Canadian home sales in 2018 dropped by 21%

Ephraim Vecina
Canadian Real Estate Wealth

Amid an overall trend of moderation nationwide, condo sales continue to exhibit significant regional variances, according to the latest Altus Group Housing Report.

Throughout Canada, a little over 48,500 condo apartment sales took place last year, with the volume significantly falling by 21% from the nearly 62,000 deals completed in 2017.

Much of this slowdown stemmed from significant weakening in the GTA market, which suffered a 38% year-over-year decline to approximately 21,400 transactions.

Despite this flaw, GTA still accounted for almost half of all sales in the areas covered by Altus. These locales include other major Ontario markets in the Greater Golden Horseshoe region.

In Vancouver, declines in condo market sales performance have eased, from a massive 31% year-over-year drop in 2017 to just a 7% shrinkage in 2018.

According to the Real Estate Board of Greater Vancouver, overall residential sales fell by 29.1% year-over-year in April, down to 1,829 homes sold.

Inventory saw the addition of 5,742 new for-sale listings last month, up by 16% from the 4,949 new listings in March. Overall supply in Greater Vancouver stood at 14,357 homes for sale, around 46% larger than the availability on April 2018.

Meanwhile, Montreal enjoyed its third straight year of growth in condo deals, having seen a 19% annual growth in 2018. The market also reached its highest number of condo apartment transactions (around 8,100 deals for the year) to date.

Over the past few quarters, Montreal’s real estate boom has helped the city reach a budget surplus of $212.7 million last year – amounting to approximately $130 per resident, and marking the second highest registered since 2012.

Copyright © 2019 Key Media Pty Ltd

Investors seeking mix-use developments

Ephraim Vecina
Canadian Real Estate Wealth

Investors are gravitating towards large mixed-use developments situated near rapid transit lines in Metro Vancouver, according to a new analysis by Avison Young.

The trend is being spurred on by the city’s political borders and geographic limitations – factors that have led to a consistently severe shortage of developable land.

“As land prices have risen and the availability of development sites declined, investor interest has grown exponentially in the redevelopment of typical low-rise shopping centres and the adjacent surface parking lots that form a substantial part of most traditional car-centred regional malls,” Avison Young stated.

The latest mixed-use complexes – which the commercial real estate services firm classified as “urban enclaves” – offer extensive opportunities across multiple asset classes along with various community amenities, all readily accessible via existing public transport routes.

“Metro Vancouver and its constituent municipalities have encouraged developers to build along transit corridors and allowed higher densities at development sites that had long been established as commercial retail nodes such as regional malls,” Avison Young explained.

Authorities on the municipal and provincial levels should take care not to scare off investors, however. A mid-April analysis by CBRE Ltd. noted that Vancouver’s successive introduction of several foreigner-aimed regulations is pushing capital away towards Toronto.

The speculation tax and the Landowner Transparency Act, in particular, have proved most discouraging.

“You have policy changes on a snap, on a whim,” CBRE Ltd. executive vice president David Ho told Bloomberg in an interview. “Investors typically look at stability in a market and this is not stability.”

Copyright © 2019 Key Media Pty Ltd

With Seaside, Mosaic steps into South Delta

Barbara Gunn
The Vancouver Sun

Seaside

Project address: 4638 Orca Way, Tsawwassen

Project size: 125 two-, three- and four-bedroom rowhomes (in the first phase)

Developer: Mosaic

Architect: Ekistics

Interior designer: Insight Design Group

Price: two-bed and den from $579,900; three-bed from $654,900; three-bed and den from $819,900; four-bed from $764,900

Sales centre: 4638 Orca Way, Tsawwassen

Hours: noon — 6 p.m., daily

Telephone: 604-943-3902

Website: mosaichomes.com/property/seaside

Mosaic’s Seaside, which is quickly taking shape just a short stroll from the ocean in Tsawwassen, represents a first for the long-time developer on several levels.

To begin with, the master-planned rowhome community is the first project Mosaic has undertaken, not only in Tsawwassen, but in all of South Delta.

The homes, which have beach-y exterior colours and coastal influences inspired by their location, have a look not previously offered by Mosaic.

