RECBC
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The Council has become aware that some owner-built homes in the province are being offered for sale illegally. Are you confident that the homes you are helping clients to buy or sell can be legally sold? 

Before a property owner builds their own home, or substantially reconstructs their own home, they must apply for an Owner Builder Authorization from the Homeowner Protection Office (HPO). Then, they must occupy their home themselves for the first year following construction. During that year, the home can’t be sold or rented. After the first year, and for the next ten years, any prospective buyers must receive an Owner Builder Disclosure Notice – whether they are buying the home from the owner-builder, or from subsequent owners.

Before listing a property or before assisting a client to make an offer on a property, as a licensee you have a responsibility to take appropriate steps to ensure that a home can be legally sold. Owner-builders who sell homes before the one year occupancy period has ended, or who don’t provide the Owner Builder Disclosure Notice to buyers, can face legal proceedings under the Homeowner Protection Act. And licensees could face an investigation and potential discipline for not acting in the best interests of their clients.

Avoid the Risks: Take Steps to Ensure a Home Can be Legally Sold

 STEP 1: Search the HPO’s New Homes Registry. Enter the home’s address or legal description to find out if the home has a policy of home warranty insurance, or if it is built under an exemption, such as an Owner-Builder Authorization. Checking online is a fast, simple way to find out if the home can legally be offered for sale – and it’s recommended whether you are acting for a seller or a buyer.

STEP 2: Advise owner-builder clients to file occupancy permit information promptly, so the HPO can verify the information and provide an Owner Builder Disclosure Notice well in advance of any offers for sale.

STEP 3: Ensure that any prospective buyers within the ten-year period receive an Owner-Builder Disclosure Notice. Insert the Receipt of Owner-Builder Disclosure Notice Clause into the Contract of Purchase and Sale to confirm that the buyer received the notice.

© Copyright Real Estate Council of British Columbia

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Fraser Valley still a split market, with detached home prices up 10 per cent annually compared with townhomes up 2.7 per cent and condo prices dropping

Joannah Connolly
Other

The Fraser Valley real estate market continued its hot streak in August, rounding out the second busiest summer ever in the region, the Fraser Valley Real Estate Board (FVREB) reported September 2.

There were 1,525 residential unit sales processed on the MLS in August, an increase of 35.6 per cent compared with the 1,125 home sales in August last year.

Jorda Maisey, FVREB president, said, “High consumer confidence and low mortgage rates continue to drive the activity we’ve seen in our market this summer.

“This year marks one of the busiest summer markets we’ve ever had in the Fraser Valley, second only to 2005.”

The number of new residential listings this August rose 2.9 per cent year over year. However, inventory remained extremely tight, with active home listings falling 25 per cent versus August last year.

Sales and Listings

Single-family detached home sales increased 33.8 per cent compared with last August, although they fell 24.2 per cent compared with July’s high figures, reflecting a seasonal slowdown and tighter inventory.

Sales of townhouses and other attached properties in the region increased 39.8 per cent year over year, in line with the recent rising trend for townhouses, and dropped 21.2 per cent month over month.

Fraser Valley condos sales increased a similar 35.9 per cent year over year but dropped a more moderate 8.7 per cent compared with July.

Maisey added, “Even with the [summer] season, sales last month remained 25 per cent higher than the board’s 10-year average for August.”

Fraser Valley: What’s Up, What’s Down
	Aug/Jul 15	Aug 15/14
Overall Home Sales	-21.2%	+35.6%
– Detached	-24.2%	+33.8%
– Townhouse	-21.2%	+39.8%
– Apartment	-8.7%	+35.9%
New Listings	-13.9%	+2.9%
Active Listings	-5.4%	-25.1%

 

The number of new residential listings increased again in August, rising 2.9 per cent year over year to 2,012 compared with the 1,956 new listings seen in August 2014.

However, this annual rise was driven entirely but a jump in detached home listings, which rose 7.5 per cent, compared with townhomes and condos, with dropped 5.1 and 1.2 per cent respectively.

In total, there were 5,020 active home listings at the end of August, a drop of 25.1 per cent from the 6,698 listings available in August last year, as demand continued to outstrip supply. This was particularly severe in townhome listings, which were down 32.6 per cent annually.

MLS Benchmark Prices

In August, the benchmark price of a detached Fraser Valley house was $626,400, a rise of 10.5 per cent compared with August 2014 when it was $569,800.

Fraser Valley townhouse prices in August rose a much more modest 2.8 per cent year over year to $306,700, despite increasing sales and decreasing supply.

Resale condominium apartments in the Valley were yet again the only property type to see prices falling year over year, by 2.4 per cent in August to $191,900 – likely because of ever-increasing competition from new condo sales in the region.

