BC home sales in 2020 will more than make up for an expected decline this year

Josh Sherman
Livabl

BC home sales in 2020 will more than make up for an expected decline this year, according to the British Columbia Real Estate Association’s new forecast for housing activity in the province.

BCREA predicts 71,400 homes will change hands on the resale market this year, down 9 percent from 2018’s tally.

However, in 2020 BCREA expects residential transactions to total 81,700, rebounding by 14 percent.

“The shock to affordability from restrictive mortgage policies, especially the B20 stress test, will continue to limit housing demand in the province this year,” says Cameron Muir, BCREA’s chief economist.

With Guideline B-20, policymakers introduced in January 2018 a so-called “stress test” for uninsured mortgage applicants.

Through the test, homebuyers who put forward a downpayment of at least 20 percent (the minimum for an uninsured mortgage) need to qualify at a rate that is 2 percentage points higher than what the lender is offering.

Similar testing for insured mortgages was established in 2016.

Numerous voices in the industry say cooling in housing markets across the country is a byproduct of the regulations.

Muir also suggests the BC market is still reeling from the most recent mortgage-rule change, he anticipates demand will overcome the hurdle in 2020.

“[A] relatively strong economy and favourable demographics are likely creating pent-up demand in the housing market.”

BCREA expects the average price of a BC home to sink 2 percent to $697,000 this year.

But as with sales activity, BCREA forecasts recovery in 2020, with the average price set to climb to $726,000, representing a year-over-year increase of 4 percent.

“The inventory of homes for sale has climbed out of a cyclical low, leading to balanced market conditions in many areas and buyer’s market conditions in some communities and across some products types,” the forecast reads.

© 2019 BuzzBuzzHome Corp.

Saltmine tech firm providing virtual tours of commercial spaces

Steve Randall
REP

The future of commercial real estate search is the focus of a new partnership between Cushman & Wakefield and design data tech firm Saltmine.

The technology provided by Saltmine enables C&W’s real estate professionals to create space plans, test fits and virtual tours of potential workspaces using artificial intelligence planning and 3-D space visualization tools.

“With our cloud-based platform, Cushman & Wakefield is able to offer clients a transformative way to evaluate and choose real estate,” said Saltmine founder and CEO Shagufta Anurag. “The ability to see in real time what a workspace could look like allows clients to proactively shape their workplace strategy like never before.”

Cushman & Wakefield says its clients are demanding technology that makes their real estate strategies simple, efficient, and predictable.

Using the Saltmine platform, the firm’s advisors can quickly digitize fully fitted properties in a matter of days, creating powerful interactive renderings that allow clients to experience the potential of their workspace.

“By virtually taking clients through a space and laying out their costs, we can make their site selection process predictable, experiential and flexible,” said Melanie Kirkwood Ruiz, Cushman & Wakefield’s Chief Information Officer for the Americas. “Clients know a relationship with Cushman & Wakefield brings expertise accentuated by technology.”

Copyright © 2019 Key Media Pty Ltd

300 homes have returned to the market?s long-term rental supply

Ephraim Vecina
Canadian Real Estate Wealth

In the four months since Vancouver’s new real estate regulations came into effect on September 2018, a little over 300 homes have returned to the market’s long-term rental supply, after previously being used as full-time Airbnb units.

The new study by McGill University researchers asserted that this volume was sufficient to nudge up Vancouver’s vacancy rate, which fell to as low as 0.7% in 2016.

Furthermore, if all 1,800 homes classified as full-time Airbnb listings prior to September 2018 go back to the rental segment, vacancy will increase by an estimated 1%.

Co-author David Wachsmuth stated that these figures attest to the volatility of the province’s housing situation. By many metrics, British Columbia is Canada’s hottest residential real estate market at present.

“The housing affordability and rental vacancy stats is systematically so much worse in B.C., including in the smaller communities, compared to the rest of the country,” Wachsmuth told Star Vancouver, adding that governments at higher levels should take responsibility and handle the problem, instead of just leaving municipalities on their own to manage the situation.

“If you look at the rest of the (census metropolitan area), the full-time listings have accelerated,” Wachsmuth explained. “It’s kind of two steps forward, one step back. Richmond and Surrey are now getting more of this activity.”

The McGill University study also found that more than 31,000 homes across Canada were used for Airbnb rental so frequently in 2018 that they have likely become unavailable as part of long-term rental supply.

The figure was contested by Airbnb, which said that the study was nowhere near being an accurate assessment since the information was gathered only via Airbnb’s data published online.

“We don’t agree with the validity of that number,” Airbnb Canada director of public policy Alex Dagg said. “[They have] no way of knowing those houses or those units would ever be on the long-term rental market.”

“Without all the information, faulty assumptions are made about our hosts and how they use our platform,” communications officer Lindsey Scully added.