And the 10,000-square-foot residents-only Seaside Club, which will open this summer along with some of the 125 two-, three- and four-bedroom homes in phase one, is an amenity space not commonly built by Mosaic.

Geoff Duyker, the company’s senior vice-president of marketing, says a South Delta presence is “very meaningful” for Mosaic, citing the area’s growing economic drivers, which include the Delta iPort distribution centre, the 450,000-square-foot Amazon facility and the Tsawwassen Mills and Tsawwassen Commons shopping malls.

“All of a sudden, there is activity here, and we’re super excited to be able to provide new housing for people who want to live here.”

Indeed, Tsawwassen — which locals will attest is one of the sunniest spots in Metro Vancouver — now has myriad shops, restaurants and big-box stores, courtesy of the two new malls.

Residents of Seaside will also be but a stroll from the par-70 Tsawwassen Springs Golf Course, which borders the community to the east — a forested area borders it to the south — and a short drive to the sandy shores of Boundary Bay’s Centennial Beach.

Residents will also be well positioned to take a weekend getaway to the Southern Gulf Islands or Vancouver Island, given their proximity to the BC Ferries terminal just minutes down the causeway.

When residents are at home, however, they’ll be able to take advantage of other activities, courtesy of the Seaside Club. Its indoor and outdoor amenities include a great room with a kitchen, party table and televisions — perfect for entertaining a large group — a fitness centre, kids’ play room, lap pool and dog-wash station.

On site at Seaside, which will include just under 300 homes when complete in about three years, are four smartly outfitted display homes, some with water views, that showcase the interiors.

As well, Duyker says, they also speak to the diverse buyers who may be interested in residency at Seaside. One model, for instance, is a two-bedroom-and-den unit that may be well suited to a younger couple, while a model with “a master on the main” may be more of interest to downsizers.

“We have four main types of homes, and we believe we have a home for everyone,” says Duyker, who notes that some 50 of the first-phase homes have now been purchased. Some of those buyers grew up in South Delta “and have wanted to come home,” while others are migrating from Vancouver, Richmond and Burnaby, he says.

“They’re very impressed with the value that’s offered here for the home that they’re able to purchase.”

All homes, meantime, are three levels, have two parking spots and are fitted with huge windows and 10-foot-high ceilings and wood laminate flooring on the main levels. Clean palettes of white on white or white on taupe are on offer.

Abundant storage is on offer, thanks to crawl spaces, closets and thoughtfully placed nooks.

Kitchens have island or peninsula layouts, flat-panel upper cabinets and Shaker-style lowers and under-cabinet task lighting. Under-cabinet LED task lighting will be sure to help with meal prep.

Bathrooms have oversized porcelain tile flooring, rectangular sinks, soaker tubs and Kohler single-lever chrome faucets.

Finishes aside, Duyker believes that the biggest draw of Seaside is its location.

“In terms of our physical setting, I’d say our most definitive feature is our proximity to the ocean,” he says. “It’s five minutes to where you get to dip your toes in the water.

“I think for the families who’ve chosen to come here, first and foremost, they love the setting — to be this close to the ocean, to be bordered by a forest and a golf course, and then to be in an area that is really evolving in a very positive way. This is a great place to live.”

© 2019 Postmedia Network Inc.

Several glitzy high-end towers are proposed for downtown, many by prominent international architects

John Mackie
The Vancouver Sun

Rumours about the death of Vancouver’s high-end real estate market may be exaggerated.

Several new highrise developments are in the works for downtown. And many are high-end projects being designed by internationally renowned “starchitects.”

A rezoning application was recently posted at 1075 Nelson for a 60-storey tower designed by British architect Tom Wright.

Wright achieved fame for the Burj Al Arab in Dubai, a “striking sail-shaped building” that bills itself as “the world’s most luxurious hotel.”

Now the American architectural giant SOM has been tapped to do a 375-foot tower at 1650 Alberni St.

SOM designed the world’s tallest building — the Burj Khalifa — in Dubai. It also designed the Freedom Tower on the World Trade Center site in New York, the tallest building in North America.

The SOM building is one of four towers being planned on Alberni by Landa Global Properties.