 

Fraser Valley MLS Benchmark Prices, % Change
	August 2015	Aug/Jul 2015	August 2015/2014
-Detached	$629,400	+1.3%	+10.5%
-Townhouse	$304,900	+0.6%	+2.8%
-Apartment	$192,700	+0.4%	-2.4%

 

To see home prices, sales and listings broken down by community, see the FVREB August 2015 statistics package. 

© 2015 Real Estate Weekly

 

MLS home sales between 25 and 30 per cent above the 10-year average from June to August, according to Real Estate Board of Greater Vancouver

Joannah Connolly
Other

It’s been a scorching summer for real estate in Greater Vancouver, with MLS home sales between 25 and 30 per cent above the 10-year average from June to August, according to Real Estate Board of Greater Vancouver (REBGV) figures released September 2.

Resale transactions were up 21.3 per cent annually in August and prices up 12 per cent compared with August 2014.

However, this was the second consecutive monthly drop following June’s huge figures, with sales down 15.5 per cent since July, revealing some seasonal decline.

Nevertheless, last month’s sales were 27.9 per cent above the 10-year sales average for the month.

Darcy McLeod, REBGV president, said, “There was no summer lull in our market this year.”

Resale home prices continued to beat previous records, with the benchmark price of a Greater Vancouver home now at $708,500. This is a 12 per cent increase compared with July 2014.

Sales and Listings

Greater Vancouver home sales rose 21.3 per cent to 3,362 units in August, compared with the 2,771 sales of August 2015. This is a drop of 9.1 per cent compared with the 3,978 sales in July 2015.

 

What’s Up, What’s Down – At a Glance
	Aug/Jul 15	Aug 15/14
Overall Sales	-15.5%	+21.3%
– Detached	-17.2%	+11.4%
– Attached	-16.2%	+18.7%
– Apartment	-13.6%	+32.7%
New Listings	-16.2%	+8.7%
Current Listings	-5.3%	-26.2%

 

Broken down by housing type, detached home sales reached 1,290 units in August, an increase of 11.4 per cent from the 1,158 detached sales recorded in August 2014.

Condo-apartment sales once again saw the biggest annual rise, reaching 1,494 in August 2015, a rise of 32.7 per cent compared with the 1,126 sales in August 2014, reflecting the growth in this market segment.

Sales of townhouses and other attached properties totalled 578 in August, an increase of 18.7 per cent compared with the 487 sales in August 2014.

New listings for detached, attached and apartment properties in Metro Vancouver totalled 4,281 in August. This represents an 8.7 per cent increase compared to the 3,940 new listings in August 2014 but a 16 per cent drop compared with the 5,112 new listings in July.

Total listings remained extremely tight, with the number of properties listed on the MLS at the end of August standing at 10,897, a 26.2 per cent decrease compared with August 2014 and a 5.3 per cent decline compared with July 2015.

“Home buyers … are motivated, but they’re competing for a smaller supply of homes for sale than is typical for this time of year – that’s the dynamic driving our market right now,” said McLeod.

The sales-to-active-listings ratio in August 2015 was 30.9 per cent. The board said that this is the sixth consecutive month that this ratio has been above 30 per cent in Metro Vancouver, meaning that the sellers’ market conditions are persisting.

“Those who have a sound buying strategy and an understanding of current price trends are having the most success in today’s market,” McLeod added.

Benchmark Prices (MLS Home Price Index)

The benchmark price for combined MLS residential property types in Metro Vancouver continued to set its monthly new record, now standing at $708,500. This represents a 12 per cent increase compared with August 2014.

The benchmark price for a detached property in Metro Vancouver increased 17.5 per cent from August 2014 to $1,159,600, the highest price growth rate of all the property types.

Townhome and other attached unit prices increased 7.3 per cent between August 2014 and 2015 to $511,500, which was no increase over July’s figure.

The benchmark price of a condominium-apartment property continued to increase at the slowest rate, albeit an increasing one, rising 6.3 per cent compared with August 2014 to $405,400.

The composite benchmark prices by housing type are:

Greater Vancouver MLS® Benchmark Prices % Change
	Aug 2015	Aug/Jul 15	Aug 15/14
Detached	$1,159,000	+1.6%	+17.5%
Townhome	$511,500	+0.0%	+7.3%
Apartment	$405,400	+1.1%	+6.3%

 

Home prices vary widely throughout the REBGV region. To get a good idea of home prices in a specific location, check the detailed MLS Home Price Index in the REBGV full statistics package.

© 2015 Real Estate Weekly

Luxury home sales in key markets such as Vancouver driven by overseas buyers – but usually immigrants buying homes, not investors, says report

Joannah Connolly
Other

The luxury home segment in key markets such as Vancouver has unsurprisingly been found to be largely driven by overseas buyers, according to a new Re/Max report.

