over the next year,” said Phil Moore, REBGV president.

Q3 2018 activity by category

Land: There were 199 commercial land sales in Q3 2018, which is a 34.8 per cent decrease from the 305 land sales in Q3 2017. The dollar value of land sales was $2.007 billion in Q3 2018, a 14.8 per cent decrease from $2.356 billion in Q3 2017.

Office and Retail: There were 229 office and retail sales in the Lower Mainland in Q3 2018, which is down 4.2 per cent from the 239 sales in Q3 2017. The dollar value of office and retail sales was $1.377 billion in Q3 2018, a 45.5 per cent increase from $946 million in Q3 2017.

Industrial: There were 118 industrial land sales in the Lower Mainland in Q3 2018, which is down 12.6 per cent from the 135 sales in Q3 2017. The dollar value of industrial sales was $290 million in Q3 2018, a 30.1 per cent decrease from $414 million in Q3 2017.

Multi-Family: There were 19 multi-family land sales in the Lower Mainland in Q3 2018, which is down 17.4 per cent from 23 sales in Q3 2017. The dollar value of multi-family sales was $230 million in Q3 2018, a 3.9 per cent increase from $221 million in Q3 2017.

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Buyers and investors alike have adopted a cautious stance towards Vancouver real estate

Ephraim Vecina
Canadian Real Estate Wealth

Buyers and investors alike have adopted a cautious stance towards Vancouver’s real estate assets for most of 2018, which the city’s real estate board attributed as the main driver of slower overall activity.

In November, the market’s sales volume fell 42.5% year-over-year, bringing it to a level 34.7% below the 10-year average, according to the latest numbers from the Real Estate Board of Greater Vancouver.

This followed a pronounced decrease in demand for the city’s residential properties in October. In its report, the Canadian Real Estate Association stated that Vancouver’s sales-to-new-listings ratio fell by 26.22% annually during that month to reach 48.4.

Complicating matters is the fact that only 1 out of 10 people currently renting in the city are planning to buy their own homes next year, a problematic prospect in a market with a demand level that is the 3rd lowest in Western Canada.

“While homebuying intentions are up among current home buyers [14% in 2017 to 19% this year], this has been offset by weaker intentions among current renters – the latter being the primary pool for potential first-time buyers. Affordability remains a challenge for first-time buyers in the Vancouver market,” according to the Altus Group’s Vancouver Flash Report 2018.

REBGV data indicated that the benchmark price of the market’s detached homes as of November was just over $1.5 million, while apartments were at $667,800 (2.3% annual decrease).

Copyright © 2018 Key Media Pty Ltd

November home sales lowest in 10 years

Neil Sharma
REP

Last month’s homes sales in Vancouver were the lowest in a decade, and down 42.5% from exactly a year earlier.

The 1,608 home sales in Metro Vancouver are worrying, but there were earlier indications that the city’s housing market was decelerating, says Adil Dinani, a sales representative with Royal LePage in Vancouver.

“Before, there was a divergence in the market,” he said. “The single-family detached market was slower and the condo market carried the balance, but that’s come down as well. The condo market eight to 12 months ago was on fire, but now it’s totally shifted. Most segments of the market are in buyers’ territory. Policy measures put forth—the 20% foreign buyer tax, the OSFI [Office of the Superintendent of Financial Institutions] rules and the vacancy and speculation tax introduced by the NDP—have played major roles.”

Interest rate hikes are mounting and conspiring to make homeownership even shakier for some of the region’s residents.

According to Ron Antalek, a REMAX sales agent, Vancouver’s troubles began in the summer and have finally reached an ugly denouement. While he concurs that B-20, the mortgage stress test implemented by OSFI, has done its part to erode Vancouver’s once sizzling real estate market, he says the provincial NDP has made it its mission to quell the once-white-hot activity in order to make housing affordable.

“To suggest affordable housing is created by dropping the market, I disagree,” he said. “The government should have created incentives to the development community that would create affordable housing and rental units. It could have been done in a better way.

“What’s happening is in our province with the NDP’s policies of an increased foreign buyer tax and an empty housing tax has definitely affected the market, especially Vancouver. It has adversely affected the investor community.”

Copyright © 2018 Key Media Pty Ltd