Two buildings were designed by the famed New York architect Robert Stern, in an art deco style. The towers will be 43 and 48 storeys, and include 451 “luxury residences.”

The other Landa building, 1818 Alberni, was designed by local architect Foad Rafii and will be 21 storeys. It will be a boutique building with 36 “private residences,” restricted to two per floor.

Landa’s CEO Kevin Cheung said the Stern towers will be a “billion-dollar project,” the SOM building will be $500 million and 1818 Alberni will probably be around $250 million.

Add them up and Landa is looking at $1.75 billion in buildings for one street. But with the current downturn in the local market, Cheung isn’t sure how much they will sell for.

“That’s a great question,” he said. “The downtown luxury market, or tower market, hasn’t really been proven for quite a while now. The only project that’s currently selling is Davie and Nicola, and they’re going for around $1,900 a foot.”

Nonetheless, Landa plans to press ahead.

“We’re dedicated long-term to Vancouver,” said Cheung, the Vancouver-raised scion of a prominent Shanghai real estate family. “We already have our rezoning on 1488 (Alberni, the Stern project). We’re constantly talking with the city on the rezoning process of 1650, the design, the look, so everything is moving ahead in the pipeline.”

Heritage expert Don Luxton said it typically takes seven years for a big tower to go through the planning and building stages in Vancouver. So developers like Landa are looking long-term.

“Just because (high-end condos are) temporarily not selling doesn’t mean that people don’t understand there to be a market,” said Luxton. “And they are anticipating the market to come back. That’s pretty clear.”

The new towers are part of an ongoing boom that is dramatically changing Vancouver’s skyline. The city allowed for higher towers on Alberni/Georgia and the Burrard corridor in its West End plan, and developers swooped in.

Land prices in the rezoned areas went through the roof. A property search showed Landa purchased the 132×132-foot site at 1650 Alberni for $130 million in April 2018. It sold in 2006 for $11.64 million.

Landa purchased the 264.4×131-foot site at 1444 Alberni and 711 Broughton in April 2016 for $130 million, which had sold for $62.625 million two years earlier.

The 1075 Nelson site raised eyebrows in 2016, when Ian Young of the South China Morning Post discovered it had been flipped three times in three years, selling for $16.8 million in 2013, $60 million and finally $68 million.

Given the high prices paid for the land, the towers will have to be high end to make money, although the city has negotiated to have some rental units included in the projects.

There will be 129 rentals in the Stern buildings, which go to a Development Permit Board meeting May 27. The rezoning proposal for 1075 Nelson includes 323 market condos, 113 social housing units and 49 rentals, and can be viewed at a community open house on May 28 from 5 p.m. to 7:30 p.m. at the Sutton Place Hotel (845 Burrard).

One common feature of the new wave of towers is they all look different, even when they’re built by the same developer.

“We’re not going to do anything like a cookie cutter, or a specific look,” said Cheung. “Each site is unique, in the sense. On the Stern project we had a larger site where we can really pull off the look and feel (of the art deco design).

“We thought it was unique, and different. Vancouver really didn’t have that, a more classical building. It definitely stands out from the glass towers that are in the city.”

The design for the SOM building is still being finalized. But Cheung said it “will be more sculptural in its nature, but in a glass form.”

Wright’s design for 1075 Nelson is an elegant building that features a couple of gentle curves. It also has trees or greenery in the middle.

Rick Gregory of Henson Developments said the design was inspired by “the idea of the first meeting of the Europeans and the First Nations.”

“(Wright) was looking at the downtown peninsula, including Stanley Park, and seeing that there was water on the Burrard Inlet side and water on the False Creek side and trees in the middle,” said Gregory.

“That’s how he thought communications would have gone at the beginning, in terms of describing the geography, so that’s really where it stemmed from. He had some wavy patterns on both sides of some trees, and so he put that up on the edge vertically.”

The building sits on a block where four new towers will be built, including Westbank’s acclaimed Butterfly building, designed by the late Bing Thom. Units in the Butterfly have reportedly sold for up to $4,000 a square foot.

Luxton thinks Vancouver was “long overdue” for some fresh designs by international architects. But he isn’t sure if they stick around long enough to understand their buildings in a local context.