However, the report aims to debunk the common perception that most of these purchases are by foreign investors looking to park their money in Vancouver real estate and leave the property empty.

RE/MAX 2015 Spotlight on Luxury says Re/Max brokers and agents reported that foreign buyers have continued to drive demand in the Vancouver luxury market in the first half of 2015.

It adds, “Foreign buyers, primarily from China, tend to be families looking to live in Vancouver, viewing Canada as an economically and socially stable country in which to invest their money and raise a family. Their home-buying decisions are strongly influenced by proximity to good schools, and newly-built houses with top-quality finishes are in highest demand.”

Gurinder Sandhu, executive vice-president of Re/Max Integra Ontario-Atlantic Canada, told CBC, “While there has been a lot of concern about foreign investors in Canada’s housing market, we’re seeing that the foreign buyers in our major luxury markets are living in their properties.”

The report said that increase of sales at the top end of the market – home sales over $3 million – can also be attributed overall price appreciation, driven by low inventory and high demand for single-family homes, which has led to more homes being sold above the $3 million threshold.

Between January 1 and July 31 of this year, 572 properties sold for over $3 million, compared with 319 during the same period in 2014 – an increase of 79 per cent, said the report.

© 2015 Real Estate Weekly

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Barbara Yaffe
The Vancouver Sun

For those wondering whether Vancouver’s crazy housing market conditions will ever ease, the answer is yes, probably next year.

According to new property prognostications issued by the Royal Bank of Canada, sales volumes in B.C. are poised to decline in 2016 by nearly five per cent.

That would mark a huge turnaround from this year, with resale housing units projected to be up more than 20 per cent by the end of 2015.

However, the dropping sales volumes do not mean prices will become affordable, only that the pace of the price increases is expected to moderate.

Prices are forecast to increase 7.8 per cent this year for all types of housing, probably more in the Vancouver area. Next year, price growth will run at a more modest 4.9 per cent, the slowest rate in three years, but still the fastest growth rate of any province.

The bank on Monday released its latest Housing Affordability Index, showing housing affordability is nearing the worst level ever seen in Canada.

RBC’s economic research unit says higher interest rates will bring ”deteriorating trends in housing affordability in Ontario and B.C. (which) will take the edge off Canada’s hottest markets in terms of demand, but price momentum is likely to remain more or less intact.”

According to figures for July from the Greater Vancouver Real Estate Board, the typical price for all types of residential property in Metro Vancouver now stands at than $700,500, up 11.2 per cent in the past 12 months.

RBC’s research features a graph showing ownership costs of a detached bungalow in Vancouver, incredibly, gobbles more than 80 per cent of household income. No wonder consignment shopping is all the rage.

That compares with 42 per cent of household income consumed by housing nationally, and 59 per cent in Toronto.

RBC says that affordability is “most stretched” in Vancouver and Toronto, and for the single-family detached housing sector. Construction of single-family houses in Vancouver has fallen by nearly one quarter in the past decade alone, the result of restrictive development policies.

By contrast, affordability conditions for condo apartments in Vancouver, and Toronto, are “just a little worse than it has been on average over the past 30 years”.

B.C. is one of several provinces benefiting from improving labour market trends — its jobless rate for 2015 is forecast to be third lowest in the country, after Manitoba and Saskatchewan — and rock-bottom interest rates.

But the low interest rate party is set to end, RBC says, predicting the Bank of Canada gradually will begin removing monetary stimulus one year from now. Longer term interest rates could increase by the end of 2015.

That will mean fewer people will be able to qualify for the sort of jumbo mortgages being assumed by so many buyers in the Vancouver area. And some may be force to sell properties they no longer can support.

That said, all signs point to the Lower Mainland continuing to be Canada’s toughest housing market.

In its mid-August quarterly house price analysis and assessment, the Canada Mortgage and Housing Corp. identified Toronto, Regina and Winnipeg as at risk of a housing correction, expressing no concern about Vancouver.

The west coast city has a “low overall housing market risk,” due to population growth, a healthy labour market and an absence of overbuilding.

With no significant price reductions in the offing, I predict a growing number of Vancouverites will be renting.

Additional product is becoming available and, as Colliers International reported recently, units built these days increasingly are of condominium quality, with quartz countertops and in suite laundry facilities. The city also is pressing developers to build more three-bedroom units, to accommodate families.

With no corrective action by B.C.’s politicians — they have done little but dither, insisting they are loathe to interfere in the market — buying a house in Vancouver is poised to become an ever more death-defying experience.

© Copyright (c) The Vancouver Sun