Copyright © 2019 Key Media Pty Ltd

Lifestyles (and listings) in the Okanagan

REW

This week, REW went live in the Okanagan! You can’t beat the lifestyle in the Okanagan, so here are a few properties to consider that may suit your kind of living.

If you LOVE Lakeside Living… Nothing says the Okanagan like the Lake. These homes boast front seat views of the water and are steps away from all the fun! Take a plunge into these gorgeous homes.

#1. 3583 Mckinley Beach Drive, Kelowna | $997,000, 4 Bed, 6 Bath, 3399 Sqft, House

After a long day at the lake, cool down in the private pool or relax on the patio of this contemporary waterfront home.

#2. 14 Mary’s Emerald Bay Road, Vernon | $399,000, 4 Bed, 3 Bath, 2772 Sqft, House

Walk out to the lake from this custom-built Vernon home featuring a gorgeous deck with perfectly clear views of the water.

#3. 185 Heron Drive, Summerland | $739,000, 2 Bed, 2 Bath, 1482 Sqft, House

Enjoy the lake from this charming rancher, with tons of natural light and breathtaking views from all points of the home. 

#4. 3145 Hayman Road, Naramata | $949,000, 4 Bed, 3 Bath, 3398 Sqft, House

This gorgeous lake home features beautiful french doors to fully embrace the views of the Naramata and Okanagan Lake.

For wine lovers + foodies…
Close to some of the best wineries in the world, these homes are nearby great food and drink in the Okanagan.

#5. 2026 Elkridge Drive, Westbank | $559,900, 5 Bed, 4 Bath, 2463 Sqft, House

This lovely family home is perfect to relax in after a day at your neighbourhood wineries like Mission Hill or Quails’ Gate. 

#6. 3067 Ourtoland Road, West Kelowna | $1,298,000, 6 Bed, 5 Bath, 4012 Sqft, House

Live on cloud wine at this gorgeous luxury rancher located right in the heart of Okanagan Wine Country. 

#7. 3739 Lornell Court, Peachland | $1,038,000, 4 Bed, 4 Bath, 3860 Sqft, House

This executive home has spectacular lake views and is minutes away Hainle Vineyards.  

#8. 179 Uplands Court, Penticton | $675,000, 4 Bed, 3 Bath, 1961 Sqft, House

Good food and more surround this sweet family home featuring a back deck perfect for summer BBQ’s.  

#9. 1471 St. Paul Street, Kelowna | $689,900, 2 Bed, 2 Bath, 914 Sqft, Apt/Condo

This modern apartment is steps away from gourmet foods and a short drive away from all the wineries in the Kelowna. 

Sports Enthusiasts?
Calling all the mountain bikers, skiers, hikers, golfers, and adventure seekers: these Okanagan homes are only minutes away from your favourite hobbies.

#10. 150 Silver Lode Lane, Armstrong | $142,500, 2 Bed, 2 Bath, 872 Sqft, Recreational

Located at Silver Star Mountain, this cozy apartment is perfect for avid skiers or mountain bikers. 

#11. 4825 Canyon Ridge Crescent, Kelowna | $989,900, 6 Bed, 5 Bath, 5480 Sqft, House

Take a stroll or hike at Myra-Bellevue Provincial Park when you’re not relaxing in the pool of this delightful home. 

#12. 1431 Woodstock Place, Kamloops | $475,000, 3 Bed, 3 Bath, 2000 Sqft, House

From golf to boating, this family home is minutes away from all the activities at MacArthur Island Park in Kamloops.

#13. 106 Power Street, Penticton | $729,000, 3 Bed, 3 Bath, 1747 Sqft, Townhouse

Centrally located, this stunning townhouse is close to all the golfing, parks and city amenities in Penticton. 

Weekenders

Prefer to live the Okanagan lifestyle, even if you work elsewhere? These homes are perfect for weekly commuters from the Lower Mainland or Alberta.

#14. 2646 Briarwood Avenue, Kamloops | $574,900, 4 Bed, 3 Bath, 2197 Sqft, House

This immaculate, open-concept family home features plenty of green space and is a short drive away from the airport.

#15.  1910 Capistrano Drive, Kelowna | $719,900, 3 Bed, 3 Bath, 3556 Sqft, Townhouse

Minutes away from the airport, this impressive three bedroom townhouse is an excellent and easy get-away spot.

#16. 1550 Dickson Road, Kelowna | $299,900, 1 Bed, 1 Bath, 631 Sqft, Apt/Condo

Simple yet contemporary Kelowna condo with quick access to the highway yet still close to all the shops, cafe and restaurants.

#17. 202-1390 Hillside Drive, Kamloops | $359,900, 2 Bed, 1 Bath, 1064 Sqft, Apt/Condo

This comfy Kamloops apartment is a 3.5 hour drive to Vancouver, perfect to return to after a long week.