“It’s fine to come and drop some kind of building form on the site, but that’s not really what’s important,” he said. “It’s most important how it meets the ground, what it does for the street, how it fits in. These are all important things to understand.

“Is there a lot of context to them? Not really. Is it a bad thing? I don’t know. It certainly isn’t going to help anybody who’s concerned about affordability. They’re for the elite, pure and simple.”

© 2019 Postmedia Network Inc.

If you?re a first-time home buyer, there are more programs available for you to take advantage of

other

If you’re a first-time homebuyer (FTHB) in Ontario, British Columbia, or Prince Edward Island, you may be eligible to receive a land transfer tax (LTT) rebate.

The eligibility requirements and rebates differ by region.

British Columbia first-time homebuyer land transfer tax rebate

If you’re a first-time homebuyer in BC, you can take advantage of a tax exemption on your land transfer tax³, if:

• You’re a Canadian citizen or permanent resident.
• You’ve lived in BC for 12 consecutive months prior to the registration date, or you’ve filed two income tax returns in BC in the six years before registration.
• You’ve never owned a home before, anywhere in the world.
• You have not received a first-time homebuyer’s exemption or refund.
• The home is located in BC and is only used as your principal residence.
• The home has a fair market value of $475,000 or less if registered on or before February 21, 2017, or $500,000 or less if registered on or after February 22, 2017.
• The property is 0.5 hectares or smaller.

Vancouver, BC – February 22, 2017. On the heels of multiple government announcements in 2016 and early 2017, the British Columbia Real Estate Association (BCREA) welcomes the latest: an increase in the Property Transfer Tax exemption threshold for first-time buyers, announced in Budget 2017. The increase, to $500,000 from $475,000, takes effect today. 

BCREA appreciates this government’s attention to the needs of first-time homebuyers. To keep pace with the dynamic real estate market and ensure that homebuyers aren’t left behind, the Association strongly believes that this threshold—and all others related to the Property Transfer Tax—should be indexed, with adjustments made annually.

During Minister de Jong’s budget consultation in January, BCREA recommended that the first-time buyer exemption be increased to $750,000. That number would align with the exemption for newly-built homes and with the BC HOME Partnership program. This measure would have expanded consumer choices, because the First Time Home Buyers’ Program exemption applies to all homes, rather than only newly-built homes, which are often out of reach of first-time buyers.

BCREA also looks forward to learning more about the provincial government’s plans to partner with local governments to increase housing supply. Specifically, the Association supports incentives that result in faster housing and development approval processes, as well as increased density of family-oriented homes along transit corridors. 

Ontario first-time homebuyer land transfer tax rebate

If you’re buying your first home in Ontario, you may be eligible for a land transfer tax rebate equal to the full cost of your LTT¹, up to $4,000.

You are eligible if:

• You’re at least 18 years of age.
• You occupy the home as your principal residence within nine months of the closing date.
• You’ve never owned a home before, anywhere in the world.
• Your spouse has not owned a home while being your spouse.

You must apply for this refund within 18 months after the date of the transfer. Your lawyer typically applies for it on your behalf and it is an immediate rebate on closing day.

Toronto first-time homebuyer land transfer tax rebate

In Toronto, first-time homebuyers are able to receive a refund of their municipal land transfer tax², up to $4,475.

You are eligible if:

• You’re at least 18 years of age.
• You occupy the home as your principal residence within nine months of the closing date.
• You’ve never owned a home before, anywhere in the world.
• Your spouse has not owned a home while being your spouse.

You must apply for this refund within 18 months after the date of the transfer. Your lawyer can claim the rebate through when they register your transfer or deed on closing day.

PEI first-time homebuyer property transfer tax rebate

First-time homebuyers purchasing in PEI are exempt from paying land transfer tax⁴ if:

• You’re a Canadian citizen or permanent resident.
• You’ve lived in the province throughout a period of not less than six months immediately prior to the registration date, or have filed a tax return in at least two of the six taxation years immediately preceding the registration date or you’ve occupied the subject property as their principal residence for a period of six months following the registration of the deed.
• You’ve never owned a home before, anywhere in the world.
• You intend to use the property as your principal residence.

All purchasers of the property—if there is more than one—must be first-time homebuyers to receive the tax exemption.

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We’ll see your avocado toast and raise you a glass of wine

Joannah Connolly
Western Investor

The trend for quirky new-home buyer incentives is continuing after developer Woodbridge Homes recently offered a year’s worth of avocado toast to buyers of homes at its West Coquitlam development KIRA.

Today, developer Wesgroup is throwing down the gauntlet and telling its competitor, “We’ll see your avocado toast and raise you a glass of wine.”

This new incentive offers buyers a year’s worth of wine if they buy a home at Wesgroup’s MODE development in Vancouver’s River District. The exact offer is a $1,500 gift card for a nearby wine store, equal to roughly one bottle of wine a week for a year with each purchase of a home in the new riverfront development.

Brad Jones, vice-president of development at Wesgroup, told Glacier Media, “Our offer is kind of cheeky, in response to another developer’s incentive of avocado toast. But we did this in addition to what is already a really strong incentive package for MODE, which is a discount of $10,000 off a one-bedroom home, $15,000 off a two-bed, and $20,000 off a three-bedroom home. And we’re already offering great value for a new home in Vancouver.”

It’s not just condo purchases that are being incentivized. On one of its new rental developments, Wesgroup is offering an incentive of similar value to the wine, this time paying for packing and moving costs. Those who rent a two-bedroom home at The Westminster in New West qualify for itsMoving Made Easy incentive, which pays for a full-service move from a reputable local moving company and is valued up to $1,500.

Ryan Thé, vice-president of development for The Westminster, told Glacier Media, “We wanted to offer something that addresses the practical needs of renters. We know it’s hard to find rental homes with our vacancy rates so low. It’s already stressful enough to find a place, so we wanted to make life that bit easier for renters. It’s been going for about a month and we’ve had quite a lot of uptake on that.”

Making a difference

These attractive offers might seem like luxuries a buyer might otherwise have to give up, or ways to make moving less stressful. But one mortgage broker warned buyers not to be too easily swayed by quirky incentives that may not add up to much.

Alisa Aragon of Bridgestone Financing Pros, powered by Dominion Lending Centres, told Glacier Media, “With new home sales slowing, developers are getting creative with their incentives. But what’s ultimately the most important thing is whether this is the right home for you. A gift card worth $1,200 or so is great, but it won’t make much difference to your monthly costs. Make sure you’re taking into account all the costs, including mortgage payments, strata fees and property taxes, and what you’re getting for those costs.”

But as home-buying continues to be out of reach for many and sales continue to slow, developers such as Woodbridge Homes, Wesgroup and Intergulf are also offering more substantial incentives that could make a real difference to a buyer.

In addition to the year of avocado toast, Woodbridge’s KIRA development also gave buyers a limited-time opportunity to put just a 10 per cent deposit down, instead of the usual 20-25 per cent deposit on presale homes.

Wesgroup is offering those stepped discounts from $10,000 to $20,000, depending on the size of unit, at MODE. And in North Vancouver, developer Intergulf is allowing all buyers to put down 15 per cent deposit on a new home at Hunter at Lynn Creek.

More developments offering low-deposit and other incentives include:

• Court by Heinrichs Development: 10 per cent deposit and live free for the first six months;
• Luxia at Yorkson by Isle of Mann: 5-10 per cent deposit and a $5,000 gift card from Urban Barn with a purchase of a home;
• 27North by Intragulf and Tatla: 10 per cent deposit plus choice of Mount Seymour ski pass and skis for all the family, or free golf for a year, or free mountain bikes for the family, or the cash equivalent.

And these are just a snapshot of the value-added incentives being offered around the region’s housing projects, as developers attempt to lure buyers in a challenging market. Many companies won’t advertise it, but would give back a “decoration allowance” that can amount to tens of thousands of dollars returned to the buyer on completion, while still selling the home at full price on paper. Other developers will negotiate other aspects of a presale home, such as throwing in upgrades or an additional parking stall, or offering a discount to take no parking stall.