© 2019 REW. A Division of Glacier Media

Q1 new condo prices easing

Steve Randall
Canadian Real Estate Wealth

Growth in the price of new condos eased in the first quarter of 2019 as continued strength in Vancouver and Ottawa was offset by weaker growth in Toronto and Victoria.

Statistics Canada’s Experimental Condominium Apartment Index gained 0.7% in Q1 2019 compared to 2.3% in the previous quarter. The index measures changes over time in the contractors’ selling prices of units in new condominium apartment buildings in six CMAs.

Although prices did rise in Toronto and Victoria, the pace was slower than in the fourth quarter of 2018 at 1.1% and 0.5% respectively. This marked the slowest pace of growth in Toronto since Q2 2018 and for Ottawa since the index began in 2017.

Meanwhile, Vancouver saw a 2.5% rise, the third consecutive quarterly gain; and Ottawa posted a 2.4% increase after decreasing 1.5% in the previous quarter.

Annual increase The 6-CMA composite index gained 5.5% over the 12-month period ending in the first quarter, primarily driven by Vancouver (+9.0%) and Toronto (+5.2%). The composite index has risen for five consecutive quarters year over year.

There were declines for Calgary (-15.8%) and Montreal (-5.5%). Montreal saw the largest decline since the index began in 2017.

Copyright © 2019 Key Media Pty Ltd

StatsCan index gained 0.7% in Q1 2019

Steve Randall
Mortgage Broker News

Growth in the price of new condos eased in the first quarter of 2019 as continued strength in Vancouver and Ottawa was offset by weaker growth in Toronto and Victoria.

Statistics Canada’s Experimental Condominium Apartment Index gained 0.7% in Q1 2019 compared to 2.3% in the previous quarter. The index measures changes over time in the contractors’ selling prices of units in new condominium apartment buildings in six CMAs.

Although prices did rise in Toronto and Victoria, the pace was slower than in the fourth quarter of 2018 at 1.1% and 0.5% respectively. This marked the slowest pace of growth in Toronto since Q2 2018 and for Ottawa since the index began in 2017.

Meanwhile, Vancouver saw a 2.5% rise, the third consecutive quarterly gain; and Ottawa posted a 2.4% increase after decreasing 1.5% in the previous quarter.

Annual increase
The 6-CMA composite index gained 5.5% over the 12-month period ending in the first quarter, primarily driven by Vancouver (+9.0%) and Toronto (+5.2%). The composite index has risen for five consecutive quarters year over year.

There were declines for Calgary (-15.8%) and Montreal (-5.5%). Montreal saw the largest decline since the index began in 2017.

Copyright © 2019 Key Media

High tech city looking at 5 hectares on Lake Ontario

Steve Randall
REP

A plan to create a modern, high-tech city in Toronto will benefit from a C$1.3 billion (U$980 million) investment from Alphabet Inc. but the project has raised some questions from Waterfront Toronto.

The parent of Google will invest in the project through its Sidewalk Labs subsidiary and aims to work with local partners to finance the $3.9 billion development on Lake Ontario.

The plan to create a five-hectare neighbourhood includes tall-timber housing and a new Canadian HQ for Google and was set out by the firm in document released Monday.

“Our plan puts the public sector in the driver’s seat in ways that’s not the norm for a lot of tech companies in the world,” Dan Doctoroff, the company’s chief executive officer told Bloomberg at a media briefing. “Sidewalk aims to partner with the government in order to create the conditions for real estate developers, civic organizations, tech companies, and residents, workers and visitors to build a great community in the decades to come.”

Addressing housing affordability, Sidewalk has said that half of the residential units built would be purpose-built rentals, with 40% larger apartments with 2 or more bedrooms.

4 in 10 of all residential units built would be below-market rates and it believes that could bring around 1,700 below-market rate homes to the area.

Sidewalk will not be leading the entire development but focus instead on the area of the Google headquarters, around 7% of the entire project.

Waterfront Toronto concerns In an open letter Stephen Diamond, the chairman of the board of directors of Waterfront Toronto, the body responsible for the revitalization of the waterfront, has responded with some concerns about the Sidewalk Labs Master Innovation and Development Plan (MIDP).

“Based on our initial review of the MIDP, there are a number of exciting ideas that respond to challenges we face, particularly related to environmental sustainability and economic development. There are also proposals where it is clear that Waterfront Toronto and Sidewalk Labs have very different perspectives about what is required for success,” wrote Diamond.