An alternative approach

Taking a different approach to getting people into its homes, and as part of its “Locals First” policy, Panatch Group is operating a rent-to-own scheme at its Port Moody development 50 Electronic Avenue. This program allowed 30 eligible households (first-time buyers who live and work in Port Moody), selected by lottery out of hundreds of applicants, to rent a home at less than market value for up to two years. Within this time, the participating households get the option to purchase their unit and will then have their accumulated rent, which has been collated in a trust, paid towards a purchase price that was locked in at the contract date.

Kush Panatch, president of Richmond-based, family-owned Panatch Group, said, “For a lack of a better name, it’s basically taking 30 families or people in Port Moody and providing them with what I call a pathway to homeownership.”

He added, “The housing challenge is very real.”

Copyright © Western Investor

Whether it is free wine or avocado toast, creative offers are signs of the times in a real estate market with slowing sales.

Derrick Penner
The Vancouver Sun

A Vancouver condo developer is offering free wine to presale buyers in an attempt to one-up a competitor that offered free avocado toast to purchasers — attention-seeking gimmicks for a slowing real estate market.

Wesgroup Properties is the developer of Mode offering purchasers a free glass of wine every day for a year, or rather a $1,500 gift card to Everything Wine. At around $28 per week, it is enough to buy a pretty decent bottle or two to pour and ponder the future.

Wesgroup’s offer, which is good for the month of June, follows Woodbridge Homes’ enticement of free avocado toast for buyers who signed up for $400,000 condos in its Kira project in Coquitlam in early May.

“It’s clearly a cheeky response to the avocado toast incentive that got so heavily picked up (in the media),” said Brad Jones, Wesgroup’s vice-president of development, but it also promotes some of the development’s neighbourhood features.

Mode, a 25-storey tower in the River District where units start at $519,900, will be just down the street from an Everything Wine store at the heart of the development’s planned town centre.

The offers are signs of the times in a real estate market with slowing sales that have caused resale values to fall and some developers to hit pause on new construction.

“(Sales are) certainly harder in this market,” Jones said. “You’ve probably seen an uptick in not only the volume but creativity of offerings out there.”

In marketing terms, it is referred to as ambush marketing, said professor Lindsay Meredith, a professor emeritus in Simon Fraser University’s Beedie School of Business, adding that the method is finding ways to get the news media to tell your story, rather than depending on advertising.

“You’re bombarded with probably 5,000 (advertising) messages a day,” said Meredith. “What do you do? You try to ignore all of them.”

Memory retention is paramount in marketing Meredith said, and “retention is much higher” if consumers see it in a news story.

However, to succeed, offers need to have more of a hook, according to real estate consultant Michael Ferreira.

“Any kind of incentive where you can build a story around it, especially if it relates to the buyer,” said Ferreira, a principal with the firm Urban Analytics.

For instance, the avocado toast giveaway, a joke on the internet meme about millennials who can’t afford real estate, resonated with potential buyers who feel shut out of the market, Ferreira said.

They can also create a little bit of urgency in a market where buyers “just don’t feel any need to make a quick buying decision,” Ferreira added.

Urban Analytics tracks project marketing data, which shows that presales of units over the first three months of this year are down 56 per cent from the last three months of 2018, Ferreira said.

Part of that is because a lot of developers have put off launching new projects, but “there is just no urgency with buyers,” Ferreira said.

“They read the papers, they see that (sales and prices) are down in the resale statistics,” he said. “They’re just waiting.”

The avocado toast tactic worked for the Kira development, which saw 60 per cent of its units sell in two weeks, which “far exceeded our targets,” said Cameron McNeill, partner with marketing firm MLA Canada, which headed the campaign.

“Our expectations were high in regards to the avocado toast campaign because we knew it was a story that resonated with our target audience,” McNeil said in a statement via email.

Such campaigns, however, typically come with more concrete incentives. At Kira, for instance, the developer reduced its requirement for deposits to 10 per cent rather than the more typical 20 per cent.

And at Mode, Jones said the free wine is part of a package that includes limited-time price breaks of $10,000 to $20,000, depending on the size of units.