He set out the early causes for concern:

• Sidewalk Labs proposes the up-front creation of an IDEA District that covers a much larger area than the 12 acres of Quayside. Waterfront Toronto has told Sidewalk Labs that the concept of the IDEA District is premature and that Waterfront Toronto must first see its goals and objectives achieved at Quayside before deciding whether to work together in other areas. Even then, we would only move forward with the full collaboration and support of the City of Toronto, particularly where it pertains to City-owned lands.
• Sidewalk Labs proposes to be the lead developer of Quayside. This is not contemplated in the PDA. Should the MIDP go forward, it should be on the basis that Waterfront Toronto lead a competitive, public procurement process for a developer(s) to partner with Sidewalk Labs.
• Sidewalk Labs’ proposals require future commitments by our governments to realize project outcomes. This includes the extension of public transit to Quayside prior to development, new roles for public administrators, changes to regulations, and government investment. These proposals raise important implementation concerns. They are also not commitments that Waterfront Toronto can make.
• Sidewalk Labs has initial proposals relating to data collection, data use, and digital governance. We will require additional information to establish whether they are in compliance with applicable laws and respect Waterfront Toronto’s digital governance principles.

A review and evaluation process is now beginning including consultations with the public and other stakeholders.

Copyright © 2019 Key Media Pty Ltd

The residential construction sector led the gains for overall Canadian construction investment in April

Steve Randall
REP

The residential construction sector led the gains for overall Canadian construction investment in April, the latest month of figures released by Statistics Canada.

The 3.6% increase for the residential sector took investment to $10.6 billion for the month, while the non-residential sector gained 0.3% to $4.7 billion. The total investment in Canadian construction was up 2.6% to $14.8 billion.

Within the gains for residential construction investment, the multi-unit dwellings sector hit new highs in April with a 7.1% increase to $5.6 billion. The single-family homes sector gained 0.3% to $5.0 billion.

Provincially, gains in multi-unit investment were led by British Columbia (+$205 million), Manitoba (+$94 million) and Quebec (+$75 million).

Meanwhile, non-residential investment was up slightly in Quebec (+$19 million) and British Columbia (+$16 million). These gains were partially offset by declines in Alberta (-$11 million) and Ontario (-$11 million).

Copyright © 2019 Key Media Pty Ltd

Upheaval in Hong Kong could have people moving to Vancouver

Neil Sharma
Mortgage Broker News

With political upheaval in Hong Kong, which has seen millions take to the streets to protest an extradition law with Mainland China, speculation is rampant that a rush of new residents will make their way to Vancouver.

If that happens, there could be implications for domestic homebuyers, many, if not most, of whom are already struggling to get a foothold in the local real estate market.

“The younger people who are trying to purchase homes right now are already sidelined because of the cost of real estate in Vancouver and what I think is a very punitive stress test,” said Vancouver-based mortgage broker Robert Mogensen. “If the political situation in Hong Kong causes people to flee and many choose Vancouver, it will only make the situation worse for younger people already living in the city.”

Granted, Hong Kong money would be nothing new for Vancouver. Anticipating the territory’s turnover to China in 1997, money began flowing into Vancouver from Hong Kong in the late ‘80s, however, much has changed since then.

“A lot of Hong Kong residents have, over the years, been buying property in Vancouver, so I’m not sure there would be a great rush, although, to some degree, I’m sure there will be people coming here if unrest in Hong Kong continues, and that will worsen the existing problem,” continued Mogensen.

Mike Michelin, a mobile mortgage advisor with CIBC who’s based in Vancouver, says the industry has been abuzz with speculation this week that Hong Kong residents, fearful of relentless encroachment from Mainland China, will flock to Canada rather than only to the west coast metropolis.

“There’s been buzz around town from industry brokers that there could be an influx of people from Hong Kong, but we’ll have to see whether it will have an impact on the market here,” said Michelin. “We’ve heard between 150,000 to 170,000 would be coming back to Canada from Hong Kong, but, for the most part, I think they’ll go to the GTA because Toronto is a centre and there are better chances of employment there. It will be interesting to see if we get a spike.”

While new residents would certainly inject life into Vancouver’s reeling real estate market, Michelin admits that news of yet more foreign money must make younger people chary.

“If you’re a Canadian resident aged 25 to 30 and just starting out your career, it might not be very positive because it will impact prices, making them go up,” he said. “If you want to sell your home, it could be a good thing, but for first-time buyers it will be a challenge if prices rebound and go up.”

While Mogensen believes Vancouver’s become too fragile to sustain more capital inflow from abroad, he noted that Mainland Chinese money is the culprit. Yet, irrespective of the money’s provenance, younger Vancouverites’ frustrations are palpable in the city.

“They’re very fearful that the situation is getting worse and they’re very frustrated, not to mention disillusioned, with the government because it allowed this to happen as it stood idly by, happy to collect taxes at the expense of Canadians who want to buy property in Vancouver,” he said. “It’s sad because a lot of younger people are leaving the city for other parts of the province and country, or if they’re staying they feel hopeless. Their incomes in no way, shape or form allow them to buy much real estate in Vancouver or even the Greater Vancouver Area.”

Copyright © 2019 Key Media