© 2019 Postmedia Network Inc

Highrise condo projects, which carry significant risk for developers and construction lenders, comprised the largest proportion of postponed developments

Joanne Lee-Young
The Vancouver Sun

Vancouver-based developer Townline gave official notice that it’s postponing its Meridian project, a 39-storey tower with one-, two- and three-bedroom units near the Evergreen Line in Coquitlam.

Other developers, who had been scheduled to launch sales in recent months, have been more discreetly letting key dates go by without proceeding as planned. And there is market chatter about others who will join them.

It’s no wonder some developers are hitting pause, according to Michael Ferreira, managing principal at Urban Analytics, which keeps track of presale condo data.

The number of new or presale condo and townhome sales recorded across Metro Vancouver during the first quarter of 2019 represented a 56-per-cent drop from the last quarter and a 61-per-cent drop from the same quarter last year. At 1,783, it was the third-lowest quarterly sales total since 2010, after the global financial and credit crisis.

The postponing of several condo-project launches in the first quarter of 2019 meant 75-per-cent fewer units were released for sale, compared with the previous quarter.

“Highrise condo projects, which carry significant risk for developers and construction lenders, comprised the largest proportion of postponed developments,” said Ferreira in a news release.

Projects that are more dependent on buyers who are investors have also been hit hard, as investors are “more apt to stay on the sidelines and wait for what they perceive as a bottom of the market.”

This impacted some findings for the quarter. For example, there was a more significant drop in sales in the area north of the Fraser River because of the greater concentration of highrise developments there.

To compare, while highrise condo sales fell by 61 per cent year-on-year, there was only a 28-per-cent drop for lowrise condo sales.

The Real Estate Development Marketing Act requires developers to secure construction financing nine months after they file a disclosure statement, which allows them to legally sell their units. When presales were selling like hotcakes, this timeline was easy to meet.

Now, “with such a short window in which to meet presale targets required to obtain financing, developers are reluctant to launch a new project without some certainty they’ll meet those targets,” said Ferreira.

He added that the “overwhelming majority of unsold units are in the pre-construction phase, with completed and unsold units accounting for just six per cent of all unsold inventory.”

Across Metro, 93 per cent of all highrise-condo units scheduled to be completed by the end of 2020 are sold. The number goes down to 80 per cent of units being sold when looking at units that will be completed later in the third quarter of 2022.

Only in a few markets such as South Surrey/White Rock, Langley/Cloverdale and Richmond/South Delta were there more than 50 completed, move-in ready units that were unsold.

Overall, the total number of completed, move-in-ready-but-unsold units at the end of the first quarter of 2019 was 453. This figure has been increasing “moderately” and is an 18-per-cent increase over the last quarter, but still well below the high of just over 2,200 that was recorded in the last quarter of 2013, according to Urban Analytics.

© 2019 Postmedia Network Inc.

Restrictive policies led to loss in property values

Ephraim Vecina
Mortgage Broker News

An array of restrictive policies like school and speculation taxes have led to the loss of as much as $90 billion in the overall value of Metro Vancouver properties, according to an analysis by a non-partisan organization.

The study conducted by STEPUP Now estimated that on average, each home in Vancouver lost $153,873 in value due to misguided legislation, CTV News Vancouver reported.

Of the Metro area’s locales, West Vancouver and Vancouver suffered the largest declines in market value, at 14.68% and 13%, respectively.

“While the government’s goal may indeed be to bottom out the housing market in an attempt to somehow address the complex issue of affordability, they are simply removing billions of dollars from the B.C. economy, to everyone’s detriment,” according to Paul Sullivan, senior partner with Burgess, Cawley, Sullivan and Associates Ltd.

The observations came as the Real Estate Board of Greater Vancouver released its latest numbers. The data indicated that a total of 1,829 sales transpired in the region last month, representing a massive 43% plunge from the 10-year sales average for April.

Fortunately, the latest Canadian Real Estate Association report showed that Toronto and Montreal helped make up for B.C.’s market weaknesses last month. Overall sales activity increased by 3.6% month-over-month in April.

Supply also went up by 2.7%, following the 3.4% increase seen during March. The national sales-to-new listings ratio stood at 54.8%, from the 54.3% in March.

Copyright © 2019 Key Media